EXHIBIT 1.1
Newfield Exploration Company
Common Stock
(par value $.01 per share)
UNDERWRITING AGREEMENT
May 21, 2003
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described
Ladies and Gentlemen:
From time to time Newfield Exploration Company, a Delaware corporation
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain shares of its common stock, par value $.01 per share
(the "Shares"), specified in Schedule II to such Pricing Agreement (with respect
to such Pricing Agreement, the "Firm Shares"). Each Share includes one Right (a
"Right") to Purchase Series A Junior Participating Preferred Stock issued
pursuant to the Rights Agreement dated as of February 12, 1999 between the
Company and ChaseMellon Shareholder Services, L.L.C. If specified in such
Pricing Agreement, the Company may grant the Underwriters the right to purchase
at their election an additional number of shares specified in such Pricing
Agreement as provided in Section 3 hereof (the "Optional Shares"). The Firm
Shares and the Optional Shares, if any, which the Underwriters elect to purchase
pursuant to Section 3 hereof are herein collectively referred to as the
"Designated Shares."
1. Particular sales of Designated Shares may be made from time to time
to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to an Underwriter or Underwriters who act without any firm
being designated as its or their representative. This Underwriting Agreement
shall not be construed as an obligation of the Company to sell any of the Shares
or as an obligation of any of the Underwriters to purchase any of the Shares.
The obligation of the Company to issue and sell any of the Shares and the
obligation of any of the Underwriters to purchase any of the Shares shall be
evidenced by the Pricing Agreement with respect to the Designated Shares
specified therein. Each Pricing Agreement shall specify the aggregate number of
the Firm Shares, the maximum number of Optional Shares, if any, the initial
public offering price of such Firm Shares and Optional Shares or the manner of
determining such price, the purchase price to the Underwriters of such
Designated
Shares, the names of the Underwriters of such Designated Shares, the names of
the Representatives of such Underwriters, the number of such Designated Shares
to be purchased by each Underwriter and the commission, if any, payable to the
Underwriters with respect thereto and shall set forth the date, time and manner
of delivery of such Firm and Optional Shares, if any, and payment therefor. The
Pricing Agreement shall also specify (to the extent not set forth in the
registration statement and prospectus with respect thereto) the terms of such
Designated Shares. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange of
telegraphic communications or any other rapid transmission device designed to
produce a written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-103349)
(as amended prior to being declared effective, the "Initial
Registration Statement") in respect of the Shares has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered or to be delivered to the
Representatives (excluding exhibits to the Initial Registration
Statement, but including all documents incorporated by reference in the
prospectus contained therein) have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement or
any document incorporated by reference therein has heretofore been
filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act and relating to the Shares, is
hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and any post-effective amendment thereto
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and the documents incorporated by reference in the
prospectus contained in the Initial Registration Statement at the time
such part of the Initial Registration Statement became effective or
such part of the Rule 462(b) Registration Statement becomes effective,
each as amended at the time such part of the Initial Registration
Statement or the Rule 462(b) Registration Statement became effective,
are hereinafter collectively called the "Registration Statement"; the
prospectus relating to the Designated Shares, in the form in which it
has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter
called the "Prospectus"; any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary
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Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Shares in the form in which it is filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any post-effective amendment
thereto and as of the applicable filing date and at the Time of
Delivery (as defined in Section 4 hereof) as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Shares through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Shares;
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(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with the business of the Company and its
subsidiaries, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, other than as
set forth or contemplated in the Prospectus, since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, there has not been any material change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole;
(e) The Company and its subsidiaries have (i) generally
satisfactory title to all their interests in their producing oil and
gas properties and to all of their material interests in nonproducing
oil and gas properties, title investigations having been carried out by
the Company in accordance with the general practice in the oil and gas
industry, (ii) good and indefeasible title to all other real property
owned by them that is material to the Company and its subsidiaries
taken as a whole and (iii) good and valid title to all personal
property owned by them that is material to the Company and its
subsidiaries taken as a whole, in each case free and clear of all
liens, encumbrances, claims, security interests, subleases and defects
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company
and its subsidiaries; and any real property (other than oil and gas
properties) and buildings material to the Company and its subsidiaries
taken as a whole held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases (except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, preference and other
similar laws relating to or affecting creditors' rights generally and
