EXHIBIT 99.1
PIONEER NATURAL RESOURCES COMPANY
DEBT SECURITIES
UNDERWRITING AGREEMENT
April 25, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
J.P. MORGAN SECURITIES INC.
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 to the several
underwriters named in Schedule I hereto (the "UNDERWRITERS"), $150,000,000 in
aggregate principal amount of its 7.50% Senior Notes due 2012 (the "NOTES"),
which are unconditionally guaranteed on an unsecured basis (the "GUARANTEE", and
together with the Notes, the "SECURITIES") by Pioneer Natural Resources USA,
Inc., a Delaware corporation and wholly owned subsidiary of the Company (the
"GUARANTOR"), and which are registered under the registration statement referred
to in Section 2(a). The Securities will be issued pursuant to the provisions of
an Indenture dated as of January 13, 1998 (as amended, the "INDENTURE") between
the Company and The Bank of New York, as trustee (the "TRUSTEE"), as
supplemented with respect to the Securities by the Third Supplemental Indenture
to be dated as of the Closing Date (as defined below), among the Company, the
Guarantor and the Trustee (the "THIRD SUPPLEMENTAL INDENTURE").
2. Representations and Warranties of the Company and the Guarantor.
Each of the Company and the Guarantor, as of the date of this Agreement, jointly
and severally, represents and warrants to, and agrees with, each Underwriter
that:
(a) A registration statement (No. 333-42315) (the "SHELF
REGISTRATION STATEMENT"), including a prospectus, relating to the
Securities has been filed with the Securities and Exchange Commission
("COMMISSION") and has become effective. Pursuant to Rule 462(b) under
the Securities Act of 1933 (the "ACT"), a separate registration
statement (the "462(b) REGISTRATION STATEMENT"), relating to the
Securities has been filed with the Commission. The Shelf Registration
Statement, as amended at the time of this Agreement, and the 462(b)
Registration Statement that is deemed to be part of the Shelf
Registration Statement, collectively, are hereinafter referred to as
the "REGISTRATION STATEMENT", and the prospectus included in such
Registration Statement, as supplemented to reflect the terms of the
Securities, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("RULE 424(b)") of the 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, 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 this Agreement, 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 Underwriters, if any, specifically for
use therein.
(c) Each of the Company and the Guarantor 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 each of the Company and the Guarantor
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 Company has an authorized capitalization as set forth
in the Prospectus.
(f) This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantor.
(g) The Indenture has been duly authorized and has been duly
qualified under the Trust Indenture Act of 1939 (the "TRUST INDENTURE
ACT"); the Securities have been duly authorized; and when the
Securities are delivered and paid for pursuant to Section 4 of this
Agreement on the Closing Date, the Indenture and the Third Supplemental
Indenture will have been duly authorized, executed and delivered, such
Securities will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the
Prospectus and the Indenture and the Third Supplemental Indenture, and
such Securities will constitute legal, valid and binding obligations of
the Company and the Guarantor, enforceable against the Company and the
Guarantor in accordance with their terms (subject, as to enforcement of
legal remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect, and, as to remedies of specific performance and
injunctive and other forms of equitable relief, to equitable defenses
or principles and to the discretion of the court before which any
proceeding may therefor be brought).
(h) 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
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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.
(i) 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 Sale of Securities. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
98% of the principal amount thereof, plus accrued interest, if any, from April
30, 2002, to the Closing Date, the principal amount of Notes set forth opposite
such Underwriter's name in Schedule I hereto.
4. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 a.m., New York City time, on April 30, 2002 (or such
later date not later than three business days after such date as the
Underwriters shall designate), which date and time may be postponed by agreement
between the Underwriters and the Company or as provided in Section 8 hereof
(such date and time of delivery and payment for the Securities being herein
called the "CLOSING DATE"). Delivery of the Securities shall be made to the
Underwriters for the respective accounts of the several Underwriters against
payment by the several Underwriters of the purchase price thereof to or upon
order of the Company by wire transfer and payable in immediately available funds
to an account specified by the Company. Delivery of the Securities shall be made
through the facilities of The Depository Trust Company unless the Underwriters
shall otherwise instruct.
The Company hereby confirms its engagement of Raymond James &
Associates, Inc. ("RJA") as, and RJA hereby confirms its agreement with the
Company to render services as, a "qualified independent underwriter," within the
meaning of Section (b)(15) of Rule 2720 of the Conduct Rules of the National
Association of Securities Dealers, Inc. (the "NASD") with respect to the
offering and sale of the Securities. RJA agrees in acting as a qualified
independent underwriter to undertake the legal responsibilities and liabilities
of an underwriter under the Act, including those in Section 11 of the Act. RJA,
solely in its capacity as qualified independent underwriter and not otherwise,
is referred to herein as the "Independent Underwriter." As compensation for the
services of the Independent Underwriter hereunder, the Company agrees to pay the
Independent Underwriter $100,000 on the Closing Date. The price at which the
Securities will be sold to the public will not be higher than the maximum price
recommended by RJA acting as Independent Underwriter.
5. Certain Agreements of the Company and the Guarantor. Each of the
Company and the Guarantor agrees, jointly and severally, with the several
Underwriters that it will furnish to counsel for the Underwriters, one conformed
copy of the registration statement relating to the Securities, including all
exhibits, in the form it became effective and of all amendments thereto and
that, in connection with the offering of the Securities:
(a) The Company and the Guarantor 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
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Underwriters, subparagraph (5)) not later than the second business day
following the execution and delivery of this Agreement.
(b) During the offering of the Securities, the Company will
advise the Underwriters promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus and will afford the
Underwriters a reasonable opportunity to comment on any such proposed
amendment or supplement; and during that period, the Company will also
advise the Underwriters 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
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 Underwriters of such event
and the Company and the Guarantor 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 Underwriters' 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 this 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
Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to
the date of this 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 this Agreement, which will satisfy the provisions of
Section 11(a) of the Act.
(e) The Company will furnish to the Underwriters 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
Underwriters reasonably request. 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
Securities for sale under the laws of such United States jurisdictions
as the Underwriters may designate, will continue such qualifications in
effect so long as required for the distribution and will arrange for
the determination of the legality of the Securities for purchase by
institutional investors.
(g) The Company will pay all expenses incident to the
performance of its obligations under this Agreement, for any filing
fees or other expenses (including fees and disbursements of counsel) in
connection with qualification of the Securities for sale under the laws
of such United States jurisdictions as the Underwriters may designate
and the printing of memoranda relating thereto, for any applicable
filing fee incident to the review by the NASD of the 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 Securities and for expenses
incurred in distributing the Prospectus, any preliminary
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prospectuses, any preliminary prospectus supplements or any other
amendments or supplements to the Prospectus to the Underwriters.
(h) Neither the Company nor the Guarantor will take, directly
or indirectly, any action designed to or which constitutes or which
might reasonably be expected to cause or result, under the Securities
Exchange Act of 1934 or otherwise, in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Securities.
(i) Neither the Company nor the Guarantor will offer, sell,
contract to sell, pledge or otherwise dispose of (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with
the Company or any affiliate of the Company), directly or indirectly,
or file with the Commission a registration statement under the Act
relating to, any debt securities issued or guaranteed by the Company or
the Guarantor in an offering to the public (or in a private offering in
which holders of debt securities are granted rights to have such debt
securities registered under the Act or to exchange such debt securities
for other debt securities that are so registered), or publicly disclose
the intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of the Underwriters for a
period beginning at the time of execution of this Agreement until the
later of the Closing Date or the lifting of trading restrictions by the
Underwriters; provided, however, that such restrictions shall not
extend more than seven days following the Closing Date and shall not
restrict the filing by the Company with the Commission of the 462(b)
Registration Statement or a new unallocated shelf registration
statement of up to $1 billion of total securities.
6. Conditions to the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantor contained herein as of the Closing Date, to the
accuracy of the statements of the officers of the Company and the Guarantor, as
applicable, made pursuant to the provisions hereof, to the performance by the
Company and the Guarantor of their obligations hereunder and to the following
additional conditions precedent:
(a) On or prior to the date of this Agreement, the
Underwriters 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:
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(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
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 5(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
6
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company, the Guarantor or any Underwriter, shall be
contemplated by the Commission.
(c) Subsequent to the execution of this 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, 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 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, be likely to prejudice
materially the success of the proposed issue, sale or disposition of
the 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, 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 Securities.
(d) The Underwriters shall have received an opinion, dated the
Closing Date, of Vinson & Elkins, L.L.P., counsel for the Company and
the Guarantor, to the effect that:
(i) Each of the Company and the Guarantor 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 Company has an authorized capitalization as
described in the Prospectus. Upon issuance, the Securities
will conform in all material respects as to legal matters to
the description thereof in the Prospectus;
(iii) The execution, delivery and performance of this
Agreement and the issuance and sale of the 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 the
Guarantor, 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 the Guarantor or any
subsidiary of the Company or the Guarantor or any of their
properties, and the Company and the Guarantor have full
corporate power and authority to authorize, issue and sell the
Securities as contemplated by this Agreement;
(iv) The Indenture has been duly authorized, executed
and delivered by the Company and the Third Supplemental
Indenture has been duly authorized, executed and delivered by
the Company; the Indenture has been duly qualified under the
Trust
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Indenture Act; and, assuming due authorization, execution and
delivery thereof by each party thereto other than the Company
and the Guarantor, the Indenture and the Third Supplemental
Indenture constitute legal, valid and binding obligations of
the Company and the Guarantor enforceable against the Company
and the Guarantor in accordance with their terms (subject, as
to enforcement of legal remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect, and,
as to remedies of specific performance and injunctive and
other forms of equitable relief, to equitable defenses or
principles and to the discretion of the court before which any
proceeding may therefor be brought);
(v) The Notes have been duly authorized and executed
and, when authenticated in accordance with the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance
with their terms (subject, as to enforcement of legal
remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and, as to
remedies of specific performance and injunctive and other
forms of equitable relief, to equitable defenses or principles
and to the discretion of the court before which any proceeding
may therefor be brought);
(vi) The Guarantee has been duly authorized and
executed and constitutes the legal, valid and binding
obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms (subject, as to enforcement of
legal remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and, as to
remedies of specific performance and injunctive and other
forms of equitable relief, to equitable defenses or principles
and to the discretion of the court before which any proceeding
may therefor be brought);
(vii) 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
Securities, as of its effective date, the Registration
Statement and the Prospectus, as of the date of this
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
(viii) This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor.
(e) The Underwriters shall have received a letter, dated the
Closing Date, from Vinson & Elkins L.L.P., counsel for the Company and
the Guarantor, 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 this 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
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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.
(f) The Underwriters 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) 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 this Agreement in connection with the issuance
or sale of the 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;
(ii) The execution, delivery and performance of this
Agreement and the issuance and sale of the 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;
(iii) 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);
(iv) 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 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);
(v) Each of the Material Corporate Subsidiaries
(including the Guarantor) 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
9
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);
(vi) 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);
(vii) 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.
(g) The Underwriters 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 and
the Guarantor, the validity of the Securities delivered on such Closing
Date, the Indenture, the Registration Statement, the Prospectus and
other related matters as the Underwriters may require, and the Company
and the Guarantor shall have furnished to such counsel such documents
as they request for the purpose of enabling them to pass upon such
matters.
(h) The Underwriters shall have received a certificate, dated
the Closing Date, of each of the Company and the Guarantor, signed by
(i) the President or any Vice President and (ii) a principal financial
or accounting officer of the Company or the Guarantor, as applicable,
in which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
the Company or the Guarantor, as applicable, in this Agreement are true
and correct, that the Company or the Guarantor, as applicable, has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at
10
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, or the Guarantor and its subsidiaries, as
applicable, in each case taken as a whole except as set forth in the
Prospectus or as described in such certificate.
(i) The Underwriters 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 Underwriters with such conformed
copies of such opinions, certificates, letters and documents as the
Underwriters reasonably request. The Underwriters may in their sole
discretion waive compliance with any conditions to the obligations of
the Underwriters under this Agreement.
7. Indemnification and Contribution. (a) Each of the Company and the
Guarantor, jointly and severally, will indemnify and hold harmless each
Underwriter (including the Independent Underwriter in its role as a qualified
independent underwriter pursuant to the rules of the NASD), 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 the Guarantor 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 or the Guarantor by any
Underwriter, 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 this 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 7(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 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 Underwriters, (x) 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 Securities to
such person, a copy of the final Prospectus.
