EXHIBIT 1.1
MISSION RESOURCES CORPORATION
$125,000,000
10 7/8% Senior Subordinated Notes due 2007 Series B
PURCHASE AGREEMENT
------------------
May 23, 2001
X.X. XXXXXX SECURITIES INC.
XXXXXXX LYNCH, PIERCE,
XXXXXX & XXXXX INCORPORATED
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Mission Resources Corporation (formerly Bellwether Exploration
Company), a Delaware corporation, (the "Company"), proposes to issue and sell
-------
$125,000,000 aggregate principal amount of its 10 7/8% Senior Subordinated Notes
due 2007 Series B (together with the Guarantees (as defined below), the
"Securities"). The Securities will be issued pursuant to an Indenture to be
----------
dated as of May 29, 2001 (the "Indenture") between the Company, the subsidiaries
---------
of the Company listed on Schedule 1 hereto (each a "Guarantor" and together, the
---------
"Guarantors") and Bank of New York, as trustee (the "Trustee"). The Securities
---------- -------
will be guaranteed by guarantees (the "Guarantees", and each a "Guarantee") of
---------- ---------
each of the Guarantors. The Company hereby confirms its agreement with X.X.
Xxxxxx Securities Inc. ("JPMorgan") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
--------
Incorporated (together with JPMorgan, the "Initial Purchasers") concerning the
------------------
purchase of the Securities from the Company by the Initial Purchasers.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Offering Memorandum.
The Securities will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company will
--------------
prepare an offering memorandum dated the date hereof (the "Offering Memorandum")
-------------------
setting forth information concerning the Company and the Securities. Copies of
the Offering Memorandum will be delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement. Any references herein to
the Offering Memorandum shall be deemed to include all amendments and
supplements thereto, unless otherwise noted. The Company hereby confirms that
it has authorized the use of the Offering Memorandum in connection with the
offering and resale of the Securities by the Initial Purchasers in accordance
with Section 2.
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights
2
Agreement, substantially in the form attached hereto as Annex A (the
"Registration Rights Agreement"), pursuant to which the Company will agree to
-----------------------------
file with the Securities and Exchange Commission (the "Commission") a
----------
registration statement under the Securities Act (the "Exchange Offer
--------------
Registration Statement") registering an issue of senior subordinated notes of
----------------------
the Company and guarantees of each of the Guarantors (the "Exchange Securities")
-------------------
which are identical in all material respects to the Securities (except that the
Exchange Securities will not contain terms with respect to transfer
restrictions) and under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
------------------
Statement").
---------
1. Representations, Warranties and Agreements of the Company and the
-----------------------------------------------------------------
Guarantors. The Company and the Guarantors jointly and severally represent and
----------
warrant to, and agree with, the several Initial Purchasers on and as of the date
hereof and the Closing Date (as defined in Section 3) that:
(a) The Offering Memorandum, as of its date, did not, and on the
Closing Date the Offering Memorandum will not, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided
--------
that the Company and the Guarantors make no representation or warranty as
to information contained in or omitted from the Offering Memorandum in
reliance upon and in conformity with written information relating to the
Initial Purchasers furnished to the Company by or on behalf of any Initial
Purchaser specifically for use therein as specified in Section 15 hereof
(the "Initial Purchasers' Information").
-------------------------------
(b) The Offering Memorandum, as of its date, contains all of the
information that, if requested by a prospective purchaser of the
Securities, would be required to be provided to such prospective purchaser
pursuant to Rule 144A(d)(4) under the Securities Act.
(c) Assuming the accuracy of the representations and warranties of
the Initial Purchasers contained in Section 2 and their compliance with the
agreements set forth therein, it is not necessary, in connection with the
issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in
the manner contemplated by this Agreement and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
-----
Indenture Act").
-------------
(d) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are duly
qualified to do business and are in good standing as foreign corporations
in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification, and have all power and authority necessary to own or hold
their respective properties and to conduct the businesses in which they are
engaged, except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), results of
operations, business or
3
prospects of the Company and its subsidiaries taken as a whole (a "Material
--------
Adverse Effect").
--------------
(e) The Company will, on the Closing Date, have an authorized
capitalization as set forth in the Offering Memorandum under the heading
"Capitalization"; and all of the outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable. All of the outstanding 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 or indirectly by
the Company, free and clear of any lien, charge, encumbrance, security
interest, restriction upon voting or transfer or any other claim of any
third party.
(f) The Company and each of the Guarantors has full right, power and
authority to execute and deliver this Agreement, the Indenture (including
the Guarantees set forth therein), the Registration Rights Agreement and
the Securities (as defined in Section 15) (collectively, the "Transaction
-----------
Documents") and to perform its obligations hereunder and thereunder; and
---------
all corporate action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents
and the consummation of the transactions contemplated thereby will have
been duly and validly taken.
(g) This Agreement has been duly authorized, executed and delivered
by the Company and each of the Guarantors and constitutes a valid and
legally binding agreement of the Company and each of the Guarantors.
(h) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law) and federal policies with respect to
indemnifications therein.
(i) The Indenture has been duly authorized by the Company and each of
the Guarantors and, when duly executed and delivered in accordance with its
terms by each of the parties thereto, will constitute a valid and legally
binding agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its
terms, except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and
by general equitable principles (whether considered in a proceeding in
equity or at law). On the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and the
rules and regulations of the Commission applicable to an indenture which is
qualified thereunder.
