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EXHIBIT 1.1
[Draft--2/27/96]
7,920,297 Shares
Santa Fe Energy Resources, Inc.
COMMON STOCK
($0.01 PAR VALUE)
UNDERWRITING AGREEMENT
March __, 1996
Lazard Freres & Co. LLC
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
As Representatives for the several
Underwriters named in Schedule I
c/o Lazard Freres & Co. LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
SECTION 1. Introductory. Minorco (U.S.A.) Inc. (the "Selling
Stockholder"), a Colorado corporation and stockholder of Santa Fe Energy
Resources, Inc. (the "Company") proposes to sell to the several underwriters
named in Schedule I hereto (the "Underwriters") for whom Lazard Freres & Co.
LLC, Xxxxxx Xxxxxxx & Co. Incorporated and Salomon Brothers Inc are acting as
representatives (the "Representatives"), an aggregate of 7,920,297 shares of the
Company's Common Stock, par value $0.01 per share (the "Firm Shares"). The
Selling Stockholder also proposes to sell to the Underwriters, upon the terms
and conditions set forth in Section 4 hereof, up to an additional 792,030 shares
of the Company's Common Stock, par value $.01 per share (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "Shares".
The Company and the Selling Stockholder hereby, severally and
not jointly, agree with the Underwriters as follows:
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SECTION 2. Representations, Warranties and Agreements of the
Company. The Company represents and warrants to, and agrees with, the
Underwriters and the Selling Stockholder that:
(a) The Company meets the registrant requirements for use of
Form S-3 under the Securities Act of 1933, as amended (the "Act"). A
registration statement on Form S-3 (File No. 333-00753), including a
form of prospectus relating to the Shares, has been filed by the
Company pursuant to the Act, with the Securities and Exchange
Commission (the "Commission"). The Company may have filed one or more
amendments thereto, including the related preliminary prospectus, each
of which has previously been furnished to you. The Company will next
file with the Commission either (i) prior to effectiveness of such
registration statement, a further amendment to such registration
statement (including the form of final prospectus) or (ii) after
effectiveness of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b)(1) or (4) under the Act. In the
case of clause (ii), the Company has included or shall include in such
registration statement, as amended at the Effective Time (as defined
below), all information (other than information permitted to be omitted
from the Registration Statement when it becomes effective pursuant to
Rule 430A ("Rule 430A Information")) required by the Act and the rules
and regulations thereunder (the "Rules and Regulations") to be included
in the final prospectus with respect to the Shares and the offering
thereof. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together
with all other such required information, with respect to the Shares
and the offering thereof, and, except to the extent you shall agree in
writing to a modification, shall be in all substantive respects in the
form furnished to you prior to the execution of this Agreement or, to
the extent not completed at such time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to
the execution of this Agreement, will be included or made therein. For
purposes of this Agreement, "Effective Time" means the time as of which
such registration statement, or the most recent post-effective
amendment thereto, if any, was or is declared
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effective by the Commission and each date after the date hereof on
which a document incorporated by reference in the Registration
Statement is filed. "Preliminary Prospectus" means each prospectus
included in such registration statement, or amendments thereof, before
it becomes effective under the Act, any prospectus filed with the
Commission by the Company pursuant to Rule 424(a) and any prospectus
included in the Registration Statement at the Effective Time that omits
Rule 430A Information. Such registration statement, as amended at the
Effective Time, including incorporated documents, exhibits and
financial statements, and including all Rule 430A Information, if any,
is hereinafter referred to as the "Registration Statement", and the
form of prospectus relating to the Shares and the offering thereof, as
first filed with the Commission pursuant to and in accordance with Rule
424(b) or, if no such filing is required, as included in the
Registration Statement, is hereinafter referred to as the "Prospectus".
Any reference herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934
(the "Exchange Act") on or before the Effective Time of the
Registration Statement or the issue date of such Preliminary Prospectus
or the Prospectus, as the case may be, and references to information
being "included", "contained" or "set forth in" any such document (or
similar expressions) shall be similarly construed; and any reference
herein to the terms "amend", "amendment" or supplement" with respect to
the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Time of the
Registration Statement, or the issue date of any Preliminary Prospectus
or the Prospectus, as the case may be, deemed to be incorporated
therein by reference.
(b) At the Effective Time, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined in
Section 4), the Prospectus (and any supplements thereto) will, comply
in all material respects with the applicable requirements of the Act
and the Rules and Regulations;
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at the Effective Time, the Registration Statement did not or will not
include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, at the Effective Time,
the Prospectus, if not filed pursuant to Rule 424(b), did not or will
not, and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus (together with any supplements thereto)
will not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The preceding sentence does not apply to information
contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) based upon and in conformity
with written information furnished to the Company by the
Representatives specifically for use therein as specified in Section
9(a) (the "Underwriters' Information") or to written information
furnished to the Company by the Selling Stockholder specifically for
use therein as specified in Section 9(a) (the "Selling Stockholder's
Information").
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, and, at the time of such
filing, none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act and the rules and regulation of the Commission thereunder and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
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(d) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission and no
proceedings for that purpose shall have been instituted or, to the
Company's knowledge, threatened by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Rules and Regulations,
and did not contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; except that this representation and warranty shall not
apply to any statements or omissions made based upon and in conformity
with the Underwriters' Information or the Selling Stockholder's
Information.
(e) The consolidated financial statements included in the
Registration Statement and Prospectus (and any amendment or supplement
thereto) present fairly in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as
of the dates indicated and the results of their operations, the
statements of their cash flows and the changes in their financial
position for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis during the periods involved; and the
supporting schedules, if any, included in the Registration Statement
present fairly the information required to be stated therein.
(f) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as incorporated by reference,
set forth or contemplated in the Prospectus, which had a material
adverse effect on the financial condition, business, or results of
operations of the Company and its subsidiaries considered as a whole (a
"Material Adverse Effect"); and, since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been (i) any change in
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the outstanding capital stock of the Company, (ii) any increase in
long-term debt of the Company or any of its subsidiaries or (iii) any
material adverse change, or any development involving a material
adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, which, with respect to any case
referred to in sub-clause (i), (ii) or (iii) would be reasonably likely
to have a Material Adverse Effect.
