Xxxxx Xxxxxxx Natural Gas Corp.
4,675,000 Shares (1)
Common Stock
($.01 par value)
U.S. Underwriting Agreement
, New York
, 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. (the "Company"), an Oklahoma
corporation, 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 Xxxxx Xxxxxxx Natural Gas Holdings Corp. (the
"Selling Stockholder"), a Delaware corporation and an indirect wholly owned
subsidiary of S.A. Xxxxx Xxxxxxx et Cie (the "Parent"), 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, the Selling Stockholder and the Parent are concurrently
entering into an International Underwriting 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
_______________
/ Plus an option to purchase from the Selling Stockholder up to 701,250,
additional shares to cover over-allotments.
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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.
(a) The Company, the Selling Stockholder and the Parent 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 (File No.
333-21321) 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 (as hereinafter
defined) with respect to the Securities and the offering thereof. As
filed, such amendment and form of final prospectuses, or such final
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 hereinafter defined)) 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
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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 (as hereinafter defined), 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
heading "Underwriting" 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 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, the Selling Stockholder
and the Parent 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 "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
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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
prospectuses 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 forms of final prospectuses 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 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 (File No. 333-21321). 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,
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
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International Preliminary Prospectus are hereinafter collectively called
the "Preliminary Prospectuses".
(b) The Selling Stockholder and the Parent, jointly and severally,
represent and warrant to, and agree 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, security
interests 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, the Exchange 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.
(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.
6
(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,
telecopied or telegraphic 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. 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
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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 the Selling Stockholder by wire transfer
payable in same 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 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 your review prior to
the filing and will not file any such proposed amendment, supplement or
Rule 462(b) Registration Statement 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,
8
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 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
9
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 announce the offering of, 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 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
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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.
(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
announce the offering of, 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, (ii) the exercise of any option or warrant or the
conversion of a security outstanding on the date hereof and referred to in the
Prospectuses and, (iii) the pledge of Common Stock in effect at the Execution
Time and described in the Prospectuses under the Section captioned "Selling
Shareholder and Principal Shareholders".
(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, the Selling Stockholder and the Parent 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, the Selling
Stockholder and the Parent made in any certificates pursuant to the provisions
hereof, to the performance by the Company, the Selling Stockholder and the
Parent 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.
11
(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 subsidiary, Xxxxx Xxxxxxx Gas
Marketing Corp. (the "Subsidiary"), 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 the 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 Subsidiary 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 validly issued, 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 after due
inquiry, no stop order suspending the effectiveness of the Registration
Statement has been
12
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, the Exchange 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 issuance, offering 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, except
for the Selling Stockholder pursuant to the Registration Rights Agreement
dated as of November 9, 1993, entered into by and between the Company and
the Selling Stockholder.
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.
13
(c) The Selling Stockholder shall have furnished to the U.S.
Representatives the opinion of Xxxxxx Xxxxxxx, Esq., Senior Counsel to 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, security
interests 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, the Exchange 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 Parent shall have furnished to the U.S. Representatives the
opinion of counsel of the Parent, 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 Parent;
(ii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the Parent
of the transactions contemplated herein, except such as may have been
obtained under the Act, the Exchange Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of
14
the Securities by the U.S. Underwriters and such other approvals
(specified in such opinion) as have been obtained; and
(iii) neither the consummation of any of the transactions herein
contemplated by the Parent or the fulfillment of the terms hereof by the
Parent 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 Parent
or the terms of any indenture or other agreement or instrument known to
such counsel and to which the Parent 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 Parent or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Parent 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 Parent
and public officials.
(e) 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, the Selling Stockholder and the Parent shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the U.S. Representatives a
certificate of the Company, signed by the Chief Executive Officer and the Chief
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).
(g) The Selling Stockholder shall have furnished to the U.S.
Representatives a certificate, signed by the President and Treasurer of the
Selling Stockholder, dated the Closing Date, to the effect that the signer of
such certificate has carefully examined the Registration Statement, the
Prospectuses, any
15
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.
(h) The Parent shall have furnished to the U.S. Representatives a
certificate, signed by the President Directeur General of the Parent, dated
the Closing Date, to the effect that the signer of such certificate has
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 Parent 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.
(i) 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 such
letter; a reading of the minutes of the meetings of the stockholders,
directors and the audit, compensation and executive committees of the
Company and its 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
16
(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, 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.
Ernst & Young LLP shall also have furnished to the Company a letter
stating that in planning and performing the audit of the consolidated financial
statements of the Company, for the year ended December 31, 1996, they considered
the internal control structure in determining the audit procedures for
expressing an opinion on the consolidated financial statements (but not to
provide assurance on the internal control structure). Such letter shall
indicate whether they noted any matters involving the internal control structure
and its operation which they considered to be material weaknesses.
(j) 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).
(k) 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.
(l) 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 executive officer and director of the Company 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
17
International Representatives and the U.S. Representatives, other than shares
of Common Stock disposed of as bona fide gifts.
(m) 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.
(n) The National Association of Securities Dealers, Inc. ("NASD"),
upon review of the terms of the public offering of the U.S. Underwritten
Securities, shall not have objected to the participation by any of the U.S.
Underwriters in such offering or asserted any violation of the by-laws of the
NASD.
(o) On or prior to the Execution Time, the New York Stock Exchange
shall have approved the listing of the Securities, subject to official notice of
issuance.
(p) 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.
(q) 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 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, the
Selling Stockholder and the Parent in writing or by telephone, facsimile or
telegraph 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 or the Parent 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 reasonable out-of-pocket expenses paid to third parties
(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 or the
Parent's refusal,
18
inability or failure to satisfy any condition to the obligations of the U.S.
Underwriters set forth in Section 6, the Selling Stockholder or the Parent,
as the case may be, shall reimburse the Company on demand for all amounts so
paid.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company, the Selling
Stockholder and the Parent 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, the Selling Stockholder and the Parent 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
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, the Selling
Stockholder or the Parent 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, the Selling Stockholder and the
Parent, 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, the Selling Stockholder and the Parent 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
19
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 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, the Selling Stockholder and the
Parent, 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, the
Parent 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, the Selling Stockholder and the Parent 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, the Selling Stockholder and the Parent,
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, the Selling Stockholder and the Parent 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, the
20
Selling Stockholder and the Parent 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, the Parent or the U.S. Underwriters. The
Company, the Selling Stockholder, the Parent 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 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, the Parent 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, the Parent 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
21
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) 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 or Oklahoma 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, of the Parent 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, the Parent 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, telecopied to 000-000-0000 or telegraphed and confirmed to
them , care of Salomon Brothers Inc, at Seven Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, attention of the Equity Syndicate; or, if sent to the Company, will
be mailed, delivered or telecopied to 000-000-0000 or telegraphed 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 telecopied to 000-000-0000 or telegraphed and confirmed
to it at 0000 Xxxxxxxxxx Xxxx, Xxxxx 000X Xxxxxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000, attention of the President; or if sent to the Parent, will be mailed,
delivered or telegraphed and confirmed to it at 87 Avenue de la Grande Armee,
75782 Xxxxx Xxxxx 00, Xxxxxx.
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.
22
15. JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE OF PROCESS. The
Parent agrees that any legal suit, action or proceeding brought, by any party to
this Agreement or their respective successors or the directors, officers,
employees, agents and controlling persons referred to in Section 8 hereof,
against it arising out of or based upon its alleged breach of, or failure to
perform, any obligation under this Agreement or the transactions contemplated
hereby may be instituted in any State or Federal court sitting in The City of
New York and any appellate court from any thereof, and waives any objection
which it may now or hereafter have to the laying of venue of any such
proceeding, and irrevocably submits to the nonexclusive jurisdiction of such
courts in any suit, action or proceeding. The Parent has appointed CT
Corporation, New York, New York, as its authorized agent (the "Authorized
Agent") upon whom process may be served in any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby which may be instituted in any State or Federal court sitting in The City
of New York and any appellate court from any thereof, by any person and
expressly accepts the nonexclusive jurisdiction of any such court in respect of
any such action. Such appointment shall be irrevocable. The Parent hereby
represents and warrants that the Authorized Agent has agreed to act as said
agent for service of process, and agrees to take any and all action, including
the filing of any and all documents and instruments, that may be necessary to
continue such appointment in full force and effect as aforesaid. Service of
process upon the Authorized Agent and written notice of such service to the
Parent shall be deemed, in every respect, effective service of process upon the
Parent.
16. 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.
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, the Parent and the several U.S. Underwriters.
Very truly yours,
XXXXX XXXXXXX NATURAL GAS CORP.,
by
---------------------------------
Name:
Title:
XXXXX XXXXXXX NATURAL GAS HOLDINGS CORP.,
by
---------------------------------
Name:
Title:
23
S.A. XXXXX XXXXXXX ET CIE,
by
-------------------------------
Name:
Title:
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.
EXHIBIT A
XXXXX XXXXXXX NATURAL GAS CORP.
PUBLIC OFFERING OF COMMON STOCK
, 1997
Salomon Brothers Inc
Credit Suisse First Boston Corporation
Howard, Weil, Labouisse, Xxxxxxxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the several U.S. Underwriters,
c/o Salomon Brothers Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This letter is being delivered to you in connection with the proposed
U.S. Underwriting Agreement (the "U.S. Underwriting Agreement"), among Xxxxx
Xxxxxxx Natural Gas Corp., an Oklahoma corporation (the "Company"), Xxxxx
Xxxxxxx Natural Gas Holdings Corp., a Delaware corporation, S.A. Xxxxx Xxxxxxx
et Cie and you as representatives of a group of U.S. Underwriters named therein,
relating to an underwritten public offering of Common Stock, $.01 par value (the
"Common Stock"), of the Company.
In order to induce you and the other U.S. Underwriters to enter into
the U.S. Underwriting Agreement, the undersigned agrees not to 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 announce the offering 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, for a period of 90 days following the day on which
the U.S. Underwriting Agreement is executed, without your prior written consent.
2
If, for any reason, the U.S. Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the U.S. Underwriting
Agreement), the agreement set forth above shall likewise be terminated.
Yours very truly,
[Signature of executive
officer or director of Company]
By:
--------------------------------
Name:
Title:
Address:
