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EXHIBIT 99.2
EOG RESOURCES, INC.
Flexible Money Market Cumulative Preferred Stock (MMP(R)), Series C
Liquidation Preference $100,000 Per Share
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PURCHASE AGREEMENT
December 14, 1999
Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
EOG Resources, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to Xxxxxx
Brothers Inc. (the "Purchaser") 500 shares of the Preferred Stock of the Company
specified above (the "Shares") for resale by the Purchaser to "qualified
institutional buyers" in reliance upon Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"), or to certain institutional accredited
investors in accordance with Section 3 of this Agreement.
1. The Company represents and warrants to, and agrees with, the
Purchaser that:
(a) An offering memorandum dated December 14, 1999 in respect of
the Shares will be prepared in connection with the offering of the
Shares (such offering memorandum, including the documents incorporated
by reference therein, is herein called the "Offering Memorandum"); and
the Offering Memorandum and any amendments or supplements thereto do
not and will not, as of their respective dates, contain an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions
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(R) Registered trademark of Xxxxxx Brothers Inc.
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made in reliance upon and in conformity with information furnished in
writing to the Company by the Purchaser expressly for use therein;
(b) The documents incorporated or deemed incorporated by
reference in the Offering Memorandum at the time they were or are
hereafter filed with the Securities and Exchange Commission (the
"SEC") complied and will comply in all material respects with the
requirements of the Securities Exchange Act of 1934 (the "Exchange
Act") and the rules and regulations of the SEC thereunder, and such
documents have been or will be timely filed with the SEC;
(c) Since the respective dates as of which information is given
in the Offering Memorandum, there has not been any material adverse
change in the general affairs, prospects, management, financial
position or results of operations of the Company and its consolidated
subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, in each case other than as set forth in or
contemplated by the Offering Memorandum;
(d) The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, has
full power and authority (corporate and other) to own its properties
and to conduct its business as such business is described in the
Offering Memorandum, and is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which
the ownership of its properties or the conduct of its business
requires such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse effect
on the Company;
(e) The authorized, issued and outstanding shares of capital
stock of the Company is as set forth in the Offering Memorandum; such
shares of capital stock have been duly authorized and validly issued
by the Company and are fully paid and nonassessable; none of such
shares of capital stock was issued in violation of preemptive or other
similar rights of any securityholder of the Company; and the Shares
have been duly authorized by the Company for issuance and, when issued
and delivered by the Company pursuant to this Agreement against
payment of the consideration therefor set forth herein, will be
validly issued, fully paid and nonassessable and will not be subject
to preemptive or other similar rights of any securityholder of the
Company;
(f) Each of the Company's subsidiaries has been duly incorporated
and is validly existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Offering Memorandum, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in
good standing would not have a material
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adverse affect on the Company and its consolidated subsidiaries, taken
as a whole; and all the outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly
issued, are fully paid and nonassessable, and (except in the case of
foreign subsidiaries, for directors' qualifying shares) are owned by
the Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests and claims;
(g) This Agreement has been duly authorized, executed and
delivered by the Company; each of the Auction Agent Agreement and the
Registration Rights Agreement referred to in the Offering Memorandum
(the "Other Agreements") has been duly authorized by the Company and,
when executed and delivered by the Company and the other parties
thereto, each Other Agreement will constitute a valid and legally
binding instrument, enforceable against the Company in accordance with
its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws
relating to or affecting creditors' rights generally and to general
equity principles; and the Shares and the Other Agreements will
conform to the descriptions thereof in the Offering Memorandum;
(h) The issuance and delivery of the Shares, the execution and
delivery of the Other Agreements and this Agreement, the consummation
of the transactions therein and herein contemplated and the compliance
with the terms thereof and hereof are within the Company's corporate
powers, and do not and will not conflict with, violate or result in a
breach of any of the terms or provisions of, or constitute a default
under, the Certificate of Incorporation, as amended or restated, or
By-laws of the Company, or any indenture, mortgage or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which any of their respective property or assets is
subject, or any existing applicable law, rule, regulation, judgment,
order or decree of any domestic government, governmental
instrumentality or court having jurisdiction over the Company or any
of its subsidiaries or any of their respective properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such governmental instrumentality or court is required
for the issue and sale of the Shares or the consummation by the
Company of the transactions contemplated by this Agreement, the terms
of the Shares or the Other Agreements, except such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with
the purchase and resale of the Shares by the Purchaser;
(i) Other than as set forth in the Offering Memorandum, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any of their respective
properties or assets is the subject which, if determined adversely to
the Company or such subsidiary, would individually or in the aggregate
have a material adverse effect on the financial position or results of
operations of the Company and its consolidated subsidiaries taken as a
whole or that could adversely affect the consummation of the
transactions contemplated by this Agreement, the terms of the Shares
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or the Other Agreements; and, to the knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities
or by others;
(j) The Company and its subsidiaries have all licenses,
franchises, permits, authorizations, approvals and orders and other
concessions of and from all governmental regulatory officials and
bodies that are necessary to own or lease their respective properties
and conduct their respective businesses as described in the Offering
Memorandum, except for such licenses, franchises, permits,
authorizations, approvals, orders and concessions the failure to
obtain which will not have a material adverse effect on the financial
condition or results of operations of the Company and its consolidated
subsidiaries taken as a whole;
(k) When the Shares are issued and delivered pursuant to this
Agreement, none of the Shares will be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are
listed on a national securities exchange registered under Section 6 of
the Exchange Act, or quoted in a U.S. automated inter-dealer quotation
system;
(l) The Company is not, and after giving effect to the offering
and sale of the Shares and the application of the net proceeds
therefrom will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(m) Neither the Company nor any person acting on behalf of the
Company has offered or sold the Shares by means of any general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act;
(n) The Company has not, directly or indirectly, solicited any
offer to buy or offered to sell, and will not, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to
any United States citizen or resident, any security which is or would
be integrated with the sale of the Shares in a manner that would
require any of the Shares to be registered under the Securities Act;
(o) The Company is subject to the reporting requirements of
Section 13 or 15 of the Exchange Act; and
(p) The Company is not subject to any obligation, duty or
liability imposed on it as a "holding company," a "subsidiary company"
of a "holding company," an "affiliate" of a "holding company," or an
"affiliate" of a "subsidiary company" of a "holding company," in each
case as such term is defined in Public Utility Holding Company Act of
1935, as amended ("PUHCA").
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2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Purchaser, and the Purchaser agrees to purchase
from the Company, at a purchase price of $98,750 per share, 500 Shares.
The Company hereby confirms to the Purchaser that the Shares are not,
and when issued will not be, of the same class as securities listed on a
national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.
3. Upon the authorization by the Company of the release of the Shares,
the Purchaser proposes to offer the Shares for resale upon the terms and
conditions set forth in this Agreement, the Offering Memorandum (including the
restrictions set forth under the caption "Notice to Investors" therein), the
terms of the Shares and the legend on the certificates for the Shares, and the
Purchaser hereby represents and warrants to, and agrees with, the Company that:
(a) It will offer or sell the Shares only to (i) persons who it
reasonably believes are "qualified institutional buyers" within the
meaning of Rule 144A under the Securities Act in transactions meeting
the requirements of such Rule 144A or (ii) a limited number of persons
that it reasonably believes to be and, with respect to sales, are
accredited investors, as such term is defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act ("Institutional Accredited
Investors");
(b) It is an "accredited investor" within the meaning of Rule 501
under the Securities Act; and
(c) It will not offer or sell Shares by means of any general
solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act.
4. Certificates for the Shares to be purchased by the Purchaser
hereunder, in definitive global form, registered in the name of Cede & Co.,
shall be delivered by or on behalf of the Company to the Purchaser through the
facilities of The Depository Trust Company for the account of the Purchaser,
against payment by the Purchaser or on its behalf of the purchase price therefor
by wire transfer of immediately available funds to a bank account designated by
the Company. The closing of the sale and purchase of the Shares shall be held at
the offices of Xxxxxxxxx & Xxxxxxxxx, L.L.P., South Tower Pennzoil Place, 000
Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx, except that physical delivery of the
certificates for the Shares may be made at the offices of an agent chosen by the
Company to act on behalf of The Depository Trust Company. The time and date of
such delivery and payment with respect to the Shares shall be at 9:00 a.m.,
Houston time, on December 22, 1999 or at such other time and date as the
Purchaser and the Company may agree upon in writing, such time and date for
delivery being herein called the "Time of Delivery."
