EXHIBIT 1.1
Newfield Exploration Company
UNDERWRITING AGREEMENT
August 8, 2002
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described
Ladies and Gentlemen:
From time to time Newfield Exploration Company, a Delaware corporation
(the "Company"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its debt securities (the "Securities") specified
in Schedule II to such Pricing Agreement. The Securities specified in such
Pricing Agreement are referred to as the "Firm Designated Securities" with
respect to such Pricing Agreement. If specified in such Pricing Agreement, the
Company may grant the Underwriters the right to purchase at their election an
additional principal amount of Securities specified as provided in such Pricing
Agreement as provided in Section 3 hereof (the "Optional Designated
Securities"). The Firm Designated Securities and the Optional Designated
Securities, if any, which the Underwriters elect to purchase pursuant to Section
3 hereof are herein collectively referred to as the "Designated Securities."
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating thereto and
in or pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Designated Securities, for whom the firms
designated as representatives of the Underwriters of such Designated Securities
in the Pricing Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single firm
acting as sole representative of the Underwriters and to an Underwriter or
Underwriters who act without any firm being designated as its or their
representatives. This Underwriting Agreement shall not be construed as an
obligation of the Company to sell any of the Securities or as an obligation of
any of the Underwriters to purchase any of the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Securities specified therein. Each Pricing
Agreement shall specify the aggregate principal amount of the Firm Designated
Securities, the maximum principal amount of Optional Designated Securities, if
any, the initial public offering price of such Firm and Optional
Designated Securities or the manner of determining such price, the terms of the
Designated Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities, the
names of the Representatives of such Underwriters, the principal amount of such
Designated Securities to be purchased by each Underwriter and the commission, if
any, payable to the Underwriters with respect thereto and shall set forth the
date, time and manner of delivery of such Firm Designated Securities and
Optional Designated Securities, if any, and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the Registration Statement and Prospectus (as defined) with respect thereto) the
terms of such Designated Securities. A Pricing Agreement shall be in the form of
an executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-71348)
(as amended prior to being declared effective, the "Initial
Registration Statement") in respect of the Securities, has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered or to be delivered to
the Representatives (excluding exhibits to the Initial Registration
Statement, but including all documents incorporated by reference in the
prospectus contained therein), have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no
other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed,
or transmitted for filing, with the Commission (other than documents
heretofore delivered to the Representatives); and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission; any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) under the Act and relating to
the Securities, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement (other than any
parts solely relating to securities other than the Securities), any
post-effective amendment thereto and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectus (other than exhibits and
documents solely relating to securities other than the Securities)
contained in the Initial Registration Statement at the time such part
of the Initial Registration Statement became effective but excluding
Forms T-1, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
are hereinafter collectively called the "Registration Statement"; the
prospectus relating to the Designated Securities, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter
called the
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"Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the applicable Designated Securities in the form in which it is filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by
reference therein as of the date of such filing;
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Designated
Securities;
(c) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration Statement
or the Prospectus relating to the Securities will conform, in all
material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration
Statement and any post-effective amendment thereto and as of the
applicable filing date and at the Time of Delivery as to the Prospectus
and any amendment or supplement thereto relating to the Securities,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by
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an Underwriter of Designated Securities through the Representatives
expressly for use in the Prospectus as amended or supplemented relating
to such Designated Securities;
(d) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with the business of the Company and its
subsidiaries, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any material change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as
a whole, otherwise than as set forth or contemplated in the Prospectus;
(e) The Company and its subsidiaries have (i) generally
satisfactory title to all their interests in their producing oil and
gas properties and to all of their material interests in nonproducing
oil and gas properties, title investigations having been carried out by
the Company in accordance with the general practice in the oil and gas
industry, (ii) good and indefeasible title to all other real property
owned by them that is material to the Company and its subsidiaries,
taken as a whole, and (iii) good and valid title to all personal
property owned by them that is material to the Company and its
subsidiaries, taken as a whole, in each case free and clear of all
liens, encumbrances, claims, security interests, subleases and defects
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company
and its subsidiaries; and any real property (other than oil and gas
properties) and buildings material to the Company and its subsidiaries,
taken as a whole, held under lease by the Company and its subsidiaries
are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described
in the Prospectus and to enter into and perform its obligations under
this Agreement, and has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction; and each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X under the Act, a "Subsidiary") has been duly
incorporated or otherwise organized and is validly existing as a
corporation or other entity in good standing under the laws of its
jurisdiction of incorporation or organization;
