-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C3pCCdm82FPr0zLp2I18Ix332rV1kycV951Zz7gijvm48D6nbRODYcCDeNeqo+vZ p/GMLDff4oZiLHe5P2OUCw== 0000899078-02-000534.txt : 20021002 0000899078-02-000534.hdr.sgml : 20021002 20021001202527 ACCESSION NUMBER: 0000899078-02-000534 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20021002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SWIFT ENERGY CO CENTRAL INDEX KEY: 0000351817 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 742073055 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-100243 FILM NUMBER: 02779031 BUSINESS ADDRESS: STREET 1: 16825 NORTHCHASE DR STE 400 CITY: HOUSTON STATE: TX ZIP: 77060 BUSINESS PHONE: 2818742700 MAIL ADDRESS: STREET 1: 16825 NORTHCHASE DRIVE STREET 2: SUITE 400 CITY: HOUSTON STATE: TX ZIP: 77060 S-3 1 regstmt.txt FORM S-3 As filed with the Securities and Exchange Commission on October 1, 2002 Registration Statement No. ---------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 SWIFT ENERGY COMPANY (Exact name of Registrant as specified in its charter) Texas 74-2073055 (State of incorporation) (I.R.S. Employer Identification No.) Terry E. Swift, Chief Executive Officer Swift Energy Company 16825 Northchase Drive, Suite 400 Houston, Texas 77060 (281) 874-2700 (Name, address and telephone number of Registrant's principal executive offices and agent for service) Copies to: Judy G. Gechman Jenkens & Gilchrist, A Professional Corporation 1100 Louisiana Street, Suite 1800 Houston, Texas 77002 (713) 951-3300 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. |_| If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. |X| If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.g. |_| If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. |_| If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. |_|
CALCULATION OF REGISTRATION FEE ======================================== ================== ==================== ==================== ============== Proposed Maximum Proposed Maximum Amount of Title of Each Class of Amount being Offering Price Aggregate Offering Registration Securities to be Registered Registered Per Share (1) Price (1)(2) Fee - ---------------------------------------- ------------------ -------------------- -------------------- -------------- Common Stock, $0.01 par value (3) 300,000 shares $10.60 $3,180,000.00 $293.00 ======================================== ================== ==================== ==================== ==============
(1) Calculated pursuant to Rule 457(c) under the Securities Act of 1933, as amended, and based upon the average of the high and low prices reported on the New York Stock Exchange, Inc. on September 30, 2002. (2) This registration statement shall also cover any additional shares of common stock which become issuable by reason of any stock dividend, stock split, recapitalization or other similar transaction effected without the receipt of consideration which results in an increase in the number of the outstanding shares of common stock. (3) Attached to each share of common stock is a preferred share purchase right pursuant to the Rights Agreement (as Amended and Restated as of March 31, 1999) between Swift Energy Company and American Stock Transfer & Trust Company, as Rights Agent. Until the occurrence of certain prescribed events, none of which has occurred, the rights are not detachable from the common stock nor exercisable and will be transferred along with, and only with, the common stock. Accordingly, no separate registration fee is payable with respect thereto. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. The information in this prospectus is not complete and may be changed. Antrim may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities, in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED OCTOBER 1, 2002 PROSPECTUS Swift Energy Company 300,000 Shares To be offered by Marabella Enterprises Limited, a shareholder of Swift Energy Company This prospectus relates to the offer and sale by Marabella Enterprises Limited, a wholly-owned subsidiary of Bligh Oil & Minerals N.L., and by any pledgees of its shares of up to 300,000 presently issued and outstanding shares of common stock, par value $0.01 per share. We will receive none of the proceeds from the sale of the shares by Marabella. For a description of our common stock and related rights, see "Description of Capital Stock." Under an asset purchase agreement with Marabella and its affiliates, we are obligated to register these 300,000 shares, and to maintain the effectiveness of this registration statement until September 30, 2003. The sale of the shares by Marabella is not currently subject to any underwriting agreement. See "Plan of Distribution." The shares may be sold by Marabella and by any pledgees of its shares from time to time on the New York Stock Exchange or such other national securities exchange or automated interdealer quotation system on which our common stock is then listed, through negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices. Under our asset purchase agreement with Marabella and its affiliates, Marabella together with any of its pledgees may not sell more than a total of 60,000 of these shares in any one week until September 30, 2003. See "Plan of Distribution." Our common stock is traded on the New York Stock Exchange and the Pacific Exchange under the symbol "SFY." The last reported sale price of our common stock on September 30, 2002 on the New York Stock Exchange was $10.40 per share. Marabella, any of its pledgees of the 300,000 shares and any broker executing selling orders on their behalf may be deemed to be "underwriters" within the meaning of the Securities Act of 1933. Commissions received by any broker may be deemed to be underwriting commissions under the Securities Act. ------------------------------- Investing in our common stock involves risks. See "Risk Factors" beginning on page 2. ------------------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is _______________, 2002 You should rely only on the information contained in or incorporated by reference in this prospectus and in any prospectus supplement. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in or incorporated by reference in this prospectus is accurate as of any date other than the date on the front of this prospectus.
TABLE OF CONTENTS Page About This Prospectus.............................................1 Where You Can Find More Information...............................1 Risk Factors......................................................2 Forward-Looking Statements........................................6 The Company.......................................................6 Use Of Proceeds...................................................8 Description Of Capital Stock......................................8 Selling Shareholders.............................................12 Plan Of Distribution.............................................12 Legal Matters....................................................14 Experts..........................................................14
i ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or "SEC," using a "shelf" registration process. Under the shelf process, Marabella and other selling shareholders using this registration statement may sell up to a total of 300,000 shares of the common stock described in this prospectus in one or more offerings until September 30, 2003. You should read this prospectus, together with additional information described under the heading "Where You Can Find More Information." As used in this prospectus, "Swift," "we," "us," and "our" refer to Swift Energy Company and, where applicable, its subsidiaries. WHERE YOU CAN FIND MORE INFORMATION Available Information We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, or "Exchange Act," which requires us to file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document that we file at the public reference rooms of the SEC in Washington, D.C., New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the operation of its public reference rooms. You may also access our filings over the Internet at the SEC's web site at http://www.sec.gov, or at our own website at http://www.swiftenergy.com. This prospectus constitutes part of a registration statement on Form S-3 filed with the SEC under the Securities Act of 1933, as amended, or "Securities Act." It omits some of the information contained in the registration statement, and reference is made to the registration statement for further information with respect to us and the securities being offered hereunder. Any statement contained in this prospectus concerning the provisions of any document filed as an exhibit to the registration statement or otherwise filed with the SEC is not necessarily complete, and in each instance reference is made to the copy of the filed document. Incorporation by Reference The SEC allows us to "incorporate by reference" certain information we file with them into this prospectus, which means that we can disclose important information to you by referring you to other documents filed with the SEC. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information and the information in the prospectus. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until the earlier of the sale by the selling shareholders of all the securities covered by this prospectus or September 30, 2003: 1. Our Annual Report on Form 10-K for the year ended December 31, 2001; 2. Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2002 and June 30, 2002; 3. The description of our common stock contained in our registration statement on Form 8-A filed on July 24, 1981, as amended through June 24, 1991, including any amendment or report filed before or after the date of this prospectus for the purpose of updating the description; 4. Our Current Reports on Form 8-K filed on April 10, 2002, April 15, 2002, April 16, 2002 and June 18, 2002; and 5. The description of our preferred share purchase rights contained in our registration statement on Form 8-A filed on August 11, 1997, as amended on April 7, 1999, including any amendment or report filed before or after the date of this prospectus for the purpose of updating the description. You may request a copy of these filings (other than an exhibit to a filing, unless that exhibit is specifically incorporated by reference into that filing) at no cost, by writing or telephoning Alton D. Heckaman, Jr., Senior Vice President - Finance and Chief Financial Officer, Swift Energy Company, Suite 400, 16825 Northchase Drive, Houston, Texas 77060, phone: (281) 874-2700. RISK FACTORS An investment in our stock involves significant risks. You should carefully consider the following risk factors before you decide to purchase Swift stock. You should also carefully read and consider all of the information we have included or incorporated by reference in this prospectus before you decide to purchase Swift stock. Oil and natural gas prices are volatile. A substantial decrease in oil and natural gas prices would adversely affect our financial results. Our future financial condition, results of operations and the value of our oil and natural gas properties depend primarily upon market prices for oil and natural gas. Oil and natural gas prices historically have been volatile and will likely continue to be volatile in the future. The prices for oil and natural gas are subject to wide fluctuation in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty, worldwide economic conditions, weather conditions, import prices, political conditions in major oil producing regions, especially the Middle East, and actions taken by OPEC. A significant decrease in price levels for an extended period would negatively affect us in several ways: o our cash flow would be reduced, decreasing funds available for capital expenditures employed to replace reserves or increase production; o certain reserves would no longer be economic to produce, leading to both lower proved reserves and cash flow; o our lenders could reduce the borrowing base under our credit facility because of lower oil and gas reserve values, reducing our liquidity and possibly requiring mandatory loan repayments; and o access to other sources of capital, such as equity or long-term debt markets, could be severely limited or unavailable in a low price environment. Consequently, our revenues and profitability would suffer. Our debt reduces our financial flexibility, and our debt levels may increase. At August 31, 2002, our long term debt comprised approximately 48% of our total capitalization. Increased debt: 2 o would require us to dedicate a significant portion of our cash flow to the payment of interest; o would subject us to a higher financial risk in an economic downturn due to substantial debt service costs; o would limit our ability to obtain financing or raise equity capital in the future; and o may place us at a competitive disadvantage to the extent that we are more highly leveraged than some of our peers. Subject to restrictions in our credit facility and the indentures for our senior subordinated notes due 2009 and 2012, as of August 31, 2002, we had a $300.0 million credit facility with a borrowing base of $195.0 million of which $190.3 million was available for borrowing. If we increase our debt levels further, the risks discussed above would become greater. If we cannot replace our reserves, our revenues and financial condition will suffer. Unless we successfully replace our reserves, our production will decline, resulting in lower revenues and cash flow. When oil and gas prices decrease, our cash flow decreases, resulting in less available cash to drill and replace our reserves and an increased need to draw on our bank line of credit. Drilling wells is speculative and capital intensive. Developing and exploring for oil and gas properties requires significant capital expenditures and involves a high degree of financial risk. The budgeted costs of drilling, completing and operating wells are often exceeded and can increase significantly when drilling costs rise. Drilling may be unsuccessful for many reasons, including geological or title problems, weather, cost overruns, equipment shortages and mechanical difficulties. Moreover, the successful drilling of an oil or gas well does not ensure a profit on investment. Exploratory wells bear a much greater risk of loss than development wells. A variety of factors, both geological and market-related, can cause a well to become uneconomical or only marginally economic. In addition to their cost, unsuccessful wells can hurt our efforts to replace reserves. Estimates of proved reserves are uncertain, and revenues from production may vary from expectations significantly. The quantities and values of our proved reserves included in this prospectus and the documents we have incorporated by reference are only estimates and subject to numerous uncertainties. Estimates by other engineers might differ materially. The accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation. These estimates depend on assumptions regarding quantities and production rates of recoverable oil and gas reserves, future prices for oil and gas, and timing and amounts of development expenditures and operating expenses, all of which will vary from those assumed in our estimates. These variances may be significant. For example, in 2001 the net reduction in our estimate of proved reserves in New Zealand was approximately 37 Bcfe. Any significant variance from the assumptions used could result in the actual amounts of oil and gas ultimately recovered and future net cash flows being materially different from the estimates in our reserve reports. In addition, results of drilling, testing, production and changes in prices after the date of the estimate may result in substantial downward revisions. These estimates may not accurately predict the present value of net cash flows from oil and gas reserves. 