5. The Company agrees with the Purchaser as follows:
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(a) To prepare the Offering Memorandum in a form approved by the
Purchaser, to make no further amendment or any supplement to the
Offering Memorandum which shall be disapproved by the Purchaser
promptly after reasonable notice thereof; and to advise the Purchaser
promptly of any such amendment or supplement after the Time of
Delivery and to furnish the Purchaser with copies thereof;
(b) To cooperate with the Purchaser in qualifying the Shares for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Purchaser may reasonably request; provided that
in no event shall the Company be obligated to qualify to do business
in any jurisdiction where it is not now so qualified, to take any
action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject, to qualify in any
jurisdiction as a broker-dealer or to subject itself to any taxing
authority where it is not now so subject;
(c) To furnish the Purchaser and its counsel with two copies of
the Offering Memorandum and each amendment or supplement thereto
signed for purposes of identification by an authorized officer of the
Company, and to furnish such additional quantities thereof as the
Purchaser may from time to time reasonably request, and if, at any
time prior to completion of the resale of the Shares by the Purchaser,
any event shall have occurred as a result of which the Offering
Memorandum 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 Offering Memorandum
is delivered, not misleading, or, if for any other reason it shall be
necessary or desirable during such same period to amend or supplement
the Offering Memorandum, to notify the Purchaser and upon the
Purchaser's request to prepare and furnish without charge to the
Purchaser and to any dealer in securities as many copies as such
Purchaser may from time to time reasonably request of an amended
Offering Memorandum or a supplement to the Offering Memorandum which
will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and
continuing until the expiration of six months after the Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of
any securities of the Company which mature more than one year after
such Time of Delivery and which are substantially similar to the
Shares without the prior written consent of the Purchaser;
(e) During the period of two years after the sale of the Shares
to the Purchaser hereunder, not to resell or permit any affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Shares that have been reacquired by the Company or any of its
affiliates;
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(f) Not to be or become, at any time prior to the expiration of
three years after the Time of Delivery, an open-end investment trust,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act;
(g) So long as the Shares are outstanding, for the benefit of the
holders of Shares from time to time, to file with SEC on a timely
basis and otherwise in accordance with the rules and regulations of
the SEC, annual reports on Form 10-K and interim reports on Forms 10-Q
and 8-K, or, in each case, the successor form thereto; and
(h) From the date hereof to the Time of Delivery, not to,
directly or indirectly, sell, offer to sell, contract to sell, grant
an option to purchase, issue any instrument convertible into or
exchangeable for, or otherwise issue securities of the Company or its
subsidiaries similar to, the Shares without the prior written approval
of the Purchaser.
6. The Company covenants and agrees with the Purchaser that the Company
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the issue
of the Shares, the preparation and printing of the Offering Memorandum and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Purchaser and dealers; (ii) the cost of printing or producing
this Agreement, the Other Agreements, the Broker-Dealer Agreement between the
auction agent and Xxxxxx Brothers Inc. referred to in the Offering Memorandum
(the "Broker-Dealer Agreement"), any Blue Sky and Legal Investment Memoranda and
any other documents in connection with the offering, purchase, sale and delivery
of the Shares; (iii) all expenses in connection with the qualification of the
Shares for offering and sale under state securities laws as provided in Section
5(b) hereof, including the reasonable fees and disbursements of a single counsel
for the Purchaser in connection with such qualification and in connection with
any Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Shares; (v) the cost of preparing certificates
representing the Shares; (vi) the cost of qualifying the Shares with The
Depository Trust Company; (vii) the reasonable fees and disbursements of counsel
for the Purchaser; (viii) all fees and expenses in connection with listing the
Shares on any stock exchange(s); (ix) all fees and expenses of any transfer
agent and registrar and of any auction agent; and (x) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, Section 8 and
Section 10 hereof, the Purchaser will pay all of its own costs and expenses,
including transfer taxes, if any, on resale of any of the Shares by it.
7. The obligations of the Purchaser hereunder shall be subject, in its
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of the Time of Delivery, 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:
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(a) Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel for the Purchaser,
shall have furnished to them such opinion or opinions, dated the Time
of Delivery, with respect to the incorporation of the Company, the
validity of the Shares, the due authorization, execution and delivery
of this Agreement and the Other Agreements, the Offering Memorandum,
and other related matters as the Purchaser 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;
(b) (A) Xxxxxxxxx & Xxxxxxxx L.L.P., counsel for the Company,
shall have furnished to the Purchaser an opinion, dated the Time of
Delivery, in form and substance satisfactory to the Purchaser, to the
effect that:
(i) The Company has authorized capitalization as set forth
in the Offering Memorandum;
(ii) The Shares have been duly authorized by the Company for
issuance and sale to the Purchaser pursuant to this Agreement
and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration therefor set forth
herein, will be validly issued, fully paid and nonassessable and
will not be subject to preemptive or other similar rights of any
shareholder of the Company; the relative rights, preferences,
interests and powers of the holders of the Shares are as set
forth in the Certificate of Designation relating thereto, and all
such provisions are valid under the laws of the State of
Delaware; and the Shares conform in all material respects to the
description thereof contained in the Offering Memorandum;
(iii) The Purchase Agreement has been duly authorized,
executed and delivered by the Company;
(iv) Each of the Other Agreements has been duly authorized
and validly executed and delivered by the Company and, assuming
due authorization, execution and delivery by the other party or
parties thereto, constitutes a valid and binding agreement of the
Company enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws relating to or
affecting creditors' rights generally and to general equity
principles and such counsel need not express any opinion as to
the enforceability of any provisions of the Other Agreements
relating to indemnity and contribution, and each of the Other
Agreements and the Broker-Dealer Agreement conforms in all
material respects to the description thereof contained in the
Offering Memorandum;
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(v) No registration of the Shares under the Securities Act
is required for the offer, sale and initial resale of the Shares
in the manner contemplated by this Agreement and the Offering
Memorandum;
(vi) The issuance and delivery of the Shares, the execution
and delivery of this Agreement and the Other Agreements, and the
consummation of the transactions herein and therein contemplated
and the compliance with the terms of this Agreement and the Other
Agreements, do not and will not conflict with, violate or result
in a breach of any of the terms or provisions of, or constitute a
default under, the Certificate of Incorporation, as amended or
restated, or the By-laws of the Company;
(vii) The Company is not, and after the consummation of the
sale of the Shares contemplated by this Agreement will not be, an
"investment company" or an entity "controlled" by an "investment
company," as such terms are defined in the Investment Company
Act; and
(viii) The Company is not subject to, or is exempt from,
regulation as a "holding company," or a "subsidiary company" of a
"holding company," in each case as such term is defined in PUHCA.
(B) Xxxxx Xxxxxxxx, Xx., Senior Vice President and General
Counsel of the Company, shall have furnished to the Purchaser an
opinion, dated the Time of Delivery, in form and substance
satisfactory to the Purchaser, to the effect that:
(i) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, with all necessary corporate power and authority to own
its properties and conduct its business as such business is
described in the Offering Memorandum;
(ii) The issuance and delivery of the Shares and the
execution and delivery of this Agreement and the Other
Agreements, and the consummation of the transactions herein and
therein contemplated and the compliance with the terms of the
Shares, this Agreement and the Other Agreements, do not and will
not conflict with, violate or result in a breach of any of the
terms or provisions of, or constitute a default under, the
Certificate of Incorporation, as amended or restated, or By-laws
of the Company, or any indenture, mortgage or, to such counsel's
knowledge, other agreement or instrument to which the Company or
any of its subsidiaries listed on Annex I hereto (the "Major
Subsidiaries") is a party or to which any of the properties or
assets of any of them is subject, or any existing applicable law,
rule, regulation, judgment, order or decree of any domestic
government, governmental instrumentality or court known to such
counsel and having jurisdiction over the Company or any
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Major Subsidiary or any of their respective properties; and no
consent, approval, authorization, order, registration or
qualification of or with any such governmental instrumentality or
court is required for the issue and sale of the Shares pursuant
to and in accordance with the terms of this Agreement and as
contemplated by the Offering Memorandum or the consummation by
the Company of the transactions contemplated by this Agreement or
the Other Agreements, except such consents, approvals,
authorizations, orders, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the purchase and resale of the Shares by the Purchaser;
(iii) Each of the Major Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has full corporate
power and authority to own its properties and to conduct its
business as such business is described in the Offering
Memorandum;
(iv) Each document filed with the SEC pursuant to the
Exchange Act (except for the reports of experts pertaining to
natural resource reserves and the financial statements and other
financial data included in the Offering Memorandum, as to which
such counsel need express no opinion) which is incorporated by
reference in the Offering Memorandum, complied as to form, when
so filed, in all material respects with requirements of the
particular form of the SEC upon which it was filed; and
(v) Other than as set forth in the Offering Memorandum,
there are no legal or governmental proceedings pending to which
the Company or any Major Subsidiary is a party or of which any
property or assets of the Company or a Major Subsidiary is the
subject which, if determined adversely to the Company or such
Major Subsidiary, would individually or in the aggregate have a
material adverse effect on the consolidated financial position or
results of operations of the Company and its consolidated
subsidiaries taken as a whole or that could adversely affect the
consummation of the transactions contemplated by this Agreement;
and to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or by
others.
Such opinions shall also contain a statement to the effect
that no facts have come to such counsel's attention that has
caused such counsel to believe that the Offering Memorandum
(except for the financial statements and schedules, natural
resource reserve reports or other financial and reserve data
included in the Offering Memorandum, as to which such counsel
need express no belief) and any further amendments or supplements
thereto made by the Company prior to the Time of Delivery
contained as of its date or contains as of the Time of Delivery
an untrue statement of a material fact or omitted or omits, as
the case may be, to state a material
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fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(c) On the date hereof and also at the Time of Delivery, Xxxxxx
Xxxxxxxx LLP shall have furnished to the Purchaser letters, dated the
respective date of delivery thereof, in form and substance
satisfactory to the Purchaser, to the effect set forth in Annex II
hereto as to financial information in the Offering Memorandum relating
to the Company;
(d) (i) The Company shall not have sustained since the date of
its latest audited financial statements included in the Offering
Memorandum any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Offering Memorandum, and (ii) since the respective dates of which
information is given in the Offering Memorandum there shall not have
been any change in the capital stock or long-term debt of the Company
or any change, or any development involving a prospective change, in
or affecting the general affairs, prospects, management, financial
position, stockholder's equity or results of operations of the Company
otherwise than as set forth or contemplated in the Offering
Memorandum, the effect of which, in any such case described in Clause
(i) or (ii), is in the Purchaser's judgment so material and adverse as
to make it impracticable or inadvisable to proceed with the offering
of the Shares for resale or the delivery of the Shares on the terms
and in the manner contemplated in this Agreement and the Offering
Memorandum;
(e) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded any securities of the Company by any
"nationally recognized statistical rating organization," as that term
is defined for purposes of Rule 436(g)(2) under the Securities 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 securities of the Company;
(f) On or after the date hereof 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; (ii) a general
moratorium on commercial banking activities in New York declared by
either Federal or New York State authorities; or (iii) the outbreak or
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war; if
the effect of any such event specified in clause (iii) in the
Purchaser's judgment makes it impracticable or inadvisable to proceed
with the offering or the delivery of, or materially impairs the
ability of the Purchaser to purchase, hold or effect resales of, the
Shares on the terms and in the manner contemplated by this Agreement
and the Offering Memorandum; and
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(g) The Company shall have furnished or caused to be furnished to
the Purchaser at the Time of Delivery certificates of officers of the
Company satisfactory to the Purchaser 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 (d) of
this Section and as to such other matters as the Purchaser may
reasonably request.
