EXHIBIT 99.1
PIONEER NATURAL RESOURCES COMPANY
COMMON STOCK
UNDERWRITING AGREEMENT
April 16, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Dear Sirs:
1. Introductory. Pioneer Natural Resources Company, a Delaware
corporation (the "COMPANY"), proposes to issue and sell from time to time shares
of its common stock, par value $.01 per share ("COMMON STOCK"), registered under
the registration statement referred to in Section 2(a) ("REGISTERED
SECURITIES"). Particular offerings of the Registered Securities will be sold
pursuant to a Terms Agreement referred to in Section 3, for resale in accordance
with terms of offering determined at the time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "OFFERED SECURITIES". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"UNDERWRITERS" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "REPRESENTATIVES"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
then the term "Representatives", as used in this Agreement (other than in
Sections 2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company and
Pioneer Natural Resources USA, Inc., a Delaware corporation and wholly owned
subsidiary of the Company ("PIONEER USA"), as of the date of each Terms
Agreement referred to in Section 3, each represents and warrants to, and agrees
with, each Underwriter that:
(a) A registration statement (No. 333-42315), including a
prospectus, relating to the Registered Securities has been filed with
the Securities and Exchange Commission ("COMMISSION") and has become
effective. Such registration statement, as amended at the time of any
Terms Agreement referred to in Section 3, is hereinafter referred to as
the "REGISTRATION STATEMENT", and the prospectus included in such
Registration Statement, as supplemented as contemplated by Section 3 to
reflect the terms of the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE
424(b)") under the Securities Act of 1933 ("ACT"), including all
material incorporated by reference therein, is hereinafter referred to
as the "PROSPECTUS". No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the registration statement
relating to the Registered Securities, such registration statement
conformed in all respects to the requirements of the Act
and the rules and regulations of the Commission ("RULES AND
REGULATIONS") and did not include 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 not misleading, and on the
date of each Terms Agreement referred to in Section 3, the Registration
Statement and the Prospectus will conform in all material respects to
the requirements of the Act and the Rules and Regulations, and neither
of such documents will include 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 not misleading, except that
the foregoing does not apply to statements in or omissions from any of
such documents based upon written information furnished to the Company
by any Underwriter through the Representatives, if any, specifically
for use therein.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own and lease its
properties and conduct its business as described in the Prospectus; and
the Company is duly qualified to do business as a foreign corporation
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(d) Each subsidiary of the Company has been duly incorporated
or otherwise organized and is an existing corporation or other entity
in good standing under the laws of the jurisdiction of its
incorporation or organization, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Prospectus; and each subsidiary of the Company is duly qualified to
do business as a foreign corporation or other entity in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification; all of the
issued and outstanding capital stock or other ownership interest of
each subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable; and the capital stock or
other ownership interest of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens,
encumbrances and defects, other than those arising under the Company's
bank line of credit.
(e) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with the
Terms Agreement on the Closing Date (as defined below), such Offered
Securities will have been, validly issued, fully paid and nonassessable
and will conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive
rights with respect to its Common Stock.
(f) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act except (i) for the
obligation to register and maintain the effectiveness of the
registration on Form S-3 (Registration No. 333-39381) for the issuance
of Common Stock upon exchange of the exchangeable shares of Pioneer
Natural Resources Canada Inc., an Alberta corporation and a wholly
owned indirect subsidiary of the Company, pursuant to that Combination
Agreement dated September 3, 1997, between the Company and Chauvco
Resources Ltd., and (ii) except for such contracts, agreements or
understandings as have already been fully performed.
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(g) The Offered Securities have been approved for listing on
The New York Stock Exchange (the "STOCK EXCHANGE"), subject to notice
of issuance.
(h) The Terms Agreement (including the provisions of this
Agreement) has been duly authorized, executed and delivered by the
Company.
(i) The financial statements included or incorporated by
reference in the Registration Statement and Prospectus present fairly
the financial position of the Company and its consolidated subsidiaries
as of the dates shown and their results of operations and cash flows
for the periods shown, and such financial statements have been prepared
in conformity with the generally accepted accounting principles in the
United States applied on a consistent basis except as noted therein;
any schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein;
and, if pro forma financial statements are included or incorporated by
reference in the Registration Statement and Prospectus, then the
assumptions used in preparing the pro forma financial statements
included in the Registration Statement and the Prospectus provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(j) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus there has been no material adverse change,
nor any development or event involving a prospective material adverse
change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a
whole, and, except as disclosed in the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("TERMS AGREEMENT") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the number of shares to be
purchased by each Underwriter and the purchase price to be paid by the
Underwriters. The Terms Agreement will also specify the time and date of
delivery and payment (such time and date, or such other time not later than
seven full business days thereafter as the Underwriter first named in the Terms
Agreement (the "LEAD UNDERWRITER") and the Company agree as the time for payment
and delivery, being herein and in the Terms Agreement referred to as the
"CLOSING DATE"), the place of delivery and payment and any details of the terms
of offering that should be reflected in the prospectus supplement relating to
the offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the Closing Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Offered Securities for sale as set forth in the Prospectus.
Unless otherwise required by the Lead Underwriter or as otherwise
provided in the Terms Agreement, the certificates for the Offered Securities
delivered to the Underwriters on the Closing Date will be in definitive form, in
such denominations and registered in such names as the Lead Underwriter
requests.
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4. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish to counsel for the Underwriters, one
conformed copy of the registration statement relating to the Registered
Securities, including all exhibits, in the form it became effective and of all
amendments thereto and that, in connection with each offering of Offered
Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable,
and if consented to by the Lead Underwriter, subparagraph (5)) not
later than the second business day following the execution and delivery
of the Terms Agreement.
(b) During a particular offering of Offered Securities in
which the Lead Underwriter participates, the Company will advise the
Lead Underwriter promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus and will afford the Lead
Underwriter a reasonable opportunity to comment on any such proposed
amendment or supplement; and during that period, the Company will also
advise the Lead Underwriter promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of
any part thereof and will use reasonable commercial efforts to prevent
the issuance of any such stop order and to obtain as soon as possible
its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
then the Company promptly will notify the Lead Underwriter of such
event and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither the Lead Underwriter's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5
hereof.
(d) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, the Company will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the registration statement relating to the Registered
Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to
the date of such Terms Agreement and (iii) the date of the Company's
most recent Annual Report on Form 10-K filed with the Commission prior
to the date of such Terms Agreement, which will satisfy the provisions
of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of
the Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement,
the Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the Lead
Underwriter reasonably requests. The Company will pay the expenses of
printing and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such United States
jurisdictions as the Lead Underwriter designates and will continue such
qualifications in effect so long as required for the distribution.
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(g) The Company will pay all expenses incident to the
performance of its obligations under the Terms Agreement (including the
provisions of this Agreement), for any filing fees or other expenses
(including fees and disbursements of counsel) in connection with
qualification of the Offered Securities for sale under the laws of such
United States jurisdictions as the Lead Underwriter may designate and
the printing of memoranda relating thereto, for any applicable filing
fee incident to the review by the National Association of Securities
Dealers, Inc. of the Registered Securities, for any travel expenses of
the Company's officers and employees and any other expenses of the
Company in connection with attending or hosting meetings with
prospective purchasers of Registered Securities and for expenses
incurred in distributing the Prospectus, any preliminary prospectuses,
any preliminary prospectus supplements or any other amendments or
supplements to the Prospectus to the Underwriters.
(h) The Company will not offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any
additional shares of its Common Stock or securities convertible into or
exchangeable or exercisable for any shares of its Common Stock, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the Lead
Underwriter for a period beginning at the time of execution of the
Terms Agreement and ending the number of days after the date of the
Terms Agreement specified under "Blackout" in the Terms Agreement
except grants of employee stock awards pursuant to the terms of a plan
in effect on the date of the Terms Agreement, issuances of Common Stock
pursuant to such awards, the exercise of any other employee stock
options outstanding on the date of the Terms Agreement and other
matters identified in the Terms Agreement under "Blackout".
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Securities will
be subject to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of
delivery thereof, of Ernst & Young LLP confirming that they are
independent public accountants within the meaning of the Act and the
applicable published Rules and Regulations thereunder and stating to
the effect that:
(i) in their opinion the financial statements and any
schedules and any summary of earnings examined by them and
included in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on any unaudited financial statements included in
the Registration Statement;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements, if
any, and any summary of earnings included in the
Prospectus do not comply as to form in all material
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respects with the applicable accounting requirements
of the Act and the related published Rules and
Regulations or any material modifications should be
made to such unaudited financial statements and
summary of earnings for them to be in conformity with
generally accepted accounting principles;
(B) if any unaudited "capsule" information
is contained in the Prospectus, the unaudited
consolidated net sales, net operating income, net
income and net income per share amounts or other
amounts constituting such "capsule" information and
described in such letter do not agree with the
corresponding amounts set forth in the unaudited
consolidated financial statements or were not
determined on a basis substantially consistent with
that of the corresponding amounts in the audited
statements of operations;
(C) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of the such letter,
there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt
of the Company and its consolidated subsidiaries or,
at the date of the latest available balance sheet
read by such accountants, there was any decrease in
consolidated net current assets or net assets, as
compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(D) for the period from the closing date of
the latest statement of operations included in the
Prospectus to the closing date of the latest
available statement of operations read by such
accountants there were any decreases, as compared
with the corresponding period of the previous year
and with the period of corresponding length ended the
date of the latest statement of operations included
in the Prospectus, in consolidated net sales, net
operating income per share amounts of consolidated
income before extraordinary items or net income;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Prospectus (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the Company and its subsidiaries subject
to the internal controls of the Company's accounting system or
are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no
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proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or any Underwriter, shall be contemplated by
the Commission.
(c) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of a
majority in interest of the Underwriters including any Representatives,
is material and adverse and makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating
of any debt securities of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any change in U.S. or international
financial, political or economic conditions or currency exchange rates
or exchange controls as would, in the judgment of a majority in
interest of the Underwriters including any Representatives, be likely
to prejudice materially the success of the proposed issue, sale or
disposition of the Offered Securities, whether in the primary market or
in respect of dealings in the secondary market; (iv) any material
suspension or material limitation of trading in securities generally on
the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (v) any banking moratorium declared by U.S. Federal or New York
authorities; (vi) any major disruption of settlements of securities or
clearance services in the United States; or (vii) any attack on,
outbreak or escalation of hostilities or act of terrorism involving the
United States, any declaration of war by Congress or any other national
or international calamity or emergency if, in the judgment of a
majority in interest of the Underwriters including any Representatives,
the effect of any such attack, outbreak, escalation, act, declaration,
calamity or emergency makes it impractical or inadvisable to proceed
with completion of the public offering or the sale of and payment for
the Offered Securities.
(d) The Representatives shall have received from each person
who is a director or executive officer of the Company an agreement to
the effect that, for a period beginning at the time of execution of the
Terms Agreement and ending the number of days after the date of the
Terms Agreement specified under "Blackout" in the Terms Agreement, such
person will not offer, sell, contract to sell, pledge or otherwise
dispose of, directly or indirectly, any shares of Securities or
securities convertible into or exchangeable or exercisable for any
shares of Securities, or publicly disclose the intention to make any
such offer, sale, pledge or disposal, without the prior written consent
of the lead Underwriter, except for matters identified in the Terms
Agreement under "Blackout".
(e) The Representatives shall have received an opinion, dated
the Closing Date, of Vinson & Elkins, L.L.P., counsel for the Company,
to the effect that:
(i) Each of the Company and Pioneer USA has been duly
incorporated and is an existing corporation in good standing
under the laws of the State of Delaware with corporate power
and authority to own and lease its properties and conduct its
business as described in the Prospectus;
(ii) The Offered Securities and all other outstanding
shares of the Common Stock of the Company have been duly
authorized; all outstanding shares of capital stock of the
Company are, and, when the Offered Securities have been
delivered
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and paid for in accordance with the Terms Agreement on the
Closing Date, the Offered Securities will be, validly issued,
fully paid and nonassessable; the Common Stock of the Company
conforms in all material respects as to legal matters to the
description thereof contained in the Prospectus; and the
stockholders of the Company have no preemptive rights with
respect to the Offered Securities;
(iii) The execution, delivery and performance of the
Terms Agreement (including the provisions of this Agreement)
and the issuance and sale of the Offered Securities will not
result in a breach or violation of any of the terms and
provisions of the charter or by-laws of the Company or Pioneer
USA, nor will they result in a violation of any statute, any
rule or, to the knowledge of such counsel, regulation having
jurisdiction over the Company or any subsidiary of the Company
or any of their properties, and the Company has full corporate
power and authority to authorize, issue and sell the Offered
Securities as contemplated by the Terms Agreement (including
the provisions of this Agreement);
(iv) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein, and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
Act; and the registration statement relating to the Registered
Securities, as of its effective date, the Registration
Statement and the Prospectus, as of the date of the Terms
Agreement, and any amendment or supplement thereto, as of its
date, appear on their face to comply as to form in all
material respects with the requirements of the Act and the
Rules and Regulations (it being understood that such counsel
need express no opinion or view as to the financial
statements, notes or schedules thereto, or other financial or
accounting data or engineering or reserve data); and
(v) The Terms Agreement (including the provisions of
this Agreement) has been duly authorized, executed and
delivered by the Company.
(f) The Representatives shall have received a letter, dated
the Closing Date, from Vinson & Elkins L.L.P., counsel for the Company,
to the effect that no facts have come to such counsel's attention that
have causes such counsel to believe that (i) the Registration
Statement, at the time it became effective and as of the Closing Date,
contained any untrue statement of material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) that the Prospectus, as of the
date of the Terms Agreement and as of the Closing Date, contained any
untrue statement of material fact or omitted to state any 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, (iii) the documents incorporated by reference in the
Registration Statement, as of the date they were filed with the
Securities and Exchange Commission, contained any untrue statement of
material fact or omitted to state any 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; it being
understood that such counsel need express no opinion or view as to the
financial statements, notes or schedules thereto, or other financial or
accounting data or engineering or reserve data contained in the
Registration Statement or the Prospectus.
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(g) The Representatives shall have received an opinion, dated
the Closing Date, of Mark L. Withrow, Executive Vice President and
General Counsel of the Company to the effect that:
(i) There are no contracts, agreements or
understandings known to such counsel between the Company and
any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such
securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act except (i) for the obligation to
register and maintain the effectiveness of the registration on
Form S-3 (Registration No. 333-39381) for the issuance of
Common Stock upon exchange of the exchangeable shares of
Pioneer Natural Resources Canada Inc., an Alberta corporation
and a wholly owned indirect subsidiary of the Company,
pursuant to that Combination Agreement dated September 3,
1997, between the Company and Chauvco Resources Ltd., and (ii)
except for such contracts, agreements or understandings as
have already been fully performed;
(ii) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required for the consummation of the transactions
contemplated by the Terms Agreement (including the provisions
of this Agreement) in connection with the issuance or sale of
the Offered Securities by the Company, except such as have
been obtained and made under the Act and such as may be
required under state securities laws;
(iii) The execution, delivery and performance of the
Terms Agreement (including the provisions of this Agreement)
and the issuance and sale of the Offered Securities will not
result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any order known
to such counsel of any governmental agency or body or any
court having jurisdiction over the Company or any subsidiary
of the Company or any of their properties, or any agreement or
instrument known to such counsel to which the Company or any
such subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject;
(iv) The Company is duly qualified as a foreign
corporation in good standing in all jurisdictions where its
ownership or leasing of properties or the conduct of its
business requires such qualification, except where the failure
so to register or qualify does not have a material adverse
effect on the condition (financial or other), business,
prospects or results of operations of the Company and its
subsidiaries considered as a whole (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of public officials or officers of the
Company, provided that such counsel shall state that he
believes that both the Underwriters and he are justified in so
relying upon such opinions and certificates);
(v) Pioneer USA, Pioneer International Resources
Company, a Delaware corporation, Pioneer Natural Resources
Canada Inc., a Canadian corporation, and Westpan NGL Co., a
Delaware corporation (collectively, the "MATERIAL CORPORATE
SUBSIDIARIES"), have each been duly organized and are validly
existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation (such counsel
being entitled to rely with respect to the opinion in this
clause relating to
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Pioneer Natural Resources Canada Inc. upon the opinion of
local counsel, provided that such counsel shall state that he
believes that both the Underwriters and he are justified in so
relying upon such opinions);
(vi) Each of the Material Corporate Subsidiaries is
duly qualified as a foreign corporation in good standing in
all jurisdictions where their ownership or leasing of
properties or the conduct of their businesses requires such
qualification, except where the failure so to register or
qualify does not have material adverse effect on the condition
(financial or other), business, prospects or results of
operations of the Company and its subsidiaries considered as a
whole (such counsel being entitled to rely with respect to the
opinion in this clause upon opinions of local counsel and with
respect to matters of fact upon certificates of public
officials or officers of the Company or the Material Corporate
Subsidiaries, provided that such counsel shall state that he
believes that both the Underwriters and he are justified in so
relying upon such opinions and certificates);
(vii) all outstanding shares of capital stock of the
Material Corporate Subsidiaries have been duly authorized and
validly issued, are fully paid and non-assessable, and are
owned by the Company or by another subsidiary of the Company
free and clear of any liens, encumbrances or claims except as
described in the Prospectus and other than those arising under
the Company's bank line of credit (such counsel being entitled
to rely with respect to the opinion in this clause relating to
Pioneer Natural Resources Canada Inc. upon opinion of local
counsel, provided that such counsel state that he believes
that both the Underwriters and he are justified in so relying
upon such opinions);
(viii) Although such counsel has not verified, is not
passing on and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus (or any
documents incorporated by reference therein), except as
otherwise specifically dealt with in this opinion, no facts
have come to the attention of such counsel that have caused
such counsel to believe (a) that the Registration Statement,
as amended prior to the Closing Date (other than the financial
statements, including the notes thereto and related schedules,
other financial data and accounting information and
engineering and reserve data contained therein, as to which
such counsel need express no opinion or belief), contained as
of its effective date or contains as of the Closing Date, an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or, (b) that the
Prospectus, as amended and supplemented prior to the Closing
Date (other than the financial statements, including the notes
thereto and related schedules, other financial data and
accounting information and engineering and reserve data
contained therein, as to which such counsel need express no
opinion or belief), contains as of the Closing Date an untrue
statement of a material fact or omitted or omits 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.
(h) The Representatives shall have received from Baker Botts
L.L.P., counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
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(i) The Representatives shall have received a certificate,
dated the Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, that no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission and that, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole except as set forth in the Prospectus or
as described in such certificate.
(j) The Representatives shall have received a letter, dated
the Closing Date, of Ernst & Young, LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three days prior to
the Closing Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Lead Underwriter may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters under this Agreement and the Terms Agreement.
6. Indemnification and Contribution. (a) The Company and Pioneer USA,
jointly and severally, will indemnify and hold harmless each
Underwriter, its partners, directors and officers and each person, if
any, who controls such Underwriter within the meaning of Section 15 of
the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or
preliminary prospectus supplement, or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that neither the Company nor Pioneer USA will be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents
in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the
only such information furnished by any Underwriter consists of the
information described as such in the Terms Agreement. With respect to
any untrue statement or omission of a material fact made in any
preliminary Prospectus, the indemnity agreement contained in this
Section 6(a) shall not inure to the benefit of any Underwriter (or any
of the directors, officers, employees and agents of such Underwriter or
any controlling person of such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased the
Offered Securities, to the extent that any such loss, claim, damage or
liability of such Underwriter occurs under the circumstances where it
shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (w) the Company had previously
furnished copies of the final Prospectus to the Representatives, (x)
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the delivery of the final Prospectus was required by the Act to be made
to such person, (y) the untrue statement or omission of a material fact
contained in the preliminary Prospectus was corrected in the final
Prospectus, and (z) there was not sent or given to such person, at or
prior to the written confirmation of the sale of the Offered Securities
to such person, a copy of the final Prospectus.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, its directors and officers and each
person, if any, who controls the Company within the meaning of Section
15 of the Act, against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Underwriter
through the Representatives, if any, specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred, it
being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in the
Terms Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and after notice from the indemnifying party
to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying
party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of
such indemnified party from all liability on any claims that are the
subject matter of such action and (ii) does not include a statement as
to, or an admission of, fault, culpability or a failure to act by or
behalf of an indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Offered
Securities or (ii) if the
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allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Underwriters and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Offered Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to
each director of the Company, to each officer of the Company who has
signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities under the Terms Agreement
and the aggregate number of shares of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total number of shares of Offered Securities, then the Lead Underwriter may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, then the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
under the Terms Agreement (including the provisions of this Agreement), to
purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and if the
aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities and arrangements satisfactory to the Lead Underwriter and the Company
for the purchase of such Offered Securities by other persons are not made within
36 hours after such default, then the Terms Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company, except
as provided in Section 8. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
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8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to the Terms Agreement (including the provisions of this Agreement)
will remain in full force and effect, regardless of any investigation, or
statement as to the results thereof, made by or on behalf of any Underwriter,
the Company or any of their respective representatives, officers or directors or
any controlling person, and will survive delivery of and payment for the Offered
Securities. If the Terms Agreement is terminated pursuant to Section 7 or if for
any reason the purchase of the Offered Securities by the Underwriters is not
consummated, then the Company shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 4 and the respective obligations of
the Company and the Underwriters pursuant to Section 6 shall remain in effect.
If the purchase of the Offered Securities by the Underwriters is not consummated
for any reason other than solely because of the termination of the Terms
Agreement pursuant to Section 7 or the occurrence of any event specified in
clause (iii), (iv), (v), (vi) or (vii) of Section 5(c), then the Company will
reimburse the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or sent by facsimile
transmission and confirmed to them at their address furnished to the Company in
writing for the purpose of communications hereunder or, if sent to the Company,
will be mailed, delivered or sent by facsimile transmission and confirmed to it
at 5205 N. O'Connor Blvd., Suite 1400, Irving, Texas 75039, (fax) (972)
969-3580, Attention: Scott D. Sheffield.
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company and such
Underwriters as are identified in the Terms Agreement and their respective
successors and the officers and directors and controlling persons referred to in
Section 6, and no other person will have any right or obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for
the several Underwriters in connection with the financing described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives jointly or by the Lead
Underwriter will be binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. APPLICABLE LAW. THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to the Terms Agreement
(including the provisions of this Agreement) or the transactions contemplated
thereby.
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If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement among the
Company, Pioneer Natural Resources USA, Inc., and the several Underwriters in
accordance with its terms.
Very truly yours,
PIONEER NATURAL RESOURCES COMPANY
By: /s/ Richard P. Dealy
-------------------------------------
Name: Richard P. Dealy
Title: Vice President and Chief
Accounting Officer
PIONEER NATURAL RESOURCES USA, INC.
By: /s/ Richard P. Dealy
-------------------------------------
Name: Richard P. Dealy
Title: Vice President and Chief
Accounting Officer
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above
written.
CREDIT SUISSE FIRST BOSTON CORPORATION
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Robert Wheeler
-------------------------------------------
Name: Robert Wheeler
Title: Managing Director
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