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Xxxxx Xxxxxxx Natural Gas Corp.
4,675,000 Shares (1)
Common Stock
($.01 par value)
U.S. Underwriting Agreement
, New Jersey
, 1997
Salomon Brothers Inc
Credit Suisse First Boston Corporation
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As U.S. Representatives of the several
U.S. Underwriters,
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Xxxxx Xxxxxxx Natural Gas Corp., an Oklahoma corporation (the "Company"),
proposes to sell to the underwriters named in Schedule I hereto (the "U.S.
Underwriters"), for whom you (the "U.S. Representatives") are acting as
representatives, 2,337,500 shares of Common Stock, $.01 par value ("Common
Stock"), of the Company, and S.A. Xxxxx Xxxxxxx et Cie (the "Selling
Stockholder") proposes to sell to the U.S. Underwriters 2,337,500 shares of
Common Stock (said shares to be issued and sold by the Company and shares to
be sold by the Selling Stockholder collectively being hereinafter called the
"U.S. Underwritten Securities"). The Selling Stockholder also proposes to
grant to the U.S. Underwriters an option to purchase up to 701,250 additional
shares of Common Stock (the "U.S. Option Securities"; the U.S. Option
Securities, together with the U.S. Underwritten Securities, being hereinafter
called the "U.S. Securities"). It is understood that the Company and the
Selling Stockholder are concurrently entering into an International
Underwriting
-----------------
(1) - Plus an option to purchase from the Selling Stockholder up to 701,250
additional shares to cover over-allotments.
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Agreement dated the date hereof (the "International Underwriting Agreement")
providing for the sale by the Company and the Selling Stockholder of an
aggregate of 825,000 shares of Common Stock (said shares to be sold by the
Company and the Selling Stockholder pursuant to the International Underwriting
Agreement being hereinafter called the "International Underwritten
Securities"), outside the United States and Canada through arrangements with
certain underwriters (the "International Underwriters"), for whom Salomon
Brothers International Limited, Credit Suisse First Boston (Europe) Limited,
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated and Xxxxxx Xxxxxxx & Co.
International Limited are acting as representatives (the "International
Representatives"), and providing for the grant to the International
Underwriters of an option to purchase from the Selling Stockholder up to
123,750 additional shares of Common Stock (the "International Option
Securities"; the International Option Securities, together with the
International Underwritten Securities, being hereinafter called the
"International Securities" and the International Securities, together with the
U.S. Securities, being hereinafter called the "Securities"). It is further
understood and agreed that the U.S. Underwriters and the International
Underwriters have entered into an Agreement Between U.S. Underwriters and
International Underwriters dated the date hereof (the "Agreement Between U.S.
Underwriters and International Underwriters"), pursuant to which, among other
things, the International Underwriters may purchase from the U.S. Underwriters
a portion of the U.S. Securities to be sold pursuant to the U.S. Underwriting
Agreement and the U.S. Underwriters may purchase from the International
Underwriters a portion of the International Securities to be sold pursuant to
the International Underwriting Agreement.
1. Representations and Warranties.
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(a) The Company and the Selling Stockholder jointly and severally
represent and warrant to, and agree with, each U.S. Underwriter as set forth
below in this Section 1. Certain terms used in this Section 1 are defined in
paragraph (iii) hereof.
(i) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933 (the "Act") and has filed with the Securities
and Exchange Commission (the "Commission") a registration statement (333-
[ ]) on such Form, including related preliminary prospectuses, for the
registration under the Act of the offering and sale of the Securities.
The Company may have filed one or more amendments thereto, including the
related preliminary prospectuses, each of which has previously been
furnished to you. The Company will next file with the Commission one of
the following: (A) prior to effectiveness of such registration
statement, a further amendment to such registration statement, including
the form of final prospectus, (B) final prospectuses in accordance with
Rules 430A and 424(b)(1) or (4), or (C) final prospectuses in accordance
with Rules 415 and 424(b)(2) or (5). In the case of clause (B), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in the
Prospectuses with respect to the Securities and the offering thereof. As
filed, such amendment and form of final prospectuses, or such final
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prospectuses, shall contain all Rule 430A Information, together with all
other such required information, with respect to the Securities and the
offering thereof and, except to the extent the U.S. Representatives shall
agree in writing to a modification, shall be in all substantive respects
in the form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained
in the latest U.S. Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein.
The Company agrees that it will not, without your agreement, file a
Rule 462(b) Registration Statement. If the Registration Statement
contains the undertaking specified by Regulation S-K Item 512(a), the
Registration Statement, at the Execution Time, meets the requirements
set forth in Rule 415(a)(i)(x).
It is understood that two forms of prospectus are to be used in
connection with the offering and sale of the Securities: one form of
prospectus relating to the U.S. Securities, which are to be offered and
sold to United States and Canadian Persons, and one form of prospectus
relating to the International Securities, which are to be offered and
sold to persons other than United States and Canadian Persons. The two
forms of prospectus are identical except for the outside front cover
page[, the inside front cover page, the discussion under the headings
"Underwriting" and "Certain United States Tax Consequences to Non-United
States Holders" and the outside back cover page]. Such form of
prospectus relating to the U.S. Securities as first filed pursuant to
Rule 424(b) or, if no filing pursuant to Rule 424(b) is made, such form
of prospectus included in the Registration Statement at the Effective
Date, is hereinafter called the "U.S. Prospectus"; such form of
prospectus relating to the International securities as first filed
pursuant to Rule 424(b) or, if no filing pursuant to Rule 424(b) is
made, such form of prospectus included in the Registration Statement at
the Effective Date, is hereinafter called the "International
Prospectus"; and the U.S. Prospectus and the International Prospectus
are hereinafter collectively called the "Prospectuses".
(ii) On the Effective Date, the Registration Statement did or
will, and when the Prospectuses are first filed (if required) in
accordance with Rule 424(b) and on the Closing Date (as defined herein)
and on any date on which shares sold in respect of the U.S. Underwriters'
over-allotment option are purchased, if such date is not the Closing Date
(a "Settlement Date"), each Prospectus (and any supplements thereto)
will, comply in all material respects with the applicable requirements of
the Act and the Securities Exchange Act of 1934 (the "Exchange Act") and
the respective rules thereunder; on the Effective Date, the Registration
Statement did not or will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and, on
the Effective Date, each Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to
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Rule 424(b) and on the Closing Date and any Settlement Date, each
Prospectus (together with any supplement thereto) will not, include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that the Company and the Selling Stockholder make no
representations or warranties as to the information contained in or
omitted from the Registration Statement, or the Prospectuses (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any U.S.
Underwriter relating to such U.S. Underwriter through the U.S.
Representatives specifically for inclusion in the Registration Statement
or the Prospectuses (or any supplement thereto).
(iii) The terms which follow, when used in this Agreement, shall
have the meanings indicated. The term "the Effective Date" shall mean
each date that the Registration Statement and any post-effective
amendment or amendments thereto and any Rule 462(b) Registration
Statement became or become effective and each date after the date hereof
on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto.
"Prospectuses" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424 (b) after the Execution Time or, if
no filing pursuant to Rule 424(b) is required, shall mean the form of
final prospectus relating to the Securities included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean
the registration statement referred to in paragraph (i) above, including
incorporated documents, exhibits and financial statements, as amended at
the Execution Time (or, if not effective at the Execution Time, in the
form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended or
such Rule 462(b) Registration Statement, as the case may be. Such term
shall include any Rule 430A Information deemed to be included therein at
the Effective Date as provided by Rule 430A. "Rule 415", "Rule 424",
"Rule 430A", "Rule 462" and "Regulation S-K" refer to such rules or
regulation under the Act. "Rule 430A Information" means information with
respect to the Securities and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A. "United States or Canadian Person" shall mean any
person who is a national or resident of the United States or Canada, any
corporation, partnership, or other entity created or organized in or
under the laws of the United States or Canada or of any political
subdivision thereof, or any estate or trust the income of which is
subject to United States or Canadian Federal income taxation, regardless
of its source (other than any non-United States or non-Canadian branch of
any United States or Canadian Person), and shall include any United
States or Canadian branch of a person other than a United States or
Canadian Person. "U.S." or "United States" shall mean the United States
of America (including the states thereof and the District of Columbia),
its territories, its possessions and other areas subject to its
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jurisdiction. "Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to Rule
462(b) relating to the offering covered by the initial registration
statement (333-[ ]). Any reference herein to the Registration
Statement, Preliminary Prospectuses or the Prospectuses shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act
on or before the Effective Date of the Registration Statement or the
issue date of the Preliminary Prospectuses or the Prospectuses, as the
case may be; and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, the
Preliminary Prospectuses or the Prospectuses shall be deemed to refer to
and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue date of the
Preliminary Prospectuses or the Prospectuses, as the case may be, deemed
to be incorporated therein by reference. The "U.S. Preliminary
Prospectus" and the "International Preliminary Prospectus", respectively,
shall mean any preliminary prospectus with respect to the offering of the
U.S. Securities and the International Securities, as the case may be, r
referred to in paragraph (i) above and any preliminary prospectus with
respect to the offering of the U.S. Securities and the International
Securities, as the case may be, included in the Registration Statement at
the Effective Date that omits Rule 430A Information; and the U.S.
Preliminary Prospectus and the International Preliminary Prospectus are
hereinafter collectively called the "Preliminary Prospectuses".
(b) The Selling Stockholder represents and warrants to, and agrees
with, each U.S. Underwriter that:
(i) The Selling Stockholder is the lawful owner of the U.S.
Securities to be sold by the Selling Stockholder hereunder and upon sale
and delivery of, and payment for, such U.S. Securities, as provided
herein, the Selling Stockholder will convey good and marketable title to
such U.S. Securities, free and clear of all liens, encumbrances, equities
and claims whatsoever.
(ii) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
U.S. Securities and has not effected any sales of shares of Common Stock
which, if effected by the issuer, would be required to be disclosed in
response to Item 701 of Regulation S-K.
(iii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Selling Stockholder of the transactions contemplated herein, except such
as may have been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the U.S. Securities by the U.S. Underwriters and such
other approvals as have been obtained.
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(iv) Neither the sale of the U.S. Securities being sold by the
Selling Stockholder nor the consummation of any other of the transactions
herein contemplated by the Selling Stockholder or the fulfillment of the
terms hereof by the Selling Stockholder will conflict with, result in a
breach or violation of, or constitute a default under any law or the
charter or by-laws of the Selling Stockholder or the terms of any
indenture or other agreement or instrument to which the Selling
Stockholder or any of its subsidiaries is a party or bound, or any
judgement, order or decree applicable to the Selling Stockholder or any
of its subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Selling
Stockholder or any of its subsidiaries.
Any certificate signed by any officer of the Company and delivered
to the U.S. Representatives or counsel for the U.S. Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each U.S.
Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company and the Selling Stockholder agree, severally and not jointly, to sell
to each U.S. Underwriter, and each U.S. Underwriter agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholder, at a
purchase price of $[ ] per share, the amount of the U.S. Underwritten
Securities set forth opposite such U.S. Underwriter's name in Schedule I
hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Selling Stockholder
hereby grants an option to the several U.S. Underwriters to purchase,
severally and not jointly, up to 701,250 shares of the U.S. Option Securities
at the same purchase price per share as the U.S. Underwriters shall pay for
the U.S. Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the U.S. Underwritten Securities by the U.S.
Underwriters. Said option may be exercised in whole or in part at any time
(but not more than once) on or before the 30th day after the date of the U.S.
Prospectus upon written or facsimile notice by the U.S. Representatives to the
Selling Stockholder setting forth the number of shares of the U.S. Option
Securities as to which the several U.S. Underwriters are exercising the option
and the Settlement Date. Delivery of certificates for the shares of U.S.
Option Securities by the Selling Stockholder, and payment therefor to the
Selling Stockholder, shall be made as provided in Section 3 hereof. The
maximum number of shares of the U.S. Option Securities to be sold by the
Selling Stockholder is set forth in Schedule II hereto. In the event that the
U.S. Underwriters exercise less than their full over-allotment option, the
number of shares of the U.S. Option Securities to be sold by each party listed
on Schedule II shall be, as nearly as practicable, in the same proportion to
each other as are the number of shares of the U.S. Option Securities listed
opposite their respective names on said Schedule II. The number of shares of
the U.S. Option Securities to be purchased by each U.S. Underwriter shall be
the same percentage of the total number of shares of the U.S. Option
Securities to be purchased by the several U.S. Underwriters as such U.S.
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Underwriter is purchasing of the U.S. Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the U.S.
Underwritten Securities and the U.S. Option Securities (if the option provided
for in Section 2(b) hereof shall have been exercised on or before the third
business day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on [ ], 1997, or such later date (not later than [ ],
1997) as the U.S. Representatives and the International Representatives shall
designate, which date and time may be postponed by agreement among the U.S.
Representatives, the International Representatives, the Company and the
Selling Stockholder or as provided in Section 9 hereof (such date and time of
delivery and payment for the U.S. Securities being herein called the "Closing
Date"). Delivery of the U.S. Securities shall be made to the U.S.
Representatives for the respective accounts of the several U.S. Underwriters
against payment by the several U.S. Underwriters through the U.S.
Representatives of the respective aggregate purchase prices of the U.S.
Securities being sold by the Company and the Selling Stockholder to or upon
the order of the Company and the Selling Stockholder by wire transfer payable
in same day funds. Delivery of the U.S. Underwritten Securities and the U.S.
Option Securities shall be made at such location as the U.S. Representatives
shall reasonably designate at least one business day in advance of the Closing
Date and payment for such U.S. Securities shall be made at the office of
Cravath, Swaine & Xxxxx, counsel for the U.S. Underwriters at Xxxxxxxxx Xxxxx,
000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx. Certificates for the U.S. Securities
shall be registered in such names and in such denominations as the U.S.
Representatives may request not less than three full business days in advance
of the Closing Date.
The Company and the Selling Stockholder agree to have the U.S.
Securities available for inspection, checking and packaging by the U.S.
Representatives in New York, New York, not later than 1:00 PM on the business
day prior to the Closing Date. The Selling Stockholder will pay all
applicable state transfer taxes, if any, involved in the transfer to the
several U.S. Underwriters of the U.S. Securities to be purchased by them from
the Selling Stockholder and the respective U.S. Underwriters will pay any
additional stock transfer taxes involved in further transfers.
If the option provided for in Section 2(b) hereof is exercised after
the third business day prior to the Closing Date, the Selling Stockholder will
deliver (at the expense of the Selling Stockholder) to the U.S.