8. (a) The Company will indemnify and hold harmless the Purchaser and
each person, if any, who controls the Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in the Offering Memorandum (or any amendment or
supplement thereto), or any report furnished to securityholders
and not otherwise deemed to be included in the Offering
Memorandum, or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 8(d) below) any such
settlement is effected with the written consent of the Company;
and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 8(c) hereof, the fees and
disbursements of counsel chosen by the Purchaser), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii)
above; provided, however, that the indemnity set forth in this
Section 8(a) shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of the Purchaser
expressly for use in the Offering Memorandum (or any amendment or
supplement thereto).
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(b) The Purchaser agrees to indemnify and hold harmless the
Company, directors of the Company, and each person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any and all
loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Offering Memorandum (or any
amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by or on behalf of
the Purchaser expressly for use therein.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 8(a) above, counsel to the
indemnified parties shall be selected by the Purchaser, and, in the
case of parties indemnified pursuant to Section 8(b) above, counsel to
the indemnified parties shall be selected by the Company, provided
that if it so elects within a reasonable time after receipt of such
notice, an indemnifying party, jointly with any other indemnifying
parties receiving such notice, may assume the defense of such action
with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably
object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to
those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not
be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. An
indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no
event shall the indemnifying parties be liable for fees and expenses
of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 8
hereof (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation,
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proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for reasonable
fees and expenses of counsel, such indemnifying party agrees that it
shall be liable for any settlement of the nature contemplated by
Section 8(a)(ii) effected without its written consent if (i) such
settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii)
such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement
of the nature contemplated by Section 8(a)(ii) effected without its
consent if such indemnifying party (i) reimburses such indemnified
party in accordance with such request to the extent it considers such
request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable,
in each case prior to the date of such settlement.
(e) If the indemnification provided for in this Section 8 is for
any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to herein, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities,
claims, damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Purchaser on the other hand from the offering of the Shares pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and
of the Purchaser on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Purchaser on the other hand in connection with the
offering of the Shares pursuant to this Agreement shall be deemed to
be in the same respective proportions as the total net proceeds from
the offering of the Shares pursuant to this Agreement (before
deducting expenses but after deducting the total fee or commission
received by the Purchaser) received by the Company and the total fee
or commission received by the Purchaser bear to the aggregate initial
public offering price of the Shares. The relative fault of the Company
on the one hand and the Purchaser on the other hand shall be
determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information
supplied by the Company or by the Purchaser and the parties'
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relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Purchaser agree that it would not be just and equitable if
contribution pursuant to this Section 8(e) were determined by pro rata
allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above in this
Section 8(e). The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to
above in this Section 8(e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8(e), the Purchaser
shall not be required to contribute any amount in excess of the amount
by which the total price at which the Shares purchased and resold by
it were resold to investors exceeds the amount of any damages which
the Purchaser has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission.
For purposes of this Section 8(e), each person, if any, who controls
the Purchaser within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to
contribution as the Purchaser; and each director of the Company, and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
shall have the same rights to contribution as the Company. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(f) The Purchaser hereby confirms and the Company acknowledges
that the statements made in (i) the last full paragraph on the cover
page of the Offering Memorandum concerning the terms of the offering
of the Shares by the Purchaser; and (ii) the second sentence of the
sixth paragraph of the text under the caption "Offer and Resale" in
the Offering Memorandum, concerning the intention of the Purchaser to
make a market in the Shares, constitute the only written information
furnished to the Company by or on behalf of the Purchaser expressly
for use in the Offering Memorandum (or any amendment or supplement
thereto).
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Purchaser, 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 the Purchaser or any controlling person of the Purchaser, or the Company or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Shares.
10. If for any reason, the Shares are not delivered by or on behalf of
the Company as provided herein, the Company will reimburse the Purchaser for all
out-of-pocket expenses approved
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in writing by the Purchaser, including fees and disbursements of counsel,
reasonably incurred by the Purchaser in making preparations for the purchase,
sale and delivery of the Shares, but the Company shall then be under no further
liability to the Purchaser except as provided in Section 6 and Section 8 hereof.