3 At December 31, 2001, approximately 50% of our estimated proved reserves were undeveloped. Recovery of undeveloped reserves generally requires significant capital expenditures and successful drilling operations. The reserve data assumes that we can and will make these expenditures and conduct these operations successfully, which may not occur. We incurred a write down of the carrying values of our properties in the fourth quarter of 2001 and could incur additional write downs in the future. Under the full cost method of accounting, SEC accounting rules require that on a quarterly basis we review the carrying value of our oil and gas properties on a country by country basis for possible write down or impairment. Under these rules, capitalized costs of proved reserves may not exceed a ceiling calculated at the present value of estimated future net revenues from those proved reserves, determined using a 10% per year discount and unescalated prices in effect as of the end of each fiscal quarter. Capital costs in excess of the ceiling must be permanently written down. We recorded an after-tax, non-cash charge during the fourth quarter of 2001 of $63.5 million. This type of write down results in a charge to earnings and a reduction of shareholders' equity, but does not impact our cash flow from operating activities. Once incurred, write downs are not reversible at a later date. If commodity prices continue to decline or if we have downward oil and gas reserve revisions, we could incur additional write downs in the future. See "The Company." Reserves on properties we buy may not meet our expectations and could change the nature of our business. Property acquisition decisions are based on various assumptions and subjective judgments that are speculative. Although available geological and geophysical information can provide information about the potential of a property, it is impossible to predict accurately a property's production and profitability. Furthermore, future acquisitions may change the nature of our operations and business. In addition, we may have difficulty integrating future acquisitions into our operations, and they may not achieve our desired profitability objectives. Likewise, as is customary in the industry, we generally acquire oil and gas acreage without any warranty of title except through the transferor. In many instances, title opinions are not obtained if, in our judgment, it would be uneconomical or impractical to do so. Losses may result from title defects or from defects in the assignment of leasehold rights. While our current operations are primarily in Texas, Louisiana and New Zealand, we may pursue acquisitions of properties located in other geographic areas, which would decrease our geographical concentration, and could also be in areas in which we have no or limited experience. We may have difficulty competing for oil and gas properties or supplies. We operate in a highly competitive environment, competing with major integrated and independent energy companies for desirable oil and gas properties, as well as for the equipment, labor and materials required to develop and operate such properties. Many of these competitors have financial and technological resources substantially greater than ours. The market for oil and gas properties is highly competitive and we may lack technological information or expertise available to other bidders. We may incur higher costs or be unable to acquire and develop desirable properties at costs we consider reasonable because of this competition. 4 Governmental regulations are costly and complex, especially regulations relating to environmental protection. Our exploration, production and marketing operations are regulated extensively at the international, federal, state and local levels. These laws and regulations affect the costs, manner and feasibility of our operations. As an owner and operator of oil and gas properties, we are subject to international, federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. We have made and will continue to make significant expenditures in our efforts to comply with the requirements of these environmental laws and regulations, which may impose liability on us for the cost of pollution clean-up resulting from operations, subject us to liability for pollution damages and require suspension or cessation of operations in affected areas. Changes in or additions to laws and regulations regarding the protection of the environment could increase our compliance costs and might hurt our business. We are subject to state and local regulations domestically and are subject to New Zealand regulations that impose permitting, reclamation, land use, conservation and other restrictions on our ability to drill and produce. These laws and regulations can require well and facility sites to be closed and reclaimed. We frequently buy and sell interests in properties that have been operated in the past, and as a result of these transactions we may retain or assume clean-up or reclamation obligations for our own operations or those of third parties. We may be exposed to financial and other liabilities as the general partner in 71 limited partnerships. We currently serve as the managing general partner of 71 limited partnerships, all but six of which are in the process of liquidating and terminating their operations. We are contingently liable for our obligations as a general partner, including any liabilities that cannot be repaid from partnership assets or insurance proceeds. In the future, we may be exposed to litigation in connection with the partnerships. We are exposed to the risk of financial non-performance by customers. Our ability to collect on sales to our customers is dependent on the liquidity of our customer base. 5 FORWARD-LOOKING STATEMENTS Some of the information included in this prospectus and the documents we have incorporated by reference contain forward-looking statements. Forward-looking statements use forward-looking terms such as "believe," "expect," "may," "intend," "will," "project," "budget," "should" or "anticipate" or other similar words. These statements discuss "forward-looking" information such as: o anticipated capital expenditures and budgets; o future cash flows and borrowings; o pursuit of potential future acquisition or drilling opportunities; and o sources of funding for exploration and development. These forward-looking statements are based on assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks, including the following: o fluctuations of the prices received or demand for oil and natural gas; o uncertainty of drilling results, reserve estimates and reserve replacement; o operating hazards; o acquisition risks; o unexpected substantial variances in capital requirements; o environmental matters; o acts of war or terrorism; and o general economic conditions. Other factors that could cause actual results to differ materially from those anticipated are discussed in our periodic filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2001. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in this prospectus and the documents we have incorporated by reference. We will not update these forward-looking statements unless the securities laws require us to do so. THE COMPANY Swift Energy Company, a Texas corporation, engages in developing, exploring, acquiring, and operating oil and gas properties, with a focus on onshore oil and natural gas reserves in Texas and Louisiana and onshore oil and natural gas reserves in New Zealand. 6 Year-end 2001 reserves quantities increased approximately 3% from 629.4 Bcfe at year-end 2000 to 645.8 Bcfe, with a reserve replacement rate of 137% of 2001 production. The 62.1 Bcfe of proved developed reserves as estimated at December 31, 2001, associated with the TAWN assets we acquired in New Zealand in January 2002 were not included in our 2001 year-end reserve report. The reserves associated with the acquisition of assets from Antrim Energy Inc. in March 2002 were also not reflected in our 2001 year-end reserve report. We focus our business in the following core areas:
Net Proved Reserves and Production as of Year-End 2001 ----------------------------------------------------------------- Area Location Reserves Percent Production of Quantities Proved (Bcfe) Reserves (Bcfe) - --------------------- --------------------- ------------------ -------------------- ------------------ AWP Olmos South Texas 207.5 32% 13.0 Masters Creek Western Louisiana 104.7 16% 15.3 Lake Washington Southern Louisiana 72.5 11% 1.2 Brookeland East Texas 59.1 9% 6.5 Rimu/Kauri New Zealand 101.9 16% 0.5 Other 100.1 16% 8.3 ------------------ -------------------- ------------------ Total 645.8 100% 44.8 ================== ==================== ==================
We have a well-balanced portfolio of oil and gas properties and prospects. The AWP Olmos and Lake Washington areas are characterized by long-lived reserves that we expect to produce steadily over a long period of time. The Masters Creek and Brookeland areas are characterized by shorter-lived reserves with high initial rates of production that decline more rapidly. Swift's philosophy is to pursue a balanced growth strategy that includes an active drilling program, strategic acquisitions, and the utilization of advanced technologies. Over the past five fiscal years we have spent an average of 11% of our capital expenditure budget on exploration drilling, 51% on development activities, 19% on proved property acquisitions and 14% on lease acquisitions. Our strategy is to grow through drilling on our core properties and in emerging growth areas when oil and gas prices are strong, with a shift toward acquisitions when prices weaken. We believe this balanced approach has resulted in our ability to grow reserves in a relatively low cost manner, while participating in the upside potential of exploration. Over the five-year period ended December 31, 2001, we replaced 302% of our production at an average cost of $1.26 per Mcfe. Capital expenditures for development and exploration drilling were $44 million in 1999 and $115.5 million in 2000, while the amounts spent for acquisitions were $20.6 million in 1999 and $33.4 million in 2000. In 2001 drilling expenditures totaled $183.2 million, while $40.5 million was spent to acquire producing properties. For 2002, our capital expenditures, excluding the net effect of acquisitions and dispositions, are currently expected to range from approximately $90.0 million to $106.0 million. We recorded a domestic, non-cash, full cost ceiling adjustment during the fourth quarter of 2001. This domestic $98.9 million pre-tax charge ($63.5 million after-tax) resulted from the application of ceiling test rules as prescribed by the SEC for companies that follow the full cost method of accounting. Under the full cost method of accounting, a company's net book value of its oil and gas properties, less related deferred income taxes, may not exceed a calculated "ceiling." If the capitalized costs exceed this ceiling, the excess capitalized costs must be written down and expensed. Full cost companies must use the prices in effect at the end of each quarter to calculate the ceiling value of reserves. 7 Our credit facility of $190.0 million, with a borrowing base of $275.0 million expires on October 1, 2005. Our principal executive offices are located at 16825 Northchase Drive, Suite 400, Houston, Texas 77060 and our telephone number is (281) 874-2700. USE OF PROCEEDS Marabella and other selling shareholders, if any, will receive all of the proceeds from the sale of the shares being offered by this prospectus. We will not receive any of the proceeds from the sale of the shares. DESCRIPTION OF CAPITAL STOCK General As of the date of this prospectus, we are authorized to issue up to 90,000,000 shares of stock, including up to 85,000,000 shares of common stock and up to 5,000,000 shares of preferred stock. As of the close of business on August 31, 2002, we had 26,893,069 shares of common stock and no shares of preferred stock outstanding. As of August 31, 2002, we had approximately 2,753,909 shares of common stock subject to issuance upon exercise of outstanding options. The following is a summary of the key terms and provisions of our equity securities. You should refer to the applicable provisions of our articles of incorporation, bylaws, the Texas Business Corporation Act and the documents we have incorporated by reference for a complete statement of the terms and rights of our capital stock. Common Stock Voting Rights. Each holder of common stock is entitled to one vote per share. Subject to the rights, if any, of the holders of any series of preferred stock pursuant to applicable law or the provision of the certificate of designation creating that series, all voting rights are vested in the holders of shares of common stock. Holders of shares of common stock have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of directors can elect 100% of the directors, and the holders of the remaining shares voting for the election of directors will not be able to elect any directors. Dividends. Dividends may be paid to the holders of common stock when, as and if declared by the board of directors out of funds legally available for their payment, subject to the rights of holders of any preferred stock. Swift has never declared a cash dividend and intends to continue its policy of using retained earnings for expansion of its business. Rights upon Liquidation. In the event of our voluntary or involuntary liquidation, dissolution or winding up, the holders of common stock will be entitled to share, in proportion to the number of shares of common stock held by them, in any of our assets available for distribution after the payment in full of all debts and distributions and after the holders of all series of outstanding preferred stock, if any, have received their liquidation preferences in full. Non-Assessable. All outstanding shares of common stock are fully paid and non-assessable, including the common stock being offered under this prospectus. 8 No Preemptive Rights. Holders of common stock are not entitled to preemptive purchase rights in future issuances of our common stock. Listing. Our outstanding shares of common stock, including the shares being offered using this prospectus, are listed on the New York Stock Exchange under the symbol "SFY." Preferred Stock Our board of directors can, without approval of our shareholders, issue one or more series of preferred stock and determine the terms of the preferred stock, including the following terms: o the series, the number of shares offered and the liquidation value of the preferred stock; o the price at which the preferred stock will be issued; o the dividend rate, the dates on which the dividends will be payable and other terms relating to the payment of dividends on the preferred stock; o the liquidation preference of the preferred stock; o the voting rights of the preferred stock; o whether the preferred stock is redeemable or subject to a sinking fund, and the terms of any such redemption or sinking fund; o whether the preferred stock is convertible or exchangeable for any other securities, and the terms of any such conversion; and o any additional rights, preferences, qualifications, limitations and restrictions of the preferred stock. Undesignated preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and to thereby protect the continuity of our management. The issuance of shares of preferred stock may adversely affect the rights of the holders of our common stock. For example, any preferred stock issued may rank prior to our common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. As a result, the issuance of shares of preferred stock may discourage bids for our common stock or may otherwise adversely affect the market price of our common stock or any existing preferred stock. Anti-takeover Provisions Certain provisions in our articles of incorporation, bylaws and our shareholders' rights plan may encourage persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. Our Classified Board of Directors. Our bylaws provide that our board of directors is divided into three classes as nearly equal in number as possible. The directors of each class are elected for three-year terms, and the terms of the three classes are staggered so that directors from a single class are elected at 9 each annual meeting of shareholders. A staggered board makes it more difficult for shareholders to change the majority of the directors and instead promotes continuity of existing management. Our Ability to Issue Preferred Stock. As discussed above, our board of directors can set the voting rights, redemption rights, conversion rights and other rights relating to authorized but unissued shares of preferred stock and could issue that stock in either private or public transactions. Preferred stock could be issued for the purpose of preventing a merger, tender offer or other takeover attempt which the board of directors opposes. Our Rights Plan. Our board of directors has adopted a shareholders' rights plan. The rights attach to all common stock certificates representing outstanding shares. One right is issued for each share of common stock outstanding. Each right entitles the registered holder, under the circumstances described below, to purchase from us one one-thousandth of a share of our Series A Junior Participating Preferred Stock, a "Series A" share, at a price of $150.00 per one one-thousandth of a Series A share, subject to adjustment. The dividend and liquidation rights and the non-redemption feature of the Series A shares are designed so that the value of one one-thousandth of a Series A share purchasable upon exercise of each right will approximate the value of one share of common stock. The following is a summary of the terms of the rights plan. You should refer to the applicable provisions of the rights plan which we have incorporated by reference as an exhibit to the registration statement of which this prospectus is a part. The rights will separate from the common stock and rights certificates will be distributed to the holders of common stock as of the earlier of: o 10 business days following a public announcement that a person or group of affiliated persons has acquired beneficial ownership of 15% or more of our outstanding voting shares, or o 10 business days following the commencement or announcement of an intention to commence a tender offer or exchange offer which would result in a person or group beneficially owning 15% or more of our outstanding voting shares. The rights are not exercisable until rights certificates are distributed. The rights will expire on July 31, 2007 unless that date is extended or the rights are earlier redeemed or exchanged. If a person or group (with certain exceptions for investment advisers) acquires 15% or more of our voting shares, each right then outstanding, other than rights beneficially owned by such person or group, becomes a right to buy that number of shares of common stock or other securities or assets having a market value of two times the exercise price of the right. The rights belonging to the acquiring person or group become null and void. If Swift is acquired in a merger or other business combination, or 50% of its consolidated assets or assets producing more than 50% of its earning power or cash flow are sold, each holder of a right will have the right to receive that number of shares of common stock of the acquiring company which at the time of such transaction has a market value of two times the purchase price of the right. At any time after a person or group acquires beneficial ownership of 15% or more of our outstanding voting shares and before the earlier of the two events described in the prior paragraph or acquisition by a person or group of beneficial ownership of 50% or more of our outstanding voting shares, our board of directors may, at its option, exchange the rights, other than those owned by such person or group, in whole or in part, at an exchange ratio of one share of common stock or a fractional share of Series A stock or other preferred stock equivalent in value thereto, per right. 10 The Series A shares issuable upon exercise of the rights will be non-redeemable and rank junior to all other series of our preferred stock. Each whole Series A share will be entitled to receive a quarterly preferential dividend in an amount per share equal to the greater of $1.00 in cash, or in the aggregate, 1,000 times the dividend declared on the common stock, subject to adjustment. In the event of liquidation, the holders of Series A shares may receive a preferential liquidation payment equal to the greater of $1,000 per share, or in the aggregate, 1,000 times the payment made on the shares of common stock. In the event of any merger, consolidation or other transaction in which the shares of common stock are exchanged for or changed into other stock or securities, cash or other property, each whole Series A share will be entitled to receive 1,000 times the amount received per share of common stock. Each whole Series A share will be entitled to 1,000 votes on all matters submitted to a vote of our shareholders and Series A shares will generally vote together as one class with the common stock and any other capital stock on all matters submitted to a vote of our shareholders. Prior to the earlier of the date it is determined that rights certificates are to be distributed or the expiration date of the rights, our board of directors may redeem all, but not less than all, of the then outstanding rights at a price of $0.01 per right. Our board of directors in its sole discretion may establish the effective date and other terms and conditions of the redemption. Upon redemption, the ability to exercise the rights will terminate and the holders of rights will only be entitled to receive the redemption price. As long as the rights are redeemable, we may amend the rights agreement in any manner except to change the redemption price. After the rights are no longer redeemable, we may, except with respect to the redemption price, amend the rights agreement in any manner that does not adversely affect the interests of holders of the rights. Business Combinations Under Texas Law. Swift is a Texas corporation subject to Part Thirteen of the Texas Business Corporation Act known as the "Business Combination Law." In general, the Business Combination Law prevents an affiliated shareholder, or the affiliated shareholder's affiliates or associates, from entering into a business combination with an issuing public corporation during the three-year period immediately following the date on which the affiliated shareholder became an affiliated shareholder, unless: o before the date such person became an affiliated shareholder, the board of directors of the issuing public corporation approves the business combination or the acquisition of shares that caused the affiliated shareholder to become an affiliated shareholder; or o not less than six months after the date such person became an affiliated shareholder, the business combination is approved by the affirmative vote of holders of at least two-thirds of the issuing public corporation's outstanding voting shares not beneficially owned by the affiliated shareholder, or its affiliates or associates. An affiliated shareholder is a person that is or was within the preceding three-year period the beneficial owner of 20% or more of a corporation's outstanding voting shares. An issuing public corporation includes most publicly held Texas corporations, including Swift. The term business combination includes: o mergers, share exchanges or conversions involving the affiliated shareholder; 11 o dispositions of assets involving the affiliated shareholder having an aggregate value of 10% or more of the market value of the assets or of the outstanding common stock or representing 10% or more of the earning power or net income of the corporation; o issuances or transfers of securities by the corporation to the affiliated shareholder other than on a pro rata basis; o plans or agreements relating to a liquidation or dissolution of the corporation involving an affiliated shareholder; o reclassifications, recapitalizations, distributions or other transactions that would have the effect of increasing the affiliated shareholder's percentage ownership of the corporation; and o the receipt of tax, guarantee, loan or other financial benefits by an affiliated shareholder other than proportionately as a shareholder of the corporation. SELLING SHAREHOLDERS The selling shareholders are Marabella Enterprises Limited, c/o Bligh Oil & Minerals N.L., Level 10, Suite 1, 100 William Street, Sydney, NSW 2011, Australia, and any pledgees of Marabella under bona fide arm's length loan transactions with third party banks or financial institutions or a broker or a dealer. Based on information available to us as of September 30, 2002, Marabella beneficially owns 300,000 shares of common stock, which may be offered by the selling shareholders, and assuming the sale of all of the common stock which may be offered and sold hereunder, Marabella would not, to our knowledge, own any shares of Swift common stock after this offering. The total number of shares being offered hereunder represents approximately 1.1% of our outstanding shares of common stock as of September 30, 2002. Marabella and its affiliates have not had any relationship with Swift that is material to Swift within the past three years other than their joint ownership of certain oil and gas interests in New Zealand. Under an asset purchase agreement between Swift and Marabella and its affiliates relating to Swift's acquisition from them of these interests, until September 30, 2003, the selling shareholders are permitted to sell no more than a total of 60,000 shares of Swift common stock in any calendar week. See "Plan of Distribution." PLAN OF DISTRIBUTION Swift is registering, under the Securities Act of 1933, the 300,000 shares of its common stock being offered hereby by Marabella and its pledgees, if any. Swift will pay the expenses of registration of the shares. Marabella will pay any brokerage commissions and similar selling expenses attributable to the sale of the shares. Swift will receive no part of the proceeds from the sale of the shares by the selling shareholders. Marabella has agreed to indemnify Swift against certain losses, claims, damages and liabilities incident to the sale of the shares, including liabilities under the Securities Act. Marabella has informed Swift that it may effect sales of shares from time to time in: o ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers, o block trades, in which the broker-dealer will attempt to sell shares as agent but may position and resell a portion of the block as principal to facilitate the transaction, 12 o purchases by a broker-dealer as principal and resale by the broker-dealer for its account, o an exchange distribution or special offering in accordance with the rules of the applicable exchange, o privately negotiated transactions, o short sales, o sales by broker-dealers of a specified number of shares at a stipulated price per share, o a combination of any such methods of sale, and o any other method permitted pursuant to applicable law, at market prices prevailing at the time of sale, or at negotiated prices. These sales may or may not involve brokers or dealers. Marabella may also pledge the shares to a broker or dealer and upon a default, the broker or dealer may effect sales of the pledged shares. Marabella has advised Swift that Marabella has not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of the shares, nor is there an underwriter or coordinating broker acting in connection with the proposed sale of shares by Marabella. Swift originally issued the shares offered hereunder to Marabella under the terms of an asset purchase agreement attached as an exhibit to the registration statement of which this prospectus is a part. The asset purchase agreement governed the purchase by Swift from Marabella and an affiliated entity of their participating interest in certain New Zealand oil and gas interests. Under that agreement, until September 30, 2003, Marabella and any pledgees of the shares, together with parties who acquire shares from pledgees, may not sell more than a total of 60,000 shares in any calendar week. Swift has placed a stop transfer notation to this effect in its stock transfer book with regard to the shares offered hereunder. Marabella and any other selling shareholders, and any broker, dealer or other agent that acts on their behalf in connection with the sale of these shares, may be deemed to be "underwriters" within the meaning of the Securities Act, in which event compensation received by any such broker, dealer or agent and profit on any resale of the shares may be deemed to be underwriting discounts or commissions under the Securities Act. Commissions received by a broker, dealer or agent may be in excess of customary compensation. The shares offered hereunder may also be sold by the selling shareholders in the future in accordance with Rule 144 under the Securities Act by complying with the requirements of that rule. Because Marabella and any other selling shareholder may be an "underwriter" within the meaning of Section 2(11) of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act for offers and sales of the shares, including delivery through the facilities of the New York Stock Exchange or the Pacific Exchange as provided in Rule 153 under the Securities Act. Swift has informed Marabella that the anti-manipulative provisions of Regulation M promulgated under the Exchange Act may apply to sales of shares in the market by Marabella. If Marabella notifies Swift that Marabella has entered into any material arrangement with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, Swift will file a supplement to this prospectus, if required, pursuant to Rule 424(b) under the Securities Act, disclosing: 13 o the name of the participating broker-dealer(s), o the number of shares involved, o the price at which such shares were sold, o the commission paid or discounts or concessions allowed to the broker-dealer(s), where applicable, o whether the broker-dealer(s) conducted any investigation to verify the information in or incorporated by reference in this prospectus, and o other material facts of the transaction. LEGAL MATTERS Jenkens & Gilchrist, A Professional Corporation, Houston, Texas, will issue an opinion for Swift regarding the legality of the securities offered by this prospectus. EXPERTS On June 12, 2002, our board of directors, acting upon the recommendation of our audit committee, approved the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2002 to replace Arthur Andersen LLP as our independent auditors. The audit partner and manager primarily responsible for our audit of financial statements for the years 1999, 2000 and 2001 which have been incorporated by reference into this prospectus, as well as other personnel of Arthur Andersen LLP have left Arthur Andersen. As a result of these events and the revocation of Arthur Andersen's license in Texas, Arthur Andersen is no longer in a position to consent to the inclusion or incorporation by reference in any prospectus or registration statement of its report on such financial statements. Therefore, we would not have been able to obtain, and have not filed, Arthur Andersen's consent in reliance on Rule 437a under the Securities Act of 1933. Due to the lack of Arthur Andersen's written consent to the incorporation by reference of its reports in this prospectus, Arthur Andersen may not have any liability under Section 11 of the Securities Act of 1933 for false and misleading statements or omissions contained in this prospectus, including the financial statements. Any other claims against Arthur Andersen related to any such false or misleading statements or omissions will be limited, particularly in the event that Arthur Andersen ceases to exist or becomes insolvent. Information referenced or incorporated by reference in this prospectus regarding our estimated quantities of oil and gas reserves and the discounted present value of future net cash flows therefrom is based upon estimates of such reserves and present values audited by H.J. Gruy and Associates, Inc., independent petroleum engineers. 14 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following table sets forth the costs and expenses in connection with the sale of securities being registered hereby. All amounts are estimates, except the registration fee.
Item Amount ---- ---------- SEC registration fee...................... $ 293 Legal fees and expenses................... $ 12,000 Miscellaneous expenses.................... $ 1,500 ---------- Total..................................... $ 13,793 ==========
Item 15. Indemnification of Officers and Directors Swift has the authority under Articles 2.02(A)(16) and 2.02-1 of the Texas Business Corporation Act to indemnify its directors and officers to the extent provided for in such statute. Swift's bylaws, as amended, provide for indemnification of its officers, directors and employees to the fullest extent permitted by Article 2.02-1 of the Texas Business Corporation Act. With shareholder approval, Swift amended its articles of incorporation to confirm that Swift has the power to indemnify certain persons in such circumstances as are provided in its Bylaws. The amendment allows Swift to enter into additional insurance and indemnity arrangements at the discretion of Swift's board of directors. Swift has entered into indemnification agreements with certain of its officers and directors which indemnify the individual to the fullest extent permitted by law. Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that a corporation's articles of incorporation may provide for the elimination or limitation of a director's liability. Swift's Articles of Incorporation eliminate the liability of directors to Swift or its shareholders for monetary damages for an act or omission in his capacity as a director, with certain specified exceptions to the fullest extent permitted by Article 7.06 of the Texas Miscellaneous Corporation Laws Act. Swift maintains insurance which will cover amounts that it is required to pay certain of its officers and directors under the indemnity provisions described above and coverage for its officers and directors against certain liabilities, including certain liabilities under the federal securities law. II-1 Item 16. Exhibits
Exhibit No. Document Description ----------- -------------------- 4.1 Asset Purchase Agreement among Swift Energy Company, Swift Energy New Zealand Limited, Bligh Oil & Minerals N.L., Marabella Enterprises Limited and Bligh Oil & Minerals (NL)Limited, dated as of August 30, 2002 4.2 Rights Agreement, including exhibits, as amended and restated as of March 31, 1999, between Swift Energy Company and American Stock Transfer & Trust Company, as Rights Agent (incorporated by reference to Exhibit 1 to Swift Energy Company's Registration Statement on Form 8-A/A filed April 7, 1999) 5 Opinion of Jenkens & Gilchrist, A Professional Corporation, as to the validity of the Securities being registered hereunder 23.1 Consent of H.J. Gruy and Associates, Inc. 23.2 Form of Consent of Jenkens & Gilchrist, A Professional Corporation (included in Exhibit 5)
17. Undertakings (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made of securities registered hereby, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that the undertakings set forth in paragraph (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Exchange Act that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby understands that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Houston, State of Texas, on September 30, 2002. SWIFT ENERGY COMPANY By: /s/ Alton D. Heckaman, Jr. -------------------------------- Alton D. Heckaman, Jr. Senior Vice President and Chief Financial Officer Each person whose signature appears below as a signatory to this registration statement constitutes and appoints Terry E. Swift, Alton D. Heckaman, Jr., and David W. Wesson, or any of them, his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated, in multiple counterparts with the effect of one original.