4
(j) The Securities have been duly authorized by the Company and, when
duly executed, authenticated, issued and delivered as provided in the
Indenture (assuming the Indenture is the valid and legally binding
obligation of the Trustee and due authentication of the Securities by the
Trustee) and paid for as provided herein, will be duly and validly issued
and outstanding and will constitute valid and legally binding obligations
of the Company, as issuer, and each of the Guarantors, as guarantors,
entitled to the benefits of the Indenture and enforceable against the
Company, as issuer, and each of the Guarantors, as guarantors, in
accordance with their terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(k) Each of the guarantors that, as of the date of the Guarantees, is
a guarantor of the $100,000,000 10 7/8% Senior Subordinated Notes due 2007
issued by the Company on April 9, 1997 is also a Guarantor of the
Securities. The Guarantees have been duly authorized by each of the
Guarantors and, when the Securities have been duly executed, authenticated,
issued and delivered as provided in the Indenture and paid for as provided
herein (assuming due authorization, execution and delivery of the Indenture
by the Trustee and due authentication of the Securities by the Trustee),
will constitute valid and legally binding obligations of each of the
Guarantors, enforceable against the Guarantors in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and to general equitable principles (whether considered in
a proceeding in equity or at law).
(l) The Exchange Securities have been duly authorized by the Company
and the related guarantees have been duly authorized by each of the
Guarantors and, when duly executed, authenticated, issued and delivered as
provided in the Indenture and the Registration Rights Agreement (assuming
the Indenture is the valid and legally binding obligation of the Trustee)
will constitute a valid and legally binding obligation of the Company, as
issuer, and each of the Guarantors, as guarantors, enforceable against the
Company, as issuer, and each of the Guarantors, as guarantors, in
accordance with its terms, except to the extent that such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and by general equitable principles (whether considered in
a proceeding in equity or at law).
(m) Each of the Transaction Documents not referred to in the
preceding clauses (g) through (l) has been duly authorized by the Company
and, when duly executed and delivered in accordance with their terms by
each of the parties thereto will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and to general equitable principles (whether considered in
a proceeding in equity or at law).
5
(n) Each Transaction Document conforms in all material respects to
the description thereof contained in the Offering Memorandum.
(o) The execution, delivery and performance by the Company and each
of the Guarantors of each of the Transaction Documents to which it is a
party, the issuance, authentication, sale and delivery of the Securities
and compliance by the Company and each of the Guarantors with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any material indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute or any judgment, order,
decree, rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties or assets; and no consent,
approval, authorization or order of, or filing or registration with, any
such court or arbitrator or governmental agency or body under any such
statute, judgment, order, decree, rule or regulation is required for the
execution, delivery and performance by the Company and each of the
Guarantors of each of the Transaction Documents to which each is a party,
the issuance, authentication, sale and delivery of the Securities and
compliance by the Company and each of the Guarantors with the terms thereof
and the consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations, filings,
registrations or qualifications which shall have been obtained or made
prior to the Closing Date and as may be required to be obtained or made
under the Securities Act and applicable state securities laws as provided
in the Registration Rights Agreement.
(p) KPMG LLP are independent certified public accountants with
respect to the Company and its subsidiaries (i) as required by the
Securities Act and the rules and regulations of the Commission thereunder
and (ii) within the meaning of Rule 101 of the Code of Professional Conduct
of the American Institute of Certified Public Accountants ("AICPA") and its
-----
interpretations and rulings thereunder. PricewaterhouseCoopers are
independent certified public accountants with respect to Xxxxx and its
subsidiaries (i) as required by the Securities Act and the rules and
regulations of the Commission thereunder and (ii) within the meaning of
Rule 101 of the Code of Professional Conduct of the AICPA and its
interpretations and rulings thereunder. The historical financial statements
(including the related notes) contained in the Offering Memorandum comply
as to form in all material respects with the requirements applicable to a
registration statement on Form S-1 under the Securities Act (except that
certain supporting schedules are omitted); such financial statements have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present the financial position of the entities purported to be covered
thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated; and
the financial information contained in the
6
Offering Memorandum under the headings "Summary--Summary Historical and Pro
Forma Financial Information", "Capitalization", "Selected Historical
Consolidated Financial and Other Data - Bellwether" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
are derived from the accounting records of the Company and its subsidiaries
and fairly present the information purported to be shown thereby. The pro
forma financial information contained in the Offering Memorandum has been
prepared on a basis consistent with the historical financial statements
contained in the Offering Memorandum (except for the pro forma adjustments
specified therein), includes all material adjustments to the historical
financial information required by Rule 11-02 of Regulation S-X under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act") to reflect the transactions described in the Offering
Memorandum, gives effect to assumptions made on a reasonable basis and
fairly presents the historical and proposed transactions contemplated by
the Offering Memorandum and the Transaction Documents. The other historical
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, fairly presented.
(q) There are no legal or governmental proceedings pending to which
the Company (including any predecessor entity) or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, could
reasonably be expected to have a Material Adverse Effect, and to the best
knowledge of the Company, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(r) No action has been taken and no statute, rule, regulation or
order has been enacted, adopted or issued by any governmental agency or
body which prevents the issuance of the Securities or suspends the sale of
the Securities in any jurisdiction; no injunction, restraining order or
order of any nature by any federal or state court of competent jurisdiction
has been issued with respect to the Company or any of its subsidiaries
which would prevent or suspend the issuance or sale of the Securities or
the use of the Offering Memorandum in any jurisdiction; no action, suit or
proceeding is pending against or, to the best knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries
before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to
interfere with or adversely affect the issuance of the Securities or in any
manner draw into question the validity or enforceability of any of the
Transaction Documents or any action taken or to be taken pursuant thereto;
and the Company has complied with any and all requests by any securities
authority in any jurisdiction for additional information to be included in
the Offering Memorandum.
(s) Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws (or other comparable organizational
documents), (ii) in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of trust,
loan agreement or other material agreement or instrument to which it is a
party or by which it is bound or to which any of its property or assets is
subject or (iii) in violation in any material respect of
7
any law, ordinance, governmental rule, regulation or court decree to which
it or its property or assets may be subject.
(t) The Company and each of its subsidiaries possess all material
licenses, certificates, authorizations and permits issued by, and have made
all declarations and filings with, the appropriate federal, state or
foreign regulatory agencies or bodies which are necessary or desirable for
the ownership of their respective properties or the conduct of their
respective businesses as described in the Offering Memorandum, except where
the failure to possess or make the same would not, singularly or in the
aggregate, have a Material Adverse Effect, and neither the Company nor any
of its subsidiaries has received notification of any revocation or
modification of any such license, certificate, authorization or permit or
has any reason to believe that any such license, certificate, authorization
or permit will not be renewed in the ordinary course.
(u) The Company and each of its subsidiaries have filed all federal,
state, local and foreign income and franchise tax returns required to be
filed through the date hereof and have paid all taxes due thereon, and no
tax deficiency has been determined adversely to the Company or any of its
subsidiaries which has had (nor does the Company or any of its subsidiaries
have any knowledge of any tax deficiency which, if determined adversely to
the Company or any of its subsidiaries, could reasonably be expected to
have) a Material Adverse Effect.
(v) Neither the Company nor any of its subsidiaries is an "investment
company" or a company "controlled by" an investment company within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
----------
Company Act"), and the rules and regulations of the Commission thereunder
-----------
or a "holding company" or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(w) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(x) The Company and each of its subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
standard in the oil and gas industry for similarly situated companies.
Neither the Company nor any of its subsidiaries has received notice from
any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such
insurance.
8
(y) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, licenses and know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of their
respective businesses; and the conduct of their respective businesses will
not conflict in any material respect with, and the Company and its
subsidiaries have not received any notice of any claim of conflict with,
any such rights of others.
(z) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property which are material to the business of
the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except such as
do not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or could not reasonably
be expected to have a Material Adverse Effect.
(aa) No labor disturbance by or dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the
Company, is contemplated or threatened.
(bb) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section
-----
4975 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code")) or accumulated funding deficiency" (as defined in Section 302
----
of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred with respect to any
employee benefit plan of the Company or any of its subsidiaries which could
reasonably be expected to have a Material Adverse Effect; each such
employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company and each of its
subsidiaries have not incurred and do not expect to incur liability under
Title IV of ERISA with respect to the termination of, or withdrawal from,
any pension plan for which the Company or any of its subsidiaries would
have any liability; and each such pension plan that is intended to be
qualified under Section 401(a) of the Code is so qualified in all material
respects and nothing has occurred, whether by action or by failure to act,
which could reasonably be expected to cause the loss of such qualification.
(cc) 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 and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to
9
receive required permits, licenses or other approvals, or liability would
not, individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(dd) Neither the Company nor any of its subsidiaries nor, to the best
knowledge of the Company, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity, made any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds; violated or
is in violation of any provisions of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(ee) On and immediately after the Closing Date, the Company and each
of the Guarantors (after giving effect to the issuance of the Securities
and to the other transactions related thereto as described in the Offering
Memorandum) will be Solvent. As used in this paragraph, the term "Solvent"
means, with respect to a particular date, that on such date the present
fair market value (or present fair saleable value) of the assets of the
Company or such Guarantor, as the case may be, is not less than the total
amount required to pay the probable liabilities of the Company or such
Guarantor on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured, the Company or such
Guarantor is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business, assuming the sale of the
Securities as contemplated by this Agreement and the Offering Memorandum,
the Company or such Guarantor is not incurring debts or liabilities beyond
its ability to pay as such debts and liabilities mature and the Company or
such Guarantor is not engaged in any business or transaction, and is not
about to engage in any business or transaction, for which its property
would constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which the Company is engaged.
In computing the amount of such contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in the
light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
(ff) Neither the Company nor Xxxxx nor any of their respective
subsidiaries owns any "margin securities" as that term is defined in
Regulations T and U of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), and the offer, issuance, sale of the
---------------------
Securities and the application of the net proceeds therefrom will not
violate Regulations T, U or X of the Federal Reserve Board.
(gg) Except for this Agreement, neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding with
any person that would give rise to a valid claim against the Company or the
Initial Purchasers for a brokerage commission, finder's fee or like payment
in connection with the offering and sale of the Securities.
10
(hh) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ii) Neither the Company nor any of its affiliates or any person
acting on its or their behalf has engaged or will engage in any directed
selling efforts (as such term is defined in Regulation S under the
Securities Act ("Regulation S")), and all such persons have complied and
------------
will comply with the offering restrictions requirement of Regulation S to
the extent applicable.
(jj) Neither the Company nor any of its affiliates has, directly or
through any agent, sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined
in the Securities Act), which is or will be integrated with the sale of the
Securities in a manner that would require registration of the Securities
under the Securities Act.
(kk) Neither the Company nor any of its affiliates or any other person
acting on its or their behalf has engaged, in connection with the offering
of the Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(ll) Neither the Company nor any of its affiliates has taken and none
of them will take, directly or indirectly, any action prohibited by
Regulation M under the Exchange Act in connection with the offering of the
Securities.
(mm) No forward-looking statement (within the meaning of Section 27A
of the Securities Act and Section 21E of the Exchange Act) contained in the
Offering Memorandum has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith.
(nn) Neither the Company nor any of its subsidiaries does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Florida Statutes Section 517.075.
(oo) Since the date as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change or any development involving a prospective material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, management or business prospects of the
Company, whether or not arising in the ordinary course of business, (ii)
neither the Company nor any of its subsidiaries has incurred any material
liability or obligation, direct or contingent, other than in the ordinary
course of business, (iii) neither the Company nor any of its subsidiaries
has entered into any material transaction other than in the ordinary course
of business and (iv) there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, or any dividend
or distribution of any kind declared, paid or made by the Company on any
class of its capital stock, or any redemption in respect thereof.
(pp) The oil and gas reserve estimates of the Company, Xxxxx and the
Company's subsidiaries contained in the Offering Memorandum have been
prepared or
11
reviewed by independent petroleum consultants as set forth in the Offering
Memorandum, in each case in accordance with the Commission guidelines
applied on a consistent basis throughout the periods involved, and neither
the Company nor any of its subsidiaries has any reason to believe that such
estimates do not fairly reflect the oil and gas reserves of the Company,
Xxxxx and their respective subsidiaries at the dates indicated in the
Offering Memorandum.
(qq) Xxxxx Xxxxx Company, Petroleum Engineers are independent
petroleum engineers with respect to the Company.
(rr) Each of Netherland Xxxxxx & Associates, Inc. and X.X. Xxxxx &
Company (i) are independent petroleum engineers with respect to the Company
and (ii) prior to the merger of Bellwether Exploration Company and Xxxxx,
were independent petroleum engineers with respect to Xxxxx.
2. Purchase and Resale of the Securities. (a) On the basis of the
-------------------------------------
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Company agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the principal amount of Securities set forth opposite the name of such
Initial Purchaser on Schedule 2 hereto at a purchase price equal to 99.21625 %
of the principal amount thereof. The Company shall not be obligated to deliver
any of the Securities except upon payment for all of the Securities to be
purchased as provided herein.
(b) The Initial Purchasers have advised the Company that they propose
to offer the Securities for resale upon the terms and subject to the conditions
set forth herein and in the Offering Memorandum. Each Initial Purchaser,
severally and not jointly, represents, warrants to and agrees with the Company
that (i) it is purchasing the Securities pursuant to a private sale exempt from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D") or in any manner involving a public offering within the meaning
------------
of Section 4(2) of the Securities Act and (iii) it has solicited and will
solicit offers for the Securities only from, and has offered or sold and will
offer, sell or deliver the Securities, as part of their initial offering, only
(A) within the United States to persons whom it reasonably believes to be
qualified institutional buyers ("Qualified Institutional Buyers"), as defined in
------------------------------
Rule 144A under the Securities Act ("Rule 144A"), or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each case,
---------
in transactions in accordance with Rule 144A and (B) outside the United States
to persons other than U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").
------------
(c) In connection with the offer and sale of Securities in reliance
on Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
12
(i) the Securities have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from,
or in transactions not subject to, the registration requirements of the
Securities Act.
(ii) such Initial Purchaser has offered and sold the Securities, and
will offer and sell the Securities, (A) as part of its distribution at any
time and (B) otherwise until 40 days after the later of the commencement of
the offering of the Securities and the Closing Date, only in accordance
with Regulation S or Rule 144A or any other available exemption from
registration under the Securities Act.
(iii) none of such Initial Purchaser or any of its affiliates or any
other person acting on its or their behalf has engaged or will engage in
any directed selling efforts (as such term is defined in Regulation S) with
respect to the Securities, and all such persons have complied and will
comply with the offering restrictions requirement of Regulation S.
(iv) at or prior to the confirmation of sale of any Securities sold
in reliance on Regulation S, it will have sent to each distributor, dealer
or other person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933, as amended (the "Securities
----------
Act"), and may not be offered or sold within the United States
---
or to, or for the account or benefit of U.S. persons (i) as part
of their distribution at any time or (ii) otherwise until 40
days after the later of the commencement of the offering of the
Securities and the date of original issuance of the Securities,
except in accordance with Regulation S or Rule 144A or any other
available exemption from registration under the Securities Act.
Terms used above have the meanings given to them by Regulation
S."
(v) it has not and will not enter into any contractual arrangement
with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the
Company.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and prior to the date
six months after the Closing Date will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 and the Public Offers
of Securities Regulations 1995 with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom; and (iii)
it has only issued or passed on and
13
will only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(e) Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Company and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 5(d) and (e), counsel for the Company and for the Initial Purchasers,
respectively, may rely upon the accuracy of the representations and warranties
of the Initial Purchasers and their compliance with their agreements contained
in this Section 2, and each Initial Purchaser hereby consents to such reliance.
(f) The Company acknowledges and agrees that the Initial Purchasers
may sell Securities to any affiliate of an Initial Purchaser and that any such
affiliate may sell Securities purchased by it to an Initial Purchaser.
3. Delivery of and Payment for the Securities. (a) Delivery of and
------------------------------------------
payment for the Securities shall be made at the offices of Xxxxxxx Xxxxxxx &
Xxxxxxxx, 425 Lexington Ave., New York, New York, or at such other place as
shall be agreed upon by the Initial Purchasers and the Company, at 10:00 A.M.,
New York City time, on May 29, 2001, or at such other time or date, not later
than seven full business days thereafter, as shall be agreed upon by the Initial
Purchasers and the Company (such date and time of payment and delivery being
referred to herein as the "Closing Date").
------------
(b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of same-
day funds to such account or accounts as the Company shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Initial Purchasers of the certificates
evidencing the Securities. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of the Initial Purchasers hereunder. Upon delivery, the
Securities shall be in global form, registered in such names and in such
denominations as JPMorgan on behalf of the Initial Purchasers shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates evidencing the
Securities available for inspection by JPMorgan on behalf of the Initial
Purchasers in New York, New York at least 24 hours prior to the Closing Date.
