<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 31, 1997
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------
NEWFIELD EXPLORATION COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 71-1133047
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
363 N. SAM HOUSTON PKWY E., SUITE 2020
HOUSTON, TEXAS 77060
(281) 847-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive officers)
<TABLE>
<S> <C>
TERRY W. RATHERT Copies of all communications,
VICE PRESIDENT-PLANNING AND including all communications sent to the
ADMINISTRATION AND SECRETARY agent for service, should be sent to:
363 N. SAM HOUSTON PKWY E., SUITE 2020
HOUSTON, TEXAS 77060 JAMES H. WILSON
(281) 847-6000 VINSON & ELKINS L.L.P.
2300 FIRST CITY TOWER
(Name, address, including zip code, and telephone 1001 FANNIN
number, including area code, of agent for service) HOUSTON, TEXAS 77002-6760
(713) 758-1074
</TABLE>
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined
in light of market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==============================================================================================================
TITLE OF EACH CLASS OF AMOUNT PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION
REGISTERED REGISTERED PRICE PER SHARE(1) OFFERING PRICE(1) FEE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 272,600 $22.60 $6,160,760 $1,876.00
==============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the low and high sales prices
of the Registrant's Common Stock on July 25, 1997 on the New York Stock
Exchange.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further Amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION, DATED JULY 31, 1997.
PROSPECTUS
NEWFIELD EXPLORATION COMPANY
272,600 SHARES OF COMMON STOCK, $.01 PAR VALUE
This Prospectus relates to the offer and sale of up to 272,600 shares
(the "Shares") of common stock, par value $.01 per share ("Common Stock"), of
Newfield Exploration Company ("Newfield" or the "Company").
The Shares are owned by certain persons (the "Selling Stockholders")
who acquired the Shares from the Company in connection with privately
negotiated transactions pursuant to which the Company acquired businesses owned
in part by the Selling Stockholders. See "The Company" and "Selling
Stockholders."
The Selling Stockholders may from time to time sell all or a portion
of the Shares on the New York Stock Exchange (the "NYSE"), in the
over-the-counter market, on any other national securities exchange on which the
Common Stock is then listed or traded, in negotiated transactions or otherwise,
at prices then prevailing or related to the then current market price or at
negotiated prices. See "Plan of Distribution." Newfield will not receive any
proceeds from the sale of Shares hereunder. See "Use of Proceeds." All
expenses of registration of the Shares are being borne by Newfield, but all
selling and other expenses incurred by the Selling Stockholders will be borne
by the Selling Stockholders. See "Selling Stockholders."
The Selling Stockholders and any broker-dealers participating in the
distribution of the Shares may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any profit on the sale of Shares and any commissions or discounts given to any
such broker-dealers may be regarded as underwriting commissions or discounts
under the Securities Act.
The Shares have not been registered for sale by the Selling
Stockholders under the securities laws of any state as of the date of this
Prospectus. Brokers or dealers effecting transactions in the Shares should
confirm the registration thereof under the securities laws of the states in
which such transactions occur, or the existence of any exemption from
registration.
The Common Stock is traded on the NYSE. On July 30, 1997 the last
sale price of the Common Stock as reported on the composite tape for issues
listed on the NYSE was $23 5/8 per share.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 3
NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY NEWFIELD OR THE SELLING STOCKHOLDERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO
WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO
ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
_______________
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Form S-3 Registration Statement (herein, together with all
amendments and exhibits, referred to as the "Registration Statement") under the
Securities Act with the Commission. This Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of which
were omitted in accordance with the rules and regulations of the Commission.
For further information, reference is hereby made to the Registration
Statement. Any statements contained herein concerning the provisions of any
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission are not necessarily complete, and in each instance
reference is made to the copy of such document so filed. Each such statement
is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports and other information with the Commission.
The Registration Statement and such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549, and at the Commission's Regional Offices at
Seven World Trade Center, 13th Floor, New York, New York 10048 and CitiCorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511.
Copies of such material can be obtained by mail from the Public Reference
Branch of the Commission at 450 West Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, the Registration Statement, reports,
proxy statements and other information concerning the Company may be inspected
at the office of the NYSE, 20 Broad Street, 7th Floor, New York, New York
10005. Certain of such reports, proxy statements and other information are
also available on the Commission's World Wide Web site at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference (Commission File Number 1-12534):
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997 and June 30, 1997;
3. The Company's Current Reports on Form 8-K filed with the
Commission on May 15, 1997 and July 21, 1997;
and
4. The Company's Registration Statement on Form 8-A dated
November 4, 1993.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Shares shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents that are incorporated by
reference herein, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents). Requests
should be directed to James P. Ulm, II, Treasurer, at the Company's principal
executive offices.
2
<PAGE> 4
THE COMPANY
Newfield explores, develops and acquires oil and natural gas
properties principally in the Gulf of Mexico. On May 15, 1997, the Company
acquired the assets and subsidiaries of Huffco International, L.L.C. (the
"International Assets"), including a subsidiary that owns a 35% interest in a
production sharing contract with respect to a 415,000 acre block located in 60
to 100 feet of water in the Bohai Bay offshore the People's Republic of China.
In addition, Newfield acquired certain rights and data relating to offshore
West Africa, a small technical staff and an international data base.
The Company was incorporated in Delaware in 1988. The address of the
Company's principal executive offices is 363 North Sam Houston Parkway East,
Suite 2020, Houston, Texas 77060, and its telephone number is (281) 847-6000.
USE OF PROCEEDS
The Selling Stockholders will receive all of the net proceeds from the
sale of the Shares owned by them. Newfield will not receive any of the
proceeds from the sale of the Shares offered hereby.
SELLING STOCKHOLDERS
The following table sets forth certain information as of May 31, 1997
regarding beneficial ownership of Common Stock of the Company by each of the
Selling Stockholders. At the time of acquisition of the International Assets,
Terry Huffington, a principal owner of Huffco International, L.L.C. ("Huffco"),
was elected as a director of the Company and David A. Trice, the Chief
Executive Officer of Huffco, was elected as a vice president of the Company and
as president of Newfield International Inc., a wholly owned subsidiary of the
Company. Ms. Huffington and Mr. Trice constitute all of the Selling
Stockholders. In connection with the Company's acquisition of the
International Assets, the Selling Stockholders acquired the number of Shares
set forth opposite their names in the second column below. Pursuant to the
terms of the acquisition agreements, the Selling Stockholders also retained
certain contingent payment rights with respect to the International Assets.
<TABLE>
<CAPTION>
Shares of Newfield Common Stock
-------------------------------
Beneficially Covered by
NAME Owned(1) this Prospectus
---- ------------ ---------------
<S> <C> <C>
Terry Huffington 269,942(2) 268,579
David A. Trice 39,021(3) 4,021
-------- --------
Totals 308,963 272,600
======== ========
</TABLE>
- -------------------
(1) Under the regulations of the Commission, shares are deemed to
"beneficially owned" by a person if he or she directly or
indirectly has or shares the power to vote or dispose of such
shares, whether or not he or she has any pecuniary interest in
such shares, or if he or she has the right to acquire the power
to vote or dispose of such shares within 60 days, including any
right to acquire such power through the exercise of any option,
warrant or right.
(2) Includes 1,363 restricted shares of Common Stock granted to Ms.
Huffington in May 1997 pursuant to the Company's 1995 Non-
Employee Director Restricted Stock Plan that are subject to
certain forfeiture provisions.
3
<PAGE> 5
(3) Includes 35,000 restricted shares of Common Stock granted to Mr.
Trice in May 1997 pursuant to the Company's 1995 Omnibus Stock
Plan that are subject to certain forfeiture provisions.
All expenses of registration of the Shares are being borne by
Newfield, but all selling and other expenses incurred by the Selling
Stockholders will be borne by the Selling Stockholders.
PLAN OF DISTRIBUTION
Sales of Shares by the Selling Stockholders may be made from time to
time in one or more transactions, on the NYSE, in the over-the-counter market or
any other exchange or quotation system on which the Shares may be listed or
quoted (collectively, the "Exchanges"), in negotiated transactions or in a
combination of any such methods of sale, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Shares may be offered
directly, to or through underwriters or agents designated from time to time or
to or through brokers or dealers, or through any combination of these methods of
sale. The methods by which the Shares may be sold include (a) a block trade
(which may involve crosses) in which the broker or dealer so engaged will
attempt to sell the securities as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by a broker
or dealer as principal and resale by such broker or dealer for its own account
pursuant to this Prospectus; (c) exchange distributions or secondary
distributions in accordance with the rules of the NYSE; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; (e) firm
commitment or best efforts underwritings; and (f) privately negotiated
transactions. An underwriter, agent, broker or dealer may receive compensation
in the form of discounts, concessions or commissions from the Selling
Stockholders and/or the purchasers of the Shares for whom such broker-dealers
may act as agents or to whom they sell as principals, or both (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). A member firm of an Exchange may be engaged to act as the Selling
Stockholders' agent in the sale of Shares by the Selling Stockholders.
In connection with distributions of Shares or otherwise, the Selling
Stockholders may enter into hedging transactions with brokers or dealers or
other financial institutions with respect to the Common Stock of the Company.
In connection with such transactions, such brokers or dealers or other
financial institutions may engage in short sales of Common Stock of the Company
in the course of hedging the positions they assume with the Selling
Stockholders. Such hedging transactions may require or permit the Selling
Stockholders to deliver Shares to such brokers or dealers or other financial
institutions to settle such hedging transactions. The Selling Stockholders may
also sell Common Stock of the Company short and deliver Shares to close out
such short positions. If so required by applicable law, this Prospectus, as
amended or supplemented, may be used to effect (i) the short sales of Common
Stock of the Company referred to above, (ii) the sale or other disposition by
the brokers or dealers or other financial institutions of any Shares they
receive pursuant to the hedging transactions referred to above or (iii) the
delivery by the Selling Stockholders of Shares to close out short positions.
The Selling Stockholders may also pledge the Shares registered hereunder to a
broker or dealer or other financial institution and, upon a default, such
broker or dealer or other financial institution may effect sales of the pledged
Shares pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Stockholders may also donate the Shares registered
hereunder to a third party and such donee may effect sales of the Shares
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). In addition, any Shares covered by this Prospectus that qualify
for sale pursuant to Rule 144 under the Securities Act may be sold under Rule
144 rather than pursuant to this Prospectus. The foregoing description in this
paragraph is subject to a Selling Stockholder's compliance with Section 16(c)
of the Exchange Act, to the extent and during such periods as Section 16(c) is
applicable to such Selling Shareholder.
The Selling Stockholders and any underwriters, brokers, dealers,
agents or others that participate with the Selling Stockholders in the
distribution of the Shares may be deemed to be "underwriters" within the
meaning of the Securities Act, and any underwriting discounts, commissions or
fees received by such persons and any profit on the resale of the Shares
purchased by such persons may be deemed to be underwriting commissions or
discounts under the Securities Act.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities that they may incur in connection with the sale of the
Shares, including liabilities arising under the Securities Act, and to
contribute to payments that the Selling Stockholders may be required to make
with respect thereto. Agents, underwriters, brokers and dealers may be
entitled under agreements entered into by the Selling Stockholders or the
Company to indemnification against certain civil liabilities, including
liabilities under the Securities Act.
There is no assurance that any of the Selling Stockholders will sell
any or all of the Shares offered hereby.
VALIDITY OF SECURITIES
The validity of the Shares has been passed upon by Vinson & Elkins
L.L.P., Houston, Texas.
EXPERTS
The audited consolidated financial statements and related schedules of
the Company incorporated by reference in this Prospectus, to the extent and for
the periods indicated in their reports, have been audited by Coopers & Lybrand
L.L.P., independent certified public accountants, and have been incorporated by
reference herein in reliance upon such reports given on the authority of that
firm as experts in accounting and auditing.
Certain information incorporated by reference in this Prospectus
relating to the Company's proved oil and gas reserves and future net cash flows
therefrom is derived from estimates prepared by Ryder Scott Company, Petroleum
Engineers, and is incorporated by reference herein in reliance upon such firm
as experts with respect to such matters.
4
<PAGE> 6
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be borne by the Company with respect to the
distribution of the securities are estimated to be:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee . . . . . . . . . . $ 1,867
Printing Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Blue Sky Fees and Expenses (including attorneys fees) . . . . . . . . . 1,000
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . 1,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,867
======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the General Corporation Law of the State of
Delaware (the "DGCL"), a Delaware corporation has the power, under specified
circumstances, to indemnify its directors, officers, employees and agents in
connection with threatened, pending or completed actions, suits or proceedings,
whether civil, criminal, administrative or investigative (other than an action
by or in right of the corporation), brought against them by reason of the fact
that they were or are such directors, officers, employees or agents, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in any such action, suit or proceeding. Article Seventh of
the Company's Second Restated Certificate of Incorporation, as amended (the
"Newfield Charter"), together with Article VI of its Restated Bylaws (the
"Newfield Bylaws") provide for indemnification of each person who is or was
made a party to any actual or threatened civil, criminal, administrative or
investigative action, suit or proceeding because such person is, was or has
agreed to become an officer or director of the Company or is a person who is or
was serving or has agreed to serve at the request of the Company as a director,
officer, partner, venturer, proprietor, trustee, employee, agent or similar
functionary of another corporation or of a partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise to the fullest
extent permitted by the DGCL as it existed at the time the indemnification
provisions of the Newfield Charter and Bylaws were adopted or as may be
thereafter amended. Article VI of the Newfield Bylaws expressly provides that
it is not the exclusive method of indemnification.
Article Seventh of the Newfield Charter and Article VI of the Newfield
Bylaws also provide that the Company may maintain insurance, at its own
expense, to protect itself and any director, officer, employee or agent of the
Company or of another entity against any expense, liability or loss, regardless
of whether the Company would have the power to indemnify such person against
such expense, liability or loss under the DGCL.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174
of the DGCL (relating to liability for unauthorized acquisitions or redemptions
of, or dividends on, capital stock) or (iv) for any transaction from which the
director derived an improper personal benefit. Article Seventh of the Newfield
Charter contains such a provision.
Howard H. Newman and Jeffrey A. Harris, each a director of the Company
and a Managing Director of E.M. Warburg, Pincus & Co., LLC ("Warburg"), are
indemnified by an affiliate of Warburg against certain liabilities that Messrs.
Newman and Harris may incur as a result of their serving as directors of the
Company. Thomas G. Ricks, a director of the Company and President and Chief
Executive Officer of The University of Texas Investment Management Company
("UTIMCO"), is indemnified by UTIMCO against certain liabilities that he may
incur as a result of his serving as a director of the Company.
II-1
<PAGE> 7
#ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
------ -----------------------
<S> <C>
3.1 Second Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-69540)).
3.1.1 Certificate of Amendment to Second Restated Certificate of
Incorporation of the Company dated May 15, 1997.
3.2 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994).
5.1 Opinion of Vinson & Elkins L.L.P. as to the legality of the shares
of Common Stock the subject of the Registration Statement.
+10.1 Newfield Exploration Company 1989 Stock Option Plan (incorporated
by reference to Exhibit 10.1 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.2 Newfield Exploration Company 1990 Stock Option Plan (incorporated
by reference to Exhibit 10.2 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.3 Newfield Exploration Company 1991 Stock Option Plan (incorporated
by reference to Exhibit 10.3 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.4 Newfield Exploration Company 1993 Stock Option Plan (incorporated
by reference to Exhibit 10.4 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.5 Newfield Employee 1993 Incentive Compensation Plan (incorporated by
reference to Exhibit 10.5 to the Company's Registration Statement
on Form S-1 (Registration No. 33-69540)).
+10.6 Restricted Stock Plan and Agreement (incorporated by reference to
Exhibit 10.6 to the Company's Registration Statement on Form S-1
(Registration No. 33-69540)).
+10.7 Amended and Restated Securityholders Agreement among Newfield
Exploration Company and certain of its stockholders dated as of
October 18, 1993 (incorporated by reference to Exhibit 10.7 to the
Company's Registration Statement on Form S-1 (Registration No. 33-
69540)).
10.8 Credit Agreement among the Company and the Chase Manhattan Bank
("Chase"), as Agent, and the Banks signatory thereto (without
exhibits ) dated as of May 20, 1996 (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1996).
10.8.1 First Amendment to Credit Agreement among the Company, Chase, as
Agent, and the Banks signatory thereto effective as of April 1,
1997 (incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1997).
10.8.2 Second Amendment to Credit Agreement among the Company, Chase, as
Agent, and the Banks signatory thereto effective as of May 2, 1997.
+10.9 Newfield Exploration Company 1995 Omnibus Stock Plan (incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-8 (Registration No. 33-92182)).
</TABLE>
II-2
<PAGE> 8
<TABLE>
<S> <C>
+10.10 Newfield Exploration Company 1995 Non-Employee Director Restricted
Stock Plan (Restated).
+10.11 Newfield Exploration Company Deferred Compensation Plan.
+10.12 Subscription Agreement between the Company and Terry Huffington
dated May 15, 1997.
+10.13 Subscription Agreement between the Company and David A. Trice dated
May 15, 1997.
+10.14 Asset Purchase Agreement among Newfield Offshore Inc., Huffco and
Huffco Turkey, Inc. dated as of May 12, 1997 (without exhibits and
schedules).
+10.15 Resolution of Members Establishing the Preferences, Limitations and
Relative Rights of Series "A" Preferred Shares of Huffco China,
LDC. dated May 14, 1997.
+10.16 Guaranty Agreement among the Company, Newfield Offshore Inc.,
Huffco and Huffco Turkey, Inc. dated as of May 15, 1997.
10.17 Promissory Note dated July 15, 1997 by the Company as maker in
favor of The Chase Manhattan Bank.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ryder Scott Company.
23.3 Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
24.1 Powers of Attorney (set forth on signature pages).
- --------------------
</TABLE>
+ Identifies management contracts and compensatory plans or arrangements.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(a) to include any prospectus required by Section
10(a)(3) of the Securities Act;
(b) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
(c) to include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to section 13 or section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement;
II-3
<PAGE> 9
(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering; and
(4) that, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Exchange Act that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the provisions described under Item 15 above, or
otherwise, the Company has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-4
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on July 30, 1997.
NEWFIELD EXPLORATION COMPANY
By: /s/JOE B. FOSTER
--------------------------------------
Joe B. Foster
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Terry W. Rathert, C. William Austin and
Brian L. Rickmers, or any of them, his true and lawful attorney-in-fact and
agent, with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities indicated
on July 30, 1997.
SIGNATURE TITLE
/s/JOE B. FOSTER Chairman of the Board and Chief Executive Officer
- ------------------------- (Principal Executive Officer)
Joe B. Foster
/s/ROBERT W. WALDRUP Vice President - Operations and Director
- -------------------------
Robert W. Waldrup
/s/TERRY W. RATHERT Vice President-Planning and Administration
- ------------------------- and Secretary
Terry W. Rathert (Principal Financial Officer)
/s/RONALD P. LEGE Controller and Assistant Secretary
- ------------------------- (Principal Accounting Officer)
Ronald P. Lege
/s/CHARLES W. DUNCAN, JR. Director
- -------------------------
Charles W. Duncan, Jr.
/s/JEFFREY A. HARRIS Director
- -------------------------
Jeffrey A. Harris
II-5
<PAGE> 11
/s/TERRY HUFFINGTON Director
- -------------------------
Terry Huffington
/s/HOWARD H. NEWMAN Director
- -------------------------
Howard H. Newman
/s/THOMAS G. RICKS Director
- -------------------------
Thomas G. Ricks
/s/C.E. SHULTZ Director
- -------------------------
C.E. Shultz
/s/DALE E. ZAND Director
- -------------------------
Dale E. Zand
II-6
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
------ -----------------------
<S> <C>
3.1 Second Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 (Registration No. 33-69540)).
3.1.1 Certificate of Amendment to Second Restated Certificate of
Incorporation of the Company dated May 15, 1997.
3.2 Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1994).
5.1 Opinion of Vinson & Elkins L.L.P. as to the legality of the shares
of Common Stock the subject of the Registration Statement.
+10.1 Newfield Exploration Company 1989 Stock Option Plan (incorporated
by reference to Exhibit 10.1 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.2 Newfield Exploration Company 1990 Stock Option Plan (incorporated
by reference to Exhibit 10.2 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.3 Newfield Exploration Company 1991 Stock Option Plan (incorporated
by reference to Exhibit 10.3 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.4 Newfield Exploration Company 1993 Stock Option Plan (incorporated
by reference to Exhibit 10.4 to the Company's Registration
Statement on Form S-1 (Registration No. 33-69540)).
+10.5 Newfield Employee 1993 Incentive Compensation Plan (incorporated by
reference to Exhibit 10.5 to the Company's Registration Statement
on Form S-1 (Registration No. 33-69540)).
+10.6 Restricted Stock Plan and Agreement (incorporated by reference to
Exhibit 10.6 to the Company's Registration Statement on Form S-1
(Registration No. 33-69540)).
+10.7 Amended and Restated Securityholders Agreement among Newfield
Exploration Company and certain of its stockholders dated as of
October 18, 1993 (incorporated by reference to Exhibit 10.7 to the
Company's Registration Statement on Form S-1 (Registration No. 33-
69540)).
10.8 Credit Agreement among the Company and the Chase Manhattan Bank
("Chase"), as Agent, and the Banks signatory thereto (without
exhibits ) dated as of May 20, 1996 (incorporated by reference to
Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1996).
10.8.1 First Amendment to Credit Agreement among the Company, Chase, as
Agent, and the Banks signatory thereto effective as of April 1,
1997 (incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1997).
10.8.2 Second Amendment to Credit Agreement among the Company, Chase, as
Agent, and the Banks signatory thereto effective as of May 2, 1997.
+10.9 Newfield Exploration Company 1995 Omnibus Stock Plan (incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-8 (Registration No. 33-92182)).
</TABLE>
<PAGE> 13
<TABLE>
<S> <C>
+10.10 Newfield Exploration Company 1995 Non-Employee Director Restricted
Stock Plan (Restated).
+10.11 Newfield Exploration Company Deferred Compensation Plan.
+10.12 Subscription Agreement between the Company and Terry Huffington
dated May 15, 1997.
+10.13 Subscription Agreement between the Company and David A. Trice dated
May 15, 1997.
+10.14 Asset Purchase Agreement among Newfield Offshore Inc., Huffco and
Huffco Turkey, Inc. dated as of May 12, 1997 (without exhibits and
schedules).
+10.15 Resolution of Members Establishing the Preferences, Limitations and
Relative Rights of Series "A" Preferred Shares of Huffco China,
LDC. dated May 14, 1997.
+10.16 Guaranty Agreement among the Company, Newfield Offshore Inc.,
Huffco and Huffco Turkey, Inc. dated as of May 15, 1997.
10.17 Promissory Note dated July 15, 1997 by the Company as maker in
favor of The Chase Manhattan Bank.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ryder Scott Company.
23.3 Consent of Vinson & Elkins L.L.P. (included in Exhibit 5.1).
24.1 Powers of Attorney (set forth on signature pages).
- --------------------
</TABLE>
+ Identifies management contracts and compensatory plans or arrangements.
<PAGE> 1
EXHIBIT 3.1.1
CERTIFICATE OF AMENDMENT
OF
SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
NEWFIELD EXPLORATION COMPANY
Newfield Exploration Company, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Newfield
Exploration Company, resolutions were duly adopted setting forth a
proposed amendment of the Second Restated Certificate of Incorporation
of such corporation, declaring such amendment to be advisable and in
the best interest of such corporation and providing for the submission
of such amendment to the stockholders of such corporation for
consideration thereof. The resolutions setting forth the proposed
amendment are as follows:
"RESOLVED, that the Board of Directors deems it advisable
and in the best interest of the Company to increase the number of
shares of common stock, par value $.01 per share, of the Company
authorized for issuance from 50,000,000 shares to 100,000,000
shares;
RESOLVED, that , to effect such increase, the first
paragraph of article FOURTH of the Company's Second Restated
Certificate of Incorporation shall be amended (the "Amendment")
to read in its entirety as follows:
"FOURTH: The aggregate number of shares which the
corporation shall have the authority to issue is
105,000,000 shares, of which 5,000,000 shall be shares of
preferred stock, par value $.01 per share ("Preferred
Stock"), and 100,000,000 shall be shares of common stock,
par value $.01 per share ("Common Stock")."
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an annual meeting of the stockholders of such corporation was
duly called and held, upon notice in accordance with Section 222 of the
General Corporation Law of the State of Delaware, at which meeting the
necessary number of shares as required by statute were voted in favor of
such amendment.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
<PAGE> 2
IN WITNESS WHEREOF, Newfield Exploration Company. has caused this
certificate to be signed by Terry W. Rathert, its Secretary, this 15th day of
May, 1997.
NEWFIELD EXPLORATION COMPANY
By: /s/ Terry W. Rathert
----------------------------
Terry W. Rathert
Secretary
<PAGE> 1
EXHIBIT 5.1
[VINSON & ELKINS L.L.P. LETTERHEAD]
July 18, 1997
Newfield Exploration Company
363 N. Sam Houston Parkway E.
Suite 2020
Houston, Texas 77060
Ladies and Gentlemen:
We acted as counsel for Newfield Exploration Company, a Delaware
corporation (the "Company"), in connection with the Company's Registration
Statement on Form S-3 (the "Registration Statement") relating to a proposed
offering and sale of up to an aggregate of 272,600 shares (the "Shares") of
common stock, par value $.01 per share, of the Company by the Selling
Stockholders (as defined in the Registration Statement).
Before rendering our opinion, we examined the corporate records of the
Company, including its Second Restated Certificate of Incorporation (as
amended), its Restated Bylaws and certain resolutions of the Board of Directors
of the Company. We also examined the Registration Statement together with the
exhibits thereto, and such certificates of officers of the Company, other
documents and records as we deemed necessary for the purposes of this opinion.
As to matters of fact relevant to the opinions expressed herein, and as to
factual matters arising in connection with our examination of corporate
documents, records and other documents and writings, we relied upon
certificates and other communications of corporate officers of the Company,
without further investigation as to the facts set forth therein.
Based upon the foregoing, we are of the opinion that the Shares have
been validly authorized for issuance and are validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. By giving such consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations
<PAGE> 2
of the Securities and Exchange Commission issued thereunder. For purposes of
this opinion, we assume that the securities to be offered and sold pursuant to
the Registration Statement will be offered and sold in compliance with all
applicable state securities or Blue Sky laws.
Very truly yours,
/s/ VINSON & ELKINS L.L.P.
VINSON & ELKINS L.L.P.
<PAGE> 1
EXHIBIT 10.8.2
SECOND AMENDMENT
TO
CREDIT AGREEMENT
AMONG
NEWFIELD EXPLORATION COMPANY,
AS THE COMPANY,
THE CHASE MANHATTAN BANK,
AS AGENT,
AND
THE BANKS SIGNATORY HERETO
EFFECTIVE AS OF MAY 2, 1997
<PAGE> 2
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment")
executed effective as of the 2nd of May 1997 (the "Effective Date") is among
NEWFIELD EXPLORATION COMPANY, a corporation duly organized and validly existing
under the laws of the state of Delaware (the "Company"); each of the banks
under the Credit Agreement (hereinafter defined) (individually, a "Bank" and,
collectively, the "Banks"); and THE CHASE MANHATTAN BANK (formerly known as The
Chase Manhattan Bank, N.A.), as agent for the Banks under the Credit Agreement
(in such capacity, together with its successors in such capacity, the "Agent").
RECITALS
A. The Company, the Agent and the Banks are parties to that
certain Credit Agreement dated as of May 20, 1996, as amended by that certain
First Amendment to Credit Agreement dated as of April 1, 1997 (the "Credit
Agreement"), pursuant to which the Banks have made certain credit available to
and on behalf of the Company.
B. The Company has requested and the Agent and the Banks have
agreed to amend certain provisions of the Credit Agreement.
C. NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Defined Terms. All capitalized terms which are
defined in the Credit Agreement, but which are not defined in this Second
Amendment, shall have the same meanings as defined in the Credit Agreement.
Unless otherwise indicated, all section references in this Second Amendment
refer to the Credit Agreement.
Section 2. Amendments to Credit Agreement.
2.1 Amendments to Section 1.01.
(a) The definition of "Agreement" is hereby amended to read as
follows:
"Agreement" shall mean this Credit Agreement, as amended by
the First Amendment, as amended by the Second Amendment, and as
further amended from time to time.
(b) The following definitions of "Second Amendment" and "Second
Amendment Effective Date" are hereby added where alphabetically appropriate:
"Second Amendment" shall mean that certain Second Amendment to
Credit Agreement dated as of May 2, 1997 among the Company, the Agent
and the Banks.
"Second Amendment Effective Date" shall mean the "Effective
Date" as such term is defined in the Second Amendment.
<PAGE> 3
2.2 Amendment to Section 9.03. Section 9.03 is hereby amended to
delete Section 9.03(j) and add the following new Section 9.03(j) which reads in
its entirety as follows:
(j) equity investments in the aggregate not to exceed
$10,000,000 in Special Purpose Subsidiaries; and investments, loans or
advances by the Company or any of its Subsidiaries in or to any of its
Subsidiaries which are not Special Purpose Subsidiaries for investment
by such Person in either direct interests in Oil and Gas Properties or
in Persons owning Oil and Gas Properties;
2.3 Amendment to Schedule 7.14. Schedule 7.14 is hereby deleted
in its entirety and the revised Schedule 7.14 dated as of the Second Amendment
Effective Date (attached hereto) is hereby inserted in lieu thereof.
Section 3. Consent. The Company, on or after the Second
Amendment Effective Date, is creating Newfield International Inc., a Bahamian
company, Newfield Offshore Inc., a Bahamian company, and Newfield Asia Inc., a
Bahamian company, for the purposes of (a) acquiring Oil and Gas Properties
located in jurisdictions outside of the United States and (b) acquiring Persons
owning Oil and Gas Properties located in jurisdictions outside of the United
States. The Agent and the Banks hereby consent to the creation of such
Subsidiaries and the acquisition of such Persons and their respective
Subsidiaries which are described in Schedule 7.14 pursuant to Section 9.18 of
the Credit Agreement.
The foregoing waiver is granted to the extent and only to the extent
necessary to permit the creation and/or acquisitions described in this Section
3; and nothing in the forgoing consent shall be deemed to be constitute a
waiver of compliance by the Company or any of its Subsidiaries of any other
term, condition, agreement or covenant contained in the Credit Agreement or any
Loan Document.
Section 4. Conditions Precedent. The effectiveness of this
Second Amendment is subject to the receipt by the Agent of the following
documents and satisfaction or waiver of the other conditions provided in this
Section 4, each of which shall be satisfactory to the Agent in form and
substance:
4.1 Loan Documents. The Agent shall have received multiple
counterparts as requested of this Second Amendment, each executed and delivered
by a duly authorized officer of each party.
4.2 No Default. No Default or Event of Default shall have
occurred and be continuing as of the Effective Date.
Section 5. Representations and Warranties; Etc. The Company
hereby affirms: (a) that as of the date of execution and delivery of this
Second Amendment, all of the representations and warranties contained in the
Credit Agreement and each Loan Document are true and correct in all material
respects as though made on and as of the Effective Date; and (b) that after
giving effect to this Second Amendment and to the transactions contemplated
hereby and that no Defaults exist under the Credit Agreement or will exist
under the Credit Agreement after giving effect to the aforesaid transactions.
-2-
<PAGE> 4
Section 6. Miscellaneous.
6.1 Confirmation. The provisions of the Credit Agreement (as
amended by this Second Amendment) shall remain in full force and effect in
accordance with its terms following the effectiveness of this Second Amendment.
6.2 Counterparts. This Second Amendment may be executed by one or
more of the parties hereto in any number of separate counterparts, and all of
such counterparts taken together shall be deemed to constitute one and the same
instrument.
6.3 No Oral Agreement. THIS WRITTEN SECOND AMENDMENT, THE CREDIT
AGREEMENT AND THE OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
6.4 GOVERNING LAW. THIS SECOND AMENDMENT (INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[SIGNATURES BEGIN NEXT PAGE]
-3-
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed effective as of the date first written above.
NEWFIELD EXPLORATION COMPANY
By: /s/TERRY W. RATHERT
---------------------------------------
Terry W. Rathert
Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK, as Agent
By: /s/PETER M. LING
---------------------------------------
Peter M. Ling
Vice President
THE CHASE MANHATTAN BANK
By: /s/PETER M. LING
---------------------------------------
Peter M. Ling
Vice President
BANK BOSTON, N.A., F/K/A
THE FIRST NATIONAL BANK OF BOSTON
By: /s/GEORGE W. PASELLA
---------------------------------------
George W. Passela
Managing Director
-4-
<PAGE> 6
BANK OF MONTREAL
By: /s/ROBERT L. ROBERTS
---------------------------------------
Robert L. Roberts
Director, U.S. Corporate Banking
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
By: /s/MICHAEL J. KOLOSOWSKY
---------------------------------------
Michael J. Kolosowsky
Vice President
SOCIETE GENERALE
By: /s/RICHARD A. ERBERT
---------------------------------------
Richard A. Erbert
Vice President
FIRST NATIONAL BANK OF COMMERCE
By: /s/DAVID R. REID
---------------------------------------
David R. Reid
Senior Vice President
-5-
<PAGE> 1
EXHIBIT 10.10
NEWFIELD EXPLORATION COMPANY
1995 NON-EMPLOYEE DIRECTOR RESTRICTED STOCK PLAN
(RESTATED)
I. PURPOSE OF THE PLAN
The NEWFIELD EXPLORATION COMPANY 1995 NON-EMPLOYEE DIRECTOR RESTRICTED
STOCK PLAN (the "PLAN") is intended to promote the interests of Newfield
Exploration Company, a Delaware corporation (the "COMPANY"), by enhancing the
ability of the Company to attract and retain the services of individuals as
directors of the Company who are essential for the growth and profitability of
the Company.
II. DEFINITIONS
Unless the context otherwise indicates, the following definitions shall
apply to the Plan:
(a) "BOARD" shall mean the Board of Directors of the Company.
(b) "COMMITTEE" shall mean the Committee of the Board appointed
pursuant to Paragraph III of the Plan.
