EXHIBIT 1.2
EXECUTION COPY
▇▇▇ ▇▇▇▇▇, INC.
▇▇▇ ▇▇▇▇▇ RESOURCES FUNDING CORP.
225,000 UNITS, EACH UNIT CONSISTING OF
$512 7.25% SENIOR SUBORDINATED NOTES OF ▇▇▇ ▇▇▇▇▇, INC.
DUE SEPTEMBER 15, 2013 AND
$488 7.25% SENIOR SUBORDINATED NOTES OF ▇▇▇ ▇▇▇▇▇ RESOURCES FUNDING CORP.
DUE SEPTEMBER 15, 2013,
UNCONDITIONALLY GUARANTEED AS TO THE PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST BY ▇▇▇ ▇▇▇▇▇, INC.
------------------
UNDERWRITING AGREEMENT
September 11, 2003
▇▇▇▇▇▇▇, Sachs & Co.,
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
As representatives of the several Underwriters
named in Schedule I hereto (the "Representatives")
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇ ▇▇▇▇▇, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
$115,200,000 principal amount of 7.25% Senior Subordinated Notes due September
15, 2013 of the Company (the "Company Notes"). Concurrently with the proposed
issuance and sale of the Company Notes, ▇▇▇ ▇▇▇▇▇ Resources Funding Corp., an
unlimited company existing under the laws of Nova Scotia, Canada and a wholly
owned subsidiary of the Company (the "Subsidiary Issuer"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the Underwriters an
aggregate of $109,800,000 principal amount of 7.25% Senior Subordinated Notes
due September 15, 2013 of the Subsidiary Issuer (the "Subsidiary Notes"),
unconditionally guaranteed on a senior subordinated basis as to the payment of
principal, premium, if any, and interest by the Company (the "Company
Guarantee"). The Company Notes and the Subsidiary Notes (together with the
Company Guarantee) are proposed to be sold to the Underwriters as 225,000 units
(the "Units"), each unit consisting of (A) $512 principal amount of Company
Notes and (B) $488 principal amount of Subsidiary Notes (including the Company
Guarantee). The Company Notes and the Subsidiary Notes (together with the
Company Guarantee) comprising a Unit shall not be separable and shall be held
and transferred only as a Unit. The Units are to be issued pursuant to an
indenture to be dated as of September 16, 2003 (the "Indenture") among the
Company, the Subsidiary Issuer and U.S. Bank, as trustee (the "Trustee"). The
Units, the Company Notes, the Subsidiary Notes and the Company Guarantee are
collectively referred to herein as the "Securities".
The Company and the Underwriters, in accordance with the requirements
of Rule 2720 ("Rule 2720") of the National Association of Securities Dealers,
Inc. and subject to the terms and conditions stated herein, also hereby confirm
the engagement of the services of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. as a "qualified
independent underwriter" within the meaning of Rule 2720(b)(15) in connection
with the offering and sale of the Securities (in such capacity, the "QIU").
1. Representations and Warranties of the Company and the Subsidiary
Issuer. The Company and the Subsidiary Issuer (insofar as a representation and
warranty relates to the Subsidiary Issuer and the Subsidiary Notes), jointly and
severally represent and warrant to, and agree with, each of the Underwriters and
the QIU that:
(a) Effectiveness of the Registration Statement. (i) A
registration statement on Form S-3 (File No. 333-104896) ((as amended
at the time it became effective) the "Initial Registration Statement")
in respect of the Securities has been filed with the Securities and
Exchange Commission (the "Commission"); (ii) the Initial Registration
Statement and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to the Representatives for each
of the other Underwriters, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, have been declared effective by the Commission in
such form; (iii) other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Securities Act"), which became effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed with the Commission; and (iv) no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any,
has been issued and no proceeding for that purpose has been initiated
or, to the knowledge of the Company and the Subsidiary Issuer,
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission
under the Securities Act, is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement
and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto but excluding Form T-1 and including (x) the
information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act in
accordance with Section 6(a) hereof and deemed by virtue of Rule 430A
under the Securities Act to be part of the Initial Registration
Statement at the time it was declared effective and (y) the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time the Initial Registration Statement
became effective, as amended at the time the Initial Registration
Statement became effective or such Rule 462(b) Registration Statement,
if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Securities Act, is hereinafter called the "Prospectus"; and any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date of such Preliminary Prospectus or
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Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statement);
(b) Preliminary Prospectus. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the
Securities Act and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein or that
constitute a reference to the QIU consented to by it pursuant to
Section 9;
(c) Incorporated Documents. The documents incorporated by
reference in the Prospectus, as amended, when they became effective or
were filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(d) Registration Statement and Prospectus. The Registration
Statement conforms, and the Prospectus and any further amendments or
supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Securities
Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through
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▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein or that constitute a
reference to the QIU consented to by it pursuant to Section 9;
(e) Financial Statements. The financial statements and the
related notes thereto (including with respect to Matador Petroleum
Corporation, a Texas corporation ("Matador")) of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act, as applicable, and present fairly in all material
respects the financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby, and the supporting
schedules included or incorporated by reference in the Registration
Statement present fairly in all material respects the information
required to be stated therein; and the other financial information
included or incorporated by reference in the Registration Statement and
the Prospectus has been derived from the accounting records of the
Company and its consolidated subsidiaries and presents fairly in all
material respects the information shown thereby; and the pro forma
financial information and the related notes thereto included or
incorporated by reference in the Registration Statement and the
Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as applicable,
and the assumptions underlying such pro forma financial information are
reasonable and are set forth or incorporated by reference in the
Registration Statement and the Prospectus;
(f) No Material Adverse Change. Neither the Company nor any of
its subsidiaries has sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, other than as
may result from the offering of common stock of the Company as
contemplated by the Prospectus, there has not been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change in or affecting the
business, properties, management, financial position, stockholders'
equity, results of operations or prospects of the Company and of its
subsidiaries, taken as a whole (a "Material Adverse Effect"), otherwise
than as set forth or contemplated in the Prospectus;
(g) Subsidiaries. The subsidiaries listed in Schedule II to
this Agreement are the only "significant subsidiaries" (as defined in
Rule 1-02(w) of Regulation S-X under the Exchange Act) of the Company;
(h) Title to Real and Personal Property. There are no defects
in the title to, or encumbrances upon the leasehold interests in, the
oil and gas producing properties of the Company and its subsidiaries or
the assets or facilities used by the Company and its subsidiaries,
except for such defects or encumbrances that (i) do not materially
interfere with
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the use made and proposed to be made of such property by the Company
and its subsidiaries or (ii) individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect;
(i) Organization and Good Standing. Each of the Company and
the Subsidiary Issuer has been duly incorporated and is validly
existing as a corporation (and with respect to the Subsidiary Issuer,
an unlimited company) in good standing under the laws of Delaware and
Nova Scotia, Canada, respectively, with corporate power and authority
necessary to own its properties and conduct the business in which it is
engaged as described in the Prospectus, and is duly qualified as a
foreign entity for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified or in good standing in any
such foreign jurisdiction; and each subsidiary of the Company (other
than the Subsidiary Issuer, which is referred to in the preceding
clause) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation;
(j) Capitalization. The Company has an authorized
capitalization as set forth in the Prospectus under the caption
"Capitalization", and all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable; and all of the issued and
outstanding shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company free
and clear of all liens, encumbrances, equities or claims;
(k) The Securities; the Indenture. The Units, the Company
Notes and the Subsidiary Notes have been duly authorized by the Company
and the Subsidiary Issuer, as applicable, and, when issued, executed
and delivered against payment therefor pursuant to this Agreement and
authenticated in accordance with the Indenture, will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company and the Subsidiary
Issuer, as applicable, entitled to the benefits provided by the
Indenture; the Company Guarantee has been duly authorized by the
Company and when issued, executed and delivered in accordance with the
Indenture and, upon the due authorization, issuance, execution,
delivery and authentication of the Subsidiary Notes and the due
endorsement of the Company Guarantee thereon, will have been duly
executed, issued and delivered and will constitute a valid and legally
binding obligation of the Company entitled to the benefits provided by
the Indenture; the Indenture has been duly authorized by the Company
and the Subsidiary Issuer and duly qualified under the Trust Indenture
Act and, when executed and delivered by the Company, the Subsidiary
Issuer and the Trustee, will constitute a valid and legally binding
obligation of the Company and the Subsidiary Issuer, enforceable
against the Company and the Subsidiary Issuer in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(l) Authority. Each of the Company and the Subsidiary Issuer
has all necessary corporate power and authority to execute and deliver
this Agreement and to perform its respective obligations hereunder; and
all corporate action required to be taken for the due and proper
authorization, execution and delivery by the Company and the Subsidiary
Issuer of this
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Agreement and the consummation by each of them of the transactions
contemplated hereby has been duly and validly taken;
(m) Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by each of the Company and the
Subsidiary Issuer;
(n) No Conflicts; Consents. The issue and sale of the
Securities and the compliance by the Company and the Subsidiary Issuer
with all of the provisions of the Securities (including the Company
Guarantee), the Indenture and this Agreement and the consummation of
the transactions herein and therein contemplated will not (i) conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or the Subsidiary Issuer pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or the Subsidiary Issuer or any of
their subsidiaries is a party or by which the Company or the Subsidiary
Issuer or any of their subsidiaries is bound or to which any of the
property or assets of the Company or the Subsidiary Issuer or any of
their subsidiaries is subject, (ii) result in any violation of the
provisions of the Certificate of Incorporation or By-laws or similar
organizational or constituent documents of the Company or the
Subsidiary Issuer or (iii) result in the violation of any statute or
any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or the Subsidiary Issuer or
any of their subsidiaries or any of their properties, except, in the
case of clauses (i) and (iii) above, for any such conflict, breach,
default, lien, charge, encumbrance or violation that would not,
individually or in the aggregate, have a Material Adverse Effect; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the
consummation by the Company or the Subsidiary Issuer of the
transactions contemplated by this Agreement or the Indenture, except
the registration under the Securities Act of the Securities, such as
have been obtained under the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(o) No Violation or Default. Neither the Company nor any of
its subsidiaries is (i) in violation of its Certificate of
Incorporation or By-laws or similar organizational or constituent
documents or (ii) in default in the performance or observance of any
obligation, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound, except in the case of clause (ii), for any such defaults that
would not, individually or in the aggregate, have a Material Adverse
Effect;
(p) Descriptions in the Prospectus. The statements set forth
in the Prospectus under the caption "Description of the Units" and
"Description of the Notes", insofar as they purport to constitute a
summary of the terms of the Indenture or the Securities, are accurate,
complete and fair in all material respects. The statements set forth in
the Prospectus under the caption "United States Federal Income Tax
Considerations" and "Canadian Federal Income Tax Considerations,"
insofar as they purport to constitute summaries of the terms of laws or
regulations or legal conclusions, fairly summarize the matters
described therein in all material respects. The statements in the
Prospectus incorporated by reference from "Item 1.
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Business-Regulation-United States" and "Item 1.
Business-Regulation-Canada", of the Company's Annual Report on Form
10-K/A for the year ended December 31, 2002 and in Item 15 of the
Registration Statement, insofar as they purport to constitute summaries
of the terms of laws or regulations or legal conclusions, fairly
summarize the matters described therein in all material respects;
(q) Legal Proceedings. Other than as set forth in the
Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the
Company or any of its subsidiaries is or, to the knowledge of the
Company, may be a party or to which any property of the Company or any
of its subsidiaries is or, to the knowledge of the Company, may be the
subject that, individually or in the aggregate, if determined adversely
to the Company or any of its subsidiaries, could reasonably be expected
to have a Material Adverse Effect or materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement; no such investigations, actions, suits or proceedings have
been threatened to the Company or, to the knowledge of the Company, are
contemplated by any governmental or regulatory authority or threatened
by others; and (i) there are no pending legal, governmental or
regulatory actions, suits or proceedings that are required under the
Securities Act to be described in the Prospectus and that are not so
described and (ii) there are no statutes, regulations, contracts or
other documents that are required under the Securities Act to be filed
as exhibits to the Registration Statement or described in the
Prospectus and that have not been so filed or described;
(r) No Undisclosed Relationships. No relationship, direct or
indirect, exists between or among the Company or any of its
subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries, on the other, that is required by the Securities Act to
be described in the Prospectus and that is not so described;
(s) Investment Company Act. Neither the Company nor the
Subsidiary Issuer is, or after giving effect to the offering and sale
of the Securities and the application of the proceeds thereof as
described in the Prospectus, will be an "investment company", as such
term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(t) Taxes. Except with respect to any taxes that are being
contested in good faith by the Company or its subsidiaries, the Company
and its subsidiaries have paid all United States and Canadian federal,
state, provincial and local taxes and filed all tax returns required to
be paid or filed through the date hereof and there is no tax deficiency
that has been, or could reasonably be expected to be, asserted against
the Company or any of its subsidiaries or any of their respective
properties or assets;
(u) Licenses and Permits. The Company and its subsidiaries
possess all licenses, certificates, permits and other authorizations
issued by, and have made all declarations and filings with, the
appropriate United States and Canadian federal, state, provincial or
local governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of
their respective businesses as described in the Prospectus, except
where the failure to possess or make the same would not, individually
or in the aggregate, have a Material Adverse Effect; and neither the
Company nor any of its
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subsidiaries has received notice of any revocation or modification
adverse to the Company or its subsidiaries of any such material
license, certificate, permit or authorization or has any reason to
believe that any such material license, certificate, permit or
authorization will not be renewed in the ordinary course;
(v) Independent Accountants. KPMG LLP, who have certified
certain financial statements of the Company and its subsidiaries, are
independent public accountants with respect to the Company and its
subsidiaries as required by the Securities Act and the rules and
regulations of the Commission thereunder;
(w) Intellectual Property. The Company and its subsidiaries
own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service ▇▇▇▇ registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective businesses as
described in the Prospectus (the "Intellectual Property"); and, to the
knowledge of the Company, the conduct of their respective businesses as
described in the Prospectus will not conflict in any material respect
with any such rights of others, and the Company and its subsidiaries
have not received any notice of any claim of infringement or conflict
with any such rights of others;
(x) No Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company and the Subsidiary Issuer, is contemplated or
threatened that could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(y) Compliance with Environmental Laws. The Company and its
subsidiaries (i) are in compliance with any and all applicable United
States and Canadian federal, state, provincial and local laws, rules,
regulations, decisions and orders relating to the protection of human
health and safety, the environment or the use, disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"); (ii) have received and are in
compliance with all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct their respective
businesses as described in the Prospectus; and (iii) have not received
notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants, except in any such case for any
such failure to comply, or failure to receive required permits,
licenses or approvals, or liability as would not, individually or in
the aggregate, have a Material Adverse Effect;
(z) Hazardous Substances. To the knowledge of the Company,
there has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic wastes or hazardous substances, including, but not limited to,
any naturally occurring radioactive materials, brine, drilling mud,
crude oil, natural gas liquids and other petroleum materials, by, due
to or caused by the Company or any of its subsidiaries (or any other
entity (including any predecessor) for whose acts or omissions the
Company or any of its subsidiaries is or could reasonably be expected
to be liable) upon any of the property now or previously owned or
leased by the Company or any of its subsidiaries, or upon any other
property, in violation of any Environmental Laws or in a manner or to a
8
location that could reasonably be expected to give rise to any
liability under any Environmental Laws, except for any violation or
liability which could not reasonably be expected to have, individually
