EXHIBIT 10.7
3,000,000 Shares
XXXXXXXX PETROLEUM CORPORATION
COMMON STOCK
(PAR VALUE $0.20 PER SHARE)
PLACEMENT AGENCY AGREEMENT
--------------------------
____________, 2001
To The Persons Listed on
Schedule A Hereto
Ladies and Gentlemen:
1. Introductory. Xxxxxxxx Petroleum Corporation, a Delaware corporation
("COMPANY"), proposes to issue and sell 3,000,000 shares ("OFFERED SECURITIES")
of its common stock, par value $0.20 per share ("SECURITIES"), on an all or none
basis, directly to certain investors (collectively, the "INVESTORS"). The
Company desires to engage Jefferies & Company, Inc. ("Jefferies") as the lead
placement agent (the "LEAD PLACEMENT AGENT") and each other person listed in
Schedule A hereto as a placement agent (each a "Placement Agent" and together
with the Lead Placement Agent, the "Placement Agents") in connection with such
issuance and sale. The Company wishes to confirm its agreements with you as the
Placement Agent as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Placement Agents that:
(a) A registration statement (No. 333-47078) relating to the
Offered Securities, including a form of prospectus, has been filed with
the Securities and Exchange Commission ("COMMISSION") and either (i) has
been declared effective under the Securities Act of 1933 ("ACT") and is
not proposed to be amended or (ii) is proposed to be amended by post-
effective amendment. If such registration statement ("INITIAL
REGISTRATION STATEMENT") has been declared effective, either (i) an
additional registration statement ("ADDITIONAL REGISTRATION STATEMENT")
relating to the Offered Securities may have been filed with the
Commission pursuant to Rule 462(b) ("RULE 462(B)") under the Act and, if
so filed, has
1
become effective upon filing pursuant to such Rule and the Offered
Securities all have been duly registered under the Act pursuant to the
initial registration statement and, if applicable, the additional
registration statement or (ii) such an additional registration statement
is proposed to be filed with the Commission pursuant to Rule 462(b) and
will become effective upon filing pursuant to such Rule and upon such
filing the Offered Securities will all have been duly registered under
the Act pursuant to the initial registration statement and such
additional registration statement. If the Company does not propose to
amend the initial registration statement or if an additional
registration statement has been filed and the Company does not propose
to amend it, and if any post-effective amendment to either such
registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c) ("RULE 462(C)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"EFFECTIVE TIME" with respect to the initial registration statement or,
if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (i) if the Company has advised
the Placement Agents that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by
the Commission or has become effective upon filing pursuant to Rule
462(c), or (ii) if the Company has advised the Placement Agents that it
proposes to file an amendment or post-effective amendment to such
registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as
the case may be, is declared effective by the Commission. If an
additional registration statement has not been filed prior to the
execution and delivery of this Agreement but the Company has advised the
Placement Agents that it proposes to file one, "EFFECTIVE TIME" with
respect to such additional registration statement means the date and
time as of which such registration statement is filed and becomes
effective pursuant to Rule 462(b). "EFFECTIVE DATE" with respect to the
initial registration statement or the additional registration statement
(if any) means the date of the Effective Time thereof. The initial
registration statement, as amended at its Effective Time, including all
information contained in the additional registration statement (if any)
and deemed to be a part of the initial registration statement as of the
Effective Time of the additional registration statement pursuant to the
General Instructions of the Form on which it is filed and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("RULE
430A(B)") under the Act, is hereinafter referred to as the "INITIAL
REGISTRATION STATEMENT". The additional registration statement, as
amended at its Effective Time, including the contents of the initial
registration statement incorporated by reference therein and including
all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "ADDITIONAL REGISTRATION
STATEMENT". The Initial Registration Statement and the Additional
Registration Statement are herein referred to collectively as the
"REGISTRATION STATEMENTS" and individually as a "REGISTRATION
STATEMENT". The form of prospectus relating to the Offered Securities,
as first filed with the Commission pursuant to and in accordance with
Rule 424(b) ("RULE 424(B)") under the Act or (if no such filing is
required) as included in a Registration Statement, is hereinafter
referred to as the
2
"PROSPECTUS". No document has been or will be prepared or distributed in
reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement: (i) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
("RULES AND REGULATIONS") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii)
on the Effective Date of the Additional Registration Statement (if any),
each Registration Statement conformed, or will conform, in all material
respects to the requirements of the Act and the Rules and Regulations
and did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) on the date of this Agreement, the
Initial Registration Statement and, if the Effective Time of the
Additional Registration Statement is prior to the execution and delivery
of this Agreement, the Additional Registration Statement each conforms,
and at the time of filing of the Prospectus pursuant to Rule 424(b) or
(if no such filing is required) at the Effective Date of the Additional
Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all respects
to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes, or will include, any untrue
statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading. If the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of
this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and the Prospectus will
conform in all respects to the requirements of the Act and the Rules and
Regulations, neither of such documents will include any untrue statement
of a material fact or will omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and no Additional Registration Statement has been or will be
filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by the Lead Placement
Agent, with respect to applicability of the two preceding sentences to
the Lead Placement Agent, or any other Placement Agent, with respect to
applicability of the two preceding sentences to such other Placement
Agent, specifically for use therein, it being understood and agreed that
the only such information is that described as such in Section 7(b)
hereof.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; the Company is duly
qualified to do business as a foreign corporation in good standing in
the States of Louisiana and Texas; and the Company is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct
of its business requires such qualification except where the failure to
be so qualified would not individually or in the aggregate have a
material adverse effect on
3
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole
("MATERIAL ADVERSE EFFECT").
(d) Each subsidiary of the Company (A) that is a corporation has
been duly incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation, and has
corporate power and authority to own its property and to conduct its
business as described in the Prospectus or (B) that is a limited
partnership or limited liability company, as the case may be, has been
duly formed and is validly existing as a limited partnership or limited
liability company, as the case may be, in good standing under the laws
of the jurisdiction of its formation, and has full power and authority
to own its property and to conduct its business as described in the
Prospectus; and, in either case, is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or lease of property or the conduct of its
business requires such qualification except where the failure to be so
qualified would not have a Material Adverse Effect; all of the issued
and outstanding capital stock or other ownership interests of each
subsidiary of the Company is owned by the Company and has been duly
authorized and validly issued and is fully paid and nonassessable;
except as disclosed in the prospectus, the capital stock or other
ownership interests of each subsidiary owned by the Company, directly or
through subsidiaries, is owned free from liens, encumbrances and
defects; all the outstanding shares of capital stock or other ownership
interests of each subsidiary of the Company have been duly and validly
issued and are fully paid and nonassessable; and except for the
Company's general partnership interest in BKWC Limited Partnership,
neither the Company nor any of its subsidiaries are general partners in
any partnership.
(e) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with this
Agreement on each Closing Date (as defined below), such Offered
Securities will have been, validly issued, fully paid and nonassessable
and will conform to the description thereof contained in the Prospectus;
and the stockholders of the Company have no preemptive rights with
respect to the Securities.
(f) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company, the
Lead Placement Agent or any other Placement Agent for a brokerage
commission, finder's fee or other like payment in connection with the
offering of Offered Securities.
(g) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to a Registration Statement (except as to which
valid notice has been given and valid waivers of such rights have been
made, copies of which have been furnished to the Placement Agents) or,
except as disclosed in the Prospectus and set forth on
4
Schedule B hereto, in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.
(h) The Company has filed a complete application to list the
Offered Securities on The New York Stock Exchange.
(i) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and
such as may be required under state securities laws.
(j) The execution, delivery and performance of this Agreement,
and the issuance and sale of the Offered Securities will not result in a
breach or violation of any of the terms and provisions of, or constitute
a default under, any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Company or any subsidiary of the Company or any of
their properties, or any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Company to which
the Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws of
the Company or any such subsidiary, except where such violation or
default would not have a Material Adverse Effect, and the Company has
full power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement.
(k) This Agreement and the Escrow Agreement have each been duly
authorized, executed and delivered by the Company.
(l) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by them (excluding all oil and gas
properties that are dealt with in clause (m) below), in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the Company
and its subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them.
(m) The Company and its subsidiaries have sufficient title to
its oil and gas properties, free and clear of all liens, encumbrances
and defects except (i) as disclosed in the Prospectus, (ii) liens and
encumbrances under gas sales contracts, operating agreements,
unitization and pooling agreements and such other agreements as are
customarily found in connection with comparable drilling and producing
operations; and (iii) liens, encumbrances and defects that do not,
individually and in the aggregate, materially affect the value of such
properties or materially interfere with the ability of the Company to
conduct its business as currently conducted or to utilize such
properties for their intended purposes.
5
(n) Except as described in the Prospectus, all royalties,
rentals, deposits and other amounts due on the oil and gas properties of
the Company and its subsidiaries have properly and timely paid in all
material respects, and no material amounts of proceeds from the sale or
production attributable to the oil and gas properties of the Company and
its subsidiaries are currently being held, or are being threatened to be
held, in suspense by any purchaser or purchasers thereof.
(o) The Company and its subsidiaries possess certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them, except
for those certificates, authorities or permits, the failure of which to
be possessed by the Company, would not, individually or in the aggregate
have a Material Adverse Effect, and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate(s), authority(ies) or permit(s) that, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect.
(p) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(q) The Company and its subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "INTELLECTUAL PROPERTY
RIGHTS") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(r) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates any
real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating
to any environmental laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse
Effect; and the Company is not aware of any pending investigation which
might lead to such a claim.
(s) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of
its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this
6
Agreement, and no such actions, suits or proceedings are threatened or,
to the Company's knowledge, contemplated.
(t) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and
such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied on
a consistent basis; and the assumptions used in preparing the pro forma
financial statements included in each Registration Statement and the
Prospectus provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(u) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving
a prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company and
its subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Prospectus, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(v) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940.
(w) Coutret & Associates, Inc. ("Coutret"), petroleum engineers
from whose reserve report information is set forth in the Registration
Statement and the Prospectus, were, as of the date of such respective
report, and are, as of the date hereof, independent petroleum engineers
with respect to the Company and its subsidiaries. The information
underlying the estimates of the reserves of the Company and the
subsidiaries, supplied by the Company to Coutret for purposes of
preparing such reserve reports (including, without limitation,
production, costs of operation and development, current prices for
production, agreements relating to current and future operations and
sales of production, working interest and net revenue information
relating to the Company's ownership in such properties) was true and
correct in all material respects on the dates such information was
supplied and such reserve reports were prepared; the estimates of future
capital expenditures and other future exploration and development costs
supplied to Coutret by the Company were prepared in good faith and with
a reasonable basis; the information provided by Coutret for purposes of
preparing the reserve report was prepared in accordance with customary
industry practices and conforms in all material respects to all
guidelines promulgated by the Commission; and except as described in the
Prospectus, other than normal production of the reserves and intervening
product price fluctuations described in the Prospectus, there are no
facts or circumstances that would, individually or in the aggregate have
a material adverse effect on the Company's reserves or present value of
future net cash flows therefrom, as described in
7
the Prospectus and described in the reserve report; and estimates of
such reserves and the present value of future net cash flows therefrom
as described in the Prospectus and reflected in the reserve report
comply in all material respects to the applicable requirements of the
Commission and the Act, including Regulation S-X and Industry Guide 2
under the Act.
3. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, but subject
to the terms and conditions herein set forth, the Lead Placement Agent and the
Placement Agents, acting as lead placement agent and placement agents,
respectively, for the Company in connection with the issuance and sale of the
Offered Securities, agrees to use their respective reasonable best efforts to
solicit offers to purchase Offered Securities from the Company. In acting under
this Agreement and in connection with the sale of any Offered Securities, the
Lead Placement Agent and each other Placement Agent each are acting solely as an
agent of the Company and do not assume any obligation towards, or relationship
of agency or trust with, any Investor. Neither the Lead Placement Agent nor any
other Placement Agent shall have any liability to the Company if any Investor's
offer to purchase shares of Offered Securities solicited by the Lead Placement
Agent or any other Placement Agent and accepted by the Company is not
consummated for any reason. For avoidance of doubt, the Company and the
Placement Agents agree that neither the Lead Placement Agent nor any other
Placement Agent shall have any obligation whatsoever to purchase any Offered
Securities and that neither the Lead Placement Agent nor any other Placement
Agent is acting as an underwriter of this offering of Offered Securities. If
the Company shall default in its obligations to deliver Offered Securities to
any Investor whose offer it has accepted, the Company shall hold the Placement
Agents harmless against any loss, claim, damage or liability from or as a result
of such default and shall, in particular, pay to the Placement Agents the
commissions that they would have received had the sale to such Investor(s) been
consummated.
Concurrently with the execution and delivery of this Agreement, the
Company, the Lead Placement Agent, each other Placement Agent and Xxxxx Fargo
Bank Minnesota, National Association, as escrow agent (the "ESCROW AGENT"),
shall enter into an Escrow Agreement in substantially the form attached hereto
as Exhibit A (the "ESCROW AGREEMENT"), pursuant to which an escrow account will
be established at the Company's expense, for the benefit of the Investors (the
"ESCROW ACCOUNT"). Prior to the Closing Date, (i) each of the Investors will
deposit in the Escrow Account an amount equal to $[___] per Offered Security
multiplied by the number of Offered Securities that the Company has agreed to
sell to such Investor and (ii) the Escrow Agent will notify the Company and the
Placement Agent whether the Investors have deposited in the Escrow Account funds
in an aggregate amount equal to the proceeds of the sale of all of the Offered
Securities (the "REQUISITE FUNDS").
At [____] a.m., New York time, on [____], 2001, or at such other time
not later than seven full business days thereafter as Jefferies and the Company
determine but in no event prior to the date on which the Escrow Agent shall have
received less than all of the Requisite Funds (such time being herein referred
to as the "CLOSING DATE"), the Escrow Agent shall release the Requisite Funds
from the Escrow Account for collection by the Company and the Placement Agents
as provided in the Escrow Agreement and the Company shall deliver the Offered
Securities to the accounts of the Investors, which delivery may be made through
the facilities of The Depositary Trust Company. The closing shall take place at
the office of Skadden, Arps, Slate, Meager & Xxxx LLP, 0000 Xxxxx, Xxxxx
0
0000, Xxxxxxx, Xxxxx 00000. For purposes of Rule 15c6-1 under the Securities
Exchange Act of 1934, the Closing Date (if later than the otherwise applicable
settlement date) shall be the settlement date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
certificates for the Offered Securities so to be delivered will be in definitive
form, in such denominations and registered in such names as the Investors
request and will be made available for checking and packaging at the above
office of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP at least 24 hours prior to
the Closing Date.
As compensation for the Lead Placement Agent's and each other Placement
Agent's efforts and obligations hereunder, the Company will pay to the Lead
Placement Agent and each other Placement Agent commissions equal to:
(a) with respect to commissions for the Lead Placement Agent,
$[___]/1/ per Offered Security times the total number of Offered
Securities for which offers to purchase have been made and adequate
funds have been validly deposited in the Escrow Account by any Investor
who was solicited by the Lead Placement Agent and is listed on a
schedule provided by the Lead Placement Agent to the Escrow Agent
pursuant to Section 4 of the Escrow Agreement, and which offers have
been accepted by the Company, and
(b) with respect to commissions for any other Placement Agent,
$[___]/2/ per Offered Security times the total number of Offered
Securities for which offers to purchase have been made and adequate
funds have been validly deposited in the Escrow Account by any Investor
who was solicited by such Placement Agent and who is listed on a
schedule provided by such Placement Agent to the Escrow Agent pursuant
to Section 4 of the Escrow Agreement, and which offers have been
accepted by the Company.
For avoidance of doubt, in the event that between the date of this
Agreement and the Closing Date, one or more Investors solicited by the Lead
Placement Agent or one or more Placement Agents fails to deposit funds in the
Escrow Account for the number of Offered Securities that such Investor had
offered to purchase, then the Lead Placement and each other Placement Agent
shall be entitled to solicit offers to purchase Offered Securities from
additional Investors and be compensated for such solicitation in accordance with
the foregoing subsection (a) or (b), as applicable.
In addition to the foregoing and as additional compensation to the Lead
Placement Agent for its services and obligations hereunder as such, the Company
will pay to the Lead Placement Agent an additional commission in the amount of
$[____]/3/.
Such payments will be made by the Company on the Closing Date or upon
such other date as set forth in the Escrow Agreement that the funds deposited in
the Escrow Account are returned to the Investors without a closing hereunder.
-------------
/1/ Will equal 5% of the per share price to Investor. Assuming a $5.00 per share
price, this amount will be $.25 per Offered Security.
/2/ Will equal 5% of the per share price to Investor. Assuming a $5.00 per share
price, this amount will be $.25 per Offered Security.
/3/ Will equal 2% of the gross proceeds to the Company of this offering.
9
4. Solicitation of Offers by the Placement Agents. It is understood
that the Placement Agents will use their reasonable efforts to solicit from the
public offers to purchase the Offered Securities as set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the
Placement Agents that:
(a) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by Jefferies,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement.
The Company will advise the Lead Placement Agent promptly of any
such filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to register
a portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the Company
will file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to the Lead Placement Agent, any
other Placement Agent or any Investor, or will make such filing at such
later date as shall have been consented to by Jefferies.
(b) The Company will advise Jefferies promptly of any proposal to amend
or supplement the initial or any additional registration statement as filed
or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not
effect such amendment or supplementation without Jefferies' consent, which
consent shall not be unreasonably withheld after a reasonable opportunity
by Jefferies to review any such amendment or supplement; and the Company
will also advise Jefferies promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) The Company will comply with the requirements of the Act and the
Rules and Regulations thereunder and any other applicable rules and
regulations so far as to permit the completion of the distribution of the
Offered Securities as contemplated in this Agreement and the Prospectus.
If, at any time when a prospectus relating to the Offered Securities is
required to be delivered under the Act in connection with the solicitation
of offers by the Lead Placement Agent, any other Placement Agents or any
dealers, any event
10
occurs as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will promptly notify Jefferies of such event and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither Jefferies' consent to, nor the
Placement Agents' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "AVAILABILITY DATE" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"AVAILABILITY DATE" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Placement Agents copies of each
Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with the solicitation of offers by the
Placement Agents or dealers, the Prospectus and all amendments and
supplements to such documents, in each case in such reasonable quantities
as Jefferies requests. The Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of the
execution and delivery of this Agreement or the Effective Time of the
Initial Registration Statement. All other documents shall be so furnished
as soon as available. The Company will pay the expenses of printing and
distributing to the Placement Agents and the Investors all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such domestic jurisdictions as
Jefferies designates and will continue such qualifications in effect so
long as required for the distribution.
(g) During the period of five years hereafter, the Company will furnish
to the Lead Placement Agent and, upon request, to each of the other
Placement Agents, as soon as practicable after the end of each fiscal year,
a copy of its annual report to stockholders for such year; and the Company
will furnish to the Lead Placement Agent (i) as soon as available, a copy
of each report and any definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (ii) from time to time, such other information concerning
the Company as Jefferies may reasonably request.
11
(h) The Company will pay all expenses incident to the performance of its
obligations under this Agreement, for any filing fees and other expenses
(including fees and disbursements of counsel) incurred in connection with
qualification of the Offered Securities for sale under the laws of such
domestic jurisdictions as Jefferies designates and the printing of
memoranda relating thereto, for the filing fee incident to, and the
reasonable fees and disbursements of counsel to the Placement Agents in
connection with, the review by the National Association of Securities
Dealers, Inc. of the Offered Securities, for any travel expenses of the
Company's officers and employees, any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers
of the Offered Securities and for expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Placement Agents and Investors. In addition,
the Company will pay to the Lead Placement Agent on the Closing Date, or
upon such other date as set forth in the Escrow Agreement that the funds
deposited in the Escrow Account are returned to the Investors without a
closing hereunder, an amount equal to the difference between $[____] minus
$20,000, which total amount represents reimbursement of all fees,
disbursements and out-of-pocket expenses (including fees and disbursements
of counsel) incurred by Jefferies as provided for under the Letter
Agreement dated July 27, 2000 between Jefferies and the Company.
(i) For a period of 180 days after the date of the initial public
offering of the Offered Securities, the Company will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
or file with the Commission any registration statement under the Act
relating to, any additional shares of its Securities or securities
convertible into or exchangeable or exercisable for any shares of its
Securities, or publicly disclose the intention to make any such offer,
sale, pledge, disposition or filing, whether for the benefit of the
Company, its securityholders or any other person, without the prior written
consent of Jefferies, except issuances of Securities pursuant to the
conversion or exchange of convertible or exchangeable securities or the
exercise of warrants or options, in each case outstanding on, and in
accordance with the terms of such securities as of, the date hereof, grants
of employee stock options pursuant to the terms of a plan in effect on the
date hereof, issuances of Securities pursuant to the exercise of such
options.
(j) The Company will not engage any person other than the Lead Placement
Agent (including any other Placement Agent) as lead placement agent.
6. Conditions of the Obligations of the Placement Agents. The obligations
of the Placement Agents hereunder and the obligation of any Investor to purchase
Offered Securities on the Closing Date, whose offer to purchase such Offered
Securities has been solicited by the Placement Agents and accepted by the
Company, will be subject to the accuracy of the representations and warranties
on the part of the Company herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional conditions
precedent:
(a) The Placement Agents shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this
12
Agreement or, if the Effective Time of the Initial Registration Statement
is subsequent to the execution and delivery of this Agreement, shall be
prior to the filing of the amendment or post-effective amendment to the
registration statement to be filed shortly prior to such Effective Time),
of KPMG LLP confirming that they are independent public accountants for the
Company within the meaning of the Act and the applicable published Rules
and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules)
examined by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on the unaudited
financial statements included in the Registration Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements of
the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other specified
procedures, nothing came to their attention that caused them to believe
that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act
and the related published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles;
(B) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(C) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year and with the period of corresponding
length ended the date of the latest income statement included in
the Prospectus, in consolidated net sales, or
13
in the total or per share amounts of consolidated income before
extraordinary items or net income, except in all cases set forth
in clause (B) above for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(iv) on the basis of their review of the unaudited pro forma as
adjusted financial statements and selected consolidated financial data
included in the Registration Statement and inquiries of officials of the
Company who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that caused
them to believe that the unaudited pro forma as adjusted financial
statements and selected consolidated financial data included in the
Registration Statement do not comply as to form in all material respects
with the applicable accounting requirements under the Act;
(v) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "REGISTRATION STATEMENTS" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration is subsequent to such execution and delivery,
"REGISTRATION STATEMENTS" shall mean the Initial Registration Statement and
the additional registration statement as proposed to be filed or as
proposed to be amended by the post-effective amendment to be filed shortly
prior to its Effective Time, and (iii) "PROSPECTUS" shall mean the
prospectus included in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or such later date as shall have been consented to by
Jefferies. If the Effective Time of the Additional Registration Statement
(if any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to the Lead Placement Agent, any other Placement
Agent or any Investor, or shall have occurred at such later date as shall
have been consented to by Jefferies. If the Effective Time of the Initial
14
Registration Statement is prior to the execution and delivery of this
Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to the Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company, the Lead Placement Agent or any other Placement
Agent, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event which
results, or which could reasonably be expected to result, in a change in
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as one enterprise
which, in the judgment of Jefferies, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii) any
downgrading in the rating of any debt securities or preferred stock of the
Company by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public
announcement that any such organization has under surveillance or review
its rating of any debt securities or preferred stock of the Company (other
than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating); (iii) any
material suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of Jefferies, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the Offered Securities.
