1
[FORM OF EXCHANGE AGENCY AGREEMENT]
, 1996
First Trust of New York, National Association
100 Wall Street
New York, NY 10005
Ladies and Gentlemen:
Pursuant to the provision of the Offer (the "Exchange Offer") for all of Benton
Oil and Gas Company (the "Company") outstanding 11 5/8% Notes due 2003 (the
"Initial Notes") in exchange for 11 5/8% Senior Notes due 2003 (the "Exchange
Notes"), all of the Company's issued and outstanding Initial Notes accepted for
tender of exchange (the "Exchange") prior to 5:00 p.m. New York time on ,
1996, unless extended, for the Company's Exchange Notes will be exchanged
pursuant to the terms and conditions of the Exchange Offer. The Exchange Offer
is being made pursuant to a prospectus (the "Prospectus") included in the
Company's registration statement on Form S-4 (File No. 33- ) (the
"Registration Statement") filed with the Securities and Exchange Commission (the
"SEC"). The term "Expiration Date" shall mean the date on which the Exchange
Offer, as it may be extended, shall expire. Upon receipt and execution of this
letter and confirmation of the arrangements herein set forth, First Trust of New
York, National Association will act as the Exchange Agent for the Exchange (the
"Exchange Agent"). A copy of the Prospectus is attached hereto as Exhibit A.
A copy of the form of the letter of transmittal, including the related notice of
guaranteed delivery (the "Letters of Transmittal"), to be used by the holders of
the Initial Notes (the "Holders") to surrender their Initial Notes in order to
receive the Exchange Notes pursuant to the Exchange is attached hereto as
Exhibit B.
The Company hereby appoints you to act as Exchange Agent in connection with the
Exchange. In carrying out your duties as Exchange Agent, you are to act in
accordance with the following:
1. You are to mail the Prospectus and the Letters of Transmittal to all of the
Holders on the day that you are notified by the Company that the Registration
Statement has become effective under the Securities Act of 1933, as amended, and
to make subsequent mailings thereof to persons who become Holders prior to the
Expiration Date as may from time to time be requested by the Company.
2. You are to examine the Letters of Transmittal and the Initial Notes and other
documents delivered or mailed to you, by or for the Holders, prior to the
Exchange Date, to ascertain whether (i) the Letters of Transmittal are properly
executed and completed in accordance with the instructions set forth therein,
(ii) the Initial Notes are in proper form for transfer, and (iii) all other
documents submitted to you are in proper form. In each case where a Letter of
Transmittal or other document has been improperly executed or completed or, for
any other reason, is not in proper form, or some other irregularity exists, you
are authorized to endeavor to take such action as you consider appropriate to
notify the tenderer of such irregularity and as to the appropriate means of
resolving the same. Determination of questions as to the proper completion or
execution of the Letters of Transmittal, or as to the proper form for transfer
of the Initial Notes or as to any other irregularity in connection with the
submission of Letters of Transmittal and/or Initial Notes and other documents in
connection with the Exchange, shall be made by you together with officers of, or
counsel for, the Company and with representatives of the Company at their
written instructions or oral direction confirmed by facsimile. Any determination
made by the Company on such questions shall be final and binding. As Exchange
Agent, you are entitled to rely on any determination by the Company as described
above and shall be fully protected and indemnified in such reliance.
3. Tender of the Initial Notes may be made only as set forth in the Letter of
Transmittal. Notwithstanding the foregoing, tenders which the Company shall
approve in writing as having been properly tendered shall be considered to be
properly tendered. Letters of Transmittal shall be recorded by you as to the
date and time of receipt and shall be preserved and retained by you. Exchange
Notes are to be issued in exchange for the Initial Notes pursuant to the
Exchange only (i) against deposit with you of the Initial Notes, together with
executed Letters of Transmittal and any other documents required by the Exchange
Offer on each business day from the execution hereof up to the Expiration Date
or (ii) in the event the holder is a participant in the Depository Trust Company
("DTC") system, by the utilization of DTC's Automated Tender Offer Program
("ATOP") and any evidence required by the Exchange Offer on each business day
from the execution hereof up to the Expiration Date.
4. Upon the oral or written request of the Company (with written confirmation of
such oral request thereafter), you will transmit by telephone, and promptly
thereafter confirm in writing to (i) Michael B. Wray, President and Chief
Financial Officer (telephone (805) 566-5600) and (ii) Jack A. Bjerke, Emens,
Kegler, Brown, Hill & Ritter Co., L.P.A., counsel to the Company (telephone
(614) 462-5400) or such other persons as the Company may reasonably request, the
aggregate number of the Initial Notes tendered to you and the number of the
Notes properly tendered that day. Furthermore, you shall transmit copies of all
Agents Messages (as defined in the Letter of Transmittal) received in connection
with ATOP to the aforementioned persons as they are
2
received. In addition, you will also inform the aforementioned persons, upon
oral request made from time to time (with written confirmation of such request
thereafter) prior to the Expiration Date, of such information as they or any of
them may reasonably request.
5. Upon the terms and subject to the conditions of the Exchange Offer, delivery
of Exchange Notes to be issued in exchange for accepted Initial Notes will be
made by you promptly after acceptance of the tendered Initial Notes.
6. If any Holder shall report to you that his/her failure to surrender Initial
Notes registered in his/her name is due to the loss, misplacement or destruction
of a certificate or certificates, you shall request such Holder (i) to furnish
to the Exchange Agent an affidavit of loss and, if required by the Company, a
corporate bond of indemnity in an amount and evidenced by such certificate or
certificates of a surety, as may be satisfactory to you and the Company, and
(ii) to execute and deliver an agreement to indemnify the Company and you in
such form as is acceptable to you and the Company. The obligees to be named in
each such indemnity bond shall include the Company and you. You shall report to
the Company the names of all Holders who claim that their Initial Notes have
been lost, misplaced or destroyed and the principal amount of such Initial
Notes.
7. As soon as practicable after you mail or deliver to an Initial Holder the
Exchange Notes that such Holder may be entitled to receive, you shall arrange
for cancellation of the Initial Notes submitted to you or returned by DTC in
connection with ATOP. Such Notes shall be forwarded to First Trust of New York,
National Association, as trustee (the "Trustee") under the Indenture dated as of
May 2, 1996 governing the Initial Notes, for cancellation and retirement as you
are instructed by the Company (or a representative designated by the Company).
8. For your services as the Exchange Agent hereunder, the Company shall pay you
in accordance with the schedule of fees attached hereto as Exhibit C. The
Company also will reimburse you for your reasonable out-of-pocket expenses
(including but not limited to counsel fees not previously paid to you as set
forth in Exhibit C) in connection with your services promptly after submission
to the Company of itemized statements.
9. As the Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically set forth
herein or in the Exhibits attached hereto or as may be subsequently requested in
writing of you by the Company and agreed to by you in writing with respect to
the Exchange;
(b) will be regarded as making no representations and having no responsibilities
as to the validity, accuracy, sufficiency, value or genuineness of any of the
Company's Holder record information, any Initial Notes deposited with you
hereunder or any Exchange Notes, any Letters of Transmittal or other documents
prepared by the Company in connection with the Exchange Offer or any signatures
or endorsements other than your own, and will not be required to and will bake
no representations as to the validity, value or genuineness of the Exchange
Offer;
(c) shall not be obligated to take any legal action hereunder which might in
your judgment involve any expenses or liability unless you shall have been
furnished with an indemnity reasonably satisfactory to you;
(d) may rely on and shall be fully protected and indemnified as provided in
paragraph 10 hereof in acting in reliance upon any certificate, instrument,
opinion, notice, letter, telegram, facsimile or other document or security
delivered to you and reasonably believed by you to be genuine and to have been
signed by the proper party or parties;
(e) may rely on and shall be fully protected and indemnified as provided in
paragraph 10 hereof in acting upon the written or oral instructions with respect
to any matter relating to your acting as Exchange Agent specifically covered by
this Agreement or supplementing or qualifying any such action of officer or
agent or such other person or persons as may be designated or whom you
reasonably believe has been designated by the Company;
(f) may consult with counsel satisfactory to you, including counsel for the
Company, and the opinion or advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by you hereunder in good faith and in accordance with the opinion or advice of
such counsel;
(g) shall not at any time advise any person as to the wisdom of the Exchange or
to the market value or decline or appreciation in market value of any Initial
Notes or Exchange Notes; and
(h) shall not be liable for anything which you may do or refrain from doing in
connection with this letter except for your gross negligence, willful misconduct
or bad faith.
10. The Company covenants and agrees to indemnify and hold harmless First Trust
of New York, National Association and its officers, directors, employees,
agents, and affiliates (collectively, the "Indemnified Parties" and each an
"Indemnified Party") and hold each Indemnified Party harmless against any loss,
liability or reasonable expense of any nature (including reasonable legal and
other fees and expenses) incurred in connection with the administration of the
duties of the Indemnified Parties hereunder; provided, however, that no
Indemnified Party shall be indemnified against any such loss, liability or
expense arising out of such party's gross negligence or bad faith. In no case
shall the Company be liable under this indemnity with respect to any claim
against
3
any Indemnified Party unless the Company shall be notified by such Indemnified
Party by letter, or by cable, telex or telecopier confirmed by letter, of the
written assertion of a claim against such Indemnified Party, or of any action
commenced against such Indemnified Party, promptly after but in any event within
10 days of the date such Indemnified Party shall have received any such written
assertion of a claim or shall have been served with a summons, or other legal
process, giving information as to the nature and basis of the claim, but failure
so to notify the Company shall not relieve the Company of any liability which it
may have otherwise than on account of this Agreement or hereunder except such
liability which is a direct result of such Indemnified Party's failure to notify
promptly. The Company shall be entitled to participate at its own expense in the
defense against any such claim or legal action. If such Indemnified Party in
such notice so directs, the Company shall assume the defense of any suit brought
to enforce any such claim. If such Indemnified Party does not so direct the
Company but elects not to defend any such claim or legal action or if such
Indemnified Party has elected to defend any such claim or legal action but is
not, in the reasonable judgment of the Company, diligently pursuing such
defense, then the Company may elect to assume the defense of any suit brought to
enforce any such claim. In the event the Company assumes the defense, the
Company shall not be liable for any fees and expenses thereafter incurred by
such Indemnified Party's counsel, except for any reasonable fees and expenses of
such Indemnified Party's counsel incurred in representing such Indemnified Party
that are necessary and appropriate as a result of the need to have separate
representation because of a conflict of interest between such Indemnified Party
and the Company: You shall not enter into a settlement or other compromise with
respect to any indemnified loss, liability or expense without the prior written
consent of the Company, which shall not be unreasonably withheld or delayed if
not adverse to the Company's interests.
11. This Agreement and your appointment as the Exchange Agent shall be construed
and enforced in accordance with the laws of the State of New York and shall
inure to the benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of the parties hereto. This Agreement may not
be modified orally. Any inconsistency between this Agreement and the Letter of
Transmittal, as they may from time to time be supplemented or amended, shall be
resolved in favor of the latter, except with respect to the duties, liabilities
and indemnification of you as Exchange Agent.
BENTON OIL AND GAS COMPANY
By:
Title: