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EXHIBIT 1.5
NEWFIELD EXPLORATION COMPANY
2,500,000 SHARES OF COMMON STOCK
(par value $0.01 per share)
SALES AGENCY AGREEMENT
July [ ], 1999
PAINEWEBBER INCORPORATED
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Newfield Exploration Company, a Delaware corporation (the "Company"),
confirms its agreement with PaineWebber Incorporated (the "Agent"), as follows:
SECTION 1. Description of Securities. The Company proposes to issue and
sell through the Agent, as sales agent, up to 2,500,000 shares (the "Shares") of
its Common Stock, par value $0.01 per share ("Common Stock"), on the terms set
forth in Section 3 hereof.
SECTION 2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Agent that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and the rules and regulations thereunder
("Rules and Regulations"). A registration statement on Form S-3 (Registration
No. 333-81583) with respect to the Shares, including a form of prospectus, has
been prepared by the Company in conformity with the requirements of the Act and
the Rules and Regulations and filed with the Securities and Exchange Commission
(the "Commission") and has become effective. Such registration statement and
prospectus may have been amended or supplemented prior to the date of this
Agreement. Any such amendment or supplement was so prepared and filed, and any
such amendment or supplement filed after the effective date of such registration
statement has become effective. No stop order suspending the effectiveness of
the registration statement has been issued, and no proceeding for that purpose
has been instituted or threatened by the Commission. Copies of such registration
statement and prospectus, any such amendment or supplement and all documents
incorporated by reference therein that were filed with the Commission on or
prior to the date of this Agreement have been delivered to the Agent. Such
registration statement, as it may have heretofore been amended, is referred to
herein as the "Registration Statement," and the
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final form of prospectus included in the Registration Statement, as amended or
supplemented from time to time, is referred to herein as the "Prospectus." Any
reference herein to the Registration Statement, the Prospectus, or any amendment
or supplement thereto shall be deemed to refer to and include the documents
incorporated (or deemed to be incorporated) by reference therein, and any
reference herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement or Prospectus shall be deemed to refer to and
include the filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein.
(b) Each part of the Registration Statement, when such part became or
becomes effective, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at each Closing Date (as
hereinafter defined), conformed or will conform in all material respects with
the requirements of the Act and the Rules and Regulations; each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at each Closing
Date, did not or will not include an 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
foregoing shall not apply to statements in or omissions from any such document
in reliance upon, and in conformity with, written information relating to the
Agent furnished to the Company by the Agent, specifically for use in the
Registration Statement, the Prospectus or any amendment or supplement thereto.
(c) The documents incorporated by reference in the Registration
Statement or the Prospectus, or any amendment or supplement thereto, when they
became effective under the Act or were filed with the Commission under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, conformed in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
(d) The consolidated financial statements of the Company and its
subsidiaries, together with the related notes and schedules, set forth or
incorporated by reference in the Registration Statement and Prospectus present
fairly the consolidated financial condition and the results of operations and
cash flows of the Company and its subsidiaries as of the dates indicated or for
the periods therein specified and were prepared in conformity with generally
accepted accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein).
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(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of its incorporation
with power and authority (corporate and other) to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and Prospectus; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to be
so qualified and be in good standing, considering all such cases in the
aggregate, would not have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(f) Each "significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X under the Act, if any, has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and conduct its business as presently
conducted and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to be so qualified would not have
a material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(g) The Company and its subsidiaries have (i) generally satisfactory
title to all their interests in their oil and gas properties, title
investigations having been carried out by the Company in accordance with the
general practice in the oil and gas industry, (ii) good and indefeasible title
to all other real property owned by them that is material to the Company and its
subsidiaries considered as one enterprise and (iii) good and valid title to all
personal property owned by them that is material to the Company and its
subsidiaries considered as one enterprise, in each case free and clear of all
liens, encumbrances, claims, security interests, subleases and defects except
such as are described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such interests or property by the Company and its subsidiaries; and any
real property and buildings held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries.
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
significant subsidiary, if any, of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and (except for
directors' qualifying shares and as otherwise set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.
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(i) The Shares have been duly authorized and, when the Shares are
issued and delivered pursuant to this Agreement, the Shares will be duly and
validly issued and fully paid and non-assessable; the Shares conform in all
material respects to the description thereof contained in the Registration
Statement and the Shares will conform in all material respects to the
description thereof contained in the Prospectus as amended or supplemented with
respect to the Shares. The stockholders of the Company have no preemptive rights
with respect to the Shares.
(j) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with the business
of the Company and its subsidiaries, considered as one enterprise, from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its subsidiaries, or any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(k) Except as set forth in the Prospectus, there is not pending nor, to
the knowledge of the Company, threatened any action, suit or proceeding to which
the Company or any of its subsidiaries is a party, before or by any court or
governmental agency or body, that could reasonably be expected to result in any
material adverse change in the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, or that could reasonably be expected
to materially and adversely affect the properties or assets thereof considered
as a whole.
(l) There are no contracts or documents of the Company or any of its
subsidiaries that are required to be filed as exhibits to the Registration
Statement or to any of the documents incorporated by reference therein by the
Act or the Exchange Act or by the rules and regulations of the Commission
thereunder that have not been so filed.
(m) All necessary action has been duly and validly taken by the Company
to authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles.
(n) The issue and sale of the Shares and the compliance by the Company
with all of the provisions of this Agreement and the consummation of the
transactions contemplated herein will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it is bound or to which any of the property of the Company or any of its
subsidiaries is subject except for such breaches or defaults that would not in
the aggregate have a
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material adverse effect on the Company's ability to perform its obligations
under this Agreement or on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, nor will such action result in the
violation of the Company's charter or by-laws, or any statute or any order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of its properties; no
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the issue and sale of the Shares and
the consummation by the Company of the transactions contemplated by this
Agreement, except such as may be required by state securities or blue sky laws.
(o) Each of the Company and its subsidiaries owns or possesses adequate
rights to use all of the patents, patent rights, licenses, inventions,
copyrights, know-how (including seismic data, trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names to the extent presently
employed by them in connection with, and material to (individually or in the
aggregate), the business now operated by them, and neither the Company nor any
of its subsidiaries has received any notice of infringement of or conflict with
asserted rights of others with respect to any of the foregoing which, if singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(p) The Company and its subsidiaries have not violated and are in
compliance with all laws, statutes, ordinances, regulations, rules and orders of
any foreign, federal, state or local government and any other governmental
department or agency, and any judgment, decision, decree or order of any court
or governmental agency, department or authority, including, without limitation,
environmental laws, except for such violations or noncompliance which,
individually or in the aggregate, would not have a material adverse effect on
the condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(q) The Company possesses such licenses, permits, consents, orders,
certificates or authorizations issued by the appropriate federal, state, foreign
or local regulatory agencies or bodies necessary to conduct the business now
operated by it, except for licenses, permits, consents, orders, certificates or
authorizations, the absence of which, individually or in the aggregate, would
not have a material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, and the Company has not received any
notice of proceedings relating to the revocation or modification of any such
licenses, permits, consents, orders, certificates or authorizations which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(r) The Company carries, or is covered by, insurance in such amounts
and covering such risks as is customary for companies engaged in similar
businesses in similar industries.
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(s) Except as described in the Prospectus, there has been no storage,
disposal, generation, manufacture, spill, discharge, refinement, transportation,
handling or treatment of toxic wastes, hazardous wastes or hazardous substances
by the Company (or to the knowledge of the Company, any of its predecessors in
interest) at, upon or from any of the property now or previously owned or leased
or under contract for purchase by the Company in violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit or which
would require remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any violation or
remedial action which would not result in, or which would not be reasonably
likely to result in, singularly or in the aggregate with all such violations and
remedial actions, any material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and the terms
"hazardous wastes," "toxic wastes" and "hazardous substances" shall have the
meaning specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(t) PricewaterhouseCoopers LLP, who have audited the financial
statements of the Company and its subsidiaries included in the Prospectus, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
(u) Xxxxx Xxxxx Company Petroleum Engineers, whose reserve report is
referred to in a document incorporated by reference in the Registration
Statement, are independent petroleum engineers with respect to the Company.
(v) The Rights Agreement dated as of February 12, 1999 (the "Rights
Agreement"), between the Company and ChaseMellon Shareholder Services L.L.C. has
been duly authorized, executed and delivered by the Company; the preferred stock
purchase rights (the "Rights") issued and issuable under the Rights Agreement
have been duly authorized by the Company; each outstanding share of Common Stock
is associated with and entitled to one duly authorized and validly issued Right;
and, when the Common Stock to be sold by the Company hereunder is issued, each
such share will be associated with and entitled to one duly authorized and
validly issued Right.
(w) The Company now meets the exemptive requirements set forth in Rule
101(c)(1) of Regulation M under the Exchange Act.
SECTION 3. Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to issue and sell
through the Agent, as exclusive sales agent, and the Agent agrees to sell, as
sales agent for the Company, on a reasonable efforts basis, up to 2,500,000
Shares (the "Maximum Amount") on the terms set forth herein.
The Shares, up to the Maximum Amount, are to be sold on a daily basis
or otherwise as shall be agreed to by the Company and the Agent. The Company
will designate the maximum amount of Shares to be sold by the Agent on a daily
or other basis as reasonably agreed to by the Agent and in any event not in
excess of the amount available for issuance under the currently effective
Registration Statement. Subject to the terms and conditions hereof, the Agent
shall use its reasonable efforts to sell all of the designated Shares up to the
Maximum Amount. The
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compensation to the Agent for sales of Shares shall be at a fixed commission
rate of 3% of the gross sales price per share for the first one million
(1,000,000) Shares sold under this Agreement and 2 1/2% of the gross sales price
per share for the remainder of the Shares sold under this Agreement. The
remaining proceeds, after further deduction for any transaction fees imposed by
any governmental or self-regulatory organization in respect of such sales, shall
constitute the net proceeds to the Company for such Shares (the "Net Proceeds").
Notwithstanding any provision in this Agreement to the contrary, the
Company is under no obligation to issue and sell any or all of the Shares
through the Agent pursuant to this Agreement. The Company or the Agent may, upon
notice to the other party by telephone (confirmed promptly by telecopy), suspend
the offering of Shares pursuant to such instructions; provided, however, that
such suspension shall not affect or impair the parties' respective obligations
with respect to any Shares sold hereunder prior to the giving of such notice.
The Company may also instruct the Agent by telephone (confirmed promptly by
telecopy) not to sell Shares if such sales cannot be effected at or above the
price designated by the Company in such instruction. Notwithstanding the
foregoing, under no circumstances shall the number of Shares sold pursuant to
this Agreement exceed the Maximum Amount or the number of shares of Common Stock
available for issuance under the currently effective Registration Statement.
If either party has reason to believe that the exemptive provisions set
forth in Rule 101(c)(1) of Regulation M under the Exchange Act are not satisfied
with respect to the Shares, it shall promptly notify the other party and sales
of Shares under this Agreement shall be suspended until that or other exemptive
provisions have been satisfied in the judgment of each party. The Agent shall
sell the Shares only by means of ordinary brokers' transactions on the New York
Stock Exchange (the "NYSE").
The Agent shall provide written confirmation to the Company following
the close of trading on the NYSE each day in which Shares are sold under this
Agreement setting forth the number of Shares sold on such day, the Net Proceeds
to the Company, and the compensation payable by the Company to the Agent with
respect to such sales.
Settlement for sales of Shares will occur on the third business day (or
such earlier day as is industry practice for regular-way trading) following the
date on which such sales are made (each a "Closing Date"). The amount of
proceeds for such sales to be delivered to the Company against the receipt of
the Shares sold shall be equal to the aggregate sales prices at which such
Shares were sold, net of the Agent's compensation for such sales and after
deduction for any transaction fees imposed by any governmental or
self-regulatory organization in respect of such sales. Settlement for all Shares
shall be effected by free delivery of Shares to the Agent's account at The
Depository Trust Company in return for payments in same day funds delivered to
the account designated by the Company. If the Company shall default on its
obligation to deliver Shares on any Closing Date, the Company shall (i) hold the
Agent harmless against any loss, claim or damage arising from or as a result of
such default by the Company and (ii) pay the Agent any commission to which it
would otherwise be entitled absent such default.
On each Closing Date, the Company shall be deemed to have affirmed each
representation and warranty contained in this Agreement, and on each Filing Date
(as defined below), the Company shall affirm in writing each representation and
warranty contained in this
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Agreement. The Company covenants and agrees with the Agent that on or prior to
the second business day after the end of each calendar week during which sales
of Shares were made by the Agent (each such week a "Reporting Period"), the
Company will (i) file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b) (each a "Filing Date"), which prospectus
supplement will set forth, with regard to such Reporting Period, the dates
included within the Reporting Period, the amount of Shares sold through the
Agent, the Net Proceeds to the Company and the compensation payable by the
Company to the Agent with respect to sales of Shares pursuant to this Agreement
and (ii) deliver such number of copies of each such prospectus supplement to the
NYSE as are required by such Exchange. Any obligation of the Agent to use its
reasonable efforts to sell the Shares shall be subject to the continuing
accuracy of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the continuing
satisfaction of the additional conditions specified in Section 5 of this
Agreement.
SECTION 4. Covenants of the Company. The Company covenants and agrees
with the Agent that:
(a) During the period in which a prospectus relating to the Shares is
required to be delivered under the Act, the Company will notify the Agent
promptly of the time when any subsequent amendment to the Registration Statement
has become effective or any subsequent supplement to the Prospectus has been
filed and of any request by the Commission for any amendment or supplement to
the Registration Statement or Prospectus or for additional information; it will
prepare and file with the Commission, promptly upon the Agent's request, any
amendments or supplements to the Registration Statement or Prospectus that, in
the Agent's opinion, may be necessary or advisable in connection with the
distribution of the Shares by the Agent; the Company will not file any amendment
or supplement to the Registration Statement or Prospectus (other than any
prospectus supplement relating to the offering of other securities (including,
without limitation, common stock other than pursuant to this Agreement)
registered under the Registration Statement) unless a copy thereof has been
submitted to the Agent a reasonable period of time before the filing and the
Agent has not reasonably objected thereto; and it will furnish to the Agent at
the time of filing thereof a copy of any document that upon filing is deemed to
be incorporated by reference in the Registration Statement or Prospectus; and
the Company will cause each amendment or supplement to the Prospectus to be
filed with the Commission as required pursuant to the applicable paragraph of
Rule 424(b) of the Rules and Regulations or, in the case of any document to be
incorporated therein by reference, to be filed with the Commission as required
pursuant to the Exchange Act, within the time period prescribed.
(b) The Company will advise the Agent, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any such
purpose; and it will promptly use its reasonable best efforts to prevent the
issuance of any stop order or to obtain its withdrawal if such a stop order
should be issued.
(c) Within the time during which a prospectus relating to the Shares is
required to be delivered under the Act, the Company will comply as far as it is
able with all requirements
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imposed upon it by the Act and by the Rules and Regulations, as from time to
time in force, so far as necessary to permit the continuance of sales of or
dealings in the Shares as contemplated by the provisions hereof and the
Prospectus and will file on or before their due date all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Shares. If during such period any
event occurs as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
then existing, not misleading, or if during such period it is necessary to amend
or supplement the Registration Statement or Prospectus to comply with the Act,
the Company will promptly notify the Agent to suspend the offering of Shares
during such period and the Company will amend or supplement the Registration
Statement or Prospectus (at the expense of the Company, unless the misstatements
or omissions in question were made solely in reliance on written information
relating to the Agent furnished to the Company by the Agent expressly for use in
the Registration Statement or Prospectus in which case such amendment or
supplement shall be at the expense of the Agent) so as to correct such statement
or omission or effect such compliance.
(d) The Company will use its reasonable best efforts to qualify the
Shares for sale under the securities laws of such jurisdictions as the Agent
designates and to continue such qualifications in effect so long as required for
the distribution of the Shares, except that the Company shall not be required in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any jurisdiction.
(e) The Company will furnish to the Agent and its counsel (at the
expense of the Company) copies of the Registration Statement, the Prospectus
(including all documents incorporated by reference therein) and all amendments
and supplements (other than any prospectus supplement relating to the offering
of other securities including, without limitation, Common Stock other than
pursuant to this Agreement) to the Registration Statement or Prospectus that are
filed with the Commission during the period in which a prospectus relating to
the Shares is required to be delivered under the Act (including all documents
filed with the Commission during such period that are deemed to be incorporated
by reference therein), in each case as soon as available and in such quantities
as the Agent may from time to time reasonably request and will also furnish
copies of the Prospectus to the NYSE in accordance with Rule 153 of the Rules
and Regulations.
(f) The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the end
of the Company's current fiscal quarter, an earnings statement (which need not
be audited) covering a 12-month period that satisfies the provisions of Section
11(a) of the Act and Rule 158 of the Rules and Regulations.
(g) The Company, whether or not the transactions contemplated hereunder
are consummated or this Agreement is terminated, will pay all expenses incident
to the performance of its obligations hereunder, including, but not limited to,
expenses relating to (i) the printing and filing of the Registration Statement
as originally filed and of each amendment thereto, (ii) the preparation,
issuance and delivery of the Shares, (iii) the reasonable fees and disbursements
of
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the Company's counsel and accountants, (iv) the qualification of the Shares
under securities laws in accordance with the provisions of Section 4(d) of this
Agreement, including filing fees and any reasonable fees or disbursements of
counsel for the Agent in connection therewith, (v) the printing and delivery to
the Agent of copies of the Prospectus and any amendments or supplements thereto,
and of this Agreement, (vi) the fees and expenses incurred in connection with
the listing of the Shares on the NYSE, and (vii) filing fees of the Commission
and the National Association of Securities Dealers, Inc. In addition to any fees
that may be payable to the Agent under this Agreement, the Company will
promptly, upon the request of the Agent, reimburse the Agent for the fees and
disbursements of the Agent's legal counsel incurred in connection with the
establishment of the structured equity shelf program established by this
Agreement.
(h) The Company will apply the net proceeds from the sale of the Shares
as set forth in the Prospectus.
(i) The Company will not, directly or indirectly, offer or sell any
shares of Common Stock (other than the Shares offered pursuant to the provisions
of this Agreement) or securities convertible into or exchangeable for, or any
rights to purchase or acquire, Common Stock during the period from the date of
this Agreement through the final Closing Date for the sale of Shares hereunder
without giving the Agent at least three business days' prior written notice
specifying the nature of the proposed sale and the date of such proposed sale;
provided, however, that no such notice shall be required in connection with the
Company's issuance or sale of (i) shares of Common Stock pursuant to any
employee or director stock option or benefits plan, stock ownership plan or
dividend reinvestment plan of the Company now in effect and (ii) Common Stock
issuable upon conversion of securities or the exercise of warrants, options or
other rights in effect or outstanding on the date hereof. The Company
acknowledges that the Agent shall have the right to suspend activity under this
sales program upon receipt of the notice pursuant to the preceding sentence for
such period of time as the Agent deems reasonable or appropriate.
(j) The Company will, at any time during the term of this Agreement, as
supplemented from time to time, advise the Agent immediately after it shall have
received notice or obtain knowledge thereof, of any information or fact that
would alter or affect any opinion, certificate, letter and other document
provided to the Agent pursuant to Section 5 herein.