general principles of equity, regardless of whether considered in a
proceeding at law or in equity), with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries;
(f) 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 power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described
in the Prospectus and to enter into and perform its obligations under
this Agreement, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction; and each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X under the Act, a "Subsidiary") has been duly
incorporated or otherwise organized and is validly existing as a
corporation or other entity in good standing under the laws of its
jurisdiction of incorporation or organization;
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(g) The Company has an authorized capitalization as set forth
in the Prospectus, 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; and all of the outstanding shares of
capital stock or other ownership interests of each Subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable and (except for directors' qualifying shares or
similar ownership and as otherwise set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(h) The Designated Shares have been duly authorized, and, when
the Firm Shares are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Firm Shares and, in the case
of any Optional Shares, pursuant to Overallotment Options (as defined
in Section 3 hereof) with respect to such Optional Shares, such
Designated Shares will be duly and validly issued and fully paid and
non-assessable; the Designated Shares conform to the description
thereof contained in the Registration Statement and the Designated
Shares will conform to the description thereof contained in the
Prospectus as amended or supplemented with respect to such Designated
Shares;
(i) The issue and sale of the Designated Shares and the
compliance by the Company with all of the provisions of this Agreement,
any Pricing Agreement and each Overallotment Option, if any, and the
consummation of the transactions contemplated herein and therein will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company 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 properties or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation
of the provisions of the certificate of incorporation or bylaws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties, and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Designated
Shares or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement or any
Overallotment Option, except such as have been, or will have been prior
to each Time of Delivery, obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Shares by the Underwriters;
(j) Neither the Company nor any of its subsidiaries is in
violation of its charter, by-laws or other organizational documents or
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound, other than any such default that would not have a material
adverse effect on the financial
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position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries, taken as a whole (a
"Material Adverse Effect");
(k) The statements set forth in the Prospectus under the
caption "Description of Capital Stock," and in the Prospectus as
amended or supplemented insofar as they purport to constitute a summary
of the terms of the capital stock and stockholder rights plan of the
Company and under the caption "Plan of Distribution," insofar as they
purport to describe the provisions of the laws and documents referred
to therein, are accurate in all material respects;
(l) The consolidated financial statements of the Company,
including the notes thereto, included or incorporated by reference in
the Prospectus present fairly, in all material respects, the
consolidated financial position of the Company and its subsidiaries as
at the dates indicated and the results of their operations and cash
flows for the periods specified; except as otherwise stated in the
Prospectus, said financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis, except in the case of unaudited financial statements for the
absence of notes thereto and subject to normal year-end adjustments;
and the selected historical financial data for the Company included in
the Prospectus as amended and supplemented have been compiled on a
basis consistent with that of the audited or unaudited, as applicable,
consolidated financial statements of the Company; any pro forma
financial statements or data included or incorporated by reference in
the Prospectus comply as to form in all material respects with the
applicable accounting requirements of Regulation S-X under the Act to
the extent applicable, and the pro forma adjustments have been properly
applied to the historical amounts in the compilation of those
statements; the other financial and statistical data set forth or
incorporated by reference in the Prospectus related to the Company are
accurately presented and prepared on a basis consistent with the
financial statements and books and records of the Company, and there
are no financial statements (historical or pro forma) that are required
to be included in the Prospectus that are not included as required;
(m) The Company owns or possesses adequate rights to use the
patents, patent rights, licenses, inventions, copyrights, know-how
(including seismic data, trade secrets and other unpatented or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"patent and proprietary rights") to the extent employed by it in and
material to the business now operated by it, and the Company has not
received any notice of infringement of or conflict with asserted rights
of others with respect to any patent or proprietary rights, which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding), singly or in the aggregate, would result in a
Material Adverse Effect;
(n) The Company possesses such licenses, permits, consents,
orders, certificates or authorizations issued by the appropriate
federal, state, foreign or local regulatory agencies or bodies
necessary to conduct the business now operated by it, except for
licenses, permits, consents, orders, certificates or authorizations,
the absence of which, individually or in the aggregate, would not have
a Material Adverse Effect, and the Company has not received any notice
of proceedings relating to the revocation or
6
modification of any such licenses, permits, consents, orders,
certificates or authorizations which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect;
(o) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject, except as would not have a
Material Adverse Effect; and, to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(p) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is customary for companies engaged
in similar businesses in similar industries;
(q) Except as described in the Prospectus, there has been no
storage, disposal, generation, manufacture, spill, discharge,
refinement, transportation, handling or treatment of toxic wastes,
hazardous wastes or hazardous substances by the Company (or to the
knowledge of the Company, any of its predecessors in interest) at, upon
or from any of the property now or previously owned or leased or under
contract for purchase by the Company in violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit or
which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except
for any violation or remedial action which would not have singularly or
in the aggregate with all such violations and remedial actions, any
Material Adverse Effect; and the terms "hazardous wastes," "toxic
wastes" and "hazardous substances" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection;
(r) The Company is not and, after giving effect to the
offering and sale of the Designated Shares, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended (the "Investment Company Act");
(s) The Company maintains disclosure controls and procedures
(as such term is defined in Rule 13a-14 under the Exchange Act), which
(i) are designed to ensure that material information relating to the
Company, including its subsidiaries, is made known to the principal
executive officer and the principal financial officer of the Company by
others within the Company, particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared and
(ii) have been evaluated for effectiveness as of a date within 90 days
prior to the filing of the Company's most recent annual or quarterly
report filed with the Commission;
(t) Based on its evaluation of its disclosure controls and
procedures, the Company is not aware of (i) any significant deficiency
in the design or operation of internal controls which could adversely
affect its ability to record, process, summarize and report financial
data or any material weaknesses in internal controls; or (ii) any
fraud,
7
whether or not material, that involves management or other employees
who have a significant role in the internal controls of the Company;
(u) Since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could
significantly affect internal controls, including any corrective
actions with regard to significant deficiencies and material
weaknesses;
(v) The Audit Committee of the Company's Board of Directors
complies with the applicable and currently effective requirements of
the New York Stock Exchange and the SEC;
(w) PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(x) Ernst & Young LLP, who have audited certain financial
statements of EEX Corporation and its subsidiaries, are independent
public accountants with respect to EEX Corporation as required by the
Act and the rules and regulations of the Commission thereunder; and
(y) Xxxxx Xxxxx Company Petroleum Engineers are independent
petroleum engineers with respect to the Company.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of the
Firm Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Shares that the Company thereby grants to the Underwriters the right
(an "Overallotment Option") to purchase at their election up to the number of
Optional Shares set forth in such Pricing Agreement, on the terms set forth in
the paragraph above, for the sole purpose of covering over-allotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
number of Optional Shares to be purchased and the date on which such Optional
Shares are to be delivered, as determined by the Representatives but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless the Representatives and the Company otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm Shares
to be purchased by each Underwriter as set forth in Schedule I to the Pricing
Agreement applicable to such Designated Shares shall be, in each case, the
number of Optional Shares which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the number of Optional Shares to be so added
shall be, in each case, that proportion of Optional Shares which the number of
Firm Shares to be purchased
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by such Underwriter under such Pricing Agreement bears to the aggregate number
of Firm Shares (rounded as the Representatives may determine to the nearest 100
shares). The total number of Designated Shares to be purchased by all the
Underwriters pursuant to such Pricing Agreement shall be the aggregate number of
Firm Shares set forth in Schedule I to such Pricing Agreement plus the aggregate
number of Optional Shares which the Underwriters elect to purchase.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such authorized
denominations and registered in such names as the Representatives may request
upon at least forty-eight hours' prior notice to the Company, shall be delivered
by or on behalf of the Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its behalf of the
purchase price therefor by wire transfer of federal (same-day) funds to the
account specified by the Company to the Representatives at least forty-eight
hours in advance as specified in such Pricing Agreement, (i) with respect to the
Firm Shares, all in the manner and at the place and time and date specified in
such Pricing Agreement or at such other place and time and date as the
Representatives and the Company may agree upon in writing, such time and date
being herein called the "First Time of Delivery" and (ii) with respect to the
Optional Shares, if any, in the manner and at the time and date specified by the
Representatives in the written notice given by the Representatives of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as the Representatives and the Company may agree upon in writing, such
time and date, if not the First Time of Delivery, being herein called the
"Second Time of Delivery." Each such time and date for delivery is herein called
a "Time of Delivery."
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Designated Shares and prior to
any Time of Delivery for such Designated Shares which shall be
disapproved by the Representatives for such Designated Shares promptly
after reasonable notice thereof; to advise the Representatives promptly
of any such amendment or supplement after any Time of Delivery for such
Designated Shares and furnish the Representatives with copies thereof;
to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act for
so long as the delivery of a prospectus is required in connection with
the offering or sale of such Designated Shares, and during such same
period to advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any supplement to the Prospectus
or any amended Prospectus has been filed with the Commission, of the
issuance by the Commission of any stop order or of any
9
order preventing or suspending the use of any prospectus relating to
such Designated Shares, of the suspension of the qualification of such
Designated Shares for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any prospectus relating to
such Designated Shares or suspending any such qualification, promptly
to use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Designated
Shares for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of such Designated Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) On the second business day following the date of the
Pricing Agreement for such Designated Shares (or at such other date and
time as set forth in the Pricing Agreement) and from time to time
thereafter, to furnish the Underwriters with copies of the Prospectus
as amended or supplemented in New York City in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Designated Shares and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, to notify the Representatives and
upon their request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Shares and continuing to and including
the later of (i) the termination of trading restrictions for such
Designated Shares, as notified to the Company by the
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Representatives, (ii) the last Time of Delivery for such Designated
Shares and (iii) any period specified in the Pricing Agreement, not to
offer, sell, contract to sell or otherwise dispose of, except as
provided hereunder or in the Pricing Agreement, any securities of the
Company that are substantially similar to the Designated Shares,
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Shares or
any such substantially similar securities (other than as set forth in
the Pricing Agreement or pursuant to employee stock option plans
existing on, or upon the conversion of convertible or exchangeable
securities outstanding as of, the date of the Pricing Agreement for
such Designated Shares) without the prior written consent of the
Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel, accountants and reserve
engineers in connection with the registration of the Designated Shares under the
Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Blue Sky Memorandum, closing documents (including compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Designated Shares; (iii) all expenses in connection with the
qualification of the Designated Shares for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey(s); (iv) any filing
fees incident to, and the fees and disbursements of counsel for the Underwriters
in connection with, any required reviews by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Designated Shares; (v)
the cost of preparing certificates for the Designated Shares; (vi) the cost and
charges of any transfer agent or registrar or dividend disbursing agent; (vii)
fees and expenses in connection with listing the Designated Shares; and (viii)
all other costs and expenses incident to the performance of its obligations
hereunder and under the Pricing Agreement (including with respect to any
Optional Shares) which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Designated Shares by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares under
the Pricing Agreement relating to such Designated Shares shall be subject, in
the discretion of the Representatives, to the condition that all representations
and warranties and other statements of
11
the Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Shares are, at and as of each Time of Delivery for such
Designated Shares, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Shares shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated each Time of
Delivery for such Designated Shares, with respect to the matters
covered in paragraphs (i), (ii) with respect to the authorized capital
stock and the Designated Shares, (iii), (vi) and (x) of subsection (c)
below as well as such other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Counsel for the Company satisfactory to the
Representatives shall have furnished to the Representatives their
written opinions, dated each Time of Delivery for such Designated
Shares, respectively, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has authorized capital stock as set
forth in the Prospectus as amended or supplemented, 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; the Designated Shares have been duly
authorized and, when issued and delivered against payment
therefor as provided herein and in the Pricing Agreement with
respect to such Designated Shares, will be validly issued,
fully paid and non-assessable; and the Designated Shares
conform in all material respects to the description thereof in
the Prospectus as amended or supplemented;
12
(iii) This Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized,
executed and delivered by the Company;
(iv) The issue and sale by the Company of the
Designated Shares being delivered at such Time of Delivery and
the compliance by the Company with all of the provisions of
this Agreement and the Pricing Agreement with respect to the
Designated Shares and the performance of the Company's
obligations hereunder and thereunder will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its subsidiaries is a party or by which the Company 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 action result in any violation of the
provisions of the certificate of incorporation or bylaws of
the Company or any statute or any order, rule or regulation
known to us of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of their properties, except for any such conflicts,
defaults, breaches or violations that would not in the
aggregate have a material adverse effect on the Company's
ability to perform its obligations under this Agreement or the
Pricing Agreement or that would not have a Material Adverse
Effect (except that such counsel need express no opinion with
respect to federal or state securities or Blue Sky laws with
respect to this subparagraph);
(v) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Designated Shares being delivered at such Time of
Delivery or the performance by the Company of its obligations
under this Agreement or such Pricing Agreement, except such as
have been obtained under the Act and such consents, approvals,
authorizations, orders, registrations or qualifications as may
be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the
Designated Shares by the Underwriters;
(vi) The statements set forth in the Prospectus as
amended or supplemented under the caption "Description of
Common Stock and Preferred Stock," insofar as they purport to
constitute a summary of the terms of the Designated Shares
(including the associated Rights), and under the captions
"Plan of Distribution" and "Underwriting," insofar as they
purport to describe the provisions of the laws and documents
referred to therein, are accurate in all material respects;
(vii) The Company is not an "investment company" as
such term is defined in the Investment Company Act;
(viii) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements and the notes
13
thereto and the related schedules or other information of a
financial or reserve engineering nature therein, as to which
such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
and such counsel has no reason to believe that any of such
documents, when they became effective or were so filed, as the
case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue
statement of a material fact or omitted to state a material
fact requiring to be stated therein or necessary to make the
statements therein not misleading, or, in the case of other
documents which were filed under the Act or the Exchange Act
with the Commission, 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;
(ix) The Registration Statement and the Prospectus as
amended or supplemented, and any further amendments and
supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements and the notes
thereto and the related schedules or other information of a
financial or reserve engineering nature therein, as to which
such counsel need express no opinion), as of their respective
effective or issue dates complied as to form in all material
respects with the requirements of the Act and the rules and
regulations of the Commission thereunder;
(x) Although such counsel need not assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinions in
subsections (ii) and (vi) of this Section 7(c), such counsel
have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made
by the Company prior to such Time of Delivery (other than the
financial statements and related schedules or other
information of a financial or reserve engineering nature
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading or
that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules or other
information of a financial or reserve engineering nature
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus
as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules or other information of a financial or reserve
engineering nature therein, as to which
14
such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration
Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to
the Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required;
(d) C. Xxxxxxx Xxxxxx, Legal Counsel of the Company, shall
have furnished to the Representatives his written opinion, dated each
Time of Delivery for such Designated Shares, respectively, in form and
substance satisfactory to the Representatives, to the effect that,
other than as set forth in the Prospectus as amended or supplemented,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect; and to
such counsel's knowledge, no such proceedings are threatened by
governmental authorities or threatened by others;
(e) On the date of the Pricing Agreement for such Designated
Shares at a time prior to the execution of the Pricing Agreement with
respect to such Designated Shares and at each Time of Delivery for such
Designated Shares, the independent accountants of the Company who have
audited the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement
shall have furnished to the Representatives a letter, dated the date of
such Pricing Agreement or the effective date of the Registration
Statement or the date of the most recent report filed with the
Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex II hereto, and
with respect to such letter dated such Time of Delivery, as to such
other matters as the Representatives may reasonably request and in form
and substance reasonably satisfactory to the Representatives;
(f) As soon as practicable following the execution of the
Pricing Agreement with respect to the Designated Shares and at each
Time of Delivery for such Designated Shares, the independent
accountants of EEX Corporation and its subsidiaries who have audited
the EEX Corporation financial statements included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the date of the Pricing Agreement, and
a letter dated such Time of Delivery, respectively, to the effect set
forth in Annex II hereto as applicable with respect to EEX
Corporation's financial statements and related information included or
incorporated by reference in the Registration Statement, and with
respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and
substance reasonably satisfactory to the Representatives;
15
(g) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
first amended or supplemented relating to the Designated Shares any
loss or interference with the business of the Company and its
subsidiaries, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as first amended or
supplemented relating to the Designated Shares, and (ii) since the
respective dates as of which information is given in the Prospectus as
first amended or supplemented relating to the Designated Shares there
shall not have been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus as first amended or
supplemented relating to the Designated Shares, the effect of which, in
any such case described in clause (i) or (ii), is in the judgment of
the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Designated Shares on the terms and in the manner contemplated in
the Prospectus as first amended or supplemented relating to the
Designated Shares;
(h) On or after the date of the Pricing Agreement relating to
the Designated Shares (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock or
other preferred securities by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities or preferred stock or such other preferred security;
(i) On or after the date of the Pricing Agreement relating to
the Designated Shares there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New
York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either federal or New York or Texas State
authorities; or (iv) (A) any change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls, (B) any major disruption of settlements of securities or
clearance services in the United States, or (C) any attack on or
outbreak or escalation of hostilities or act of terrorism involving the