or in the aggregate with all such violations and liabilities, a
Material Adverse Effect;
(aa) Compliance with ERISA. Except as would not reasonably be
expected to have a Material Adverse Effect, (i) each employee benefit
plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), that is maintained,
administered or contributed to by the Company or any of its affiliates
for employees or former employees of the Company and its affiliates has
been maintained in compliance with its terms and the requirements of
any applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"); (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any such plan excluding transactions effected pursuant to a
statutory or administrative exemption; and (iii) for each such plan
that is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and
the fair market value of the assets of each such plan (excluding for
these purposes accrued but unpaid contributions) exceeds the present
value of all benefits accrued under such plan determined using
reasonable actuarial assumptions;
(bb) Accounting Controls. The Company and its subsidiaries
maintain systems of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations; (ii) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences;
(cc) Insurance. Except as would not reasonably be expected to
have a Material Adverse Effect, (i) the Company and its subsidiaries
have insurance covering their respective properties, operations,
personnel and businesses, which insurance is in amounts and insures
against such losses and risks to protect the Company and its
subsidiaries and their respective businesses as described in the
Prospectus in a manner consistent with other businesses similarly
situated; and neither the Company nor any of its subsidiaries has (ii)
received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made
in order to continue such insurance or (iii) any reason to believe that
it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable
cost from similar insurers as may be necessary to continue its
business;
(dd) No Restrictions or Subsidiaries. No subsidiary of the
Company is currently prohibited, directly or indirectly, under any
agreement or other instrument to which it is a party or is subject,
from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or
from transferring any of such subsidiary's properties or assets to the
Company or any other subsidiary of the Company;
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(ee) No Broker's Fees. Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person (other than this Agreement) that would give rise to a
valid claim against the Company or any of its subsidiaries or any
Underwriter for a brokerage commission, finder's fee or like payment in
connection with the offering and sale of the Securities;
(ff) No Stabilization. Neither the Company nor the Subsidiary
Issuer has taken (or has caused any of its subsidiaries to take),
directly or indirectly, any action which is designed to or which
constitutes or which could reasonably be expected to cause or result in
stabilization or manipulation of the price of the Units or to
facilitate the sale or resale of the Units, in each case in violation
of Regulation M under the Exchange Act;
(gg) Margin Rules. Neither the issuance, sale and delivery of
the Securities nor the application of the proceeds thereof by the
Company as described in the Registration Statement and the Prospectus
will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System;
(hh) Forward-Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act) contained in the Registration Statement and
the Prospectus has been made or reaffirmed without a reasonable basis
or has been disclosed other than in good faith;
(ii) Statistical and Market Data. Nothing has come to the
attention of the Company or the Subsidiary Issuer that has caused the
Company or the Subsidiary Issuer to believe that the statistical and
market-related data included in the Registration Statement and the
Prospectus is not based on or derived from sources that are reliable
and accurate in all material respects;
(jj) Reserve Report Data. The oil and gas reserve estimates
(including with respect to Matador) of the Company and its subsidiaries
contained or incorporated by reference in the Registration Statement
and Prospectus have been prepared by the Company and, with respect to
the year-end estimates of the Company and its subsidiaries (which, for
the avoidance of doubt, does not include Matador), reviewed by ▇▇▇▇▇
▇▇▇▇▇ Company, L.P., in accordance with the Commission guidelines
applied on a consistent basis throughout the periods involved and
neither the Company nor its subsidiaries has any reason to believe that
such reserve estimates do not fairly reflect the oil and gas reserves
of the Company and its subsidiaries at the dates indicated in the
Registration Statement and the Prospectus;
(kk) Independent Petroleum Engineering Firm. ▇▇▇▇▇ ▇▇▇▇▇
Company, L.P. are independent petroleum engineers with respect to the
Company and its subsidiaries;
(ll) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. Except as could not reasonably be
expected to have a Material Adverse Effect, there is and has been no
failure on the part of the Company or any of the Company's directors or
officers, in their capacities as such, to comply with any provision of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated in connection therewith, including Section 402 related to
loans and Sections 302 and 906 related to certifications;
10
(mm) Foreign Jurisdictions. Neither the Company nor any of its
subsidiaries does business or engages in activities or owns material
properties in any jurisdiction outside of the United States and Canada.
2. Purchase and Sale of the Securities. Subject to the terms and
conditions herein set forth, each of the Company and the Subsidiary Issuer
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
the Subsidiary Issuer, at a purchase price of $981.25 per Unit, plus accrued
interest, if any, from September 16, 2003 to the Time of Delivery (as defined
below) hereunder, the principal amount of indebtedness represented by the
Securities set forth opposite the name of such Underwriter in Schedule I hereto.
3. Representatives' Authorization. Upon the authorization by the
Representatives of the release of the Securities, the several Underwriters
propose to offer the Securities for sale upon the terms and conditions set forth
in the Prospectus.
4. Qualified Independent Underwriters. (a) The Company hereby confirms
its engagement of the services of the QIU as, and the QIU hereby confirms its
agreement with the Company to render services as, a "qualified independent
underwriter" within the meaning of Rule 2720(b)(15) with respect to the offering
and sale of the Securities.
(b) The QIU hereby represents and warrants to, and agrees
with, the Company, the Subsidiary Issuer and the other Underwriters
that with respect to the offering and sale of the Securities as
described in the Prospectus:
(i) The QIU constitutes a "qualified independent underwriter"
within the meaning of Rule 2720(b)(15);
(ii) The QIU has participated in the preparation of the
Prospectus and has exercised the usual standards of "due diligence"
with respect thereto;
(iii) The QIU has undertaken the legal responsibilities and
liabilities of an underwriter under the Securities Act specifically
including those inherent in Section 11 thereof;
(iv) Based upon (A) a review of the Company, including an
examination of the Registration Statement, information regarding the
earnings, assets, capital structure and growth rate of the Company and
other pertinent financial and statistical data, (B) inquiries of and
conferences with the management of the Company and its counsel and
independent public accountants regarding the business and operations of
the Company, (C) consideration of the prospects for the industry in
which the Company competes, estimates of the business potential of the
Company, assessments of its management, the general condition of the
securities markets, market prices of the capital stock and debt
securities of, and financial and operating data concerning, companies
believed by the QIU to be comparable to the Company with debt
securities of maturity and seniority similar to the Securities and the
demand for securities of comparable companies similar to the Securities
and (D) such other studies, analyses and investigations as the QIU has
deemed appropriate, and assuming that the offering and sale of the
Securities is made as contemplated herein and in the Prospectus, the
QIU recommends, as of the date of the execution and delivery of this
Agreement, that the
11
yield on the Securities be not less than 7.25% (corresponding to an
initial public offering price of 7.25%), which minimum yield should in
no way be considered or relied upon as an indication of the value of
the Securities; and
(v) Subject to the provisions of Section 8 hereof, the QIU
will furnish to the other Underwriters at the Time of Delivery a
letter, dated the Time of Delivery, in form and substance satisfactory
to the Underwriters, to the effect of clauses (i) through (iv) above.
(c) The QIU hereby agrees with the Company and the other
Underwriters that, as part of its services hereunder, in the event of
any amendment or supplement to the Prospectus, the QIU will render
services as a "qualified independent underwriter" within the meaning of
Rule 2720(b)(15) with respect to the offering and sale of the
Securities as described in the Prospectus as so amended or supplemented
that are substantially the same as those services being rendered with
respect to the offering and sale of the Securities as described in the
Prospectus (including those described in subsection (b) above).
(d) The Company, the QUI and the other Underwriters agree to
comply in all material respects with all of the requirements of Rule
2720 applicable to them in connection with the offering and sale of the
Securities. The Company agrees to cooperate with the Underwriters and
the QIU to enable the Underwriters to comply with Rule 2720 and the QIU
to perform the services contemplated by this Agreement.
(e) As compensation for the services of the QIU hereunder, the
Company agrees to pay the QIU $5,000 at the Time of Delivery. In
addition, the Company agrees promptly to reimburse the QIU for all
out-of-pocket expenses, including fees and disbursements of counsel,
reasonably incurred in connection with this Agreement and the services
to be rendered hereunder.