Signatures Title Date ---------- ----- ---- /s/ A. Earl Swift - ------------------------------------------- Chairman of the Board September 30, 2002 A. Earl Swift /s/ Terry E. Swift - ------------------------------------------- President, Chief Executive Officer (Principal September 30, 2002 Terry E. Swift Executive Officer) and Director /s/ Alton D. Heckaman, Jr. - ------------------------------------------- Senior Vice President September 30, 2002 Alton D. Heckaman, Jr. Chief Financial Officer (Principal Financial Officer) /s/ David W. Wesson - ------------------------------------------- Controller September 30, 2002 David W. Wesson (Principal Accounting Officer) /s/ Virgil N. Swift - ------------------------------------------- Director September 30, 2002 Virgil N. Swift /s/ G. Robert Evans - ------------------------------------------- Director September 30, 2002 G. Robert Evans /s/ Henry C. Montgomery - ------------------------------------------- Director September 30, 2002 Henry C. Montgomery /s/ Clyde W. Smith, Jr. - ------------------------------------------ Director September 30, 2002 Clyde W. Smith, Jr. /s/ Harold J. Withrow - ------------------------------------------- Director September 30, 2002 Harold J. Withrow /s/ Raymond E. Galvin - ------------------------------------------- Director September 30, 2002 Raymond E. Galvin
EX-4 3 apagmt.txt EXHIBIT 4.1 Exhibit 4.1 ASSET PURCHASE AGREEMENT - -------------------------------------------------------------------------------- between SWIFT ENERGY COMPANY and SWIFT ENERGY NEW ZEALAND LIMITED and BLIGH OIL & MINERALS N.L. and MARABELLA ENTERPRISES LIMITED and BLIGH OIL & MINERALS (NZ) LIMITED
TABLE OF CONTENTS Page Article I Purchase and Sale..............................................2 Section 1.1 Sale and Purchase of Interests......................2 Section 1.2 Closing Date........................................5 Section 1.3 Effective Date......................................5 Section 1.4 Purchase Price......................................5 Section 1.5 No Assumption of Liabilities........................6 Section 1.6 Valuation and Accounting............................6 Section 1.7 Rimu Production Station.............................6 Section 1.8 Taxation............................................6 Article II Buyer's and Swift's Representations and Warranties............8 Section 2.1 Organization and Good Standing......................8 Section 2.2 Authorization and Validity..........................8 Section 2.3 No Conflicts or Violation...........................8 Section 2.4 Finder's Fee........................................8 Section 2.5 The Shares..........................................9 Section 2.6 SEC Filings; Disclosure.............................9 Section 2.7 Accuracy of Information Furnished and Representations.....................................9 Section 2.8 GST Registration....................................9 Article III Representations and Warranties of BLIGH.....................10 Section 3.1 Organization and Good Standing.....................10 Section 3.2 Capitalization.....................................10 Section 3.3 Corporate Records, No Conflicts or Violation.......10 Section 3.4 Authorization and Validity.........................11 Section 3.5 Liabilities and Obligations........................11 Section 3.6 Employees and Employee Benefit Plans...............11 Section 3.7 Absence of Certain Changes.........................11 Section 3.8 Title; Leased Assets...............................12 Section 3.9 Insurance..........................................12 Section 3.10 Status of Contracts................................12 Section 3.11 Taxes..............................................12 Section 3.12 Consents...........................................13 Section 3.13 Compliance with Laws; Regulatory Compliance........13 Section 3.14 Finder's Fees......................................13 Section 3.15 Litigation and Claims..............................13 Section 3.16 Accuracy of Information Furnished and Representations....................................13 Section 3.17 Condition of Certain of the Interests..............14 Section 3.18 Data and Records...................................14 Section 3.19 Environmental Compliance...........................15 Section 3.20 Questionable Payments..............................16 Section 3.21 Limitations of Representations and Warranties......16 Section 3.22 Representations and Warranties Concerning Securities.........................................16
i
Article IV Buyer's and Swift's Covenants................................19 Section 4.1 Consummation of Agreement..........................19 Section 4.2 Registration on Form S-3...........................19 Section 4.3 Registration Procedures............................19 Article V BLIGH's Covenants.............................................23 Section 5.1 Business Operations and Consummation of Agreement..23 Section 5.2 Access and Future Cooperation......................23 Section 5.3 Material Change....................................23 Section 5.4 Consents, Approvals and Notifications of Third Parties............................................23 Section 5.5 No Negotiation with Others.........................24 Section 5.6 Information for Tax Returns........................24 Section 5.7 Expenses of Registration, Restriction on Resale of the Shares......................................24 Section 5.8 Hedging Transactions...............................25 Article VI Buyer's and Swift's Conditions Precedent.....................26 Section 6.1 Representations and Warranties.....................26 Section 6.2 Covenants..........................................26 Section 6.3 Proceedings........................................26 Section 6.4 No Material Adverse Change.........................26 Section 6.5 Consents...........................................26 Section 6.6 Due Diligence......................................26 Section 6.7 Documents to be Delivered by Bligh.................27 Section 6.8 Additional Instruments of Transfer.................28 Article VII bligh's Conditions Precedent................................29 Section 7.1 Representations and Warranties.....................29 Section 7.2 Covenants..........................................29 Section 7.3 Documents to be Delivered at Closing...............29 Section 7.4 Proceedings........................................30 Section 7.5 Consents...........................................30 Section 7.6 No Material Adverse Change.........................30 Article VIII Indemnification............................................31 Section 8.1 Bligh's Indemnity..................................31 Section 8.2 Buyer's and Swift's Indemnity......................31 Section 8.3 Reclamation Obligations............................32 Section 8.4 Securities Indemnification.........................32 Section 8.5 Conditions of Indemnification......................33 Section 8.6 Contribution.......................................33 Section 8.7 Remedies Not Exclusive.............................34 Section 8.8 Limitation on Liability............................34 Article IX Termination..................................................35 Section 9.1 Termination by Buyer or Swift......................35 Section 9.2 Termination by Bligh...............................35
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Article X Miscellaneous.................................................36 Section 10.1 Amendment..........................................36 Section 10.2 Assignment.........................................36 Section 10.3 Notice.............................................36 Section 10.4 Confidentiality....................................36 Section 10.5 Entire Agreement...................................38 Section 10.6 Costs, Expenses and Legal Fees.....................38 Section 10.7 Severability.......................................38 Section 10.8 Survival of Representations, Warranties and Covenants..........................................38 Section 10.9 Governing Law......................................38 Section 10.10 Captions...........................................38 Section 10.11 Counterparts; Facsimile Execution..................38
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EXHIBITS Exhibit 1.3.................................................Adjustment Statement Exhibit 1.8.........................................Letter Dated 24 January 2002 Exhibit 3.2.......................................................Capitalisation Exhibit 3.5......................................... Liabilities and Obligations Exhibit 3.7...........................................Absence of Certain Changes Exhibit 3.8.................................................Title; Leased Assets Exhibit 3.9............................................................Insurance Exhibit 3.12............................................................Consents Exhibit 3.15...............................................Litigation and Claims Exhibit 3.19............................................Environmental Compliance Exhibit 6.7..........................................Opinion of Seller's Counsel Exhibit 7.3...........................................Opinion of Buyer's Counsel
iv ASSET PURCHASE AGREEMENT This Asset Purchase Agreement, dated as of August ____, 2002 is made by and among SWIFT ENERGY COMPANY, a Texas corporation ("Swift"), SWIFT ENERGY NEW ZEALAND LIMITED, a New Zealand corporation and an indirect wholly-owned subsidiary of Swift ("Buyer"), and BLIGH OIL & MINERALS N.L, an Australian corporation organized under the Corporations Act 2001 ("Bligh Australia"), MARABELLA ENTERPRISES LIMITED a New Zealand corporation and a wholly-owned subsidiary of Bligh Australia ("Marabella") and BLIGH OIL & MINERALS (NZ) LIMITED, a New Zealand corporation and a wholly-owned subsidiary of Bligh Australia ("Bligh NZ") (Marabella and Bligh NZ are collectively referred to herein as "Seller" and Bligh Australia, Marabella and Bligh NZ are collectively referred to herein as "Bligh"). W I T N E S S E T H: WHEREAS, Seller owns and desires to sell, and Buyer desires to purchase, on the terms and subject to the conditions and limitations set forth herein, Seller's 5.0% participating interest in Petroleum Exploration Permit PEP 38719 ("PEP 38719"), Seller's 5.0% participating interest in Petroleum Mining Permit 38151 ("PMP 38151"), Seller's 3.24% participating interest in Petroleum Mining License 38138 ("PML 38138"), Seller's 3.24% participating interest in Petroleum Mining License 38139 ("PML 38139"), Seller's 3.24% participating interest in Petroleum Mining License 38140 ("PML 38140"), Seller's 3.24% participating interest in Petroleum Mining License 38141 ("PML 38141"), and certain rights and interests related thereto; WHEREAS, Seller owns a 5.0% participating interest in the joint venture owning the assets (other than the Rimu production station) located on PEP 38719 and on PMP 38151 under the Joint Venture Operating Agreement governing the joint venture operating PEP 38719 and PMP 38151 and a 3.24% participating interest in the joint venture assets located on PML 38138, PML 38139, PML 38140 and on PML 38141 under the Joint Venture Operating Agreement governing the joint venture operating PML 38138, PML 38139, PML 38140 and PML 38141; WHEREAS, Seller desires to sell Seller's interests in PEP 38719, PMP 38151, PML 38138, PML 38139, PML 38140 and PML 38141, and the joint ventures owning the assets thereon, under the Joint Venture Operating Agreements governing these joint ventures; and WHEREAS, Seller agrees to sell its interest in all of the foregoing described assets and Buyer agrees to purchase Seller's interest in such assets upon the following terms and conditions so as to enable Buyer to legally and beneficially acquire the interests of Seller in PEP 38719, PMP 38151, PML 38138, PML 38139, PML 38140, PML 38141 and the joint ventures owning the assets thereon, under the Joint Venture Operating Agreements governing these joint ventures; NOW, THEREFORE, in consideration of the mutual representations, warranties and covenants contained herein and the consideration provided herein, and on the terms and subject to the conditions herein set forth, the parties hereto agree as follows: 1 Article I Purchase and Sale Section 1.1 Sale and Purchase of Interests. Subject to and upon the terms and conditions contained herein, at the Closing (hereinafter defined), Seller shall, free and clear of all liens, claims and encumbrances, sell, transfer, assign, convey and deliver to Buyer, and Buyer shall purchase, accept and acquire from Seller, free and clear of all liens, claims and encumbrances, the Interests (hereafter defined). (a) Interests means: (A) Seller's 5.0% participating interest in PEP 38719, issued by the Minister on 12 August 1996, and Seller's 5.0% participating interest in PMP 38151, issued by the Minister on 30 January 2002 together with Seller's rights under that certain Farmout Agreement and that certain Deed of Assignment and Assumption, both made effective as of April 1, 1998; (B) Seller's 3.24% participating interest in PML 38138, issued by the Minister on 17 November 1987, and Seller's 3.24% participating interest in PML 38139, issued by the Minister on 17 November 1987, and Seller's 3.24% participating interest in PML 38140, issued by the Minister on 17 November 1987, and Seller's 3.24% participating interest in PML 38141, issued by the Minister on 4 May 1988, together with Seller's rights under any additional licences, permits, servitudes, rights of way, farmin agreements, farmout agreements and options or interests related to Seller's 3.24% participating interest in any or all of PML 38,138, PML 38139, PML 38140 and PML 38141; (C) Seller's interests in or arising under that certain Joint Operating Agreement entered into originally between Buyer and Marabella Enterprises Limited with respect to PEP 38719, with a stated effective date of 1 April 1998 (the "RIMU Operating Agreement"), and Seller's interests in or arising under the certain Joint Venture Operating Agreement entered into originally between Bligh Oil & Minerals N.L., Petrocorp Exploration (Taranaki) Limited, and others, with respect to the Crown Petroleum Prospecting License 38034, dated 14 April 1986 (the "TAWN Operating Agreement" and collectively with the RIMU Operating Agreement the "Joint Venture Operating Agreements"); 2 (D) Seller's interests in, or rights in or arising under, any Joint Assets (hereafter defined), including, but not limited to the following: (1) Seller's 3.24% interest in the "Gas Export Pipeline" which means the gas export pipeline which is currently owned by the TAWN Joint Venturers and runs between the Waihapa Production Facilities and the New Plymouth Power Station; (2) Seller's 3.24% interest in the "Ngatoro Spur Line" which means the Petroleum liquids pipeline currently owned by the TAWN Joint Venturers used for the transportation of Petroleum liquids from Petroleum Mining License 38091, issued by the Minister on 4 April 1984 (the "Kaimiro License") and from Petroleum Mining Permit 38148, issued by the Minister on 23 December 1996 (the "Ngatoro Permit") to the Oil Export Pipeline described in (3) below; (3) Seller's 3.24% interest in the "Oil Export Pipeline" which means the oil export pipeline which is currently owned by the TAWN Joint Venturers and which runs between the Waihapa Production Facilities and the Omata Tank Farm, a crude oil and condensate storage facility situated at Omata, New Plymouth; (4) Seller's 3.24% interest in the "Waihapa Production Facilities" which means the facilities which are currently owned by the TAWN Joint Venturers, including but not limited to the Tariki/Ahuroa gas plant, and used for Petroleum production, processing, gathering, treatment, storage and transportation operations. (b) As used in this Agreement: (i) The term "JointOperations" shall mean all operations for the exploration for Petroleum (as said term is defined in the Operating Agreements), and the production, processing, transportation and sale of Petroleum, and all things necessary and incidental thereto, conducted pursuant to the Joint Venture Operating Agreements. (ii) The term "Contracts" shall mean all gas purchase and sale agreements, gas contracts, crude oil purchase and sale agreements, Petroleum liquids sales agreements, processing agreements, leases of equipment or facilities and any and all other contractual agreements. As used in this Agreement, the term "Joint Contracts" shall mean all Contracts related in any way to the Joint Operations. 3 (iii) The term "Property" shall mean real, personal and mixed property used in connection with the exploration for Petroleum and the production, processing, transportation and sale thereof including, but not limited to (i) wells, all wellhead equipment, fixtures, field separators and liquid extractors, pipe, casing, and tubing, (ii) all production, gathering line and pipeline equipment and facilities, and (iii) all tanks, machines, equipment, tools, dies, vessels and other facilities and inventory. As used in this Agreement, the term "Joint Property" shall mean all Property related in any way to the Joint Operations. (iv) The term "Lands" shall mean all real property rights and titles. As used in this Agreement, the term "Joint Lands" shall mean all Lands related in any way to the Joint Operations. (v) The term "Data" shall mean geological data and reports, subject to all applicable licensing and other agreements, and all restrictions on transfer, all well logs, core reports and any core samples, seismic data, interpreted maps, contour maps, isopach maps and other such records and documents. As used in this Agreement, the term "Joint Data" shall mean all Data related in any way to the Joint Operations. (vi) The term "Records" shall mean corporate files, records, financial statements and tax returns, documents, correspondence and data. As used in this Agreement, the term "Joint Records" shall mean all Records related in any way to the Joint Operations. (vii) The term "Joint Assets" shall mean all interests incident to the Joint Operations, including any rights to use, own, operate or maintain the Joint Contracts, Joint Property, Joint Lands, Joint Data and Joint Records. (viii) The term "Minister" means the Minister of Energy or any other Minister for the time being exercising the powers conferred on the Minister of Energy by the Petroleum Act 1937 or the Crown Minerals Act 1991. (ix) The term "TAWN Joint Venturers" means the parties from time to time to the TAWN Operating Agreement. (x) All references to "$" are references to United States dollars unless otherwise specified. 4 Section 1.2 Closing Date. The closing of the transactions contemplated hereby (the "Closing") shall occur as soon as reasonably practicable following satisfaction of all conditions precedent to the parties' obligations to Closing (the "Closing Date"), but not later than two months after the date of execution of this Agreement or such later date as the parties may agree at 10:00 a.m. New Zealand Time, in the offices of Swift Energy New Zealand Limited, 113-119 The Terrace, Level 19, PWC Tower, Wellington, New Zealand. Section 1.3 Effective Date. If the transactions contemplated by this Agreement are consummated in accordance with this Agreement, the date on which the economic benefits and burdens relating to the Interests of Seller shall shift from Seller to Buyer shall be 1 April 2002 ("the Effective Date"). Notwithstanding anything in this Section 1.3 to the contrary, the shift of economic benefits and burdens as of the Effective Date shall not relieve Bligh from any liability or obligation to Buyer or Swift arising out of any breach of Bligh's representations, warranties or covenants under this Agreement, and shall not relieve Buyer or Swift from any liability or obligation to Bligh arising out of any breach of Buyer's or Swift's representations, warranties or covenants under this Agreement. As a result of such shift, and recognizing that Buyer is the operator with respect to the Interests, and subject to any apportionments required in respect of revenues earned and expenditures incurred in respect of the period up to and including the Effective Date, no further amounts will be payable from Seller to Buyer for capital expenditures or operating expenditures, and no further revenue amounts will be payable to Seller from Buyer, whether related to or arising out of operations prior to, on, or after the Effective Date. The parties acknowledge that to the extent of any imbalance in such amounts as of the Effective Date, such imbalance has been taken into account in determining the Purchase Price (hereinafter defined) and is set out in the statement attached as Exhibit 1.3. Section 1.4 Purchase Price. The total Purchase Price for the Interests (the "Purchase Price") shall be satisfied by; (a) payment to Bligh Australia of the of the sum of $2,750,000 less the amount of the adjustment required in terms of section 1.3 above; and (b) by the transfer to Bligh Australia of Three Hundred Thousand (300,000) fully paid and non-assessable shares of Swift common stock, $0.01 par value (the "Shares"), each Share valued at the closing price of Swift's common stock on the New York Stock Exchange on the Closing Date, as published in the Wall Street Journal for New York Stock Exchange Composite Transactions. The parties each acknowledge and confirm that the number of shares of Swift's common stock included in the Purchase Price is not subject to adjustment, and that such number was set taking account of, among other factors, the shift of economic benefits and burdens provided for in Section 1.3 above. At the Closing, Buyer shall; (a) pay to Bligh Australia the sum of $2,750,000 (less the amount of the adjustment made pursuant to section 1.3) in immediately cleared funds; and (b) cause Swift to deliver to Bligh Australia the Shares in satisfaction of Buyer's obligation to pay the Purchase Price to Seller. By its acceptance of the sum of $2,750,000 (less the amount of the adjustment made pursuant to section 1.3) and delivery of the Shares, Bligh will acknowledge that payment of $2,750,000 (less the amount of the adjustment made pursuant to section 1.3) and delivery of the Shares to it represents full and final satisfaction of Buyer's obligation to pay the Purchase Price for the Interests. The parties agree that the Purchase Price does not include any capitalized interest, and that the "lowest price" for the purposes of section EH48(3)(a) of the New Zealand Income Tax Act 1994 is equal to the Purchase Price. 5 Section 1.5 No Assumption of Liabilities. Except for the obligations of Bligh related to the Interests which first arise or are first to be performed after the Closing Date, and which do not relate to any breach of Bligh's representations, warranties or covenants under this Agreement, and except for such economic burdens described in Section 1.3 herein and which do not relate to any breach of Bligh's representations, warranties or covenants under this Agreement, (such obligations, together with such economic burdens described in Section 1.3, are collectively referred to herein as "Assumed Obligations"), neither Buyer nor Swift shall assume, purchase or agree to pay, perform or discharge any liabilities or obligations of Bligh, whether accrued, absolute, contingent or otherwise, including without limitation, liabilities based on, arising out of, or in connection with the Interests. Section 1.6 Valuation and Accounting. The transactions contemplated by this Agreement shall be valued at the closing price of Swift's common stock on the New York Stock Exchange on the Closing Date, as published in the Wall Street Journal for New York Stock Exchange Composite Transactions. The transactions contemplated by this Agreement shall be accounted for as a purchase under United States generally accepted accounting principles. Section 1.7 Rimu Production Station. Seller does not have, and has not ever had, any rights, title or any interests in the Rimu production station designed to produce specification gas, specification propane and butane and stabilized crude oil, which has been commissioned by Swift, and furthermore Seller owes no amounts to Buyer within the areas prescribed by PEP 38719 or PMP 38151 related to Buyer's construction of the Rimu production station or installation of flowlines, gathering or separation equipment pertaining to either PEP 38719 or PMP 38151. Section 1.8 Waihapa Production Station and associated assets. Buyer and Swift agree that, by a letter from Buyer to Bligh dated 24 January 2002 (a copy of which is attached as Exhibit 1.8), Buyer described the intention of the parties to put in place access arrangements, including access to processing facilities at the Waihapa production station owned and operated by an affiliate of the Buyer for transportation of hydrocarbons owned or produced by Seller or its affiliates and transportation of those hydrocarbons from the Waihapa production station to the oil storage facility at Omata, adjacent to the port of New Plymouth, by means of the oil export pipeline owned and operated by an affiliate of the Buyer. In particular, the present intentions of the Buyer relating to access to the Waihapa production station and associated assets are stated in the letter of 24 January 2002, however the parties specifically reserve their positions in regard to the finalisation of any such access arrangements. For the avoidance of doubt, the parties and acknowledge and agree that the rights granted pursuant to any such access arrangements will be personal to the Seller and those of its affiliates named therein and shall not be transferable or assignable. Section 1.9 Taxation. The parties to this Agreement acknowledge that New Zealand goods and services tax ("GST") imposed under the New Zealand Goods and Services Tax Act 1985 is not chargeable on the sale by Seller of the Interests, and Buyer and Swift will not claim GST input tax credit in respect of the sale unless Seller is subsequently determined to be liable for GST in relation to the sale. If Seller is subsequently determined to be liable for GST in relation to the sale by Seller of the Interests, then Seller will, if requested to do so by Buyer, become a registered person for GST purposes and issue Buyer with a GST tax invoice for the amount of the Purchase Price (together with GST thereon). Upon receipt of such GST tax invoice, Buyer will promptly pay such GST to Seller for payment to the New Zealand Inland Revenue Department and Buyer will (or will procure that any body or group that Buyer is or was at the relevant time a member will), at the first opportunity to do so, claim a GST input credit from the New Zealand Inland Revenue Department in respect of that sale. 6 ARTICLE II Buyer's and Swift's Representations and Warranties Buyer and Swift acknowledge and agree that (i) because Swift is the indirect parent corporation of Buyer, Swift has a financial interest in and will benefit from the transactions contemplated by this Agreement, (ii) Swift has entered into this Agreement as an inducement for Bligh to enter into this Agreement and consummate the transactions contemplate hereby, and (iii) but for Swift's willingness to enter into this Agreement and consummate the transactions contemplate hereby, Bligh would not have been willing to enter into this Agreement and consummate the transactions contemplated hereby. Accordingly, Buyer and Swift, jointly and severally, represent and warrant that the following are true and correct as of this date and will be true and correct through and on the Closing Date as if made on and as of such dates: Section 2.1 Organization and Good Standing. Buyer and Swift are corporations duly organized, validly existing and in good standing under the laws of the jurisdictions of their incorporation, with all requisite power and authority to carry on the businesses in which they are engaged, to own the properties they own and to execute and deliver this Agreement and the other agreements contemplated hereby and to consummate the transactions contemplated hereby and thereby. Buyer and Swift are duly qualified, validly existing and in good standing in all jurisdictions where the nature of their business makes such qualification necessary. Section 2.2 Authorization and Validity. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by Buyer and Swift and no corporate proceedings other than those that will be taken prior to Closing are necessary in connection with such authorization. This Agreement has been, and each other agreement contemplated hereby will be, prior to Closing, duly executed and delivered by Buyer and Swift, and, assuming the due authorization, execution and delivery by Bligh, this Agreement constitutes, and each agreement contemplated hereby will constitute, legal, valid and binding obligations of Buyer and Swift, enforceable against Buyer and Swift in accordance with their respective terms. Section 2.3 No Conflicts or Violation. Neither the execution and performance of this Agreement or the other agreements contemplated hereby, nor the consummation of the transactions contemplated hereby or thereby, will (a) conflict with, or result in a breach of the terms, conditions and provisions of, or constitute a default under, the Articles of Incorporation or Bylaws of Swift, or other governing documents of Buyer, or any agreement, indenture or other instrument under which Buyer or Swift is bound, or (b) violate or conflict with any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body having jurisdiction over Buyer or Swift or the properties or assets of Buyer or Swift. Section 2.4 Finder's Fee. Neither Buyer nor Swift have incurred any obligation for any finder's, broker's or agent's fee in connection with the transactions contemplated hereby in a manner that will result in liability on the part of Bligh. Section 2.5 The Shares. The Shares to be issued to Bligh Australia pursuant to this Agreement, when issued in accordance with the terms of this Agreement, will be duly authorized, validly issued, fully paid and non-assessable. The issuance of the Shares pursuant to this Agreement will transfer to Bligh Australia valid title to the Shares, free and clear of all liens, encumbrances and claims of every kind except for any created by Bligh. The Shares are, or upon Closing will be, listed for trading on the New York Stock Exchange. The Shares will be "restricted securities" under the U.S. securities laws and regulations until the Registration Statement (defined hereinafter in Section 4.2) for the resale of the Shares has been filed and declared effective by the U.S. Securities and Exchange Commission (the "SEC"). 7 Section 2.6 SEC Filings; Disclosure. Swift has filed with the SEC all forms, statements, reports and documents required to be filed by it for the fiscal years 1999, 2000 and 2001, and for the quarterly periods ended March 31 and June 30 2002, under each of the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the respective rules and regulations thereunder, all of which, as amended, if applicable, complied when filed in all material respects with the applicable requirements of the appropriate Act and the rules and regulations thereunder. As of the filing date of each, Swift's Disclosure Documents (as hereinafter defined in Section 3.22(h), but not including Swift's press releases, which are not included in the definition of Swift's Disclosure Documents for purposes of this Section 2.6. did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Section 2.7 Accuracy of Information Furnished and Representations. All information furnished to Bligh by Buyer or Swift herein or in any exhibit hereto is, and as supplemented after the date of this Agreement by any and all filings with the SEC and any and all publicly disclosed information, including but not limited to any and all press releases, as of the Closing Date will be, true, correct and complete in all material respects, and such information states all material facts required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, true, correct and complete in all material respects. No representation or warranty by Buyer or Swift in this Agreement or any agreement or document delivered by Buyer or Swift pursuant to this Agreement contains or will contain, as of the Closing Date, an untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained in any such representation or warranty, in light of the circumstances under which they were made, not misleading. Section 2.8 GST Registration Buyer represents and warrants that the joint ventures constituted by the Joint Operating Agreements are registered person for the purposes of the New Zealand Goods and Services Tax Act 1985 at the time of entering into this Agreement. 8 ARTICLE III Representations and Warranties of Bligh Bligh agrees that (i) because Bligh Australia is the parent corporation of Seller, Bligh Australia has a financial interest in and will benefit from the transactions contemplated by this Agreement, (ii) Bligh Australia has entered into this Agreement as an inducement for Buyer and Swift to enter into this Agreement and consummate the transactions contemplated hereby, and (iii) Bligh Australia's willingness to enter into this Agreement and consummate the transactions contemplate hereby, Buyer and Swift would not have been willing to enter into this Agreement and consummate the transactions contemplated hereby. Accordingly, Bligh Australia and Seller, jointly and severally, represent and warrant that the following are true and correct as of this date and will be true and correct through and on the Closing Date as if made on and as of such dates: Section 3.1 Organization and Good Standing. Bligh Australia and Seller are each corporations duly organized, validly existing and in good standing under the laws of the jurisdictions of their organization, with all requisite power and authority to own the Interests. Seller is duly qualified, validly existing and is in good standing in all jurisdictions where the nature of the ownership of the Interests makes such qualification necessary. Neither Bligh Australia nor Seller owns, directly or indirectly, any of the capital stock of any other corporation, other than Bligh Australia's ownership of the capital stock of Seller, or any equity, profit sharing, participation, or other interest in any corporation, partnership, joint venture or other entity which owns the Interests, conducts any portion of the Joint Operations or owns any portion of the Joint Assets. Section 3.2 Capitalization. Bligh Australia owns all of the issued and outstanding capital stock of Seller, free and clear of all liens, claims, encumbrances, equities and proxies. . Except as specified in Exhibit 3.2, each outstanding share of capital stock of Bligh and Seller has been legally and validly issued and is fully paid and nonassessable. Except as specified in Exhibit 3.2, there exist no options, warrants, subscriptions or other rights to purchase, or securities convertible into or exchangeable for, any of the authorized or outstanding securities of Bligh Australia or Seller, and there are no other such rights limiting Bligh Australia's ability to act on behalf of Seller as its ultimate parent entity. Section 3.3 Corporate Records, No Conflicts or Violation. The Certificate and Articles of Incorporation and the Bylaws duly certified as of a recent date by a duly appointed and authorized officer, with respect to Bligh, and the other governing documents duly certified as a recent date by duly appointed and authorized officers, with respect to Bligh Australia and Seller, that have been delivered to Buyer are true, correct and complete copies thereof. Neither the execution and performance of this Agreement or the other agreements contemplated hereby, nor the consummation of the transactions contemplated hereby or thereby, will (a) conflict with, or result in a breach of the terms, conditions and provisions of, or constitute a default under the Certificate and Articles of Incorporation or Bylaws of Bligh, or other governing documents of Bligh Australia or Seller, or any agreement, indenture or other instrument under which Bligh is bound, or (b) violate or conflict with any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body having jurisdiction over Bligh's properties or assets. 