Representatives, at Seven World Trade Center, New York, New York, on the date
specified by the U.S. Representatives (which shall be within three business
days after exercise of said option), certificates for the U.S. Option
Securities in such names and denominations as the U.S. Representatives shall
have requested against payment of the purchase price thereof to or upon the
order of the Selling Stockholder identified in Schedule II by certified or
official bank check or checks drawn on or by a New York Clearing House bank
and payable in next day funds. If settlement for the U.S. Option Securities
occurs after the Closing Date, the Selling Stockholder will deliver to the
U.S. Representatives on the Settlement Date for the U.S. Option Securities,
and the obligation of the U.S. Underwriters to purchase the U.S. Option
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Securities shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
It is understood and agreed that the Closing Date shall occur
simultaneously with the "Closing Date" under the International Underwriting
Agreement, and that the Settlement Date, if any, shall occur simultaneously
with the "Settlement Date" under the International Underwriting Agreement.
4. Offering by Underwriters. It is understood that the several
U.S. Underwriters propose to offer the U.S. Securities for sale to the public
as set forth in the U.S. Prospectus.
5. Agreements.
(a) The Company agrees with the several U.S. Underwriters that:
(i) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering
of the Securities, the Company will not file any amendment of the
Registration Statement or Supplement to the Prospectuses or any Rule
462(b) Registration Statement unless the Company has furnished a copy
for you prior to the filing and will not file any such proposed amendment
or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the Prospectuses is otherwise
required under Rule 424(b), the Company will cause the Prospectuses,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the U.S.
Representatives of such timely filing. The Company will promptly advise
the U.S. Representatives (A) when the Registration Statement, if not
effective at the Execution Time, and any amendment thereto, shall have
become effective, (B) when the Prospectuses, and any supplement
thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (C) when, prior to termination
of the offering of the Securities, any amendment to the Registration
Statement shall have been filed or become effective, (D) of any request
by the Commission for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or supplement to the Prospectuses or
for any additional information, (E) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or the institution or threatening of any proceeding for that purpose and
(F) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(ii) If, at any time when a prospectus relating to the Securities
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is required to be delivered under the Act, any event occurs as a result
of which either of the Prospectuses as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement either of
the Prospectuses to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) prepare and
file with the Commission, subject to the second sentence of subparagraph
(a)(i) of this Section 5, an amendment or supplement which will correct
such statement or omission or an amendment which will effect such
compliance and (ii) supply any supplemented Prospectuses to you in such
quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make generally
available to its security holders and to the U.S. Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(iv) The Company will furnish to the U.S. Representatives and
counsel for the U.S. Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
U.S. Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an U.S. Underwriter
or dealer may be required by the Act or otherwise required, as many
copies of each U.S. Preliminary Prospectus and the U.S. Prospectus and
any supplement thereto as the U.S. Representatives may reasonably
request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(v) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the U.S.
Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the securities and
will pay the fee of the National Association of Securities Dealers, Inc.,
in connection with its review of the offering.
(vi) The Company will not, for a period of 90 days following the
Execution Time, without the prior written consent of the International
Representatives and the U.S. Representatives, offer, sell or contract to
sell, pledge, or otherwise dispose of, or enter into any transaction
which is designed to, or could be expected to, result in the disposition
by any person of directly or indirectly, or file a registration statement
with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act with respect to, any
shares of capital stock of the Company or any securities convertible
into, or exchangeable for, shares of capital stock of the Company or
announce an intention to effect any such transaction; provided, however,
that the Company may issue and sell the Securities pursuant to the terms
of this Agreement and the International Underwriting Agreement, may issue
and sell Common Stock pursuant to the terms of any employee stock option
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plan, stock ownership plan or dividend reinvestment plan of the Company
in effect at the Execution Time and the Company may issue Common Stock
issuable upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time.
(b) Each U.S. Underwriter agrees that (i) it is not purchasing any
of the U.S. Securities for the account of any person other than a United
States or Canadian Person, (ii) it has not offered or sold, and will not offer
or sell, directly or indirectly, any of the U.S. Securities or distribute any
U.S. Prospectus to any person outside the United States or Canada, or to any
person other than a United States or Canadian Person, and (iii) any dealer to
whom it may sell any of the U.S. Securities will represent that it is not
purchasing for the account of any person other than a United States or
Canadian Person and agree that it will not offer or resell, directly or
indirectly, any of the U.S. Securities outside the United States or Canada, or
to any person other than a United States or Canadian Person or to any other
dealer who does not so represent and agree; provided, however, that the
foregoing shall not restrict (A) purchases and sales between the U.S.
Underwriters on the one hand and the International Underwriters on the other
hand pursuant to the Agreement Between U.S. Underwriters and International
Underwriters, (B) stabilization transactions contemplated under the Agreement
Between U.S. Underwriters and International Underwriters, conducted through
Salomon Brothers Inc (or through the U.S. Representatives and International
Representatives) as part of the distribution of the Securities, and (C) sales
to or through (or distributions of U.S. Prospectuses or U.S. Preliminary
Prospectuses to) United States or Canadian Persons who are investment
advisors, or who otherwise exercise investment discretion, and who are
purchasing for the account of any person other than a United States or
Canadian Person.