5. Delivery and Payment; Time of Delivery. (a) The Securities to be
purchased by each Underwriter hereunder will be represented by one or more
definitive global Securities in book-entry form which will be deposited by or on
behalf of the Company and the Subsidiary Issuer with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company and the Subsidiary Issuer to ▇▇▇▇▇▇▇, Sachs & Co. at least forty-eight
hours in advance, by causing DTC to credit the Securities to the account of
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. at DTC. The Company and the Subsidiary Issuer will cause
the certificates representing the Securities to be made available to ▇▇▇▇▇▇▇,
Sachs & Co. for checking at least twenty-four hours prior to the Time of
Delivery at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be 9:30 a.m., New
York City time, on September 16, 2003. or such other time and date as ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. and the Company may agree upon in writing. Such time and date are
herein called the "Time of Delivery". The Company and the Subsidiary Issuer
shall not be obligated to deliver any of the Securities except against payment
by the Underwriters for all of the Securities to be purchased as provided
herein.
(b) The documents to be delivered at the Time of Delivery by
or on behalf of the parties hereto pursuant to Section 8 hereof,
including the cross-receipt for the Securities and any additional
customary closing documents reasonably requested by the Underwriters,
will be
12
delivered at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Closing Location"),
and the Securities will be delivered at the Designated Office, all at
the Time of Delivery. A meeting will be held at the Closing Location at
4:30 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will
be available for review by the parties hereto. For the purposes of this
Section 5, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law
or executive order to close.
(c) Each Underwriter agrees that (i) it has not offered or
sold, and prior to the six months after the date of issue of the Units
will not offer or sell, any Units to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has complied, and will comply with, all
applicable provisions of the Financial Services and Markets ▇▇▇ ▇▇▇▇ of
Great Britain ("FSMA") with respect to anything done by it in relation
to the Units in, from or otherwise involving the United Kingdom, and
(iii) it has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) received by it in connection with the issue or
sale of any Units in circumstances in which section 21(1) of the FSMA
does not apply to the Company or the Subsidiary Issuer.
6. Further Agreements of the Company and the Subsidiary Issuer. Each of
the Company and the Subsidiary Issuer, jointly and severally, agrees with each
of the Underwriters and with the QIU:
(a) Amendments or Supplements; Notice to Representatives. To
prepare the Prospectus in a form approved by the Representatives and to
file such Prospectus pursuant to Rule 424(b) under the Securities Act
not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act; to make no further amendment or
any supplement to the Registration Statement or Prospectus prior to the
Time of Delivery which shall be disapproved by the Representatives
promptly after reasonable notice thereof; to advise the Representatives
and the QIU, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives and the
QIU with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and
for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Securities; to advise the
Representatives and the QIU, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Securities
13
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information with respect to
the Registration Statement or any document incorporated by reference
therein; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, to promptly use its
reasonable best efforts to obtain the withdrawal of such order;
(b) Blue Sky Compliance. Promptly from time to time to take
such action as the Representatives may reasonably request to qualify
the Securities for offering and sale under the securities laws of such
United States jurisdictions as the Representatives may request and to
comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Securities, provided, however, that
in connection therewith neither the Company nor the Subsidiary Issuer
shall be required to qualify as a foreign corporation or other entity
or as a dealer in securities in any such jurisdiction where it would
not otherwise be required to so qualify or to file a general consent to
service of process or to subject itself to taxation in any such
jurisdiction;
(c) Delivery of Copies; Prospectus Compliance. Prior to 10:00
a.m., New York City time, on the New York Business Day next succeeding
the date of this Agreement, or as soon thereafter on such New York
Business Day as reasonably practicable, and from time to time, to
furnish the Underwriters with written and electronic copies of the
Prospectus in New York City in such quantities as the Representatives
may reasonably request, and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
time of issue of the Prospectus in connection with the offering or sale
of the Securities and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Securities
Act, the Exchange Act or the Trust Indenture Act, to notify the
Representatives and upon the Representatives' request to file such
document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many written and electronic copies
as the Representatives may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with
sales of any of the Securities at any time nine months or more after
the time of issue of the Prospectus, upon the Representatives' request
but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many written and electronic copies as the
Representatives may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Securities Act;
(d) Earnings Statement. To make generally available to its
securityholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c)), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Securities
14
Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company Rule 158);
(e) Clear Market. During the period beginning from the date
hereof and continuing to and including the Time of Delivery, not to
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company or the Subsidiary Issuer which mature more
than one year after the Time of Delivery and which are substantially
similar to the Securities, without the Representatives' prior written
consent;
(f) Annual Report. For so long as the Securities remain
outstanding, to furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its consolidated subsidiaries
certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), to make available to the
holders of the Securities consolidated summary financial information of
the Company and its subsidiaries for such quarter in reasonable detail,
it being understood and agreed that the Company and the Subsidiary
Issuer may satisfy their obligations under this Section 6(f) through
the Company's filing of annual and quarterly reports and proxy
statements with the Commission pursuant to the Exchange Act;
(g) Information. During a period of five years from the
effective date of the Registration Statement, (i) to furnish to the
Representatives copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and (ii)
to deliver to the Representatives (A) as soon as they are available,
copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which the
Securities or any class of securities of the Company is listed; and (B)
such additional non-confidential information concerning the business
and financial condition of the Company as the Representatives may from
time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to their
stockholders generally or to the Commission), it being understood and
agreed that the Company and the Subsidiary Issuer shall be deemed to
have furnished and delivered such documents to the Representatives to
the extent that such documents are publicly available on the
Commission's ▇▇▇▇▇ (or any successor) filing system or are posted on
the Company's Internet website;
(h) No Stabilization. Not to (and to cause its subsidiaries
not to) take, directly or indirectly, any action which is designed to
or which constitutes or which could reasonably be expected to cause or
result in stabilization or manipulation of the price of the Units or to
facilitate the sale or resale of the Units, in each case in violation
of Regulation M under the Exchange Act;
(i) Use of Proceeds. To use the net proceeds received by the
Company and the Subsidiary Issuer from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds"; and
15
(j) Rule 462(b) Registration Statement. If the Company and the
Subsidiary Issuer elect to rely upon Rule 462(b), the Company and the
Subsidiary Issuer shall file a Rule 462(b) Registration Statement with
the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Company
and the Subsidiary Issuer shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Securities Act.
7. Payment of Expenses. Each of the Company and the Subsidiary Issuer,
jointly and severally, covenants and agrees with the several Underwriters and
the QIU that the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company's and the Subsidiary Issuer's
counsel and accountants in connection with the registration of the Securities
under the Securities Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus and the Prospectus and amendments and supplements thereto; (ii) the
cost of printing or producing any Agreement among Underwriters, this Agreement,
the Indenture, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) any fees charged by securities rating services for rating
the Securities; (iv) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, any required review by the
National Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (v) the cost of preparing the Securities; (vi) the fees and expenses
of the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities; and (vii) all other costs and
expenses incident to the performance of the Company's and the Subsidiary
Issuer's obligations hereunder which are not otherwise specifically provided for
in this Section. It is understood, however, that, except as provided in this
Section, and Sections 10 and 13 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make, and will pay for the mailing and delivering of
copies any Preliminary Prospectus and the Prospectus to the Underwriters and
dealers, the cost of printing or producing a Blue Sky Memorandum, including the
fees and disbursements of counsel for the Underwriters in connection with the
Blue Sky Memorandum.
8. Conditions of the Underwriters' Obligations. The respective
obligations of the Underwriters hereunder shall be subject, in their discretion,
to the condition that all representations and warranties of the Company and the
Subsidiary Issuer herein are, at and as of the Time of Delivery, true and
correct, the condition that each of the Company and the Subsidiary Issuer shall
have performed all of their respective obligations hereunder theretofore to be
performed at or prior to the Time of Delivery, the condition (in the case of the
Underwriters other than the QIU) that the QIU shall have furnished to the other
Underwriters the letter referred to in clause (v) of Section 4(b) of this
Agreement and the following additional conditions:
(a) Registration Compliance; No Stop Order. The Prospectus
shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act and in accordance with
Section 6(a) hereof; if the Company and the Subsidiary Issuer have
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no
16
proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information with
respect to the Registration Statement or any document incorporated by
reference therein on the part of the Commission shall have been
complied with to reasonable satisfaction of the Representatives or the
QIU, as the case may be;
(b) Opinion of Counsel for the Underwriters. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters and the QIU, shall have
furnished to the Representatives such written opinion or opinions,
dated the Time of Delivery, with respect to matters as the
Representatives and the QIU may reasonably request, and such counsel
shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Opinion of Counsel for the Company. ▇▇▇▇▇▇ & ▇▇▇▇▇▇
L.L.P., counsel for the Company, shall have furnished to the
Representatives their written opinion, dated the Time of Delivery, in
form and substance reasonably satisfactory to the Representatives and
counsel to the Underwriters, to the effect set forth in Annex II(a)-1
hereto, and the General Counsel of the Company shall have furnished to
the Representatives his written opinion, dated the Time of Delivery, in
form and substance reasonably satisfactory to the Representatives and
counsel to the Underwriters, to the effect set forth in Annex II(a)-2
hereto.