(d) The Placement Agents shall have received an opinion, dated the
Closing Date, of Xxxxxx & Xxxxxx, L.L.P., counsel for the Company, to the
effect that:
(i) The Company has been duly incorporated and is an existing
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; and solely based upon
certificates received from the appropriate government officials, the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification;
(ii) Each subsidiary of the Company (A) that is a corporation
has been duly incorporated and is an existing corporation in good
standing under the laws of its jurisdiction of incorporation, and has
corporate power and authority to
15
own its property and to conduct its business as described in the
Prospectus or (B) that is a limited partnership or limited liability
company, as the case may be, has been duly formed and is validly
existing as a limited partnership or limited liability company, as the
case may be, in good standing under the laws of the jurisdiction of its
formation, and has full power and authority to own its property and to
conduct its business as described in the Prospectus; and solely based
upon certificates received from the appropriate governmental officials,
in either case, is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or lease of property or the conduct of its business
requires such qualification; all of the issued and outstanding capital
stock or other ownership interests of each subsidiary of the Company is
owned by the Company and has been duly authorized and validly issued and
is fully paid and nonassessable; the capital stock or other ownership
interests of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects; all
the outstanding shares of capital stock or other ownership interests of
each subsidiary of the Company have been duly and validly issued and are
fully paid and nonassessable; and neither the Company nor any of its
subsidiaries are general partners in any partnership;
(iii) The Offered Securities delivered on the Closing Date have
been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to the Securities;
(iv) There are no contracts, agreements or understandings known
to such counsel between the Company and any person granting such person
the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or, except as disclosed in the Prospectus and in an exhibit to
the opinion, in any securities being registered pursuant to any other
registration statement filed by the Company under the Act;
(v) The Company is not and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940;
(vi) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and
such as may be required under state securities laws;
(vii) The execution, delivery and performance of this Agreement,
the Escrow Agreement and the issuance and sale of the Offered Securities
will not
16
result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, any rule, or regulation or,
to our knowledge, any order of any governmental agency or body or any
court having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or instrument to
which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement;
(viii) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein or was included in the Initial
Registration Statement or the Additional Registration Statement (as the
case may be), and, to the knowledge of such counsel, no stop order
suspending the effectiveness of a Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and each
Registration Statement and the Prospectus, and each amendment or
supplement thereto, 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; and such counsel do not know of
any legal or governmental proceedings required to be described in a
Registration Statement or the Prospectus which are not described as
required or of any contracts or documents of a character required to be
described in a Registration Statement or the Prospectus or to be filed
as exhibits to a Registration Statement which are not described and
filed as required; it being understood that such counsel need express no
opinion as to the financial statements or other financial, statistical
or reserve data contained in the Registration Statements or the
Prospectus;
(ix) The statements set forth in the Prospectus under the
captions "Business--Regulations", "Business--Legal and Regulatory
Proceedings", "Transactions with Our Management and Securityholders" and
"Description of Capital Stock", insofar as they are descriptions of
contracts, agreements or other legal documents, or refer to statements
of law or legal conclusions, are accurate in all material respects and
present fairly the information described therein; and
(x) This Agreement and the Escrow Agreement has been duly
authorized, executed and delivered by the Company.
In addition, such counsel shall state that because the primary
purpose of their engagement was not to establish or confirm factual
matters or financial, statistical or reserve data and because of the
wholly or partially non-legal character
17
of many of the statements contained in the Registration Statement or the
Prospectus (except as described in clause (viii) above), they are not
passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, and they have not independently verified
the accuracy, completeness or fairness of such statements and that,
without limiting the generality of the foregoing, they assume no
responsibility for and have not independently verified the accuracy,
completeness or fairness of the financial statements and schedules and
other financial, statistical and reserve data included in the
Registration Statement and the Prospectus, and they have not examined
the financial, statistical or reserve records from which such financial
statements, schedules and other financial, statistical or reserve data
are derived. Such counsel shall state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company,
and with representatives of the Placement Agents and counsel of the Lead
Placement Agent, at which the contents of the Registration Statement and
the Prospectus and related matters were discussed and that they have
also reviewed certain corporate documents furnished to them by the
Company. Such counsel shall state that based upon such participation and
review, no facts have come to their attention that cause them to believe
that the Registration Statement, as of its effective date contained, or
the Prospectus, as of its date contained, or as of the date hereof
contains, an untrue statement of a material fact or omitted 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,
except that in each case such counsel need express no belief with
respect to the financial statements and schedules and other financial,
statistical and reserve data included in the Registration Statement or
the Prospectus.
In rendering the foregoing opinion, Xxxxxx & Xxxxxx L.L.P. may
state that such opinion is limited to the Federal laws of the United
States and the General Corporation Law of the State of Delaware, and
that they are expressing no opinion as to the effect of the laws of any
other jurisdiction. In addition, such counsel may state that they have
relied as to certain matters on information obtained from public
officials, officers of the Company and other sources believed by them to
be responsible.
(e) The Lead Placement Agent shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel for the Lead Placement Agent only, such
opinion or opinions, dated the Closing Date and addressed only to the Lead
Placement Agent, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on the Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Lead Placement Agent may require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(f) The Placement Agents shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of
18
the Company in which such officers, to the best of their knowledge after
reasonable investigation, shall state that: the representations and
warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b),
including payment of the applicable filing fee in accordance with Rule
111(a) or (b) under the Act, prior to the time the Prospectus was printed
and distributed to the Lead Placement Agent, any other Placement Agent or
any Investor; and, subsequent to the respective dates of the most recent
financial statements in the Prospectus, there has been no material adverse
change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as a
whole except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(g) The Placement Agents shall have received a letter, dated the Closing
Date, of KPMG LLP which meets the requirements of subsection (a) of this
Section, except that the specified date referred to in such subsection will
be a date not more than three days prior to the Closing Date for the
purposes of this subsection.
(h) The Placement Agents shall have received a letter, dated the Closing
Date, of Coutret with respect to their status as independent reserve
engineers and with respect to reserve information of the Company contained
in the Registration Statement and the Prospectus, in form and substance
reasonably satisfactory to the Placement Agents.
(i) On or prior to the date of this Agreement, the Placement Agents
shall have received lockup letters from each of the executive officers and
directors of the Company.
(j) The Offered Securities have been approved for listing on the New
York Stock Exchange and evidence thereof provided to the Placement Agents.