(c) The agreements of the U.S. Underwriters set forth in paragraph
(b) of this Section 5 shall terminate upon the earlier of the following
events:
(i) a mutual agreement of the International Representatives and the
U.S. Representatives to terminate the selling restrictions set forth in
paragraph (b) of this Section 5 and in Section 5(b) of the International
Underwriting Agreement; or
(ii) the expiration of a period of 30 days after the Closing Date,
unless (A) the U.S. Representatives shall have given notice to the
Company and the International Representatives that the distribution of
the U.S. Securities by the U.S. Underwriters has not yet been completed,
or (B) the International Representatives shall have given notice to the
Company and the U.S. Underwriters that the distribution of the
International Securities by the International Underwriters has not yet
been completed. If such notice by the U.S. Representatives or the
International Representatives is given, the agreements set forth in such
paragraph (b) shall survive until the earlier of (1) the event referred
to in clause (i) of this subsection (c) or (2) the expiration of an
additional period of 30 days from the date of any such notice.
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(d) The Selling Stockholder agrees with the several U.S.
Underwriters that it will not during the period of 90 days following the
Execution Time, without the prior written consent of the International
Representatives and the U.S. Representatives, offer, sell, contract to sell,
pledge, or otherwise dispose of or enter into any transaction which is
designed to, or could be expected to, result in the disposition by any person,
directly or indirectly, or cause to be filed a registration statement with the
Commission in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act with respect to, any shares of capital stock of
the Company or any securities convertible into or exercisable or exchangeable
for such capital stock, or announce an intention to effect any such
transaction, other than (i) the Shares to be sold hereunder and under the
International Underwriting Agreement and (ii) any option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectuses.
(e) Each U.S. Underwriter that will offer or sell shares of Common
Stock in Canada as part of the distribution agrees that it will only make such
offers and sales pursuant to an exemption from the prospectus requirements in
each jurisdiction in Canada in which such offers and sales are made.
6. Conditions to the obligations of the U.S. Underwriters. The
obligations of the U.S. Underwriters to purchase the U.S. Underwritten
Securities and the U.S. Option Securities, as the case may be, shall be
subject to the accuracy of the representations and warranties on the part of
the Company and the Selling Stockholder contained herein as of the Execution
Time, the Closing Date and any Settlement Date pursuant to Section 3 hereof,
to the accuracy of the statements of the Company and the Selling Stockholder
made in any certificates pursuant to the provisions hereof, to the performance
by the Company and the Selling Stockholder of their respective obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the International Representatives and the U.S.
Representatives agree in writing to a later time, the Registration Statement
will become effective not later than (i) 6:00 PM New York City time on the
date of determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii) 12:00
Noon on the business day following the day on which the public offering price
was determined, if such determination occurred after 3:00 PM New York City
time on such date; if filing of either of the Prospectuses, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectuses, and any such
supplement, will be filed in the manner and within the time period
required by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the U.S. Representatives
the opinion of Xxxxx & Xxxxxxx, counsel for the Company, dated the Closing
Date, to the effect that:
(i) each of the Company and its subsidiaries, Xxxxx Xxxxxxx Gas
12
Marketing Corp. and Stonewater Pipeline Company, Ltd.(individually a
"Subsidiary" and collectively the "Subsidiaries"), has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its properties and conduct
its business as described in the Prospectuses, and is duly qualified to
do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material business;
(ii) all the outstanding shares of capital stock of each Subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Prospectuses,
all outstanding shares of capital stock of the Subsidiaries are owned by
the Company either directly or through wholly owned subsidiaries free and
clear of any perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests, claims, liens
or encumbrances;
(iii) the Company's authorized equity capitalization is as set forth
in the Prospectuses; the capital stock of the Company conforms to the
description thereof contained in the Prospectuses; the outstanding shares
of Common Stock (including the Securities being sold hereunder by the
Selling Stockholder) have been duly and validly authorized and issued and
are fully paid and nonassessable; the Securities being sold hereunder by
the Company have been duly and validly authorized, and, when issued and
delivered to and paid for by the U.S. Underwriters pursuant to this
Agreement and by the International Underwriters pursuant to the
International Underwriting Agreement, will be fully paid and
nonassessable; (the Securities being sold by the Selling Stockholder are
duly listed and admitted for trading on the New York Stock Exchange; the
Securities being sold hereunder by the Company are duly authorized for
listing, subject to official notice of issuance and evidence of
satisfactory distribution, on the New York Stock Exchange; the
certificates for the Securities are in valid and sufficient form; and the
holders of outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the Securities;
(iv) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any
of its subsidiaries of a character required to be disclosed in the
Registration Statement which is not adequately disclosed in the
Prospectuses, and there is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Prospectuses, or to be filed as an exhibit, which is not described or
filed as required;
(v) the Registration Statement has become effective under the Act;
any required filing of the Prospectuses, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and within the time
period required by Rule 424(b); to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has
13
been issued, no proceedings for that purpose have been instituted or
threatened and the Registration Statement and each of the Prospectuses
(other than the financial statements and other financial and statistical
information contained therein as to which such counsel need express no
opinion) comply as to form in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder; and such counsel has no reason to believe that at the
Effective Date the Registration Statement includes any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not misleading
or that the Prospectuses include any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(vi) this Agreement and the International Underwriting Agreement
have been duly authorized, executed and delivered by the Company;
(vii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the
Securities by the U.S. Underwriters and such other approvals (specified
in such opinion) as have been obtained;
(viii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions contemplated herein or in
the International Underwriting Agreement nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws of the
Company or the terms of any indenture or other agreement or instrument
known to such counsel and to which the Company or any of its subsidiaries
is a party or bound or any judgment, order or decree known to such
counsel to be applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries; and
(ix) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of Oklahoma
or the Federal Laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
U.S. Underwriters and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials. Reference to the Prospectuses in this paragraph (b) include any
supplements thereto at the Closing Date.
14
(c) The Selling Stockholder shall have furnished to the U.S.
Representatives the opinion of [ ], counsel for the Selling
Stockholder, dated the Closing Date, to the effect that:
(i) this Agreement and the International Underwriting Agreement have
been duly authorized, executed and delivered by the Selling Stockholder
and the Selling Stockholder has full legal right and authority to sell,
transfer and deliver in the manner provided in this Agreement the
Securities being sold by the Selling Stockholder hereunder;
(ii) the delivery by the Selling Stockholder to the several U.S.
Underwriters of certificates for the Securities being sold hereunder by
the Selling Stockholder against payment therefor as provided herein, will
pass good and marketable title to such Securities to the several U.S.
Underwriters, free and clear of all liens, encumbrances, equities and
claims whatsoever;
(iii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Selling Stockholder of the transactions contemplated herein, except such
as may have been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the U.S. Underwriters and such other
approvals (specified in such opinion) as have been obtained; and
(iv) neither the sale of the Securities being sold by the Selling
Stockholder nor the consummation of any other of the transactions herein
contemplated by the Selling Stockholder or the fulfillment of the terms
hereof by the Selling Stockholder will conflict with, result in a breach
or violation of, or constitute a default under any law or the charter or
By-laws of the Selling Stockholder or the terms of any indenture or other
agreement or instrument known to such counsel and to which the Selling
Stockholder or any of its subsidiaries is a party or bound, or any
judgement, order or decree known to such counsel to be applicable to the
Selling Stockholder or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Selling Stockholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the
Selling Stockholder and public officials.
(d) The U.S. Representatives shall have received from Cravath,
Swaine & Xxxxx, counsel for the U.S. Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectuses (together with any
supplement thereto) and other related matters as the U.S. Representatives may
reasonably require, and the Company and the Selling Stockholder shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) The Company shall have furnished to the U.S. Representatives a
certificate of the Company, signed by the Chairman of the Board and the Chief
15
Financial Officer and Treasurer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the Prospectuses, any supplement to the Prospectuses
and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectuses (exclusive of any supplement thereto), there
has been no material adverse change in the condition (financial or
other), earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectuses (exclusive of any supplement thereto).
(f) The Selling Stockholder shall have furnished to the U.S.
Representatives a certificate, signed by the President and Chief Executive
Officer and the Chief Financial Officer of the Selling Stockholder, dated the
Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectuses, any
supplement to either of the Prospectuses and this Agreement and that the
representations and warranties of the Selling Stockholder in this Agreement
are true and correct in all material respects on and as of the Closing Date to
the same effect as if made on the Closing Date.
(g) At the Execution Time and at the Closing Date, Ernst & Young
LLP shall have furnished to the U.S. Representatives a letter or letters,
dated respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the U.S. Representatives, confirming that
they are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules included or incorporated in the Registration
Statement and the Prospectuses and reported on by them comply in 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) on the basis of a reading of the latest unaudited financial
statements made available by the Company and its subsidiaries; carrying
out certain specified procedures (but not an examination in accordance
with generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth in
16
such letter; a reading of the minutes of the meetings of the
stockholders, directors and [names of any important committees, e.g.,
executive, finance, audit] committees of the Company and the
Subsidiaries; and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and
its subsidiaries as to transactions and events subsequent to December 31,
1996, nothing came to their attention which caused them to believe that:
(1) with respect to the period subsequent to December 31, 1996,
there were any changes, at a specified date not more than five business
days prior to the date of the letter, in the long-term debt of the
Company and its subsidiaries or capital stock of the Company or
decreases in the stockholders' equity of the Company as compared with
the amounts shown on the December 31, 1996, consolidated balance
sheet included or incorporated in the Registration Statement and the
Prospectuses, or for the period from January 1, 1997 to such specified
date there were any decreases, as compared with the comparable period
in 1996 in total revenues or oil and gas sales or income before income
taxes or in total or per share amounts of net income of the Company and
its subsidiaries, except in all instances for changes or decreases set
forth in such letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the U.S. Representatives;
or
(2) the information included or incorporated in the Registration
Statement and Prospectuses in response to Regulation S-K, Item 301
(Selected Financial Data), Item 302 (Supplementary Financial
Information) and Item 402 (Executive Compensation) is not in conformity
with the applicable disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the general
accounting records of the Company and its subsidiaries) set forth in the
Registration Statement and the Prospectuses, including the information
set forth under the captions " " and " " in the
Prospectuses, the information included or incorporated in Items [1, 2, 6,
7 and 11] of the Company's Annual Report on Form 10-K, incorporated by
reference in the Registration Statement and the Prospectus, and the
information included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or incorporated
in any Quarterly Reports on Form 10-Q of the Company, incorporated by
reference in the Registration Statement and the Prospectus, agrees with
the accounting records of the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Prospectuses in this paragraph (g) include
any supplement thereto at the date of the letter.