(d) Opinion of Canadian Counsels. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Stirling
Scales, Nova Scotia, Canada counsel for the Subsidiary Issuer, shall
have furnished to the Representatives their written opinion, dated the
Time of Delivery, in form and substance reasonably satisfactory to the
Representatives and counsel to the Underwriters, to the effect set
forth in Annex II(b)-1 and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ counsel
for the Subsidiary Issuer, shall have furnished to the Representatives
their written opinion, dated the Time of Delivery, in form and
substance reasonably satisfactory to the Representatives and counsel to
the Underwriters, to the effect set forth in Annex II(b)-2.
(e) Comfort Letters. On the date of the Prospectus at a time
prior to the execution of this Agreement, as soon as practicable on the
effective date of any filed post-effective amendment to the
Registration Statement filed subsequent to the date of this Agreement
and also at the Time of Delivery, KMPG LLP shall have furnished to the
Representatives and the QIU a letter or letters, dated the respective
dates of delivery thereof, in form and substance satisfactory to the
Representatives (with respect to the financial statements and certain
financial information contained or incorporated by reference in the
Registration Statement and Prospectus (including with respect to
Matador)), to the effect set forth in Annex I hereto (the executed copy
of the letter delivered prior to the execution of this Agreement is
attached as Annex I(a) hereto and a draft of the form of letter to be
delivered on each effective date of any post-effective amendment to the
Registration Statement and as of each Time of Delivery is attached as
Annex I(b) hereto);
(f) Officers' ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Certificate. On the date of this
Agreement, the Executive Vice President and Chief Financial Officer of
the Company shall have furnished to the Representatives a certificate,
dated the date of delivery thereof and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representatives,
with
17
respect to the financial statements contained or incorporated by
reference in the Registration Statement and the Prospectus that were
audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
(g) No Material Adverse Change. (i) Neither the Company nor
any of its subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Registration Statement and the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court or
arbitrator or governmental or regulatory authority, otherwise than as
set forth or contemplated in the Registration Statement and the
Prospectus, and (ii) other than as may result from the proposed
offering of common stock of the Company, since the respective dates as
of which information is given in the Registration Statement and the
Prospectus (exclusive of any amendments or supplements thereto on or
after the date of this Agreement) there shall not have been any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, properties, general affairs,
management, financial position, stockholders' equity or results of
operations of the Company or any of its subsidiaries otherwise than as
set forth or contemplated in the Prospectus, the effect of which, in
any such case described in clause (i) or (ii), is in the judgment of
the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering, sale or the
delivery of the Securities on the terms and in the manner contemplated
by this Agreement and in the Prospectus;
(h) No Downgrade. On or after the date hereof, (i) no
downgrading shall have occurred in the rating accorded the Units or any
of the Company's or the Subsidiary Issuer's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's or the
Subsidiary Issuer's debt securities;
(i) Certain Events. On or after the date hereof there shall
not have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal
or New York State authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United
States; (iv) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national
emergency or war or (v) the occurrence of any other calamity or crisis
or any change in financial, political or economic conditions in the
United States or elsewhere, if the effect of any such event specified
in clause (iv) or (v) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering, sale
or delivery of the Securities on the terms and in the manner
contemplated in this Agreement and the Prospectus;
(j) Furnishing of Prospectuses. The Company and the Subsidiary
Issuer shall have complied with the provisions of Section 6(c) hereof
with respect to the furnishing of
18
prospectuses on the New York Business Day next succeeding the date of
this Agreement or as soon thereafter as reasonably practicable on such
New York Business Day; and
(k) Officers' Certificates. The Company and the Subsidiary
Issuer shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery certificates of the chief
financial officer or chief accounting officer and one additional senior
executive officer of the Company and the Subsidiary Issuer satisfactory
to the Representatives as to (i) the accuracy in all material respects
of the representations and warranties of the Company and the Subsidiary
Issuer herein at and as of such Time of Delivery, (ii) the performance
in all material respects by the Company and the Subsidiary Issuer of
all of its obligations hereunder to be performed at or prior to such
Time of Delivery and (iii) the matters set forth in subsections (a),
(g) of this Section; provided, however, that the officers' certificates
shall not be qualified by materiality with respect to any
representation, warranty or obligation that is already qualified by
materiality or Material Adverse Effect.
9. Consent of Qualified Independent Underwriter. The QIU hereby
consents to the references to it as set forth under the caption "Underwriting"
in the Prospectus and in any amendment or supplement thereto made in accordance
with Section 6(a) hereof.
10. Indemnification and Contribution. (a) Indemnification of the
Underwriters by the Company and the Subsidiary Issuer. The Company and the
Subsidiary Issuer, jointly and severally, will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that neither the Company
nor the Subsidiary Issuer shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇,
Sachs & Co. expressly for use therein or that constitutes a reference to the QIU
consented to by it pursuant to Section 9 hereof.
(b) Indemnification of the Qualified Independent Underwriter
by the Company and the Subsidiary Issuer. The Company and the
Subsidiary Issuer, jointly and severally, will indemnify and hold
harmless ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., in its capacity as QIU, against any
losses, claims, damages or liabilities, joint or several, to which the
QIU may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or (iii) any
act or omission to act or any alleged
19
act or omission to act by ▇▇▇▇▇▇▇, Sachs & Co. as QIU in connection
with any transaction contemplated by this Agreement or undertaken in
preparing for the purchase, sale and delivery of the Securities, except
as to this clause (iii) to the extent that any such loss, claim, damage
or liability results from the gross negligence or bad faith of ▇▇▇▇▇▇▇,
Sachs & Co. in performing the services as QIU, and will reimburse the
QIU for any legal or other expenses reasonably incurred by the QIU in
connection with investigating or defending any such loss, claim, damage
or liability, or any action in respect thereof as such expenses are
incurred; provided, however, that neither the Company nor the
Subsidiary Issuer shall be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Company by any Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly
for use therein or that constitutes a reference to the QIU consented to
by it pursuant to Section 9 hereof.
(c) Indemnification of the Company, the Subsidiary Issuer and
the Qualified Independent Underwriter by the Underwriters. Each
Underwriter will, severally and not jointly, indemnify and hold
harmless the Company, the Subsidiary Issuer and the QIU, as the case
may be, against any losses, claims, damages or liabilities to which the
Company, the Subsidiary Issuer or the QIU, as the case may be, may
become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company or the
Subsidiary Issuer by such Underwriter through ▇▇▇▇▇▇▇, Sachs & Co.
expressly for use therein; and will reimburse the Company, the
Subsidiary Issuer or the QIU, as the case may be, for any legal or
other expenses reasonably incurred by the Company, the Subsidiary
Issuer or the QIU, as the case may be, in connection with investigating
or defending any such action or claim as such expenses are incurred.
(d) Indemnification of the Company, the Subsidiary Issuer and
the Underwriters by the Qualified Independent Underwriter. The QIU will
indemnify and hold harmless the Company, the Subsidiary Issuer and each
Underwriter against any losses, claims, damages or liabilities to which
the Company, the Subsidiary Issuer or such Underwriter, as the case may
be, may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or
20
alleged untrue statement or omission or alleged omission was made in
any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by the QIU
expressly for use therein or constitutes a reference to the QIU
consented to by it pursuant to Section 9 hereof; and will reimburse the
Company, the Subsidiary Issuer or each Underwriter, as the case may be,
for any legal or other expenses reasonably incurred by the Company, the
Subsidiary Issuer or each Underwriter, as the case may be, in
connection with investigating or defending any such action or claim as
such expenses are incurred.
(e) Notice and Procedures. Promptly after receipt by an
indemnified party under subsection (a), (b), (c) or (d) above of notice
of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party
under such subsection, notify such indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying
party shall not relieve it from any liability which it may have to any
indemnified party under subsection (a), (b), (c) or (d) above except to
the extent that it has been materially prejudiced (through the
forfeiture of substantive rights and defenses) by such failure and
shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or
any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(f) Contribution. If the indemnification provided for in this
Section 10 is unavailable to or insufficient to hold harmless an
indemnified party under subsection (a), (b), (c) or (d) above in
respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the
Subsidiary Issuer on the one hand and the Underwriters on the other
from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice
required under subsection (e) above, then each indemnifying party shall
contribute
21
to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company and the Subsidiary Issuer on
the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company and the Subsidiary Issuer on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the sale of the Securities (before
deducting expenses) received by the Company and the Subsidiary Issuer
bear to the total underwriting discount and commissions received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. Each of the parties to this Agreement acknowledges
that ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., in its capacity as QIU, will not benefit
from the offering of the Securities other than the underwriting
discounts and commissions it receives in its capacity as Underwriter.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Subsidiary Issuer
on the one hand or either the Underwriters or the QIU on the other and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company, the Subsidiary Issuer, the Underwriters and the QIU agree that
it would not be just and equitable if contribution pursuant to this
subsection (f) were determined by pro rata allocation (even if the
Underwriters and the QIU were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (f). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (f) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (f), no Underwriter
(including ▇▇▇▇▇▇▇, Sachs & Co. in its capacity as QIU) shall be
required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount of any
damages which such Underwriter (including ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. in its
capacity as QIU) has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (f)
to contribute are several in proportion to their respective
underwriting obligations and not joint.
(g) Non-Exclusive Remedies; Control Persons. The obligations
of the Company and the Subsidiary Issuer under this Section 10 shall be
in addition to any liability which the Company or the Subsidiary Issuer
may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter or the
QIU within the meaning of the Securities Act; and the obligations of
the Underwriters under this Section 10 shall be in addition to any
liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each officer and
director of the Company or the Subsidiary Issuer (including any person
who, with his or her consent, is named in the Registration Statement as
about to become a director of the Company or the Subsidiary Issuer) and
to each person, if any, who controls the Company, the Subsidiary
22
Issuer or the QIU within the meaning of the Securities Act; and the
obligations of the QIU under this Section 10 shall be in addition to
any liability which the QIU may otherwise have and shall extend, upon
the same terms and conditions, to each officer and director of the
Company and the Subsidiary Issuer (including any person who, with his
or her consent, is named in the Registration Statement as about to
become a director of the Company or the Subsidiary Issuer), to each
Underwriter and to each person, if any, who controls the Company, the
Subsidiary Issuer or any of the Underwriters within the meaning of the
Securities Act.
11. Defaulting Underwriter. (a) If any Underwriter shall default in its
obligation to purchase the Securities which it has agreed to purchase hereunder,
the Representatives may in their discretion arrange for themselves or another
party or other parties to purchase such Securities on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Securities, then the
Company and the Subsidiary Issuer shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Securities on such terms.
In the event that, within the respective prescribed periods, the Representatives
notify the Company and the Subsidiary Issuer that the Representatives have so
arranged for the purchase of such Securities, or the Company and the Subsidiary
Issuer notifies the Representatives that they have so arranged for the purchase
of such Securities, the Representatives or the Company and the Subsidiary Issuer
shall have the right to postpone the Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company and the Subsidiary Issuer agrees to
file promptly any amendments to the Registration Statement or the Prospectus
which in the Representatives opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters
by the Representatives and the Company and the Subsidiary Issuer as
provided in subsection (a) above, the aggregate principal amount of
such Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Securities, then the
Company and the Subsidiary Issuer shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of
Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the principal amount of Securities which such
Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters
by the Representatives and the Company and the Subsidiary Issuer as
provided in subsection (a) above, the aggregate principal amount of
Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Securities, or if the Company and
the Subsidiary Issuer shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase
Securities of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter, the Company or the Subsidiary Issuer,
except for the expenses to be borne by the Company and the Subsidiary
23
Issuer and the Underwriters as provided in Section 7 hereof and the
indemnity and contribution agreements in Section 10 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
12. Survival. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Subsidiary Issuer, the
several Underwriters and the QIU set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter, the QIU or any
controlling person of any Underwriter or the QIU, or the Company, the Subsidiary
Issuer or any officer or director or controlling person of the Company or the
Subsidiary Issuer, and shall survive delivery of and payment for the Securities.
13. Termination. If this Agreement shall be terminated pursuant to
Section 11 hereof, neither the Company nor the Subsidiary Issuer shall then be
under any liability to any Underwriter or the QIU except as provided in Sections
7 and 10 hereof; but if the transactions contemplated by this Agreement are not
consummated because any condition to the obligation of the Underwriters set
forth in Section 8 (other than Section 8(i)(i), (iii), (iv) or (v) or the QIU's
failure to furnish the letter referred to in Section 4(b)(v)) that is not
satisfied, then the Company and the Subsidiary Issuer, jointly and severally,
will reimburse the Underwriters through the Representatives for all
out-of-pocket expenses approved in writing by the Representatives, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Securities, but
neither the Company nor the Subsidiary Issuer shall then be under any further
liability to any Underwriter or the QIU except as provided in Sections 7 and 10
hereof.
14. Authority of Representatives. In all dealings hereunder, the
Representatives shall act on behalf of each of the Underwriters, and the parties
hereto shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Underwriter made or given by the Representatives
jointly or by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on behalf of the Representatives.
15. Notices. All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to the Representatives in care of ▇▇▇▇▇▇▇,
Sachs & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department; if to the QIU shall be delivered or sent by mail, letter or
facsimile transmission to the name and address of the QIU set forth in the
immediately preceding clause; if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: General Counsel; and if to the Subsidiary
Issuer shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Subsidiary Issuer set forth in the Registration Statement,
attention: General Counsel; provided, however, that any notice to an Underwriter
pursuant to Section 10(e) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company and the Subsidiary Issuer by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
16. Persons Entitled to Benefit of Agreement. This Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the QIU, the
Company, the Subsidiary Issuer and, to the extent provided in Sections 10 and 12
hereof, the officers and directors of the Company or the
24
Subsidiary Issuer and each person who controls the Company, the Subsidiary
Issuer, the QIU or any Underwriter, and their respective heirs, executors,
administrators, successors and permitted assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
17. Time of the Essence. Time shall be of the essence of this
Agreement. As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
19. Counterparts. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.
20. Amendments or Waivers. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by each of
the parties hereto.
21. Headings. The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
22. Entire Agreement. This Agreement, including the Schedules and
Annexes hereto, constitutes the entire agreement among the parties pertaining to
the subject matter hereof and supercedes all other prior and contemporaneous
agreements and understandings, whether oral and written, of the parties in
connection therewith.
23. Tax Disclosure. The Company and the Subsidiary Issuer are
authorized, subject to applicable law, to disclose any and all aspects of this
potential transaction that are necessary to support any U.S. federal income tax
benefits expected to be claimed with respect to such transaction, and all
materials of any kind (including tax opinions and other tax analyses) related to
those benefits, without the Underwriters imposing any limitation of any kind.
25
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters,
the Company and the Subsidiary Issuer.
Very truly yours,
▇▇▇ ▇▇▇▇▇, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief Financial Officer
▇▇▇ ▇▇▇▇▇ Resources Funding Corp.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
/s/ ▇▇▇▇▇▇▇, Sachs & Co.