(g) (i) The Company and each of its subsidiaries have good
title to their producing oil and gas properties, free and clear of all
liens, encumbrances and defects, except (W) those described in the
Prospectus, (X) liens securing taxes and other governmental charges, or
claims of materialmen, mechanics and similar persons, not yet due and
payable, (Y) liens and encumbrances under oil and gas leases, options
to lease, operating agreements, unitization and pooling agreements,
participation and drilling concession agreements and gas sales
contracts, securing payment of amounts not yet due and payable and of a
scope and nature customary in the oil and gas industry and (Z) liens,
encumbrances and defects that do not, singly or in the aggregate,
materially affect the value of such oil and gas properties or
materially interfere with the use made or proposed to be made of such
properties by the Company and its subsidiaries; and (ii) except to the
extent described in the Prospectus, the leases, options to lease,
drilling concessions or other arrangements held by the Company and its
subsidiaries reflect in all material respects the right of the Company
and its subsidiaries to explore the unexplored and undeveloped acreage
described in the Prospectus and the care taken by the Company and its
subsidiaries with respect to acquiring or otherwise procuring such
leases, options to lease, drilling concessions and other arrangements
was generally consistent with standard industry practices for acquiring
or procuring leases to explore acreage for hydrocarbons.
(h) 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 with
power
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and authority to own, lease and operate their properties and conduct
their businesses as described in the Registration Statement and
Prospectus; and each of them is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in
which it owns or leases properties or in which the conduct of its
business requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
Material Adverse Effect.
(i) The Company has an authorized capitalization as set forth
in the Prospectus, and all shares of capital stock outstanding,
including the Shares, have been duly authorized, are validly issued,
fully paid and non-assessable, and conform in all material respects to
the description thereof contained in the Prospectus. The sale of the
Shares is not subject to pre-emptive or other similar rights or to
restrictions on transfer (other than those imposed by the Act, the
Rules and Regulations or state securities or Blue Sky laws and other
than restrictions on transfers contained in that certain Stock
Ownership and Registration Rights Agreement, dated December 10, 1991,
among Minorco, a Luxembourg societe anonyme, the Selling Stockholder
and the Company (the "Stock Ownership Agreement") which have been
met). The Shares are duly listed and admitted for trading on the
New York Stock Exchange (the "NYSE").
(j) Neither the Company nor any of its subsidiaries is in
violation of its or any of their Certificate of Incorporation or Bylaws
or other organizational documents or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to which it or
any of them is a party or by which it or any of them or their
properties may be bound, except any violation or default that would not
have a Material Adverse Effect; the execution, delivery and performance
of this Agreement, compliance by the Company with all the provisions
hereof and the consummation by the Company of the transactions
contemplated by this Agreement will not violate or constitute a breach
of any of the terms or provisions of, or a default (with the passage of
time or otherwise) under, the
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Certificate of Incorporation or Bylaws or other organizational
documents of the Company or any of its subsidiaries or any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease or other agreement
or instrument to which it or any of them is a party or by which it or
any of them or their properties may be bound, or violate or breach with
any laws, administrative regulations or rulings or court decrees
applicable to the Company, any of its subsidiaries or their respective
property.
(k) No consent, approval, authorization, order, registration,
filing or qualification of or with any court or governmental authority
or agency or of the NYSE is required for the sale of the Shares or the
consummation by the Company of the transactions contemplated by this
Agreement, except such as may be required under the Act, the Rules and
Regulations or state securities or Blue Sky laws in connection with the
distribution of the Shares by the Underwriters.
(l) The Company and its subsidiaries are in compliance in all
material respects with all laws and regulations applicable to them and
their respective properties and possess all certificates, authorities
or permits issued by, and have made all filings with, the appropriate
state, local, federal or foreign regulatory agencies or bodies
necessary or desirable to conduct the business now operated by them,
except where noncompliance with such laws or regulations or the failure
to possess or make the same would not have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor any
of its subsidiaries has received any notice of proceedings relating to
the revocation, termination or modification of any such certificate,
authority, permit or filing.
(m) Except as described in the Prospectus, there are no
actions, suits or proceedings before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge
of the Company, contemplated or threatened against the Company or any
of its subsidiaries, or to which any of their respective properties is
subject, which, if adversely determined, would individually or in the
aggregate be reasonably likely to result in any Material Adverse
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Effect or adversely affect the sale of the Shares in the manner
contemplated by the Prospectus.
(n) This Agreement has been duly authorized,
executed and delivered by the Company.
(o) The Company has complied with all the provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(p) Other than the Stock Ownership Agreement and that certain
agreement dated March 24, 1995 between HC Associates and the Company,
there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities under the Registration
Statement.
(q) Except as set forth in the Prospectus under the caption
"Underwriting" or as incorporated by reference therein, neither the
Company nor any of its officers, directors or, to the Company's
knowledge, holders of five percent or more of any class of its capital
stock or any of their respective affiliates is a member of, or is
associated or affiliated with a member of, the National Association of
Securities Dealers, Inc.
SECTION 3. Representations, Warranties and Agreements of the
Selling Stockholder. The Selling Stockholder represents and warrants to, and
agrees with, the Underwriters and the Company that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of the Selling Stockholder.
(b) The Selling Stockholder has the legal right and power to
execute and deliver this Agreement and to sell, transfer and deliver
the Shares to be sold by the Selling Stockholder in the manner provided
in this Agreement, and no such action will contravene any provision of
applicable law, or the certificate of incorporation or by-laws or other
organizational document of the Selling Stockholder, or any agreement
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or other instrument binding upon the Selling Stockholder [(after giving
effect to the waiver by the Company of the restrictions on transfer
contained in the Stock Ownership Agreement)] or any administrative or
court, decree or order, and no consent, approval, authorization, order,
filing, registration or qualification of or with any court or
governmental authority or agency is required for the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein by the Selling Stockholder, except such as may be
required under the Act and the Rules and Regulations or state
securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters.
(c) The Selling Stockholder has, and will deliver to the
Underwriters, good and marketable title to the Shares to be sold by the
Selling Stockholder, free and clear of any mortgage, pledge, lien,
encumbrance, adverse claim or equity (collectively, a "Lien").
(d) During the 90-day period beginning from the date hereof,
the Selling Stockholder will not, except as provided hereunder, sell
any equity securities of the Company or any securities convertible into
or exchangeable or exercisable for any such equity securities without
the prior written consent of Lazard Freres & Co. LLC.
(e) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares.
(f) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in
conformity with the Selling Stockholder Information, such Preliminary
Prospectus and the Registration Statement did, and the Prospectus and
any further amendments or supplements to the Registration Statement and
the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of
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the Act and the rules and regulations of the Commission thereunder and
such Registration Statement and Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein (and, in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(g) In order to document an exemption from any liability for
withholding under Section 1445(a) of the Internal Revenue Code of 1986,
as amended, with respect to the transactions herein contemplated, the
Selling Stockholder will deliver to you prior to or at the Closing Date
a certification of non-foreign status substantially similar to the
sample certification provided in Treasury Regulations Section 1.1445-
2(b)(2)(iii)(B).
SECTION 4. Purchase, Sale and Delivery of Shares. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Selling Stockholder hereby
agrees to sell to the Underwriters, and the Underwriters agree to purchase from
the Selling Stockholder, at a purchase price of $______ per Share (the "purchase
price per Share"), the Firm Shares.
The Selling Stockholder will deliver the Firm Shares to you
for your account, against payment of the purchase price therefor by wire
transfer of same day funds (subject to payment to Lazard Freres & Co. LLC by the
Selling Stockholder of one day's interest on the amount of such purchase price
at a rate determined by Lazard Freres & Co. LLC to reflect its cost of funds) to
an account specified in writing by the Selling Stockholder. Payment for the Firm
Shares shall be made at the office of Cravath, Swaine & Xxxxx at 10:00 A.M., New
York Time, on March __, 1996 or at such other place or time not later than three
full business days thereafter as you and the Company determine (the "Initial
Closing Date").
The Selling Stockholder hereby agrees to sell to the
Underwriters and, on the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Selling Stockholder, pursuant to an option to be
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exercised in the 30-day period commencing on the date of this Agreement, all or
less than all of the Additional Shares at the purchase price per Share.
Additional Shares may be purchased solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Underwriter agrees, severally and
not jointly, to purchase from the Selling Stockholder that proportion of the
total number of Additional Shares (subject to adjustment by you to eliminate
fractions) to be purchased as the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule I hereto bears to the total number of Firm
Shares.
The Selling Stockholders will deliver the Additional Shares to
be purchased by you for the accounts of the Underwriters, against payment of the
purchase price therefor by wire transfer of same day funds (subject to payment
to Lazard Freres & Co. LLC by the Selling Stockholder of one day's interest on
the amount of such purchase price at a rate determined by Lazard Freres & Co.
LLC to reflect its cost of funds) to an account specified in writing by the
Selling Stockholder, at the office of Cravath, Swaine & Xxxxx on such date and
at such time (the "Option Closing Date") as shall be specified in the notice
from Lazard Freres & Co. LLC to the Selling Stockholder exercising the option to
purchase Additional Shares. The Option Closing Date may be the same as the
Initial Closing Date but shall in no event be earlier than the Initial Closing
Date nor earlier than two nor later than ten business days after the giving of
the notice hereinafter referred to. Such notice may be given, by letter or by
telecopy or other facsimile transmission or by telephone (if subsequently
confirmed in writing), to the Selling Stockholder at any time within 30 days
after the date of this Agreement. The Option Closing Date may be varied by
agreement between the Underwriters and the Selling Stockholder. The Initial
Closing Date and the Option Closing Date are herein collectively referred to as
the "Closing Date".
The certificates for all the Shares so to be delivered will be
made available at the office of Lazard Freres & Co., New York, New York for
checking and packaging at least one full business day prior to the Initial
Closing Date or the Option Closing Date, as the case may be.
SECTION 5. Offering by Underwriters. After the
Registration Statement becomes effective the Underwriters
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will offer the Shares for sale to the public on the terms and conditions as set
forth in the Prospectus.
SECTION 6. Covenants of the Company. The Company covenants and
agrees with the Underwriters and the Selling Stockholder that:
(a) If the Effective Time is prior to the execution and
delivery of this Agreement, the Company will file the Prospectus with
the Commission pursuant to and in accordance with subparagraph (1) (or,
if applicable, and with your consent, subparagraph (4)) of Rule 424(b)
within the time period prescribed by such rule. The Company will advise
you promptly of any proposal to amend or supplement the Registration
Statement as filed, or the related Prospectus, prior to the Closing
Date, and will not effect such amendment or supplement without your
consent; the Company will also advise you promptly of the effectiveness
of the Registration Statement (if the Effective Time is subsequent to
the execution and delivery of this Agreement), of the filing and
effectiveness of any amendment or supplement to the Registration
Statement or the Prospectus, and of the issuance by the Commission of
any stop order in respect of the Registration Statement or of any order
preventing or suspending the use of any Preliminary Prospectus or any
Prospectus relating to the Shares or the initiation of proceedings for
any such purpose, of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or of any request by
the Commission to amend or supplement the Registration Statement or
Prospectus or for additional information and will use its best efforts
to prevent the issuance of any such stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or any
prospectus relating to the Shares or suspending any such qualification
and to obtain as soon as possible its lifting, if issued.
(b) If, at any time prior to the expiration of nine months
after the Effective Date when a prospectus relating to the Shares is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the
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statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
or supplement the Prospectus to comply with the Act, the Rules and
Regulations or any other law, the Company promptly will prepare and
file with the Commission an amendment or supplement which will correct
such statement or omission or an amendment which will effect such
compliance and will notify you and, upon your request, prepare and
furnish without charge to the Underwriters, the Selling Stockholder and
to any dealer in securities as many copies as you may from time to time
reasonably request, of an amended Prospectus or a supplement to the
Prospectus complying with Section 10(a) of the Act which will correct
such statement or omission or effect such compliance.
(c) The Company will make generally available to the Company's
security holders as soon as practicable an earnings statement which
will satisfy the provisions of Section 11(a) of the Act and the Rules
and Regulations thereunder (including Rule 158).
(d) The Company will deliver to you as many signed and
conformed copies of the Registration Statement (as originally filed)
and of each amendment thereto (including exhibits filed therewith) and
copies of each Preliminary Prospectus and the Prospectus as you may
reasonably request.
(e) The Company will take such action as you may reasonably
request, in cooperation with you, to qualify the Shares for offering
and sale under the applicable securities laws of such states and other
jurisdictions of the United States as you may designate, and will
maintain such qualifications in effect for as long as may be required
for the distribution of the Shares provided, however, that in no event
shall the Company be obligated in connection therewith to qualify as a
foreign corporation, or to execute a general consent to service of
process. The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Shares have been
qualified as above provided.
(f) The Company will not effect any public sale or public
distribution of its equity securities, or any securities convertible
into or exchangeable or
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exercisable for such securities, during the 90-day period beginning
from the date hereof (except (i) pursuant to (A) registration on Form
S-8 or any successor form, (B) registration on Form S-4 or any
successor form, or (C) registration of securities in connection with a
dividend reinvestment plan on form(s) applicable to such securities, or
(ii) the issuance of shares of common stock upon the conversion by
holders of shares of preferred stock of the Company outstanding on the
date hereof) without the prior written consent of Lazard Freres & Co.
LLC.
SECTION 7. Conditions of the Obligations of the Underwriters.
The obligations of the Underwriters to purchase and pay for the Firm Shares on
the Initial Closing Date will be subject (i) in the case of representations and
warranties qualified as to materiality, to the accuracy of such representations
and warranties in all respects, and in the case of representations and
warranties not qualified as to materiality, to the accuracy of such
representations and warranties in all material respects taken as a whole, in
each case on the part of the Company and the Selling Stockholder herein as of
the date hereof and as of the Initial Closing Date with the same force and
effect as if made as of that date, (ii) to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, (iii) to the
performance by the Company and the Selling Stockholder of their respective
obligations hereunder and (iv) to the following additional conditions precedent:
(a) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not
later than (i) 6:00 p.m. New York City time on the date of
determination of the offering price, if such determination occurred at
or prior to 3:00 p.m. New York City time on such date or (ii) 12:00
noon New York City time on the business day following the day on which
the offering price was determined if such determination occurred after
3:00 p.m. New York City time on such date. If the Effective Time is
prior to the execution and delivery of this Agreement, the Company
shall have filed the Prospectus with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by
the Rules and Regulations and in accordance with Section 6(a) hereof.
In either case, prior to the Initial Closing Date no stop order
suspending the
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effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened by the Commission; and the Company shall have complied in
all material respects with all requests for additional information on
the part of the Commission to your reasonable satisfaction.
(b) You shall not have advised the Company that the
Registration Statement or Prospectus, or any amendment or supplement
thereto, contains any untrue statement of fact or omits to state any
fact which, you have concluded, is material and in the case of an
omission is required to be stated therein or is necessary to make the
statements therein not misleading.
(c) You and the Selling Stockholder shall each have received a
favorable opinion of Xxxxxxx & Xxxxx L.L.P., counsel for the Company,
dated the Initial Closing Date, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware with corporate power and
authority to own, and operate its properties and conduct its
businesses in all material respects as described in the
Prospectus.
(ii) The Company has an authorized capitalization
as set forth in the Prospectus, and all of the issued and
outstanding shares of capital stock of the Company (including
the Shares) have been duly and validly authorized and issued
and are fully paid and non-assessable; and the Shares conform
in all material respects to the description of such stock
contained in the Prospectus.
(iii) This Agreement has been duly authorized,
executed and delivered by the Company.
(iv) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the
transactions herein contemplated will breach or result in
violation of (a) any of the provisions of the Certificate of
Incorporation or Bylaws of the Company or (b) any
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statute or any order, rule or regulation of the United States
(or any state, territory or possession thereof) known to such
counsel of any court or governmental agency or body of the
United States (or any state, territory or possession thereof)
having jurisdiction over the Company or any of its
subsidiaries or any of their properties other than, in the
case of clause (b) above, any violation which, individually or
in the aggregate, will not have a Material Adverse Effect.
(v) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental authority or agency or body of the United States
(or any state, territory or possession thereof) having
jurisdiction over the Company or any of its subsidiaries or of
the NYSE is required for the sale of the Shares or the
consummation by the Company of the transactions contemplated
by this Agreement, except (a) the registration under the Act
of the Shares, and (b) such consents, approvals,
authorizations, registrations or qualifications (1) as have
been, or prior to the Initial Closing Date will be, obtained
or (2) as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the
Shares by the Underwriters.
(vi) The Registration Statement is effective under
the Act and to their knowledge, no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued under the Act and no proceedings
therefor have been initiated or threatened by the Commission.
(vii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Initial Closing Date (other than
the financial statements and related schedules and other
financial data therein, other financial data and information
included therein that is extracted from a report of Xxxxx
Xxxxx Company pertaining to natural resource reserves that is
referred to or included therein, as to which such counsel need
express no opinion), when they became effective or
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were filed with the Commission, as the case may be, conformed
in all material respects to the requirements of the Act or the
Exchange Act, as applicable and the rules and regulations of
the Commission thereunder; and such counsel does not believe
that any of such documents, when such documents became
effective or were so filed, as the case may be, contained an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading.
(viii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to the Initial Closing Date (other than the
financial statements and related schedules and other financial
data and information that is extracted from a report of Xxxxx
Xxxxx Company pertaining to natural resource reserves that is
referred to or included therein, as to which such counsel need
express no opinion) appeared on their face to be appropriately
responsive in all material respects with the requirements of
the Act and the rules and regulations thereunder; they do not
believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to the Initial Closing Date (other than the financial
statements and related schedules and other financial data
therein, other financial data and information included therein
that is extracted from a report of Xxxxx Xxxxx Company
pertaining to natural resource reserves that is referred to or
included therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or
that, as of its date or as of the Initial Closing Date, the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Initial Closing Date (other than
the financial statements and related schedules and other
financial data therein, other financial data and information
included therein that is extracted from a report of Xxxxx
Xxxxx
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Company pertaining to natural resource reserves that is
referred to or included therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required
to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in
the Registration Statement or the Prospectus which are not
filed or incorporated by reference or described as required.
(d) Xxxxx X. Xxxxx, General Counsel for the Company, shall
have furnished to you and the Selling Stockholder his written opinion,
dated the Initial Closing Date, in form and substance satisfactory to
you and the Selling Stockholder, to the effect that:
(i) The Company has been duly qualified as a
foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business,
so as to require such qualification, except to the extent that
the failure to be so qualified or be in good standing would
not have a Material Adverse Effect (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company, provided that he
shall state that he believes that both you and he are
justified in relying upon such opinions and certificates).
(ii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation,
except to the extent that the failure to be so qualified or be
in good standing would not have a Material Adverse Effect; and
all of the issued shares of capital stock of each such
subsidiary have been duly and
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validly authorized and issued, are fully paid and
non-assessable, and, except as disclosed in the Prospectus or
incorporated therein by reference, are owned directly or
indirectly by the Company, free and clear of all Liens (such
counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company
or its subsidiaries, provided that he shall state that he
believes that both you and he are justified in relying upon
such opinions and certificates).
(iii) The sale of the Shares is not subject to
pre-emptive or other similar rights or to restrictions on
transfer (other than those imposed by the Act, the Rules and
Regulations or state securities or Blue Sky laws and other
than restrictions on transfers contained in that Stock
Ownership Agreement or other agreements to which the Selling
Stockholder may be a party or to which its property may be
subject which are not known to such counsel), and the Shares
are duly listed and admitted for trading on the NYSE.
(iv) To such counsel's knowledge after reasonable
investigation and other than as set forth in the Prospectus,
there are no legal or governmental proceedings now pending,
contemplated or threatened to which the Company or any of its
subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would be likely, individually or in the
aggregate, to have a Material Adverse Effect, or adversely
affect the sale of the Shares.
(v) Neither the Company nor any of its
subsidiaries is in violation of its or any of their
Certificate of Incorporation or Bylaws or other organizational
documents or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or instrument to
which it or any of them is a party or by which it or any of
them or their properties
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may be bound, except any violation or default that would not
have a Material Adverse Effect.
(vi) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach
or violation of any of the terms or provisions of, or
constitute a default under, any contract indenture, mortgage,
deed of trust, loan agreement, note, lease or other agreement
or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which the Company 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 other than any breach, default or violation which,
individually or in the aggregate, will not have a Material
Adverse Effect.
(vii) The Registration Statement is effective under
the Act and to such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or
any part thereof has been issued under the Act and no
proceedings therefor have been initiated or threatened by the
Commission.
(viii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Initial Closing Date (other than
the financial statements and related schedules and other
financial data therein, other financial data and information
included therein that is extracted from a report of Xxxxx
Xxxxx Company pertaining to natural resource reserves that is
referred to or included therein, as to which such counsel need
express no opinion), when they became effective or were filed
with the Commission, as the case may be, conformed in all
material respects to the requirements of the Act or the
Exchange Act, as applicable and the rules and regulations of
the Commission thereunder; and such counsel does not believe
that any of such documents, when such documents became
effective or were so filed, as the case may be, contained an
untrue statement of a material fact or omitted to state a
material
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fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when
such documents were so filed, not misleading.
(ix) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to the Initial Closing Date (other than the
financial statements and related schedules and other financial
data therein, other financial data and information included
therein that is extracted from a report of Xxxxx Xxxxx Company
pertaining to natural resource reserves that is referred to or
included therein, as to which such counsel need express no
opinion) appeared on their face to be appropriately responsive
in all material respects with the requirements of the Act and
the rules and regulations thereunder; he does not believe
that, as of its effective date, the Registration Statement or
any further amendment thereto made by the Company prior to the
Initial Closing Date (other than the financial statements and
related schedules and other financial data therein, other
financial data and information included therein that is
extracted from a report of Xxxxx Xxxxx Company pertaining to
natural resource reserves that is referred to or included
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that, as of its date or as of the Initial Closing Date, the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Initial Closing Date (other than
the financial statements and related schedules and other
financial data therein, other financial data and information
included therein that is extracted from a report of Xxxxx
Xxxxx Company pertaining to natural resource reserves that is
referred to or included therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; and he does not
know of any amendment
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to the Registration Statement required to be filed or of any
contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be incorporated by reference into the Prospectus or
required to be described in the Registration Statement or the
Prospectus which are not filed or incorporated by reference or
described as required.
(e) You shall have received an opinion of Xxx X. Xxxxxxx,
General Counsel for the Selling Stockholder, dated the Initial Closing
Date, to the effect that:
(i) This Agreement has been duly executed and
delivered by or on behalf of the Selling Stockholder; and the
sale of the Shares to be sold by the Selling Stockholder
hereunder and the compliance by the Selling Stockholder with
all of the provisions of this Agreement and the consummation
of the transactions herein contemplated will not conflict with
or result in a breach or violation of any terms or provisions
of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Selling
Stockholder is subject [(after giving effect to the waiver by
the Company of the restrictions contained in the Stock
Ownership Agreement)], nor will such action result in any
violation of the provisions of the Certificate of
Incorporation by By-laws of the Selling Stockholder or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the
Selling Stockholder or the property of the Selling
Stockholder, except that such counsel need express no opinion
as to the state securities or Blue Sky laws or as to
compliance with the anti-fraud provisions of Federal or state
securities laws.
(ii) No consent, approval, authorization or order
of any court or governmental agency or body is required for
the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by the
Selling Stockholder hereunder, except such as have
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been obtained under the Act and such as may be required under
state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters.
(iii) To the best of such counsel's knowledge after
reasonable inquiry, the Selling Stockholder had full right,
power and authority to sell, assign, transfer and deliver, or
to cause to be sold, assigned, transferred and delivered, the
Shares to be sold by the Selling Stockholder hereunder.
(iv) The sale of the Shares is not subject to
pre-emptive or other similar rights or to restrictions on
transfer, except (a) those imposed by the Act, the Rules and
Regulations or state securities or Blue Sky laws and (b)
restrictions on transfers contained in that Stock Ownership
Agreement which have been met.
(v) The Underwriters have acquired marketable
title to such Shares, free and clear of all Liens, assuming
the Underwriters have acquired such Shares in good faith and
without notice of any adverse claim as used in the Uniform
Commercial Code in effect in the State of New York.