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(g) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable; and all of the issued shares of capital stock
or other ownership interests of each Subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and
non-asssessable and (except for directors' qualifying shares or similar
ownership and as otherwise set forth in the Prospectus) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities and claims;
(h) The Designated Securities have been duly and validly
authorized, and, when (1) the Firm Designated Securities are issued and
delivered pursuant to this Agreement and the Pricing Agreement with
respect to such Firm Designated Securities and, (2) if any of the
Optional Designated Securities are issued and delivered pursuant to
Over-allotment Options (as defined in Section 3 hereof) with respect to
such Optional Designated Securities, such Designated Securities will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture, enforceable in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, and will have been duly authorized and duly qualified under
the Trust Indenture Act and, at the Time of Delivery for such
Designated Securities (as defined in Section 4 hereof), the Indenture
will constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indenture conforms, and the Designated Securities
will conform, to the descriptions thereof contained in the Prospectus
as amended or supplemented with respect to the Designated Securities;
(i) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the Designated
Securities, the Indenture, this Agreement, any Pricing Agreement and
each Over-allotment Option, if any, and the consummation of the
transactions contemplated herein and therein will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the
properties or assets of the Company is subject, nor will such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no consent,
approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
issue and sale of the Designated Securities or the consummation by the
Company of the transactions contemplated by this Agreement, the Pricing
Agreement or any Over-allotment Option, except such as have been, or
will have been, prior to each Time of Delivery, obtained under the Act
and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase
and distribution of the Designated Securities by the Underwriters;
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(j) Neither the Company nor any of its subsidiaries is in
violation of its charter, by-laws or other organizational documents or
in default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound, other than any such default that would not have a material
adverse effect on the financial position, stockholders' equity, results
of operations, business or prospects of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect");
(k) The statements set forth in the Prospectus under the
captions "Description of Existing Indebtedness," "Description of Debt
Securities" and "Description of the Notes", and in the Prospectus as
amended or supplemented, insofar as they purport to constitute a
summary of the terms of the Designated Securities, the Securities, and
the Indenture, respectively, and under the captions "Underwriting" and
"Plan of Distribution", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate
in all material respects;
(l) The consolidated financial statements, including the
notes thereto, included or incorporated by reference in the Prospectus
present fairly, in all material respects, the consolidated financial
position of the Company and its subsidiaries as at the dates indicated
and the results of their operations and cash flows for the periods
specified; except as otherwise stated in the Prospectus, said financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis, except in the case
of unaudited financial statements for the absence of notes thereto and
subject to normal year-end adjustments; and the selected historical
financial data for the Company included in the Prospectus as amended
and supplemented have been compiled on a basis consistent with that of
the audited or unaudited, as applicable, consolidated financial
statements of the Company; any pro forma financial statements or data
included or incorporated by reference in the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of Regulation S-X of the Act to the extent applicable, and
the pro forma adjustments have been properly applied to the historical
amounts in the compilation of those statements; the other financial and
statistical data set forth or incorporated by reference in the
Prospectus related to the Company are accurately presented and prepared
on a basis consistent with the financial statements and books and
records of the Company, and there are no financial statements
(historical or pro forma) that are required to be included in the
Prospectus that are not included as required;
(m) The Company owns or possesses adequate rights to use the
patents, patent rights, licenses, inventions, copyrights, know-how
(including seismic data, trade secrets and other unpatented or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively,
"patent and proprietary rights") to the extent employed by it in and
material to the business now operated by it, and the Company has not
received any notice of infringement of or conflict with asserted rights
of others with respect to any patent or proprietary rights, which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding), singly or in the aggregate, would result in a
Material Adverse Effect;
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(n) The Company possesses such licenses, permits, consents,
orders, certificates or authorizations issued by the appropriate
federal, state, foreign or local regulatory agencies or bodies
necessary to conduct the business now operated by it, except for
licenses, permits, consents, orders, certificates or authorizations,
the absence of which, individually or in the aggregate, would not have
a Material Adverse Effect, and the Company has not received any notice
of proceedings relating to the revocation or modification of any such
licenses, permits, consents, orders, certificates or authorizations
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect;
(o) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company
or any of its subsidiaries is the subject except as would not have a
Material Adverse Effect; and, to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(p) The Company carries, or is covered by, insurance in such
amounts and covering such risks as is customary for companies engaged
in similar businesses in similar industries;
(q) Except as described in the Prospectus, there has been no
storage, disposal, generation, manufacture, spill, discharge,
refinement, transportation, handling or treatment of toxic wastes,
hazardous wastes or hazardous substances by the Company (or, to the
knowledge of the Company, any of its predecessors in interest) at, upon
or from any of the property now or previously owned or leased or under