11. All statements, requests, notices, and agreements hereunder shall
be in writing, and if to the Purchaser shall be delivered or sent by mail, telex
or facsimile transmission to it at 3 World Financial Center, New York, New York
10285, Attention: Xxxxx Xxxxxx, Facsimile No. (000) 000-0000; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
it at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000, Attention: Xxxxx
Xxxxxx, Vice President, Finance, Facsimile No. (000) 000-0000. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
12. This Agreement shall be binding upon, and inure solely to the
benefit of, the Company, the Purchaser and, to the extent provided in Section 8
and Section 9 hereof, the directors of the Company and each person who controls
the Company or the Purchaser, 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. No purchaser of any of the
Shares from the Purchaser shall be deemed a successor or assign by reason merely
of such purchase.
13. Time shall be of the essence in this Agreement. As used herein, the
term "business day" shall mean any day when banks in the Borough of Manhattan,
The City of New York are open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the parties
hereto 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.
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If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Purchaser and the Company in accordance with its terms.
Very truly yours,
EOG RESOURCES, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President, Finance
Accepted as of the date hereof:
XXXXXX BROTHERS INC.
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: Vice President
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ANNEX I
LIST OF MAJOR SUBSIDIARIES
EOG Resources International, Inc.
EOG Resources Marketing, Inc.
EOG Resources Canada Inc.
EOG-Canada, Inc.
EOG Resources Trinidad Limited
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ANNEX II
DESCRIPTION OF COMFORT LETTER
PERTAINING TO THE COMPANY
Pursuant to Section 7(c) of the Purchase Agreement, the accountants
shall furnish letters to the Purchaser to the effect that:
(i) They are independent certified public accountants with
respect to the Company within the meaning of the Code of Professional
Ethics and Rules of Conduct of the American Institute of Certified
Public Accountants;
(ii) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five fiscal years included in the Offering Memorandum
agrees with the corresponding amounts (after restatements where
applicable) in the Company's audited consolidated financial statements
for such fiscal years;
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Company, inspection of the minute
books of the Company since the date of the latest audited financial
statements included in the Offering Memorandum, inquiries of officials
of the Company 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) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Offering Memorandum are not in conformity
with generally accepted accounting principles applied on the
basis substantially consistent with the basis for the audited
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Offering Memorandum;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Memorandum 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
in the Offering Memorandum;
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(C) the unaudited financial statements which were not
included in the Offering Memorandum but from which were derived
any unaudited condensed financial statements referred to in
Clause (A) and any unaudited income statement data and balance
sheet items included in the Offering Memorandum and referred to
in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included in the Offering Memorandum;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Memorandum do not comply as
to form in all material respects with the applicable accounting
requirements 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 or any increase in the consolidated
long-term debt of the Company, or any decreases in consolidated
net current assets or net assets or other items specified by the
Purchaser, or any increases in any items specified by the
Purchaser, in each case as compared with amounts shown in the
latest balance sheet included in the Offering Memorandum, except
in each case for changes, increases or decreases which the
Offering Memorandum 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 in the Offering Memorandum to the specified
date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Purchaser, or any increases in any items specified by the
Purchaser, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding
length specified by the Purchaser, except in each case for
decreases or increases which the Offering Memorandum discloses
have occurred or may occur or which are described in such letter.
(iv) They have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Offering Memorandum (in each case to the extent that
such dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company subject to
the internal control of the Company's accounting system or are derived
directly from such records by analysis or computation) with the
results obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to be
in agreement with such results, except as otherwise specified in such
letter; and
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(v) In addition to the audit referred to in their report(s)
included in the Offering Memorandum and the limited procedures,
inspection of minute books, inquiries and other procedures referred to
in paragraphs (iii) and (iv) above, they have carried out certain
specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Purchaser, which are derived from the general accounting records of
the Company and its subsidiaries, which are included in the Offering
Memorandum and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
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