4. Further Agreements of the Company and the Guarantors. The Company
----------------------------------------------------
and each of the Guarantors agree with each of the Initial Purchasers:
(a) to advise the Initial Purchasers promptly and, if requested,
confirm such advice in writing, of the happening of any event which makes
any statement of a material fact made in the Offering Memorandum untrue or
which requires the making of any
14
additions to or changes in the Offering Memorandum (as amended or
supplemented from time to time) in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
to advise the Initial Purchasers promptly of any order preventing or
suspending the use of the Offering Memorandum, of any suspension of the
qualification of the Securities for offering or sale in any jurisdiction
and of the initiation or threatening of any proceeding for any such
purpose; and to use its best efforts to prevent the issuance of any such
order preventing or suspending the use of the Offering Memorandum or
suspending any such qualification and, if any such suspension is issued, to
obtain the lifting thereof at the earliest possible time;
(b) to furnish promptly to each of the Initial Purchasers and counsel
for the Initial Purchasers, without charge, as many copies of the Offering
Memorandum (and any amendments or supplements thereto) as may be reasonably
requested;
(c) prior to making any amendment or supplement to the Offering
Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by
notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the reasonable opinion of
counsel for the Initial Purchasers or counsel for the Company, to amend or
supplement the Offering Memorandum in order that the Offering Memorandum
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered to a
purchaser, not misleading, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended or
supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
to furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, unless the Company is then
subject to and in compliance with Section 13 or 15(d) of the Exchange Act
(the foregoing agreement being for the benefit of the holders from time to
time of the Securities and prospective purchasers of the Securities
designated by such holders);
(f) to promptly take from time to time such actions as the Initial
Purchasers may reasonably request to qualify the Securities for offering
and sale under the securities or Blue Sky laws of such jurisdictions as the
Initial Purchasers may designate and to continue such qualifications in
effect for so long as required for the resale of the Securities; and to
arrange for the determination of the eligibility for investment of the
Securities under the laws of such jurisdictions as the Initial Purchasers
may reasonably request; provided that the Company and its subsidiaries
--------
shall not be obligated to qualify
15
as foreign corporations in any jurisdiction in which they are not so
qualified or to file a general consent to service of process in any
jurisdiction;
(g) to assist the Initial Purchasers in arranging for the Securities
to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
------
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market and for the Securities to
----
be eligible for clearance and settlement through The Depository Trust
Company ("DTC");
---
(h) not to, and to cause its affiliates not to, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as such term is defined in the Securities Act) which could be integrated
with the sale of the Securities in a manner which would require
registration of the Securities under the Securities Act;
(i) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may
be, not to, and to cause its affiliates not to, and not to authorize or
knowingly permit any person acting on their behalf to, solicit any offer to
buy or offer to sell the Securities by means of any form of general
solicitation or general advertising within the meaning of Regulation D or
in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act; and not to offer, sell, contract to sell or
otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, contract or disposition would cause
the exemption afforded by Section 4(2) of the Securities Act to cease to be
applicable to the offering and sale of the Securities as contemplated by
this Agreement and the Offering Memorandum;
(j) for a period of 90 days from the date of the Offering Memorandum,
not to offer for sale, sell, contract to sell or otherwise dispose of,
directly or indirectly, or file a registration statement for, or announce
any offer, sale, contract for sale of or other disposition of any debt
securities issued or guaranteed by the Company or any of its subsidiaries
(other than the Securities) without the prior written consent of the
Initial Purchasers;
(k) until consummation of the Exchange Offer, without the prior
written consent of the Initial Purchasers, not to, and not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to, resell
any of the Securities that have been reacquired by them, except for
Securities purchased by the Company or any of its affiliates and resold in
a transaction in compliance with the Securities Act;
(l) in connection with the offering of the Securities, until JPMorgan
on behalf of the Initial Purchasers shall have notified the Company ( which
JPMorgan shall do as soon as reasonably practicable) of the completion of
the distribution of the Securities, not to, and to cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act) not to,
either alone or with one or more other persons, bid for or purchase, for
any account in which it or any of its affiliated purchasers has a
beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities; and not to, and to
16
cause its affiliated purchasers not to, make bids or purchase for the
purpose of creating actual, or apparent active trading in or of raising the
price of the Securities;
(m) in connection with the offering of the Securities, to make its
officers, employees, independent accountants, independent petroleum
engineers and legal counsel reasonably available upon request by the
Initial Purchasers;
(n) to furnish to each of the Initial Purchasers on the date hereof a
copy of the independent accountants' report included in the Offering
Memorandum signed by the accountants rendering such report;
(o) to do and perform all things required to be done and performed by
it under this Agreement that are within its control prior to or after the
Closing Date, and to use its reasonable efforts to satisfy all conditions
precedent on its part to the delivery of the Securities;
(p) to not take any action prior to the execution and delivery of the
Indenture which, if taken after such execution and delivery, would have
violated any of the covenants contained in the Indenture;
(q) to not take any action prior to the Closing Date which would
require the Offering Memorandum to be amended or supplemented pursuant to
Section 4(d);
(r) prior to the Closing Date, not to issue any press release or
other communication directly or indirectly or hold any press conference
with respect to the Company, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and consistent
with the past practices of the Company and of which the Initial Purchasers
are notified), without consulting and obtaining the consent of the Initial
Purchasers, unless in the judgment of the Company and its counsel, and
after notification to the Initial Purchasers, such press release or
communication is required by law; and
(s) to apply the net proceeds from the sale of the Securities as set
forth in the Offering Memorandum under the heading "Use of Proceeds".
5. Conditions of Initial Purchasers' Obligations. The respective
---------------------------------------------
obligations of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company and the Guarantors contained
herein, to the accuracy of the statements of the Company, the Guarantors and
their respective officers made in any certificates delivered pursuant hereto, to
the performance by the Company and the Guarantors of their obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial Purchasers
may agree; and no stop order suspending the sale of the
17
Securities in any jurisdiction shall have been issued and no proceedings
for the purpose shall have been commenced or shall be pending or
threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel for the Initial
Purchasers, is material or omits to state any fact which, in the opinion of
such counsel is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of the Transaction Documents and
the Offering Memorandum, and all other legal matters relating to the
Transaction Documents and the transactions contemplated thereby, shall be
satisfactory in all material respects to the Initial Purchasers, and the
Company shall have furnished to the Initial Purchasers all documents and
information that they or their counsel may reasonably request to enable
them to pass upon such matters.
(d) Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P. shall have furnished to
the Initial Purchasers their written opinion, as counsel to the Company,
addressed to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers.