------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
as Representatives on behalf of each of the
Underwriters named in Schedule I hereto, and,
in the case of ▇▇▇▇▇▇▇, Sachs & Co., also as the
Qualified Independent Underwriter
26
SCHEDULE I
Principal Amount of
Indebtedness Represented
by the Securities
Underwriter to be Purchased
----------- ---------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co............................................................................. $56,250,000
▇.▇. ▇▇▇▇▇▇ Securities Inc...................................................................... $56,250,000
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated..................................................................... $56,250,000
BNP Paribas Securities Corp..................................................................... $14,062,500
Citigroup Global Markets Inc.................................................................... $14,062,500
Scotia Capita (USA) Inc......................................................................... $14,062,500
Wachovia Capital Markets........................................................................ $14,062,500
Total......................................................................... $225,000,000.00
===============
27
SCHEDULE II
Significant Subsidiaries
1. ▇▇▇▇▇ Drilling Company, a Delaware corporation
2. ▇▇▇ ▇▇▇▇▇ Resources Ltd, an Alberta corporation
3. ▇▇▇ ▇▇▇▇▇ Resources Funding Corp., a Nova Scotia unlimited company
28
Annex I
FORM OF ANNEX I DESCRIPTION OF COMFORT LETTER
Pursuant to Section 8(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial
information) examined by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Securities Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma
financial information, prospective financial statements and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been
separately furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statement of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
report on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which have been separately
furnished to the Representatives; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to
in paragraph (vi)(A)(i) below comply as to form in the related in all
material respects with the applicable accounting requirements of the
Securities Act and the Exchange Act and the related published rules and
regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act and
the related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the
Prospectus and included or incorporated by reference in Item 6 of the
Company's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform in all
material respects with the disclosure requirements of Items 301, 302,
402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and
regulations, or (ii) any material modifications should be made
to the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act
2
and the published rules and regulations thereunder or the pro
forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and
its subsidiaries, or any decreases in consolidated net current
assets or stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraphs (iii) and (vi) above, they have carried out certain specified
procedures, not constituting an examination in accordance with generally
accepted auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which appear
in the Prospectus (excluding documents incorporated by reference) or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of the Company
and its subsidiaries and have found them to be in agreement.
3
Annex II(a)-1
Form of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. Opinion
(i) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion; the Prospectus
was filed with the Commission pursuant to the subparagraph of Rule 424(b) under
the Securities Act specified in such opinion on the date specified therein; and
no order suspending the effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no proceeding for that purpose is
pending or threatened by the Commission.
(ii) The Registration Statement and the Prospectus (including
amendments or supplements thereto filed as of the date of such opinion) (other
than the financial statements, including the related notes and schedules thereto
and the auditors' report thereon, other financial and accounting information and
the oil and gas reserve reports and related reserve information included or
excluded therefrom, as to which such counsel need express no opinion) appear on
their face to comply, as of the effective date thereof in the case of the
Registration Statement, and as of the date filed with the Commission and as of
the date of this Agreement, in the case of the Prospectus, as to form in all
material respects with the requirements of the Securities Act.
(iii) The Company and each of its subsidiaries incorporated in the
States of Delaware or Texas have been duly incorporated and are validly existing
as corporations in good standing under the Delaware General Corporation Law or
the Texas Business Corporation Act, as the case may be, and have all corporate
power and authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, in each case as described in
the Registration Statement and the Prospectus, except where the failure to have
such power or authority would not, individually or in the aggregate, have a
Material Adverse Effect.
(iv) The Company's authorized equity capitalization is as set forth in
the Prospectus under the heading "Capitalization."
(v) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder; and
all action required to be taken by the Company pursuant to the Delaware General
Corporation Law for the due and proper authorization, execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby has been duly and validly taken.
(vi) The Units and the Company Notes have been duly authorized and
executed by the Company and, when duly authenticated by the Trustee in
accordance with the terms of the Indenture and issued and delivered by the
Company against payment therefor in accordance with this Agreement, and assuming
the due authorization, execution, issuance and delivery of the Units and the
Subsidiary Notes by the Subsidiary Issuer and the due authentication of the
Subsidiary Notes by the Trustee, will be duly and validly issued and outstanding
and will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Indenture, subject to (a) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws relating to or
affecting the enforcement of creditors' rights and remedies generally, (b)
general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law) and (c) an
implied covenant of good faith and fair dealing.
(vii) The Company Guarantee has been duly authorized and executed by
the Company and, when issued and delivered by the Company and duly endorsed on
the Subsidiary Notes in accordance with the Indenture, and assuming the due
authorization, execution, issuance and delivery of the Units and Subsidiary
Notes by the Subsidiary Issuer, the due authentication of the Securities by the
Trustee, and payment for the Units in accordance with this Agreement, will be
duly and validly issued and outstanding and will constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with its terms and entitled to the benefits of the Indenture, subject
to (a) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights and remedies generally, (b) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law) and (c) an implied covenant of good faith and fair dealing.
(viii) The form of global certificate representing the Units has been
duly authorized by the Company and complies in all material respects with any
applicable requirements of the certificate of incorporation and bylaws of the
Company.
(ix) The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Subsidiary Issuer and the due authorization, execution and delivery
thereof by and enforceability against the Trustee, constitutes a valid and
legally binding agreement of the Company and the Subsidiary Issuer under the
laws of the State of New York enforceable against the Company and the Subsidiary
Issuer in accordance with its terms, subject, as to enforcement, to (a)
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights and remedies generally, (b) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law); and (c) an implied covenant of good faith and fair dealing. The Indenture
conforms in all material respects to the requirements of the Trust Indenture Act
and the rules and regulations of the Commission applicable to an indenture that
is qualified thereunder.
(x) The issuance and sale by the Company of the Company Notes or the
Company Guarantee at the Time of Delivery and the compliance by the Company with
the provisions of the Company Notes, the Company Guarantee, the Indenture or
this Agreement will not (i) constitute a violation of the provisions of the
certificate of incorporation or bylaws of the Company or (ii) violate the
Delaware General Corporation Law, the Texas Business Corporation Act, the laws
of the State of New York or applicable federal law of the United States of
America (except the New York State securities laws, Securities Act or the
Exchange Act, as to which such counsel does not express any opinion), except, in
the case of clause (ii) above, for such violations that would not, individually
or in the aggregate, have a Material Adverse Effect.
(xi) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or court or arbitrator
(collectively, "consents") under the Delaware General Corporation Law, the Texas
Business Corporation Act, the laws of the State of New York or applicable
federal law of the United States of America or of or with any Federal, New York
or Texas court or governmental or regulatory authority is required for (i) the
execution, delivery and performance by the Company or the Subsidiary Issuer of
this Agreement or (ii) the issuance and sale
2
by the Company of the Company Notes and the Company Guarantee and by the
Subsidiary Issuer of the Subsidiary Notes to the Underwriters in accordance with
this Agreement, except in each case such as have been obtained under the
Securities Act and for such consents as may be required under applicable state
securities laws in connection with the purchase and distribution of the
Securities by the Underwriters or that are required by the bylaws or regulations
of the National Association of Securities Dealers, Inc. or under the Trust
Indenture Act.
(xii) The statements in the Prospectus under the caption "Description
of Common Stock and Preferred Stock of ▇▇▇ ▇▇▇▇▇," insofar as they purport to
summarize certain provisions of the capital stock of the Company, accurately
describe in all material respects the matters described therein. The statements
in the Prospectus under the captions "Description of the Units" and "Description
of the Notes", insofar as they purport to summarize certain provisions of the
Indenture or the Securities, accurately describe in all material respects the
matters described therein; and the statements in the Prospectus under the
heading "United States Federal Income Tax Considerations" and those incorporated
by reference from "Item 1. Business -- Regulation - United States" of the
Company's Annual Report on Form 10-K/A for the year ended December 31, 2002 and
in Item 15 of the Registration Statement, insofar as they purport to constitute
summaries of laws or regulations or legal conclusions with respect thereto,
accurately describe in all material respects the portions of the statutes and
regulations addressed thereby; and, to the knowledge of such counsel, (i) there
are no legal, governmental or regulatory suits or proceedings pending against
the Company or its subsidiaries that are required under the Securities Act to be
described in the Prospectus and that are not described as required by the
Securities Act and (ii) there are no agreements or contracts or other documents
that are required under the Securities Act to be filed as exhibits to the
Registration Statement or described in the Prospectus and that have not been
filed or described as required by the Securities Act.