The U.S. Representatives shall have also received from Ernst & Young
LLP a letter stating that the Company's system of internal accounting controls
17
taken as a whole is sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would be material in
relation to the financial statements of the Company and its subsidiaries.
(h) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectuses (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified in the letter
or letters referred to in paragraph (g) of this Section 6 or (ii) any change,
or any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect of
which, in any case referred to in clause (i) or (ii) above, is, in the
judgment of the U.S. Representatives, so material and adverse as to make it
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Prospectuses (exclusive of any supplement thereto).
(i) On or prior to the Execution Time, the New York Stock Exchange
shall have approved the U.S. Underwriters' participation in the distribution
of the U.S. Securities to be sold by the Selling Stockholder.
(j) At the Execution Time, the Company shall have furnished to the
U.S. Representatives a letter substantially in the form of Exhibit A hereto
from each officer and director of the Company and major shareholders addressed
to the U.S. Representatives, in which each such person agrees not to offer,
sell or contract to sell, or otherwise dispose of, (or enter into any
transaction which is designed to, or would be expected to, result in the
disposition by any person of) directly or indirectly, or announce an offering
of, any shares of Common Stock beneficially owned by such person or any
securities convertible into, or exchangeable for, shares of Common Stock for a
period of 90 days following the Execution Time without the prior written
consent of the International Representatives and the U.S. Representatives,
other than shares of Common Stock disposed of as bona fide gifts.
(k) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such
rating that does not indicate the direction of the possible change.
(l) Prior to the Closing Date, the Company shall have furnished to
the U.S. Representatives such further information, certificates and documents
as the U.S. Representatives may reasonably request.
(m) The closing of the purchase of the International Underwritten
Securities to be issued and sold by the Company pursuant to the International
Underwriting Agreement shall occur concurrently with the closing described
herein.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
18
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the U.S. Representatives and counsel for
the U.S. Underwriters, this Agreement and all obligations of the U.S.
Underwriters hereunder may be canceled at, or at any time prior to, the
Closing Date by the U.S. Representatives. Notice of such cancelation shall be
given to the Company and the Selling Stockholder in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Cravath, Swaine & Xxxxx, counsel for the U.S.
Underwriters, at Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx
the Closing Date.
7. Reimbursement of U.S. Underwriters' Expenses. If the sale of
the Securities provided for herein is not consummated because any condition to
the obligations of the U.S. Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company or the Selling
Stockholder to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the U.S. Underwriters, the
Company will reimburse the U.S. Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. If the Company is required to
make any payments to the U.S. Underwriters under this Section 7 because of the
Selling Stockholder's refusal, inability or failure to satisfy any condition
to the obligations of the U.S. Underwriters set forth in Section 6, the
Selling Stockholder shall reimburse the Company on demand for all amounts so
paid.
8. Indemnification and Contribution. (a) The Company and the
Selling Stockholder jointly and severally agree to indemnify and hold harmless
each U.S. Underwriter, the directors, officers, employees and agents of each
U.S. Underwriter and each person who controls any U.S. Underwriter within the
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
International or U.S. Preliminary Prospectus or in either of the Prospectuses,
or in any amendment thereof 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 agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company and the Selling Stockholder will 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 any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
19
and in conformity with written information furnished to the Company by or on
behalf of any U.S. Underwriter relating to such U.S. Underwriters through the
U.S. Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company or the
Selling Stockholder may otherwise have.
(b) Each U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within
the meaning of either the Act or the Exchange Act and the Selling Stockholder,
to the same extent as the foregoing indemnity from the Company to each U.S.
Underwriter, but only with reference to written information relating to such
U.S. Underwriter furnished to the Company by or on behalf of such U.S.
Underwriter through the U.S. Representatives specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any U.S. Underwriter may otherwise
have. The Company and the Selling Stockholder acknowledge that the statements
set forth [in the last paragraph of the cover page and under the heading
"Underwriting"] in any U.S. or International Preliminary Prospectus and the
Prospectuses constitute the only information furnished in writing by or on
behalf of the several U.S. Underwriters for inclusion in any U.S. or
International Preliminary Prospectus or the Prospectuses, and you, as the U.S.
Representatives, confirm that such statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set forth
below); provided, however, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel chosen
by the indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not
20
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Selling Stockholder,
jointly and severally, and the U.S. Underwriters agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company, the Selling Stockholder
and one or more of the U.S. Underwriters may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and
the Selling Stockholder on the one hand and by the U.S. Underwriters on the
other from the offering of the U.S. Securities; provided, however, that in no
case shall any U.S. Underwriter (except as may be provided in any agreement
among underwriters relating to the offering of the U.S. Securities) be
responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such U.S. Underwriter
hereunder. If the allocation provided by the immediately preceding sentence
is unavailable for any reason, the Company and the Selling Stockholder,
jointly and severally, and the U.S. Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling Stockholder on the one
hand and of the U.S. Underwriters on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company and the
Selling Stockholder shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses), and benefits received by the U.S.
Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the U.S.
Prospectus. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
Company, the Selling Stockholder or the U.S. Underwriters. The Company, the
Selling Stockholder and the U.S. Underwriters agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 8, each person who controls an U.S. Underwriter
within the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an U.S. Underwriter shall have the same rights
21
to contribution as such U.S. Underwriter, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Default by an U.S. Underwriter. If any one or more U.S.
Underwriters shall fail to purchase and pay for any of the U.S. Securities
agreed to be purchased by such U.S. Underwriter or U.S. Underwriters hereunder
and such failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining U.S. Underwriters
shall be obligated severally to take up and pay for (in the respective
proportions which the amount of U.S. Securities set forth opposite their names
in Schedule I hereto bears to the aggregate amount of U.S. Securities set
forth opposite the names of all the remaining U.S. Underwriters) the U.S.
Securities which the defaulting U.S. Underwriter or U.S. Underwriters agreed
but failed to purchase; provided, however, that in the event that the
aggregate amount of U.S. Securities which the defaulting U.S. Underwriter or
U.S. Underwriters agreed but failed to purchase shall exceed 10% of the
aggregate amount of U.S. Securities set forth in Schedule I hereto, the
remaining U.S. Underwriters shall have the right to purchase all, but shall
not be under any obligation to purchase any, of the U.S. Securities, and if
such nondefaulting U.S. Underwriters do not purchase all the U.S. Securities,
this Agreement will terminate without liability to any nondefaulting U.S.
Underwriter, the Selling Stockholder or the Company. In the event of a
default by any U.S. Underwriter as set forth in this Section 9, the Closing
Date shall be postponed for such period, not exceeding seven days, as the U.S.
Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectuses or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting U.S. Underwriter of its liability, if any, to the
Company, the Selling Stockholder and any nondefaulting U.S. Underwriter for
damages occasioned by its default hereunder.
10. Effective Date of Agreement and Termination. This Agreement
shall become effective at such time (after notification of the effectiveness
of the Registration Statement has been released by the Commission) as the U.S.
Underwriters, the Selling Stockholder and the Company shall agree on the
initial public offering price and underwriting discount per share, unless
prior to such time such of the U.S. Underwriters as have agreed to purchase in
the aggregate 50% or more of the U.S. Securities shall have given notice to
the Company that such Underwriters elect that this Agreement shall not become
effective; provided, however, that the provisions of this Section 10 and of
Section 8 hereof shall at all times be effective. If this Agreement shall not
have become effective prior to 5:00 PM, New York City time, on the seventh
full business day after the Effective Date, this Agreement shall not
thereafter become effective unless such period is extended by agreement among
the U.S. Underwriters, the Selling Stockholder and the Company.
This Agreement shall be subject to termination in the absolute
discretion of the U.S. Representatives, by notice given to the Company prior
to delivery of and payment for the U.S. Securities, if prior to such time (i)
22
trading in the Company's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the judgment of the U.S. Representatives, impracticable or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the U.S. Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
the Company or its officers, of the Selling Stockholder and of the U.S.
Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any U.S. Underwriter, the Selling Stockholder or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the U.S. Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the U.S. Representatives, will be
mailed, delivered or telefaxed to 000-000-0000 and confirmed to them , care of
Salomon Brothers Inc, at Xxxxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000;
or, if sent to the Company, will be mailed, delivered or telefaxed to
000-000-0000 and confirmed to it at 00000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxx Xxxx, XX 00000, attention of the legal department; or if sent to the
Selling Stockholder, will be mailed, delivered or telegraphed and confirmed to
it at [ ].
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
23
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholder and the several U.S. Underwriters.
Very truly yours,
XXXXX XXXXXXX NATURAL GAS CORP.,
by
-----------------------------
Name:
Title:
S.A. XXXXX XXXXXXX ET CIE,
by
-----------------------------
Name:
Title:
24
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CREDIT SUISSE FIRST BOSTON
CORPORATION
HOWARD, WEIL, LABOUISSE, XXXXXXXXXX
INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
By: SALOMON BROTHERS INC,
by
-----------------------------
Name:
Title:
For themselves and the other several
U.S. Underwriters named in Schedule I
to the foregoing Agreement.