contract for purchase by the Company in violation of any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit or
which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except
for any violation or remedial action which would not have, singularly
or in the aggregate with all such violations and remedial actions, any
Material Adverse Effect; and the terms "hazardous wastes," "toxic
wastes" and "hazardous substances" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations
with respect to environmental protection;
(r) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be, an "investment
company", as such term is defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(s) PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company or its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder; and
(t) Xxxxx Xxxxx Company Petroleum Engineers are independent
petroleum engineers with respect to the Company.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
the Firm Designated
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Securities, the several Underwriters propose to offer the Firm Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Securities that the Company thereby grants to the Underwriters the
right (an "Over-allotment Option") to purchase at their election up to the
principal amount of Optional Designated Securities set forth in such Pricing
Agreement, on the terms set forth in the paragraph above, for the sole purpose
of covering sales of Designated Securities in excess of the Firm Designated
Securities. Any such election to purchase Optional Designated Securities may be
exercised by written notice from the Representatives to the Company, given
within a period specified in the Pricing Agreement, setting forth the aggregate
principal amount of Optional Designated Securities to be purchased and the date
on which such Optional Designated Securities are to be delivered, as determined
by the Representatives but in no event earlier than the First Time of Delivery
(as defined in Section 4 hereof) or, unless the Representatives and the Company
otherwise agree in writing, earlier than or later than the respective number of
business days after the date of such notice set forth in such Pricing Agreement.
The principal amount of Optional Designated Securities to be added to
the principal amount of Firm Designated Securities to be purchased by each
Underwriter as set forth in Schedule I to the Pricing Agreement applicable to
such Designated Securities shall be, in each case, the principal amount of
Optional Designated Securities which the Company has been advised by the
Representatives have been attributed to such Underwriter; provided that, if the
Company has not been so advised, the principal amount of Optional Designated
Securities to be so added shall be, in each case, that proportion of Optional
Designated Securities which the principal amount of Firm Designated Securities
to be purchased by such Underwriter under such Pricing Agreement bears to the
aggregate principal amount of Firm Designated Securities (rounded as the
Representatives may determine to the nearest 1,000 dollars). The total principal
amount of Designated Securities to be purchased by all the Underwriters pursuant
to such Pricing Agreement shall be the aggregate principal amount of Firm
Designated Securities set forth in Schedule I to such Pricing Agreement plus the
aggregate principal amount of Optional Designated Securities which the
Underwriters elect to purchase.
4. Designated Securities to be purchased by each Underwriter pursuant
to the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least forty-eight hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer of
Federal (same-day) funds to the escrow account maintained by Wachovia Bank,
National Association as Escrow Agent under the Escrow Agreement as specified in
such Pricing Agreement, for distribution, as the case may be, to the Company
simultaneously with the EEX Acquisition, as defined in the Escrow Agreement, or
to the Paying Agent in connection with the Special Mandatory Redemption, as
defined in the Prospectus, all in accordance with the Escrow Agreement, (i) with
respect to the Firm Designated Securities, all in the manner and at the place
and time and date specified in such Pricing Agreement or at such other place and
time and date as the Representatives and the Company may agree upon in writing,
such time and date being herein called the "First Time of Delivery" and (ii)
with respect to the Optional Designated Securities, if any, in the manner and at
the time and date specified by the Representatives in the written notice
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given by the Representatives of the Underwriters' election to purchase such
Optional Designated Securities, or at such other time and date as the
Representatives and the Company may agree upon in writing, such time and date,
if not the First Time of Delivery, being herein called the "Second Time of
Delivery". Each such time and date for delivery is herein called a "Time of
Delivery." If the Designated Securities are redeemed pursuant to the Special
Mandatory Redemption (as defined in the Prospectus), then concurrently with the
Special Mandatory Redemption, the Underwriters, severally, in proportion to
their respective commitments hereunder, will pay to the Company by wire transfer
of Federal (same day) funds to an account designated by the Company an amount of
money equal to one-half (1/2) of the underwriting discount set forth in the
Pricing Agreement with respect to the Designated Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Designated Securities and prior
to any Time of Delivery for such Designated Securities which shall be
disapproved by the Representatives for such Designated Securities
promptly after reasonable notice thereof; to advise the Representatives
promptly of any such amendment or supplement after any Time of Delivery
for such Designated Securities and furnish the Representatives with
copies thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Designated Securities, and
during such same period to advise the Representatives, promptly after
it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
with the Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
prospectus relating to the Designated Securities, of the suspension of
the qualification of such Designated Securities for offering or sale in
any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus
or for additional information; and, in the event of the issuance of any
such stop order or of any such order preventing or suspending the use
of any prospectus relating to the Designated Securities or suspending
any such qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Designated
Securities for offering and sale under the securities laws of such
jurisdictions as the Representatives may request and to comply with
such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of such
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Designated Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) By 12:00 noon, New York City Time, on the second business
day succeeding the date of the Pricing Agreement for such Designated