(xiii) Neither the Company nor the Subsidiary Issuer is and, after
giving effect to the offering and sale of the Securities and the application of
the proceeds thereof as described in the Prospectus under the caption "Use of
Proceeds," will be an "investment company" within the meaning of the Investment
Company Act.
(xiv) The documents filed under the Exchange Act and incorporated by
reference in the Prospectus, as amended at the time the Registration Statement
was declared effective, and any further amendment or supplement thereto made by
the Company prior to the Time of Delivery (other than the financial statements,
including the related notes and schedules thereto and the auditors' report
thereon, other financial and accounting information and the oil and gas reserve
reports and related reserve information included or excluded therefrom, as to
which such counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, appear on their face to comply as
to form in all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder.
Such counsel shall also state that in the course of preparation by the
Company of the Registration Statement and the Prospectus and any amendment and
supplement thereto, such counsel has participated in conferences with
representatives of the Company and with representatives of the Company's
independent accountants and with representatives of and counsel to the
Underwriters at which conferences the contents of the Registration Statement and
the Prospectus and any amendment and supplement thereto and related matters were
discussed and,
3
although such counsel has not independently verified, is not passing upon, and
assumes no responsibility for and expresses no opinion regarding the accuracy,
completeness or fairness of the statements contained or incorporated by
reference in, the Registration Statement, the Prospectus and any amendment or
supplement thereto (except as expressly provided in paragraph (xii) above), no
facts have come to the attention of such counsel that have caused such counsel
to believe that the Registration Statement, at the time of its effective date
(including the information incorporated by reference therein and information, if
any, deemed pursuant to Rule 430A to be part of the Registration Statement at
the time of effectiveness), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or any
amendment or supplement thereto as of its date and the Time of Delivery,
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (other than the financial statements,
including the related notes and schedules thereto and the auditors' report
thereon, other financial and accounting information and the oil and gas reserve
reports and related reserve information contained or incorporated by reference
therein or excluded therefrom, as to which such counsel need express no belief).
In rendering such opinion, such counsel may rely as to matters of fact
on certificates of responsible officers of the Company and public officials that
are furnished to the Underwriters and, with respect to the opinion set forth in
paragraph (a), on telephonic advice from the Staff of the Commission.
The opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. described above shall be rendered
to the Underwriters at the request of the Company and shall so state therein.
4
Annex II(a)-2
Form of Opinion of General Counsel of the Company
(i) Each of the Company's subsidiaries incorporated in the States of
Wyoming or Colorado has been duly incorporated and are validly existing as
corporations in good standing under the Wyoming Business Corporation Act or the
Colorado Corporation Code, as the case may be, and has all corporate power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, in each case as described in the
Registration Statement and the Prospectus, except when the failure to have such
power or authority would not, individually or in the aggregate, have a Material
Adverse Effect.
(ii) The Company and each of its subsidiaries are duly qualified to do
business and are in good standing in each United States jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, which jurisdictions will be
set forth on an exhibit to such counsel's opinion, except where the failure to
be so qualified would not, individually or in the aggregate, have a Material
Adverse Effect.
(iii) All the outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the outstanding shares of capital stock of the
Company's subsidiaries incorporated in the States of Colorado, Delaware, Texas
and Wyoming have been duly and validly authorized and issued and are fully paid
and non-assessable.
(iv) To the knowledge of such counsel, except as described in the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its
subsidiaries is or may be a party or to which any property of the Company or any
of its subsidiaries is or may be the subject which, individually or in the
aggregate, if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect; and to the
knowledge of such counsel, no such investigations, actions, suits or proceedings
are threatened or contemplated by any governmental or regulatory authority or
threatened by others.
(v) The issuance and sale by the Company of the Company Notes or the
Company Guarantee at the Time of Delivery and the compliance by the Company with
the provisions of the Company Notes, the Company Guarantee, the Indenture or
this Agreement and the consummation by the Company of the transactions
contemplated hereby or thereby will not result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
pursuant to any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of their properties or assets is subject, except for such
liens, charges or encumbrances that would not, individually or in the aggregate,
have a Material Adverse Effect.
(vi) No consent, approval, authorization, order, registration or
qualification (collectively, "consents") under the laws of the State of Colorado
or with any Colorado court or arbitrator or governmental or regulatory authority
is required for (I) the execution, delivery and performance by the Company or
the Subsidiary Issuer of this Agreement or (ii) the issuance and sale by the
Company of
the Company Notes and the Company Guarantee and by the Subsidiary Issuer of the
Subsidiary Notes to the Underwriters in accordance with this Agreement, except
in each case for such consents as may be required under applicable state
securities laws in connection with the purchase and distribution of the
Securities by the Underwriters.
(vii) To the knowledge of such counsel, except as would not,
individually or in the aggregate, result in a Material Adverse Effect, (i) each
of the Company and its subsidiaries owns, possesses or has obtained all
licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals, domestic or
foreign, necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date hereof in
the manner described in the Registration Statement and the Prospectus; and (ii)
neither the Company nor any such subsidiary has received any notice of any
proceeding relating to revocation or modification adverse to the Company or its
subsidiaries of any such license, permit, certificate, consent, order, approval
or other authorization, except as described in the Registration Statement and
the Prospectus.
(viii) To the knowledge of such counsel, neither the Company nor any of
its subsidiaries is (i) in violation of its charter or by-laws or similar
organizational or constituent documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject; or (iii) in violation of any law
or statute or any judgment, order, rule or regulation of any court or arbitrator
or governmental or regulatory authority, except in the case of clauses (ii) and
(iii) for any such default or violation that would not, individually or in the
aggregate, have a Material Adverse Effect.
The opinion of the General Counsel described above shall be rendered to
the Underwriters at the request of the Company and shall so state therein.
2
Annex II(b)-1
Form of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Stirling Scales Opinion
(i) The Subsidiary Issuer has been duly incorporated and is validly
subsisting under the laws of Nova Scotia, Canada, with corporate power and
authority to own its properties and conduct its business as described in the
Prospectus.
(ii) The Subsidiary Issuer has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock of the
Subsidiary Issuer have been duly and validly authorized and issued and are fully
paid and non-assessable, except that the holder thereof may be assessed without
limit upon bankruptcy or winding up by virtue of the nature of an unlimited
company.
(iii) This Agreement has been duly authorized, executed and delivered
by the Subsidiary Issuer.
(iv) The Indenture has been duly authorized, executed and delivered by
the Subsidiary Issuer.
(v) The issue and sale of the Subsidiary Notes and the Units and the
compliance by the Subsidiary Issuer with all of the provisions of the Subsidiary
Notes and the Units, the Indenture and this Agreement and the consummation of
the transactions herein and therein contemplated will not result in any
violation of the provisions of the constating documents of the Subsidiary
Issuer;
(vi) Under Nova Scotia provincial law, no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the issue and sale of the Subsidiary
Notes and the Units or the consummation by the Subsidiary Issuer of the
transactions contemplated by this Agreement, or the Indenture, except such
consents, approvals, authorizations, registrations or qualifications as may be
required under Nova Scotia provincial securities laws in connection with the
purchase and distribution of the Subsidiary Notes and the Units by the
Underwriters.
Annex II(b)-2
Form of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP Opinion
(i) ▇▇▇ ▇▇▇▇▇ Resources Ltd has been duly incorporated and is validly
subsisting under the laws of Alberta, Canada, with corporate power and authority
to own its properties and conduct its business as described in the Prospectus.
(ii) The statements set forth in the Prospectus under the caption
"Canadian Federal Income Tax Consideration", insofar as they purport to describe
the provisions of the laws referred to therein, fairly summarize the matters
described therein in all material respects; and the statements in the Prospectus
incorporated by reference from "Item 1. Business-Regulation -- Canada," of the
Company's Annual Report on Form 10-K/A for the year ended December 31, 2002, to
the extent that they constitute summaries of the terms of matters of Canadian
law or regulation or legal conclusions, fairly summarize the matters described
therein in all material respects.