The Company will furnish the Placement Agents with such conformed copies of such
opinions, certificates, letters and documents as the Placement Agents may
reasonably request. Jefferies may in its sole discretion waive compliance with
any conditions to the obligations of the Placement Agents hereunder.
7. Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Placement Agent
(which term as used in this Section 7 shall, for avoidance of doubt,
include the Lead Placement Agent), their respective partners, directors and
officers and each person, if any, who controls the respective Placement
Agents within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities, joint or several, to which any of the
Placement Agents may become subject, under the Act or otherwise, insofar as
such losses,
19
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement, the Prospectus,
or any amendment or supplement thereto, or any related preliminary
prospectus, 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 or (ii) any act or
omission of any other Placement Agent engaged by the Company to solicit
offers to purchase Offered Securities from Investors, and will reimburse
the Placement Agents for any legal or other expenses reasonably incurred by
any such Placement Agent in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company will not be liable in any
such case to the Lead Placement Agent or any other Placement Agent who
furnished written information to the Company 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 in or omission or alleged omission
from any of such documents in reliance upon and in conformity with such
written information furnished to the Company by the Lead Placement Agent or
such other Placement Agent, as the case may be, specifically for use
therein, it being understood and agreed that the only such information
furnished by the Lead Placement Agent or any other Placement Agents
consists of the information described as such in subsection (b) below.
Insofar as the foregoing indemnity agreement, or the representations
and warranties contained in Section 2(b), may permit indemnification for
liabilities under the Act of any person who is a Placement Agent or a
partner or controlling person of a Placement Agent within the meaning of
Section 15 of the Act and who, at the date of this Agreement, is a
director, officer or controlling person of the Company, the Company has
been advised that in the opinion of the Commission such provisions may
contravene Federal public policy as expressed in the Act and may therefore
be unenforceable. In the event that a claim for indemnification under such
agreement or such representations and warranties for any such liabilities
(except insofar as such agreement provides for the payment by the Company
of expenses incurred or paid by a director, officer or controlling person
in the successful defense of any action, suit or proceeding) is asserted by
such a person, the Company will submit to a court of appropriate
jurisdiction (unless in the opinion of counsel for the Company the matter
has already been settled by controlling precedent) the question of whether
or not indemnification by it for such liabilities is against public policy
as expressed in the Act and therefore unenforceable, and the Company will
be governed by the final adjudication of such issue.
(b) The Lead Placement Agent and each other Placement Agent will
severally and not jointly indemnify and hold harmless the Company, its
directors and officers and each person, if any who controls the Company
within the meaning of Section 15 of the Act, 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 any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are
based upon the omission or the alleged omission to state therein a material
fact
20
required to be stated therein or necessary to make the statements therein
not misleading, in each 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 reliance upon and in conformity with written
information furnished to the Company by the Lead Placement Agent or such
other Placement Agent, as the case may be, specifically for use therein,
and will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by the
Placement Agents consists of the following information in the Prospectus
under the caption "Plan of Distribution" furnished by the Placement Agents:
the second, third and fourth sentences of the second paragraph, and the
fifth paragraph under such caption.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In the case of
parties indemnified pursuant to subsection (a) above, counsel to the
indemnified parties shall be selected by Jefferies, and in the case of
parties indemnified pursuant to subsection (b) above, counsel to the
indemnified parties shall be selected by the Company. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party, subject
to the next sentence of this subsection (c) will not be liable to such
indemnified party under this Section, for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Notwithstanding the foregoing, each indemnified party shall have the right
to employ separate counsel of its choice (including local counsel), and the
indemnifying parties shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the employment of counsel by the indemnified
party has been authorized in writing by the indemnifying party, (ii) the
use of counsel chosen to represent such indemnified party would present
such counsel with a conflict, or potential conflict, of interest, (iii) the
actual or potential defendants in, or targets of, any such action include
both such indemnified party and the indemnifying party, and such
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party,
or (iv) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability
21
on any claims that are the subject matter of such action and (ii) does not
include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Placement Agents on the
other from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand and the Placement Agents on the other in connection with
the statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Placement
Agents on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total commissions received by the Placement
Agents. 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 or the Placement Agents and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by
an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of 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
action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), the Placement Agents
shall not be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by any such
Placement Agent and distributed to the public were offered to the public
exceeds the amount of any damages which any such Placement Agent 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 Placement Agents' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 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 of Placement Agents within the meaning of the Act; and the
obligations of the Placement Agents under this Section shall be in addition
to any liability which the respective Placement Agents may otherwise have
and shall extend, upon the same terms and conditions, to each director of
the Company, to each officer of the Company who has signed a Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
22
8. [RESERVED]
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Placement Agents set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of the Placement Agents, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If for any reason the purchase of the
Offered Securities by the Investors is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Company and the Placement Agents
pursuant to Section 7 shall remain in effect, and if any Offered Securities have
been purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Investors is not consummated for any reason, the
Company will reimburse the Placement Agents for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with its obligations hereunder.
10. Notices. All communications hereunder will be in writing and, if
sent to the Placement Lead Agent, will be mailed, delivered or telegraphed and
confirmed to the Placement Agent at 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxx 00000, Attention: Investment Banking Department--Transactions Advisory
Group, or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention:
President; (provided, however, that any notice to a Placement Agent pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Placement Agent.)
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. [RESERVED]
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
If the foregoing is in accordance with the Placement Agents'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will
23
become a binding agreement between the Company and the Placement Agents in
accordance with its terms.
Very truly yours,
XXXXXXXX PETROLEUM CORPORATION
By:__________________________
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Executive Vice President and
Chief Operating Officer
The foregoing Placement Agency Agreement is hereby confirmed and accepted as of
the date first above written.
Jefferies & Company, Inc.
By: __________________________________
Name: Xxxx Xxxxxxxx
Title: Senior Vice President
Xxxxxxx Xxxxx Xxxxxx Inc.
By: __________________________________
Name:
Title:
Chase Securities Inc.
By: __________________________________
Name:
Title:
Xxxxxx Xxxxxxxxxx Xxxxx LLC
By: __________________________________
Name:
Title:
Xxxxxxx Rice & Co.
By: __________________________________
Name:
Title:
24
SCHEDULE A
Xxxxxxxxx & Company, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Xxxxxxx Xxxxx Xxxxxx Inc.
Xxxxx Securities Inc.
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Xxxxxxx Xxxx & Co.
25
SCHEDULE B
1. February 2000 Registration Rights Agreement
2. September 2000 Registration Rights Agreement
26
EXHIBIT A
FORM OF ESCROW AGREEMENT
27
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, is dated as of January [__], 2001, by and among
XXXXXXXX PETROLEUM CORPORATION, a Delaware corporation (the "Company"), the
parties listed on Schedule 1 hereto who are acting as Placement Agents (each a
"Placement Agent" and collectively the "Placement Agents") with respect to the
Shares (as defined herein), and Xxxxx Fargo Bank Minnesota, National
Association, a [____] (the "Escrow Agent").
WHEREAS, the Company proposes to sell an aggregate of 3,000,000 shares
of its common stock, $0.20 par value per share (the "Shares"), for an aggregate
of $[_____], all as described in the Company's registration statement on Form S-
1 (Registration No. 333-47078) (which, together with all amendments or
supplements thereto is referred to herein as the "Registration Statement");
WHEREAS, the Shares are being offered by the Company to investors whom
the Placement Agents have introduced to the Company, pursuant to registration
under the Securities Act of 1933, as amended, and pursuant to registration or
exemptions from registration under state securities laws;
WHEREAS, the offering of the Shares will terminate on January [___],
2001 (the "Final Closing Date") and, if subscriptions for the total number of
Shares being offered pursuant to the Registration Statement have not been
received by the Company on or before the Final Closing Date, no Shares will be
sold and all payments made by subscribers will be refunded by the Escrow Agent
with interest earned thereon, if any; and
WHEREAS, with respect to all subscription payments received from
subscribers, the Company proposes to establish an escrow account with the Escrow
Agent at [address].