(k) Each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented (other than a supplement filed pursuant to Rule
424(b) under the Act that contains solely the information set forth in the final
paragraph of Section 3 of this Agreement) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than a Current Report on Form 8-K, unless the Agent shall otherwise reasonably
request), the Company shall furnish or cause to be furnished to the Agent
forthwith a certificate dated the date of filing with the Commission of such
amendment, supplement or other document, the date of effectiveness of amendment,
as the case may be, in form satisfactory to the Agent to the effect that the
statements contained in the certificate referred to in Section 5(f) hereof which
were last furnished to the Agent are true and correct at the time of such
amendment, supplement, filing, as the case may be, as though made at and as of
such time (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate
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of the same tenor as the certificate referred to in said Section 5(f), modified
as necessary to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such certificate.
(l) Each time that (i) the Registration Statement or the Prospectus is
amended or supplemented (other than a supplement filed pursuant to Rule 424(b)
under the Act that contains solely the information set forth in the final
paragraph of Section 3 of this Agreement) or (ii) there is filed with the
Commission any document incorporated by reference into the Prospectus (other
than a Current Report on Form 8-K, unless the Agent shall otherwise reasonably
request), the Company shall furnish or cause to be furnished forthwith to the
Agent and to counsel to the Agent a written opinion of Xxxxxx & Xxxxxx L.L.P.,
counsel to the Company ("Company Counsel"), or other counsel satisfactory to the
Agent, dated the date of filing with the Commission of such amendment,
supplement or other document and the date of effectiveness of such amendment, as
the case may be, in form and substance satisfactory to the Agent, of the same
tenor as the opinion referred to in Section 5(d) hereof, but modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such opinion.
(m) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented to include additional amended financial information
or there is filed with the Commission any document incorporated by reference
into the Prospectus which contains additional amended financial information, the
Company shall cause PricewaterhouseCoopers LLP, or other independent accountants
satisfactory to the Agent, forthwith to furnish the Agent a letter, dated the
date of effectiveness of such amendment, or the date of filing of such
supplement or other document with the Commission, as the case may be, in form
satisfactory to the Agent, of the same tenor as the letter referred to in
Section 5(e) hereof but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.
(n) Each time that the Registration Statement or the Prospectus shall
be amended or supplemented to include additional amended reserve information or
there is filed with the Commission any document incorporated by reference into
the Prospectus which contains additional amended reserve information, the
Company shall cause its chief petroleum engineer, or another engineer of the
Company satisfactory to the Agent, forthwith to furnish the Agent a certificate,
dated the date of effectiveness of such amendment, or the date of filing of such
supplement or other document with the Commission, as the case may be, in form
satisfactory to the Agent, of the same tenor as the certificate referred to in
Section 5(f) hereof but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letter.
(o) The Company hereby consents to the Agent trading in the Company's
Common Stock for its own account on the same side of the market and at the same
time as the Company's sales pursuant to this Agreement.
(p) The Company will not, directly or indirectly, (i) take any action
designed to cause or result in, or that constitutes or might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
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Shares or (ii) sell, bid for, purchase, or pay anyone any compensation for
soliciting purchases of the Shares other than the Agent.
SECTION 5. Conditions of Agent's Obligations. The obligations of the
Agent to sell the Shares as provided herein shall be subject to the accuracy, as
of the date hereof and as of each Closing Date, of the representations and
warranties of the Company herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall have been instituted or, to the
knowledge of the Company, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise) shall have been complied with to the
Agent's reasonable satisfaction.
(b) The Agent shall not have advised the Company that the Registration
Statement or Prospectus, or any amendment or supplement thereto, contains an
untrue statement of fact that in the Agent's reasonable opinion is material, or
omits to state a fact that in the Agent's reasonable opinion is material and is
required to be stated therein or is necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there shall not have been any material change, on a
consolidated basis, in the capital stock of the Company and its subsidiaries, or
any material adverse change, or any development that may reasonably be expected
to cause a material adverse change, in the condition (financial or other),
business, prospects, net worth or results of operations of the Company and its
subsidiaries, or a downgrading in or withdrawal of the rating assigned to any of
the Company's securities by any rating organization, and no rating organization
shall have publicly announced that it has under surveillance or review its
rating of any of the Company's securities.
(d) The Agent shall have received on the date hereof and at every other
date specified in Section 4(l) hereof, opinions of Company Counsel, dated as of
such dates, respectively, substantially to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has full corporate power and
authority to conduct its business as described in the Registration
Statement and Prospectus;
(ii) [Each "significant subsidiary" of the Company (as such
term is defined in Rule 1-02 of Regulation S-X under the Act) has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and to conduct its business as presently conducted; and, except for
directors' qualifying shares and as otherwise set forth in the
Prospectus, all of the issued and outstanding shares of capital stock
of each significant subsidiary have been duly authorized and are
validly issued, fully paid and non-assessable and, to such counsel's
knowledge, are owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity] [To such counsel's knowledge, the Company
has no "significant subsidiaries" (as such term is defined in Rule 1-02
of Regulation S-X under the Act)];
(iii) The Shares have been duly and validly authorized, and,
when issued and delivered to and paid for by the purchasers thereof
pursuant to this Agreement, will be fully paid and nonassessable and
conform in all material respects to the description
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thereof in the Prospectus and the stockholders of the Company have no
preemptive rights with respect to the Shares;
(iv) The Registration Statement has become effective under the
Act and has registered under the Act the offer and sale of the Shares
in the manner contemplated by this Agreement; to the knowledge of such
counsel no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission;
(v) The Registration Statement, when it became effective, and
the Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission (and at each Closing Date on or
prior to the date of the opinion), complied as to form in all material
respects with the requirements of the Act and the Rules and
Regulations; and the documents incorporated by reference in the
Registration Statement or Prospectus or any amendment or supplement
thereto, when filed with the Commission under the Exchange Act,
complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder;
(vi) The description in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents are accurate in all material respects and fairly
present the information required to be shown; and such counsel do not
know of any statutes or legal or governmental proceedings required to
be described in the Prospectus that are not described as required, or
of any contracts or documents of a character required to be described
in the Registration Statement or Prospectus (or required to be filed
under the Exchange Act if upon such filing they would be incorporated
by reference therein) or to be filed as exhibits to the Registration
Statement that are not described and filed as required;
(vii) The statements set forth in the Prospectus under the
caption "Description of Capital Stock," insofar as they purport to
constitute a summary of the terms of the Shares, and under the caption
"Plan of Distribution," insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate
in all material respects;
(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The execution, delivery and performance of this Agreement
by the Company and the consummation of the transactions contemplated
herein by the Company do not and will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which it
is bound or to which any of the property of the Company or any of its
subsidiaries is subject except for such breaches or defaults that would
not in the aggregate have a material adverse effect on the Company's
ability to perform its obligations under this Agreement or on the
condition, financial or otherwise, or the earnings, business affairs or
business
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prospects of the Company and its subsidiaries considered as one
enterprise, nor will such action result in the violation of the
Company's charter or by-laws, or any statute, order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any
of its properties (except that such counsel need express no opinion
with respect to federal or state securities or Blue Sky laws); and no
consent, approval, authorization or order of, or filing with, any court
or governmental agency or regulatory body is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Shares by the Company,
except such as have been obtained under the Act and such as may be
required under state securities or blue sky laws in connection with the
sale and distribution of the Shares by the Agent;
(x) The Rights Agreement has been duly authorized, executed
and delivered by the Company; Rights issued and issuable under the
Rights Agreement have been duly authorized by the Company; each
outstanding share of Common Stock is associated with and entitled to
one duly authorized and issued Right; and, when the Common Stock to be
sold by the Company hereunder is issued, each such share will be
associated with and entitled to one duly authorized and issued Right;
and
(xi) To such counsel's knowledge and other than as set forth
in the Prospectus, there are no actions, suits or proceedings pending
or threatened against or affecting the Company or any of its
subsidiaries or the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company or any
of its subsidiaries, or any of their respective officers in their
capacities as such, before or by any Federal or state or foreign court,
commission, regulatory body, wherein an unfavorable ruling, decision or
finding might materially and adversely affect the Company or any of its
subsidiaries or its business, properties, business prospects, condition
(financial or otherwise) or results of operations.
In addition, such counsel shall state that such counsel has no reason
to believe that either the Registration Statement, at the time it (including
each Post-Effective Amendment thereto) became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Prospectus and any amendments or supplements thereto, on the date of
such opinion and at each Filing Date on or prior to the date of the opinion,
included an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements and related
schedules or other financial data or information of a reserve engineering nature
included in any of the documents mentioned in this paragraph.
(e) On the date hereof and at such other dates specified in Section
4(m) hereof, the Agent shall have received a letter from PricewaterhouseCoopers
LLP, independent public accountants for the Company, or other independent
accountants satisfactory to the Agent, dated the date of delivery thereof,
substantially in the form attached hereto as Annex I and otherwise in form and
substance satisfactory to Agent.
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(f) On the date hereof and at such other dates specified in Section
4(n) hereof, the Agent shall have received a certificate of the chief petroleum
engineer of the Company, dated as of each such date, to the effect that, after
reasonable investigation, nothing has come to his attention since the date of
the preparation of the estimates of the Company's proved reserves included or
incorporated by reference in the Registration Statement that would cause him to
believe that such estimates in the aggregate were materially incorrect as of
such date.
(g) The Agent shall have received from the Company a certificate, or
certificates, signed by the Chairman of the Board, the President or a Vice
President and by the principal financial or accounting officer of the Company,
dated as of the date hereof and dated as of each Filing Date contemplated by
this Agreement, to the effect that, to their knowledge based upon reasonable
investigation:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made at and as of the date hereof
or the Filing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the date hereof and each such Filing Date
(as the case may be);
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been instituted or, to the knowledge of such officer after
due inquiry, is threatened, by the Commission;
(iii) Since the date of this Agreement there has occurred no
event required to be set forth in an amendment or supplement to the
Registration Statement or Prospectus that has not been so set forth and
there has been no document required to be filed under the Exchange Act
and the rules and regulations of the Commission thereunder that upon
such filing would be deemed to be incorporated by reference in the
Prospectus that has not been so filed; and
(iv) (A) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
loss or interference with the business of the Company and its
subsidiaries, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus that has had or
could reasonably be expected to have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise and (B) since the respective dates as of which
information is given in the Prospectus, there has not been any material
adverse change, on a consolidated basis, in the business, financial
condition or results of operations of the Company and its subsidiaries
considered as one enterprise which has not been described in an
amendment or supplement to the Registration Statement or Prospectus
(directly or by incorporation).