(c) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(d) "FAIR MARKET VALUE" shall mean as of any specified date, the
closing price of the Stock on the New York Stock Exchange (or, if
the Stock is not then listed on such exchange, such other
national securities exchange on which the Stock is then listed)
on that date, or if no prices are reported on that date, on the
last preceding date on which such prices of the Stock are
reported.
(e) "FORFEITURE RESTRICTIONS" shall mean the conditions applicable to
shares of Stock granted under the Plan, including the
prohibitions against sale or other disposition of shares of Stock
granted under the Plan and the corresponding obligation of the
Non-Employee Director to forfeit his/her ownership of or right to
such shares and to surrender such shares to the Company in the
event the Non-Employee Director fails to satisfy such conditions.
(f) "NON-EMPLOYEE DIRECTOR" shall mean a director of the Company who
is not otherwise an employee of the Company or any of its
Subsidiaries.
(g) "RESTRICTED SHARES" shall mean shares of Stock granted under the
Plan which are subject to Forfeiture Restrictions.
(h) "RULE 16-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Exchange Act or any successor
rule or regulation thereto as in effect from time to time.
(i) "STOCK" shall mean the Common Stock, par value $.01 per share, of
the Company and may consist of authorized but unissued shares of
the Company or previously issued shares reacquired and held by
the Company or any of its Subsidiaries.
(j) "SUBSIDIARY" shall mean any subsidiary corporation as defined in
section 424(f) of the Internal Revenue Code of 1986, as amended.
(k) "TOTAL AND PERMANENT DISABILITY" shall mean the inability to
perform duties and services as a director of the Company by
reason of a medically determined physical or mental impairment
supported
<PAGE> 2
by medical evidence which in the opinion of the Committee can be
expected to result in death or which can be expected to last for
a continuous period of not less than twelve (12) months.
III. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a Committee which shall be appointed
by and serve at the pleasure of the Board and consist of at least two members.
Members of the Committee shall be "disinterested persons" within the meaning of
Rule 16b-3. The Committee is authorized to interpret the Plan and may from
time to time adopt such rules, regulations, forms and agreements, consistent
with the provisions of the Plan, as it may deem advisable to carry out the
Plan.
IV. ELIGIBILITY OF NON-EMPLOYEE DIRECTORS
Shares of Stock shall be issued under Paragraph VI of the Plan only to
individuals who are Non-Employee Directors. Shares of Stock may not be granted
to a Non-Employee Director if such director has been an employee of the Company
or any of its Subsidiaries for any part of the calendar year preceding the
calendar year in which such grant is to be made.
V. SHARES SUBJECT TO THE PLAN
The aggregate number of shares of Stock that may be issued under the
Plan may not exceed 25,000 shares. Any of such shares which remain unissued at
the termination of the Plan shall cease to be subject to the Plan. If shares
issued under Paragraph VI of the Plan are forfeited to the Company, such shares
shall again become available for issuance under the Plan to the extent
permissible under Rule 16b-3. The aggregate number of shares that may be
issued under the Plan shall be adjusted to reflect a change in capitalization
of the Company, such as stock dividends or stock splits. Until termination of
the Plan, the Company shall make available at all times a sufficient number of
shares to meet the requirements of the Plan.
VI. ISSUANCE OF RESTRICTED SHARES AND FORFEITURE RESTRICTIONS
(a) ANNUAL ISSUANCE OF RESTRICTED SHARES. Subject to the limitation
of the number of shares of Stock set forth in Paragraph V, (i) as
of the date of the annual meeting of the stockholders of the
Company in each year that the Plan is in effect as provided in
Paragraph VIII hereof, each Non-Employee Director who is in
office immediately after such meeting shall receive, without the
exercise of the discretion of any person or persons, a number of
Restricted Shares determined by dividing (y) $30,000 by (z) the
Fair Market Value on the date of the annual meeting of
stockholders, rounded down to the nearest whole number, subject
to the terms set forth below, and (ii) each Non-Employee Director
who is appointed to the Board by the Board for the first time
after the 1997 annual meeting of stockholders (and not in
connection with an annual meeting of stockholders) shall receive,
without the exercise of the discretion of any persons or person,
a number of Restricted Shares determined by dividing (y) $30,000
by (z) the Fair Market Value on the effective date of his/her
appointment as a director, rounded down to the nearest whole
number, effective as of his/her date of appointment as a
director, subject to the terms set forth below. Any nominee Non-
Employee Director may make an irrevocable written election in
advance of election or appointment to the Board not to receive a
grant of Restricted Stock pursuant to this Paragraph VI(a).
(b) FORFEITURE RESTRICTIONS AND OTHER TERMS AND CONDITIONS. The
following provisions are applicable to the Restricted Shares
issued pursuant to Paragraph VI(a):
(i) The shares of Stock issued to a Non-Employee Director
pursuant to this Plan shall not be sold, assigned,
pledged, or otherwise transferred to the extent then
subject to the Forfeiture Restrictions.
-2-
<PAGE> 3
(ii) The Forfeiture Restrictions shall lapse as to each grant
of shares of Stock issued to a Non-Employee Director
pursuant to this Plan prior to the 1997 annual meeting of
stockholders in accordance with the following schedule
provided that the lapse conditions described below have
been satisfied:
<TABLE>
<CAPTION>
Number of Shares as to Which
Lapse Date Forfeiture Restrictions Lapse
---------- -----------------------------
<S> <C>
The day before the date of First Annual 333
Meeting of Stockholders
following date of issuance of
Restricted Shares
The day before the date of Second
Annual Meeting of Stockholders following 333
date of issuance of Restricted
Shares
The day before the date of Third Annual 334
Meeting of Stockholders
following date of issuance of
Restricted Shares
</TABLE>
(iii) The Forfeiture Restrictions shall lapse as to each grant
of shares of Stock issued to a Non-Employee Director
pursuant to this Plan following the 1997 annual meeting of
stockholders the day before the date of the first annual
meeting of stockholders following the date of issuance of
restricted shares, provided that the lapse conditions
described below have been satisfied.
(iv) The Forfeiture Restrictions shall lapse as of a given date
with respect to the applicable number of shares of Stock
only if the Non-Employee Director has remained a Non-
Employee Director of the Company continuously from the
date of issuance of the Restricted Shares through such
lapse date, provided, however, that if a Non-Employee
Director terminates as a director by reason of death or
Total and Permanent Disability, the Forfeiture
Restrictions on all Restricted Shares issued pursuant to
this Plan to such Non-Employee Director shall lapse as of
the date of his termination as a director. To the extent
that the lapse conditions are not satisfied as of a given
lapse date, the Non-Employee Director shall for no
consideration forfeit and surrender to the Company all of
the shares of Restricted Stock which are then subject to
Forfeiture Restrictions. Unrestricted shares of Stock,
evidenced in such manner as the Committee shall deem
appropriate, shall be issued to the holder of Restricted
Stock promptly after the applicable restrictions have
lapsed or otherwise been satisfied.
(v) Any Restricted Stock shall be evidenced by issuance of a
stock certificate which shall be registered in the name of
the Non-Employee Director and shall bear an appropriate
legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock. The Non-Employee
Director shall not be entitled to delivery of the stock
certificate until the Forfeiture Restrictions have lapsed,
and the Company shall retain custody of the stock
certificate until the Forfeiture Restrictions have lapsed.
(vi) In the event that the number of shares of Stock available
for grants under the Plan is insufficient to make all
grants provided for in this Paragraph VI hereby made on
the applicable date, then all Non-Employee Directors who
are entitled to a grant on such date shall share ratably
in the number of shares of Stock then available, if any,
for grant under the Plan, shall have no right to receive a
grant with respect to the deficiencies in the number of
available shares of Stock and the grants under this
Paragraph VI shall thereafter terminate.
-3-
<PAGE> 4
(vii) It is intended that the Plan meet the requirements of Rule
16b-3 and that any Non-Employee Director who is eligible
to receive a grant of Restricted Stock or to whom a grant
of Restricted Stock is made pursuant to this Paragraph VI
will not for such reason cease to be a "disinterested
person" within the meaning of Rule 16b-3 with respect to
the Plan and other stock-related plans of the Company.
VII. SHARES RECEIVED IN REORGANIZATION OR STOCK SPLIT
The prohibitions of Paragraph VI shall not apply to the transfer of
Restricted Shares pursuant to a plan of reorganization of the Company, but the
stock or securities received in exchange therefor, and any Stock received as a
result of a stock split or stock dividend with respect to Restricted Shares,
shall also become Restricted Shares subject to the Forfeiture Restrictions and
provisions governing the lapsing of such Forfeiture Restrictions applicable to
the original shares granted to the Non-Employee Director for all purposes of
the Plan and the certificates representing such additional shares shall be
legended to show such restrictions. Notwithstanding the foregoing, if (i) the
Company shall not be the surviving entity in any merger or consolidation (or
survives only as a subsidiary of an entity other than a previously wholly-owned
subsidiary of the Company), (ii) the Company sells, leases or exchanges or
agrees to sell, lease or exchange all or substantially all of its assets to any
other person or entity (other than a wholly-owned subsidiary of the Company),
or (iii) the Company is to be dissolved and liquidated, then effective as of
the effective date of such merger, consolidation, dissolution and liquidation,
or sale, all Forfeiture Restrictions on all Restricted Shares shall lapse.
VIII. TERM OF PLAN
The Plan shall be effective upon the date of its adoption by the Board,
provided the Plan is subsequently approved by the stockholders of the Company
within 12 months thereafter. Unless sooner terminated under the provisions of
Paragraph XI, no shares shall be issued under Paragraph VI after the expiration
of ten years from the effective date of the Plan.
IX. RIGHTS AS STOCKHOLDER
Upon issuance of Restricted Shares to a Non-Employee Director, except
with respect to the Forfeiture Restrictions, such Non-Employee Director shall
have all the rights of a stockholder of the Company with respect to such
Restricted Shares, including the right to vote such Restricted Shares and to
receive all dividends or other distributions paid with respect to such
Restricted Shares.
X. WITHHOLDING TAX
To the extent the issuance of shares of Stock or the lapse of Forfeiture
Restrictions results in the receipt of compensation by a Non-Employee Director,
the Company (or the employing Subsidiary) is authorized to withhold from any
other cash compensation then or thereafter payable to such Non-Employee
Director any tax required to be withheld by reason of the receipt of
compensation resulting from the issuance of shares or the lapse of Forfeiture
Restrictions.
Alternatively, a Non-Employee Director may authorize the Company to
retain or withhold sufficient shares of Stock otherwise receivable by the Non-
Employee Director from the Company with respect to Restricted Shares or may
deliver to the Company sufficient shares of Stock to enable the Company to
satisfy any such withholding requirement.
XI. AMENDMENT OR TERMINATION OF PLAN
The Board in its discretion may terminate the Plan at any time with
respect to any shares of Stock which have not theretofore been issued. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided that no change may be made which would impair the rights
of a Non-Employee Director to whom Restricted Shares have theretofore been
issued without the consent of such Non-Employee Director; and provided, further
that the Board may not make any alteration or amendment that would materially
increase the benefits accruing to participants under the Plan, increase the
aggregate number of shares of Stock that may be issued under the Plan (other
-4-
<PAGE> 5
than an increase reflecting a stock dividend, stock split or similar
recapitalization of the Company), change the class of individuals eligible to
receive Stock under the Plan, extend the maximum period during which
Restricted Shares may be granted under the Plan, or decrease any authority
granted to the Committee hereunder in contravention of Rule 16b-3, without the
approval of the stockholders of the Company. Notwithstanding the foregoing,
the Plan shall not be amended more than once every six months other than to
comport with changes in the Internal Revenue Code of 1986, as amended, and the
Employee Retirement Income Security Act of 1974, as amended, or the regulations
issued thereunder.
XII. GOVERNMENT REGULATIONS
Notwithstanding any provisions hereof to the contrary, the obligations
of the Company to deliver shares of Stock under the Plan shall be subject to
all applicable laws, rules and regulations and to such approvals by any
governmental agencies or national securities exchanges on which the Stock is
traded.
-5-
<PAGE> 1
EXHIBIT 10.11
NEWFIELD EXPLORATION COMPANY
DEFERRED COMPENSATION PLAN
Effective Date: April 1, 1997
<PAGE> 2
NEWFIELD EXPLORATION COMPANY
DEFERRED COMPENSATION PLAN
W I T N E S S E T H :
WHEREAS, NEWFIELD EXPLORATION COMPANY, has decided to adopt the
following NEWFIELD EXPLORATION COMPANY DEFERRED COMPENSATION PLAN (the "Plan");
NOW, THEREFORE, the Plan is hereby adopted as follows, effective as of
April 1, 1997:
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I. DEFINITIONS AND CONSTRUCTION
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(1) Account . . . . . . . . . . . . . . . . . . . . . . . . . 1
(2) Base Salary . . . . . . . . . . . . . . . . . . . . . . . 1
(3) Bonus Compensation . . . . . . . . . . . . . . . . . . . . 1
(4) Code . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(5) Committee . . . . . . . . . . . . . . . . . . . . . . . . 1
(6) Company . . . . . . . . . . . . . . . . . . . . . . . . . 1
(7) Company Deferrals . . . . . . . . . . . . . . . . . . . . 1
(8) Company Stock . . . . . . . . . . . . . . . . . . . . . . 1
(9) Directors . . . . . . . . . . . . . . . . . . . . . . . . 1
(10) Effective Date . . . . . . . . . . . . . . . . . . . . . . 1
(11) Member . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(12) Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
(13) Plan Year . . . . . . . . . . . . . . . . . . . . . . . . 2
(14) Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(15) Trust Agreement . . . . . . . . . . . . . . . . . . . . . 2
(16) Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . 2
(17) Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Number and Gender . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II. PARTICIPATION
2.1 Participation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Cessation of Active Participation . . . . . . . . . . . . . . . . 3
ARTICLE III. ACCOUNT CREDITS
3.1 Base Salary Deferrals . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Bonus Compensation Deferrals . . . . . . . . . . . . . . . . . . . 4
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<S> <C>
3.3 Company Deferrals . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Earnings Credits . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV. VESTING AND IN-SERVICE DISTRIBUTIONS
4.1 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 In-Service Distributions . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE V. PAYMENT OF BENEFITS
5.1 Payment Election Generally . . . . . . . . . . . . . . . . . . . . 7
5.2 Time of Benefit Payment . . . . . . . . . . . . . . . . . . . . . 7
5.3 Form of Benefit Payment . . . . . . . . . . . . . . . . . . . . . 7
5.4 Failure to Elect Form of Payment . . . . . . . . . . . . . . . . . 7
5.5 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.6 Acceleration of Payment . . . . . . . . . . . . . . . . . . . . . 8
5.7 Designation of Beneficiaries . . . . . . . . . . . . . . . . . . . 8
5.8 Unclaimed Benefits . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE VI. ADMINISTRATION OF THE PLAN
6.1 Committee Powers and Duties . . . . . . . . . . . . . . . . . . . 9
6.2 Self-Interest of Members . . . . . . . . . . . . . . . . . . . . . 9
6.3 Claims Review . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.4 Company to Supply Information . . . . . . . . . . . . . . . . . 10
6.5 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII. ADMINISTRATION OF FUNDS
7.1 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Trust Fund Property . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VIII. NATURE OF THE PLAN . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX. PARTICIPATING EMPLOYERS . . . . . . . . . . . . . . . . 14
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE X. MISCELLANEOUS
10.1 Not Contract of Employment . . . . . . . . . . . . . . . . . . . 15
10.2 Alienation of Interest Forbidden . . . . . . . . . . . . . . . . 15
10.3 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.4 Amendment and Termination . . . . . . . . . . . . . . . . . . . 15
10.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10.6 Governing Laws . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
(iv)
<PAGE> 6
I.
DEFINITIONS AND CONSTRUCTION
1.1 DEFINITIONS: Where the following words and phrases appear in
the Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.
(1) ACCOUNT: A memorandum bookkeeping account established on the records
of the Company for a Member that is credited with amounts determined
in accordance with Article III of the Plan. As of any determination
date, a Member's benefit under the Plan shall be equal to the amount
credited to his Account as of such date. A Member shall have a 100%
nonforfeitable interest in his Account at all times.
(2) BASE SALARY: The base rate of cash compensation paid by the Company
to or for the benefit of a Member for services rendered or labor
performed while a Member including base pay a Member could have
received in cash in lieu of (A) deferrals pursuant to Section 3.1 and
(B) contributions made on his behalf to any qualified plan maintained
by the Company or to any cafeteria plan under section 125 of the Code
maintained by the Company.
(3) BONUS COMPENSATION: With respect to any Member for a Plan Year, an
amount awarded under the Newfield Employee 1993 Incentive Compensation
Plan.
(4) CODE: The Internal Revenue Code of 1986, as amended.
(5) COMMITTEE: The Compensation Committee of the Directors.
(6) COMPANY: Newfield Exploration Company.
(7) COMPANY DEFERRALS: Deferrals made by the Company on a Member's behalf
pursuant to Section 3.3.
(8) COMPANY STOCK: The common stock of Newfield Exploration Company.
(9) DIRECTORS: The Board of Directors of the Company.
(10) EFFECTIVE DATE: April 1, 1997.
(11) MEMBER: Each individual who is a Member pursuant to Article II.
(12) PLAN: The Newfield Exploration Company Deferred Compensation Plan.
1
<PAGE> 7
(13) PLAN YEAR: The twelve-consecutive month period commencing January 1
of each year; provided, however, that the first Plan Year shall begin
on the Effective Date and shall end on December 31, 1997.
(14) TRUST: The trust, if any, established under the Trust Agreement.
(15) TRUST AGREEMENT: The agreement, if any, entered into between the
Company and the Trustee pursuant to Article VIII.
(16) TRUST FUND: The funds and properties, if any, held pursuant to the
provisions of the Trust Agreement, together with all income, profits
and increments thereto.
(17) TRUSTEE: The trustee or trustees appointed by the Committee who are
qualified and acting under the Trust Agreement at any time.
1.2 NUMBER AND GENDER. Wherever appropriate herein, words used in
the singular shall be considered to include the plural and words used in the
plural shall be considered to include the singular. The masculine gender,
where appearing in the Plan, shall be deemed to include the feminine gender.
1.3 HEADINGS. The headings of Articles and Sections herein are
included solely for convenience, and if there is any conflict between such
headings and the text of the Plan, the text shall control.
2
<PAGE> 8
II.
PARTICIPATION
2.1 PARTICIPATION. Members in the Plan are those employees of the
Company whose Base Salary exceeds an amount equal to (i) the limitation on
elective deferrals provided in Code section 402(g) (currently $9,500 for 1997)
with such amount to be adjusted automatically to reflect any cost-of-living
adjustment authorized by section 402(g)(5) of the Code, divided by (ii) the
decimal 0.08. The Committee shall notify each employee who is a Member in the
Plan.
2.2 CESSATION OF ACTIVE PARTICIPATION. Notwithstanding any
provision herein to the contrary, an employee who is a Member shall cease to be
entitled to defer Base Salary and/or Bonus Compensation hereunder or receive an
allocation of Company Deferrals effective as of any date designated by the
Committee. Any such Committee action shall be communicated to the affected
individual prior to the effective date of such action.
3
<PAGE> 9
III.
ACCOUNT CREDITS
3.1 BASE SALARY DEFERRALS. Any Member may elect to defer receipt
of an integral percentage of from 1% to 90% of his Base Salary for any Plan
Year. A Member's election to defer receipt of a percentage of his Base Salary
for any Plan Year shall be made on or before the last day of the preceding Plan
Year; provided, however, a Member's election to defer receipt of a percentage
of his Base Salary for the Plan Year beginning April 1, 1997 shall be made on
or before March 31, 1997. Notwithstanding the foregoing, if any individual
initially becomes a Member other than on the first day of a Plan Year, such
Member's election to defer receipt of a percentage of his Base Salary for such
Plan Year may be made no later than 30 days after he becomes a Member. Such
election shall apply only to a pro rata portion of his Base Salary for such
Plan Year based upon the number of days remaining in such Plan Year after the
date of the election divided by 365 (or 366 if a leap year). Base Salary for a
Plan Year not deferred by a Member pursuant to this Section shall be received
by such Member in cash except as provided by any other plan maintained by the
Company. Deferrals of Base Salary under the Plan shall be made before elective
deferrals or contributions of Base Salary under any other plan maintained by
the Company. Deferrals of Base Salary made by a Member for a Plan Year shall
be credited to such Member's Account as of the date the Base Salary deferrals
would have been received by such Member in cash had no deferrals been made
pursuant to this Section. Deferral elections of Base Salary for a Plan Year
pursuant to this Section shall be irrevocable.
3.2 BONUS COMPENSATION DEFERRALS. Any Member may elect to defer
receipt of an integral percentage of from 1% to 100% of his Bonus Compensation
for any Plan Year. Such election may apply to the Member's Incentive
Compensation Award or the Deferred Incentive Compensation Award under the
Newfield Employee 1993 Incentive Compensation Plan for a Plan Year. Such
election may apply only to the portion of the Member's Deferred Incentive
Compensation Award which is payable in cash. A Member's election to defer a
portion of such Member's Deferred Incentive Compensation Award shall constitute
an irrevocable election by such Member to receive such portion of the Deferred
Incentive Compensation Award in cash under the Newfield Employee 1993 Incentive
Compensation Plan. A Member's election to defer receipt of a percentage of his
Bonus Compensation for any Plan Year shall be made on or before the last day of
the preceding Plan Year. Notwithstanding the foregoing (1) a Member's election
to defer receipt of a percentage of his Bonus Compensation for the Plan Year
beginning April 1, 1997, may be made on or before March 31, 1997 and (2) if any
individual initially becomes a Member other than on the first day of a Plan
Year, such Member's election to defer receipt of a percentage of his Bonus
Compensation for such Plan Year may be made no later than 30 days after he
becomes a Member, but such election shall apply only to a pro rata portion of
his Bonus Compensation for such Plan Year based upon the number of complete
months remaining in such Plan Year divided by twelve. Bonus Compensation for a
Plan Year not deferred by a Member pursuant to this Section shall be received
by such Member in cash or in Company Stock, as applicable, except as provided
by any other plan maintained by the Company. Deferrals of Bonus Compensation
under this Plan shall be
4
<PAGE> 10
made before elective deferrals or contributions of Bonus Compensation under any
other plan maintained by the Company. Bonus Compensation deferrals made by a
Member shall be credited to such Member's Account as of the date the Bonus
Compensation deferral would have been received by such Member had no deferral
been made pursuant to this Section 3.2. Deferral elections of Bonus
Compensation for a Plan Year pursuant to this Section shall be irrevocable.
3.3 COMPANY DEFERRALS. For each Plan Year during which a Member
has made the maximum elective contributions under the Newfield Exploration
Company 401(k) Plan pursuant to section 402(g) of the Code, the Company shall
credit a Member's Account with an amount equal to 100% of the compensation
deferrals made by such Member pursuant to Sections 3.1 and 3.2 of the Plan,
with such amounts being limited to 8% of a Member's Base Salary for such Plan
Year and reduced by the amount of Company matching contributions made for the
account of the Member under the Newfield Exploration Company 401(k) Plan for
such Plan Year. Company Deferrals made on a Member's behalf shall be credited
to his Account in accordance with the procedures established from time to time
by the Committee.
3.4 EARNINGS CREDITS. As of the last day of each calendar quarter,
a Member's Account shall be credited with an amount of earnings based on the
balance of such Member's Account for each day during such calendar quarter and
utilizing an interest rate equal to the prime-based borrowing rate option
established in the Company's revolving credit facility (or in the absence
thereof the prime rate of interest of The Chase Manhattan Bank, N.A. or its
successor). Interest shall be computed as the average on a daily basis, using
a 365 or 366 day year as the case may be, and the actual days elapsed
(including the first day but excluding the last day) occurring in the calendar
quarter for which such interest is payable. So long as there is any balance in
a Member's Account, such Account shall continue to receive earnings credits
pursuant to this Section.
5
<PAGE> 11
IV.
VESTING AND IN-SERVICE DISTRIBUTIONS
4.1 VESTING. A Member shall be 100% vested in his Account at all
times.
4.2 IN-SERVICE DISTRIBUTIONS. In-service distribution shall not
be permitted under the Plan. Members shall not be permitted to make
withdrawals from the Plan prior to termination of employment from the Company.
Members shall not, at any time, be permitted to borrow from the Plan.
6
<PAGE> 12
V.
PAYMENT OF BENEFITS
5.1 PAYMENT ELECTION GENERALLY. In conjunction with the Deferral
elections made by a Member pursuant to Section 3.1 or 3.2 for each Plan Year,
such Member shall elect the form of payment with respect to such Deferral, the
Company Deferrals attributable thereto, and the earnings credited thereto. Any
such election regarding the form of payment of a Deferral, the Company
Deferrals attributable thereto, and the earnings credited thereto shall be
irrevocable once made.
5.2 TIME OF BENEFIT PAYMENT. With respect to each Deferral
election made by a Member pursuant to Section 3.1 or 3.2, such Member shall
commence payment of such Deferral, the Company Deferrals attributable thereto,
and the earnings credited thereto as soon as administratively practicable after
the Member terminates employment with the Company.
5.3 FORM OF BENEFIT PAYMENT. With respect to each Deferral
election made by a Member pursuant to Section 3.1 or 3.2, such Member shall
elect the form of payment with respect to such Deferral, the Company Deferrals
attributable thereto and the earnings credited thereto from one of the
following forms:
(a) A lump sum; or
(b) Installment payments for a period not less than one
year and not more than ten years.
Installment payments shall be paid monthly commencing on the date specified in
Section 5.2. The amount of each installment payment shall be determined by
multiplying the Deferral, the Company Deferrals attributable thereto, and the
earnings credited thereto at the time of payment by a fraction, the numerator
of which is one and the denominator of which is the number of remaining
installment payments to be made to the Member. In the event the total amount
credited to a Member's Account does not exceed $50,000, the Committee may, in
its sole discretion, pay such amount in a lump sum.
5.4 FAILURE TO ELECT FORM OF PAYMENT. If a Member fails to elect
the form of payment of a Deferral, such Deferral, the Company Deferrals
attributable thereto and the earnings credited thereto shall be paid in a lump
sum as soon as administratively practicable after the Member terminates
employment with the Company.
5.5 DEATH. In the event of a Member's death at a time when
amounts are credited to such Member's Account, such amounts shall be paid to
such Member's designated beneficiary or beneficiaries at the time set forth in
Section 5.2 and in the form elected by the Member pursuant to Section 5.3, or
if no election has been made, pursuant to Section 5.4. However, the Member's
designated beneficiary or beneficiaries may request a lump sum payment based
upon hardship, and the Committee, in its sole discretion, may approve such
request.
7
<PAGE> 13
5.6 ACCELERATION OF PAYMENT. The Committee, in its sole
discretion, may accelerate the payment of all Account balances under the Plan.
In such case, the balance in each Member's Account shall be paid to such
Member, or his designated beneficiary in the event of his death, in a single,
lump sum cash payment as soon as administratively practicable following such
Committee action in full satisfaction of such Member's or beneficiary's rights
hereunder.
5.7 DESIGNATION OF BENEFICIARIES.
(a) Each Member shall have the right to designate the
beneficiary or beneficiaries to receive distribution of his Account in the
event of his death. Each such designation shall be made by executing the
beneficiary designation form prescribed by the Committee and filing it with the
Committee. Any such designation may be changed at any time by execution of a
new designation in accordance with this Section.
(b) If no such designation is on file with the Committee
at the time of the death of the Member or such designation is not effective for
any reason as determined by the Committee, then the designated beneficiary or
beneficiaries to receive the distribution shall be as follows:
(1) If a Member leaves a surviving spouse, his
distribution shall be paid to such surviving spouse;
(2) If a Member leaves no surviving spouse, his
distribution shall be paid to such Member's executor or administrator,
or to his heirs at law if there is no administration of such Member's
estate.
5.8 UNCLAIMED BENEFITS. If the Committee is unable to locate a
Member or beneficiary entitled to a distribution hereunder, upon the
Committee's determination thereof, such Member's or beneficiary's Account shall
be forfeited to the Company. Notwithstanding the foregoing, if subsequent to
any such forfeiture the Member or beneficiary to whom such distribution is
payable makes a valid claim for such distribution, such forfeited Account shall
be restored, without the crediting of interest subsequent to the forfeiture,
and the balance of such Account shall be distributed to such Member or
beneficiary as soon as administratively practicable.
8
<PAGE> 14
VI.
ADMINISTRATION OF THE PLAN
6.1 COMMITTEE POWERS AND DUTIES. The general administration of
the Plan shall be vested in the Committee. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and
provisions hereof and shall have all powers necessary to accomplish these
purposes, including, but not by way of limitation, the right, power, authority,
and duty:
(a) To make rules, regulations, and bylaws for the
administration of the Plan that are not inconsistent with the terms
and provisions hereof, and to enforce the terms of the Plan and the
rules and regulations promulgated thereunder by the Committee;
(b) To construe in its discretion all terms, provisions,
conditions, and limitations of the Plan;
(c) To correct any defect or to supply any omission or to
reconcile any inconsistency that may appear in the Plan in such manner
and to such extent as it shall deem in its discretion expedient to
effectuate the purposes of the Plan;
(d) To employ and compensate such accountants, attorneys,
investment advisors, and other agents, employees, and independent
contractors as the Committee may deem necessary or advisable for the
proper and efficient administration of the Plan;
(e) To determine in its discretion all questions relating
to eligibility;
(f) To determine whether and when there has been a
termination of a Member's employment with the Company, and the reason
for such termination;
(g) To make a determination in its discretion as to the
right of any person to a benefit under the Plan and to prescribe
procedures to be followed by distributees in obtaining benefits
hereunder; and
(h) To receive and review reports from the Trustee as to
the financial condition of the Trust Fund, if any, including its
receipts and disbursements.
6.2 SELF-INTEREST OF MEMBERS. No member of the Committee shall
have any right to vote or decide upon any matter relating solely to himself
under the Plan or to vote in any case in which his individual right to claim
any benefit under the Plan is particularly involved. In any case in which a
Committee member is so disqualified to act and the remaining members cannot
agree, the remaining members of the Committee shall appoint a temporary
substitute member to exercise all the powers of the disqualified member
concerning the matter in which he is disqualified.
9
<PAGE> 15
6.3 CLAIMS REVIEW. In any case in which a claim for Plan benefits
of a Member or beneficiary is denied or modified, the Committee shall furnish
written notice to the claimant within ninety days (or within 180 days if
additional information requested by the Committee necessitates an extension of
the ninety-day period), which notice shall:
(a) State the specific reason or reasons for the denial
or modification;
(b) Provide specific reference to pertinent Plan
provisions on which the denial or modification is based;
(c) Provide a description of any additional material or
information necessary for the Member, his beneficiary, or
representative to perfect the claim and an explanation of why such
material or information is necessary; and
(d) Explain the Plan's claim review procedure as
contained herein.
In the event a claim for Plan benefits is denied or modified, if the Member,
his beneficiary, or a representative of such Member or beneficiary desires to
have such denial or modification reviewed, he must, within sixty days following
receipt of the notice of such denial or modification, submit a written request
for review by the Committee of its initial decision. In connection with such
request, the Member, his beneficiary, or the representative of such Member or
beneficiary may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within
sixty days following such request for review the Committee shall, after
providing a full and fair review, render its final decision in writing to the
Member, his beneficiary or the representative of such Member or beneficiary
stating specific reasons for such decision and making specific references to
pertinent Plan provisions upon which the decision is based. If special
circumstances require an extension of such sixty-day period, the Committee's
decision shall be rendered as soon as possible, but not later than 120 days
after receipt of the request for review. If an extension of time for review is
required, written notice of the extension shall be furnished to the Member,
beneficiary, or the representative of such Member or beneficiary prior to the
commencement of the extension period.
6.4 COMPANY TO SUPPLY INFORMATION. The Company shall supply full
and timely information to the Committee, including, but not limited to,
information relating to each Member's compensation, age, retirement, death, or
other cause of termination of employment and such other pertinent facts as the
Committee may require. The Company shall advise the Trustee, if any, of such
of the foregoing facts as are deemed necessary for the Trustee to carry out the
Trustee's duties under the Plan and the Trust Agreement. When making a
determination in connection with the Plan, the Committee shall be entitled to
rely upon the aforesaid information furnished by the Company.
6.5 INDEMNITY. The Company shall indemnify and hold harmless each
member of the Committee against any and all expenses and liabilities arising
out of his administrative functions or fiduciary responsibilities, including
any expenses and liabilities that are caused by or result from an
10
<PAGE> 16
act or omission constituting the negligence of such member in the performance
of such functions or responsibilities, but excluding expenses and liabilities
that are caused by or result from such member's own gross negligence or willful
misconduct. Expenses against which such member shall be indemnified hereunder
shall include, without limitation, the amounts of any settlement or judgment,
costs, counsel fees, and related charges reasonably incurred in connection with
a claim asserted or a proceeding brought or settlement thereof.
11
<PAGE> 17
VII.
ADMINISTRATION OF FUNDS
7.1 PAYMENT OF EXPENSES. All expenses incident to the
administration of the Plan and Trust, including but not limited to, legal,
accounting, Trustee fees, and expenses of the Committee, may be paid by the
Company and, if not paid by the Company, shall be paid by the Trustee from the
Trust Fund, if any.
7.2 TRUST FUND PROPERTY. All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and properties of
any kind at any time received or held by the Trustee, if any, shall be held for
investment purposes as a commingled Trust Fund pursuant to the terms of the
Trust Agreement. The Committee shall maintain one or more Accounts in the name
of each Member, but the maintenance of an Account designated as the Account of
a Member shall not mean that such Member shall have a greater or lesser
interest than that due him by operation of the Plan and shall not be considered
as segregating any funds or property from any other funds or property contained
in the commingled fund. No Member shall have any title to any specific asset
in the Trust Fund, if any.
12
<PAGE> 18
VIII.
NATURE OF THE PLAN
The Company intends and desires by the adoption of the Plan to
recognize the value to the Company of the past and present services of
employees covered by the Plan and to encourage and assure their continued
service with the Company by making more adequate provision for their future
retirement security. The Plan is intended to constitute an unfunded, unsecured
plan of deferred compensation for a select group of management or highly
compensated employees of the Company. Plan benefits herein provided are to be
paid out of the Company's general assets. The Plan constitutes a mere promise
by the Company to make benefit payments in the future and Members have the
status of general unsecured creditors of the Company. Nevertheless, subject to
the terms hereof and of the Trust Agreement, if any, the Company may transfer
money or other property to the Trustee and the Trustee shall pay Plan benefits
to Members and their beneficiaries out of the Trust Fund.
The Committee, in its sole discretion, may establish the Trust and
direct the Company to enter into the Trust Agreement and adopt the Trust for
purposes of the Plan. In such event, the Company shall remain the owner of all
assets in the Trust Fund and the assets shall be subject to the claims of the
Company's creditors if the Company ever becomes insolvent. For purposes
hereof, the Company shall be considered "insolvent" if (a) the Company is
unable to pay its debts as they become due, or (b) the Company is subject to a
pending proceeding as a debtor under the United Sates Bankruptcy Code (or any
successor federal statute). The chief executive officer of the Company and its
Board of Directors shall have the duty to inform the Trustee in writing if the
Company becomes insolvent. Such notice given under the preceding sentence by
any party shall satisfy all of the parties' duty to give notice. When so
informed, the Trustee shall suspend payments to the Members and hold the assets
for the benefit of the Company's general creditors. If the Trustee receives a
written allegation that the Company is insolvent, the Trustee shall suspend
payments to the Members and hold the Trust Fund for the benefit of the
Company's general creditors, and shall determine within the period specified in
the Trust Agreement whether the Company is insolvent. If the Trustee
determines that the Company is not insolvent, the Trustee shall resume payments
to the Members. No Member or beneficiary shall have any preferred claim to, or
any beneficial ownership interest in, any assets of the Trust Fund.
13
<PAGE> 19
IX.
PARTICIPATING EMPLOYERS
The Committee may designate any entity or organization eligible by law
to participate in this Plan as an Employer by written instrument delivered to
the Secretary of the Company and the designated Employer. Such written
instrument shall specify the effective date of such designated participation,
may incorporate specific provisions relating to the operation of the Plan which
apply to the designated Employer only and shall become, as to such designated
Employer and its employees, a part of the Plan. Each designated Employer shall
be conclusively presumed to have consented to its designation and to have
agreed to be bound by the terms of the Plan and any and all amendments thereto
upon its submission of information to the Committee required by the terms of or
with respect to the Plan; provided, however, that the terms of the Plan may be
modified so as to increase the obligations of an Employer only with the consent
of such Employer, which consent shall be conclusively presumed to have been
given by such Employer upon its submission of any information to the Committee
required by the terms of or with respect to the Plan. Except as modified by
the Committee in its written instrument, the provisions of this Plan shall be
applicable with respect to each Employer separately, and amounts payable
hereunder shall be paid by the Employer which employs the particular Member, if
not paid from the Trust Fund.
14
<PAGE> 20
X.
MISCELLANEOUS
10.1 NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of
the Plan shall not be deemed to be a contract between the Company and any
person or to be consideration for the employment of any person. Nothing herein
contained shall be deemed to give any person the right to be retained in the
employ of the Company or to restrict the right of the Company to discharge any
person at any time nor shall the Plan be deemed to give the Company the right
to require any person to remain in the employ of the Company or to restrict any
person's right to terminate his employment at any time.
10.2 ALIENATION OF INTEREST FORBIDDEN. The interest of a Member or
his beneficiary or beneficiaries hereunder may not be sold, transferred,
assigned, or encumbered in any manner, either voluntarily or involuntarily, and
any attempt so to anticipate, alienate, sell, transfer, assign, pledge,
encumber, or charge the same shall be null and void; neither shall the benefits
hereunder be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person to whom such benefits or funds are payable,
nor shall they be an asset in bankruptcy or subject to garnishment, attachment
or other legal or equitable proceedings.
10.3 WITHHOLDING. All deferrals and payments provided for
hereunder shall be subject to applicable withholding and other deductions as
shall be required of the Company under any applicable local, state or federal
law.
10.4 AMENDMENT AND TERMINATION. The Committee may from time to
time, in its discretion, amend, in whole or in part, any or all of the
provisions of the Plan; provided, however, that no amendment may be made that
would impair the rights of a Member with respect to amounts already allocated
to his Account. The Committee may terminate the Plan at any time. In the
event that the Plan is terminated, the balance in a Member's Account shall be
paid to such Member or his designated beneficiary in a single lump sum payment
of cash in full satisfaction of all of such Member's or beneficiary's benefits
hereunder. Any such amendment to or termination of the Plan shall be in
writing and signed by an member of the Committee.
10.5 SEVERABILITY. If any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining provisions hereof; instead, each provision shall be fully
severable and the Plan shall be construed and enforced as if said illegal or
invalid provision had never been included herein.
10.6 GOVERNING LAWS. ALL PROVISIONS OF THE PLAN SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF TEXAS EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL
LAW.
15
<PAGE> 1
EXHIBIT 10.12
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH NOR APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
REGULATORY AUTHORITY, NOR HAS ANY SUCH AUTHORITY PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS SUBSCRIPTION AGREEMENT OR THE MERITS OF THIS OFFERING. NO
TRANSFER OF ANY SECURITIES OFFERED HEREBY SHALL BE PERMITTED UNTIL THE
TRANSFEROR SHALL HAVE COMPLIED WITH ALL RESTRICTIONS ON TRANSFER SET FORTH
HEREIN AND SUCH SECURITIES HAVE BEEN REGISTERED UNDER SUCH ACTS OR UNTIL THE
COMPANY SHALL HAVE RECEIVED A FAVORABLE OPINION FROM LEGAL COUNSEL ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION
UNDER SUCH ACTS. ANY REPRESENTATION CONTRARY TO THE ABOVE IS UNLAWFUL.
SUBSCRIPTION AGREEMENT
Newfield Exploration Company
363 N. Sam Houston Pkwy E, Suite 2020
Houston, Texas 77060
Ladies and Gentlemen:
The undersigned (the "Undersigned") understands that Newfield
Exploration Company, a Delaware corporation (the "Company"), is offering for
sale (the "Offering") to the Undersigned a number of shares of common stock,
par value $.01 per share ("Common Stock"), of the Company as determined
pursuant to Section 1 below. The Undersigned further understands that the
Offering is being made without registration of the Shares (as defined below)
under the Securities Act of 1933, as amended (the "Securities Act").
1. Purchase and Sale. Subject to the terms and conditions hereof,
the Undersigned hereby irrevocably subscribes for and agrees to purchase from
the Company that number of shares of Common Stock (the "Shares") equal to
$5,396,782 divided by the Average Trading Price (as defined below), rounded
down to the next whole share, for a purchase price per share equal to the
Average Trading Price. "Average Trading Price" means the average of the
closing sales price of the Common Stock, rounded to four decimal places, as
reported under "NYSE Composite Transaction Reports" in The Wall Street Journal
for each of the 20 consecutive Trading Days immediately preceding the Closing
Date (as defined in that certain Asset Purchase Agreement (the "Asset Purchase
Agreement") among Newfield Offshore Inc., a Bahamian company and wholly owned
subsidiary of the Company, Huffco International, L.L.C. and Huffco Turkey, Inc.
dated May 12, 1997). "Trading Day" shall mean a day on which the New York
Stock Exchange, Inc. (the "NYSE") is open for the transaction of business. The
aggregate of such consideration to be
<PAGE> 2
paid for the Shares is referred to in this Agreement as the "Purchase Price."
The Undersigned agrees to deliver the Purchase Price to the Company immediately
available funds within one business day following the Closing Date (the date on
which such delivery occurs is hereinafter referred to as the "Subscription
Closing Date"). Subject to the terms and conditions hereof, the Company hereby
agrees to issue and sell to the Undersigned the Shares for an aggregate
consideration equal to the Purchase Price. The Company will deliver
certificates evidencing the Shares to the Undersigned promptly after the
tendering by the Undersigned of the Purchase Price.
2. Representations, Warranties and Covenants of the Company. The
Company represents and warrants to and covenants with the Undersigned as
follows:
(a) The Company is duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, with full power
and authority to conduct its business as it is currently being conducted
and to own its assets.
(b) The Company has duly authorized the issuance and sale of
the Shares for an aggregate consideration equal to the Purchase Price
and, without limiting the generality of the foregoing, the Board of
Directors of the Company has specifically approved such issuance and
sale for purposes of, and such sale is intended to comply with the
provisions of, Rule 16b-3(d)(1) under the Exchange Act (as hereinafter
defined herein).
(c) The Shares, when issued and paid for in accordance with
the terms of this Subscription Agreement, will represent validly
authorized, duly issued and fully paid and non-assessable shares of
Common Stock of the Company, and the issuance of the Shares will not
conflict with the certificate of incorporation or the bylaws of the
Company.
(d) As of their respective dates, the SEC Documents (as
hereinafter defined) complied in all material respects with the
requirements of the Exchange Act, and the rules and regulations of the
SEC thereunder applicable to such SEC Documents, and none of the SEC
Documents 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, in light of the circumstances under which
they were made, not misleading. Since the date of the latest of the SEC
Documents, there has been no change in the financial condition,
properties, assets, liabilities, business or operations of the Company
or any of its subsidiaries, which change by itself or in conjunction
with all other such changes, whether or not arising in the ordinary
course of business, would or could reasonably be expected to be
materially adverse to the assets, business, prospects, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole.
3. Representations, Warranties and Covenants of the Undersigned.
The Undersigned hereby represents and warrants to and covenants with the
Company and to each officer, director and agent of the Company as follows:
-2-
<PAGE> 3
(a) General.
(i) The Undersigned has all requisite authority to
enter into this Subscription Agreement and to perform all the
obligations required to be performed by the Undersigned
hereunder.
(ii) The Undersigned is the sole party in interest and
is not acquiring the Shares as an agent or otherwise for any
other person. The Undersigned is a resident of the State of
Texas.
(b) Information Concerning the Company
(i) The Undersigned is familiar with the business and
financial condition, properties, operations and prospects of the
Company, and has been afforded the opportunity to ask questions
of, and has received satisfactory answers from, the Company's
officers, or other persons acting on the Company's behalf,
concerning the business and financial condition, properties,
operations and prospects of the Company and concerning the terms
and conditions of the Offering.
(ii) The Undersigned understands that, unless the
Undersigned notifies the Company in writing to the contrary
before the Subscription Closing Date, all the representations and
warranties contained in this Subscription Agreement will be
deemed to have been reaffirmed and confirmed as of the
Subscription Closing Date, taking into account all information
received by the Undersigned.
(iii) The Undersigned understands that the purchase of
the Shares involves various risks and that no assurance can be
given as to the future value of any investment in the Shares or
the future financial condition or results of operations of the
Company.
(iv) The Undersigned has received and had an opportunity
to review the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 and Quarterly Report on Form 10-Q for
quarterly period ended March 31, 1997, and the documents
incorporated therein by reference (collectively, the "SEC
Documents").
(v) All documents, records and books pertaining to a
proposed investment in the Shares that the Undersigned has
requested have been made available to the Undersigned.
(vi) The Undersigned is relying solely on the
information described herein and the answers to questions with
respect thereto furnished to the
-3-
<PAGE> 4
Undersigned by the Company. No representations or warranties
have been made to the Undersigned by the Company as to the tax
consequences of this investment or as to profits, losses or cash
flow which may be received or sustained as a result of this
investment.
(c) Status of the Undersigned.
(i) The Undersigned has had the opportunity to consult
with the Undersigned's own attorney and accountant regarding the
Undersigned's investment in the Shares and their suitability for
purchase by the Undersigned, and to the extent necessary, the
Undersigned has retained, at the Undersigned's own expense, and
relied upon, appropriate professional advice regarding the
investment, tax and legal merits, risks and consequences of this
Subscription Agreement and of purchasing and owning the Shares.
(ii) The Undersigned represents that the Undersigned is:
(A) a natural person whose individual net worth,
or joint net worth with his or her spouse, exceeds
$1,000,000 (including the value of homes, home
furnishings and personal automobiles);
(B) a natural person who had individual income
in excess of $200,000 in each of the last two years
or joint income with his or her spouse in excess of
$300,000 in each of the last two years and who
reasonably expects to reach the same level of
individual or joint income this year. For purposes
of the Offering, individual income shall equal
adjusted gross income, as reported in the
Undersigned's federal income tax return, less any
income attributable to a spouse or to property
owned by the spouse, and as may be further adjusted
in accordance with the rules, regulations and
releases of the Securities and Exchange Commission
(the "SEC"); or
(C) has appointed a "purchaser representative"
(as defined in Section 501 of Regulation D under the
Securities Act) and, jointly with such purchaser
representative, has such knowledge and experience
in financial and business matters as to be capable
of evaluating the merits and risks of an investment
in the Shares.
(iii) The Undersigned agrees to furnish any additional
information requested to assure compliance with applicable
federal and state securities laws in connection with the purchase
and sale of the Shares.
-4-
<PAGE> 5
(d) Restrictions on Transfer or Sale of Shares.
(i) The Undersigned is acquiring the Shares subscribed
for solely for the Undersigned's own beneficial account, for
investment purposes, and not with a view to, or for resale in
connection with, any distribution of the Shares. The Undersigned
understands that the offer and sale of the Shares has not been
registered under the Securities Act or any state securities laws
by reason of specific exemptions under the provisions thereof
that depend in part upon the investment intent of the Undersigned
and the other representations made by the Undersigned in this
Subscription Agreement. The Undersigned understands that the
Company is relying upon the representations, covenants and
agreements contained in this Subscription Agreement (and any
supplemental information) for the purpose of determining whether
this transaction meets the requirements for such exemptions.
(ii) The Undersigned understands that the Shares are
"restricted securities" under applicable federal securities laws
and that the Securities Act and the rules of the SEC provide in
substance that the Undersigned may dispose of the Shares only
pursuant to an effective registration statement under the
Securities Act or an exemption therefrom.
(iii) The Undersigned agrees: (A) that the Undersigned
will not sell, assign, pledge, give, transfer or otherwise
dispose of the Shares or any interest therein, or make any offer
or attempt to do any of the foregoing, except pursuant to a
registration of the Shares under the Securities Act and all
applicable state securities laws or in a transaction which is
exempt from the registration provisions of the Securities Act and
all applicable state securities laws; (B) that the Company and
any transfer agent for the Shares shall not be required to give
effect to any purported transfer of any of the Shares except upon
compliance with the foregoing restrictions and the receipt of a
favorable opinion of counsel satisfactory to the Company or
evidence satisfactory to the Company that such restrictions have
been complied with; and (C) that a legend in substantially the
following form will be placed on the certificates representing
the Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT
IN ACCORDANCE WITH SUCH ACT AND THE RULES AND REGULATIONS
THEREUNDER AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. THE COMPANY WILL NOT TRANSFER SUCH SECURITIES EXCEPT UPON
RECEIPT OF A FAVORABLE OPINION OF COUNSEL AND/OR EVIDENCE
SATISFACTORY TO THE COMPANY THAT THE REGISTRATION PROVISIONS OF
SUCH ACT HAVE BEEN COMPLIED WITH OR THAT SUCH REGISTRATION IS NOT
REQUIRED AND THAT SUCH TRANSFER WILL NOT VIOLATE ANY APPLICABLE
STATE SECURITIES LAWS.
-5-
<PAGE> 6
(iv) The Undersigned has not offered or sold any
portion of the subscribed for Shares and has no present
intention of dividing such Shares with others or of
reselling or otherwise disposing of any portion of such
Shares either currently or after the passage of a fixed or
determinable period of time or upon the occurrence or
nonoccurrence of any predetermined event or circumstance.
4. Survival; Indemnification. All representations, warranties and
covenants contained in this Subscription Agreement and the indemnification
contained in this Section 4 shall survive (i) the acceptance of this
Subscription Agreement by the Company, (ii) changes in the transactions,
documents and instruments described herein that are not material or that are to
the benefit of the Undersigned, and (iii) the death or disability of the
Undersigned. The Undersigned acknowledges the meaning and legal consequences
of the representations, warranties and covenants in Section 3 hereof and that
the Company has relied upon such representations, warranties and covenants in
determining the Undersigned's qualification and suitability to purchase the
Shares. Both parties hereby agree to indemnify, defend and hold harmless the
other party and their respective officers, directors, employees, agents and
controlling persons, from and against any and all losses, claims, damages,
liabilities, expenses (including attorneys' fees and disbursements), judgments
or amounts paid in settlement of actions arising out of or resulting from the
untruth of any representation of such party herein or the breach of any
warranty or covenant herein by such party. Notwithstanding the foregoing,
however, no representation, warranty, covenant or acknowledgment made herein by
the Undersigned shall in any manner be deemed to constitute a waiver of any
rights granted to it under the Securities Act or state securities laws.
5. Conditions to Obligations of the Undersigned and the Company.
The obligations of the Undersigned to purchase and pay for the Shares and of
the Company to sell such Shares are subject to the conditions that (i) the
representations and warranties of the Company contained in Section 2 hereof and
of the Undersigned contained in Section 3 hereof shall be true and correct on
and as of the Subscription Closing Date in all respects with the same effect as
though such representations and warranties had been made on and as of the
Subscription Closing Date and (ii) consummation of the Acquisition (as defined
in the Asset Purchase Agreement).
6. Registration of Resales.
(a) As soon as practicable, but in any event within 60 days
following the Subscription Closing Date, the Company shall prepare and
file with the SEC a "shelf" registration statement (the "Registration
Statement") pursuant to Rule 415 under the Securities Act on Form S-3 or
other form deemed appropriate by the Company covering the resale of the
Shares by the Undersigned and use all reasonable efforts to cause the
Registration Statement to become effective as soon as practicable
thereafter. The Company also shall cooperate and assist in any filings
required to be made with the NYSE so as to cause the Registration
Statement to become effective. The Company also shall, as promptly as
practicable, prepare and file with the SEC such amendments and
supplements
-6-
<PAGE> 7
to the Registration Statement and any prospectus used in connection with
the Registration Statement, and use its best efforts to cause each such
amendment to become effective, as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of the
Shares; provided, that at least seven days before filing the
Registration Statement or prospectus, or any amendments or supplements
thereto, the Company will furnish to the counsel selected by the
Undersigned and identified to the Company in writing (and reasonably
acceptable to the Company) ("Undersigned's Counsel"), copies of all
documents proposed to be filed, which documents will be subject to the
review of Undersigned's Counsel. Until written notice by the
Undersigned to the Company to the contrary, Undersigned's Counsel shall
be Baker & Botts, L.L.P. The Company will not include in the
Registration Statement information concerning or relating to the
Undersigned to which the Undersigned shall reasonably object (unless the
inclusion of such information is, in the reasonable judgment of the
Company, required by applicable law or the regulations of any securities
exchange to which the Company may be subject). The Company shall:
(i) furnish without charge to the Undersigned such
number of copies of the Registration Statement and of each
amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in
the Registration Statement (including each preliminary prospectus
and summary prospectus), in conformity with the requirements of
the Securities Act, and such other documents as the Undersigned
may reasonably request in order to facilitate the disposition of
the Shares by the Undersigned, including, without limitation, all
documents incorporated by reference therein;
(ii) use all reasonable efforts to register or qualify
the Shares covered by the Registration Statement under such other
securities or blue sky laws of such jurisdictions as the
Undersigned shall reasonably request, and do any and all other
acts and things that may be reasonably necessary or advisable to
enable the Undersigned to consummate the disposition in such
jurisdictions of the Shares, except that the Company shall not
for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction where, but
for the requirements of this clause (ii), it would not be
obligated to be so qualified, to subject itself to taxation in
any such jurisdiction, or to consent to general service of
process in any such jurisdiction;
(iii) use all reasonable efforts to cause the Shares to
be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the
Undersigned to consummate the disposition of the Shares;
(iv) promptly notify the Undersigned, after becoming
aware thereof, (A) when the Registration Statement or any related
prospectus or any amendment
-7-
<PAGE> 8
or supplement has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any request by the SEC for
amendments or supplements to the Registration Statement or the
related prospectus or for additional information, (C) of the
issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose, (D) of the receipt by the
Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the
initiation of any proceeding for such purpose, or (E) the
happening of any event which makes the Registration Statement or
any post-effective amendment thereto, related prospectus or any
amendment or supplement thereto, or any document incorporated
therein by reference, contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein (in the case
of any prospectus, in the light of the circumstances under which
they were made) not misleading;
(v) use all reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of the Registration
Statement or any post-effective amendment thereto;
(vi) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available
to its security holders, as soon as reasonably practicable (but
not more than fifteen months) after the effective date of the
Registration Statement, an earnings statement that shall satisfy
the provisions of Section 11(a) of the Securities Act and the
rules and regulations promulgated thereunder;
(vii) use all reasonable efforts to list the Shares on
any securities exchange on which the Common Stock is then listed;
(viii) make available at reasonable times for inspection
by the Undersigned and by any attorney, accountant or other agent
retained by the Undersigned all pertinent financial and other
records, pertinent corporate documents and properties of the
Company, and cause all of the Company's officers, directors and
employees to supply all information reasonably requested by the
Undersigned or any attorney, accountant or agent retained by the
Undersigned in connection with the Registration Statement; and
(ix) permit the Undersigned, acting reasonably, to
specify the manner in which the Shares shall be sold or
distributed, and cause the prospectus to state, if so specified
by the Undersigned and to the extent permitted by applicable law,
that among the methods of disposition included in the
Undersigned's plan of distribution, sales may be made by the
Undersigned from time to time in the open
-8-
<PAGE> 9
market or in privately negotiated transactions at prevailing
market prices or at such other prices as shall be agreed upon by
the Undersigned and the purchaser(s) of such securities.
Notwithstanding the foregoing, the Company shall not be obligated to
effect a registration or qualification under this Section 6(a) during
any period (i) in which the Company is in possession of material non-
public information concerning it or its business and affairs, which, in
the judgment of the Board of Directors of the Company, should not be
publicly disclosed; or (ii) in which the Company is engaged in any
material acquisition transaction or disposition transaction that would,
in the judgment of the Board of Directors of the Company, be
significantly disrupted by such registration, or qualification;
provided, however, that the Company may not pursuant to this paragraph
delay or fail to effect the registration or qualification required under
this Agreement for more than two periods of up to 75 days, but in no
event for more than 120 days.
(b) The Company may require the Undersigned to furnish the
Company with such information regarding the Undersigned and pertinent to
the disclosure requirements relating to the registration and the
distribution of the Shares as the Company may from time to time
reasonably request in writing.
(c) The Undersigned agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
clauses (B) through (D) of Section 6(a)(iv) hereof, the Undersigned will
forthwith discontinue disposition of the Shares pursuant to the
Registration Statement until, with respect to Section 6(a)(iv)(B), the
lifting of such stop order or the favorable conclusion of such
proceedings or, with respect to clauses (C) and (D) of Section 6(a)(iv),
the Undersigned's receipt of the copies of the supplemented or amended
prospectus and, with respect to clauses (C) and (D) of Section 6(a)(iv),
if so directed by the Company, the Undersigned will deliver to the
Company (at the Company's expense) all copies, other than pertinent file
copies then in the Undersigned's possession, of the prospectus covering
the Shares current at the time of receipt of such notice.
(d) Registration to be Kept Effective. In connection with
such registration pursuant to the Registration Statement, the Company
shall, at its expense, (a) keep effective and maintain such registration
and any related qualification of Shares under state securities laws
until the first anniversary of the Subscription Closing Date, (b) from
time to time amend or supplement the prospectus used in connection
therewith to the extent necessary to comply with applicable laws,
including the preparation and filing with the SEC of such amendments,
post-effective amendments and supplements to the Registration Statement
and the related prospectus as may be necessary to maintain the
effectiveness of the Registration Statement for such period and to cause
the related prospectus (and any amendments or supplements thereto) to be
filed pursuant to Rules 424 and 430A under the
-9-
<PAGE> 10
Securities Act or any successor rules that may be adopted by the SEC, as
such rules may be amended from time to time, (c) comply with the
provisions of the Securities Act with respect to the disposition of all
Shares covered by the Registration Statement during the applicable
period in accordance with the intended method or methods of distribution
thereof, and (d) furnish to the Undersigned such number of copies of the
Registration Statement and the prospectus constituting a part thereof
and any amendment or supplement thereto as the Undersigned may
reasonably request in order to facilitate the disposition of the Shares
so registered.
(e) Expenses. The Company will pay all Registration Expenses
in connection with the registration of the Shares. For purposes of this
Subscription Agreement, "Registration Expenses" shall mean any and all
expenses incident to the registration of the Shares, including, without
limitation, (i) all SEC and stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees and
expenses of complying with securities or blue sky laws, (iii) all
printing, messenger and delivery expenses, (iv) all fees and expenses
incurred in connection with the listing of the Shares on any securities
exchange, and (v) the fees and disbursements of counsel for the Company
and of its independent public accountants; but excluding any
underwriting discounts and selling commissions.
(f) Rule 144. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as the Undersigned may
reasonably request, all to the extent required from time to time to
enable the Undersigned to sell the Shares without registration under the
Securities Act within the limitation of the exemptions provided by (i)
Rule 144 under the Securities Act, as such rules may be amended from
time to time, or (ii) any similar rule or regulation hereafter adopted
by the SEC. Upon the request of the Undersigned, the Company will
deliver to the Undersigned a written statement as to whether it has
complied with such requirements.
7. Indemnification for Registration.
(a) Indemnification by the Company. The Company shall
indemnify and hold harmless the Undersigned and each underwriter, if
any,and each person controlling any such underwriter against any and all
losses, claims, damages or liabilities, and expenses to which the
Undersigned may become subject under the Securities Act, common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof, whether commenced or
threatened) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, any preliminary, final or summary prospectus
contained therein (except where errors or omissions in such preliminary
prospectus are corrected in the final prospectus and the Undersigned
fails to deliver such final prospectus) or in any amendment
-10-
<PAGE> 11
or supplement thereto or any document incorporated by reference therein
or (ii) any 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 the Company will reimburse the Undersigned
for any legal or any other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided, that the Company shall not be
liable to the Undersigned in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and in
conformity with written information with respect to the Undersigned
furnished to the Company by the Undersigned specifically for use in the
preparation thereof. The indemnity agreements contained in this Section
7(a) shall not apply to amounts paid in settlement of claims if such
settlement is effectuated without the consent of the Company (which
shall not be unreasonably withheld). Such indemnity shall remain in
full force and effect regardless of any investigation made by or on
behalf of the Undersigned and shall survive the transfer of the Shares
by the Undersigned.
(b) Indemnification by the Undersigned. The Undersigned shall
indemnify and hold harmless, each affiliate of the Company and their
respective directors and officers (and the directors, officers,
affiliates and controlling persons thereof, as defined in Section 15 of
the Securities Act or Section 20 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), (collectively, the "Company
Indemnified Parties"), against any and all losses, claims, damages or
liabilities, and expenses to which any such Company Indemnified Party
may become subject under the Securities Act, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof, whether commenced or threatened) arise
out of or are based upon any statement or alleged statement in or
omission or alleged omission from the Registration Statement, any
preliminary, final or summary prospectus contained therein, or any
amendment or supplement, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity
with written information with respect to the Undersigned furnished to
the Company by the Undersigned specifically for use in the preparation
of the Registration Statement, preliminary, final or summary prospectus
or amendment or supplement, or a document incorporated by reference into
any of the foregoing; provided, however, that the indemnity agreement
contained in this Section 7(b) shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action arising if
such settlement is effected without the consent of the Undersigned
(which consent shall not be unreasonably withheld). Such indemnity
shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any other Company Indemnified
Party and shall survive the transfer of the Shares by the Undersigned.
-11-
<PAGE> 12
(c) Notices of Claims, Etc. Promptly after receipt by the
Undersigned or a Company Indemnified Party (collectively, an "Indemnity
Party") hereunder of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 7, such Indemnified Party will, if a claim in
respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action;
provided, that the failure of such Indemnified Party to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under the preceding sections of this Section 7, except to
the extent that the indemnifying party is actually prejudiced by such
failure to give notice, and in no event shall such omission relieve the
indemnifying party from any other liability it may have to such
Indemnified Party. In case any such action is brought against an
Indemnified Party, unless in such Indemnified Party's reasonable
judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the
indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably
satisfactory to such Indemnified Party, and after notice from the
indemnifying party to such Indemnified Party of its election so to
assume the defense thereof, the indemnifying party will not be liable to
such Indemnified Party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof. No
indemnifying party will consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof,
the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation.
(d) Contribution. If the indemnification provided for in this
Section 7 from the indemnifying party is unavailable to an Indemnified
Party hereunder in respect of any losses, claims, damages, liabilities
or expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such Indemnified Party shall contribute to the amount paid
or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and such
Indemnified Party in connection with the actions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such
indemnifying party and an Indemnified Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party
or by such Indemnified Party. The parties hereto agree that it would
not be just and equitable if contribution pursuant to this Section 7(d)
were determined: (i) by pro rata allocation or (ii) by any other method
of allocation that does not take account of the equitable considerations
referred to in this Section 7(d). The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to
above shall be deemed to include (subject to the limitations set forth
-12-
<PAGE> 13
in Section 7(c) hereof) any legal or other fees or expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action, proceeding or claim. No party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any party who was
not guilty of such fraudulent misrepresentation.
(e) Non-Exclusivity. The obligations of the parties under
this Section 7 shall be in addition to any liability which any party may
otherwise have to any other party.
8. Notices. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid or sent by telecopy or facsimile transmission:
(a) if to the Company, to the following address:
Newfield Exploration Company
363 W. Sam Houston Pkwy E, Suite 2020
Houston, Texas 77060
Telecopy: (281) 405-4255
Attn: Terry W. Rathert
(b) if to the Undersigned, to the address or telecopy number
set forth on the signature page hereto;
(c) or at such other address or telecopy number as either
party shall have specified by notice in writing to the other.
Such notices shall be effective (i) if delivered in person or by courier, upon
actual receipt by the intended recipient, (ii) if sent by telecopy or facsimile
transmission, when the sender receives telecopier confirmation that such notice
was received at the telecopier number of the addressee, or (iii) if mailed,
upon the earlier of five days after deposit in the mail and the date of
delivery as shown by the return receipt therefor.
9. Notification of Changes. The Undersigned agrees and covenants to
notify the Company immediately upon the occurrence of any event prior to the
Subscription Closing Date which would cause any representation, warranty,
covenant or other statement contained in this Subscription Agreement to be
false or incorrect or of any change in any statement made herein occurring
prior to the Subscription Closing Date.
-13-
<PAGE> 14
10. Assignability. This Subscription Agreement is not assignable by
the Undersigned, and may not be modified, waived or terminated except by an
instrument in writing signed by the party against whom enforcement of such
modification, waiver or termination is sought.
11. Binding Effect. Except as otherwise provided herein, this
Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and assigns, and the agreements, representations, warranties
and acknowledgments contained herein shall be deemed to be made by and be
binding upon such heirs, executors, administrators, successors, legal
representatives and assigns.
12. Termination. The Subscription Agreement may be terminated, and
the transactions contemplated hereby abandoned at any time prior to the
Subscription Closing Date: (i) by mutual consent of the Company and the
Undersigned; (ii) by the Company or the Undersigned upon termination of the
Asset Purchase Agreement; (iii) by the Company, if any representation or
warranty of the Undersigned contained in Section 3 hereof shall have become
untrue such that the conditions in Section 5 would not be satisfied; (iv) by
the Undersigned, if any representation or warranty of the Company contained in
Section 2 hereof shall have become untrue such that the conditions in Section 5
would not be satisfied; or (v) by the Company or the Undersigned, as
applicable, pursuant to Section 1(b).
13. Entire Agreement. This Subscription Agreement constitutes the
entire agreement of the Undersigned and the Company relating to the matters
contained herein, superseding all prior contracts or agreements, whether oral
or written.
14. Governing Law. This Subscription Agreement shall be governed by
and construed in accordance with the laws of the State of Texas, as such law
applies to agreements between Texas residents entered into and to be performed
entirely within Texas, exclusive of any conflicts of law principles; and the
parties hereto agree that the state and federal courts situated in Harris
County, Texas shall have personal jurisdiction over the parties hereto to hear
all disputes arising under this Subscription Agreement. This Subscription
Agreement is to be at least partially performed in Harris County, Texas and, as
such, the parties agree that venue shall be proper with the state or federal
courts in Harris County, Texas to hear such disputes. If any party is not able
to effect service of process upon any other party with respect to such
disputes, such other party expressly agrees that the Secretary of State for the
State of Texas shall be an agent for such other party to receive service of
process on behalf of such other party with respect to such disputes.
15. Severability. If any provision of this Subscription Agreement or
the application thereof to the Undersigned or any circumstance shall be held
invalid or unenforceable to any extent, the remainder of this Subscription
Agreement and the application of such provision to other subscriptions or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
-14-
<PAGE> 15
16. Headings. The headings in this Subscription Agreement are
inserted for convenience and identification only and are not intended to
describe, interpret, define, or limit the scope, extent or intent of this
Subscription Agreement or any provision hereof.
17. Counterparts. This Subscription Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which together shall be deemed to be one
and the same agreement.
18. Non-Competition Obligations.
(a) As part of the consideration for the transactions
contemplated by the Asset Purchase Agreement, in consideration of the
fact that the Undersigned is a manager or director and a significant
member or shareholder of each of the Sellers (as defined in the Asset
Purchase Agreement) and as an additional incentive to the Company to
enter into this Agreement, the Undersigned and the Company agree to the
non-competition provisions of this Section 18. It is the Company's
intention that the Undersigned be appointed to the Company's Board of
Directors at the time of or promptly after the Closing (as defined in
the Asset Purchase Agreement). The Undersigned agrees that, from the
Closing until the later of the second anniversary of the Closing Date
(as defined in the Asset Purchase Agreement) and such time as the
Undersigned no longer serves as a director of the Company, the
Undersigned shall not, directly or indirectly for the Undersigned or for
others (other than the Company), conduct, participate in (financially or
otherwise), or render advice or service to any person (other than the
Company) with respect to, oil and gas operations in the Gulf of Bohai,
People's Republic of China, in or offshore Cote d'Ivoire or in or
offshore of Nigeria. Notwithstanding the foregoing restrictions, the
Undersigned shall be permited to participate financially in oil and gas
operations in the geographic areas described above through the ownership
of securities that are listed on a national securities exchange or
quoted on the Nasdaq Stock Market, provided that, except in the case of
the Company, the Undersigned does not have any control over the
management of the issuer of such securities other than the right to vote
as a stockholder of such issuer for the election of directors and other
matters submitted to stockholders for a vote.