United States, any declaration of war by Congress or any other national
or international calamity or emergency, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Firm Shares or Optional Shares or both
on the terms and in the manner contemplated in the Prospectus as first
amended or supplemented relating to the Designated Shares, whether in
the primary market or in respect of dealings in the secondary market;
16
(j) The Designated Shares at each Time of Delivery shall have
been approved for listing, subject to notice of issuance, on the New
York Stock Exchange;
(k) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the second business day following the date of the Pricing Agreement
relating to such Designated Shares (or such other date as set forth in
the Pricing Agreement); and
(l) The Company shall have furnished or caused to be furnished
to the Representatives at each Time of Delivery for the Designated
Shares certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as
to the performance by the Company of all of its obligations hereunder
to be performed at or prior to such Time of Delivery, as to the matters
set forth in subsections (a) and (g) of this Section and as to such
other matters as the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Shares, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Shares, or any amendment or supplement thereto in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter of Designated Shares through the Representatives expressly for use
in the Prospectus as amended or supplemented relating to such Designated Shares.
(b) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Shares, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
17
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Shares, or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. In any such proceeding, any indemnified party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the contrary; (ii)
the indemnifying party has failed within a reasonable time to retain counsel
reasonably satisfactory to the indemnified party; (iii) the indemnified party
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the indemnifying
party; or (iv) the named parties in any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood and
agreed that the indemnifying party shall not, in connection with any proceeding
or related proceeding in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties, and that all such fees and expenses shall be reimbursed
as they are incurred. Any such separate firm for any Underwriter shall be
designated in writing by the Representative and any such separate firm for the
Company shall be designated in writing by the Company. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify each
indemnified party from and against any loss or liability by reason of such
settlement or judgment. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise
18
or judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Shares on the other from the offering of the Designated Shares
to which such loss, claim, damage or liability (or action in respect thereof)
relates. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Underwriters
of the Designated Shares on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and such Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from such offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or such
Underwriters on the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Shares in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Designated Shares and not joint.
19
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer of the Company who signed the Registration
Statement and each director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Shares or Optional Shares which it has agreed to purchase under the
Pricing Agreement relating to such Shares, the Representatives may in their
discretion arrange for themselves or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the purchase
of such Firm Shares or Optional Shares, as the case may be, then the Company
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to the Representatives to
purchase such Shares on such terms. In the event that, within the respective
prescribed period, the Representatives notify the Company that they have so
arranged for the purchase of such Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Shares, the
Representatives or the Company shall have the right to postpone a Time of
Delivery for such Shares for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of such Shares which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
then the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Shares and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm Shares
or Optional Shares, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Shares or Optional Shares, as
the case may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Shares or Optional Shares, as the case may be, of a defaulting Underwriter
or Underwriters by the Representatives and the Company as provided in subsection
(a) above, the aggregate number of
20
Firm Shares or Optional Shares, as the case may be, which remains unpurchased
exceeds one-eleventh of the aggregate number of the Firm Shares or Optional
Shares, as the case may be, to be purchased at the respective Time of Delivery,
as referred to in subsection (b) above, or if the Company shall not exercise the
right described in subsection (b) above to require non-defaulting Underwriters
to purchase Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters, then the Pricing Agreement relating to such Firm
Shares or to such Optional Shares, as the case may be, shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Designated Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Firm Shares or Optional Shares
with respect to which such Pricing Agreement shall have been terminated except
as provided in Sections 6 and 8 hereof; but, if for any other reason, Designated
Shares are not delivered by or on behalf of the Company as provided herein, the
Company will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of such Designated
Shares, but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Shares except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or communication constituting such
Questionnaire, or otherwise furnished to the Representatives, which address will
be supplied to the Company by the Representatives upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
21
13. Notwithstanding anything herein to the contrary, each of the
Company and the Underwriters (and each employee, representative or other agent
of the foregoing persons), subject to applicable law, may disclose to any and
all persons, without limitation of any kind, the U.S. federal income tax
treatment and tax structure of this potential transaction and all materials of
any kind (including tax opinions and other tax analyses) that are provided to
such persons relating to such tax treatment and tax structure.
14. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Designated
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
15. Time shall be of the essence of each Pricing Agreement. As used
herein, unless otherwise indicated the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
16. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
17. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
22
Very truly yours,
Newfield Exploration Company
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
23
ANNEX I
PRICING AGREEMENT
[NAME(s) OF CO-REPRESENTATIVE(s),]
As Representatives of the several
Underwriters named in Schedule I hereto, [Date]
[Address]
Ladies and Gentlemen:
Newfield Exploration Company, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated May , 2003 (the "Underwriting Agreement"), to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Shares specified in Schedule II hereto (the "Designated
Shares" [consisting of Firm Shares and any Optional Shares the Underwriters may
elect to purchase]). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Shares which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Shares pursuant to Section 12 of
the Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the time and place and at the purchase price to the Underwriters set forth in
Schedule II hereto, the number of Firm Shares set forth opposite the name of
such Underwriter in Schedule I hereto [and, (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional Shares,
as provided below, the Company agrees to issue and sell to
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each of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company at the purchase price to the Underwriters
set forth in Schedule II hereto that portion of the number of Optional Shares as
to which such election shall have been exercised].
[The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised by written notice from the Representatives to the Company given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.]
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Company and one for each of the Representatives
plus one for each counsel] counterparts hereof, and upon acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination, upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
Newfield Exploration Company
By:
---------------------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Co-Representative(s)]
By:
----------------------------------
On behalf of each of the Underwriters
I-2
SCHEDULE I
[MAXIMUM NUMBER
OF OPTIONAL
NUMBER OF SHARES WHICH
[FIRM] SHARES MAY BE
UNDERWRITER TO BE PURCHASED PURCHASED
----------- --------------- --------------
[NAME(s) OF CO-REPRESENTATIVE(s)]
[NAMES OF OTHER UNDERWRITERS]
Total
=============== ==============
--------------- --------------
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SCHEDULE II
TITLE OF DESIGNATED SHARES:
Common Stock, par value $.01 per share
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares:
Maximum Number of Optional Shares:
INITIAL OFFERING PRICE TO PUBLIC:
[$........ per Share] [Formula]
PURCHASE PRICE BY UNDERWRITERS:
[$........ per Share] [Formula]
COMMISSION PAYABLE TO UNDERWRITERS:
$........ per Share in Federal (same-day) funds
FORM OF DESIGNATED SHARES:
Definitive form, to be made available for checking [and packaging] at least
twenty-four hours prior to the Time of Delivery at the office of [The Depository
Trust Company or its designated custodian] [the Representatives]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same-day) funds
[DESCRIBE ANY BLACKOUT PROVISIONS WITH RESPECT TO THE DESIGNATED SHARES]
TIME OF DELIVERY:
.......... a.m. (
New York City time), .................., 2003
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[OTHER TERMS]:
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ANNEX II
Pursuant to Section 7(e) and 7(f) of the Underwriting Agreement,
the accountants shall furnish letters regarding the Company or EEX Corporation,
as applicable (the "company"), addressed to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been [separately] furnished to the representative or representatives of
the Underwriters (the "Representatives", such term to include an
Underwriter or Underwriters who act without any firm being designated
as its or their representatives) [and are attached thereto];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the company's reports
incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which [have been separately furnished to the
Representatives] [are attached thereto]; and on the basis of specified
procedures including inquiries of officials of the company who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A)(i) below comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations, nothing
came to their attention that caused them to believe that the unaudited
condensed consolidated financial statements do not comply as to form in
all material respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the company's Annual Reports on Form 10-K for such fiscal years;
II-1
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of items 301, 302,
402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the company and its subsidiaries,
inspection of the minute books of the company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
company's reports incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the
related published rules and regulations, or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the company's reports incorporated
by reference in the Prospectus, for them to be in conformity
with generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma
II-2
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the company and
its subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
income from operations or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the company and its subsidiaries and
have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Shares for purposes of the letter delivered at the Time of Delivery for such
Designated Shares.
II-3