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(h) The Shares shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange.
(i) On the date hereof and on each Filing Date, the Company shall have
furnished to the Agent such appropriate further information, certificates and
documents as the Agent may reasonably request.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to the Agent. The Company will furnish the Agent with such conformed
copies of such opinions, certificates, letters and other documents as the Agent
shall reasonably request.
SECTION 6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Agent, the
directors, officers, employees and agents of the Agent and each person, if any,
who controls the Agent within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, from and against any and all losses, claims, liabilities,
expenses and damages (including, but not limited to, any and all investigative,
legal and other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding between any of the
indemnified parties and any indemnifying parties or between any indemnified
party and any third party, or otherwise, or any claim asserted), as and when
incurred, to which the Agent, or any such person, may become subject under the
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities, expenses
or damages arise out of or are based on (i) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or in any application or other
document executed by or on behalf of the Company or based on written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities laws thereof or filed with the
Commission, (ii) the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading or (iii) any breach by any of the indemnifying parties of any
of their respective representations, warranties and agreements contained in this
Agreement, or (iv) the engagement of the Agent pursuant to, and the performance
by the Agent of the services contemplated by, this Agreement; provided that this
indemnity agreement shall not apply to the extent that such loss, claim,
liability, expense or damage (1) arises from the sale of the Shares pursuant to
this Agreement and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to the Agent furnished in writing to the Company by the Agent expressly
for inclusion in any document described in clause (a)(i) above, or (2) is found
in a final judgment by a court of competent jurisdiction to have resulted from
the bad faith, willful misconduct or gross negligence of the Agent or the
reckless disregard by the Agent of its duties and obligations hereunder. This
indemnity agreement will be in addition to any liability that the Company might
otherwise have.
(b) The Agent agrees to indemnify and hold harmless the Company and its
directors and each officer of the Company who signed the Registration Statement,
and each person, if any,
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who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendments thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information relating to the Agent furnished to the Company by the Agent
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Any party that proposes to assert the right to be indemnified under
this Section 6 will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve the indemnifying party from (i) any liability that it might have to any
indemnified party otherwise than under this Section 6 and (ii) any liability
that it may have to any indemnified party under the foregoing provision of this
Section 6 unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against any indemnified party and it notifies the
indemnifying party of its commencement, the indemnifying party will be entitled
to participate in and, to the extent that it elects by delivering written notice
to the indemnified party promptly after receiving notice of the commencement of
the action from the indemnified party, jointly with any other indemnifying party
similarly notified, to assume the defense of the action, with counsel reasonably
satisfactory to the indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in connection with
the defense. The indemnified party will have the right to employ its own counsel
in any such action, but the fees, expenses and other charges of such counsel
will be at the expense of such indemnified party unless (1) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) a conflict or potential conflict exists (based on
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (3) the indemnifying party has not in fact employed counsel to assume the
defense of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which
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consent will not be unreasonably withheld). No indemnifying party shall, without
the prior written consent of each indemnified party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action
or proceeding relating to the matters contemplated by this Section 6 (whether or
not any indemnified party is a party thereto), unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising or that may arise out of such claim, action or
proceeding. Notwithstanding any other provision of this Section 6 (c), if at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement; provided
that an indemnifying party shall not be liable for any such settlement effected
without its consent if such indemnifying party, prior to the date of such
settlement, (1) reimburses such indemnified party in accordance with such
request for the amount of such fees and expenses of counsel as the indemnifying
party believes in good faith to be reasonable and (2) provides written notice to
the indemnified party that the indemnifying party disputes in good faith the
reasonableness of the unpaid balance of such fees and expenses.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Agent, the Company
and the Agent will contribute to the total losses, claims, liabilities, expenses
and damages (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Agent, such as persons who
control the Company within the meaning of the Act, officers of the Company who
signed the Registration Statement and directors of the Company, who also may be
liable for contribution) to which the Company and any one or more of the Agent
may be subject in such proportion as shall be appropriate to reflect the
relative benefits received by the Company on the one hand and the Agent on the
other. The relative benefits received by the Company on the one hand and the
Agent on the other hand shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received by the
Company bear to the total compensation (before deducting expenses) received by
the Agent from the sale of Shares on behalf of the Company. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Agent, on the other, with respect to the statements or omission which
resulted in such loss, claim, liability, expense or damage, or action in respect
thereof, as well as any other relevant equitable considerations with respect to
such offering. Such relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Agent, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and
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the Agent agree that it would not be just and equitable if contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed to
include, for the purpose of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the foregoing provisions
of this Section 6(d), the Agent shall not be required to contribute any amount
in excess of the commissions received by it under this Agreement and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 6(d),
any person who controls a party to this Agreement within the meaning of the Act,
and any officers, directors, employees or agents of the Agent, will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve that
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). Except for a settlement entered
into pursuant to the last sentence of Section 6(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section
6 and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Agent, (ii) acceptance of the
Shares and payment therefore or (iii) any termination of this Agreement.