In rendering the foregoing opinion, such counsel may rely upon
certificates of the Selling Stockholder, the Company and the transfer
agent for the Shares in respect of certain identified matters of fact,
provided that such counsel shall state that they believe that both you
and they are justified in relying upon such certificate.
(f) You and the Selling Stockholder shall have received from
Price Waterhouse LLP, independent public accountants, two letters, the
first dated the date of this Agreement and the other dated such Initial
Closing Date, addressed to the Underwriters and the Selling
Stockholder, in a form acceptable to you.
(g) You shall have received from the President or any Senior
Vice President and a principal financial or accounting officer of the
Company a certificate, dated the Initial Closing Date, in which such
officers, shall
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state that they have carefully examined the Registration Statement and
the Prospectus and that, to the best of their knowledge and after
reasonable investigation, (i) as of the Effective Time, the
Registration Statement and the Prospectus 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 to make the statements
therein not misleading and since the Effective Time, no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus; (ii) that there has
not been, since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any change or event
that would be reasonably likely to have a Material Adverse Effect, or
whether or not arising in the ordinary course of business; (iii) the
representations and warranties of the Company contained in Section 2
are true and correct with the same force and effect as though made on
and as of the Initial Closing Date and the Company has complied with
all agreements and satisfied all conditions on its part to be performed
or satisfied hereunder at or prior to the Initial Closing Date; and
(iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(h) You shall have received certificates from officers of the
Selling Stockholder satisfactory to you in which such officers, shall
state that they have carefully examined the Registration Statement and
the Prospectus and that, to the best of their knowledge and after
reasonable investigation, (i) as of the Effective Time, the Selling
Stockholder's Information 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 to make the statements therein not
misleading; and (ii) the representations and warranties of the Selling
Stockholder contained in Section 3 are true and correct with the same
force and effect as though made on the Initial Closing Date and the
Selling Stockholder has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to the Initial Closing Date.
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(i) You shall have received from Xxxxx Xxxxx Company a letter,
dated as of the Initial Closing Date, to the effect that (other than
changes in prices received by the Company for the sale of its
hydrocarbon production, which changes have occurred since December 31,
1995), as of such date nothing has come to its attention which would
cause them to change any opinion expressed by it in its report dated
January 22, 1996, from which information included in the Prospectus was
extracted with respect to its estimates of proved developed and proved
undeveloped oil and gas reserves of the Company and its subsidiaries as
a whole as at December 31, 1995, and the estimated future net cash
flows from such reserves as described in the Prospectus.
(j) At the Initial Closing Date, the Company shall have
furnished to you a letter substantially in the form of Exhibit B hereto
from each officer and director of the Company addressed to you, in
which each such person agrees not to offer, sell or contract to sell,
or otherwise dispose of, directly or indirectly, or announce an
offering of, any shares of equity securities of the Company
beneficially owned by such person or any securities convertible into or
exchangeable or exercisable for any such equity securities for a period
of 90 days following the Initial Closing Date without the prior written
consent of Lazard Freres & Co. LLC, other than shares of Common Stock
disposed of as bona fide gifts.
(k) At the Initial Closing Date counsel for the Underwriters
shall have been furnished with such other documents and opinions as
they may reasonably require.
The several obligations of the Underwriters to purchase the
Additional Shares hereunder are subject to (i) the accuracy of and compliance
with the representations and warranties of the Company and the Selling
Stockholder contained herein on and as of the Option Closing Date, (ii)
satisfaction on and as of the Option Closing Date of the conditions set forth in
subsections (a) to (l) of this Section 7, inclusive (and, for purposes thereof,
each reference therein to the Initial Closing Date shall be deemed to refer to
the Option Closing Date), and (iii) the absence of circumstances on or prior to
the Option Closing Date which would permit termination of this Agreement
pursuant to Section 11.
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SECTION 8. Payment of Expenses. The Company will pay all
costs, expenses, fees, disbursements and taxes incident to (i) the preparation
by the Company, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), the Prospectus, each Preliminary
Prospectus and all amendments and supplements to any of them prior to or during
the period specified in Section 6(b), (ii) the printing, reproduction and
distribution of this Agreement, and all other underwriting and selling group
documents by mail, telex or other means, (iii) the registration with the
Commission of the Shares, (iv) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the several states
and the preparation, printing and distribution of Preliminary and Supplemental
Blue Sky Memoranda and Legal Investment Survey (including the reasonable fees
and disbursements of your counsel relating to the foregoing), (v) filing fees
with the National Association of Securities Dealers, Inc. in connection with the
offering, (vi) the fees and expenses of the Registrar and Transfer Agent for the
Shares and its counsel and (viii) the performance by the Company of its other
obligations under this Agreement. Fees and expenses of counsel to the Selling
Stockholder and all other expenses of the Selling Stockholder in connection with
the foregoing and the transactions contemplated herein shall be paid by the
Company to the extent set forth in Section 3.7 of the Stock Ownership Agreement.
If the sale of the Shares provided for herein is not
consummated because of the failure to satisfy any condition to the obligations
of the Underwriters set forth in Section 7 (other than Sections 7(e) or 7(h))
hereof, because of any termination pursuant to Section 11 hereof or because of
any refusal, failure or inability of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by the
Underwriters, the Company shall reimburse you for all of your reasonable
out-of-pocket expenses incurred in connection with marketing and preparing for
the offering of the Shares, including the reasonable fees and disbursements of
counsel for the Underwriters.
If the sale of the Shares provided for herein is not
consummated because of the failure to satisfy any condition to the obligations
of the Selling Stockholders set forth in Section 7(e) or 7(h) hereof or because
of any refusal, failure or inability of the Selling Stockholder to
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perform any agreement herein or comply with any provision hereof other than by
reason of a default by the Underwriters, the Selling Stockholder shall reimburse
you for all of your reasonable out-of-pocket expenses incurred in connection
with marketing and preparing for the offering of the Shares, including the
reasonable fees and disbursements of counsel for the Underwriters.