Securities (or such other time and date as set forth in the Pricing
Agreement) and from time to time thereafter, to furnish the
Underwriters with copies of the Prospectus as amended or supplemented
in New York City in such quantities as the Representatives may
reasonably request, and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of the Designated
Securities, and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify the Representatives
and upon their request to file such document and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the later of (i) the termination of trading restrictions for
such Designated Securities, as notified to the Company by the
Representatives, (ii) the last Time of Delivery for such Designated
Securities and (iii) any period specified in the Pricing Agreement, not
to offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company which are substantially similar to the
Designated Securities without the prior written consent of the
Representatives; and
(f) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee under the Act.
6. The Company covenants and agrees with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of
10
the Company's counsel, accountants and reserve engineers in connection with the
registration of the Designated Securities and the Securities under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Pricing Agreement, the
Indenture, the Securities, any Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Designated
Securities; (iii) all expenses in connection with the qualification of the
Designated Securities and the Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and Legal Investment
survey(s); (iv) any fees charged by securities rating services for rating the
Designated Securities; (v) any filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, any required
reviews by the National Association of Securities Dealers, Inc. ("NASD") of the
terms of the sale of the Designated Securities; (vi) any fees and expenses in
connection with listing the Designated Securities; (vii) the cost of printing or
engraving the Designated Securities; (vii) the fees and expenses of any Trustee
and any agent of any trustee and the fees and disbursements of counsel for any
trustee in connection with any Indenture and the Securities; (viii) the cost of
qualifying the Securities with The Depository Trust Company; and (ix) all other
costs and expenses incident to the performance of its obligations hereunder and
under the Pricing Agreement (including with respect to any Optional Designated
Securities) which are not otherwise specifically provided for in this Section.
It is understood, however, that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Designated Securities by them, and any advertising expenses connected
with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities
under the Pricing Agreement relating to such Designated Securities shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of each Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Representatives' reasonable satisfaction;
11
(b) Counsel for the Underwriters shall have furnished to the
Representatives such written opinion or opinions, dated each Time of
Delivery for such Designated Securities, with respect to the
incorporation of the Company, the validity of the Indenture and the
Designated Securities, the Registration Statement, the Prospectus as
amended and supplemented, this Agreement and the Pricing Agreement, as
well as such other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Counsel for the Company satisfactory to the
Representatives shall have furnished to the Representatives their
written opinion, dated each Time of Delivery for such Designated
Securities, respectively, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The Company has authorized capital stock as set
forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company have been
duly and validly authorized and issued and are fully paid and
non-assessable;
(iii) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
material adverse effect on the financial position,
stockholders' equity, results of operations or business of the
Company and its subsidiaries, taken as a whole; and to such
counsel's knowledge, no such proceedings are threatened by
governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with
respect to the Designated Securities have been duly
authorized, executed and delivered by the Company;
(v) The issue and sale by the Company of the
Designated Securities being delivered at such Time of
Delivery, and the compliance by the Company with all of the
provisions of the Designated Securities, the Indenture, this
Agreement and the Pricing Agreement and the consummation of
the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of
the property or assets of the Company or any of its
12
subsidiaries is subject, nor will such action result in any
violation of the provisions of the certificate of
incorporation or by-laws of the Company or any statute or any
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except for any such
conflicts or breaches that would not, individually or in the
aggregate, adversely affect the issue or sale of the
Designated Securities by the Company, or the execution,
delivery or performance of this Agreement, the Pricing
Agreement or the Indenture by the Company or have a material
adverse effect on the financial position, stockholders'
equity, results of operations or business of the Company and
its subsidiaries, taken as a whole (except that such counsel
need express no opinion with respect to federal or state
securities or Blue Sky laws with respect to this
subparagraph);
(vi) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Designated Securities being delivered at such Time of
Delivery or the consummation by the Company of the
transactions contemplated by this Agreement or such Pricing
Agreement or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws;
(vii) The statements set forth in the Prospectus as
amended and supplemented under the captions "Description of
Debt Securities" and "Description of the Notes", insofar as
they purport to constitute a summary of the terms of the
Designated Securities or the Indenture and under the caption
"Underwriting" and "Plan of Distribution", insofar as they
purport to describe the provisions of the laws and documents
referred to therein, are accurate in all material respects;
(viii) The Designated Securities are in the form
prescribed in or pursuant to the Indenture, have been duly and
validly authorized by the Company by all necessary corporate
action and, when executed and authenticated as specified in or
pursuant to the Indenture and issued and delivered, will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture,
and will be enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles; and the Designated Securities and the
Indenture conform to the descriptions thereof in the
Prospectus and in the Prospectus as amended and supplemented;
the Indenture has been duly authorized, executed and delivered
by the Company and constitutes a valid and legally binding