9 Section 3.4 Authorization and Validity. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, have been duly authorized by Bligh and no corporate proceedings other than those that will be taken prior to Closing are necessary in connection with such authorization. This Agreement has been, and each other agreement contemplated hereby will be, at or prior to Closing, duly executed and delivered by Bligh, and, assuming the due authorization, execution and delivery by Buyer and Swift, this Agreement constitutes, and each other agreement contemplated hereby will constitute, legal, valid and binding obligations of Bligh, enforceable against Bligh. Section 3.5 Liabilities and Obligations. To the best of Bligh's knowledge and information, except as set forth in Exhibit 3.5 hereto, and except for the Assumed Obligations, there are no liabilities of any kind, character or description, whether accrued, absolute, secured or unsecured, contingent or otherwise which in any way relate to, or could result in a claim against or lien upon, the Interests and which arise out of transactions effected or events occurring on or prior to the date hereof. Except as set forth in Exhibit 3.5, and except for the Assumed Obligations, Bligh is not liable upon or with respect to, or obligated in any other way to provide funds in respect of or to guarantee or assume in any manner, any debt, obligation or dividend of any person, corporation, association, partnership, joint venture, trust or other entity, and there are no unpaid bills or past due charges for any labor or materials incurred by or on behalf of Bligh which in any way relate to, or could result in a claim against or lien upon, the Interests, and which arise out of transactions effected or events occurring on or prior to the date hereof. Section 3.6 Employees and Employee Benefit Plans. To the best of its knowledge and information, Bligh has no obligation or liability, direct or indirect, express or implied, including superannuation, redundancy entitlements or any other obligation, arising under an employment agreement or arrangement, and has no obligation to any third parties, including governmental agencies, regarding employment of any person, which could become an obligation or liability of Buyer or Swift as a result of executing, delivering or performing this Agreement or consummating the transactions contemplated hereby. Bligh does not maintain any employee benefit plan or program under which an employee is receiving, or has a right to receive, any employee benefit which could become an obligation or liability of Buyer or Swift as a result of executing, delivering or performing this Agreement or consummating the transactions contemplated hereby. Section 3.7 Absence of Certain Changes. Except as set forth in Exhibit 3.7 hereto, Bligh owns the Interests in the ordinary course of business, and there has not been and will not be prior to, or on, the Closing Date: (a) Any material damage, destruction or loss to or of the Interests, to the best of Bligh's knowledge, whether or not covered by insurance; (b) Any sale, lease or other disposition of the Interests except as permitted by the terms of this Agreement; (c) Any mortgage, pledge or grant of a lien or security interest in any of the Interests except any such encumbrance that will be released at or before the Closing; or (d) Any contract or commitment to do any of the foregoing with respect to the Interests. 10 Section 3.8 Title; Leased Assets. Section 1.1 and Exhibit 3.8 sets forth an accurate list and description of all property, rights, titles and interests that constitute the Interests. Bligh warrants title to the Interests, except for "Agreed Permitted Encumbrances" as set out in Exhibit 3.8, free and clear of all liens, claims and encumbrances. Upon consummation of the transactions contemplated hereby, Buyer shall receive, and will be entitled to use, the Interests free and clear of all liens, claims and encumbrances, other than Agreed Permitted Encumbrances. Section 3.9 Insurance. All the insurable risks relating to the Interests and, to the best of Bligh's knowledge, the Joint Operations and the Joint Assets are insured under valid and enforceable policies, issued by insurers of recognized responsibility in amounts, and against such risks and losses, as is customary in Seller's industry. Attached as Exhibit 3.9 are true, complete and correct copies of all such policies, maintained by, or maintained for the benefit of, Seller with respect to the Interests, and a list of all rights incident to such policies. Section 3.10 Status of Contracts. To the best of Bligh's knowledge and information, all of the Contracts included in the Interests and, to the best of Bligh's knowledge, the Joint Contracts (a) are in full force and effect, (b) neither Seller nor, to the knowledge of Bligh, any third party to the Contracts included in the Interests or the Joint Contracts (i) is in breach of or default, or with the lapse of time or the giving of notice, or both, would be in breach or default, with respect to any of its obligations thereunder to the extent that such breaches or defaults could have a material adverse impact on the Interests, or, to the best of Bligh's knowledge, the Joint Operations or the Joint Assets or (ii) has given or threatened to give notice of any default under or inquiry into any possible default under, or action to alter, terminate, rescind or procure a judicial reformation of any Contract included in the Interests or Joint Contracts, and (c) Bligh has no reason to believe that any other party to a Contract included in the Interests or to the best of Bligh's knowledge a Joint Contract will be in breach of or default under or repudiate any of its obligations thereunder to the extent that such breach or default will have a material adverse impact on the Interests, the Joint Operations or the Joint Assets. Section 3.11 Taxes. There is no deficiency or delinquency for the payment of any tax, assessment or governmental charge asserted against Bligh nor is there any material violation by Bligh of any taxing authority with jurisdiction over the Interests or, to the best of Bligh's knowledge, the Joint Operations or the Joint Assets, or which could affect, create a lien on, or otherwise encumber the Interests or, to the best of Bligh's knowledge, the Joint Operations or Joint Assets, or which could be asserted against Buyer or Swift as a result of executing, delivering or performing this Agreement or consummating the transactions contemplated hereby. Bligh has not received notification pertaining to any, and to the best of Bligh's knowledge there is no, audit of Bligh by the New Zealand Inland Revenue Department, the Australian Tax Office, nor any other governmental taxing authority is pending or, to the knowledge of Bligh, threatened, and the results of any completed audits are properly reflected in the Financial Statements of Bligh. Bligh has not granted any extension to any taxing authority of the limitation period during which any tax liability may be asserted against, or result in a lien or other encumbrance on, the Interests, or against Buyer or Swift as a result of executing, delivering or performing this Agreement or consummating the transactions contemplated hereby. Subject to the agreements of the parties set forth in Section 1.8 above, Bligh shall pay any and all such taxes and assessments for the period prior to the Closing Date when such taxes become due and payable. 11 Section 3.12 Consents. Set forth on Exhibit 3.12 is a list of (i) all approvals, consents, filings and notifications required to be obtained, made or given for the assignment or transfer of the Interests to Buyer and (ii) each waiver of each preferential purchase right that affects the Interests which must be obtained in connection with the assignment or transfer of the Interests to Buyer. As of the date of this Agreement, Bligh has not obtained any of the approvals, consents or waivers, and has not made any of the filings or notifications, set forth on Exhibit 3.12. Section 3.13 Compliance with Laws; Regulatory Compliance. (a) The ownership of the Interests and, to the best of Bligh's knowledge, the ownership of the Joint Assets, and the conduct of the Joint Operations have been and currently are in compliance with the provisions and requirements of any applicable law, licensing requirement or regulation. Bligh has filed with the proper authorities all necessary statements and reports required to be filed by it with respect to, and has at all times maintained all necessary licenses, permits, governmental authority or any other such authority to own, the Interests, and no existing violations exist in respect to such. There are no existing violations by Bligh of any applicable law or regulation that could materially adversely affect the Interests, nor, to the best of Bligh's knowledge, the Joint Operations or the Joint Assets. (b) Bligh is not aware of any facts, conditions or circumstances that could reasonably be expected to give rise to any claim or assertion that the Interests, the Joint Operations or the Joint Assets are not in compliance with an applicable law or regulation or with any term or condition of any applicable license, permit, governmental authority, or any other such authority. Section 3.14 Finder's Fees. Bligh has not incurred any obligation for any finder's, broker's or agent's fee in connection with the transactions contemplated hereby in a manner that will result in liability on the part of Buyer or Swift. Section 3.15 Litigation and Claims. Except as described in Exhibit 3.15, there is no legal action or administrative proceeding or investigation instituted or to Bligh's knowledge threatened against Bligh or affecting, or that could affect, the Interests nor, to the best of Bligh's knowledge, the Joint Operations or the Joint Assets. Bligh is not (a) subject to any continuing court or administrative order, writ, injunction or decree applicable in any way to the Interests, the Joint Operations or the Joint Assets, or (b) in default with respect to any such order, writ, injunction or decree. Bligh does not know of any reasonable basis for any such action, proceeding or investigation, and has not received any notice from any governmental authority or any other person claiming any violation or repudiation of the Interests, the Joint Operations or the Joint Assets or any violation of any law, rule, regulation, ordinance, order, decision or decree of any governmental authority. Section 3.16 Accuracy of Information Furnished and Representations. All information furnished to Buyer or Swift by Bligh herein or in any exhibit hereto is, and as of the Closing Date will be, true, correct and complete and such information states all facts required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made and in light of the knowledge of Swift and Buyer in relation to the interests, true, correct and complete in all respects. No representation or warranty by Bligh in this Agreement or any agreement or document delivered by Bligh pursuant to this Agreement contains or will contain, as of the Closing Date, an untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained in any such representation or warranty, in light of the circumstances under which they were made, not misleading. 12 Section 3.17 Condition of Certain of the Interests. There are no material defects in any of the Property included in the Interests nor, to the best of Bligh's knowledge, in any of the Joint Property which would prevent the use and ownership of the Interests from continuing in accordance with prior practice. Section 3.18 Data and Records. (a) At or prior to Closing, Bligh will deliver to Buyer in Wellington, New Zealand any and all documents, records and other items which constitute Data included in the Interests or Records included in the Interests. Such documents, records and other items delivered to Buyer are all of the items constituting or relating to Data included in the Interests or Records included in the Interests. Copies of all of such items are maintained, and will until the Closing Date be available for review, at Bligh's Australian office. At our prior to the Closing Date, all copies of Data included in the Interests and Records included in the Interests will have either been delivered to Buyer in Wellington, New Zealand or destroyed (and, in the case of destruction, will produce a certificate to that effect from a responsible officer of Bligh). The Data included in the Interests and the Records included in the Interests, and the information contained therein, are subject to the confidentiality provisions as stated in Section 10.4 below. Bligh has not disclosed any Data included in the Interests or Records included in the Interests, or the information contained therein, to any third-party, except as may have been publicly disclosed by Bligh prior to the Closing Date to: (i) Bligh's advisers, agents, consultants, personnel, counsel or accountants, (ii) the public, through any public filing of Bligh; or (iii) pursuant to any confidentiality undertaking having similar effect to the confidentiality provisions stated in Section 10.4 below. Bligh shall not, after the date hereof, use or disclose Data included in the Interests or Records included in the Interests, or the information contained therein, to any third-party. (b) Unless otherwise indicated, references to Joint Data and Joint Records in this Section 3.18(b) refer only to Joint Data and Joint Records in the possession of Bligh. At or prior to closing, Bligh will deliver to Buyer in Wellington, New Zealand any and all documents, records and other items which constitute Joint Data or Joint Records. Such documents, records and other items delivered to Buyer are all of the items constituting or relating to Joint Data or Joint Records in Bligh's possession. Copies of all such items are maintained, and will until the Closing Date be available for review, at Bligh Australia's office. At or prior to the Closing Date, all copies of Joint Data and Joint Records will have either been delivered to Buyer in Wellington, New Zealand or destroyed (and, in the case of destruction, will produce a certificate to that effect from a responsible officer of Bligh). The Joint Data (whether or not in Bligh's possession) and the Joint Records (whether or not in Bligh's possession) and the information contained therein, are subject to the confidentiality provisions stated in Section 10.4 below and Bligh has not disclosed any of the Joint Data (whether or not in Bligh's possession) or the Joint Records (whether or not in Bligh's possession), or the information contained therein, to any third-party, except as may have been publicly disclosed by Bligh prior to the Closing Date to: (i) Bligh's advisers, agents, consultants, personnel, counsel or accountants, (ii) the public, through any public filing of Bligh, (iv) the Australian Stock Exchange, through any application or filing of Bligh Australia, or (v) pursuant to any confidentiality undertaking having similar effect to the confidentiality provisions stated in Section 10.4 below. Bligh shall not, after the date hereof, use or disclose any Joint Data (whether or not in Bligh's possession) or Joint Records (whether or not in Bligh's possession) or the information contained therein, to any third-party. 13 Section 3.19 Environmental Compliance. Except as is set forth on Exhibit 3.19, a) To the best of its knowledge and information, Bligh has obtained and maintained in effect all environmental and health and safety permits, licenses, approvals, consents, certificates and other authorizations necessary for the ownership of the Interests have been obtained and maintained, and Bligh is not aware of any failure to obtain and maintain such in relation to the conduct of the Joint Operations or the ownership of the Joint Assets ("Environmental Permits"); (b) Bligh has not received any notice of any Environmental Claim (hereinafter defined), Environmental Liabilities (hereinafter defined) or any violation or non-compliance with any Environmental Law (hereinafter defined) or with the terms or conditions of any Environmental Permit, arising from, based upon, associated with or related to the Interests or the conduct of the Joint Operations or the ownership of the Joint Assets; (c) Bligh is not otherwise aware of any facts, conditions or circumstances in connection with, related to or associated with the Interests, the conduct of the Joint Operations or the ownership of the Joint Assets that could reasonably be expected to give rise to any Environmental Claim, Environmental Liabilities or any claim or assertion that the Interests or the conduct of the Joint Operations or the ownership of the Joint Assets is not in compliance with Environmental Laws or the terms or conditions of any Environmental Permit. As used in this Agreement, the term "Environmental Claim" shall mean any third party environmental or health and safety claim, demand, filing, investigation, administrative proceeding, action, suit or other legal proceeding, whether direct, indirect, contingent, pending, threatened or otherwise. As used in this Agreement, the term "Environmental Laws" shall mean all applicable environmental and health and safety laws, rule, regulations, ordinances, orders, decisions and decrees of all governmental authorities. As used in this Agreement, the term "Environmental Liabilities" shall mean any and all liabilities arising from, based upon, associated with or related to (i) any Environmental Permit, (ii) any Environmental Claim, (iii) any Environmental Law or (iv) the presence, handling, management, storage, transportation, processing, treatment, disposal, release, threatened release, migration or escape of Environmental Contaminants, (including, without limitation, all costs arising under any theory of recovery, in law or at equity), whether based on negligence, strict liability, or otherwise, including, without limitation, remediation, removal, response, restoration, abatement, investigative, monitoring, personal injury, and property damage costs and all other related costs; expenses, losses, damages, penalties, fines, liabilities and obligations (including interest paid or accrued, attorneys' fees, and court costs). 