SECTION 9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of
the Underwriters and the Selling Stockholder and each person, if any,
who controls any such Underwriter or the Selling Stockholder within the
meaning of either Section 15 of the Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof) (including, without
limiting the foregoing, the reasonable legal and other expenses
incurred in connection with investigating or defending or preparing to
defend or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action, as such expenses are
incurred) arising out of or based on any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement or the Prospectus or any Preliminary Prospectus, or caused by
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, except the Company shall not be liable to any
Underwriter under the indemnity agreement in this subsection (a) with
respect to any Preliminary Prospectus to the extent that any such loss,
claim, damage or liability of such Underwriter results solely from the
fact that such Underwriter sold Shares to a person as to whom there was
not sent or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus or of the Prospectus as then amended or
supplemented in any case where such delivery is required by the Act if
the loss, claim, damage or liability of such Underwriter results from
an untrue statement or omission of a material fact contained in the
Preliminary Prospectus which was corrected in the Prospectus or in the
Prospectus as then amended or supplemented and (b) insofar as such
losses, claims, damages, liabilities or expenses are caused by any such
untrue statement or omission or alleged untrue
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statement or omission based upon (x) the following information
furnished to the Company by you in (i) the last paragraph of text on
the cover page of the Prospectus concerning the terms of the offering
by the Underwriters, (ii) the first paragraph on page 2 of the
Prospectus concerning stabilization and over-allotment by the
Underwriters and (iii) the first two paragraphs and the last paragraph
of text under the caption "Underwriting" in the Prospectus (all of the
foregoing the "Underwriters' Information") or (y) the information in
the section captioned "Selling Stockholder" (the "Selling Stockholder's
Information"). This indemnity agreement will be in addition to any
liability which the Company may otherwise have to the persons referred
to above in this Section 9(a).
(b) The Selling Stockholder agrees to indemnify and hold
harmless each of the Underwriters and each person, if any, who controls
any such Underwriter within the meaning of either Section 15 of the Act
or Section 20 of the Exchange Act and the Company, its directors, its
officers who sign the Registration Statement and each person, if any,
who controls the Company within the meaning of either such Section,
from and against any and all losses, claims, damages and liabilities
(or actions in respect thereof) (including, without limiting the
foregoing, the reasonable legal and other expenses incurred in
connection with investigating or defending or preparing to defend or
appearing as a third party witness in connection with any such loss,
claim, damage liability or action, as such expenses are incurred)
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus
or any Preliminary Prospectus or caused by any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only in
each case with respect to the Selling Stockholder Information, except
the Selling Stockholder shall not be liable to any Underwriter under
the indemnity agreement in this subsection (b) with respect to any
Preliminary Prospectus to the extent that any such loss, claim, damage
or liability of such Underwriter results solely from the fact that such
Underwriter sold Shares to a person as to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of
the Prospectus or
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of the Prospectus as then amended or supplemented in any case where
such delivery is required by the Act if the loss, claim, damage or
liability of such Underwriter results from an untrue statement or
omission of a material fact contained in the Preliminary Prospectus
which was corrected in the Prospectus or in the Prospectus as then
amended or supplemented. This indemnity agreement will be in addition
to any liability which the Selling Stockholder may otherwise have to
the persons referred to above in this Section 9(b).
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Stockholder, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the
Company or the Selling Stockholder within the meaning of either Section
15 of the Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages and liabilities (or actions in respect
thereof) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only with reference to the Underwriters' Information. This indemnity
agreement will be in addition to any liability which any Underwriter
may otherwise have to the persons referred to above in this Section
9(c).
(d) In case any action or proceeding (including any
governmental or regulatory investigation or proceeding) shall be
instituted involving any person in respect of which indemnity may be
sought pursuant to any of the three preceding paragraphs, such person
(hereinafter called the indemnified party) shall promptly notify the
person against whom such indemnity may be sought (hereinafter called
the indemnifying party) in writing; however, the omission to so notify
the indemnifying party shall relieve the indemnifying party from
liability under the three preceding paragraphs only to the extent
prejudiced thereby. The indemnifying party, upon request of the
indemnified party, shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the
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indemnified party to represent the indemnified party and any others
that the indemnifying party may designate and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
action or proceeding any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and, based upon the advice
of counsel to the indemnified party, representation of both parties by
the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (a) the
reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for the Underwriters and all persons, if
any, who control any such Underwriter within the meaning of either
Section 15 of the Act or Section 20 of the Exchange Act, (b) the
reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its
officers who sign the Registration Statement and each person, if any,
who controls the Company within the meaning of either such Section and
(c) the reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for the Selling Stockholder and all
persons, if any, who control the Selling Stockholder within the meaning
of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm
for the Underwriters and such control persons of such Underwriters,
such firm shall be designated in writing by Lazard Freres & Co. LLC. In
the case of any such separate firm for the Company, and such directors,
officers and control persons of the Company, such firm shall be
designated in writing by the Company. In the case of any such separate
firm for the Selling Stockholder and such controlling persons of the
Selling Stockholder, such firm shall be designated in writing by the
Selling Stockholder.
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(e) If the indemnification provided for in this Section 9 is
insufficient or unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company
and the Selling Stockholder on the one hand and the Underwriters on the
other from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law or if
the indemnified party shall have failed to the prejudice of the
indemnifying party to give the notice required by Section 9(d), 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 Selling Stockholder on the one hand and the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Selling
Stockholder on the one hand and the Underwriters on the other shall be
deemed to be in the same proportions as the total net proceeds from the
offering (before deducting expenses) received by the Selling
Stockholder bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on
the cover page of the Prospectus. The relative fault of the Company and
the Selling Stockholder on the one hand and the Underwriters on the
other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholder or by
the Underwriters and the parties, relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. As between the Company and the Selling Stockholder,
contribution payments under this subsection (e) in every circumstance
shall be in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Selling Stockholder on
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the other in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect
thereof).