instrument of the Company, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles;
(ix) The Indenture has been duly qualified under the
Trust Indenture Act;
13
(x) The Company is not an "investment company" as
such term is defined in the Investment Company Act;
(xi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements and related schedules or other
information of a financial or reserve engineering nature
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any
of such documents, when they became effective or were so
filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act,
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of
other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading; and
(xii) The Registration Statement and the Prospectus
as amended or supplemented, and any further amendments and
supplements thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules or other information of a financial or reserve
engineering nature therein, as to which such counsel need
express no opinion), comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; although such counsel need not assume
any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement or
the Prospectus, except for those referred to in the opinions
in subsections (ii), (vii) and (viii) of this Section 7(c),
such counsel has no reason to believe that, as of its
effective date, the Registration Statement or any further
amendment thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules or other information of a financial or reserve
engineering nature therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement
thereto made by the Company prior to such Time of Delivery
(other than the financial statements and related schedules or
other information of a financial or reserve engineering nature
therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading or that, as of such Time of
Delivery, either the Registration Statement or the Prospectus
as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related
schedules or
14
other information of a financial or reserve engineering nature
therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any
amendment to the Registration Statement required to be filed
or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus
as amended or supplemented or required to be described in the
Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference
or described as required;
(d) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, the independent accountants of the
Company or its subsidiaries who have audited the financial statements
included or incorporated by reference in the Registration Statement
shall have furnished to the Representatives a letter, dated the date of
the Pricing Agreement, and a letter dated such Time of Delivery,
respectively, to the effect set forth in Annex II hereto, and with
respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and
substance satisfactory to the Representatives;
(e) On the date of the Pricing Agreement for such Designated
Securities at a time prior to the execution of the Pricing Agreement
with respect to the Designated Securities and at each Time of Delivery
for such Designated Securities, the independent accountants of EEX
Corporation and its subsidiaries who have audited the EEX Corporation
financial statements included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a
letter, dated the date of the Pricing Agreement, and a letter dated
such Time of Delivery, respectively, to the effect set forth in Annex
II hereto as applicable with respect to EEX Corporation's financial
statements and related information included or incorporated by
reference in the Registration Statement, and with respect to such
letter dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus
relating to the Designated Securities any loss or interference with the
business of the Company and its subsidiaries, taken as a whole, from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus relating to the Designated Securities, and (ii) since the
respective dates as of which information is given in the Prospectus
relating to the Designated Securities there shall not have been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or
contemplated in the
15
Prospectus relating to the Designated Securities, the effect of which,
in any such case described in Clause (i) or (ii), is in the judgment of
the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of
the Designated Securities on the terms and in the manner contemplated
in the Prospectus as amended or supplemented relating to the Designated
Securities;
(g) On or after the date of the Pricing Agreement relating to
the Designated Securities (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred stock or
other preferred securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities or preferred stock;
(h) On or after the date of the Pricing Agreement relating to
the Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange; (ii) a suspension or
material limitation in trading in the Company's securities on the New
York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York or Texas State
authorities; or (iv) (A) any change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls, (B) any major disruption of settlements of securities or
clearance services in the United States, or (C) any attack on, outbreak
or escalation of hostilities or act of terrorism involving the United
States, any declaration of war by Congress or any other national or
international calamity or emergency, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Firm Designated Securities or Optional
Designated Securities or both on the terms and in the manner
contemplated in the Prospectus as amended or supplemented relating to
the Designated Securities, whether in the primary market or in respect
of dealings in the secondary market;
(i) The Designated Securities at each Time of Delivery shall
have been approved for listing, subject to notice of issuance, on any
exchange or market listed in the Pricing Agreement;
(j) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the second business day succeeding the date of the Pricing Agreement
for such Designated Securities (or such other date as set forth in the
Pricing Agreement); and
(k) The Company shall have furnished or caused to be
furnished to the Representatives at each Time of Delivery for the
Designated Securities certificates of officers of the Company
satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f)
16
of this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
(including any Independent Underwriter named in the Pricing Agreement in its
role as a "qualified independent underwriter" of the Designated Securities
within the meaning of Section (b)(15) of Rule 2720 of the Conduct Rules of the
NASD) against any losses, claims, damages or liabilities, joint or several, to
which such Underwriter may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Securities, or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter of Designated Securities through the Representatives expressly for
use in the Prospectus as amended or supplemented relating to such Designated
Securities.