11
Each of the Company and the Guarantor, jointly and severally,
also will indemnify and hold harmless the Independent Underwriter, its
officers and employee and each person, if any, who controls the
Independent Underwriter with the meaning of the Act, from and against
any and all losses, claims, damages, liabilities and judgments incurred
as a result of the Independent Underwriter's participation as a
"qualified independent underwriter" within the meaning of Rule 2720 of
the Conduct Rules of the NASD in connection with the offering of the
Securities, except for any losses, claims, damages, liabilities and
judgments found in a final judgment by a court to have resulted from
the Independent Underwriter's or such officer's, employee's or
controlling person's willful misconduct or gross negligence.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, the Guarantor, each of their respective
directors and officers and each person, if any, who controls the
Company or the Guarantor within the meaning of Section 15 of the Act,
against any losses, claims, damages or liabilities to which the Company
or the Guarantor 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 or the Guarantor by such
Underwriter, if any, specifically for use therein, and will reimburse
any legal or other expenses reasonably incurred by the Company or the
Guarantor 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 this
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. If indemnity is
sought pursuant to the second paragraph of subsection (a) of this
Section 7, then, in addition to such counsel for the indemnified
parties, the indemnifying party shall be liable for the reasonable fees
and expenses of not more than one separate counsel (in addition to any
necessary local counsel) for the Independent Underwriter in its
capacity as a "qualified independent underwriter," its officers and
employees and all persons, if any, who control the Independent
Underwriter within the meaning of the Act, if, in the reasonable
judgment of the Independent Underwriter there may exist a conflict of
interest between the Independent Underwriter and the other indemnified
parties. In the case of any such separate counsel for the Independent
Underwriter and such officers, employees and control persons of the
Independent Underwriter, such counsel shall be designated in writing by
the Independent Underwriter. No
12
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 and the Guarantor
on the one hand and the Underwriters or the Independent Underwriter, as
the case may be, on the other from the offering of the Securities or
(ii) if the 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 and the Guarantor on the one hand and the
Underwriters or the Independent Underwriter, as the case may be, 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 and the Guarantor on the one hand and the Underwriters or
the Independent Underwriter, as the case may be, 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
(1) the total underwriting discounts and commissions received by the
Underwriters or (2) with respect to the Independent Underwriter, the
fee paid to the Independent Underwriter pursuant to Section 4. 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, the Guarantor, the Underwriters or
the Independent Underwriter, as the case may be, and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission and, in the case
of the Independent Underwriter, whether its activities as Independent
Underwriter under its engagement pursuant to Section 4 involved any
gross negligence or willful misconduct. 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 (including the Independent Underwriter) shall be required
to contribute any amount in excess of (1) with respect to the
Underwriters, the amount by which the total price at which the
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission and (2)
with respect to the Independent Underwriter, the amount by which the
fee paid to the Independent Underwriter pursuant to Section 4 exceeds
the amount of any damages which such Independent 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 and the Guarantor under
this Section shall be in addition to any liability which the Company
and the Guarantor may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any
Underwriter
13
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 or the
Guarantor, to each officer of the Company or the Guarantor who has
signed the Registration Statement and to each person, if any, who
controls the Company or the Guarantor within the meaning of the Act.
8. Default of Underwriters. If any Underwriter defaults in its
obligations to purchase Securities under this Agreement, then the non-defaulting
Underwriters may make arrangements satisfactory to the Company for the purchase
of such 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 this Agreement, to purchase the Securities that such
defaulting Underwriters agreed but failed to purchase.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and the Guarantor or their respective officers and of the several
Underwriters set forth in or made pursuant to 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 Securities. If for any
reason the purchase of the Securities by the Underwriters is not consummated,
then the Company and the Guarantor shall remain responsible for the expenses to
be paid or reimbursed by it pursuant to Section 5 and the respective obligations
of the Company, the Guarantor and the Underwriters pursuant to Section 7 shall
remain in effect. If the purchase of the Securities by the Underwriters is not
consummated for any reason other than solely because of the occurrence of any
event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(c), then
the Company or the Guarantor 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 Securities.
10. 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: Mark L. Withrow.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the Company, the Guarantor and such Underwriters as are identified
in Schedule I of this Agreement and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Underwriters. Any Underwriters will act for the
several Underwriters in connection with the financing described in this
Agreement, and any action under this Agreement taken by the Underwriters jointly
or by the Underwriters will be binding upon all the Underwriters.
13. Counterparts. This 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.
14. APPLICABLE LAW. THIS 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 and the Guarantor hereby submit 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 this
Agreement or the transactions contemplated thereby.
14
15. Information Furnished by Underwriters. For purposes of Section 7 of
this Agreement, the only information furnished to the Company by any Underwriter
for use in the Prospectus consists of the following information in the
Prospectus Supplement furnished on behalf of each Underwriter: the concession
and discount figures appearing in the seventh paragraph, the eighth paragraph
and the ninth paragraph , other than the first and last sentences thereof, under
the caption "Underwriting" in the prospectus supplement.
15
If the foregoing is in accordance with the Underwriters' 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, the
Guarantor, 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
J.P. MORGAN SECURITIES INC.
By: CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Osmar Abib
-----------------------------
Name: Osmar Abib
Title: Managing Director
In its capacity as a qualified
independent underwriter:
RAYMOND JAMES & ASSOCIATES, INC.
By: /s/ Howard W. House
-----------------------------
Name: Howard W. House
Title: Managing Director
16
SCHEDULE I
<Table>
<Caption>
PRINCIPAL AMOUNT OF NOTES
UNDERWRITER TO BE PURCHASED
----------- -------------------------
Credit Suisse First Boston Corporation.............................. $ 75,000,000
J.P. Morgan Securities Inc.......................................... $ 75,000,000
------------
Total............................................. $150,000,000
============
</Table>
A-1