(b) The Undersigned understands that the foregoing
restrictions may limit her ability to engage in certain businesses, but
acknowledges that she will receive sufficient consideration and other
benefits pursuant to this Agreement and the Asset Purchase Agreement to
justify such restrictions. The Undersigned acknowledges that money
damages would not be sufficient remedy for any breach of this Section 18
by the Undersigned, and agrees that the Company, on its own behalf or on
behalf of its affiliates, shall be entitled to specific performance and
injunctive relief as remedies for such breach or any threatened breach.
Such remedies shall not be deemed the exclusive remedies for a breach of
this Section 18, but shall be in addition to all remedies available at
law or in equity to the
-15-
<PAGE> 16
Company, including, without limitation, the recovery of damages from the
Undersigned and her agents involved in such breach.
(c) It is expressly understood and agreed that the Undersigned
and the Company consider the restrictions contained in this Section 18
to be reasonable and necessary to protect the proprietary information
and goodwill of the Company. Nevertheless, if any of the aforesaid
restrictions are found by a court having competent jurisdiction to be
unreasonable, overly broad as to geographic area or time or otherwise
unenforceable, the parties hereto intend for the restrictions set forth
in this Section 18 to be modified by such court so as to be reasonable
and enforceable and, as so modified by such court, to be fully enforced.
-16-
<PAGE> 17
IN WITNESS WHEREOF, the Undersigned has executed this Subscription
Agreement this 15th day of May, 1997.
/s/ Terry Huffington
---------------------------
Terry Huffington
c/o Huffco Group, Inc.
1100 Louisiana, 25th Floor
Houston, Texas 77002
Telecopy: (713) 651-0119
Agreed to and Accepted:
NEWFIELD EXPLORATION COMPANY
By: /s/ Terry W. Rathert
-------------------------------
Terry W. Rathert
Vice President and
Chief Fiancial Officer
-17-
<PAGE> 1
EXHIBIT 10.13
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH NOR APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
REGULATORY AUTHORITY, NOR HAS ANY SUCH AUTHORITY PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS SUBSCRIPTION AGREEMENT OR THE MERITS OF THIS OFFERING. NO
TRANSFER OF ANY SECURITIES OFFERED HEREBY SHALL BE PERMITTED UNTIL THE
TRANSFEROR SHALL HAVE COMPLIED WITH ALL RESTRICTIONS ON TRANSFER SET FORTH
HEREIN AND SUCH SECURITIES HAVE BEEN REGISTERED UNDER SUCH ACTS OR UNTIL THE
COMPANY SHALL HAVE RECEIVED A FAVORABLE OPINION FROM LEGAL COUNSEL ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION
UNDER SUCH ACTS. ANY REPRESENTATION CONTRARY TO THE ABOVE IS UNLAWFUL.
SUBSCRIPTION AGREEMENT
Newfield Exploration Company
363 N. Sam Houston Pkwy E, Suite 2020
Houston, Texas 77060
Ladies and Gentlemen:
The undersigned (the "Undersigned") understands that Newfield
Exploration Company, a Delaware corporation (the "Company"), is offering for
sale (the "Offering") to the Undersigned a number of shares of common stock,
par value $.01 per share ("Common Stock"), of the Company as determined
pursuant to Section 1 below. The Undersigned further understands that the
Offering is being made without registration of the Shares (as defined below)
under the Securities Act of 1933, as amended (the "Securities Act").
1. Purchase and Sale. Subject to the terms and conditions
hereof, the Undersigned hereby irrevocably subscribes for and agrees to
purchase from the Company that number of shares of Common Stock (the "Shares")
equal to $80,814 divided by the Average Trading Price (as defined below),
rounded down to the next whole share, for a purchase price per share equal to
the Average Trading Price. "Average Trading Price" means the average of the
closing sales price of the Common Stock, rounded to four decimal places, as
reported under "NYSE Composite Transaction Reports" in The Wall Street Journal
for each of the 20 consecutive Trading Days immediately preceding the Closing
Date (as defined in that certain Asset Purchase Agreement (the "Asset Purchase
Agreement") among Newfield Offshore Inc., a Bahamian company and wholly owned
subsidiary of the Company, Huffco International, L.L.C. and Huffco Turkey, Inc.
dated May 12, 1997). "Trading Day" shall mean a day on which the New York
Stock Exchange, Inc.
<PAGE> 2
(the "NYSE") is open for the transaction of business. The aggregate of such
consideration to be paid for the Shares is referred to in this Agreement as the
"Purchase Price." The Undersigned agrees to deliver the Purchase Price to the
Company immediately available funds within one business day following the
Closing Date (the date on which such delivery occurs is hereinafter referred to
as the "Subscription Closing Date"). Subject to the terms and conditions
hereof, the Company hereby agrees to issue and sell to the Undersigned the
Shares for an aggregate consideration equal to the Purchase Price. The Company
will deliver certificates evidencing the Shares to the Undersigned promptly
after the tendering by the Undersigned of the Purchase Price.
2. Representations, Warranties and Covenants of the Company. The
Company represents and warrants to and covenants with the Undersigned as
follows:
(a) The Company is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with
full power and authority to conduct its business as it is currently
being conducted and to own its assets.
(b) The Company has duly authorized the issuance and sale
of the Shares for an aggregate consideration equal to the Purchase
Price and, without limiting the generality of the foregoing, the Board
of Directors of the Company has specifically approved such issuance
and sale for purposes of, and such sale is intended to comply with the
provisions of, Rule 16b-3(d)(1) under the Exchange Act (as hereinafter
defined herein).
(c) The Shares, when issued and paid for in accordance
with the terms of this Subscription Agreement, will represent validly
authorized, duly issued and fully paid and non-assessable shares of
Common Stock of the Company, and the issuance of the Shares will not
conflict with the certificate of incorporation or the bylaws of the
Company.
(d) As of their respective dates, the SEC Documents (as
hereinafter defined) complied in all material respects with the
requirements of the Exchange Act, and the rules and regulations of the
SEC thereunder applicable to such SEC Documents, and none of the SEC
Documents 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, in light of the circumstances under which
they were made, not misleading. Since the date of the latest of the
SEC Documents, there has been no change in the financial condition,
properties, assets, liabilities, business or operations of the Company
or any of its subsidiaries, which change by itself or in conjunction
with all other such changes, whether or not arising in the ordinary
course of business, would or could reasonably be expected to be
materially adverse to the assets, business, prospects, condition
(financial or otherwise) or results of operations of the Company and
its subsidiaries, taken as a whole.
-2-
<PAGE> 3
3. Representations, Warranties and Covenants of the
Undersigned. The Undersigned hereby represents and warrants to and
covenants with the Company and to each officer, director and agent of
the Company as follows:
(a) General.
(i) The Undersigned has all requisite authority
to enter into this Subscription Agreement and to perform all
the obligations required to be performed by the Undersigned
hereunder.
(ii) The Undersigned is the sole party in interest
and is not acquiring the Shares as an agent or otherwise for
any other person. The Undersigned is a resident of the State
of Texas.
(b) Information Concerning the Company
(i) The Undersigned is familiar with the business
and financial condition, properties, operations and prospects
of the Company, and has been afforded the opportunity to ask
questions of, and has received satisfactory answers from, the
Company's officers, or other persons acting on the Company's
behalf, concerning the business and financial condition,
properties, operations and prospects of the Company and
concerning the terms and conditions of the Offering.
(ii) The Undersigned understands that, unless the
Undersigned notifies the Company in writing to the contrary
before the Subscription Closing Date, all the representations
and warranties contained in this Subscription Agreement will
be deemed to have been reaffirmed and confirmed as of the
Subscription Closing Date, taking into account all information
received by the Undersigned.
(iii) The Undersigned understands that the purchase
of the Shares involves various risks and that no assurance can
be given as to the future value of any investment in the
Shares or the future financial condition or results of
operations of the Company.
(iv) The Undersigned has received and had an
opportunity to review the Company's Annual Report on Form 10-K
for the year ended December 31, 1996 and Quarterly Report on
Form 10-Q for quarterly period ended March 31, 1997, and the
documents incorporated therein by reference (collectively, the
"SEC Documents").
-3-
<PAGE> 4
(v) All documents, records and books pertaining
to a proposed investment in the Shares that the Undersigned
has requested have been made available to the Undersigned.
(vi) The Undersigned is relying solely on the
information described herein and the answers to questions
with respect thereto furnished to the Undersigned by the
Company. No representations or warranties have been made to
the Undersigned by the Company as to the tax consequences of
this investment or as to profits, losses or cash flow which
may be received or sustained as a result of this investment.
(c) Status of the Undersigned.
(i) The Undersigned has had the opportunity to
consult with the Undersigned's own attorney and accountant
regarding the Undersigned's investment in the Shares and their
suitability for purchase by the Undersigned, and to the extent
necessary, the Undersigned has retained, at the Undersigned's
own expense, and relied upon, appropriate professional advice
regarding the investment, tax and legal merits, risks and
consequences of this Subscription Agreement and of purchasing
and owning the Shares.
(ii) The Undersigned represents that the
Undersigned is:
(A) a natural person whose individual
net worth, or joint net worth with his or her
spouse, exceeds $1,000,000 (including the
value of homes, home furnishings and personal
automobiles);
(B) a natural person who had individual
income in excess of $200,000 in each of the
last two years or joint income with his or
her spouse in excess of $300,000 in each of
the last two years and who reasonably expects
to reach the same level of individual or
joint income this year. For purposes of the
Offering, individual income shall equal
adjusted gross income, as reported in the
Undersigned's federal income tax return, less
any income attributable to a spouse or to
property owned by the spouse, and as may be
further adjusted in accordance with the
rules, regulations and releases of the
Securities and Exchange Commission (the
"SEC"); or
(C) has appointed a "purchaser
representative" (as defined Section 501 of
Regulation D under the Securities Act) and,
jointly with such purchaser representative,
has such knowledge and
-4-
<PAGE> 5
experience in financial and business matters
as to be capable of evaluating the merits and
risks of an investment in the Shares.
(iii) The Undersigned agrees to furnish any
additional information requested to assure compliance with
applicable federal and state securities laws in connection
with the purchase and sale of the Shares.
(d) Restrictions on Transfer or Sale of Shares.
(i) The Undersigned is acquiring the Shares
subscribed for solely for the Undersigned's own beneficial
account, for investment purposes, and not with a view to, or
for resale in connection with, any distribution of the Shares.
The Undersigned understands that the offer and sale of the
Shares has not been registered under the Securities Act or any
state securities laws by reason of specific exemptions under
the provisions thereof that depend in part upon the investment
intent of the Undersigned and the other representations made
by the Undersigned in this Subscription Agreement. The
Undersigned understands that the Company is relying upon the
representations, covenants and agreements contained in this
Subscription Agreement (and any supplemental information) for
the purpose of determining whether this transaction meets the
requirements for such exemptions.
(ii) The Undersigned understands that the Shares
are "restricted securities" under applicable federal
securities laws and that the Securities Act and the rules of
the SEC provide in substance that the Undersigned may dispose
of the Shares only pursuant to an effective registration
statement under the Securities Act or an exemption therefrom.
(iii) The Undersigned agrees: (A) that the
Undersigned will not sell, assign, pledge, give, transfer or
otherwise dispose of the Shares or any interest therein, or
make any offer or attempt to do any of the foregoing, except
pursuant to a registration of the Shares under the Securities
Act and all applicable state securities laws or in a
transaction which is exempt from the registration provisions
of the Securities Act and all applicable state securities
laws; (B) that the Company and any transfer agent for the
Shares shall not be required to give effect to any purported
transfer of any of the Shares except upon compliance with the
foregoing restrictions and the receipt of a favorable opinion
of counsel satisfactory to the Company or evidence
satisfactory to the Company that such restrictions have been
complied with; and (C) that a legend in substantially the
following form will be placed on the certificates representing
the Shares:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE SOLD, PLEDGED,
-5-
<PAGE> 6
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH
SUCH ACT AND THE RULES AND REGULATIONS THEREUNDER AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THE COMPANY
WILL NOT TRANSFER SUCH SECURITIES EXCEPT UPON RECEIPT OF A
FAVORABLE OPINION OF COUNSEL AND/OR EVIDENCE SATISFACTORY TO
THE COMPANY THAT THE REGISTRATION PROVISIONS OF SUCH ACT HAVE
BEEN COMPLIED WITH OR THAT SUCH REGISTRATION IS NOT REQUIRED
AND THAT SUCH TRANSFER WILL NOT VIOLATE ANY APPLICABLE STATE
SECURITIES LAWS.
(iv) The Undersigned has not offered or sold any
portion of the subscribed for Shares and has no present
intention of dividing such Shares with others or of reselling
or otherwise disposing of any portion of such Shares either
currently or after the passage of a fixed or determinable
period of time or upon the occurrence or nonoccurrence of any
predetermined event or circumstance.
4. Survival; Indemnification. All representations, warranties
and covenants contained in this Subscription Agreement and the indemnification
contained in this Section 4 shall survive (i) the acceptance of this
Subscription Agreement by the Company, (ii) changes in the transactions,
documents and instruments described herein that are not material or that are to
the benefit of the Undersigned, and (iii) the death or disability of the
Undersigned. The Undersigned acknowledges the meaning and legal consequences
of the representations, warranties and covenants in Section 3 hereof and that
the Company has relied upon such representations, warranties and covenants in
determining the Undersigned's qualification and suitability to purchase the
Shares. Both parties hereby agree to indemnify, defend and hold harmless the
other party and their respective officers, directors, employees, agents and
controlling persons, from and against any and all losses, claims, damages,
liabilities, expenses (including attorneys' fees and disbursements), judgments
or amounts paid in settlement of actions arising out of or resulting from the
untruth of any representation of such party herein or the breach of any
warranty or covenant herein by such party. Notwithstanding the foregoing,
however, no representation, warranty, covenant or acknowledgment made herein by
the Undersigned shall in any manner be deemed to constitute a waiver of any
rights granted to it under the Securities Act or state securities laws.
5. Conditions to Obligations of the Undersigned and the Company.
The obligations of the Undersigned to purchase and pay for the Shares and of
the Company to sell such Shares are subject to the conditions that (i) the
representations and warranties of the Company contained in Section 2 hereof and
of the Undersigned contained in Section 3 hereof shall be true and correct on
and as of the Subscription Closing Date in all respects with the same effect as
though such representations and warranties had been made on and as of the
Subscription Closing Date and (ii) consummation of the Acquisition (as defined
in the Asset Purchase Agreement).
6. Registration of Resales.
-6-
<PAGE> 7
(a) As soon as practicable, but in any event
within 60 days following the Subscription Closing Date, the
Company shall prepare and file with the SEC a "shelf"
registration statement (the "Registration Statement") pursuant
to Rule 415 under the Securities Act on Form S-3 or other form
deemed appropriate by the Company covering the resale of the
Shares by the Undersigned and use all reasonable efforts to
cause the Registration Statement to become effective as soon
as practicable thereafter. The Company also shall cooperate
and assist in any filings required to be made with the NYSE so
as to cause the Registration Statement to become effective.
The Company also shall, as promptly as practicable, prepare
and file with the SEC such amendments and supplements to the
Registration Statement and any prospectus used in connection
with the Registration Statement, and use its best efforts to
cause each such amendment to become effective, as may be
necessary to comply with the provisions of the Securities Act
with respect to the disposition of the Shares; provided, that
at least seven days before filing the Registration Statement
or prospectus, or any amendments or supplements thereto, the
Company will furnish to the counsel selected by the
Undersigned and identified to the Company in writing (and
reasonably acceptable to the Company) ("Undersigned's
Counsel"), copies of all documents proposed to be filed, which
documents will be subject to the review of Undersigned's
Counsel. Until written notice by the Undersigned to the
Company to the contrary, Undersigned's Counsel shall be Baker
& Botts, L.L.P. The Company will not include in the
Registration Statement information concerning or relating to
the Undersigned to which the Undersigned shall reasonably
object (unless the inclusion of such information is, in the
reasonable judgment of the Company, required by applicable law
or the regulations of any securities exchange to which the
Company may be subject). The Company shall:
(i) furnish without charge to the
Undersigned such number of copies of the Registration
Statement and of each amendment and supplement
thereto (in each case including all exhibits), such
number of copies of the prospectus included in the
Registration Statement (including each preliminary
prospectus and summary prospectus), in conformity
with the requirements of the Securities Act, and such
other documents as the Undersigned may reasonably
request in order to facilitate the disposition of the
Shares by the Undersigned, including, without
limitation, all documents incorporated by reference
therein;
(ii) use all reasonable efforts to
register or qualify the Shares covered by the
Registration Statement under such other securities or
blue sky laws of such jurisdictions as the
Undersigned shall reasonably request, and do any and
all other acts and things that may be reasonably
necessary or advisable to enable the Undersigned to
consummate the disposition in such jurisdictions of
the Shares, except that the Company shall not for any
such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction
where, but for the requirements of this clause (ii),
it would not be obligated to be so qualified, to
-7-
<PAGE> 8
subject itself to taxation in any such jurisdiction,
or to consent to general service of process in any
such jurisdiction;
(iii) use all reasonable efforts to cause
the Shares to be registered with or approved by such
other governmental agencies or authorities as may be
necessary to enable the Undersigned to consummate the
disposition of the Shares;
(iv) promptly notify the Undersigned,
after becoming aware thereof, (A) when the
Registration Statement or any related prospectus or
any amendment or supplement has been filed, and, with
respect to the Registration Statement or any
post-effective amendment, when the same has become
effective, (B) of any request by the SEC for
amendments or supplements to the Registration
Statement or the related prospectus or for additional
information, (C) of the issuance by the SEC of any
stop order suspending the effectiveness of the
Registration Statement or the initiation of any
proceedings for that purpose, (D) of the receipt by
the Company of any notification with respect to the
suspension of the qualification of the Shares for
sale in any jurisdiction or the initiation of any
proceeding for such purpose, or (E) the happening of
any event which makes the Registration Statement or
any post-effective amendment thereto, related
prospectus or any amendment or supplement thereto, or
any document incorporated therein by reference,
contain any untrue statement of a material fact or
omit to state any material fact required to be stated
therein or necessary to make the statements therein
(in the case of any prospectus, in the light of the
circumstances under which they were made) not
misleading;
(v) use all reasonable efforts to obtain
the withdrawal of any order suspending the
effectiveness of the Registration Statement or any
post-effective amendment thereto;
(vi) otherwise use its best efforts to
comply with all applicable rules and regulations of
the SEC, and make available to its security holders,
as soon as reasonably practicable (but not more than
fifteen months) after the effective date of the
Registration Statement, an earnings statement that
shall satisfy the provisions of Section 11(a) of the
Securities Act and the rules and regulations
promulgated thereunder;
(vii) use all reasonable efforts to list
the Shares on any securities exchange on which the
Common Stock is then listed;
(viii) make available at reasonable times
for inspection by the Undersigned and by any
attorney, accountant or other agent retained by the
Undersigned all pertinent financial and other
records, pertinent corporate documents and properties
of the Company, and cause all of the Company's
officers, directors and employees
-8-
<PAGE> 9
to supply all information reasonably requested by the
Undersigned or any attorney, accountant or agent
retained by the Undersigned in connection with the
Registration Statement; and
(ix) permit the Undersigned, acting
reasonably, to specify the manner in which the Shares
shall be sold or distributed, and cause the
prospectus to state, if so specified by the
Undersigned and to the extent permitted by applicable
law, that among the methods of disposition included
in the Undersigned's plan of distribution, sales may
be made by the Undersigned from time to time in the
open market or in privately negotiated transactions
at prevailing market prices or at such other prices
as shall be agreed upon by the Undersigned and the
purchaser(s) of such securities.
Notwithstanding the foregoing, the Company shall not be
obligated to effect a registration or qualification under this
Section 6(a) during any period (i) in which the Company is in
possession of material non-public information concerning it or
its business and affairs, which, in the judgment of the Board
of Directors of the Company, should not be publicly disclosed;
or (ii) in which the Company is engaged in any material
acquisition transaction or disposition transaction that would,
in the judgment of the Board of Directors of the Company, be
significantly disrupted by such registration, or
qualification; provided, however, that the Company may not
pursuant to this paragraph delay or fail to effect the
registration or qualification required under this Agreement
for more than two periods of up to 75 days, but in no event
for more than 120 days.
(b) The Company may require the Undersigned to
furnish the Company with such information regarding the
Undersigned and pertinent to the disclosure requirements
relating to the registration and the distribution of the
Shares as the Company may from time to time reasonably request
in writing.
(c) The Undersigned agrees that, upon receipt of
any notice from the Company of the happening of any event of
the kind described in clauses (B) through (D) of Section
6(a)(iv) hereof, the Undersigned will forthwith discontinue
disposition of the Shares pursuant to the Registration
Statement until, with respect to Section 6(a)(iv)(B), the
lifting of such stop order or the favorable conclusion of such
proceedings or, with respect to clauses (C) and (D) of Section
6(a)(iv), the Undersigned's receipt of the copies of the
supplemented or amended prospectus and, with respect to
clauses (C) and (D) of Section 6(a)(iv), if so directed by the
Company, the Undersigned will deliver to the Company (at the
Company's expense) all copies, other than pertinent file
copies then in the Undersigned's possession, of the prospectus
covering the Shares current at the time of receipt of such
notice.
-9-
<PAGE> 10
(d) Registration to be Kept Effective. In
connection with such registration pursuant to the Registration
Statement, the Company shall, at its expense, (a) keep
effective and maintain such registration and any related
qualification of Shares under state securities laws until the
first anniversary of the Subscription Closing Date, (b) from
time to time amend or supplement the prospectus used in
connection therewith to the extent necessary to comply with
applicable laws, including the preparation and filing with the
SEC of such amendments, post-effective amendments and
supplements to the Registration Statement and the related
prospectus as may be necessary to maintain the effectiveness
of the Registration Statement for such period and to cause the
related prospectus (and any amendments or supplements thereto)
to be filed pursuant to Rules 424 and 430A under the
Securities Act or any successor rules that may be adopted by
the SEC, as such rules may be amended from time to time, (c)
comply with the provisions of the Securities Act with respect
to the disposition of all Shares covered by the Registration
Statement during the applicable period in accordance with the
intended method or methods of distribution thereof, and (d)
furnish to the Undersigned such number of copies of the
Registration Statement and the prospectus constituting a part
thereof and any amendment or supplement thereto as the
Undersigned may reasonably request in order to facilitate the
disposition of the Shares so registered.
(e) Expenses. The Company will pay all
Registration Expenses in connection with the registration of
the Shares. For purposes of this Subscription Agreement,
"Registration Expenses" shall mean any and all expenses
incident to the registration of the Shares, including, without
limitation, (i) all SEC and stock exchange or National
Association of Securities Dealers, Inc. registration and
filing fees, (ii) all fees and expenses of complying with
securities or blue sky laws, (iii) all printing, messenger and
delivery expenses, (iv) all fees and expenses incurred in
connection with the listing of the Shares on any securities
exchange, and (v) the fees and disbursements of counsel for
the Company and of its independent public accountants; but
excluding any underwriting discounts and selling commissions.
(f) Rule 144. The Company covenants that it will
file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder, and it will take
such further action as the Undersigned may reasonably request,
all to the extent required from time to time to enable the
Undersigned to sell the Shares without registration under the
Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such
rules may be amended from time to time, or (ii) any similar
rule or regulation hereafter adopted by the SEC. Upon the
request of the Undersigned, the Company will deliver to the
Undersigned a written statement as to whether it has complied
with such requirements.
7. Indemnification for Registration.
-10-
<PAGE> 11
(a) Indemnification by the Company. The Company
shall indemnify and hold harmless the Undersigned and each
underwriter, if any,and each person controlling any such
underwriter against any and all losses, claims, damages or
liabilities, and expenses to which the Undersigned may become
subject under the Securities Act, common law or otherwise,
insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof, whether commenced
or threatened) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary,
final or summary prospectus contained therein (except where
errors or omissions in such preliminary prospectus are
corrected in the final prospectus and the Undersigned fails to
deliver such final prospectus) or in any amendment or
supplement thereto or any document incorporated by reference
therein or (ii) any 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
the Company will reimburse the Undersigned for any legal or
any other expenses reasonably incurred by it in connection
with investigating or defending any such loss, claim,
liability, action or proceeding; provided, that the Company
shall not be liable to the Undersigned in any such case to the
extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises out of or
is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in the Registration
Statement or amendment or supplement thereto or in any such
preliminary, final or summary prospectus in reliance upon and
in conformity with written information with respect to the
Undersigned furnished to the Company by the Undersigned
specifically for use in the preparation thereof. The
indemnity agreements contained in this Section 7(a) shall not
apply to amounts paid in settlement of claims if such
settlement is effectuated without the consent of the Company
(which shall not be unreasonably withheld). Such indemnity
shall remain in full force and effect regardless of any
investigation made by or on behalf of the Undersigned and
shall survive the transfer of the Shares by the Undersigned.
(b) Indemnification by the Undersigned. The
Undersigned shall indemnify and hold harmless, each affiliate
of the Company and their respective directors and officers
(and the directors, officers, affiliates and controlling
persons thereof, as defined in Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), (collectively, the "Company
Indemnified Parties"), against any and all losses, claims,
damages or liabilities, and expenses to which any such Company
Indemnified Party may become subject under the Securities Act,
common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect
thereof, whether commenced or threatened) arise out of or are
based upon any statement or alleged statement in or omission
or alleged omission from the Registration Statement, any
preliminary, final or summary prospectus contained therein, or
any amendment or supplement, if such statement or alleged
statement or omission or alleged omission was made in reliance
upon and in conformity with written information with respect
to the Undersigned furnished to the Company by the Undersigned
specifically for
-11-
<PAGE> 12
use in the preparation of the Registration Statement,
preliminary, final or summary prospectus or amendment or
supplement, or a document incorporated by reference into any
of the foregoing; provided, however, that the indemnity
agreement contained in this Section 7(b) shall not apply to
amounts paid in settlement of any loss, claim, damage,
liability or action arising if such settlement is effected
without the consent of the Undersigned (which consent shall
not be unreasonably withheld). Such indemnity shall remain in
full force and effect regardless of any investigation made by
or on behalf of the Company or any other Company Indemnified
Party and shall survive the transfer of the Shares by the
Undersigned.
(c) Notices of Claims, Etc. Promptly after
receipt by the Undersigned or a Company Indemnified Party
(collectively, an "Indemnity Party") hereunder of written
notice of the commencement of any action or proceeding with
respect to which a claim for indemnification may be made
pursuant to this Section 7, such Indemnified Party will, if a
claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement
of such action; provided, that the failure of such Indemnified
Party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding
sections of this Section 7, except to the extent that the
indemnifying party is actually prejudiced by such failure to
give notice, and in no event shall such omission relieve the
indemnifying party from any other liability it may have to
such Indemnified Party. In case any such action is brought
against an Indemnified Party, unless in such Indemnified
Party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist in respect
of such claim, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with
any other indemnifying party similarly notified to the extent
that it may wish, with counsel reasonably satisfactory to such
Indemnified Party, and after notice from the indemnifying
party to such Indemnified Party of its election so to assume
the defense thereof, the indemnifying party will not be liable
to such Indemnified Party for any legal or other expenses
subsequently incurred by the latter in connection with the
defense thereof. No indemnifying party will consent to entry
of any judgment or enter into any settlement that does not
include as an unconditional term thereof, the giving by the
claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) Contribution. If the indemnification
provided for in this Section 7 from the indemnifying party is
unavailable to an Indemnified Party hereunder in respect of
any losses, claims, damages, liabilities or expenses referred
to herein, then the indemnifying party, in lieu of
indemnifying such Indemnified Party shall contribute to the
amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses in
such proportion as is appropriate to reflect the relative
fault of the indemnifying party and such Indemnified Party in
connection with the actions that resulted in such losses,
claims, damages, liabilities or expenses, as well as any other
relevant
-12-
<PAGE> 13
equitable considerations. The relative fault of such
indemnifying party and an Indemnified Party shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or by such
Indemnified Party. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section
7(d) were determined: (i) by pro rata allocation or (ii) by
any other method of allocation that does not take account of
the equitable considerations referred to in this Section 7(d).
The amount paid or payable by an Indemnified Party as a result
of the losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) referred to above shall be
deemed to include (subject to the limitations set forth in
Section 7(c) hereof) any legal or other fees or expenses
reasonably incurred by such Indemnified Party in connection
with investigating or defending any such action, proceeding or
claim. No party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any party who was not
guilty of such fraudulent misrepresentation.
(e) Non-Exclusivity. The obligations of the
parties under this Section 7 shall be in addition to any
liability which any party may otherwise have to any other
party.
8. Notices. All notices and other communications provided for
herein shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid or sent by telecopy or facsimile transmission:
(a) if to the Company, to the following address:
Newfield Exploration Company
363 W. Sam Houston Pkwy E, Suite 2020
Houston, Texas 77060
Telecopy: (281) 405-4255
Attn: Terry W. Rathert
(b) if to the Undersigned, to the address or telecopy
number set forth on the signature page hereto;
(c) or at such other address or telecopy number as
either party shall have specified by notice in writing to the other.
Such notices shall be effective (i) if delivered in person or by courier, upon
actual receipt by the intended recipient, (ii) if sent by telecopy or facsimile
transmission, when the sender receives telecopier confirmation that such notice
was received at the telecopier number of the addressee, or
-13-
<PAGE> 14
(iii) if mailed, upon the earlier of five days after deposit in the mail and
the date of delivery as shown by the return receipt therefor.
9. Notification of Changes. The Undersigned agrees and covenants
to notify the Company immediately upon the occurrence of any event prior to the
Subscription Closing Date which would cause any representation, warranty,
covenant or other statement contained in this Subscription Agreement to be
false or incorrect or of any change in any statement made herein occurring
prior to the Subscription Closing Date.
10. Assignability. This Subscription Agreement is not assignable
by the Undersigned, and may not be modified, waived or terminated except by an
instrument in writing signed by the party against whom enforcement of such
modification, waiver or termination is sought.
11. Binding Effect. Except as otherwise provided herein, this
Subscription Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and assigns, and the agreements, representations, warranties
and acknowledgments contained herein shall be deemed to be made by and be
binding upon such heirs, executors, administrators, successors, legal
representatives and assigns.
12. Termination. The Subscription Agreement may be terminated,
and the transactions contemplated hereby abandoned at any time prior to the
Subscription Closing Date: (i) by mutual consent of the Company and the
Undersigned; (ii) by the Company or the Undersigned upon termination of the
Asset Purchase Agreement; (iii) by the Company, if any representation or
warranty of the Undersigned contained in Section 3 hereof shall have become
untrue such that the conditions in Section 5 would not be satisfied; (iv) by
the Undersigned, if any representation or warranty of the Company contained in
Section 2 hereof shall have become untrue such that the conditions in Section 5
would not be satisfied; or (v) by the Company or the Undersigned, as
applicable, pursuant to Section 1(b).
13. Entire Agreement. This Subscription Agreement constitutes the
entire agreement of the Undersigned and the Company relating to the matters
contained herein, superseding all prior contracts or agreements, whether oral
or written.
14. Governing Law. This Subscription Agreement shall be governed
by and construed in accordance with the laws of the State of Texas, as such law
applies to agreements between Texas residents entered into and to be performed
entirely within Texas, exclusive of any conflicts of law principles; and the
parties hereto agree that the state and federal courts situated in Harris
County, Texas shall have personal jurisdiction over the parties hereto to hear
all disputes arising under this Subscription Agreement. This Subscription
Agreement is to be at least partially performed in Harris County, Texas and, as
such, the parties agree that venue shall be proper with the state or federal
courts in Harris County, Texas to hear such disputes. If any party is not able
to effect service of process upon any other party with respect to such
disputes, such other party
-14-
<PAGE> 15
expressly agrees that the Secretary of State for the State of Texas shall be an
agent for such other party to receive service of process on behalf of such
other party with respect to such disputes.
15. Severability. If any provision of this Subscription Agreement
or the application thereof to the Undersigned or any circumstance shall be held
invalid or unenforceable to any extent, the remainder of this Subscription
Agreement and the application of such provision to other subscriptions or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
16. Headings. The headings in this Subscription Agreement are
inserted for convenience and identification only and are not intended to
describe, interpret, define, or limit the scope, extent or intent of this
Subscription Agreement or any provision hereof.
17. Counterparts. This Subscription Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which together shall be deemed to be one
and the same agreement.
-15-
<PAGE> 16
IN WITNESS WHEREOF, the Undersigned has executed this Subscription
Agreement this 15th day of May, 1997.
/s/ David A. Trice
-----------------------------------------------
David A. Trice
Address and fax number:
322 Yorkchester
Houston, TX 77079
Agreed to and Accepted:
NEWFIELD EXPLORATION COMPANY
By: /s/ Terry W. Rathert
-----------------------------------
Terry W. Rathert
Vice President and
Chief Financial Officer
-16-
<PAGE> 1
EXHIBIT 10.14
ASSET PURCHASE AGREEMENT
AMONG
NEWFIELD OFFSHORE INC.,
HUFFCO INTERNATIONAL, L.L.C.
AND
HUFFCO TURKEY, INC.
MAY 12, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . 1
1.02 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 CASH PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . 2
1.04 ADJUSTMENT TO CASH PURCHASE PRICE . . . . . . . . . . . . . 2
1.05 ESPOIR FIELD . . . . . . . . . . . . . . . . . . . . . . . . 2
1.06 NIGERIAN VENTURE . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF HUFFCO TURKEY
2.01 GOOD TITLE . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02 ORGANIZATION AND QUALIFICATION . . . . . . . . . . . . . . . 4
2.03 AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.04 VALIDITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . 4
2.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES . . . . . . . . 5
3.02 ORGANIZATIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . 6
3.03 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . 6
3.04 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.05 VALIDITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . 7
3.06 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . 8
3.07 PERMITS; COMPLIANCE . . . . . . . . . . . . . . . . . . . . 8
3.08 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 9
3.09 ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . . . 9
3.10 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.11 EMPLOYEE BENEFIT PLANS; LABOR MATTERS . . . . . . . . . . . 10
3.12 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 CERTAIN BUSINESS PRACTICES . . . . . . . . . . . . . . . . . 13
3.14 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . 13
3.15 CERTAIN AGREEMENTS . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
3.16 CONTRACTS AND COMMITMENTS . . . . . . . . . . . . . . . . . 14
3.17 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . 15
3.18 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.19 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.20 ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
4.01 ORGANIZATION AND QUALIFICATION . . . . . . . . . . . . . . . 16
4.02 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.03 VALIDITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . 16
4.04 NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . . . 16
4.05 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . 17
4.06 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . 17
5.02 NEGATIVE COVENANTS OF THE COMPANY . . . . . . . . . . . . . 18
ARTICLE VI
COVENANTS OF HUFFCO TURKEY
6.01 COVENANTS OF HUFFCO TURKEY . . . . . . . . . . . . . . . . . 20
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS . . . . . . . . . . . . . . 20
7.02 ACCESS AND INFORMATION . . . . . . . . . . . . . . . . . . . 21
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS . . . . . . . . . . . 22
7.04 PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . 23
7.05 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.06 USE OF HUFFCO NAME . . . . . . . . . . . . . . . . . . . . . 23
7.07 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.08 REPLACEMENT OF BONDS, LETTERS OF CREDIT AND GUARANTEES . . . 24
7.09 RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS . . . 24
7.11 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
7.12 SCOPE OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 29
7.13 CERTAIN TAX MATTERS . . . . . . . . . . . . . . . . . . . . 30
7.14 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . 30
7.15 REPURCHASE OF HUFFCO CHINA PREFERRED SHARES . . . . . . . . 30
ARTICLE VIII
CONDITIONS
8.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. . . . . . 31
8.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR . . . . . . 31
8.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND HUFFCO
TURKEY . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IX
MISCELLANEOUS
9.01 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 33
9.02 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . 33
9.03 WAIVER AND AMENDMENT . . . . . . . . . . . . . . . . . . . . 34
9.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES . . . . . . . . 34
9.05 ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.06 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . 34
9.07 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.08 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 37
9.09 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . 37
9.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . 37
9.11 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.12 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
EXHIBITS:
Exhibit A -- Form of Declaration of Members Establishing the
Preferences, Limitations and Relative Rights of Series
"A" Preferred Shares of Huffco China, LDC
Exhibit B -- Form of Huffington Subscription Agreement
Exhibit C -- Form of Trice Subscription Agreement
Exhibit D -- Form of General Conveyance, Assignment and Bill of
Sale
Exhibit E -- Form of Assumption Agreement
Exhibit F -- Form of Guaranty Agreement
-iii-
<PAGE> 5
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made and entered
into as of May 12, 1997 by and among Newfield Offshore Inc., a Bahamian company
("Acquiror"), Huffco International, L.L.C., a Delaware limited liability
company (the "Company"), and Huffco Turkey, Inc., a Delaware corporation
("Huffco Turkey" and, together with the Company, the "Sellers").
WHEREAS, the Sellers are the sole record and beneficial owners of all
of the issued and outstanding common shares, par value U.S. $1.00 per share
("Huffco China Shares"), of Huffco China, LDC, a Bahamian limited duration
company ("Huffco China");
WHEREAS, it is a condition to the obligations of the Sellers to
consummate the transactions contemplated by this Agreement that Acquiror's
indirect parent company, Newfield Exploration Company, a Delaware corporation
("Newfield"), guarantee certain of the obligations of Acquiror pursuant to this
Agreement; and
WHEREAS, pursuant to the terms and subject to the conditions set forth
in this Agreement, (a) the Company desires to sell the assets hereinafter
described (including all of the Huffco China Shares owned by the Company) to
Acquiror, (b) Huffco Turkey desires to sell all the Huffco China Shares owned
by Huffco Turkey to Acquiror and (c) Acquiror desires to acquire such assets
and Huffco China Shares;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements herein contained, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
THE ACQUISITION
1.01 THE ACQUISITION. Pursuant to the terms and subject to the
conditions set forth in this Agreement, Acquiror agrees to purchase from (a)
the Company all of the assets of the Company and its subsidiaries except as set
forth on Schedule 1.01(a) hereto (the "Company Assets") and (b) Huffco Turkey
all of the issued and outstanding Huffco China Shares held by Huffco Turkey for
aggregate consideration of (i) a cash purchase price, subject to adjustment as
provided in Section 1.04, of $5,850,000 (the "Cash Purchase Price"), $5,800,000
of which is payable to the Company and $50,000 of which is payable to Huffco
Turkey, (ii) the contingent payments described in Sections 1.05 and 1.06 (the
"Contingent Payments"), (iii) the assumption by Acquiror, subject to Section
7.11 of this Agreement, of all of the obligations and liabilities set forth on
Schedule 1.01(b) hereto (the "Specifically Assumed Liabilities") and (iv) the
assumption by Acquiror, subject to Section 7.11 of this Agreement, of all of
the other obligations and liabilities, whether known or unknown, contingent or
accrued, of the Company arising with respect to the Company's operations prior
to the Closing (as defined in Section 9.06) other than those set forth on
Schedule 1.01(c) hereto (such assumed liabilities and obligations, together
with the Specifically Assumed Liabilities, are hereinafter referred to as the
"Assumed Liabilities"). Pursuant to the terms and subject to the conditions
set forth in this Agreement, (a) the Company agrees to sell the Company Assets
to
<PAGE> 6
Acquiror in consideration for $5,800,000 of the Cash Purchase Price, the
Contingent Payments and the assumption by Acquiror of the Assumed Liabilities
and (b) Huffco Turkey agrees to sell all of the Huffco China Shares held by it
to Acquiror in consideration for $50,000 of the Cash Purchase Price. The
transactions referred to in this Section 1.01 are hereinafter referred to
collectively as the "Acquisition."
1.02 CLOSING. The Closing shall take place (a) at 10:00 a.m. on
May 15, 1997 or, if later, the second business day following the date on which
the conditions set forth in Article VIII (other than the conditions set forth
in Sections 8.01(b), 8.02(c), 8.02(e), 8.03(c), 8.03(d) and 8.03(f) and the
delivery of the certificates described in Sections 8.02(a), 8.02(b), 8.03(a)
and 8.03(b)) of this Agreement have been (or, in the case of Sections 8.02(a),
8.02(b), 8.03(a) and 8.03(b), would be on such date) satisfied or, if
permissible, waived, at the offices of Vinson & Elkins L.L.P. located at 2300
First City Tower, 1001 Fannin, Houston, Texas or (b) at such other date, place
and time as the parties hereto may agree in writing.
1.03 CASH PURCHASE PRICE. Subject to satisfaction or, if
permissible, waiver of the conditions set forth in Article VIII, the Cash
Purchase Price shall be paid by Acquiror at the Closing as follows: (a)
$5,800,000 (as such amount may be adjusted by Section 1.04) shall be paid to
the Company in immediately available funds and (b) $50,000 shall be paid to
Huffco Turkey in immediately available funds, in each case by wire transfer to
the account or accounts designated by the applicable Seller at least three
business days before Closing.
1.04 ADJUSTMENT TO CASH PURCHASE PRICE. The Cash Purchase Price
payable to the Company shall be increased by an amount equal to (a) all
payments made to the Company for the exercise of options under the Option Plan
(as defined in Section 5.02) on or after the date of this Agreement but before
the Closing and (b) all payments by the shareholders of the Company (the
"Shareholders") to the Company on or after May 1, 1997 pursuant to those
certain Promissory Notes made on or about February 20, 1996 payable to the
Company by the Shareholders in connection with the acquisition of their
respective interests in the Company.
1.05 ESPOIR FIELD.
(a) Contingent Payment. The parties hereby recognize and
acknowledge that the Company has in the past taken certain actions for the
purpose of acquiring an interest in production blocks CI-26 and CI-40, offshore
Cote d'Ivoire (the "Espoir Blocks"), and that Acquiror or another Newfield
company (as defined in Section 9.06 of this Agreement) may continue the
activities previously commenced by the Company after the Closing if the Espoir
Blocks become available. Subject to any right of offset pursuant to Section
7.11 of this Agreement, Acquiror hereby covenants and agrees that, if Acquiror,
any other Newfield company or any joint venture (whether in the form of an
entity or otherwise) in which any Newfield company holds an interest
successfully acquires an interest in either of the Espoir Blocks, either alone
or jointly with other parties (the "Espoir Interest") at any time prior to the
fifth anniversary of the Closing Date (as defined in Section 9.06), Acquiror
shall within 90 days after the consummation of the acquisition of the Espoir
Interest, pay to the Company, in immediately available funds by wire transfer
to an account or accounts specified by the Company, a one-time payment in an
amount determined in accordance with Section 1.05(b) below (the "Espoir Payment
Amount").
-2-
<PAGE> 7
(b) Determination of Espoir Payment Amount. If the
Espoir Value determined pursuant to Section 1.05(c) below is less than or equal
to $1,240,000 (representing the amount of the Company's sunk costs), the Espoir
Payment Amount shall be equal to the Espoir Value. If the Espoir Value is
greater than $1,240,000, the Espoir Payment Amount shall be equal to $1,240,000
plus 50% of the excess of the Espoir Value over $1,240,000.
(c) Determination of Espoir Value. Subject to adjustment
pursuant to the final sentence of this Section 1.06(c), the Espoir Value shall
be deemed to equal $4,000,000, unless Acquiror, any other Newfield company or
any joint venture (whether in the form of an entity or otherwise) in which any
Newfield company holds an interest contemporaneously with or prior to the
acquisition of the Espoir Interest transfers or agrees to transfer all or a
portion of the Espoir Interest to an unaffiliated third party (other than
Petroci) for value pursuant to an arm's length transaction, in which case, the
Espoir Value shall equal the value of consideration received by Acquiror or any
of its subsidiaries (whether in the form of up-front cash payments, exchanged
properties, overriding royalties or otherwise) divided by the fraction of the
Espoir Interest which was transferred or agreed to be transferred. In the
event the Company and Acquiror are unable to agree on the value of any noncash
consideration paid or to be paid to Acquiror or any of its subsidiaries, such
parties shall retain a mutually agreed upon independent petroleum engineer to
determine such value, and his determination shall be binding upon the Company
and Acquiror. The fees and expenses of such independent petroleum engineer
shall be borne equally by the Company and Acquiror. If any portion of the
Espoir Interest is assigned by the government of Cote d'Ivoire to Petroci or to
any other person who has neither reviewed data related to the Espoir Blocks
that was furnished by the Company or any Newfield company nor entered into an
agreement regarding the Espoir Blocks with the Company or any Newfield company
(an "Unrelated Person"), the Espoir Value as otherwise determined by this
Section 1.06(c) shall be proportionately reduced by eliminating a percentage of
such Espoir Value equal to the percentage of the Espoir Interest held by all
Unrelated Persons.
(d) Allocation of Consideration Received. The parties
hereby recognize and agree that the contingent Espoir Payment Amount is being
paid by Acquiror as consideration for the Company's interest in the development
of the Espoir Blocks project.
1.06 NIGERIAN VENTURE.
(a) Subject to any right of offset pursuant to Section
7.11 of this Agreement, Acquiror hereby covenants and agrees that, in the event
Acquiror, any other Newfield company or any joint venture (whether in the form
of an entity or otherwise) in which any Newfield company holds an interest
commits to a development program in or offshore of Nigeria pursuant to
Nigeria's Petroleum Act and Petroleum (Drilling and Productions) Regulations at
any time prior to the fifth anniversary of the Closing Date, Acquiror shall
within 90 days after the commitment to such development program, pay to the
Company, in immediately available funds by wire transfer to an account or
accounts specified by the Company, a one-time payment in the amount of
$1,000,000.
(b) Allocation of Consideration Received. The parties
hereby recognize and agree that the contingent payment provided pursuant to
this Section 1.06 is being paid by Acquiror as consideration for the Company's
interest in the development of a project in Nigeria.
-3-
<PAGE> 8
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF HUFFCO TURKEY
Huffco Turkey represents and warrants to Acquiror that:
2.01 GOOD TITLE. Huffco Turkey is the sole record and beneficial
owner of, and has good and valid title to, one Huffco China Share, free and
clear of all liens, claims, encumbrances, options, voting trusts, voting
agreements, proxies or other claims or charges of any nature whatsoever (other
than resulting from this Agreement or established by the terms of the
Memorandum and Articles of Association of Huffco China). Upon the transfer of
such Huffco China Share to Acquiror pursuant to the terms of this Agreement,
Acquiror shall be the owner of, and have good and valid title to, such Huffco
China Share, free and clear of all liens, claims, encumbrances, options, voting
trusts, voting agreements, proxies or other claims or charges of any nature
whatsoever (other than resulting from this Agreement or established by the
terms of the Memorandum and Articles of Association of Huffco China).
2.02 ORGANIZATION AND QUALIFICATION. Huffco Turkey is a
corporation duly organized, validly existing and in good standing under the
laws of Delaware. Huffco Turkey has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary.
2.03 AUTHORITY. Huffco Turkey has all requisite corporate power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Huffco Turkey and the performance
by Huffco Turkey of its obligations hereunder, including the consummation of
the transactions contemplated hereby, have been duly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
Huffco Turkey are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Huffco Turkey.
2.04 VALIDITY OF AGREEMENT. Assuming the due authorization,
execution and delivery hereof by Acquiror, this Agreement constitutes the
legal, valid and binding obligation of Huffco Turkey enforceable in accordance
with its terms, (a) except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to or affecting creditors' rights generally, and without limitation,
the effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers and (b) subject to the limitations imposed by general
rules of equity (regardless of whether such enforceability is considered at law
or in equity).
-4-
<PAGE> 9
2.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by
Huffco Turkey does not, and the performance by Huffco Turkey of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not (i) conflict with or violate the Certificate of Incorporation or equivalent
organizational documents, in each case as amended or restated, of Huffco Turkey
or any of its subsidiaries, (ii) conflict with or violate any federal, state,
foreign or local law, statute, ordinance, rule or regulation (collectively,
"Laws") or any judgment, order, writ, injunction, determination, arbitration
award or decree applicable to Huffco Turkey or any of its subsidiaries or by or
to which any of their respective properties is bound or subject or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation or imposition of a mortgage, pledge, lien,
security interest or other charge or encumbrance on any of the properties or
assets of Huffco Turkey or any of its subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
authorization, franchise or other instrument or obligation to which Huffco
Turkey or any of its subsidiaries is a party or by or to which Huffco Turkey or
any of its subsidiaries or any of their respective properties is bound or
subject.
(b) The execution and delivery of this Agreement by
Huffco Turkey does not, and the performance by Huffco Turkey of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not, require Huffco Turkey to obtain any consent, license, permit, certificate,
waiver, approval, authorization or order of, or to make any filing with or
notification to, any foreign, federal, national, republic, provincial, state,
territorial, county, municipal or city agency, department, commission, board,
office, bureau, court, tribunal or any other political entity, aggregation, or
subdivision of any of the foregoing (each, a "Governmental Entity"), except as
disclosed in Schedule 2.05(b) hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Acquiror that:
3.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company is
a Delaware limited liability company, and the Company and each of its
subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, and the Company
and each of its subsidiaries has all requisite power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary.
Schedule 3.01(a) hereto sets forth a true and complete list of all the
Company's directly or indirectly owned subsidiaries, together with the
jurisdiction of incorporation or organization of each subsidiary, the
jurisdictions in which each such subsidiary is qualified to conduct business
and the percentage of each subsidiary's outstanding capital stock or other
equity interests owned by the Company or
-5-
<PAGE> 10
another subsidiary of the Company. Except (i) as set forth in Schedule 3.01(b)
hereto or (ii) for subsidiaries of the Company set forth in Schedule 3.01(a)
hereto, neither the Company nor any of its subsidiaries (x) directly or
indirectly owns, (y) has agreed to purchase or otherwise acquire or (z) holds
any interest convertible into or exchangeable or exercisable for, the capital
stock or other equity interest of any corporation, partnership, limited
liability company or other business entity.
3.02 ORGANIZATIONAL DOCUMENTS. The Company has heretofore
furnished to Acquiror complete and correct copies of the limited liability
company agreement, articles of association or equivalent organizational
documents, in each case as amended or restated to the date hereof, of the
Company and each of its subsidiaries. Neither the Company nor any of its
subsidiaries is in violation of any of the provisions of its limited liability
company agreement, articles of association or equivalent organizational
documents.
3.03 CAPITALIZATION.
(a) Huffco China. The authorized capital of Huffco China
amounts to U.S. $5,100 and consists of 5,000 Huffco China Shares and 1,125,000
Series "A" Preferred Shares, no par value ("Huffco China Preferred Shares").
Of the authorized Huffco China Shares, 100 are issued and outstanding, of such
issued and outstanding shares, 99 are held of record and beneficially by the
Company and one is held of record and beneficially by Huffco Turkey. As of the
date of this Agreement, no Huffco China Preferred Shares were issued or
outstanding. Prior to the Closing, Huffco China shall issue 1,125,000 Huffco
China Preferred Shares to the Company. Such issued and outstanding Preferred
Shares shall have the preferences, limitations and relative rights described in
Exhibit A to this Agreement. No Huffco China Shares or Huffco China Preferred
Shares are held by Huffco China in its treasury or by the Company's
subsidiaries . Except as set forth above, there are no capital shares
(including preferred shares) of, or other equity interests in, Huffco China
authorized, issued, outstanding or reserved for issuance for any purpose.
(b) Huffco (West Africa) Inc. The authorized capital of
Huffco (West Africa) Inc. amounts to U.S.$5,000 and consists of one class of
shares with 5,000 shares, U.S.$1.00 par value per share ("Common Shares"). Of
the authorized Common Shares, 100 will be issued to the Company prior to the
Closing and will comprise all of the issued and outstanding shares of Huffco
(West Africa) Inc. No Common Shares are held by Huffco (West Africa) Inc. in
its treasury or by the Company's subsidiaries. Except as set forth above,
there are no capital shares (including preferred shares) of, or other equity
interests in, Huffco (West Africa) Inc. authorized, issued, outstanding or
reserved for issuance for any purpose.
(c) Each of the issued capital shares of, or other equity
interests in, each of the Company's subsidiaries is or, with respect to Huffco
(West Africa) Inc., will be duly authorized, validly issued and, in the case of
capital shares, fully paid and nonassessable, and has not been or, with respect
to Huffco (West Africa) Inc., will not be issued in violation of, nor are any
of the authorized capital shares of, or other equity interests in, the
Company's subsidiaries subject to, any preemptive right, right of first refusal
or similar rights created by statute, the articles of association or the
equivalent organizational documents of any of the Company's subsidiaries, or
any agreement to which the Company or any of its subsidiaries is a party or is
bound, and all such issued shares or other equity interests of the Company's
subsidiaries described on Schedule 3.01(a) hereto
-6-
<PAGE> 11
("Subsidiary Shares"), except those shares shown as owned by Huffco Turkey, are
owned or, with respect to Huffco (West Africa) Inc., will be owned by the
Company or a subsidiary of the Company free and clear of all security
interests, liens, claims, pledges, agreements, limitations on the Company's or
such subsidiaries' voting rights, charges or other encumbrances of any nature
whatsoever, except as resulting from this Agreement or established by the terms
of the subsidiaries' organizational documents. Upon the transfer of such
Subsidiary Shares to Acquiror pursuant to the terms of this Agreement, Acquiror
shall be the owner of, and have good and valid title to, such Subsidiary
Shares, free and clear of all liens, claims, encumbrances, options, voting
trusts or agreements, proxies or other claims or charges of any nature
whatsoever (other than resulting from this Agreement or established by the
terms of the subsidiaries' organizational documents). No bonds, debentures,
notes or other indebtedness of the Company's subsidiaries having the right to
vote (or convertible into or exchangeable or exercisable for securities having
the right to vote) on any matters on which shareholders may vote ("Voting
Debt") are issued or outstanding.
(d) There are no outstanding subscriptions, options,
warrants or other rights (including registration rights), agreements,
arrangements or commitments of any character to which the Company or any of its
subsidiaries is a party relating to the issued or unissued capital stock or
other equity interests of the Company's subsidiaries (including any right or
potential right to payment based in any manner upon, or calculated with
reference to, the revenues, cash flow or earnings of any of the Company's
subsidiaries) or obligating the Company or any of its subsidiaries to grant,
issue or sell any shares of capital stock, Voting Debt or other equity
interests of the Company's subsidiaries. Except as set forth on Schedule
3.03(d) hereto, there are no obligations, contingent or otherwise, (i) of any
subsidiary of the Company to repurchase, redeem or otherwise acquire any shares
or other capital stock of the Company or the capital stock or other equity
interests of any subsidiary of the Company or (ii) of the Company or any
subsidiary of the Company to purchase equity interests in, lend funds to or
provide any guarantee with respect to the obligations of, any person. Except
as set forth in Schedule 3.03(d) hereto, there are no voting trusts,
shareholder agreements, proxies or other agreements or understandings with
respect to the voting of any shares of capital stock or other equity interests
of any of the Company's subsidiaries.
3.04 AUTHORITY. The Company has all requisite power and authority
to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
action and no other proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Company.
3.05 VALIDITY OF AGREEMENT. Assuming the due authorization,
execution and delivery hereof by Acquiror, this Agreement constitutes the
legal, valid and binding obligation of the Company enforceable in accordance
with its terms, (a) except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to or affecting creditors' rights generally, and the effect of
statutory or other laws regarding fraudulent conveyances and preferential
transfers and (b) subject to the limitations imposed by general rules of equity
(regardless of whether such enforceability is considered at law or in equity).
-7-
<PAGE> 12
3.06 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the
Company does not, and the performance by the Company of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not (i) conflict with or violate the limited liability company agreement,
articles of association or equivalent organizational documents, in each case as
amended or restated, of the Company or any of its subsidiaries, (ii) conflict
with or violate any Laws or any judgment, order, writ, injunction,
determination, arbitration award or decree applicable to the Company or any of
its subsidiaries or by or to which any of their respective properties is bound
or subject or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or require payment under, or result in the creation or
imposition of a mortgage, pledge, lien, security interest or other charge or
encumbrance on any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, authorization, franchise or other instrument
or obligation to which the Company or any of its subsidiaries is a party or by
or to which the Company or any of its subsidiaries or any of their respective
properties is bound or subject.
(b) The execution and delivery of this Agreement by the
Company does not, and the performance by the Company of its obligations
hereunder, including consummation of the transactions contemplated hereby, will
not, require the Company to obtain any consent, license, permit, certificate,
waiver, approval, authorization or order of, or to make any filing with or
notification to, any Governmental Entity, except as disclosed in Schedule
3.06(b) hereto.
3.07 PERMITS; COMPLIANCE. Each of the Company and its subsidiaries
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, identification and
registration numbers, approvals and orders necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted
(collectively, the "Company Permits"). Schedule 3.07 hereto sets forth a list
of each of the Company Permits and the jurisdiction issuing the same, all of
which are in good standing and, to the Company's knowledge, not subject to
meritorious challenge. Schedule 3.07 hereto also sets forth, as of the date of
this Agreement, all actions, proceedings or investigations pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries that could reasonably be expected to result in the loss,
suspension or revocation of a Company Permit. Except as set forth in Schedule
3.07 hereto, the Company and its subsidiaries are in material compliance with,
and none of them has received from any Governmental Entity any written notice
with respect to any non-compliance with, (i) any Law applicable to the Company
or any of its subsidiaries or by or to which any of their respective properties
is bound or subject, (ii) any judgment, order, writ, injunction determination,
arbitration award or decree applicable to the Company or any of its
subsidiaries or (iii) any of the Company Permits.
-8-
<PAGE> 13
3.08 FINANCIAL STATEMENTS.
(a) The Company has provided Acquiror with true, correct
and complete copies of its (i) unaudited consolidated balance sheet as of, and
its statements of operations and shareholders' equity and statement of cash
flows for the year ended, December 31, 1996 and the notes related thereto and
(ii) unaudited consolidating balance sheet as of, and its statements of
operations and stockholders' deficit and statement of cash flows for the three
months ended, March 31, 1997 (collectively, the "Company Financial
Statements"). Each of the Company Financial Statements (including, in each
case, any related notes thereto) (i) has been prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods covered thereby (except (A) to the extent disclosed
therein or required by changes in GAAP, or (B) as may be indicated in the notes
thereto) and (ii) fairly present the consolidated financial position of the
Company and its subsidiaries as of the respective dates thereof and the
consolidated results of operations and cash flows for the periods indicated
(subject, in the case of interim periods, to adjustments, consisting only of
normal, recurring accruals, necessary to present fairly such results of
operations and cash flows).
(b) Except (i) for reserves specifically reflected or
accrued for (and only to the extent reflected or accrued for) in the balance
sheet dated as of March 31, 1997 included in the Company Financial Statements
(the "Balance Sheet"), (ii) for liabilities incurred in the ordinary course of
business since March 31, 1997, or (iii) as otherwise disclosed in this
Agreement or any schedule to this Agreement (including without limitation
liabilities and obligations pursuant to the Contracts, Leases, Guarantees and
Affiliate Agreements), none of the Company or any of its subsidiaries has any
liabilities or obligations of any nature, whether absolute, accrued, contingent
or otherwise, and whether due or to become due. To the knowledge of the
Company, there is no basis for the assertion against the Company or any of its
subsidiaries of any such liability or obligation not described in clauses (i),
(ii) or (iii) above.
3.09 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated
by this Agreement or as set forth in Schedule 3.09 hereto, since December 31,
1996 the Company and its subsidiaries have conducted their respective
businesses only in the ordinary course and in a manner consistent with past
practice, and there has not been: (a) any damage, destruction or loss with
respect to any property, assets or business of the Company or any of its
subsidiaries that would constitute a Company Material Adverse Effect; (b) any
material increase in the benefits under, or the establishment or amendment of,
any bonus, insurance, severance, deferred compensation, pension, retirement,
profit sharing, performance awards (including, without limitation, the granting
of stock appreciation rights or restricted stock awards), stock purchase or
other employee benefit plan, or any increase in the compensation payable or to
become payable to any of the directors, officers or employees of the Company or
any of its subsidiaries except in the ordinary course of business and
consistent with past practice; (c) any purchase, sale or other disposition, or
any agreement or other arrangement for the purchase, sale or other disposition,
of any of the properties or assets of the Company or any of its subsidiaries
other than pursuant to this Agreement or in the ordinary course of business;
(d) any change in the financial condition, properties, assets, liabilities,
business or operations of the Company or any of its subsidiaries, which change
by itself or in conjunction with all other such changes, whether or not arising
in the ordinary course of business, would or could reasonably be expected to
constitute a Company Material Adverse Effect, other than operating results
-9-
<PAGE> 14
that have been generally consistent with the results reflected in the Company
Financial Statements and any adverse changes affecting the oil industry in
general; (e) any contingent liability incurred by the Company or any of its
subsidiaries as guarantor or otherwise with respect to the obligations of
others or any cancellation of any debt or claim owing to, or waiver of any
right of, the Company or any of its subsidiaries; (f) any mortgage, encumbrance
or lien placed on any of the properties of the Company or any of its
subsidiaries that remains in existence on the date this representation is made;
(g) any payment or discharge of a material lien or liability of the Company or
any of its subsidiaries that was not shown in the Company Financial Statements
or incurred in the ordinary course of business thereafter; or (h) any agreement
or understanding, whether in writing or otherwise, for the Company or any of
its subsidiaries to take any of the actions specified in clauses (a) through
(g) above. The term "Company Material Adverse Effect" as used in this
Agreement shall mean any change or effect that would or could reasonably be
expected to be materially adverse to the assets, business, prospects, condition
(financial or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole, at the time of such change or effect.
3.10 LITIGATION. Except as set forth on Schedule 3.10 hereto,
there is no claim, action, suit, litigation, proceeding, arbitration or, to the
knowledge of the Company, investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief), pending or, to
the knowledge of the Company, threatened against the Company or any of its
subsidiaries or any properties or rights of the Company or any of its
subsidiaries, and neither the Company nor any of its subsidiaries is
specifically the subject of any executory judgment, order, writ, injunction,
decree or award of any Governmental Entity, including without limitation any
cease and desist order and any consent decree, settlement agreement or other
similar written agreement with any Governmental Entity.
3.11 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) Copies of Benefit Plans. Schedule 3.11(a) hereto
provides a list of each Benefit Plan. True, correct and complete copies of each
of such Benefit Plans, and related trusts, if applicable, including all
amendments thereto, have been furnished to Acquiror. There have also been
furnished to Acquiror, with respect to each such Benefit Plan required to file
such report or description, the most recent report on Form 5500 and the summary
plan description.
(b) Employee Benefit Plan Compliance.
(i) Neither the Company nor any of its
subsidiaries contributes to or has an obligation to contribute to, nor
has the Company or any of its subsidiaries at any time within six
years prior to the date of this Agreement contributed to or had an
obligation to contribute to, (A) a Plan subject to Title IV of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or (B) a "multiemployer plan" within the meaning of Section 3(37) of
ERISA.
(ii) All obligations, whether arising by Law or by
contract, required to be performed in connection with the Benefit
Plans have been performed, and there have been no omissions, defaults
or violations by any party with respect to any Benefit Plan or any Law
applicable thereto.
-10-
<PAGE> 15
(iii) Each Plan (as defined in Section 9.06) that
is intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), (A) satisfies the
requirements of such section in all material respects, (B) has
received a favorable determination letter from the Internal Revenue
Service (the "IRS") regarding such qualified status and (C) has not,
since receipt of the most recent favorable determination letter, been
amended or operated in a way that would materially adversely affect
such qualified status.
(iv) There is no matter pending (other than
routine qualification determination filings) with respect to any of
the Benefit Plans before the IRS, the Department of Labor, the Pension
Benefit Guaranty Corporation (the "PBGC") or any other Governmental
Entity.
(v) With respect to any employee benefit plan,
within the meaning of Section 3(3) of ERISA, that is not listed on
Schedule 3.11(a) hereto but which is sponsored, maintained, or
contributed to, or has been sponsored, maintained or contributed to
within six years prior to the date of this Agreement, by any
corporation, trade, business or entity under common control with the
Company or any of its subsidiaries, within the meaning of Section
414(b), (c), (m), or (o) of the Code or Section 4001 of ERISA
("Commonly Controlled Entity"), (A) no withdrawal liability, within
the meaning of Section 4201 of ERISA, has been incurred, which
withdrawal liability has not been satisfied, (B) no liability to the
PBGC has been incurred by any Commonly Controlled Entity, which
liability has not been satisfied, (C) no accumulated funding
deficiency, whether or not waived, within the meaning of Section 302
of ERISA or Section 412 of the Code has been incurred and (D) all
contributions (including installments) to such plan required by
Section 302 of ERISA and Section 412 of the Code have been timely
made.
(vi) Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
(A) contravenes the terms of any Benefit Plan, (B) will require the
Company or any of its subsidiaries to make a larger contribution to,
or pay greater benefits under, any Benefit Plan than it otherwise
would or (C) will create or give rise to any additional vested rights
or service credits under any Benefit Plan.
(vii) Neither the Company nor any of its
subsidiaries (A) sponsors or maintains any defined benefit pension
plan or (B) contributes to or has or had an obligation to contribute
to a retirement plan for which the contribution is or was calculated
either (1) on the basis of actuarial assumptions and methods or (2) on
a basis other than a fixed amount per month.
(c) No Additional Severance. Except as set forth in
Schedule 3.11(c) hereto, neither the Company nor any of its subsidiaries is a
party to any agreement, nor has the Company or any of its subsidiaries
established any policy or practice requiring, nor does any applicable Law
require, it to make a payment or provide any other form of compensation or
benefit to any person performing services for the Company or any of its
subsidiaries upon termination of such services that would not be payable or
provided in the absence of the consummation of the transactions
-11-
<PAGE> 16
contemplated by this Agreement, except the severance arrangements entered into
in connection with the transactions contemplated by this Agreement and approved
by Acquiror prior to Closing.
(d) No Excess Parachute Payments. In connection with the
consummation of the transactions contemplated by this Agreement, no payments
have or will be made under the Benefit Plans that, in the aggregate, would
result in imposition of the sanctions imposed under Section 280G or Section
4999 of the Code.
(e) Amendment or Termination of Benefit Plans. Each Plan
may be unilaterally amended or terminated in its entirety by the Company
without violating the terms of such Benefit Plans or applicable Law and without
liability except as to benefits accrued and vested thereunder prior to or upon
such amendment or termination.
(f) Labor Matters. There are no collective bargaining or
other labor union contracts to which the Company or its subsidiaries is a party
applicable to persons employed by the Company or its subsidiaries and no
collective bargaining agreement is being negotiated by the Company or any of
its subsidiaries. There is no pending or, to the knowledge of the Company,
threatened labor dispute, strike or work stoppage against the Company or any of
its subsidiaries. To the knowledge of the Company, none of the Company, any of
its subsidiaries or any of their respective representatives or employees has
committed any unfair labor practice in connection with the operation of the
respective businesses of the Company or its subsidiaries and there is no
pending or, to the knowledge of the Company, threatened charge or complaint
against the Company or any of its subsidiaries by the National Labor Relations
Board or any other Governmental Entity. The Company and each of its
subsidiaries have each complied with the Family and Medical Leave Act of 1993.
(g) Employment and Other Agreements. The Company has
furnished to Acquiror true, correct and complete copies of each (i) employment
agreement to which the Company or any of its subsidiaries is a party and (ii)
other agreement between the Company or any of its subsidiaries and any employee
or former employee that provides severance, health, deferred compensation or
other employee benefit. Schedule 3.11(g) hereto lists each such document
described in the preceding sentence.
(h) The Company has furnished to Acquiror a true and
correct list of all employees of the Company and each of its subsidiaries as of
April 30, 1997 and, with respect to each Affected Employee (as defined in
Section 7.07 of this Agreement), (i) his or her annual salary or annualized
hourly rate of pay, (ii) his or her expected annual bonus, if any, (iii)
whether he or she is an active or inactive employee and, if applicable, the
reason for inactive status, (iv) whether he or she is full-time (30 or more
hours per week) or part-time (less than 30 hours per week), and (v) whether he
or she is subject to or exempt from the provisions of the Fair Labor Standards
Act.
-12-
<PAGE> 17
3.12 TAXES. Except as set forth in Schedule 3.12 hereto:
(a) (i) all returns and reports ("Tax Returns") of or
with respect to any Tax (as defined in Section 9.06 hereof) which are required
to be filed with respect to the Company or any of its subsidiaries have been
duly and timely filed, (ii) all information provided in each such Tax Return
is true, correct and complete in all material respects, (iii) all Taxes shown
as due on each such Tax Return that are payable by the Company or any of its
subsidiaries have been timely paid in full, (iv) all withholding Tax
requirements imposed on or with respect to Company or any of its subsidiaries
have been satisfied in all material respects, and (v) no penalty, interest or
other charge is or will become due with respect to the late filing of any such
Tax Return or late payment of any such Tax, except any such tax for which
adequate provision has been made in the Balance Sheet in accordance with GAAP
and which is being contested in good faith;
(b) there is no claim pending against the Company or any
of its subsidiaries for any material amount of Taxes, and no material
assessment, deficiency or adjustment has been asserted or proposed with respect
to any Tax Return of or with respect to the Company or any of its subsidiaries;
(c) except for statutory liens for current Taxes not yet
due, no liens for Taxes exist upon any of the assets of the Company or any of
its subsidiaries; and
(d) there is not in force any extension of time with
respect to the due date for the filing of any Tax Return of the Company or any
of its subsidiaries or any waiver or agreement for any extension of time for
the assessment or payment of any tax of or with respect to the Company or any
of its subsidiaries.
3.13 CERTAIN BUSINESS PRACTICES. None of the Company, any of its
subsidiaries or any directors, officers, agents or employees of the Company or
any of its subsidiaries (in their capacities as such) has (i) used any funds
for unlawful contributions, gifts, entertainment or other unlawful purposes
relating to political activity or (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns or violated any provision of the United States Foreign
Corrupt Practices Act of 1977, as amended.
3.14 ENVIRONMENTAL MATTERS.
(a) Neither the Company nor any of its subsidiaries has
any material liability under, nor is the Company or any of its subsidiaries in
violation in any material respect of, any Environmental Law and neither the
Company nor any of its subsidiaries has any liability to any non-Governmental
Entity under any Environmental Law arising from exposure to or otherwise in
connection with any Release or threatened Release of any Hazardous Material.
(b) For purposes of this Section 3.14, (i) "Hazardous
Material" shall mean any hazardous waste, hazardous material, hazardous
substance, petroleum product, oil, toxic substance, pollutant or contaminant,
as defined or regulated under any Environmental Law, or any other substance,
exposure to which is regulated under any Environmental Law, (ii) "Environmental
Law" shall mean and include any and all laws, common laws, statutes,
ordinances, rules, regulations,
-13-
<PAGE> 18
codes, licenses, permits, consents, approvals, authorizations, orders,
judgments, decrees, injunctions, requirements, agreements, or determinations of
any Governmental Entity in any and all jurisdictions in which the Company
presently or formerly owned, operated, leased, or used property, whether
existing as of the date hereof, previously enforced, or subsequently enacted,
that are related to (A) the protection, preservation, or restoration of the
environment (including, without limitation, air, water, vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land, plant and
animal life or any other natural resource), or to human or animal health or
safety or (B) the exposure to, or the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
Release, or disposal of any Hazardous Material; and (iii) "Release" shall mean
and include any actual spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, dumping or disposing
into the environment in violation of applicable Law.
3.15 CERTAIN AGREEMENTS. None of the Company or any of its
subsidiaries is a party to, or bound by, any contract, agreement or
organizational document that purports to restrict, by virtue of a
noncompetition, territorial exclusivity or other provision covering such
subject matter, the scope of the business or operations of the Company or any
of its subsidiaries geographically or otherwise, except the Heads of Agreement
dated November 1, 1996 regarding farmouts of properties from Chevron and AGIP
in Nigeria, the Confidentiality Agreement between Kerr-McGee China Petroleum
Ltd. and Huffco China dated March 1, 1996, the Letter Agreement between the
Company and African Petroleum PLC dated December 20, 1996 and all other
confidentiality agreements relating to data reviewed by the Company to which
the Company is subject (to the extent restrictions on use of such data
contained therein may be deemed to be covered by this Section).
3.16 CONTRACTS AND COMMITMENTS. Schedule 3.16 hereto sets forth a
list of (i) each contract or agreement to which the Company or any of its
subsidiaries is a party or by which its or their property is bound
("Contracts"); (ii) all real or personal property leases to which any of the
Company or any of its subsidiaries is a party ("Leases"); (iii) guarantees, or
agreements to indemnify or be contingently liable for, the payment or
performance by any other person or business entity to which the Company or any
of its subsidiaries is a party ("Guarantees"); and (iv) contracts or other
formal or informal understandings or agreements between the Company or any of
its subsidiaries and any of its officers, directors, employees, consultants,
agents or shareholders (or any of such shareholders' family members or
affiliates) that will be binding upon Acquiror, any other Newfield company or
any of the subsidiaries of the Company after the Closing ("Affiliate
Agreements"). A true and complete copy of each Contract, Lease, Guarantee and
Affiliate Agreement has been furnished to Acquiror prior to the date hereof.
Except as specifically disclosed in Schedule 3.16 hereto, each of the
Contracts, Leases, Guarantees and Affiliate Agreements constitutes the valid
and legally binding obligation of the parties thereto and is in full force and
effect without default on the part of any party thereto. Except as set forth
in Schedule 3.16 hereto, no current or former shareholder, employee,
consultant, officer or director, of the Company or any of its subsidiaries has
any interest in any property, tangible, or intangible, including patents, trade
secrets, other confidential business information, trademarks, service marks or
trade names used in or pertaining to the business of the Company or any of its
subsidiaries, except (with respect to shareholders) for the normal rights of a
shareholder.
-14-
<PAGE> 19
3.17 INTELLECTUAL PROPERTY. The Company or one or more of its
subsidiaries own, are licensed or otherwise have the right to use or
sublicense, all foreign and domestic patents, trademarks (common law and
registered), trademark registration applications, service marks (common law and
registered), service mark registration applications, trade names and
copyrights, copyright applications, trade secrets, know-how and other
proprietary information as are necessary for the conduct of the business of the
Company and its subsidiaries as currently conducted (the "Intellectual
Property"). A list of all such patents, trademarks, service marks and
copyrights is set forth on Schedule 3.17 hereto. Neither the Company nor any
of its subsidiaries is currently in receipt of any notice of infringement or
notice of conflict with the asserted rights of others in any patents,
trademarks, service marks, trade names, trade secrets and copyrights owned or
held by other persons. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will violate or
breach the terms of or cause any cancellation of any material license held by
the Company or any of its subsidiaries with regard to any patent, trademark,
service mark, trade name, trade secret or copyright, subject, however, to the
provisions of Section 7.06 of this Agreement.
3.18 BROKERS. No broker, finder, investment banker or other person
is entitled to any brokerage, finder's or other fee, commission or payment in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
3.19 INSURANCE. Schedule 3.19 hereto sets forth a list of all
policies of insurance currently held by the Company, any of its subsidiaries or
Huffco Group, Inc. on behalf of the Company and its subsidiaries with respect
to the business or operations of the Company or any of its subsidiaries (true
and complete copies of which have been furnished to Acquiror). Such insurance
policies are in full force and effect. The Company and its subsidiaries have
given in a timely manner to their respective insurers all notices required to
be given under such insurance policies with respect to all claims and actions
covered by insurance, and, except as set forth in Schedule 3.19 hereto, no
insurer has denied coverage of any such claims or actions or reserved it rights
in respect of or rejected any of such claims. The execution of this Agreement
and the consummation of the transactions contemplated hereby will not cause any
such insurance policies held by the Company's subsidiaries to lapse, terminate
or be canceled and will not result in any party thereto having the right to
terminate or cancel such insurance policies; provided that the insurance
policies maintained by Huffco Group, Inc. on behalf of the Company and its
subsidiaries shall not be transferred pursuant to this Agreement.
3.20 ASSETS. Except as set forth in Schedule 3.20 hereto, the
Company or its subsidiaries have good and defensible title, free and clear of
all liens and encumbrances, to all of the Company Assets (other than the
Subsidiary Shares). Schedule 3.20 hereto sets forth a list of the Company
Assets (other than the Subsidiary Shares) as of the date of this Agreement.
Upon the transfer of the Company Assets (other than the Subsidiary Shares) the
Acquiror, pursuant to the terms of this Agreement, will, except as set forth in
Schedule 3.20 hereto, have good and defensible title, free and clear of all
liens and encumbrances, to the Company Assets (other than the Subsidiary
Shares).
-15-
<PAGE> 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
Acquiror hereby represents and warrants to the Company and Huffco
Turkey that:
4.01 ORGANIZATION AND QUALIFICATION. Acquiror is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of the Bahamas. Acquiror has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted and is duly qualified and in good standing to do
business in each jurisdiction in which the nature of the business conducted by
it or the ownership or leasing of its properties makes such qualification
necessary.
4.02 AUTHORITY. Acquiror has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Acquiror and the performance by
Acquiror of its obligations hereunder, including the consummation of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Acquiror
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Acquiror.
4.03 VALIDITY OF AGREEMENT. Assuming the due authorization,
execution and delivery hereof by the other parties hereto, this Agreement
constitutes the legal, valid and binding obligation of Acquiror enforceable in
accordance with its terms, (a) except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar law now or hereafter in effect
relating to or affecting creditors' rights generally, and without limitation,
the effect of statutory or other laws regarding fraudulent conveyances and
preferential transfers and (b) subject to the limitations imposed by general
rules of equity (regardless of whether such enforceability is considered at law
or in equity).
4.04 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by
Acquiror does not, and performance of its obligations hereunder, including the
consummation of the transactions contemplated hereby, will not (i) conflict
with or violate Acquiror's Memorandum or Articles of Association, (ii) conflict
with or violate any Laws in effect as of the date of this Agreement applicable
to Acquiror or any other Newfield company or by or to which any of their
properties is bound or subject or (iii) result in any breach of or constitute a
default (or an event that with or without notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or require payment under, or result
in the creation or imposition of a mortgage, pledge, lien, security interest or
other charge or encumbrance on any of the properties or assets of Acquiror or
any other Newfield company pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, authorization, franchise or other
instrument or obligation to which Acquiror or any other Newfield company is a
-16-
<PAGE> 21
party or by or to which Acquiror or any other Newfield company or any of their
respective properties is bound or subject.
(b) Except as described in Section 8.02(d) of this
Agreement, the execution and delivery of this Agreement by Acquiror does not,
and the performance of this Agreement by Acquiror, including the consummation
of the transactions contemplated hereby, will not require Acquiror or any
other Newfield company to obtain any consent, license, permit, certificate,
waiver approval, authorization or order of, or to make any filing with or
notification to, any Governmental Entities, except (i) the applicable
requirements, if any, of the Exchange Act of 1934, as amended (the "Exchange
Act"), the Securities Act of 1933, as amended (the "Securities Act"), the rules
and regulations thereunder, any other applicable state or federal securities or
blue sky laws and the New York Stock Exchange, Inc. (the "NYSE) or (ii) where
the failure to obtain such consents, licenses, permits, certificates, waivers,
approvals, authorizations or orders, or to make such filings or notifications
could not reasonably be expected to have an Acquiror Material Event.
4.05 PURCHASE PRICE. Acquiror has available to it sufficient funds
to pay the Purchase Price at the Closing.
4.06 BROKERS. No broker, finder, investment banker or other person
is entitled to any brokerage, finder's or other fee, commission or payment in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Acquiror or any other Newfield company.
ARTICLE V
COVENANTS OF THE COMPANY
5.01 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company hereby
covenants and agrees that, prior to the Closing, unless otherwise expressly
contemplated by this Agreement or consented to in writing by Acquiror, the
Company will and will cause each of its subsidiaries to:
(a) operate its business in the usual and ordinary course
consistent with past practices;
(b) use all reasonable efforts to preserve substantially
intact its business organization, maintain its rights and franchises, retain
the services of its respective officers and employees and maintain its
relationships with its respective suppliers and landlords;
(c) maintain and keep its properties and assets in as
good repair and condition as at present, ordinary wear and tear excepted, and
maintain supplies in quantities consistent with its customary business
practice; and
(d) use all reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage to those
currently maintained.
-17-
<PAGE> 22
5.02 NEGATIVE COVENANTS OF THE COMPANY. Except as expressly
contemplated by this Agreement or otherwise consented to in writing by
Acquiror, from the date of this Agreement until the Closing, the Company will
not do, and will not permit any of its subsidiaries to do, any of the
following:
(a) increase the compensation payable to or to become
payable to any director, executive officer or employee; (ii) grant any
severance or termination pay to, or enter into any employment or severance
agreement with, any director, officer or employee; (iii) establish, adopt or
enter into any employee benefit plan or arrangement or (iv) except as may be
required by applicable Law, amend, or take any other actions (including,
without limitation, the acceleration of vesting, waiving of performance
criteria or the adjustment of awards or any other actions permitted upon a
"change in control" of the Company), with respect to any of the Benefit Plans
or any of the plans, programs, agreements, policies or other arrangements
described in Section 3.11(g) of this Agreement, except the granting of the
remaining authorized but unissued stock options under the Company's 1996
Nonqualified Share Option Plan (the "Option Plan");
(b) declare or pay any dividend on, or make any other
distribution in respect of, outstanding shares of its or any of its
subsidiaries' capital stock or other equity interests, except dividends by a
wholly owned subsidiary of the Company to the Company or another wholly owned
subsidiary of the Company, except for the distribution of Huffco China
Preferred Shares as contemplated by Section 3.03(a);
(c) (i) redeem, purchase or otherwise acquire any shares
of its or any of its subsidiaries' capital stock, any securities or obligations
convertible into or exchangeable for any shares of its or its subsidiaries'
capital stock (other than any such acquisition directly from any wholly owned
subsidiary of the Company in exchange for capital contributions or loans to
such subsidiary), or any options, warrants or conversion or other rights to
acquire any shares of its or its subsidiaries' capital stock or any such
securities or obligations; (ii) effect any reorganization or recapitalization
of the Company or any of its subsidiaries; or (iii) split, combine or
reclassify any of its subsidiaries' capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of, or in
substitution for, shares of its subsidiaries' capital stock;
(d) issue (whether upon original issue or out of
treasury), sell, grant, award, deliver or limit the voting rights of any shares
of any class of its subsidiaries' capital stock, any securities convertible
into or exercisable or exchangeable for, or any rights, warrants or options to
acquire, any such shares, except for the issuance of Huffco China Preferred
Shares as contemplated by Section 3.03(a);
(e) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or a portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof, or
otherwise acquire or agree to acquire any assets of any other person (other
than the purchase of assets from suppliers or vendors in the ordinary course of
business and consistent with past practice and other than acquisitions of
equity interests in African Petroleum/Huffco International Ltd., a Bahamas
international business company, and AP Hydrocarbons Development Company
Limited, a company formed in Nigeria, both in connection with the Company's
proposed Nigerian project;
-18-
<PAGE> 23
(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its assets or any assets of any of its
subsidiaries, other than dispositions of used materials and equipment in the
ordinary course of business;
(g) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal relating to, or that may reasonably
be expected to lead to, any Competing Transaction (as defined below), or enter
into discussions or negotiate with any person or entity in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to, or endorse, any
Competing Transaction, or authorize any of the officers, directors, employees
or agents of the Company or any of its subsidiaries or any agent, investment
banker, financial advisor, attorney, accountant or other representative
retained by the Company or any of its subsidiaries to take any such action, and
the Company shall promptly notify Acquiror or promptly provide Acquiror with a
copy of all relevant terms of any such inquiries or proposals received by the
Company or any of its subsidiaries. For purposes of this Agreement, the term
"Competing Transaction" shall mean any proposal or offer from any person or
entity (other than Acquiror or an affiliate of Acquiror) relating to any
acquisition or purchase of all or (other than in the ordinary course of
business) any material portion of the assets of, or any possible disposition or
issuance of any capital stock or other equity interests in the Company or any
of its subsidiaries (or any rights or securities exercisable for or convertible
into any such capital stock or other equity interests) (other than pursuant to
the Option Plan), or any merger or other business combination with, the Company
or any of its subsidiaries;
(h) release any third party from its obligations under
any confidentiality or other similar agreement relating to information material
to the Company or any of its subsidiaries;
(i) propose to adopt any amendments to its limited
liability company agreement, articles of association or equivalent
organizational documents that would have an adverse effect on the consummation
of the transactions contemplated by this Agreement;
(j) with regard only to the subsidiaries of the Company,
(i) change any of its significant accounting policies or (ii) make or rescind
any material express or deemed election relating to Taxes, settle or compromise
any material claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, or change any of its
material methods of reporting income or deductions for Tax purposes from those
employed in the preparation of Tax returns for the taxable years ended December
31, 1995 and December 31, 1996 (as applicable), except, in the case of clause
(i) or clause (ii), as may be required by any Law or by GAAP;
(k) incur any obligation for borrowed money or purchase
money indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument or under any financing lease, whether pursuant to a sale-
and-leaseback transaction or otherwise, except in the ordinary course of
business consistent with past practice and except for interest free advances
from affiliates of the Company as necessary to enable the Company to pay
operating expenses incurred in the ordinary course of business;
-19-
<PAGE> 24
(l) enter into any material arrangement, agreement or
contract with any third party other than an operating agreement covering Block
05/36, Gulf of Bohai, People's Republic of China, substantially in the form of
the December 31, 1996 draft of such agreement provided to Acquiror, the
Memorandum and Articles of Association of African Petroleum/Huffco
International Ltd. as filed in the Commonwealth of the Bahamas on April 30,
1997, the Memorandum and Articles of Association of AP Hydrocarbons Development
Limited (as presently existing), and the Option Agreement, Farmout Agreement
and letter agreement among AP Hydrocarbons Development Limited, Nigerian
National Petroleum Corporation and Chevron Nigeria Limited substantially in the
form of the May 2, 1997 drafts of such agreements provided to Acquiror;
(m) take any action that reasonably could be expected to
result in any of the conditions set forth in Article VIII not being satisfied;
or
(n) agree in writing or otherwise to do any of the
foregoing.
ARTICLE VI
COVENANTS OF HUFFCO TURKEY
6.01 COVENANTS OF HUFFCO TURKEY. Huffco Turkey covenants and
agrees that, prior to the Closing, it will not:
(a) take any action that reasonably could be expected to
result in any of the conditions set forth in Article VIII not being satisfied;
or
(b) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal relating to, or that may reasonably
be expected to lead to, any Competing Transaction, or enter into discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to, or endorse, any Competing
Transaction, or authorize any agent, investment banker, financial advisor,
attorney, accountant or other representative retained by it to take any such
action, and Huffco Turkey shall promptly notify Acquiror or promptly provide
Acquiror with a copy of all relevant terms of any such inquiries or proposals
received by it.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 NOTIFICATION OF CERTAIN MATTERS. From the date of this
Agreement through the Closing Date, the Company and Huffco Turkey, as
appropriate, shall give prompt notice to Acquiror, and Acquiror shall give
prompt notice to the Company, orally and in writing, after any executive
officer of the Company, Huffco Turkey or Acquiror, as applicable, becomes aware
of (i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty of the party
giving such notice contained in this Agreement to be untrue or inaccurate at
any time from the date hereof to the Closing and (ii) any failure of the party
giving
-20-
<PAGE> 25
such notice to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by such person hereunder within the time
specified therefor.
7.02 ACCESS AND INFORMATION.
(a) From the date of this Agreement through the Closing
Date, the Company shall, and shall cause its subsidiaries to, (i) afford to
Newfield companies and their officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Acquiror Representatives") access during ordinary business hours and at other
reasonable times, upon reasonable prior notice, to the officers, employees,
accountants, agents, properties, offices and other facilities of the Company
and its subsidiaries and to the books and records thereof and (ii) furnish
promptly to Acquiror and the Acquiror Representatives such information
concerning the business, properties, contracts, records and personnel of the
Company and its subsidiaries (including, without limitation, financial,
operating and other data and information) as may be reasonably requested, from
time to time, by Acquiror or the Acquiror Representatives, in each case for the
purpose of conducting an investigation of the affairs of the Company and its
subsidiaries in connection with the transactions contemplated by this
Agreement. Notwithstanding the foregoing provisions of this Section 7.02, the
Company shall not be required to grant access or furnish information to the
Acquiror Representatives to the extent that such access or the furnishing of
such information is prohibited by any Law or contract. Acquiror's
investigation shall be conducted, to the extent reasonably practicable, in a
manner that minimizes any significant interference with the normal operations
of the Company.
(b) Acquiror shall, and shall direct and use all
reasonable efforts to cause the other Acquiror Representatives to, hold in
confidence and not disclose (except to Acquiror Representatives or as required
by applicable law, court order or the applicable rules of a stock exchange) all
nonpublic information received from the Company or its representatives in
connection with the transactions contemplated by this Agreement until the
earlier of (i) the Closing, (ii) three years after the termination of this
Agreement or (iii) such time as such information is otherwise publicly
available, and, if this Agreement is terminated, Acquiror shall, and shall
direct and use all reasonable efforts to cause the other Acquiror
Representatives to, either destroy or deliver to the Company all documents,
work papers and other materials (including copies) provided or based upon
information provided by the Company or its representatives in connection with
the transactions contemplated by this Agreement. In addition, from and after
the Closing until the earlier of three years after the Closing or such time as
such information is otherwise publicly available, Acquiror shall, and shall
direct and use all reasonable efforts to cause the other Acquiror
Representatives to, hold in confidence and not disclose (except as required by
applicable law, court order or the applicable rules of a stock exchange) all
nonpublic information regarding the members of the Company and agreements
between the Company and its members received from the Company or its
representatives in connection with the transactions contemplated by this
Agreement.
(c) The Company shall, shall cause its subsidiaries to
and shall direct and use all reasonable efforts to cause its and their
officers, managers, directors, members, shareholders, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"Company Representatives") to, hold in confidence and not disclose (except to
other Company Representatives, as necessary or appropriate for purposes of tax
returns and other governmental
-21-
<PAGE> 26
filings, as necessary or appropriate to defend itself against claims or as
required by applicable law, court order or the applicable rules of a stock
exchange) all nonpublic information (i) retained by the Company (to the extent
it relates to any of the assets acquired or liabilities or obligations assumed
by a Newfield company pursuant to this Agreement) or (ii) provided by a
Newfield company or their representatives in connection with the transactions
contemplated by this Agreement, pursuant to the provisions of Sections 7.09 or
7.13 of this Agreement or pursuant to the terms of the Huffco China Preferred
Shares, in the case of clause (i), until the earlier of three years after the
Closing or until such time as such information is otherwise publicly available
and, in the case of clause (ii), until the earlier of three years after
disclosure or such time as such information is otherwise publicly available.
7.03 APPROPRIATE ACTION; CONSENTS; FILINGS.
(a) The Company, Huffco Turkey and Acquiror shall each
use, and the Company and Acquiror shall cause each of their respective
subsidiaries to use, all reasonable efforts promptly (i) to take, or cause to
be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the transactions contemplated by this Agreement, (ii) to
obtain from any Governmental Entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained by the Company,
Huffco Turkey or Acquiror, respectively, or any of the Company's or Acquiror's
respective subsidiaries, in connection with the authorization, execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, (iii) to make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Acquisition required under (A) the Exchange Act, the Securities Act,
the rules and regulations thereunder and any other applicable federal or state
securities laws and (B) any other applicable Law; provided that the Company,
Huffco Turkey and Acquiror shall cooperate with each other in connection with
the making of all such filings. The Company shall furnish all information
reasonably requested by Acquiror for any application or other filing to be made
pursuant to any applicable Law in connection with the transactions contemplated
by this Agreement.
(b) The Company, Huffco Turkey and Acquiror agree, and
Acquiror and the Company shall cause each of their respective subsidiaries, to
cooperate and to use all reasonable efforts, not requiring the expenditure of
material funds or the transfer of material rights or assets, to contest and
resist any action, including legislative, administrative or judicial action,
and to have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order (whether temporary, preliminary or permanent) (an
"Order") that is in effect and that restricts, prevents or prohibits the
consummation of the Acquisition or any other transactions contemplated by this
Agreement.
(c) The Company, Huffco Turkey and Acquiror shall each
promptly give (or shall cause their respective subsidiaries to give) any
notices regarding the Acquisition, this Agreement or the transactions
contemplated hereby to third parties required by Law or by any contract,
license, lease or other agreement to which such person is a party or by which
such person is bound, and use (and cause its subsidiaries to use) all
reasonable efforts, not requiring the expenditure of material funds or the
transfer of material rights or assets, to obtain any third party consents (i)
necessary to consummate the transactions contemplated by this Agreement, (ii)
otherwise required under any contracts, licenses, leases or other agreements in
connection with the consummation of the
-22-
<PAGE> 27
transactions contemplated by this Agreement or (iii) required to prevent a
Company Material Adverse Effect from occurring after the Closing.
(d) If the Company, Huffco Turkey or Acquiror shall fail
to obtain any third party consent described in subsection (c)(i) above, the
parties shall consult and cooperate regarding the reasonable actions that can
be taken to limit the adverse effect upon the Company, Acquiror, their
respective subsidiaries and businesses resulting, or which could reasonably be
expected to result after the Closing, from the failure to obtain such consent.
(e) Acquiror covenants and agrees that, prior to the
Closing, Acquiror will not take any action that reasonably could be expected to
result in any of the conditions set forth in Article VIII not being satisfied.
7.04 PUBLIC ANNOUNCEMENTS. Acquiror and the Company shall consult
with each other before issuing any press release or otherwise making any public
statement with respect to this Agreement or the Acquisition and shall not issue
any press release or other written statement to the public prior to or at the
time of the Closing without the prior written consent of the other party, such
consent not to be unreasonably withheld; provided, however, that a party may,
without consulting with and, if applicable, obtaining the approval of the other
party, issue a press release or make a public statement if required by
applicable Law or the rules of the NYSE if such party has used commercially
reasonable efforts to consult with and, if applicable, obtain the approval of
the other party but has been unable to do so in a timely manner.
7.05 EXPENSES. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by
Acquiror (with respect to expenses incurred by Acquiror) and by the Company
(with respect to expenses incurred by the Company or Huffco Turkey); provided
that the parties recognize that the expenses paid by the Company prior to
Closing shall reduce the assets transferred to Acquiror or increase the Assumed
Liabilities assumed by Acquiror.
7.06 USE OF HUFFCO NAME. Within 60 days after the Closing Date,
Acquiror will eliminate the word "Huffco" from its and its subsidiaries'
properties and facilities; provided, however, that Acquiror shall have up to
six months to eliminate the word "Huffco" in any particular case if such
elimination would have an adverse impact on operations with respect to Block
05/36, Gulf of Bohai, People's Republic of China. Except for the periods
described above, Acquiror and its subsidiaries shall have no right to use the
name "Huffco."
7.07 EMPLOYEES.
(a) Acquiror or another Newfield company has made offers
to employ, effective as of the Closing Date, all employees of the Company who
are named on Schedule 7.07 hereto and who are employed by the Company
immediately prior to the Closing Date (the "Affected Employees") on the terms
and conditions set forth in the offer letters from Acquiror.
(b) Acquiror or another Newfield company shall offer to
each Affected Employee who accepts employment with a Newfield company coverage
under a group health plan (as defined
-23-
<PAGE> 28
in Section 5000(b)(1) of the Code) that (i) provides medical and dental
benefits to such Affected Employee and his eligible dependents as of the
Closing Date, (ii) credits such Affected Employee with any deductibles already
incurred during 1997 under the Company's group health plan, and (iii) waives
any pre-existing condition restrictions (or, alternatively, Acquiror may make
arrangements mutually acceptable with the Company for continuing coverage of
pre-existing conditions pursuant to Part 6 of Title I of ERISA (COBRA) under
Huffco Group, Inc.'s group health plan).
(c) If Acquiror involuntarily terminates the employment
of an Affected Employee who accepts employment with a Newfield company without
cause prior to the first anniversary of the Closing Date, Acquiror agrees to
pay such terminated Affected Employee an amount of severance pay equal to the
product of (i) one month's salary, as determined at the date of this Agreement,
multiplied by (ii) such Affected Employee's number of full years of service for
the Company as shown on Schedule 7.07 hereto, but not to exceed 12 months'
salary. "Cause" for this purpose shall mean conduct such as fraud,
embezzlement, theft, commission of a felony, or other criminal act against
Acquiror or any of its subsidiaries, dishonesty in the course of employment, or
substantial continued failure to perform duties.
7.08 REPLACEMENT OF BONDS, LETTERS OF CREDIT AND GUARANTEES.
Promptly following Closing, Acquiror shall obtain, or cause to be obtained in
the name of Acquiror, replacements for all bonds, letters of credit and
guarantees posted by the Company with any Governmental Entity and relating to
the Company Assets, to the extent such replacements are necessary to permit the
cancellation of the bonds, letters of credit and guarantees posted by the
Company or to consummate the transactions contemplated by this Agreement.
7.09 RECORDS. The Company may retain duplicate copies of all of
its files, records, data and other information ("Records") that may be
reasonably useful or necessary for tax or accounting purposes ("Tax Records")
and shall retain (and there shall be excluded from the Company Assets) all
Records relating to the negotiation and consummation of the transactions
contemplated by this Agreement and all Records, the transfer of which is
prevented by third party agreement or applicable law. Acquiror shall, until
the termination of the applicable statute of limitations for federal income tax
purposes, (i) retain the Tax Records, (ii) make the Tax Records available to
the Company, its members, and each such person's officers, employees, advisors
and representatives upon reasonable notice during normal business hours and
(iii) furnish copies of any and all such Tax Records to any such person at such
person's expense. In addition, the Company and its managers, officers,
employees, advisors and representatives shall have the right upon reasonable
prior notice to inspect and copy, during normal business hours and at their
expense, books, records and copies of contracts affecting the Company's
entitlement to, and the calculation of, the Contingent Payments, and any member
of the Company shall have access for such purpose in connection with the bona
fide proposed exercise of options or other rights to acquire shares or other
equity interests in the Company.
7.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Except
as otherwise expressly provided in this Agreement, the parties'
representations, warranties, covenants and agreements set forth in or made
pursuant to this Agreement shall survive the Closing for the following periods
following the Closing Date:
-24-
<PAGE> 29
(a) The representations and warranties of the parties
(other than the representations and warranties set forth in Sections 2.01,
2.03, 3.01, 3.02, 3.03, 3.04, 3.13, 3.18, 4.01, 4.02 and 4.05) shall survive
for three years.
(b) The representations and warranties set forth in
Section 3.13 shall survive for five years.
(c) The covenants and agreements of the parties set forth
in Sections 5.01, 5.02, 6.01, 7.01,7.02(a) and 7.03(e) shall survive for three
years.
(d) All other representations, warranties, covenants and
agreements shall survive without limitation as to time.
Representations and warranties in the certificates delivered by the parties
pursuant to Sections 8.02(a), 8.02(b), 8.03(a) and 8.03(b) shall survive
Closing for the same periods of time as the respective representations,
warranties, covenants and agreements to which they refer. No investigation by
any party hereto made heretofore or hereafter shall affect the representations
and warranties of the other parties hereto and each such representation and
warranty shall survive such investigation and the Closing for the period
described above. The last day, if any, of the survival period of any
representation, warranty, covenant or agreement is hereinafter referred to as
the "Termination Date." Representations, warranties, covenants and agreements
set forth in this Agreement shall terminate and be of no further force or
effect after the applicable Termination Date (if any); provided, however, that
there shall be no such termination of any representation, warranty, covenant or
agreement with respect to a bona fide claim asserted with respect thereto prior
to the applicable Termination Date in accordance with the terms of Section
7.11.
7.11 INDEMNIFICATION.
(a) Indemnification by the Company. From and after the
Closing and subject to the terms and conditions of this Section 7.11, the
Company hereby agrees to indemnify, defend and hold harmless Acquiror and the
other Newfield companies (including the Company's subsidiaries after the
Closing) and each of their directors, officers, managers, members, employees,
agents, consultants, affiliates and controlling persons (hereinafter, the
"Acquiror Indemnified Parties") from and against all Losses (as defined below)
(INCLUDING, WITHOUT LIMITATION, LOSSES RESULTING FROM THE SOLE, CONCURRENT OR
COMPARATIVE NEGLIGENCE, OR STRICT LIABILITY, OF ANY OF THE ACQUIROR INDEMNIFIED
PARTIES) asserted against, imposed upon or incurred by any Acquiror Indemnified
Party, directly or indirectly, by reason of, arising out of, or resulting from
(i) the inaccuracy or breach of any representation or warranty of the Company
or Huffco Turkey contained in or made pursuant to this Agreement; (ii) the
breach of any covenant or agreement of the Company or Huffco Turkey contained
in or made pursuant to this Agreement; (iii) the matters set forth on Schedule
1.01(a) or Schedule 1.01(c) hereto, (iv) the ownership, operations, business or
conduct of the Company following the Closing (v) the Company's or any of its
subsidiaries employment practices, relationships or agreements (including any
payments made or costs and expenses incurred pursuant to those certain letter
agreements with Messrs. Saxby, Robinson and Finlay relating to foreign
citizens' repatriation to their home countries) prior to the Closing (other
than (A) accrued obligations of the Company for wages, salaries, bonuses and
other compensation, reimbursements and benefits
-25-
<PAGE> 30
under Benefits Plans incurred in the ordinary course of business and
(B) severance and other payments made within six months of the Closing Date in
connection with the termination of employment of employees of the Company after
March 31, 1997 but at or before the Closing, in an amount not to exceed
$327,000, (vi) violations or alleged violations by the Company or any of its
subsidiaries prior to the Closing of any license with respect to proprietary
information or any confidentiality or similar agreement, and (vii) any member's
ownership of Company Shares prior to the Closing or relationship with the
Company as a member or shareholder prior to the Closing. As used in this
Section 7.11, the term "Losses" shall include (i) all debts, liabilities and
obligations, (ii) all losses, damages, reasonable costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated matter) penalties, court costs and reasonable attorneys' fees and
expenses and (iii) all demands, claims, actions, costs of investigation, causes
of action, proceedings, arbitrations, judgments, settlements and assessments,
whether or not ultimately determined to be valid.
(b) Indemnification by Acquiror.
(i) From and after the Closing and subject to the
terms and conditions of this Section 7.11, Acquiror hereby agrees to indemnify,
defend and hold harmless the Sellers and each of their directors, officers,
managers, members, employees, agents, consultants, affiliates and controlling
persons (hereinafter, collectively, the "Seller Indemnified Parties") from and
against all Losses (INCLUDING, WITHOUT LIMITATION, LOSSES RESULTING FROM THE
SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE, OR STRICT LIABILITY, OF ANY OF THE
SELLER INDEMNIFIED PARTIES) asserted against, imposed upon or incurred by any
Seller Indemnified Party, directly or indirectly, by reason of, arising out of,
or resulting from (A) the inaccuracy or breach of any representation or
warranty of Acquiror contained in or made pursuant to this Agreement; (B) the
breach of any covenant or agreement of Acquiror contained in or made pursuant
to this Agreement; (C) except to the extent that any Acquiror Indemnified Party
is entitled to the protections or benefits of Section 7.11(a) with respect to a
particular matter, the ownership, operations, business or conduct of the
Company Assets following the Closing or (D) except to the extent that any
Acquiror Indemnified Party is entitled to the protections or benefits of
Section 7.11(a) with respect to a particular matter, the Assumed Liabilities.
(ii) From and after the Closing and subject to the
terms and conditions of this Section 7.11, Acquiror hereby agrees to indemnify,
defend and hold harmless each present or former officer, manager and member of
the Company from and against all Losses (INCLUDING WITHOUT LIMITATION LOSSES
RESULTING FROM THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE, OR STRICT
LIABILITY, OF ANY SUCH PERSON) asserted against, imposed upon or incurred by
any such person in their capacity as a present or former officer, manager or
member of the Company, directly or indirectly, by reason of, arising out of, or
resulting from the Assumed Liabilities, provided that such Losses shall be
included in the Losses for which any of the Acquiror Indemnified Parties are
entitled to indemnification by the Company under Section 7.11(a) to the extent
that any of the Acquiror Indemnified Parties would have been entitled to such
indemnification if such Losses had been suffered directly by any such Acquiror
Indemnified Party.
-26-
<PAGE> 31
(c) Deductible; Method of Payment; Time Limit; De Minimis
Losses.
(i) Notwithstanding the foregoing, no
indemnification obligation pursuant to clauses (i), (ii), (v), (vi) or (vii) of
Section 7.11(a) shall arise until the aggregate of all Losses pursuant to such
clauses exceeds $100,000; thereafter indemnification obligations pursuant to
such clauses shall be satisfied as provided for herein for all Losses in excess
of such $100,000 deductible; provided, however, that any Losses resulting from
the inaccuracy or breach of any of the representations and warranties set forth
in Section 3.13 of this Agreement shall not be subject to the foregoing
limitation.
(ii) All indemnification obligations pursuant to
clauses (i), (ii), (v), (vi) or (vii) of Section 7.11(a) (except for those
relating to the inaccuracy or breach of any of the representations and
warranties set forth in Section 3.13) shall be satisfied only out of amounts,
if any, paid or payable to the Company with respect to the Contingent Payments
or the Huffco China Preferred Shares (collectively, the "Contingent Rights"),
or paid or payable for the purchase of any such Contingent Rights, prior to the
eighth anniversary of the Closing Date and not previously expended or
distributed by the Company to its members in accordance with the terms of this
paragraph (ii). Such indemnification obligations shall be nonrecourse to the
Company, except to the extent described in the preceding sentence. The Company
agrees that until all indemnification claims for which a Claim Notice (as
defined below) has been timely served by an Acquiror Indemnified Party (whether
pursuant to clauses (i), (ii), (v), (vi) or (vii) of Section 7.11(a) or
otherwise) have been resolved and satisfied, it shall retain, and not
distribute to its members or otherwise expend, amounts paid with respect to the
Contingent Rights prior to the eighth anniversary of the Closing Date, up to
the total amount of the indemnification claims remaining unsatisfied. The
Company further acknowledges and agrees that once the Company and the Acquiror
have agreed upon the amount of any claim by an Acquiror Indemnified Party, the
Acquiror or any other Newfield company, as appropriate, shall be entitled to
offset such amount against amounts thereafter payable by Acquiror or such other
Newfield company with respect to the Contingent Rights prior to the eighth
anniversary of the Closing Date. The Company shall be entitled to expend or
distribute to its members amounts received with respect to the Contingent
Rights in excess of indemnification claims by the Acquiror Indemnified Parties
that remain unresolved and unsatisfied at the time of such expenditure or
distribution and the Acquiror Indemnified Parties shall have no right to
recover such expenditures or distributions.
(iii) The Indemnifying Party shall satisfy all
indemnification obligations pursuant to this Section 7.11 (other than
obligations pursuant to clauses (i), (ii), (v), (vi) or (vii) of Section
7.11(a) unless relating to the inaccuracy or breach of any of the
representations and warranties set forth in Section 3.13) promptly after the
later of the expiration of the Notice Period (as defined below) or the
resolution of any Notice of Disagreement with respect to such obligation.
(iv) The obligations set forth in (A) Sections
7.11(a)(i), 7.11(a)(ii), 7.11(b)(i)(A) and 7.11(b)(i)(B) shall terminate and be
of no further force and effect on the applicable Termination Date with respect
to a particular representation, warranty, covenant or agreement, (B) Section
7.11(a)(v) shall terminate and be of no further force and effect on the second
anniversary of the Closing Date and (C) Sections 7.11(a)(vi) and 7.11(a)(vii)
shall terminate and be of no further force and effect on the third anniversary
of the Closing Date; provided, however, that there shall be
-27-
<PAGE> 32
no such termination of any such obligation with respect to a bona fide claim
asserted with respect thereto prior to the applicable termination date in
accordance with the provisions of Section 7.11(d). The other indemnity
obligations in this Section 7.11 shall continue without time limit.
(v) Notwithstanding the foregoing, an
indemnification obligation pursuant to clauses (i) and (ii) of Section 7.11(a)
shall arise only with respect to any Loss or series of related Losses that is
or are equal to or greater than $2,000.
(vi) The amount of an Indemnified Party's claim
for indemnification shall be reduced by the amount of any insurance proceeds
realized by the Indemnified Party (net of collection and additional or
increased insurance premium costs).
(d) Assertion of Claims. All claims for indemnification
by any of the Seller Indemnified Parties or any of the Buyer Indemnified
Parties pursuant to this Section 7.11 shall be asserted and resolved as
follows:
(i) Any person claiming indemnification pursuant
to this Section 7.11 is hereinafter referred to as an "Indemnified Party" and
any person against whom such claims are asserted is hereinafter referred to as
an "Indemnifying Party." If any Indemnified Party has a claim for Losses
against any Indemnifying Party pursuant to this Section 7.11, such Indemnified
Party shall with reasonable promptness notify the Indemnifying Party of such
Losses in writing, specifying the nature of and specific basis for such Losses
and indemnity claim and the amount or estimated amount thereof to the extent
then feasible and including a copy of all papers (if any) served with respect
to such claim (a "Claim Notice"). Notwithstanding the foregoing, failure to
deliver a Claim Notice with reasonable promptness shall have no effect on the
obligations of the Indemnifying Party except to the extent that such
Indemnifying Party is actually prejudiced thereby. If an Indemnifying Party
does not provide the Indemnified Party with a Notice of Disagreement (as
defined below) within 30 days from the date of effectiveness of a Claim Notice,
in each case given in accordance with the provisions of Section 9.07 of this
Agreement (the "Notice Period"), the amount of such Losses shall, subject to
the terms of this Section 7.11, be conclusively deemed an indemnification
obligation of the Indemnifying Party.
(ii) If, upon receipt of a Claim Notice, the
Indemnifying Party believes in good faith that the Indemnified Party is not
entitled to all or part of the indemnification described therein, then the
Indemnifying Party may provide the Indemnified Party with written notice of
such disagreement (a "Notice of Disagreement"). Such Notice of Disagreement
shall specify in reasonable detail the basis for such disagreement.
Thereafter, the Indemnified party and the Indemnifying Party shall negotiate in
good faith and use all reasonable efforts to resolve any matters set forth in
the Notice of Disagreement for a reasonable period of time.
(iii) If any Losses (other than Losses arising out
of or resulting from the matters described in Section 7.11(a)(iii) or (a)(iv))
are asserted against or sought to be collected from an Indemnified Party by a
third party, Acquiror shall defend by all appropriate proceedings with counsel
of its choice and use all reasonable efforts to settle such claims or prosecute
such proceedings to their conclusion. If the Company desires to participate
in, but not control, any such defense or settlement it may do so at its sole
cost and expense. If requested by Acquiror, the
-28-
<PAGE> 33
Company and any other Indemnified Party shall provide reasonable assistance to
Acquiror and its counsel in such defense or settlement. Notwithstanding the
foregoing, the Company is hereby authorized (A) prior to and during the Notice
Period, to file any motion, answer or other pleading that it deems necessary or
appropriate to protect its interests or those of the Indemnified or
Indemnifying Party and that is not prejudicial to the Indemnifying Party and
(B) during any period that Acquiror does not comply with its obligations
pursuant to this clause (iii), to take all actions that it deems necessary or
appropriate to protect its interests.
(iv) If any Losses arising out of or resulting
from the matters described in Section 7.11(a)(iii) or (a)(iv) are asserted
against or sought to be collected from an Indemnified Party by a third party,
the Company shall defend by all appropriate proceedings with counsel of its
choice and use all reasonable efforts to settle such claims or prosecute such
proceedings to their conclusion. If the Indemnified Party desires to
participate in, but not control, any such defense or settlement it may do so at
its sole cost and expense. If requested by the Company, Acquiror and any other
Indemnified Party shall assist the Company and its counsel in such defense or
settlement. Notwithstanding the foregoing, any Indemnified Party is hereby
authorized (A) prior to and during the Notice Period, to file any motion,
answer or other pleading that it deems necessary or appropriate to protect its
interests or those of the Indemnifying Party and that is not prejudicial to the
Indemnifying Party and (B) during any period that the Company does not comply
with its obligations pursuant to this clause (iv), to take all actions that it
deems necessary or appropriate to protect its interests.
(v) Notwithstanding the foregoing, prior to
settling any claim with a third party, the Indemnified Party shall send written
notice to the Indemnifying Party of any proposed settlement of the claim. The
Indemnifying Party shall have the option for 15 days following receipt of such
notice to (i) admit in writing liability for the claim and (ii) if liability is
so admitted, reject, in its reasonable judgment, the proposed settlement. If
the Indemnified Party settles any such claim without notifying the Indemnifying
Party or over the timely objection of the Indemnifying Party after it admits
its liability in writing, the Indemnified Party shall thereby waive any right
to indemnity therefor and shall indemnify the Indemnifying Party with respect
thereto.
(vi) The rights and remedies in this Section 7.11
shall be the exclusive rights and remedies of the parties with respect to
breaches of the representations, warranties, covenants and agreements contained
in Articles II, III, IV, V, VI, 7.01, 7.02(a) and 7.03(e) and in the
certificates delivered at Closing pursuant to Sections 8.02(a), 8.02(b),
8.03(a) and 8.03(b).
7.12 SCOPE OF REPRESENTATIONS AND WARRANTIES.
(a) Except as and to the extent expressly set forth in
Article II and in Article III and in the certificates to be delivered by
Sellers pursuant to Section 8.02(a) at Closing, Sellers make no, and disclaim
any, representations or warranties whatsoever, whether express or implied.
Each Seller disclaims all liability or responsibility for any other statement
or information made or communicated (orally or in writing) to Acquiror, its
affiliates, or any stockholder, officer, director, employee, agent, advisor or
representative of Acquiror (including, but not limited to, any opinion,
information or advice which may have been provided to any such person by any
representative of either Seller or any other person), wherever and however
made. Without limiting the foregoing, each
-29-
<PAGE> 34
Seller makes no representation or warranty as to (i) the amounts, value,
quality or deliverability of hydrocarbons from the Company Assets or assets
being sold by Huffco Turkey, (ii) any geological, geophysical or other
interpretations with respect to the Company Assets or assets being sold by
Huffco Turkey and (iii) any economic forecasts, in each case whether contained
in any material furnished to Acquiror by either Seller, its officers,
directors, employees, agents, advisors or representatives, or otherwise.
(b) Except as and to the extent expressly set forth in
Article IV and in the certificate to be delivered by Acquiror pursuant to
Section 8.03(a) at Closing, Acquiror makes no, and disclaims any,
representations or warranties whatsoever, whether express or implied. Acquiror
disclaims all liability and responsibility for any other statement or
information made or communicated (orally or in writing) to either Seller, its
affiliates or any stockholder, officer, director, employee, agent, advisor, or
representative of either (including, but not limited to, any opinion,
information or advice which may have been provided to any such person by any
representative of Acquiror or any other person), wherever and however made.
7.13 CERTAIN TAX MATTERS.
(a) Huffco China shall be treated as a partnership for
United States federal income tax purposes and the parties hereto (and their
affiliates) will characterize Huffco China as a partnership in any tax return,
statement, report or other filing made by any of them that relates to Huffco
China's status as a partnership for United States federal income tax purposes.
(b) The Company shall be responsible for preparing and
filing the United States federal income tax partnership returns of Huffco China
for the 1996 calendar year and for the short taxable year beginning on January
1, 1997 and ending on the Closing Date. Any such return shall be prepared on a
basis consistent with any prior such returns of Huffco China. The Company will
file a timely election under Section 754 of the Code to adjust the basis of the
assets of Huffco China in the manner provided in Sections 743 and 734 of the
Code. Acquiror and its affiliates shall cooperate with the Company and shall
make available to the Company all necessary books and records and timely take
all action necessary to allow the Company to prepare and file any such return
and make such election.
7.14 FURTHER ASSURANCES. The parties hereto agree to take or cause
to be taken such further action or deliver or cause to be delivered such
additional agreements or instruments as any of them may reasonably request for
the purpose of carrying out this Agreement or the transactions contemplated
hereby.
7.15 REPURCHASE OF HUFFCO CHINA PREFERRED SHARES. At a mutually
acceptable time between four and six years after the Closing Date, Acquiror and
the Company agree to use all reasonable efforts to negotiate and enter into a
mutually acceptable agreement providing for the sale of the Huffco China
Preferred Shares to a Newfield company for a purchase price equal to the amount
that would be paid by a willing buyer to a willing seller, each under no
compulsion to buy or sell, and payable either in cash or in other
consideration, as the parties may agree. If no agreement has been signed by
the sixth anniversary of the Closing Date, this Section 7.15 shall terminate.
To assist in their negotiations, the parties may retain an independent
petroleum engineering firm
-30-
<PAGE> 35
acceptable to the Acquiror and the Company. Such engineering firm shall
determine the fair market value of the Huffco China Preferred Shares, based on
the price that a willing buyer would pay to a willing seller when each is under
no compulsion to buy or sell, and shall report such value and the basis for
such value to the parties within 90 days of receipt of the parties' request.
All maps, calculations and other work papers of the engineering firm shall be
made available to either party at its request. Fees and expenses of the
engineering firm shall be borne equally by the parties.
ARTICLE VIII
CONDITIONS
8.01 CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH PARTY. The
respective obligations of Acquiror, the Company and Huffco Turkey to effect the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of the following conditions, any or all of which may be
waived, in whole or in part, by the agreement of the parties to the extent
permitted by applicable Law:
(a) no Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any Law or Order which is in effect and which
has the effect of making the Acquisition or the other transactions contemplated
in this Agreement illegal or otherwise prohibiting consummation of the
Acquisition or such other transactions; and
(b) subscription agreements, substantially in the form of
Exhibits B and C hereto, shall have been executed and delivered by the parties
thereto.
8.02 CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIROR. The
obligations of Acquiror to effect the transactions contemplated hereby shall be
subject to the satisfaction at or prior to the Closing of the following
conditions, any or all of which may be waived by Acquiror, in whole or in part,
to the extent permitted by applicable Law:
(a) each of the representations and warranties of the
Company and Huffco Turkey contained in this Agreement shall be true and correct
in all material respects (without duplication of any materiality exception
contained in any individual representation and warranty) as of the date of this
Agreement and as of the Closing as though made again as of the Closing.
Acquiror shall have received a certificate (i) of the President and the Vice
President and Managing Director of the Company, dated the Closing Date, to such
effect as it relates to the Company and (ii) of the President of Huffco Turkey,
dated the Closing Date, to such effect as it relates to Huffco Turkey;
(b) the Company and Huffco Turkey shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by the Company or Huffco Turkey
on or prior to the Closing. Acquiror shall have received a certificate (i) of
the President and the Vice President and Managing Director of the Company,
dated the Closing Date, to such effect as it relates to the Company and (ii) of
the President of Huffco Turkey, dated the Closing Date, to such effect as it
relates to Huffco Turkey;
-31-
<PAGE> 36
(c) the resignations, effective at Closing, of each of
directors and officers of Huffco China and Huffco (West Africa) Inc. shall have
been delivered to Acquiror;
(d) all consent, notification and approval requirements
with respect to Block 05/36, Gulf of Bohai, People's Republic of China that
Acquiror reasonably believes are necessary or advisable in connection with the
transactions contemplated by this Agreement shall have been satisfied;
(e) the Company and Huffco Turkey shall have executed and
delivered to Acquiror a general assignment and bill of sale substantially in
the form of Exhibit D hereto and all such documents, instruments and
certificates as are reasonably necessary to effect the transfer of the
Subsidiary Shares (other than the Huffco China Preferred Shares) to Acquiror;
(f) the Company and Acquiror shall have received releases
from employees and former employees of the Company to an extent satisfactory to
Acquiror in its sole discretion; and
(g) Huffco Group, Inc. and its affiliates shall have
transferred to the Company all of the assets held by such persons on the date
of this Agreement of the type described in Schedule 3.20 hereto.
8.03 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND HUFFCO
TURKEY. The obligations of the Company and Huffco Turkey to effect the
transactions contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of the following conditions, any or all of which may be
waived by the Company and Huffco Turkey, in whole or in part, to the extent
permitted by applicable Law:
(a) each of the representations and warranties of
Acquiror contained in this Agreement shall be true and correct in all material
respects (without duplication of any materiality exception contained in any
individual representation and warranty) as of the date of this Agreement and as
of the Closing as though made again as of the Closing. The Company and Huffco
Turkey shall have received a certificate of the President and the Treasurer of
Acquiror, dated the Closing Date, to such effect;
(b) Acquiror shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing. The Company
and Huffco Turkey shall have received a certificate of the President and the
Treasurer of Acquiror, dated the Closing Date, to such effect;
(c) Acquiror shall have executed and delivered to the
Company an assumption agreement substantially in the form of Exhibit E hereto;
(d) Acquiror shall have (i) paid the cash Purchase Price
to the Company and Huffco Turkey as provided in Article I;
-32-
<PAGE> 37
(e) the Company and Acquiror shall have received releases
from employees and former employees of the Company to an extent satisfactory to
the Company in its sole discretion; and
(f) Newfield shall have executed and delivered a guaranty
and indemnity agreement substantially in the form of Exhibit F hereto.
ARTICLE IX
MISCELLANEOUS
9.01 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Acquiror and the Company;
(b) by Acquiror or the Company if the Closing has not
occurred on or before 45 days from the date of this Agreement;
(c) by Acquiror, upon a material breach of any covenant
or agreement on the part of the Company or Huffco Turkey set forth in this
Agreement, or if any representation or warranty of the Company or Huffco Turkey
shall have become untrue, in either case such that the conditions set forth in
Section 8.02(a) or Section 8.02(b) would not be satisfied (a "Terminating
Company Breach"); provided that, if such Termination Company Breach is curable
by the Company or Huffco Turkey through the exercise of reasonable efforts and
for so long as the Company or Huffco Turkey continues to exercise such
reasonable efforts, Acquiror may not terminate this Agreement under this
Section 9.01(c);
(d) by the Company or Huffco Turkey, upon a material
breach of any covenant or agreement on the part of Acquiror set forth in this
Agreement, or if any representation or warranty of Acquiror shall have become
untrue, in either case such that the conditions set forth in Section 8.03(a) or
Section 8.03(b) would not be satisfied (a "Terminating Acquiror Breach");
provided that, if such Terminating Acquiror Breach is curable by Acquiror
through the exercise of its reasonable efforts and for so long as Acquiror
continues to exercise such reasonable efforts, the Company may not terminate
this Agreement under this Section 9.02(d); or
(e) by Acquiror or the Company, if there shall be any
Order which is final and nonappealable preventing the consummation of the
Acquisition, unless the party relying on such Order has not complied with its
obligations under Section 7.03(b).
9.02 EFFECT OF TERMINATION. In the event of any termination of
this Agreement pursuant to Section 9.01, the Company and Acquiror shall have no
obligation or liability to each other except that (i) the provisions of Section
7.05 shall survive any such termination, and (ii) nothing herein and no
termination pursuant hereto will relieve any party from liability for its
willful or negligent failure to comply with its covenants and agreements in
this Agreement.
-33-
<PAGE> 38
9.03 WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits thereof to the
extent permitted by applicable Law. This Agreement may not be amended or
supplemented at any time, except by an instrument in writing signed on behalf
of each party hereto. The waiver by any party hereto of any condition or of a
breach of any provision of this Agreement shall not operate or be construed as
a waiver of any other condition or subsequent breach.
9.04 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
(including the Schedules and Exhibits hereto) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both oral and
written, among the parties or any of them, with respect to the subject matter
hereof. Neither this Agreement nor any document delivered in connection with
this Agreement confers upon any person not a party hereto any rights or
remedies hereunder, except in the case of Section 7.11.
9.05 ASSIGNMENT. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. Acquiror may, upon notice to the Company,
assign or delegate its rights and obligations under this Agreement or any part
hereof to one or more direct or indirect wholly owned subsidiaries of Newfield,
but no such assignment shall in any way operate to enlarge, alter or change any
obligation of or due to the Company or Huffco Turkey or relieve Acquiror of its
obligations hereunder and provided that any affiliate receiving an assignment
of all or a majority of Acquiror's right to receive the Huffco China Shares
shall also assume all of Acquiror's obligations pursuant to Section 7.11.
Except as set forth in this Agreement, this Agreement shall not be assignable
by any party hereto without the consent of the other parties hereto.
9.06 CERTAIN DEFINITIONS. For the purposes of this Agreement,
unless the context clearly indicates otherwise, the term:
(a) "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned person;
(b) "beneficial owner" and words of similar import shall
have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act.
(c) "Benefit Plan" or "Benefit Plans" shall mean each
Plan and each personnel policy, stock option plan, collective bargaining
agreement, bonus plan or arrangement, incentive award plan or arrangement,
vacation policy, severance pay plan, policy or agreement, deferred compensation
agreement or arrangement, executive compensation or supplemental income
arrangement, consulting agreement, employment agreement, and each other
employee benefit plan, agreement, arrangement, program, practice or
understanding that is not a Plan and that is sponsored, maintained or
contributed to by the Company or any of its subsidiaries for the benefit of the
employees, former employees, independent contractors, or agents of the Company
or any of its subsidiaries, or has been so sponsored, maintained or contributed
to since 1974;
-34-
<PAGE> 39
(d) "business day" shall mean any day other than a day on
which banks in Houston, Texas are authorized or obligated to be closed;
(e) "Closing" shall mean a meeting, which shall be held
in accordance with Section 1.02 of this Agreement, of persons interested in the
transactions contemplated by this Agreement at which all documents deemed
necessary by the parties to this Agreement to evidence the fulfillment or
waiver of all conditions precedent to the consummation of the Acquisition are
executed and delivered and the Cash Purchase Price is paid;
(f) "Closing Date" shall mean the date of the Closing as
determined pursuant to Section 1.02 of this Agreement;
(g) "control" (including the terms "controlled,"
"controlled by" and "under common control with") shall mean the possession,
directly or indirectly or as trustee or executor, of the power to direct or
cause the direction of the management or policies of a person, whether through
the ownership of stock or as trustee or executor, by contract or credit
arrangement or otherwise;
(h) "Newfield company" shall mean Newfield and each
subsidiary of Newfield.
(i) "person" shall mean an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization, other entity or group (as defined in Section 13(d) of the
Exchange Act);
(j) "Plan" or "Plans" shall mean each "employee benefit
plan," as such term is defined in Section 3(3) of ERISA, including, but not
limited to, any employee benefit plan that may be exempt from some or all of
the provisions of ERISA, that is sponsored, maintained or contributed to by the
Company or any of its subsidiaries for the benefit of the employees, former
employees, independent contractors, or agents of the Company or any of its
subsidiaries, or has been so sponsored, maintained or contributed to since
1974;
(k) "subsidiary" or "subsidiaries" of the Company,
Acquiror or any other person, shall mean any corporation, partnership, joint
venture or other legal entity of which the Company, Acquiror or any such other
person, as the case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation
or other legal entity; and
(l) "Tax" or "Taxes" shall mean any and all taxes,
charges, fees, levies, assessments, duties or other amounts payable to any
federal, state, local or foreign taxing authority or agency, including, without
limitation, (i) income, franchise, profits, gross receipts, minimum,
alternative minimum, estimated, ad valorem, value added, sales, use, service,
real or personal property, capital stock, license, payroll, withholding,
disability, employment, social security, workers compensation, unemployment
compensation, utility, severance, excise, stamp, windfall profits, transfer and
gains taxes, (ii) customs, duties, imposts, charges, levies or other similar
assessments of any kind, and (iii) interest, penalties and additions to tax
imposed with respect thereto.
-35-
<PAGE> 40
9.07 NOTICES. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and (i) delivered in person or by courier, (ii) sent by
telecopy or facsimile transmission, or (iii) mailed, certified first class
mail, postage prepaid, return receipt requested, to the appropriate party at
the following addresses:
if to the Company:
Huffco International, L.L.C.
1100 Louisiana, 25th Floor
Houston, Texas 77002
Telecopy: (713) 651-0119
Attention: Terry Huffington
if to Huffco Turkey:
Huffco Turkey, Inc.
1100 Louisiana, 25th Floor
Houston, Texas 77002
Telecopy: (713) 651-0119
Attention: Terry Huffington
with copies in either case to:
Baker & Botts, L.L.P.
3000 One Shell Plaza
910 Louisiana
Houston, Texas 77002-4995
Telecopy: (713) 229-1522
Attention: David F. Asmus
if to Acquiror:
Newfield Offshore Inc.
c/o Newfield Exploration Company
363 N. Sam Houston Pkwy E, Suite 2020
Houston, Texas 77060
Telecopy: (281) 405-4255
Attention: Terry W. Rathert
with copies to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Telecopy: (713) 615-5926
Attention: James H. Wilson
-36-
<PAGE> 41
or to such other address as the parties set forth above shall have furnished to
the other parties set forth above by notice given in accordance with this
Section 9.07. Such notices shall be effective (i) if delivered in person or by
courier, upon actual receipt by the intended recipient, (ii) if sent by
telecopy or facsimile transmission, when the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee, or (iii) if mailed, upon the earlier of five days after deposit in
the mail and the date of delivery as shown by the return receipt therefor.
9.08 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE STATE OF TEXAS, WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9.09 SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provision, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
9.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
9.11 HEADINGS. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
9.12 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy available at law or in equity.
-37-
<PAGE> 42
IN WITNESS WHEREOF, Acquiror, the Company and Huffco Turkey have each
caused this Agreement to be executed on its behalf by its officer thereunto
duly authorized, all as of the date first above written.
NEWFIELD OFFSHORE INC.
By: /s/ Terry W. Rathert
-------------------------------
Terry W. Rathert
Secretary and Treasurer
HUFFCO INTERNATIONAL, L.L.C.
By: /s/ Terry Huffington
-------------------------------
Terry Huffington
President
HUFFCO TURKEY, INC.
By: /s/ David A. Trice
-------------------------------
David A. Trice
President
-38-
<PAGE> 1
EXHIBIT 10.15
RESOLUTION OF MEMBERS ESTABLISHING
THE
PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS
OF
SERIES "A" PREFERRED SHARES
OF
HUFFCO CHINA, LDC
Consented to by the members of Huffco China, LDC, a Bahamian
limited duration company (the "Company"), in accordance with the provisions of
Article 60 of the Company's Articles of Association this 14th day of May, 1997.
RESOLVED, that pursuant to the authority vested in the members of
the Company in accordance with the provisions of the Memorandum and Articles of
Association, a series of Preferred Stock, no par value, of the Company be and
hereby is created, effective May 1, 1997 (the "Effective Date"), and that the
designation and number of shares thereof and the preferences, limitations and
relative rights, including voting rights, of the shares of such series and the
qualifications, limitations and restrictions thereof are as follows:
SERIES "A" PREFERRED SHARES
ARTICLE I
1.1 Designation and Amount. There shall be a series of
Preferred Stock that shall be designated as "Series 'A' Preferred Shares" (the
"Preferred Shares"), and the number of shares constituting such series shall be
1,125,000. Such number of shares may be increased or decreased by unanimous
resolution of the Company's members and an appropriate amendment to the
Memorandum and Articles of Association; provided, however, that no decrease
shall reduce the number of shares of Preferred Shares to less than the number
of Preferred Shares then issued and outstanding plus the number of Preferred
Shares issuable upon exercise of outstanding rights, options or warrants or
upon conversion of outstanding securities issued by the Company.
<PAGE> 2
1.2 Certain Defined Terms.
"Affiliate" means, as to any Person, another Person which
controls, is controlled by, or is under common control with such Person, with
"control" meaning the ownership of more than fifty percent (50%) of the voting
rights in a corporation, partnership or other Person.
"arm's length" means, with respect to any contract, that the
contract was freely negotiated by two willing independent parties, neither
under any compulsion to contract with the other, and, as used in this
Agreement, specifically excludes all contracts between a contracting party and
any of its Affiliates, contracts with the Government or any government
authority or agency having regulatory authority over the other contracting
party, barter contracts, and contracts whose consideration in whole or in part
consists of a separate agreement for a different transaction between the same
parties.
"Business Day" means any day on which banks in Houston, Texas
are not authorized or permitted to be closed.
"Contract Area" shall have the meaning ascribed to such term as
set forth in the Petroleum Contract.
"Costs" means, for each month, beginning with the Effective Date,
(i) Excess Costs as of the end of the preceding month, plus (ii) the following
costs actually paid during that month (regardless of whether the costs were
incurred in that month or in another month):
(a) All costs (without duplication) actually paid by
the Company under the Participation Agreement, the Operating
Agreement or the Petroleum Contract or otherwise actually paid by
the Company with respect to Petroleum Operations, including
without limitation costs of bonuses and royalties paid by the
Company, but specifically excluding amounts paid for Taxes,
amounts paid for costs attributable to the U.S. home office of
the Company and amounts paid by Affiliates of the Company (except
as described in clauses (b), (c), and (d) below);
(b) All costs actually paid by the Company to purchase
Hydrocarbons produced from the Contract Area or any area
unitized with all or a part of the Contract Area from other
Persons, to the extent the revenues from the sale of such
purchased Hydrocarbons are included in Gross Proceeds;
(c) All Taxes actually paid by the Company to the
Government with respect to Petroleum Operations; and
(d) Actual general and administrative costs incurred by
the Company and/or Affiliates of the Company in connection with
Petroleum Operations and not
2
<PAGE> 3
otherwise included in clause (a) above, not to exceed (i) while
the Company is a nonoperator under the Operating Agreement, 25%
of the indirect charge paid by the Company to the operator under
the Operating Agreement for that month or (ii) if the Company
becomes the operator under the Operating Agreement, the
percentage of the indirect charge provided to the operator under
the Operating Agreement for that month which is borne by the
Company;
provided, however, that "Costs" shall not include (x) any costs deducted in the
calculation of Gross Proceeds or (y) any costs paid with insurance proceeds or
otherwise paid or reimbursed by a third Party, including without limitation, a
farmee under a farmout agreement, where the payment or reimbursement has not
been included in Gross Proceeds; and provided further that for the month of
May, 1997, Costs shall be determined using only amounts paid from the Effective
Date through the end of the month and using Excess Costs as of the Effective
Date. Any expenditures made in currencies other than U.S. dollars shall be
converted to U.S. dollars at the exchange rate established by the Accounting
Procedure attached to the Operating Agreement as Exhibit "A".
"Excess Costs" means (i) as of the Effective Date, U.S.
$5,000,000 and (ii) as of the end of each subsequent month, an amount equal to
the excess, if any, of Costs for such month over Gross Proceeds for such month.
"Government" means the government of the People's Republic of
China and any political subdivision thereof, and any agency or instrumentality
of any of them.
"Gross Proceeds" means, for each month, beginning at the
Effective Date, (i) the amounts actually received by the Company in such month
from the sale or other disposition of Subject Hydrocarbons (other than by
mortgage, pledge, charge or other encumbrance for the purpose of security for
finance), regardless of whether such Subject Hydrocarbons were sold in that
month or another month plus (ii) any consideration actually received by the
Company in such month from the sale, farmout or other disposition of its
interest in the Petroleum Contract to a non-Affiliate, as further described in
Article IV plus (iii) any other amounts actually received by the Company in
such month with respect to Petroleum Operations, provided that:
(a) Where Subject Hydrocarbons are sold in an arm's
length transaction to a non-Affiliate, the Gross Proceeds shall
be the amounts realized by the Company, less the deductions
described in clause (d) below. Where Subject Hydrocarbons are
exchanged or sold for non-cash consideration, the amount realized
shall be the cash value of the consideration received.
(b) Where Subject Hydrocarbons are sold to an Affiliate
of the Company or otherwise disposed of in a non-arm's length
transaction, the Gross Proceeds shall be the Market Value of such
Subject Hydrocarbons.
3
<PAGE> 4
(c) Where Subject Hydrocarbons are blended prior to
sale with other oil or gas which is also owned by the Company or
its Affiliates and which is produced from areas other than the
Contract Area or any area unitized with the Contract Area, the
Gross Proceeds shall be the Market Value of the Subject
Hydrocarbons prior to blending.
(d) All costs of gathering, treating, compressing,
processing, storing, transporting and marketing Subject
Hydrocarbons (other than income or profits Taxes) incurred by the
Company prior to the point of sale which are not included as
Costs shall be deducted from amounts received for such Subject
Hydrocarbons by the Company for purposes of determining Gross
Proceeds. Deductions for costs paid to Affiliates shall not
exceed those prevailing in arm's length transactions for
comparable services.
(e) Gross Proceeds shall include any demand charge or
similar charge paid by a purchaser to secure a right of
deliveries of Subject Hydrocarbons and any settlement payments or
other payments made by a purchaser to amend or terminate a sales
contract.
(f) Gross Proceeds shall include, at the time the
payments are received, any take-or-pay or other advance payments
for future deliveries of Subject Hydrocarbons.
(g) If the Company sells for its own account more or
less than its percentage of ownership share of Subject
Hydrocarbons, Gross Proceeds shall be based on the Hydrocarbons
that the Company actually sells, not its entitlement.
(h) Gross Proceeds shall not include any amount for
Subject Hydrocarbons used in Petroleum Operations or unavoidably
lost in production, gathering, treatment, compression,
processing, storage or transportation.
For the month of May, 1997, Gross Proceeds shall be determined using only
amounts received from the Effective Date through the end of the month. Any
proceeds received in currencies other than U.S. dollars shall be converted to
U.S. dollars at the rate of exchange actually received by the Company.
"Hydrocarbons" means oil, gas and other minerals.
"Market Value" means (i) the weighted average FOB price of
Hydrocarbons of the same or similar type and quality sold by the Company to
non-Affiliates in arm's length transactions during the month in question or
(ii) if there were no such sales, the weighted average FOB price of
Hydrocarbons of the same or similar quality sold by all parties comprising the
Contractor under the Petroleum Contract to non-Affiliates in arm's length
transactions during the month in question, in
4
<PAGE> 5
each case adjusted as necessary to account for differences in quality between
the Subject Hydrocarbons and the Hydrocarbons sold and to deduct costs of
gathering, treating, compressing, processing, storing, transporting and
marketing (other than income or profits Taxes) borne by the seller after the
point of export. In the event that neither of such prices can be calculated,
the Parties shall agree upon an index price for a Chinese crude oil listed in
Platt's Oilgram Price Report which best approximates the market value of the
Subject Hydrocarbons and shall agree upon suitable adjustments to that index
price for differences in quality between the Subject Hydrocarbons and the index
Hydrocarbons and for transportation costs between the point of delivery for the
index Hydrocarbons and the point of export for the Subject Hydrocarbons.
"Net Profits" means, for any month, the excess, if any, of Gross
Proceeds for such month over Costs for such month.
"Operating Agreement" means the operating agreement with respect
to the Contract Area among the parties comprising the Contractor under the
Petroleum Contract, as in effect from time to time, and any amendments,
modifications or replacements thereof.
"Participation Agreement" means that certain Participation
Agreement among Huffco China, LDC and Kerr-McGee China Petroleum Ltd. dated
December 1, 1995, as in effect from time to time, and any amendments,
modifications or replacements thereof.
"Parties" means the Preferred Shareholders and the Company.
"Party" means either a Preferred Shareholder or the Company.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, trust, governmental body or any other entity.
"Petroleum Contract" means that certain Petroleum Contract among
the China National Offshore Oil Corporation, Kerr-McGee China Petroleum Ltd.
and the Company, dated January 23, 1996, and any amendments, modifications or
replacements thereof.
"Petroleum Operations" means all operations conducted with
respect to the Contract Area or any area unitized with all or a part of the
Contract Area pursuant to the Petroleum Contract or under the Operating
Agreement or (if applicable) any unit agreement, and the gathering, treating,
compressing, processing, storing, transporting and marketing of oil and gas
from the Contract Area.
"Preferred Dividend" means the cash dividend provided for in
Section 2.1.
"Preferred Shareholder" means each holder of Preferred Shares.
"Record Date" means the date established in Section 2.4.
5
<PAGE> 6
"Subject Hydrocarbons" means all Hydrocarbons from the Contract
Area or areas unitized with all or a portion of the Contract Area which are
sold or otherwise disposed of by or on behalf of the Company for the Company's
account under the terms of the Petroleum Contract and the Operating Agreement
or (if applicable) any unit agreement.
"Taxes" means all taxes, duties, levies, charges and other
assessments by any government or political subdivision, or any agency or
instrumentality of any of them.
ARTICLE II
2.1 Dividends and Distributions. If there are Net Profits in
any month, the Company shall declare, and each Preferred Shareholder shall be
entitled to receive, on or before the twentieth (20th) day of the following
month, in preference to the holders of any other class or series of shares of
the Company, a dividend (the "Preferred Dividend") equal to ten percent (10%)
of the Net Profits for the month multiplied by a fraction, the numerator of
which is the number of Preferred Shares held by such Preferred Shareholder on
the Record Date and the denominator of which is the total number of Preferred
Shares issued and outstanding on the Record Date.
2.2 Duration. The Preferred Dividend shall, subject to
Sections 3.2, 6.5 and 6.6, be payable with respect to the Net Profits for each
month through and including the month of termination of the Petroleum
Contract, provided that the termination of such Preferred Dividend shall not
limit a Preferred Shareholder's entitlement to payment of any amounts accrued
but unpaid prior to that date.
2.3 Payment. Payments under Section 2.1 shall be made in
immediately available funds in U.S. dollars. Dividends on the Preferred Shares
in an amount less than the total amount then accrued and payable on such
Preferred Shares shall be allocated pro rata, on a share-by-share basis, among
all Preferred Shares at the time outstanding. Any Preferred Dividend not paid
when due shall bear interest at the "Agreed Rate", as such term is defined
under the Operating Agreement, from the due date until paid in full.
2.4 Record Date. The Record Date for payment of dividends
with respect to the Net Profits for any month shall be the last day of the
month.
2.5 Limitation. No dividend shall be declared and paid unless
immediately after the payment of such dividend, the Company will be able to
satisfy its liabilities as they become due in the ordinary course of its
business and the realizable value of the assets of the Company will not be less
than the sum of its total liabilities, other than deferred taxes, as shown in
its books of account, and its issued and outstanding share capital, nor shall a
dividend be declared and paid which is otherwise prohibited by the laws of the
Bahamas.
6
<PAGE> 7
ARTICLE III
3.1 Conduct of Petroleum Operations. The conduct of, or
decision not to conduct, any Petroleum Operations, and the extent and duration
thereof, shall be solely at the discretion of the Company and the other parties
to the Petroleum Contract. The Company shall have no obligation as a result of
the issuance of the Preferred Shares to participate in any Petroleum Operations
conducted by the other parties to the Petroleum Contract or the Operating
Agreement.
3.2 Rights of Withdrawal and Relinquishment. The Company
reserves the right, at any time, to withdraw from all or part of the Contract
Area under the terms of the Operating Agreement, without the necessity of the
consent of or notice to the Preferred Shareholders, and upon any such
withdrawal, Costs and Gross Proceeds shall be computed only with respect to the
portions of the Contract Area from which the Company has not withdrawn.
Likewise, the Company and the other parties comprising the Contractor under the
Petroleum Contract reserve the right, at any time, to relinquish any portion of
the Contract Area or the entire Petroleum Contract, without the necessity of
the consent of or notice to the Preferred Shareholders, and any such
relinquishment shall be fully effective to terminate the Preferred Dividend
with respect to the area relinquished or with respect to the entire Petroleum
Contract, as applicable. Notwithstanding the other terms of this Resolution,
the Preferred Dividend shall continue to apply to Net Profits from any interest
in any portion of the Contract Area that is acquired by the Company or any of
its Affiliates within one year after the Company's withdrawal or the
relinquishment of the Petroleum Contract.
3.3 Rights of Unitization. The Company shall have the right
and power, without the necessity of consent of or notice to the Preferred
Shareholders, to unitize all or any portion of the Contract Area with other
areas and to amend or terminate any unitization agreements, on such terms as
the Company in its sole discretion shall determine. If and whenever, through
the exercise of this power or pursuant to any law or regulation, or any order
of any Government official, any portion of the Contract Area is unitized, the
Preferred Dividend, insofar as it relates to such unitized area, shall be
calculated with respect to the Hydrocarbons that accrue to the Company under
and by virtue of the unitization.
ARTICLE IV
4.1 Restrictions on Transfer by Preferred Shareholders. Until
the eighth anniversary of the Effective Date, the Preferred Shareholders shall
have no right to transfer any of the Preferred Shares. On and after the eighth
anniversary of the Effective Date, the Preferred Shareholders shall have the
right to transfer all or any part of the Preferred Shares, but only after
complying with the following terms and provisions:
i. The selling Preferred Shareholder shall provide the
Company with written notice of the proposed terms of sale.
7
<PAGE> 8
ii. The Company shall thereafter have an option to purchase
the offered shares upon the same terms set forth in said notice, which option
may be exercised by written notice thereof given to the selling Preferred
Shareholder within 30 days after the original date of notice.
iii. If the offered shares are not purchased by the Company
pursuant to Section 4.1(ii), then the selling Preferred Shareholder shall have
the right to sell the offered shares within 180 days from the expiration date
of the option of the Company created by Section 4.1(ii) on terms no less
favorable to the selling Preferred Shareholder than those contained in the
notice. If no sale is consummated within such 180-day period, the selling
Preferred Shareholder shall again be subject to the notice requirements and
option provided for in this Section.
iv. The Company's failure to exercise the above-stated option
on any occasion shall not be a waiver of its right to exercise such option on
any future occasion when such option again becomes applicable.
v. The Company's option shall not apply to any mortgaging of
all or part of the Preferred Shares, to transfers by Preferred Shareholders
which are limited liability companies, corporations or other non-individuals to
their Affiliates or to transfers by Preferred Shareholders to their members or
subsequent transfers by such members to trusts for family members, by
inheritance or by devise.
4.2 Change in Ownership. No change of ownership of any
Preferred Shares shall be binding upon the Company until the Company has been
furnished with an original or certified copy of the instrument of transfer and
the transferee's name has been entered in the Share Register of the Company.
4.3 Limitation on Transfers. No Preferred Shares may be sold,
transferred or otherwise disposed of except as may be permitted under
applicable securities laws, whether pursuant to registration under such laws or
an exemption from such laws. Substantially the following legend shall be
placed on the Preferred Share certificates:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER ANY APPLICABLE
SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS OF FIRST REFUSAL, AND CERTAIN OTHER RESTRICTIONS ON
TRANSFER, ALL OF WHICH RIGHTS AND RESTRICTIONS ARE BINDING ON
TRANSFEREES. COPIES OF THE MEMORANDUM AND ARTICLES OF
ASSOCIATION OF THE COMPANY AND RESOLUTION OF MEMBERS COVERING
8
<PAGE> 9
THE FOREGOING MATTERS AND RESTRICTING THE TRANSFER OF SUCH SHARES
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT
THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.
ARTICLE V
5.1 Books and Records. The Company shall at all times
maintain true and correct books and records sufficient to determine the amounts
payable to the Preferred Shareholders hereunder.
5.2 Inspections. The books and records referred to in Section
5.1, joint interest billings and other evidence of Costs, and, subject to
limitations of confidentiality undertakings with co-owners or other third
parties, copies of the contracts pursuant to which Subject Hydrocarbons have
been gathered, compressed, processed, treated, transported and sold and other
evidence of Gross Proceeds (collectively, the "Company Materials"), shall be
open for inspection by the Preferred Shareholders and their representatives at
the office of the Company during normal business hours (i) for purposes of
audit, as described in Section 5.3, (ii) in connection with any bona fide
proposed exercise of options or other rights to acquire shares or other equity
interests in a Preferred Shareholder, by the Person proposing to exercise such
rights or options and such Person's representatives, (iii) in connection with a
bona fide proposed transfer of some or all of the Preferred Shares, by the
transferring Preferred Shareholder and the bona fide potential transferee and
such transferee's representatives, who in each case agree in writing to keep
such information confidential, and (iv) as required by any applicable laws,
rules or regulations of any government, in any legal proceedings, or by any
stock exchange having jurisdiction over a Preferred Shareholder or its
Affiliates. Persons to whom Company Materials are disclosed under this Section
5.2 may make photocopies of the Company Materials at their own expense, subject
to the terms of Section 5.6.
5.3 Audit Rights and Adjustments. Once each calendar year,
the Preferred Shareholders, acting as a class, shall have the right to audit,
at their own expense and during normal business hours, and subject to the
limitations of confidentiality undertakings with co-owners or other third
parties all Company Materials pertaining to the calculation of the monthly Net
Profits. Each Preferred Shareholder, its representatives and independent
certified public accountants may conduct or participate in the performance of
each audit; provided that the cost and expense of such certified public
accountants and other representatives shall be borne by such Preferred
Shareholder. The Company shall not be required to adjust any item included in
the calculation of the monthly Net Profits unless a claim therefor is presented
within 24 months after the close of the calendar year in which the monthly Net
Profits at issue was calculated, and in the absence of such timely claims, the
bills and statements rendered shall be conclusively established as correct,
except to the extent adjustments are made under the terms of the Petroleum
Contract or Operating Agreement, in which
9
<PAGE> 10
event the 24 month period for the adjusted items shall run from the close of
the calendar year in which the adjustment was made.
5.4 Monthly Statements. Within 30 days next following the
close of each month, the Company shall deliver to the Preferred Shareholders a
statement showing, in reasonable detail, the computation of Net Profits
attributable to such month.
5.5 Geological Data. Upon request, the Company shall, subject
to the limitations of confidentiality undertakings with co-owners or other
third parties, make available all electric and other logs of all wells
hereafter drilled on the Contract Area, and all cores, cuttings and other
geological, well and production data secured from Petroleum Operations
(collectively, the "Geological Data") (i) in connection with any bona fide
proposed exercise of options or other rights to acquire shares or other equity
interests in a Preferred Shareholder, to the Person proposing to exercise such
rights or options and such Person's representatives, (ii) in connection with a
bona fide proposed transfer of some or all of the Preferred Shares, to the
transferring Preferred Shareholder and the bona fide potential transferee and
such transferee's representatives, who in each case agree in writing to keep
such information confidential, or (iii) as required by applicable laws, rules
or regulations of any government, in any legal proceedings or by any stock
exchange having jurisdiction over a Preferred Shareholder or its Affiliates.
Persons to whom Geological Data is disclosed under this Section 5.5 may make
photocopies of the Geological Data at their own expense, subject to the terms
of Section 5.6.
5.6 Confidentiality. All information furnished pursuant to
this Article V is confidential and shall not be disclosed by any Person
authorized to received such information in accordance with this Article V
except to such Person's representatives, as necessary or appropriate for
purposes of tax returns and other governmental filings, as necessary or
appropriate to defend itself against claims, or as required by applicable laws,
rules or regulations of any government, in any legal proceedings or by any
stock exchange having jurisdiction over such Person or its Affiliates. The
obligations under this Section 5.6 shall terminate at the earlier of three
years after disclosure or the time at which disclosed information is otherwise
publicly available.
ARTICLE VI
6.1 Tax Returns. No tax return shall be filed for the Company
with the United States federal government or the government of any political
subdivision within the United States without the prior written approval of the
holder of the Preferred Shares (if there is only one) or the designee of the
holders of the Preferred Shares (if there is more than one), such approval not
to be unreasonably withheld. The Company shall supply the draft return for the
Preferred Shareholder's or designee's review at least thirty (30) days prior to
filing. If the Preferred Shareholder or designee does not give written notice
of its objection within fifteen (15) days of receipt of the draft, it shall be
deemed to have approved the draft. The Company shall provide a copy of each
return to each Preferred Shareholder as soon as practicable after it is filed.
The designee, if any, shall be chosen by the holders of a majority of the
Preferred Shares, after excluding shares held by the Company and
10
<PAGE> 11
its Affiliates, and the Company shall promptly thereafter be provided with the
name and notice address of such designee.
6.2 Other Tax Provisions.
i. Within 75 days after the end of each calendar year, the
Company shall send each Preferred Shareholder the tax
information concerning the Company which is necessary for
preparing United States income tax returns or information
returns of the Preferred Shareholder or any of its
Affiliates for such year.
ii. Upon request of any Preferred Shareholder, the Company
shall file an election under Section 754 of the United
States Internal Revenue Code of 1986, as amended, to
provide for an optional adjustment to the basis of the
Company's assets; provided that the Preferred Shareholders
will bear the reasonable expenses incurred by the Company
in making any requested filing and in maintaining its tax
records to account for the basis ajustments resulting from
such election.
iii. The Company shall indemnify each Preferred Shareholder
against any Taxes imposed on such Preferred Shareholder by
the Government by reason of such Preferred Shareholder's
ownership or disposition of Preferred Shares or any
dividends received with respect thereto, and any such
indemnity payment shall be a Cost under this Agreement.
iv. To the extent required by applicable United States federal
income tax law, a holder of the Company's Common Shares
who is designated by such holders as a class shall act as
the "tax matters partner" (as defined in Section 6231 of
the United States Internal Revenue Code of 1986, as
amended) for the Company. The "tax matters partner" shall
not enter into any agreement or settlement binding on and
affecting the Preferred Shareholders without the prior
written consent of the Preferred Shareholder (if only one)
or the designee of the holders of the Preferred Shares
pursuant to Section 6.1 (if there is more than one), such
consent not to be unreasonably withheld.
6.3 Voting Rights. Except as otherwise required by law or the
Memorandum and Articles of Association of the Company or as otherwise provided
herein, the Preferred Shareholders shall have no voting rights, except that the
affirmative vote of the holders of a majority of the Preferred Shares, voting
as a class, after excluding shares held by the Company and its Affiliates,
shall be required before the Company may take any action to (i) amend, modify
or terminate this Resolution; (ii) amend the Memorandum or Articles of
Association of the Company in a manner which would contradict or nullify any
portion of this Resolution or would otherwise affect the preferences,
limitations, relative rights, qualifications, limitations or restrictions of
the Preferred
11
<PAGE> 12
Shares; (iii) authorize or issue additional Preferred Shares or any shares of
the Company ranking pari passu with or senior to the Preferred Shares; (iv)
merge, consolidate, enter into any similar business combination, enter into an
arrangement, or continuation or voluntarily dissolve the Company; or (v)
transfer of all or any part of the Company's interest in the Contract Area,
Petroleum Contract and Operating Agreement to an Affiliate. Each Preferred
Share shall entitle the holder thereof to one vote on any such matter.
6.4 Certain Restrictions. At any time when either (i) the
declaration of Preferred Dividends has not been made in accordance with the
provisions hereof or (ii) the payment of Preferred Dividends has not been made
in accordance with the provisions hereof, ((i) or (ii) being "in arrears")
thereafter and until all accrued dividends and distributions, whether or not
declared, on Preferred Shares outstanding shall have been declared and paid in
full (a "default period"):
i. the Company shall not declare or pay dividends or make a
distribution on any other shares of the Company, nor shall
it or any of its subsidiaries, without the written consent
of all the holders of the issued and outstanding Preferred
Shares, redeem, purchase, retire or otherwise acquire for
valuable consideration any other shares of the Company.
This clause shall not have the effect of increasing the
required vote for amending this or any other provision
herein.
ii. If the Preferred Dividends are in arrears for sixty (60)
days or more, the Preferred Shareholders with dividends in
arrears shall thereafter be entitled, voting as a class,
(after excluding Shares held by the Company and its
Affiliates) until the end of the default period, to
exercise all authority which all of the members of the
Company are otherwise entitled to have the exclusive
authority to exercise under the terms of the Memorandum
and Articles of Association of the Company, and to do so
without the vote of or prior notice to any other member,
excluding only authority to amend the Memorandum and the
Articles of Association and the authority to merge,
consolidate, arrange or voluntarily dissolve the Company.
The voting rights of all other members shall be suspended
during this period. Immediately after the end of the
default period, the special voting rights provided in this
Section 6.4(ii) shall cease.
6.5 Transfer by the Company. If the Company transfers all or
part of its interest in the Contract Area, Petroleum Contract and Operating
Agreement to a non-Affiliate (other than by mortgage, pledge, charge or other
encumbrance for the purpose of security for finance), the consideration
received for the transfer, net of transaction costs, shall be considered "Gross
Proceeds" for purposes of this Resolution, and Costs and Gross Proceeds shall
thereafter be computed only with respect to the Company's remaining interest,
if any.
12
<PAGE> 13
6.6 Dissolution. In the event that the Company is to be wound
up and dissolved, or liquidated, whether voluntarily, by order of a court, or
otherwise (a "Dissolution Event"), each Preferred Shareholder shall, prior to
the commencement of any such Dissolution Event, have the option to require the
Company to redeem all of the Preferred Shares owned by such holder for the fair
market value of such shares, as determined in accordance with this Section 6.6,
plus accrued and unpaid Preferred Dividends and interest to the redemption
date. Prior to any Dissolution Event, the Company shall promptly mail to each
Preferred Shareholder of record a form of written demand to be used by such
holder to exercise its right of redemption (a "Demand Form") and a notice which
shall disclose the proposed dissolution, the right of such Preferred
Shareholder to require the Company to redeem such Preferred Shares pursuant to
this Section 6.6, the redemption date (which shall be after the date of
determination of the fair market value of the Preferred Shares), by which the
Preferred Shareholder must notify the Company if it elects to require the
Company to make such redemption and that, if the election is made, dividends
will cease to accumulate on the Preferred Shares after the redemption date.
Within 10 days after the fair market value of the Preferred Shares has been
determined, the Company shall (i) notify each Preferred Shareholder of such
fair market value and (ii) deposit in trust with a bank in the United States
having a combined capital and surplus in excess of U.S. $50,000,000, as trustee
for the Preferred Shareholders, funds in U.S. dollars sufficient to redeem on
the redemption date all Preferred Shares outstanding on the date of delivery of
notice to the Preferred Shareholders. Each Preferred Shareholder which elects
to require the Company to redeem all of the Preferred Shares that such holder
owns shall deliver a completed Demand Form to the Company not later than the
redemption date. Any such election which is timely delivered shall become
irrevocable on the redemption date. After the redemption date, the Company
shall be entitled to withdraw from the trust account an amount equal to the
amount deposited in such account in respect of Preferred Shares which the
holders did not elect to have redeemed. Also after the redemption date, each
Preferred Shareholder which elected to have its shares redeemed under this
Section 6.6 shall surrender its Preferred Share certificates to the Company and
shall thereupon be entitled to receive payment for the fair market value of its
Preferred Shares, plus accrued and unpaid dividends, in U.S. dollars in
immediately available funds.
To determine fair market value, the Company shall retain an
internationally-recognized independent public accounting firm approved by the
holders of at least 50% of each class of shares outstanding (after excluding,
in the case of the Preferred Shares, those shares held by the Company and its
Affiliates) (the "Appraiser") who shall determine the value of the Preferred
Shares and the other shares of the Company. If any class of shares fails to
approve the Company's selection, an internationally-recognized independent
public accounting firm shall be selected by the Houston office of the American
Arbitration Association to serve as Appraiser. Fair market value, as
determined by the Appraiser, shall exclude the value of accrued and unpaid
Preferred Dividends and interest which will be separately paid to the Preferred
Shareholders in accordance with this Section 6.6. The Company shall promptly
provide the Appraiser with copies of all pertinent contracts, records,
geological, well and production data and other information relevant to the
determination. Any member of the Company may also submit evidence to the
Appraiser which it considers will be helpful in the determination. All
materials furnished by any member to the Appraiser shall at the same time be
furnished to the Company and all other members. The Appraiser may consult and
13
<PAGE> 14
engage disinterested third parties to advise it, including without limitation
petroleum engineers. The determination of the appraiser shall be final and
binding on the Company and all members of the Company without right of appeal.
The costs of the Appraiser shall be borne by the Company.
HUFFCO INTERNATIONAL, L.L.C.
By: /s/ TERRY HUFFINGTON
--------------------------------------
Terry Huffington
Manager
HUFFCO TURKEY, INC.
By: /s/ DAVID A. TRICE
--------------------------------------
David A. Trice
President
14
<PAGE> 1
EXHIBIT 10.16
GUARANTY AGREEMENT
This Guaranty Agreement (this "Agreement") is made and entered into as
of May 15, 1997 by and between Newfield Exploration Company, a Delaware
corporation ("Guarantor"), Newfield Offshore Inc., a Bahamian company and
indirect wholly owned subsidiary of Guarantor ("Newfield Offshore"), Huffco
International, L.L.C., a Delaware limited liability company (the "Company"),
and Huffco Turkey, Inc., a Delaware corporation ("Huffco Turkey" and, together
with the Company, the "Sellers").
WHEREAS, Newfield Offshore and the Sellers are parties to that certain
Asset Purchase Agreement dated as of May 12, 1997 (the "Asset Purchase
Agreement"); and
WHEREAS, it is a condition to the obligations of the Sellers to
consummate the transactions contemplated by the Asset Purchase Agreement that
Guarantor execute and deliver this Agreement to the Sellers;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein and in the Asset Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. GUARANTY. Guarantor hereby unconditionally and irrevocably
guarantees to the Sellers and the persons described in paragraph 5 below the
prompt payment and punctual performance by Newfield Offshore of its obligations
pursuant to Sections 1.05, 1.06, 7.11(b)(i)(A), 7.11(b)(i)(B), 7.11(b)(i)(D)
and 7.11(b)(ii) of the Asset Purchase Agreement, except that, with respect to
Section 7.11(b)(i)(D) of the Asset Purchase Agreement, only to the extent such
obligation arises with respect to a Specifically Assumed Liability (as defined
in the Asset Purchase Agreement) (the "Guaranteed Obligations"). Guarantor
shall be subrogated to all of the rights of any person against Newfield
Offshore in respect of any amounts paid by Guarantor to such person pursuant to
this Agreement.
2. DIRECT GUARANTY. Upon default by Newfield Offshore with respect
to any of the Guaranteed Obligations, any Seller or other person described in
paragraph 5 below may proceed directly against Guarantor without proceeding
against Newfield Offshore or pursuing any other remedy.
3. MODIFICATIONS AND DEFENSES. Any Seller may, without notice to or
consent of Guarantor, (i) extend or alter, together with Newfield Offshore, the
time, manner, place or terms of payment or performance of the Guaranteed
Obligations, (ii) waive, or, together with Newfield Offshore, amend any terms
of the Asset Purchase Agreement or (iii) release Newfield Offshore from any or
all Guaranteed Obligations, without in any way changing, releasing or
discharging Guarantor from liability hereunder. Guarantor hereby waives any
defenses (but not rights of set-off or counterclaims) that Newfield Offshore or
any other person liable for the Guaranteed Obligations may have or assert,
other than defenses provided by the express terms of the Asset Purchase
Agreement
<PAGE> 2
or this Agreement or any defenses that Guarantor would have had if Guarantor
had been the party to the Asset Purchase Agreement instead of Newfield
Offshore.
4. WAIVER AND AMENDMENT. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits thereof to the
extent permitted by applicable law; any such waiver must be in writing and
signed by the person against whom enforcement is sought. This Agreement may
not be amended or supplemented at any time, except by an instrument in writing
signed on behalf of each party hereto. The waiver by any party hereto of any
condition or of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any other condition or subsequent breach.
5. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This Agreement
constitutes the entire agreement and supersedes all other prior agreements and
understandings, both oral and written, among the parties or any of them, with
respect to the subject matter hereof. Neither this Agreement nor any document
delivered in connection with this Agreement confers upon any person not a party
hereto any rights or remedies hereunder, except the Seller Indemnified Parties
(as defined in the Asset Purchase Agreement), who shall be entitled to enforce
this Agreement with respect to their indemnity rights pursuant to Section 7.11
of the Asset Purchase Agreement.
6. ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective legal representatives,
successors and permitted assigns. This Agreement shall not be assignable by
any party hereto without the written consent of the other parties hereto.
7. NOTICES. All notices, requests, demands, claims and other
communications that are required to be or may be given under this Agreement
shall be in writing and (i) delivered in person or by courier, (ii) sent by
telecopy or facsimile transmission, or (iii) mailed, certified first class
mail, postage prepaid, return receipt requested, to the appropriate party at
the following addresses:
if to the Company:
Huffco International, L.L.C.
1100 Louisiana, 25th Floor
Houston, Texas 77002
Telecopy: (713) 651-0119
Attention: Terry Huffington
if to Huffco Turkey:
Huffco Turkey, Inc.
1100 Louisiana, 25th Floor
Houston, Texas 77002
Telecopy: (713) 651-0119
Attention: Terry Huffington
2
<PAGE> 3
with copies in either case to:
Baker & Botts, L.L.P.
3000 One Shell Plaza
910 Louisiana
Houston, Texas 77002-4995
Telecopy: (713) 229-1522
Attention: David F. Asmus
if to Guarantor:
Newfield Exploration Company
363 N. Sam Houston Pkwy E, Suite 2020
Houston, Texas 77060
Telecopy: (281) 405-4255
Attention: Terry W. Rathert
if to Newfield Offshore:
Newfield Offshore Inc.
c/o Newfield Exploration Company
363 N. Sam Houston Pkwy E, Suite 2020
Houston, Texas 77060
Telecopy: (281) 405-4255
Attention: Terry W. Rathert
with copies in either case to:
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Telecopy: (713) 615-5926
Attention: James H. Wilson
or to such other address as the parties set forth above shall have furnished to
the other parties set forth above by notice given in accordance with this
paragraph 7. Such notices shall be effective (i) if delivered in person or by
courier, upon actual receipt by the intended recipient, (ii) if sent by
telecopy or facsimile transmission, when the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee, or (iii) if mailed, upon the earlier of five days after deposit in
the mail and the date of delivery as shown by the return receipt therefor.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE STATE OF
3
<PAGE> 4
TEXAS, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall continue in full force and effect and
shall in no way be affected, impaired or invalidated so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term,
provision, covenant or restriction is invalid, void or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
10. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
11. HEADINGS. The paragraph headings herein are for convenience only
and shall not affect the construction hereof.
4
<PAGE> 5
IN WITNESS WHEREOF, Guarantor, Newfield Offshore, the Company and Huffco
Turkey have each caused this Agreement to be executed on its behalf by its
officer thereunto duly authorized, all as of the date first above written.
NEWFIELD EXPLORATION COMPANY
By: /s/ Terry W. Rathert
-----------------------------
Terry W. Rathert
Vice President and
Chief Financial Officer
NEWFIELD OFFSHORE INC.
By: /s/ Terry W. Rathert
-----------------------------
Terry W. Rathert
Secretary and Treasurer
HUFFCO INTERNATIONAL, L.L.C.
By: /s/ Terry Huffington
-----------------------------
Terry Huffington
President
HUFFCO TURKEY, INC.
By: /s/ David A. Trice
-----------------------------
David A. Trice
President
5
<PAGE> 1
EXHIBIT 10.17
PROMISSORY NOTE
$10,000,000.00 July 15, 1997
For value received, NEWFIELD EXPLORATION COMPANY, a Delaware
corporation (the "Company"), hereby promises to pay to the order of THE CHASE
MANHATTAN BANK (the "Lender"), at its principal office, at 270 Park Avenue,
New York, New York 10017, the principal sum of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00) (or such lesser amount as shall equal the aggregate unpaid
principal amount of the loans made by the Lender to the Company hereunder), in
lawful money of the United States of America and in immediately available
funds, on or before July 13, 1998, and to pay interest on the unpaid principal
amount of each such loan, at such office, in like money and funds, for the
period commencing on the date of such loan until such loan shall be paid in
full, at the rates per annum and on the dates provided herein.
Reference is hereby made to that certain Credit Agreement (such Credit
Agreement together with all amendments and supplements thereto being the
"Credit Agreement") dated as of May 20, 1996 among the Company, the financial
institutions named therein, and the Lender, as Agent. The intention of the
Company and the Lender is to utilize the relevant provisions of the Credit
Agreement to establish the relevant procedures for the advance of funds under
this Note, the determination of interest rates for such advances and the
payment of interest on such advances. Accordingly, while this Note is not a
"Note" issued under or pursuant to the Credit Agreement, this Note incorporates
by reference and is subject to the terms of Section 2.02, Section 3.02, Section
4.03 and all related definitions and other provisions of the Credit Agreement
as such Sections, definitions and provisions pertain to the request for
borrowings under this Note, the Types of loans which may be requested, the
determination of interest rates for such loans and the payment of interest on
such loans. This Note also incorporates the terms of Section 5 and the Lender
shall be entitled to the rights afforded the Banks thereunder with respect to
this Note and the loans made pursuant to the terms hereof. Unless otherwise
specified herein, capitalized terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.
The date, amount, Type, interest rate and maturity date of each loan
made by the Lender to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, endorsed by the Lender on the schedule attached
hereto or any continuation thereof.
This Note shall be in Default if: (a) the Company shall default in the
payment when due of the principal amount hereof or any interest on any loan and
such default shall continue unremedied for a period of three (3) Business Days,
or (b) an Event of Default shall occur under the Credit Agreement. Upon the
occurrence of any of the foregoing, the Lender may declare the principal amount
hereof, together with accrued interest, and all other amounts payable by the
Company hereunder to be forthwith due and payable, whereupon such amounts shall
be immediately due and payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other formalities of any kind,
all of which are hereby expressly waived by the Company.
<PAGE> 2
If this Note is not paid at maturity whether by acceleration or
otherwise and is placed in the hands of an attorney for collection, or suit is
filed hereon, or proceedings are had in bankruptcy, receivership, re-
organization, arrangement or other legal proceedings for collection hereof, the
Company agrees to pay the Lender its reasonable attorneys' fees.
THIS NOTE (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND
ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
NEWFIELD EXPLORATION COMPANY
By: /s/TERRY W. RATHERT
---------------------------
Terry W. Rathert
Vice President
2
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our report dated February 11, 1997, on our audit of the financial
statements and the financial statement schedules of Newfield Exploration
Company. We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Houston, Texas
July 30, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PETROLEUM ENGINEERS
We hereby consent to the incorporation by reference into this Registration
Statement on Form S-3 of Newfield Exploration Company (the "Company") of our
name, which is set forth under the caption "Item 2. Properties" in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996. We
also hereby consent to the reference to our firm under the caption "Experts" in
this Registration Statement on Form S-3.
/s/ Ryder Scott Company
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
July 24, 1997