The Company also will indemnify and hold harmless any Independent
Underwriter from and against any and all losses, claims, damages, liabilities
and judgments incurred as a result of the Independent Underwriter's
participation as a "qualified independent underwriter" within the meaning of
Rule 2720 of the Conduct Rules of the NASD in connection with the offering of
the Designated Securities, except for any losses, claims, damages, liabilities
and judgments found in a final judgment by a court to have resulted from the
Independent Underwriter's willful misconduct or gross negligence.
(b) Each Underwriter will, severally, indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Designated Securities, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Securities, or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by such
17
Underwriter through the Representatives expressly for use therein; and will
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such action or claim
as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
contrary; (ii) the indemnifying party has failed within a reasonable time to
retain counsel reasonably satisfactory to the indemnified party; (iii) the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the indemnifying party; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood and agreed that the indemnifying party shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all indemnified parties, and that all such fees and
expenses shall be reimbursed as they are incurred. Any such separate firm for
any Underwriter shall be designated in writing by the Representative and any
such separate firm for the Company shall be designated in writing by the
Company. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify each indemnified party from and against any loss or
liability by reason of such settlement or judgment. If indemnity is sought
pursuant to the second paragraph of subsection (a) of this Section 8, then, in
addition to such counsel for the indemnified parties, the indemnifying party
shall be liable for the reasonable fees and expenses of not more than one
separate counsel (in addition to any necessary local counsel) for any
Independent Underwriter in its capacity as a "qualified independent
underwriter," if, in the reasonable judgment of the Independent Underwriter
there may exist a conflict of interest between the Independent Underwriter and
the other indemnified parties. In the case of any such separate counsel for the
Independent Underwriter, such counsel shall be designated in writing by the
Independent Underwriter. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which
18
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include any statement as to, or an admission of,
fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
of the Designated Securities or any Independent Underwriter, as applicable, on
the other from the offering of the Designated Securities to which such loss,
claim, damage or liability (or action in respect thereof) relates. If, however,
the allocation provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters of the Designated
Securities or the Independent Underwriter, as applicable, on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and such Underwriters or any Independent Underwriter, as
applicable, on the other shall be deemed to be in the same proportion as the
total net proceeds from such offering (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions received by
such Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Underwriters, or the
Independent Underwriter, as applicable, on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission and, in the case of any Independent Underwriter,
whether its activities as Independent Underwriter under its engagement involved
any gross negligence or willful misconduct. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter (including
any Independent Underwriter) shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter (including any
Independent Underwriter) has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be
19
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of the Underwriters of Designated Securities
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such Designated Securities
and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer of the Company who signed the Registration
Statement and each director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Designated Securities or Optional Designated Securities which it has
agreed to purchase under the Pricing Agreement relating to such Designated
Securities, the Representatives may in their discretion arrange for themselves
or another party or other parties to purchase such Designated Securities on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such Firm
Designated Securities or Optional Designated Securities, as the case may be,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to the
Representatives to purchase such Designated Securities on such terms. In the
event that, within the respective prescribed period, the Representatives notify
the Company that they have so arranged for the purchase of such Designated
Securities, or the Company notifies the Representatives that it has so arranged
for the purchase of such Designated Securities, the Representatives or the
Company shall have the right to postpone a Time of Delivery for such Designated
Securities for a period of not more than seven days, in order to effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus as amended or supplemented, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments or
supplements to the Registration Statement or the Prospectus which in the opinion
of the Representatives may thereby be made necessary. The term "Underwriter" as
used in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided in subsection (a) above, the aggregate principal amount
of such Designated Securities which remains unpurchased is not 10% or more of