SECTION 7. Representations and Agreements to Survive Delivery. All
representations, warranties and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the Agent
contained in Section 6 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Agent or any
controlling persons, or the Company (or any of their officers, directors or
controlling persons), and shall survive delivery of and payment for the Shares.
SECTION 8. Termination.
(a) The Agent shall have the right by giving notice as hereinafter
specified at any time at or prior to any Closing Date, to terminate this
Agreement if (i) any material adverse change, or any development that has
actually occurred and that is reasonably expected to cause a material adverse
change, in the business, financial condition or results of operations of the
Company and its subsidiaries has occurred which, in the judgment of such Agent,
materially impairs the investment quality of the Shares, (ii) the Company shall
have failed, refused or been unable, at or prior to the Closing Date, to perform
any agreement on its part to be performed hereunder, (iii) any other condition
of the Agent's obligations hereunder is not fulfilled, (iv) any
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suspension or limitation of trading in the Shares or in securities generally on
the NYSE, or any setting of minimum prices for trading of the Shares or in
securities generally on such exchange, shall have occurred, (v) any banking
moratorium shall have been declared by Federal or New York authorities or (vi)
an outbreak or material escalation of major hostilities in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in the
judgment of the Agent, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Shares to be sold by the Agent on
behalf of the Company. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 4(g), Section 6
and Section 7 hereof shall remain in full force and effect notwithstanding such
termination. If the Agent elects to terminate this Agreement as provided in this
Section, the Agent shall provide the required notice as specified herein.
(b) The Company shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time on or
after the first anniversary of the date of this Agreement. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(g), Section 6 and Section 7 hereof shall remain in full
force and effect notwithstanding such termination.
(c) The Agent shall have the right, by giving notice as hereinafter
specified, to terminate this Agreement in its sole discretion at any time. Any
such termination shall be without liability of any party to any other party
except that the provisions of Section 4(g), Section 6 and Section 7 hereof shall
remain in full force and effect notwithstanding such termination.
(d) This Agreement shall remain in full force and effect unless
terminated pursuant to Sections 8(a), (b) or (c) above or otherwise by mutual
agreement of the parties; provided that any such termination by mutual agreement
shall in all cases be deemed to provide that Section 4(g), Section 6 and Section
7 shall remain in full force and effect.
(e) Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Agent or the Company, as the case may be. If such termination
shall occur prior to the Closing Date for any sale of Shares, such Shares shall
settle in accordance with the provisions of the second to last paragraph of
Section 3 hereof.
SECTION 9. Notices. All notices or communications hereunder shall be in
writing and if sent to the Agent shall be mailed, delivered, telexed or
telecopied and confirmed to the Agent at PaineWebber Incorporated, 0000 Xxxxxx
xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, telecopy no. (000) 000-0000,
Attention: Corporate Finance Department, or if sent to the Company, shall be
mailed, delivered, telexed or telecopied and confirmed to the Company at 000 X.
Xxx Xxxxxxx Xxxxxxx X., Xxxxx 0000, Xxxxxxx, Xxxxx 00000, telecopy no. (281)
847-6006, attention: Xx. Xxxxx X. Xxxxxxx, Secretary. Each party to this
Agreement may change such address for notices by sending to the parties to this
Agreement written notice of a new address for such purpose.
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SECTION 10. Parties. This Agreement shall inure to the benefit of and
be binding upon the Company and the Agent and their respective successors and
the controlling persons, officers and directors referred to in Section 6 hereof,
and no other person will have any right or obligation hereunder.
SECTION 11. Adjustments for Stock Splits. The parties acknowledge and
agree that all share related numbers contained in this Agreement (including,
without limitation, the Maximum Amount) shall be adjusted to take into account
any stock split effected with respect to the Shares.
SECTION 12. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all other prior and contemporaneous agreements and
undertakings, both written and oral, among the parties hereto with regard to the
subject matter hereof.
SECTION 13. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 14. Waiver of Jury Trial. The Company and the Agent each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this agreement or any transaction
contemplated hereby.
SECTION 15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
If the foregoing correctly sets forth the understanding between the
Company and the Agent, please so indicate in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company and the Agent. Alternatively, the execution of this Agreement by the
Company and its acceptance by or on behalf of the Agent may be evidenced by an
exchange of telegraphic or other written communications.
Very truly yours,
NEWFIELD EXPLORATION COMPANY
By:
--------------------------------
Name:
Title:
ACCEPTED as of the date
first above written
PAINEWEBBER INCORPORATED
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By:
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Name:
Title:
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ANNEX I
[Form of Letter from Accountants]
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