(e) The Initial Purchasers shall have received from Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Initial
Purchasers may reasonably require, and the Company shall have furnished to
such counsel such documents and information as they request for the purpose
of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial KPMG Letter") of KPMG LLP, addressed to the Initial
-------------------
Purchasers and dated the date hereof, in form and substance satisfactory to
the Initial Purchasers.
(g) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial PWC Letter") of PricewaterhouseCoopers LLP, addressed
------------------
to the Initial Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers.
(h) The Company shall have furnished to the Initial Purchasers a
letter (the "Xxxxxx Xxxxxxxx Letter") of Xxxxxx Xxxxxxxx LLP, addressed to
----------------------
the Initial Purchasers and dated the date hereof, in form and substance
satisfactory to the Initial Purchasers.
(i) The Company shall have furnished to the Initial Purchasers a
letter (the "KPMG Bring-Down Letter") of KMPG LLP, addressed to the Initial
----------------------
Purchasers and dated the Closing Date (A) confirming that they are
independent public accountants with respect to the Company and its
subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the AICPA and its interpretations and rulings thereunder, (B)
stating, as of the date of the KPMG Bring-Down Letter (or, with respect to
matters
18
involving changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as of
a date not more than three business days prior to the date of the KPMG
Bring-Down Letter), that the conclusions and findings of such accountants
with respect to the financial information and other matters covered by the
Initial KPMG Letter are accurate and (C) confirming in all material
respects the conclusions and findings set forth in the Initial KPMG Letter.
(j) The Company shall have furnished to the Initial Purchasers a
letter (the "PWC Bring-Down Letter") of PricewaterhouseCoopers LLP,
---------------------
addressed to the Initial Purchasers and dated the Closing Date (A)
confirming that they are independent public accountants with respect to
Xxxxx and its subsidiaries within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings
thereunder, (B) stating, as of the date of the PWC Bring-Down Letter (or,
with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in
the Offering Memorandum, as of a date not more than three business days
prior to the date of the PWC Bring-Down Letter), that the conclusions and
findings of such accountants with respect to the financial information and
other matters covered by the Initial PWC Letter are accurate and (C)
confirming in all material respects the conclusions and findings set forth
in the Initial PWC Letter.
(k) The Company shall have furnished to the Initial Purchasers a
letter (the "Xxxxxx Xxxxxxxx Bring-Down Letter") of Xxxxxx Xxxxxxxx LLP,
--------------------------
addressed to the Initial Purchasers and dated the Closing Date confirming
in all material respects the conclusions and findings set forth in the
Initial Xxxxxx Xxxxxxxx Letter.
(l) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of its chief executive officer and its
chief financial officer stating that (A) such officers have carefully
examined the Offering Memorandum, (B) in their opinion, the Offering
Memorandum, as of its date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
since the date of the Offering Memorandum, no event has occurred which
should have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or supplemented)
would not include any untrue statement of a material fact and would not
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (C) as of the Closing Date,
the representations and warranties of the Company and the Guarantors in
this Agreement are true and correct in all material respects, the Company
and the Guarantors have complied with all agreements and satisfied all
conditions on their part to be performed or satisfied hereunder on or prior
to the Closing Date in all material respects, and subsequent to the date of
the most recent financial statements contained in the Offering Memorandum,
there has been no material adverse change in the financial position or
results of operation of the Company or any of its subsidiaries, or any
change, or any development including a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, except as
set forth in the Offering Memorandum.
19
(m) The Initial Purchasers shall have received a counterpart of the
Registration Rights Agreement that shall have been executed and delivered
by a duly authorized officer of the Company and of each of the Guarantors.
(n) The Indenture shall have been duly executed and delivered by the
Company, each of the Guarantors and the Trustee, and the Securities shall
have been duly executed and delivered by the Company and duly authenticated
by the Trustee.
(o) The Securities shall have been approved by the NASD for trading
in the PORTAL Market.
(p) If any event shall have occurred that requires the Company under
Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the
Initial Purchasers shall have been given a reasonable opportunity to
comment thereon, and copies thereof shall have been delivered to the
Initial Purchasers reasonably in advance of the Closing Date.
(q) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of
any rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the judgment of the Initial Purchasers would materially impair the
ability of the Initial Purchasers to purchase, hold or effect resales of
the Securities contemplated hereby.
(r) Subsequent to the execution and delivery of this Agreement or, if
earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall
not have been any change in the capital stock or long-term debt or any
change, or any development involving a prospective change, in or affecting
the condition (financial or otherwise), results of operations, business or
prospects of the Company and its subsidiaries taken as a whole, the effect
of which, in any such case described above, is, in the judgment of the
Initial Purchasers, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Securities on the
terms and in the manner contemplated by this Agreement and the Offering
Memorandum (exclusive of any amendment or supplement thereto).
(s) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or
sale of the Securities; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Securities.
(t) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Securities or
any of the Company's other debt securities or preferred stock by a
"nationally recognized statistical rating organization", as such term is
defined by the Commission for purposes of Rule 436(g)(2) of the rules and
regulations of the Commission under the Securities Act and (ii)
20
no such organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Securities or any
of the Company's or other debt securities or preferred stock.
(u) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or
the over-the-counter market shall have been suspended or limited, or
minimum prices shall have been established on any such exchange or market
by the Commission, by any such exchange or by any other regulatory body or
governmental authority having jurisdiction, or trading in any securities of
the Company on any exchange or in the over-the-counter market shall have
been suspended or (ii) any moratorium on commercial banking activities
shall have been declared by federal or New York state authorities or (iii)
an outbreak or escalation of hostilities or a declaration by the United
States of a national emergency or war or (iv) a material adverse change in
general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) the effect of which, in the case of this clause (iv), is, in
the reasonable judgment of the Initial Purchasers, so material and adverse
as to make it impracticable or inadvisable to proceed with the sale or the
delivery of the Securities on the terms and in the manner contemplated by
this Agreement and in the Offering Memorandum (exclusive of any amendment
or supplement thereto).