the aggregate principal amount of the Firm Designated Securities or Optional
Designated Securities, as the case may be, to be purchased at the respective
Time of Delivery, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Firm Designated
Securities or Optional Designated Securities, as the case may be, which such
Underwriter agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the principal amount of
Firm Designated Securities or Optional Designated Securities, as the case may
be, which such Underwriter agreed to purchase
20
under such Pricing Agreement) of the Firm Designated Securities or Optional
Designated Securities, as the case may be, of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, of a defaulting Underwriter or Underwriters by the Representatives and
the Company as provided in subsection (a) above, the aggregate principal amount
of Firm Designated Securities or Optional Designated Securities, as the case may
be, which remains unpurchased is 10% or more of the aggregate principal amount
of the Firm Designated Securities or Optional Designated Securities, as the case
may be, to be purchased at the respective Time of Delivery, as referred to in
subsection (b) above, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase Firm
Designated Securities or Optional Designated Securities, as the case may be, of
a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to
such Firm Designated Securities or such Optional Designated Securities, as the
case may be, shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter, or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Designated Securities.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Firm Designated Securities or
Optional Designated Securities with respect to which such Pricing Agreement
shall have been terminated except as provided in Sections 6 and 8 hereof; but,
if for any other reason, Designated Securities are not delivered by or on behalf
of the Company as provided herein, the Company will reimburse the Underwriters
through the Representatives for all out-of-pocket expenses approved in writing
by the Representatives, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall then be under no
further liability to any Underwriter with respect to such Designated Securities
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters
of Designated Securities shall act on behalf of each of such Underwriters, and
the parties hereto shall be entitled to act and rely upon any statement,
request, notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to
21
the Underwriters shall be delivered or sent by mail or facsimile transmission to
the address of the Representatives as set forth in the Pricing Agreement; and if
to the Company shall be delivered or sent by mail or facsimile transmission to
the address of the Company set forth in the Registration Statement, Attention:
Secretary; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail or facsimile transmission
to such Underwriter at its address set forth in its Underwriters' Questionnaire,
or communication constituting such Questionnaire, or otherwise furnished to the
Representatives, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Designated
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, unless otherwise indicated, the term "business day" shall mean any day
when the Commission's office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Very truly yours,
Newfield Exploration Company
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Xxxxx X. Xxxxxxxx
Controller
ANNEX I
Pricing Agreement
[Name(s) of Co-Representative(s),]
As Representatives of the several
Underwriters named in Schedule I hereto,
[c/o ________________________]
[Address]
[Date]
Ladies and Gentlemen:
Newfield Exploration Company, a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated ________ __, 2002 (the "Underwriting Agreement"),
to issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Designated Securities specified in Schedule II hereto (the
"Designated Securities" [consisting of Firm Designated Securities and any
Optional Designated Securities the Underwriters may elect to purchase]). Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the time and place and at the purchase price to the Underwriters set forth in
Schedule II hereto, the principal amount of Firm Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto [, (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Designated Securities, as provided below, the Company agrees to issue
and sell to each of the Underwriters, and each of the
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Underwriters agrees, severally and not jointly, to purchase from the Company at
the purchase price to the Underwriters set forth in Schedule II hereto that
portion of the principal amount of Optional Designated Securities as to which
such election shall have been exercised.]
[The Company hereby grants to each of the Underwriters the right to
purchase at their election up to the principal amount of Optional Designated
Securities set forth opposite the name of such Underwriter in Schedule I hereto
on the terms referred to in the paragraph above for the sole purpose of covering
sales of Designated Securities in excess of the principal amount of the Firm
Designated Securities. Any such election to purchase Optional Designated
Securities may be exercised by written notice from the Representatives to the
Company given within a period of 30 calendar days after the date of this Pricing
Agreement, setting forth the aggregate principal amount of Optional Designated
Securities to be purchased and the date on which such Optional Designated
Securities are to be delivered, as determined by the Representatives, but in no
event earlier than the First Time of Delivery or, unless the Representatives and
the Company otherwise agree in writing, no earlier than two or later than ten
business days after the date of such notice.]
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Company and one for each of the Representatives
plus one for each counsel] counterparts hereof, and upon acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company for examination, upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
Newfield Exploration Company
By:
-------------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Co-Representative(s)]
By:
--------------------------------------------------
On behalf of each of the Underwriters
I-2
SCHEDULE I
Principal [Maximum
Amount of Principal Amount
[Firm] of Optional
Designated Designated
Securities Securities
to be Which May be
Underwriter Purchased Purchased]
----------- --------- ----------
[Name(s) of Co-Representative(s)]
[Names of other Underwriters]
Total
SCHEDULE II
Title of Designated Securities:
[___%] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate Principal Amount:
Aggregate Principal Amount of Firm Designated Securities: [$]
Maximum Principal Amount of Optional Designated Securities: [$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
Underwriting Discount:
__% of the principal amount of the Designated Securities
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest[, if any,] from to [and accrued
amortization[, if any,] from to ]
Form of Designated Securities:
[Definitive form to be made available for checking and packaging at
least twenty-four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
Specified funds for payment of purchase price:
Federal (same day) funds
Time of Delivery:
a.m. (New York City time), , 20
Indenture:
Indenture dated , 20 , between the Company
and , as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[_______ and ________] of each year commencing on ________, 20
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$ ] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before , %,
and if] redeemed during the 12-month period beginning ,
Redemption
Year Price
---- -----
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.] [on any interest payment
date falling on or after , , at the
election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire [$ ] principal amount of Designated Securities on
in each of the years through at 100% of their
principal amount plus accrued interest[, together with [cumulative]
[noncumulative] redemptions at the option of the Company to retire an
additional [$ ] principal amount of Designated Securities in the
years through at 100% of their principal amount
plus accrued interest.]
[If Designated Securities are extendable debt securities, insert--
Extendable provisions:
Designated Securities are repayable on , [insert date and
years], at the option of the holder, at their principal amount with
accrued interest. The initial annual interest rate will be %, and
thereafter the annual interest rate will be adjusted on ,
and to a rate not less than % of the effective annual interest rate
on U.S. Treasury obligations with -year maturities as of the
[insert date 15 days prior to maturity date] prior to such [insert
maturity date].]
[If Designated Securities are floating rate debt securities, insert--
Floating rate provisions:
Initial annual interest rate will be % through [and thereafter will be
adjusted [monthly] [on each , , and ] [to an
annual rate of % above the average rate for -year [month]
[securities][certificates of deposit] issued by and [insert names of
banks].] [and the annual interest rate [thereafter] [from
through] will be the interest yield equivalent of the weekly average per
annum market discount rate for -month Treasury bills plus % of
Interest Differential (the excess, if any, of (i) the then current weekly
average per annum secondary market yield for -month certificates of
deposit over (ii) the then current interest yield equivalent of the
weekly average per annum market discount rate for -month Treasury
bills); [from and thereafter the rate will be the then current interest
yield equivalent plus % of Interest Differential].]
Defeasance provisions:
Closing location for delivery of Designated Securities: Names and addresses of
Representatives:
Representatives:
Address for Notices, etc.:
[Other Terms]:
[Listing of Designated Securities]:
[New York Stock Exchange] [None.]
[Blackout Provisions:]
[Describe any blackout provisions applicable to the Designated Securities.]
[Underwriter Provided Information:]
[The only information provided by the Underwriters or Representatives is
________________.]
ANNEX II
Pursuant to Section 7(d) and 7(e) of the Underwriting Agreement, the
accountants shall furnish letters regarding the Company or EEX Corporation, as
applicable, to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to such company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of such company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been [separately] furnished to the representative or representatives of
the Underwriters (the "Representatives," such term to include an
Underwriter or Underwriters who act without any firm being designated
as its or their representatives) [and are attached thereto];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in such company's quarterly
reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon, copies of which [have been
separately furnished to the Representatives] [are attached thereto];
and on the basis of specified procedures including inquiries of
officials of such company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations, nothing came to their attention that
caused them to believe that the unaudited condensed consolidated
financial statements do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations;
II-1
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of
such company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of such
company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
such company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of items 301, 302,
402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of such company and its subsidiaries,
inspection of the minute books of such company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
such company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in
such company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in such
company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
such company's Annual Report on Form 10-K for the most recent
fiscal year;
II-2
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in such company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of such company
and its subsidiaries, or any decreases in consolidated net
current assets or stockholders' equity or other items
specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
income from operations or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of such company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference), or
in
II-3
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of such company and its subsidiaries and
have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Securities for purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
II-4