(f) The Company, the Selling Stockholder and each of the
Underwriters agree that it would not be just and equitable if
contribution pursuant to Section 9(e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities (or actions
in respect thereof) referred to in the immediately preceding paragraph
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
Section 9(e), in no event shall any of the Underwriters be required to
contribute any amount in excess of the amount by which the total price
at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(g) The Company and the Selling Stockholder agree that any
claims that the Company may have against the Selling Stockholder and
any claims that the Selling Stockholder may have against the Company in
each case arising out of or based on any untrue statement or alleged
untrue statement in the Registration Statement or the Prospectus or any
Preliminary Prospectus, or caused by any omission or alleged omission
to state therein a material fact, or otherwise arising out of or based
upon the sale of Shares (each a "Cross-Claim"), shall be subordinated
in right of payment as set forth below to the prior indefeasible
payment in full in cash of any and all claims any Underwriters may have
against the Selling Stockholder or the Company, as the case may be,
arising out of or based on any untrue statement or
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alleged untrue statement in the Registration Statement or the
Prospectus or any Preliminary Prospectus, or caused by any omission or
alleged omission to state therein a material fact, or otherwise arising
out of or based upon the sale of Shares under this Agreement (each an
"Underwriter Claim"). The Company and the Selling Stockholder agree
that they will provide notice to Lazard Freres & Co. LLC within three
business days of the making by them of any Cross-Claim, and that such
notice shall provide reasonable detail as to the factual and legal
basis for the Cross-Claim and the amount claimed. Thereafter, no amount
may be paid by the Company or the Selling Stockholder in respect of any
such Cross-Claim until the date that is 45 days after the receipt by
Lazard Freres & Co. LLC of the foregoing notice; provided, however,
that if Lazard Freres & Co. LLC shall have prior to such 45th day
notified the Company or the Selling Stockholder, as the case may be,
who made such Cross-Claim or against whom such Cross-Claim was made of
any Underwriter Claim that any Underwriter is making or may make
against it, then no amount may be paid by the Company or the Selling
Stockholder with respect to such Cross-Claim without the prior written
approval of Lazard Freres & Co. LLC until the prior indefeasible
payment in full in cash of each such Underwriter Claim or until it has
been established in a final adjudication by a court of competent
jurisdiction that such Underwriter is not entitled to receive any
payment from the Company or the Selling Stockholder in respect of such
Underwriter Claim. If a payment or distribution is made to the Company
or the Selling Stockholder that because of this Section 9(g) should not
have been made to it, the Company or the Selling Stockholder receiving
such payment or distribution shall hold it in trust for the
Underwriters and pay it over to it or its designee as its interests
shall appear.
(h) The Company and the Selling Stockholder agree with the
Underwriters that any indemnity provision of any agreement between the
Company on the one hand and the Selling Stockholder on the other shall
not be deemed to modify or supersede any provision of this Section 9.
SECTION 10. Representations, Warranties and Agreements to
Survive Delivery. All representations,
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warranties and agreements contained in the Agreement, or contained in
certificates of officers of the Company or the Selling Stockholder submitted
pursuant hereto, including indemnity and contribution agreements, shall remain
operative and in full force and effect, regardless of any termination of this
Agreement, or any investigation, or any statement as to the results thereof,
made by or on behalf of any Underwriter or any person controlling such
Underwriter or by or on behalf of the Company, its officers or directors or
controlling persons, or by the Selling Stockholder or any person controlling the
Selling Stockholder, and shall survive acceptance of and payment for Shares
hereunder.
SECTION 11. Termination. This Agreement may be terminated for
any reason at any time prior to the delivery of and payment for the Shares on
the Initial Closing Date by the Underwriters upon the giving of written notice
by Lazard Freres & Co. LLC of such termination to the Company, if prior to such
time (i) there has been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (A) any material adverse
change in the condition, financial or otherwise, earnings, business or prospects
of the Company and its subsidiaries (considered as a whole, whether or not
arising in the ordinary course of business or (ii) there has occurred any
outbreak or escalation of hostilities or other calamity or crisis or material
change in existing national or international financial, political, economic or
securities market conditions, the effect of which is such as to make it, in the
judgement Lazard Freres & Co. LLC, impracticable or inadvisable to market the
Shares in the manner contemplated in the Prospectus or enforce contracts for the
sale of the Shares, or (iii) trading in the Common Stock of the Company has been
suspended by the Commission or a national securities exchange, or trading
generally on either the American Stock Exchange or the New York Stock Exchange
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by either of said
exchanges or by order of the Commission or any other governmental authority, or
a banking moratorium has been declared by either Federal or New York
authorities. In the event of any such termination, the provisions of Section 8,
the indemnity agreement and contribution provisions set forth in Section 9, and
the provisions of Sections 10 and 15 shall remain in effect.
SECTION 12. Notices. All notices and other communications
hereunder shall be in writing and shall be
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deemed to have been duly given if mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to you c/o
Lazard Freres & Co. LLC, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Syndicate Department; notices to the Company shall be directed to it at Sante Fe
Energy Resources, Inc., 0000 Xxxxx Xxxx Xxxx, 00xx Xxxxx, Xxxxxxx, XX 00000,
facsimile transmission no. (000) 000-0000, Attention: Xxxxx X. Xxxxx with a copy
to the Treasurer; and notices to the Selling Stockholder shall be directed to
Minorco (U.S.A.) Inc., 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Xxx X. Xxxxxxx.
SECTION 14. Parties. This Agreement shall inure to the benefit
of and be binding upon the Company, its directors and officers who signed the
Registration Statement, the Underwriters, the Selling Stockholder, any
controlling persons referred to herein and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any other person, firm or corporation any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. No purchaser of Shares from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 15. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of New York.
SECTION 16. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
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If the foregoing is in accordance with your understanding of
our agreement, please sign this Agreement and return to us counterparts hereof.
Very truly yours,
SANTA FE ENERGY RESOURCES,
INC.,
By
-------------------------
Name:
Title:
MINORCO (U.S.A.) INC.,
By
-------------------------
Name:
Title:
Confirmed and Accepted, as of the
date first above written:
LAZARD FRERES & CO. LLC
XXXXXX XXXXXXX & CO. INCORPORATED
SALOMON BROTHERS INC
By:
--------------------------------
Lazard Freres & Co. LLC
By:
--------------------------------
Name:
Title:
Acting on behalf of themselves as
Representatives of the several Underwriters
named in Schedule I hereto
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Schedule I
Number of Shares
Underwriters To be Purchased
------------ ---------------
Lazard Freres & Co. LLC
Xxxxxx Xxxxxxx & Co. Incorporated
Salomon Brothers Inc
=========
Total 7,920,297