14 Section 3.20 Questionable Payments. Neither Bligh, nor, to the best knowledge of Bligh, any of Bligh's current or former directors, officers, employees, agents, or representatives, in their capacities as such, have, to the extent that doing so would be a violation of any applicable law with respect to the ownership of the Interests, (a) used any corporate funds for any contributions, gifts, entertainment or other expenses relating to political activity, or used any corporate funds to reimburse any person for any such payment, (b) used any corporate funds for any direct or indirect payments to any foreign or domestic government officials or employees, (c) established or maintained any account or unrecorded fund of corporate monies or other assets, (d) made any false, fictitious or misclassified entries on the books and records of Bligh, (e) made any bribe, rebate, payoff, influence payment, kickback or other payment of any nature, or (f) made any material favor or gift which is not deductible for applicable tax purposes. Section 3.21 Limitations of Representations and Warranties. Bligh makes no representations or warranties except as expressly set forth in this Article III and in particular, and without limiting the generality of the foregoing, Bligh hereby negates any and all representations or warranties, whether contained in any information memorandum or otherwise, except for those set forth above in this Article III, with respect to (i) the quantity, quality or recoverability of petroleum substances produced from the area covered by the Interests; (ii) any estimates of the value of the Interests or the revenues applicable to future production therefrom; (iii) quality or value of any engineering, geological or other interpretations or economic evaluations respecting the Interests; (iv) the rates of production of petroleum substances from the area covered by the Interests; (v) the quality, condition or serviceability of the Interests; or (vi) the suitability of their use for any purpose. Section 3.22 Representations and Warranties Concerning Securities. As of the Closing Date, Bligh hereby makes the following representations and warranties to and for the benefit of Swift and Buyer: 15 (a) Bligh Australia is a corporation that has not been organized or incorporated under the laws of the United States. (b) Bligh Australia was not formed by a U.S. person (as that term is defined in Regulation S under the 1933 Act) for the purpose of investing in securities not registered under the 1933 Act. (c) Bligh Australia has assets in excess of U.S. $5,000,000. (d) Bligh Australia is not acquiring the Shares for the account or benefit of any U.S. person. The acquisition of the Shares by Bligh is for Bligh's own account and is not with a view to, or for offer or sale for Swift in connection with, the distribution in the United States of any of the Shares in violation of the 1933 Act, the 1934 Act or any U.S. state securities laws (collectively, the "Securities Acts"). Bligh is not participating and does not have a participation in any such distribution or the underwriting of any such distribution. (e) Bligh understands and acknowledges that the Shares have not been registered under the Securities Acts, are being offered to Bligh in a transaction not requiring registration under the Securities Acts, and may not be offered, sold or otherwise transferred by Bligh in the United States except in compliance with the registration requirement of the Securities Acts or pursuant to an exemption therefrom. (f) Bligh understands and acknowledges that Swift is relying on the representations contained in this Section 3.22 (a) through (e), (i) and (j) supplied by Bligh in connection with its determination of whether to issue the Shares to Bligh, and represents that any and all information that Bligh has supplied to Swift or its representatives or agents in connection with the determination of whether to issue the Shares to Bligh under this Agreement is true and complete. (g) Bligh understands and acknowledges that until such time as the Registration Statement is declared effective by the SEC, Bligh does not intend to sell the Shares other than by means of Compliant Sales as described in Section 5.7(c) and therefore Swift will place stop transfer notations in its stock transfer book and will not register the sale of the Shares unless made in accordance with the Securities Acts and this Agreement. (h) Bligh has previously obtained (i) Swift's Reports on Form 10-Q for the quarterly periods ended March 31, 2002 and June 30, 2002 and Swift's Report on Form 10-K for the years ended December 31, 2001, 2000 and 1999 and (ii) Swift's press releases since August 13, 2002 (all documents referred to collectively as "Swift's Disclosure Documents"). Bligh confirms that in addition to Swift's Disclosure Documents, Bligh has had access to and an opportunity to inspect all relevant business, financial and other corporate information, materials and data of Swift which Bligh deems necessary to make an informed investment judgment with respect to Swift and the acquisition of the Shares and to evaluate the merits and risks of Bligh investment in the Shares. Additionally, Bligh confirms that it has had an opportunity to ask questions of the directors and executive officers of Swift and to receive satisfactory answers respecting, and to obtain such additional information as Bligh requested regarding, the Shares and Swift and Swift's financial condition, affairs, business and prospects. 16 (i) In acquiring the Shares, Bligh is not relying upon any information, other than that obtained in Bligh's own independent review of Swift's Disclosure Documents, its other publicly available information about Swift and other information about Swift described in paragraph (h) of this Section 3.22. (j) Bligh is aware that no U.S. federal or state governmental authority has made any finding or determination as to the fairness of an investment in the Shares, nor any recommendation nor endorsement with respect thereto. (k) Bligh understands and acknowledges that Swift will place stop transfer notations in its stock transfer book with respect to the certificates representing the Shares in order to provide notice of the Volume Limitation on resale, as described in Section 5.7(c) - (e). Swift will remove stop transfer notations on or with respect to any new certificates representing the Shares that are sold under the Registration Statement and in compliance with the terms of this Agreement. 17 ARTICLE IV Buyer's and Swift's Covenants Section 4.1 Consummation of Agreement. Buyer and Swift agree to use its best efforts to cause the consummation of the transactions contemplated by this Agreement in accordance with its terms and conditions, including cooperating with Bligh and using best efforts to obtain each approval or consent, or make each filing or notification, as may be required to consummate the transactions contemplated by this Agreement, recognizing that a failure to obtain any such approval or consent, or a failure to make any such filing or notification, will be a failure to fulfill a condition precedent to the obligations of Bligh, as hereinafter described in Article VII. Section 4.2 Registration on Form S-3. On the first business day following the day of conclusion of the Closing, Swift shall file with the SEC a registration statement on Form S-3 (together with any amendments and supplements thereto, the "Registration Statement") for the purpose of registering the Shares for resale by Bligh under the 1933 Act. Swift represents to Bligh that Swift meets the Registrant Requirements of General Instruction I.A to SEC Form S-3, and the Transaction Requirements of General Instructions I.B.1 and I.B.3 of SEC Form S-3. Section 1.42 Registration Procedures. In connection with Swift's obligations with respect to the Registration Statement pursuant to Section 4.2 hereof, Swift shall use its reasonable best efforts to effect or cause the registration of the Shares under the 1933 Act to permit the offer and sale of such Shares by Bligh in accordance with Bligh's intended method or methods of distribution thereof, and pursuant thereto, Swift shall, as soon as reasonably possible: (a) use its reasonable best efforts to cause the Registration Statement to become effective as promptly as practicable after filing; (b) prepare and file with the SEC such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to maintain the effectiveness of the Registration Statement for a period of one year after the Closing Date except as provided for below in this Section 4.3 and in Section 5.7(c) below, and comply with the provisions of the 1933 Act and the 1934 Act with respect to the disposition of all of the Shares to be included in such Registration Statement during such applicable period in accordance with the methods of disposition disclosed to Swift by Bligh; (c) not less than five business days before filing the Registration Statement or related prospectus or any amendments or supplements thereto, furnish to Bligh and its counsel if any, copies of all such documents proposed to be filed (including exhibits), and Swift will not file any such document with the SEC if Bligh shall reasonably object to information in such a document concerning Bligh within three business days of its receipt of such document; 18 (d) promptly notify Bligh (i) when the Registration Statement, the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or post-effective amendment, when the same has become effective, (ii) of any request by the SEC for amendments or supplements to the Registration Statement or the prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by Swift of any notification with respect to the suspension of the qualification of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (v) at any time when a prospectus is required to be delivered under the 1933 Act, of the happening of any event as a result of which the Registration Statement, prospectus, any prospectus supplement, or any document incorporated by reference in any of the foregoing contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (e) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto at the earliest practicable date; (f) in connection with an underwritten offering of Shares, promptly prepare a revised prospectus, a prospectus supplement or post-effective amendment that complies with the 1933 Act and that includes such information as Swift and the managing underwriter or underwriters of such offering may deem reasonably appropriate; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be included in such prospectus supplement or post-effective amendment; (g) furnish to Bligh and each underwriter, if any, of the Shares being sold such number of copies of the Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in the Registration Statement and such other documents as Bligh and the underwriter, if any, may reasonably request in order to facilitate the disposition of the Shares; at any time when Bligh has not been given notice of the occurrence of any event described in Section 4.3 (d)(iii), (iv) or (v) above, or when Swift has not been given the notice described in the last sentence of Section 4.3, Swift consents to the use of the prospectus or any amendment or supplement thereto by Bligh and the underwriters in connection with the offering and sale of the Shares covered by the prospectus or any supplement or amendment thereto; (h) use its reasonable best efforts to (i) register or qualify the Shares to be included in the Registration Statement hereunder under such other securities laws or blue sky laws of such jurisdictions in the United States as Bligh and each managing underwriter, if any, of the Shares being sold shall reasonably request, (ii) keep such registrations or qualifications in effect for so long as the Registration Statement remains in effect and (iii) take any and all such actions as may be reasonably necessary or advisable to enable Bligh and the underwriter, if any, to consummate the disposition in such jurisdictions of such Shares; provided, however, that Swift shall not be required for any such purpose to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 4.3 (h), (B) subject itself to taxation in any such jurisdiction, or (C) consent to general service of process in any such jurisdiction; 19 (i) use its reasonable best efforts (A) to cause all of the Shares to be registered for resale with or approved by such other U.S. governmental agencies or authorities as may be necessary by virtue of the business and operations of Swift or to enable Bligh to consummate the disposition of such Shares, and (B) to prepare and deliver to the transfer agent for the Swift common stock (the "Transfer Agent") at Closing such documentation as is necessary, cooperating in good faith with Bligh and the Transfer Agent after the Closing to promptly provide such additional documentation as is necessary, including preparing and delivering to the Transfer Agent at the effective date of the Registration Statement an opinion, to enable the Transfer Agent to transfer Shares that are sold pursuant to Compliant Sales (hereinafter defined in Section 5.7(c)); (j) cooperate with Bligh and the managing underwriters, if any, to furnish for delivery, at least two business days prior to the closing of any sale, certificates representing Shares to be sold; and, in the case of an underwritten offering, enable such Shares to be registered in such names as the managing underwriters may request at least two business days prior to any sale of the Shares; 20 (k) enter into such customary agreements (including an underwriting agreement) and take such other actions in connection therewith as Bligh shall reasonably request in order to expedite or facilitate the disposition of such Shares, and in connection with an underwritten offering, at the request of Bligh or the managing underwriters, (i) make such representations and warranties to the underwriters in form, substance and scope as are customarily made in an underwritten offering; (ii) obtain such opinions of counsel to Swift in customary form and covering such matters of the type customarily covered by such opinion as the managing underwriters may reasonably request, addressed to the underwriters and dated the date of the closing under the underwriting agreement; (iii) obtain "cold comfort" letters from the independent certified public accountants of Swift addressed to the underwriters and dated the effective date of such Registration Statement and the date of the closing under the underwriting agreement, such letters to be in customary form and covering such matters of the type customarily covered by such letters; and (iv) deliver such documents and certificates as may be reasonably requested by the managing underwriters to evidence compliance with clause (i) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by Swift; (l) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earning statement covering a period of at least twelve months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder. Notwithstanding anything herein to the contrary, at any time after the effectiveness of the Registration Statement, Swift shall be entitled, by notifying Bligh, to postpone or suspend for a reasonable period of time (not to exceed 90 days in the aggregate) the offering of any Shares if Swift shall determine in good faith that such offering is reasonably likely to interfere with a pending or contemplated financing, merger, sale or acquisition of assets, recapitalization or other corporate action or policies of Swift. If Swift elects to so postpone or suspend the offering of any Shares, then Swift shall, to the extent necessary, amend or supplement the Registration Statement to permit the offering of Shares immediately following the end of such postponement or suspension, it being understood that Swift may postpone or suspend the offering of Shares only twice in any 365 day period for a period not to exceed in the aggregate 90 days. The one-year period referred to in Section 4.3(b) shall be extended by the number of days that the offering of the Shares is suspended pursuant to this paragraph. Upon the occurrence of any event described in Section 4.3 (d)(v) above, Swift shall promptly prepare and furnish to Bligh and each underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of the Shares, such prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Bligh agrees that upon receipt of any notice from Swift of the happening of any event of the kind described in Section 4.3 (d)(v) hereof, Bligh shall forthwith discontinue the disposition of Shares pursuant to the Registration Statement applicable to such Shares until Bligh receives copies of an amended or supplemented Registration Statement or prospectus, and if so directed by Swift, Bligh shall deliver to Swift all copies, other than permanent file copies, then in Bligh's possession of the prospectus covering such Shares at the time of receipt of such notice. 