(v) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial Xxxxx Xxxxx Letter") of Xxxxx Xxxxx Company Petroleum
--------------------------
Engineers, addressed to the Initial Purchasers and dated the date hereof,
in form and substance satisfactory to the Initial Purchasers.
(w) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial Netherland Xxxxxx Letter") of Netherland Xxxxxx &
--------------------------------
Associates, Inc., addressed to the Initial Purchasers and dated the date
hereof, in form and substance satisfactory to the Initial Purchasers.
(x) The Company shall have furnished to the Initial Purchasers a
letter (the "Initial X.X. Xxxxx Letter") of X.X. Xxxxx & Company, Inc.,
-------------------------
addressed to the Initial Purchasers and dated the date hereof, in form and
substance satisfactory to the Initial Purchasers.
(y) The Company shall have furnished to the Initial Purchasers a
letter (the "Xxxxx Xxxxx Bring-Down Letter") of Xxxxx Xxxxx Company
-----------------------------
Petroleum Engineers, addressed to the Initial Purchasers and dated the
Closing Date confirming in all material respects the conclusions and
findings set forth in the Initial Xxxxx Xxxxx Letter.
(z) The Company shall have furnished to the Initial Purchasers a
letter (the "Netherland Xxxxxx Bring-Down Letter") of Netherland Xxxxxx &
-----------------------------------
Associates, Inc., addressed to the Initial Purchasers and dated the Closing
Date confirming in all material respects the conclusions and findings set
forth in the Initial Netherland Xxxxxx Letter.
21
(aa) The Company shall have furnished to the Initial Purchasers a
letter (the "X.X. Xxxxx Bring-Down Letter") of X.X. Xxxxx & Company, Inc.,
----------------------------
addressed to the Initial Purchasers and dated the Closing Date confirming
in all material respects the conclusions and findings set forth in the
Initial X.X. Xxxxx Letter.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to Xxxxxxx Xxxxxxx & Xxxxxxxx.
6. Termination. The obligations of the Initial Purchasers hereunder
-----------
may be terminated by the Initial Purchasers, in their absolute discretion, by
notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Section 5
(q), (r), (s), (t) or (v) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date, any
-----------------------------
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Initial Purchaser agreed but
failed to purchase by other persons satisfactory to the Company and the non-
defaulting Initial Purchasers, but if no such arrangements are made within 36
hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers, the Company and the
Guarantors, except that the Company and the Guarantors will continue to be
liable for the payment of expenses to the extent set forth in Sections 8 and 12
and except that the provisions of Sections 9 and 10 shall not terminate and
shall remain in effect. As used in this Agreement, the term "Initial Purchasers"
includes, for all purposes of this Agreement unless the context otherwise
requires, any party not listed in Schedule 2 hereto that, pursuant to this
Section 7, purchases Securities which a defaulting Initial Purchaser agreed but
failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company, the Guarantors or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, either the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Initial Purchasers may be necessary in the Offering Memorandum or in any
other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
---------------------------------------------
Agreement shall have been terminated pursuant to Section 6 or 7, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchasers for
any reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company and each of the Guarantors shall reimburse the Initial
Purchasers for such out-of-pocket expenses (including reasonable fees and
disbursements of counsel) as shall have been reasonably incurred by the Initial
Purchasers in connection with this Agreement and the proposed purchase and
resale of the Securities. If this Agreement is terminated pursuant to Section 7
by reason of the default of one or more of the Initial Purchasers, neither the
22
Company nor the Guarantors shall be obligated to reimburse any defaulting
Initial Purchaser on account of such expenses.
9. Indemnification. (a) The Company and each of the Guarantors shall
---------------
jointly and severally indemnify and hold harmless each Initial Purchaser, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(a) and Section 10 as an Initial Purchaser), from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of the Securities), to which
that Initial Purchaser may become subject, whether commenced or threatened,
under the Securities Act, the Exchange Act, any other federal or state statutory
law or regulation, at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Memorandum or in any amendment or supplement thereto or in any
information provided by the Company or any Guarantor pursuant to Section 4(e) or
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
shall reimburse each Initial Purchaser promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that neither the
-------- -------
Company nor any Guarantor shall be liable in any such case to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with any
Initial Purchasers' Information.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company each Guarantor and their respective
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act (collectively referred to for purposes of
this Section 9(b) and Section 10 as the Company), from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company may become subject, whether commenced or threatened, under
the Securities Act, the Exchange Act, any other federal or state statutory law
or regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Offering Memorandum
or in any amendment or supplement thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any Initial
Purchasers' Information provided by such Initial Purchaser, and shall reimburse
the Company for any legal or other expenses reasonably incurred by the Company
in connection with investigating or defending or preparing to defend against or
appearing as a third party
23
witness in connection with any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
--------
however, that the failure to notify the indemnifying party shall not relieve it
-------
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced by such failure; and, provided, further,
-------- -------
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 9. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 9 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
--------
however, that an indemnified party shall have the right to employ its own
-------
counsel in any such action, but the fees, expenses and other charges of such
counsel for the indemnified party 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) the indemnified party has
reasonably concluded (based upon written advice of counsel to the indemnified
party) that there may be legal defenses available to it or other indemnified
parties that are different from or in addition to those available to the
indemnifying party, (3) a conflict or potential conflict exists (based upon
written 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 (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party 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 of attorneys (in addition to any local counsel) at any one time
for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 9(a) and 9(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment as contemplated by this Agreement. No indemnifying party shall, without
the prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have
24
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 proceedings.
The obligations of the Company each of the Guarantors and the Initial
Purchasers in this Section 9 and in Section 10 are in addition to any other
liability that the Company each of the Guarantors or the Initial Purchasers, as
the case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.