NOW, THEREFORE, it is agreed as follows:
1. Establishment of Escrow. The Escrow Agent hereby agrees to receive and
disburse the proceeds from the offering of the Shares and any interest earned
thereon in accordance herewith.
2. Deposit of Escrowed Property. Each Placement Agent, on behalf of the
subscribers for the Shares solicited by such Placement Agent, shall from time to
time, but in no event later than 12:00 noon on the date following receipt by
such Placement Agent, cause to be wired to or deposited with, or, cause such
subscribers
for the Shares to wire or deposit with, the Escrow Agent funds or checks of the
subscribers delivered in payment for the Shares (the "Escrowed Property"). Any
checks delivered to the Escrow Agent pursuant to the terms hereof shall be made
payable to or endorsed to the order of the Escrow Agent. The Escrow Agent upon
receipt of such checks shall present such checks for payment to the drawee-bank
under such checks. Any checks not honored by the drawee-bank thereunder after
the first presentment for payment shall be returned to the Placement Agent who
solicited the subscriber issuing such check, on behalf of such subscriber, in
the same manner notices are delivered pursuant to Section 6. Upon receipt of
funds or checks from the Placement Agents, the Escrow Agent shall credit such
funds and the amount of such checks to a non-interest-bearing account (the
"Escrow Account") held by the Escrow Agent. If following the credit of the
amount of any check to the Escrow Account such check is dishonored, the Escrow
Agent, if such dishonored check amount shall have been invested pursuant to
Section 3, shall liquidate to the extent of such dishonored check amount such
investments and debit the Escrow Account for the amount of such dishonored check
plus, if any, the amount of interest and other income earned with respect to any
investment of such dishonored check amount.
3. Investment of Escrowed Property. The Escrow Agent on the second business day
("business day" defined for purposes of this Escrow Agreement as any day which
is not a Saturday, a Sunday or a day on which banks or trust companies in the
City and State of New York are authorized or obligated by law, regulation or
executive order to remain closed) succeeding (unless such deposit is made in
federal or other immediately available or "same day" funds, in which case, on
the business day next succeeding) the credit of any subscription proceeds to the
Escrow Account pursuant to Section 2 and until release of such proceeds in
accordance with the terms hereof, shall deposit such proceeds in a [DESCRIBE
ACCOUNT], pursuant to Rule 15c2-4 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, in accordance
with the terms set forth on Exhibit A hereto (made a part of this Escrow
Agreement as if herein set forth). The Escrow Agent shall in no event be liable
for any loss resulting from any change in interest rates applicable to proceeds
invested pursuant to this Section. Interest on proceeds invested pursuant to
this Section shall accrue from the date of investment of such proceeds until the
termination of such investment pursuant to the terms hereof and shall be paid as
set forth in Section 5.
4. List of Subscribers. Each Placement Agent shall furnish or cause to be
furnished to the Escrow Agent, at the time of each deposit of funds or checks
pursuant to Section 2, a list, substantially in the form of Exhibit B hereto,
containing the name of, the address of, the number of Shares subscribed for by,
the subscription amount delivered to the Escrow Agent on behalf of, and the
social security or taxpayer identification number, if applicable, of, each
subscriber whose funds are being deposited by such Placement Agent, and to which
is attached a completed W-9
2
form (or, in the case of any subscriber who is not a United States citizen or
resident, a W-8 form) for each listed subscriber. In the event of any
discrepancy between the subscription amounts set forth on any list delivered by
a Placement Agent pursuant to this Section 4 and the subscription amounts
received by the Escrow Agent, the Escrow Agent shall promptly notify such
Placement Agent and the Company of such discrepancy. The Escrow Agent is
authorized to revise such list to reflect the actual subscription amounts
received and the release of any subscription amounts pursuant to Section 5.
5. Withdrawal of Subscription Amounts.
(a) If the Escrow Agent shall receive a notice, substantially in the form
of Exhibit C hereto (an "Offering Termination Notice"), from the Company, the
Escrow Agent shall (i) promptly after receipt of such Offering Termination
Notice and the clearance of all checks received by the Escrow Agent as Escrowed
Property, liquidate any investments that shall have been made pursuant to
Section 3 and send to each subscriber listed on the list held by the Escrow
Agent pursuant to Section 4 whose total subscription amount shall not have been
released pursuant to paragraph (b) or (c) of this Section 5, in the manner set
forth in paragraph (e) of this Section 5, a check to the order of such
subscriber in the amount of the remaining subscription amount held by the Escrow
Agent as set forth on such list held by the Escrow Agent, and (ii) promptly
after the fourth business day of the month immediately following the month in
which the investments made pursuant to Section 3 were terminated pursuant to
this paragraph, send, in the manner set forth in paragraph (e) of this Section
5, a check to the order of each such subscriber in the amount of interest and
other income earned and not yet paid with respect to any investment of such
subscriber's funds. The Escrow Agent shall notify the Company and the Placement
Agents of the distribution of such funds to the subscribers.
(b) In the event that (i) the Shares have been subscribed for and funds in
respect thereof shall have been deposited with the Escrow Agent on or before the
Final Closing Date and (ii) no Offering Termination Notice shall have been
delivered to the Escrow Agent, the Company and each Placement Agent, shall
deliver to the Escrow Agent a joint notice, substantially in the form of Exhibit
D hereto (a "Closing Notice"), designating the date on which Shares are to be
sold and delivered to the subscribers thereof (the "Closing Date"), which date
shall not be earlier than the clearance of any checks received by the Escrow
Agent as Escrowed Property, the proceeds of which are to be distributed on such
Closing Date, and identifying the subscribers and the number of Shares to be
sold to each thereof on such Closing Date, not less than two (2) nor more than
seven (7) business days prior to such Closing Date. The Escrow Agent, after
receipt of such Closing Notice and the clearance of such checks:
3
(i) on or prior to the Closing Date identified in such Closing
Notice, shall liquidate any investments that shall have been made pursuant to
Section 3 to the extent of the subscription amount to be distributed pursuant to
the immediately succeeding clause (ii);
(ii) on such Closing Date, pay to the Company and the Placement
Agents, in federal or other immediately available funds and otherwise in the
manner specified by the Company in such Closing Notice, an amount equal to the
aggregate of the subscription amounts paid by the subscribers identified in such
Closing Notice for the Shares to be sold on such Closing Date as set forth on
the list held by the Escrow Agent pursuant to Section 4; and
(iii) promptly after the fourth business day of the month immediately
following the month in which the investments made pursuant to Section 3 were
terminated pursuant to such Closing Notice, shall send, in the manner set forth
in paragraph (e) of this Section 5, a check to the order of each subscriber
identified in such Closing Notice in the amount of interest and other income
earned and not yet paid with respect to any investment of each such subscriber's
funds distributed on such Closing Date. At the time of such transfer, the
Escrow Agent shall identify in writing to the Company and the Placement Agents
the amount of the interest earned for the account of each subscriber and the
date such subscription was received.
(c) If at any time and from time to time prior to the release of any
subscriber's total subscription amount pursuant to paragraph (a) or (b) of this
Section 5 from escrow, the Company shall deliver to the Escrow Agent a notice,
substantially in the form of Exhibit E hereto (a "Subscription Termination
Notice"), to the effect that any or all of the subscriptions of such subscriber
have been rejected by the Company (a "Rejected Subscription"), the Escrow Agent
(i) promptly after receipt of such Subscription Termination Notice and, if such
subscriber delivered a check in payment of its Rejected Subscription, after the
clearance of such check, shall liquidate, to the extent of the sum of such
subscriber's Rejected Subscription amount as set forth in the Subscription
Termination Notice, any investments that shall have been made pursuant to
Section 3 and send to such subscriber, in the manner set forth in paragraph (e)
of this Section 5, a check to the order of such subscriber in the amount of such
Rejected Subscription amount, and (ii) promptly after the fourth business day of
the month immediately following the month in which the investments made pursuant
to Section 3 were terminated pursuant to this paragraph, shall send to such
subscriber, in the manner set forth in paragraph (e) of this Section 5, a check
to the order of such subscriber in the amount of interest and other income
earned and not yet paid with respect to any investment of such subscriber's
Rejected Subscription amount. At the time of such transfer, the Escrow Agent
shall identify in
4
writing to the Company and the Placement Agents the amount of the interest
earned for the account of each subscriber and the date such subscription was
received.
(d) On a date following the transfer of any interest earned for the
account of each subscriber pursuant to Section 5(a), (b) or (c), but not later
than January 31, 2002, the Escrow Agent shall provide each subscriber with tax
form 1099 setting forth the amount of such interest.
(e) For the purposes of this Section 5, any check that the Escrow
Agent shall be required to send to any subscriber shall be sent to such
subscriber by first class mail, postage prepaid, at such subscriber's address
furnished to the Escrow Agent pursuant to Section 4.
6. Notices. All notices and communications hereunder will be in writing and
will be mailed, delivered, or telecopied and confirmed as follows:
if to the Company, to:
Xxxxxxxx Petroleum Corporation
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
Facsimile: 000-000-0000
if to a Placement Agent, to:
the name, address and facsimile number for such Placement
Agent set forth on Schedule 1 hereto with respect to such
Placement Agent
if to the Escrow Agent, to:
Xxxxx Fargo Bank Minnesota, National Association
[Address]
Attention: [__]
Facsimile: [__]
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in the above-referenced manner. All such
notices and communications, if mailed, shall be effective when deposited in the
mails, except that notices and communications to the Escrow Agent and notices of
changes of address shall not be effective until received.
5
7. Concerning the Escrow Agent. To induce the Escrow Agent to act hereunder, it
is further agreed by the Company and Placement Agents that:
(a) The Escrow Agent shall not be under any duty to give the Escrowed
Property held by it hereunder any greater degree of care than it gives its own
similar property and shall not be required to invest any funds held hereunder
except as directed in this Escrow Agreement. Uninvested funds held hereunder
shall not earn or accrue interest.
(b) This Escrow Agreement expressly sets forth all the duties of the Escrow
Agent with respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Escrow Agreement against the Escrow Agent.
The Escrow Agent shall not be bound by the provisions of any agreement among the
other parties hereto except this Escrow Agreement.
(c) The Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct, and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, and the other parties hereto shall jointly and
severally indemnify and hold harmless the Escrow Agent (and any successor Escrow
Agent) from and against any and all losses, liabilities, claims, actions,
damages and expenses, including reasonable attorneys' fees and disbursements,
arising out of and in connection with this Escrow Agreement. Without limiting
the foregoing, the Escrow Agent shall in no event be liable in connection with
its investment or reinvestment of any cash held by it hereunder in good faith,
in accordance with the terms hereof, including without limitation any liability
for any delays (not resulting from gross negligence or willful misconduct) in
the investment or reinvestment of the Escrowed Property, or any loss of interest
incident to any such delays.
(d) The Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature believed by it in good faith to be genuine and may assume, if in good
faith, that any person purporting to give notice or receipt or advice or make
any statement or execute any document in connection with the provisions hereof
has been duly authorized to do so.
(e) The Escrow Agent may act pursuant to the advice of counsel with respect
to any matter relating to this Escrow Agreement and shall not be liable for any
action taken or omitted in good faith and in accordance with such advice.
6
(f) The Escrow Agent does not have any interest in the Escrowed Property
deposited hereunder but is serving as escrow holder only. Any payments of income
from the Escrow Account shall be subject to withholding regulations then in
force with respect to United States taxes. The parties hereto will provide the
Escrow Agent with appropriate W-9 forms for tax I.D., number certification, or
non-resident alien certifications.
This paragraph (f) and paragraph (c) of this Section 7 shall survive
notwithstanding any termination of this Escrow Agreement or the resignation of
the Escrow Agent.
(g) The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectibility of any security or other document or
instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise any party as to
the wisdom of selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder.
(i) The Escrow Agent (and any successor escrow agent) at any time may be
discharged from its duties and obligations hereunder by the delivery to it of
notice of termination signed by the Company and each Placement Agent or at any
time may resign by giving written notice to such effect to the Company and each
Placement Agent. Upon any such termination or resignation, the Escrow Agent
shall deliver the Escrowed Property to any successor escrow agent jointly
designated by the other parties hereto in writing, or to any court of competent
jurisdiction if no such successor escrow agent is agreed upon, whereupon the
Escrow Agent shall be discharged of and from any and all further obligations
arising in connection with this Escrow Agreement. The termination or
resignation of the Escrow Agent shall take effect on the earlier of (i) the
appointment of a successor (including a court of competent jurisdiction) or (ii)
the day that is 30 days after the date of delivery: (A) to the Escrow Agent of
the other parties' notice of termination or (B) to the other parties hereto of
the Escrow Agent's written notice of resignation. If at that time the Escrow
Agent has not received a designation of a successor escrow agent, the Escrow
Agent's sole responsibility after that time shall be to keep the Escrowed
Property safe until receipt of a designation of successor escrow agent or a
joint written disposition instruction by the other parties hereto or any
enforceable order of a court of competent jurisdiction.
(j) The Escrow Agent shall have no responsibility for the contents of any
writing of any third party contemplated herein as a means to resolve disputes
and may rely without any liability upon the contents thereof.
7
(k) In the event of any disagreement among or between the other parties
hereto and/or the subscribers of the Shares resulting in adverse claims or
demands being made in connection with the Escrowed Property, or in the event
that the Escrow Agent in good faith is in doubt as to what action it should take
hereunder, the Escrow Agent shall be entitled to retain the Escrowed Property
until the Escrow Agent shall have received (i) a final and non-appealable order
of a court of competent jurisdiction directing delivery of the Escrowed Property
or (ii) a written agreement executed by the other parties hereto and consented
to by the subscribers directing delivery of the Escrowed Property, in which
event the Escrow Agent shall disburse the Escrowed Property in accordance with
such order or agreement. Any court order referred to in (i) above shall be
accompanied by a legal opinion by counsel for the presenting party satisfactory
to the Escrow Agent to the effect that said court order is final and non-
appealable. The Escrow Agent shall act on such court order and legal opinion
without further question.
(l) As consideration for its agreement to act as Escrow Agent as herein
described, the Company agrees to pay the Escrow Agent the fee set forth on
Exhibit F hereto (made a part of this Escrow Agreement as if herein set forth).
In addition, the Company agrees to reimburse the Escrow Agent for all reasonable
expenses, disbursements and advances incurred or made by the Escrow Agent in
performance of its duties hereunder (including reasonable fees, expenses and
disbursements of its counsel).
(m) All parties hereto irrevocably (i) submit to the jurisdiction of any
New York State or federal court sitting in New York City in any action or
proceeding arising out of or relating to this Escrow Agreement, (ii) agree that
all claims with respect to such action or proceeding shall be heard and
determined in such New York State or federal court and (iii) waive, to the
fullest extent possible, the defense of an inconvenient forum. The other
parties hereby consent to and grant any such court jurisdiction over the persons
of such parties and over the subject matter of any such dispute and agree that
delivery or mailing of process or other papers in connection with any such
action or proceeding in the manner provided herein above, or in such other
manner as may be permitted by law, shall be valid and sufficient service
thereof.
(n) No printed or other matter in any language (including, without
limitation, the Registration Statement, the Prospectus, notices, reports and
promotional material) which mentions the Escrow Agent's name or the rights,
powers, or duties of the Escrow Agent shall be issued by the other parties
hereto or on such parties' behalf unless the Escrow Agent shall first have given
its specific written consent thereto. The Escrow Agent hereby consents to the
use of its name and the reference to the escrow arrangement in the Registration
Statement and in the Prospectus.
8
8. Miscellaneous.
(a) This Escrow Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and assigns,
heirs, administrators and representatives, and the subscribers of the Shares and
shall not be enforceable by or inure to the benefit of any other third party
except as provided in paragraph (i) of Section 7 with respect to the termination
of, or resignation by, the Escrow Agent. No party may assign any of its rights
or obligations under this Escrow Agreement without the written consent of the
other parties.
(b) This Escrow Agreement shall be construed in accordance with and
governed by the internal law of the State of New York (without reference to its
rules as to conflicts of law).
(c) This Escrow Agreement may only be modified by a writing signed by all
of the parties hereto and consented to by the subscribers of the Shares
adversely affected by such modifications. No waiver hereunder shall be effective
unless in a writing signed by the party to be charged.
(d) This Escrow Agreement shall terminate upon the payment pursuant to
Section 5 of all amounts held in the Escrow Account.
(e) The section headings herein are for convenience only and shall not
affect the construction thereof. Unless otherwise indicated, references to
Sections are to Sections contained herein.
(f) This Escrow Agreement may be executed in one or more counterparts but
all such separate counterparts shall constitute but one and the same instrument;
provided that, although executed in counterparts, the executed signature pages
of each such counterpart may be affixed to a single copy of this Agreement which
shall constitute an original.
[Signature page follows.]
9
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed as of the day and year first above written.
XXXXXXXX PETROLEUM CORPORATION
By:_____________________________
Name:
Title:
XXXXXXXXX & COMPANY, INC.
By:_____________________________
Name:
Title:
XXXXXXX XXXXX XXXXXX INC.
By:_____________________________
Name:
Title:
CHASE SECURITIES INC.
By:_____________________________
Name:
Title:
XXXXXX XXXXXXXXXX XXXXX LLC
By:_____________________________
Name:
Title:
XXXXXXX RICE & CO.
By:_____________________________
Name:
Title:
10
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Escrow Agent
By:_____________________________
Name:
Title:
11
SCHEDULE 1
PLACEMENT AGENTS
Name Address
---- -------
Xxxxxxxxx & Company, Inc. 000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Investment Banking Department -
Transactions Advisory Group
Facsimile: [__]
[OTHERS]
12
EXHIBIT A
[NAME OF ACCOUNT]
Deposits/Withdrawals may be made to the [____] Account (the
"Deposit Account") established under the Escrow Agreement to which this Exhibit
is attached only through the Escrow Account. All transaction and balance
reporting of the Deposit Account will be included as part of the Escrow Account
Statement. Activity in the Deposit Account will be reflected as the equivalent
of dollars on deposit in a [___] Account. Deposits/Withdrawals to the Deposit
Account will be made only as permitted by the Escrow Agreement to which this
Exhibit is attached. The Deposit Account has certain regulatory restrictions as
well as some minimum requirements:
1. By regulation, Xxxxx Fargo Bank Minnesota, National Association is required
to reserve the right to require seven days' prior notice of any withdrawals of
funds from an account; provided, however, that, if Xxxxx Fargo Bank Minnesota,
National Association elects to exercise its right to require seven days' prior
notice, it shall exercise such right as to all such accounts established.
2. Rates will be determined by Xxxxx Fargo Bank Minnesota, National Association
and can be determined by calling your custody account officer.
3. Balances up to $100,000 (total on deposit at Xxxxx Fargo Bank Minnesota,
National Association) are FDIC-insured.
A-1
EXHIBIT B
SUMMARY OF CASH RECEIVED
NEW PARTICIPANT DEPOSIT
[TO BE DISCUSSED]
B-1
EXHIBIT C
FORM OF OFFERING TERMINATION NOTICE
____________, 2001
Xxxxx Fargo Bank Minnesota, National Association
[Address]
Attention:
Ladies and Gentlemen:
Pursuant to Section 5(a) of the Escrow Agreement dated as of January
[__], 2001 (the "Escrow Agreement") among Xxxxxxxx Petroleum Corporation (the
"Company"), the parties named as Placement Agents therein and you, the Company
hereby notifies you of the termination of the offering of the Shares (as that
term is defined in the Escrow Agreement) and directs you to make payments to
subscribers as provided for in Section 5(a) of the Escrow Agreement.
Very truly yours,
XXXXXXXX PETROLEUM CORPORATION
By:____________________________
Name:
Title:
C-1
EXHIBIT D
FORM OF CLOSING NOTICE
____________, 2001
Xxxxx Fargo Bank Minnesota, National Association
[Address]
Attention:
Ladies and Gentlemen:
Pursuant to Section 5(b) of the Escrow Agreement dated as of January
[__], 2001 (the "Escrow Agreement") among Xxxxxxxx Petroleum Corporation (the
"Company"), the parties named as Placement Agents therein and you, the Company
hereby certifies that it has received subscriptions for the Shares (as that term
is defined in the Escrow Agreement) and the Company will sell and deliver Shares
to the subscribers thereof at a closing to be held on January [__], 2001 (the
"Closing Date"). The names of the subscribers concerned, the number of Shares
subscribed for by each of such subscribers and the related subscription amounts
are set forth on Schedule I annexed hereto.
Please accept these instructions as standing instructions for the
closing to be held on the Closing Date. The parties hereto certify that they do
not wish to have a call back regarding these instructions. The parties hereto
further certify that these instructions may be transmitted to you via facsimile.
We hereby request that the aggregate subscription amount be paid to
you, the Placement Agent and us as follows:
1. To the Company, $_________;
2. To Xxxxxxxxx & Company, Inc., $_________;
3. To [list each other Placement Agent], $______; and
4. To the Escrow Agent, $_________.
C-2
These instructions may be executed in any number of counterparts, each
of which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Very truly yours,
XXXXXXXX PETROLEUM CORPORATION
By:____________________________
Name:
Title:
C-3
SCHEDULE I
Name of Number of Subscription
Subscriber Shares Amount
---------- --------- ------------
C-4
EXHIBIT E
FORM OF SUBSCRIPTION TERMINATION NOTICE
____________, 2001
Xxxxx Fargo Bank Minnesota, National Association
[Address]
Attention:
Ladies and Gentlemen:
Pursuant to Section 5(c) of the Escrow Agreement dated as of as of
January [__], 2001 (the "Escrow Agreement") among Xxxxxxxx Petroleum Corporation
(the "Company"), the parties named as Placement Agents therein and you, the
Company hereby notifies you that the following subscription(s) have been
rejected:
Name of Amount of Subscribed Dollar Amount of
Subscriber Shares Rejected Rejected Subscription
---------- -------------------- ----------------------
Very truly yours,
XXXXXXXX PETROLEUM CORPORATION
By:
----------------------------------
Name:
Title:
C-5
EXHIBIT F
Fee to Escrow Agent: $[___]
F-1