10. Contribution. If the indemnification provided for in Section 9 is
------------
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other 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 Guarantors on the one hand and the Initial Purchasers on the other with
respect to the statements or omissions that resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors on the one hand and the Initial Purchasers on the other with respect
to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by or on behalf of the Company, on the one
hand, and the total discounts and commissions received by the Initial Purchasers
with respect to the Securities purchased under this Agreement, on the other,
bear to the total gross proceeds from the sale of the Securities under this
Agreement. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to the Company the
Guarantors or information supplied by the Company and the Guarantors on the one
hand or to any Initial Purchasers' Information on the other, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omissions. The Company, the
Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 10 were to be determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
for such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 10
shall be deemed to include, for purposes of this Section 10, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending or preparing to defend any such action or claim.
Notwithstanding the provisions of this Section 10, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the total
discounts and commissions received by such Initial Purchaser with respect to the
Securities purchased by it under this Agreement exceeds the amount of any
damages which such Initial Purchaser has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or
25
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 Initial Purchasers' obligations to contribute as provided
in this Section 10 are several in proportion to their respective purchase
obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement shall
----------------------------------------
inure to the benefit of and be binding upon the Initial Purchasers, the Company
each of the Guarantors and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except as provided in Sections 9 and 10 with respect to affiliates, officers,
directors, employees, representatives, agents and controlling persons of the
Company, each of the Guarantors and the Initial Purchasers and in Section 4(e)
with respect to holders and prospective purchasers of the Securities. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 11, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.
12. Expenses. The Company and the Guarantors agree with the Initial
--------
Purchasers to pay (a) the costs incident to the authorization, issuance, sale,
preparation and delivery of the Securities and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Offering Memorandum and any amendments or supplements thereto; (c) the
costs of reproducing and distributing each of the Transaction Documents; (d) the
costs incident to the preparation, printing and delivery of the certificates
evidencing the Securities, including stamp duties and transfer taxes, if any,
payable upon issuance of the Securities; (e) the fees and expenses of the
Company's counsel and independent accountants; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
as provided in Section 4(h) and of preparing, printing and distributing Blue Sky
Memoranda (including related fees and expenses of counsel for the Initial
Purchasers); (g) any fees charged by rating agencies for rating the Securities;
(h) the fees and expenses of the Trustee and any paying agent (including related
fees and expenses of any counsel to such parties); (i) all expenses and
application fees incurred in connection with the application for the inclusion
of the Securities on the PORTAL Market and the approval of the Securities for
book-entry transfer by DTC; (j) all travel expenses of the Company's officers
and employees and other expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Securities from the Initial
Purchasers; and (k) all other costs and expenses incident to the performance of
the obligations of the Company and the Guarantors under this Agreement which are
not otherwise specifically provided for in this Section 12; provided, however,
-------- -------
that except as provided in this Section 12 and Section 8, the Initial Purchasers
shall pay their own costs and expenses.
13. Survival. The respective indemnities, rights of contribution,
--------
representations, warranties and agreements of the Company, the Guarantors and
the Initial Purchasers contained in this Agreement or made by or on behalf of
the Company, the Guarantors or the Initial Purchasers pursuant to this Agreement
or any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement or any investigation made
by or on behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.
26
14. Notices, etc. All statements, requests, notices and agreements
-------------
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail
or telecopy transmission to JPMorgan, a division of Chase Securities Inc.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxx
(telecopier no.: (000) 000-0000); or
(b) if to the Company or the Guarantors, shall be delivered or sent
by mail or telecopy transmission to the address of the Company set forth in
the Offering Memorandum, Attention: Xxxxxx Xxxxxx (telecopier no.: (713)
652-2916).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Initial
Purchasers by JPMorgan.
15. Definition of Terms. For purposes of this Agreement, (a) the term
-------------------
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and, (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
16. Initial Purchasers' Information. The parties hereto acknowledge
-------------------------------
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Offering
Memorandum: (i) the last paragraph on the front cover page concerning the terms
of the offering by the Initial Purchasers; and (ii) the statements concerning
the Initial Purchasers contained in the third, fifth, eleventh, twelfth and
thirteenth paragraphs under the heading "Plan of Distribution".
17. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York.
18. Counterparts. This Agreement may be executed in one or more
------------
counterparts (which may include counterparts delivered by telecopier) and, if
executed in more than one counterpart, the executed agreement, counterparts
shall each be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
19. Amendments. No amendment or waiver of any provision of this
----------
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.
20. Headings. The headings herein are inserted for convenience of
--------
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company, the Guarantors
and the several Initial Purchasers in accordance with its terms.
Very truly yours,
MISSION RESOURCES CORPORATION
/s/ Xxxxxxxx X. Xxxxxxxx
By ______________________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: President
BELLWETHER INTERNATIONAL INCORPORATED,
PETROBELL, INC.,
PAN AMERICAN ENERGY FINANCE CORP.,
XXXXX PETROLEUM CORPORATION,
BLACK HAWK OIL COMPANY
/s/ Xxxxxxxx X. Xxxxxxxx
By ______________________________________
Name: Xxxxxxxx X. Xxxxxxxx
Title: President
Accepted:
X.X. XXXXXX SECURITIES INC.
/s/ Xxxxx Tramontorn
By ________________________________
Authorized Signatory
Vice President
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
/s/ Xxxxxx X. Xxxxx
By ________________________________
Authorized Signatory
SCHEDULE 1
GUARANTORS
SCHEDULE 2
Principal
Amount
Initial Purchasers of Securities
------------------ -------------
X.X. Xxxxxx Securities Inc. $ 81,250,000
Xxxxxxx Lynch, Pierce, Xxxxxx $ 43,750,000
& Xxxxx Incorporated
-------------
Total $125,000,000
ANNEX A
[Form of Exchange and Registration Rights Agreement]