21 Swift may require Bligh to furnish to Swift such information regarding Bligh and the plan of distribution of such Shares as Swift may from time to time reasonably request in writing in order to comply with the 1933 Act. Without limiting the foregoing, Swift may suspend its preparation of the Registration Statement, if Bligh has not confirmed to Swift in writing, within three business days after a written request by Swift, the accuracy and completeness of the information with respect to Bligh and its intended plan of distribution which is required by Items 507 and 508 of Regulation S-K under the Securities Act for disclosure in the Registration Statement or the prospectus included therein. Bligh agrees to notify Swift as promptly as practicable of any inaccuracy or change in information previously furnished by Bligh to Swift or of the happening of any event in either case as a result of which the Registration Statement contains an untrue statement of a material fact regarding Bligh or the distribution of such Shares or omits to state any material fact regarding Bligh or the distribution of such Shares required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and to promptly furnish to Swift any additional information required to correct and update any previously furnished information or required such that such prospectus shall not contain, with respect to Bligh or the distribution of such Shares, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. 22 ARTICLE V Bligh's Covenants Bligh Australia and Seller, jointly and severally, agree that from the date hereof to the Closing Date: Section 5.1 Business Operations and Consummation of Agreement. Bligh shall own and deal with the Interests only in the ordinary course of business, and will (a) maintain current methods of management and operations and not incur obligations or undertake any transactions relating to the Interests other than in the ordinary course of business; (b) use best efforts to preserve the Interests intact and to retain its present customers and suppliers; (c) not dispose of, encumber or relinquish any of the Interests; (d) not waive, compromise or settle any right or claim that would adversely affect the ownership or value of the Interests; (e) not waive any material right or cancel any contract, debt or claim, nor assume or enter into any contract or permit outside the ordinary course of business as it relates to the ownership of the Interests, and (f) use its best efforts to cause the consummation of the transactions contemplated by this Agreement in accordance with its terms and conditions, including cooperating with Buyer and Swift and using its best efforts to obtain each approval or consent, or make each filing or notification, as may be required to consummate the transactions contemplated by this Agreement, recognizing that a failure to obtain any such approval or consent, or a failure to make any such filing or notification, will be a failure to fulfill a condition precedent to the obligations of Buyer and Swift, as hereinafter described in Article VI. Bligh shall not take any action that might reasonably be expected to impair the Interests without the prior consent of Buyer, or take or fail to take any action that would cause or result in any of the representations or warranties made in Article III hereof to be inaccurate at the time of Closing, or preclude Bligh from making such representations and warranties at the Closing. Section 5.2 Access and Future Cooperation. In addition to the examinations and inspections called for by Section 6.6 hereof, Bligh shall until the Closing Date continue to make available, or provide for review at Bligh's Australian office during normal business hours, to Buyer and its authorized representatives, any and all documents, records, properties and any other information relating to the Interests, the Joint Operations and the Joint Assets, subject to contractual and fiduciary obligations and limits, all for the sole purpose of permitting Buyer and Swift to become familiar with the Interests, the Joint Operations and the Joint Assets. Section 5.3 Material Change. Prior to the Closing, Bligh shall promptly inform Buyer in writing of any material adverse change in the condition of the Interests, or any event that causes the representations and warranties made in Article III to be inaccurate, to the extent such change or event is known to Bligh or should reasonably be known to Bligh in the ordinary course of the ownership of the Interests. Any such disclosure shall not be deemed a waiver by Buyer of any resulting breach of a representation or warranty of Bligh contained in this Agreement. Section 5.4 Consents, Approvals and Notifications of Third Parties. Prior to the Closing Date, Bligh shall use its best efforts, and will cooperate with Buyer and Swift to the extent necessary, to obtain each written consent or approval of, and comply with any notification or filing requirement of, each governmental authority or other third party, or obtain a waiver of such consent, approval, notification or filing requirement, and obtain a waiver of each preferential right or consent or notice right of any third party relating to the Interests, the Joint Operations and the Joint Assets, as may be required for the consummation of the transactions contemplated by this Agreement. Section 5.5 No Negotiation with Others. Between the date of execution of this Agreement and Closing, Bligh will not negotiate with, or initiate, encourage, or solicit any inquiries, offers or proposals of, any person, other than Buyer and Swift, with respect to the sale of the Interests. 23 Section 5.6 Information for Tax Returns. Bligh shall cooperate with Buyer after the Closing Date by providing Buyer, as soon as reasonably practical upon request, such records and other information regarding the Interests, the Joint Operations and the Joint Assets as may reasonably be requested from time to time by Buyer in connection with the preparation or audit of any and all tax returns, audits, disputes, refund claims or litigation relating thereto; provided, however, that such information will be provided to Buyer promptly upon request to the extent that any delay could cause Buyer to be unable to meet deadlines with respect to reviewing and preparing such information. In such connection, Bligh will afford Buyer's independent tax advisors, and such other persons as may be mutually agreed upon, access to books and records or relating to the Interests; provided, however, that Buyer shall cause its independent tax advisors and such other persons to hold in strict confidence all such information (except as required to be disclosed in connection with such tax returns and audits, disputes, refund claims and litigation relating thereto). Section 5.7 Expenses of Registration, Restriction on Resale of the Shares. (a) With respect to the preparation and filing of the Registration Statement and complying with securities or blue sky laws and regulations of any U.S. jurisdiction, if the SEC does not review and issue any comment on the Registration Statement, then Swift shall bear the full amount of the filing fees, printing expenses, Swift's legal and accounting fees and other reasonable expenses. (b) If, with respect to the Registration Statement, the SEC reviews and issues any comment on the Registration Statement, and/or on any document incorporated therein by reference, this subsection 5.7 (b), and not subsection 5.7(a), shall apply. In such case, Swift shall bear the full amount of the filing fees, printing expenses, Swift's legal and accounting fees and other reasonable expenses. (c) For a period of one year after the Closing Date, Bligh will only sell the Shares in Compliant Sales. "Compliant Sales" are sales of Shares that are both (a) made in compliance with the Volume Limitation (hereinafter defined) and (b) made only under the Registration Statement. In the event that Bligh sells any of the Shares in a transaction which does not qualify as a Compliant Sale, Swift may at any time thereafter withdraw the Registration Statement. Prior to Bligh pledging or otherwise granting a bona fide lien or security interest in any or all of the Shares to a third party ("Bona Fide Pledgee") for value, Bligh must notify the Bona Fide Pledgee in writing of, and the Bona Fide Pledgee must agree to comply with, the Volume Limitation. Bligh, any Bona Fide Pledgee or any party who acquires any of the Shares from a Bona Fide Pledgee upon foreclosure of any lien or security interest in the Shares are herein referred to collectively as the "Limited Parties". 24 (d) In the aggregate, the Limited Parties may not sell or otherwise dispose of, in any given Calendar Week (hereinafter defined), more than a total of 60,000 of the Shares (the "Volume Limitation"). A Calendar Week shall begin on each Monday (New York City, New York, United States time) and continue through the following Sunday. Any unaffiliated bona fide purchaser for full value will not be subject to the Volume Limitation. (e) Swift will place a stop transfer notation in its stock transfer book with respect to the Shares in order to enforce the Volume Limitation, which notation shall not be removed until the expiration of one year after the Closing Date or the sale of all of the Shares through Compliant Sales. Without limiting other remedies of Swift, Bligh Australia and Seller, jointly and severally, agree to indemnify and hold harmless Buyer and Swift against any and all claims, liabilities, damages, costs or expenses which Buyer or Swift may incur or which may be asserted against Buyer or Swift by a third party, and which arise out of, or result from, (i) a sale or disposition of any of the Shares which does not comply with the Volume Limitation, (ii) the failure or refusal of the Transfer Agent to give effect to a sale due solely to a breach by one or more of the Limited Parties of the Volume Limitation, and (iii) a sale or disposition by Bligh of any of the Shares which does not qualify as a Compliant Sale. Section 5.9 Hedging Transactions. Bligh acknowledges that it may not, and agrees that it will not, engage in any hedging transactions involving the Shares unless any such transactions comply with the Securities Acts. 25 ARTICLE VI Buyer's and Swift's Conditions Precedent Except as may be waived in writing by Buyer or Swift, the obligations of Buyer and Swift hereunder are subject to the fulfillment or continued satisfaction on the Closing Date of each of the following conditions: Section 6.1 Representations and Warranties. The representations and warranties of Bligh contained herein shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on and as of the Closing Date, as though made on and with reference to the Closing Date, and Buyer and Swift shall not have discovered any error, misstatement or omission therein which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the Interests. Section 6.2 Covenants. Bligh shall have performed and complied in all material respects with all covenants and conditions required by this Agreement to be performed and complied with by them on or prior to the Closing Date. Section 6.3 Proceedings. On the Closing Date, no action, proceeding or order by any court or governmental body or agency or third party shall have been threatened in writing, asserted, instituted or entered, to restrain or prohibit the carrying out of the transactions contemplated by this Agreement or which would materially affect the ability of the Buyer, or Swift, to consummate the transactions contemplated by this Agreement. Section 6.4 No Material Adverse Change. With respect to the Interests, the Joint Operations and the Joint Assets, no material, adverse change in the assets, business, operations or financial condition shall have occurred prior to the Closing Date, provided that a change in the prices at which petroleum substances may be sold or changes affecting the oil and gas industry generally shall not be regarded as a material adverse change in the Interests, Joint Operations or Joint Assets. Section 6.5 Consents. All consents, approvals, filings and notifications required to be obtained, made or given for the assignment of the Interests to Buyer, or as otherwise required for the consummation of the transactions contemplated hereby, shall have been obtained, including, but not limited to, the consent of, notification to, approval of, or filing made with, (or a waiver of such issued by) the appropriate governmental agencies, specifically including the New Zealand Minister of Energy, and any third parties, with respect to the transfer of the Interests. Section 6.6 Due Diligence. Buyer, acting through its own advisers, agents, consultants, personnel, counsel, accountants or other representatives designated by Buyer, shall have been afforded full and complete opportunity to inspect and/or examine the Interests and the books and records, titles and leases to properties, loans and other agreements, any pending or threatened litigation, and any other matters pertaining to the Interests. At the conclusion of any such inspection and/or examination (if any) Buyer shall have determined that no materially adverse condition exists with respect to the Interests, their condition or any matter pertaining thereto. Section 6.7 Documents to be Delivered by Bligh. In order to consummate the transactions contemplated hereby, the following documents shall be delivered by Bligh to Buyer at the Closing: 26 (a) appropriate documents transferring the Interests from Seller to Buyer; (b) true, correct and complete copies of Bligh Australia's and Seller's Certificate and Articles of Incorporation, and all amendments thereto, and other governing documents, duly certified as of a recent date by duly appointed and authorized officers; (c) a good standing certificate issued by the Australian Corporate Registry, with respect to Bligh Australia, and issued by the equivalent governmental agency or similar evidence, with respect to Seller, dated as of a recent date, duly certifying as to the existence and good standing of each as a corporation under the laws of Australia and New Zealand, respectively; (d) written instruments evidencing all consents, approvals, notifications and filings, or waivers of such, necessary for Bligh to consummate the transactions contemplated hereby; (e) for each of Bligh Australia and Seller, a certificate duly executed by a duly appointed and authorized officer or director thereof that certifies (i) the due adoption by the Board of Directors and/or by the shareholders of each, as applicable, of corporate resolutions attached to such certificate authorizing the transactions, the execution and delivery of this Agreement and the other agreements and documents contemplated hereby and the taking of all actions contemplated hereby and thereby; (ii) the incumbency and true signatures of those officers duly authorized to act on behalf of each in connection with the transactions contemplated hereby and this Agreement and to execute and deliver this Agreement and other agreements and documents contemplated hereby on behalf of Bligh Australia or Seller, as applicable, (iii) that the copy of Bylaws of each attached to such certificate is a true and correct copy of such Bylaws and that such Bylaws have not been amended except as reflected in such copy and (iv) that all of their representations and warranties in this Agreement, whether made by Bligh, Australia or Seller, are true, accurate and complete as of the date hereof and as of the Closing Date as if made on and as of the Closing Date, and that each of their covenants and obligations to be performed pursuant to this Agreement at or prior to the Closing, whether by Bligh Australia or Seller, have been duly performed and complied with; (f) to the extent held by Seller, original copies of all permits and licenses, and of all Contracts, Data, Records and other documents, directly related to rights or interests included in the Interests, and all amendments, supplements or modifications thereto, together with a written assignment thereof to Buyer; (g) possession or constructive possession of the Interests; (h) the opinions of counsel to Bligh, dated the Closing Date, in the form and substance of Exhibit 6.7 hereto, provided that the opinion of Bligh's New Zealand counsel is subject to approval, with such revisions as necessary, from such New Zealand counsel. Section 6.8 Additional Instruments of Transfer. At the Closing, and at all times thereafter as may be necessary, Bligh shall execute and deliver to Buyer such other instruments of transfer as shall be reasonably necessary or appropriate to vest in Buyer good and indefeasible title to the Interests and to comply with the purposes and intent of this Agreement, as well as any other agreements or documents necessary to consummate the transactions contemplated by this Agreement. 27 ARTICLE VII Bligh's Conditions Precedent Except as may be waived in writing by Bligh, the obligations of Bligh hereunder are subject to the fulfillment or continued satisfaction on the Closing Date of each of the following conditions: Section 7.1 Representations and Warranties. The representations and warranties of Buyer and Swift contained herein shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on and as of the Closing Date, as though made on and with reference to the Closing Date, and Bligh shall not have discovered any error, misstatement or omission therein which, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the financial condition or business operations of Swift. Section 7.2 Covenants. Buyer and Swift shall have performed and complied in all material respects with all covenants or conditions required by this Agreement to be performed and complied with by it prior to the Closing Date. Section 7.3 Documents to be Delivered at Closing. Buyer and Swift shall have delivered to Bligh at the Closing: (a) the opinion of counsel(s) to Buyer and Swift, dated the Closing Date, in the form and substance of Exhibit 7.3 hereto, provided that the opinion of Buyer's and Swift's New Zealand counsel is subject to approval, with such revisions as necessary, from such New Zealand counsel; (b) a Certificate of an executive officer of each that certifies (i) the due adoption by the Board of Directors and/or by the shareholders of each, as applicable, of corporate resolutions attached to such certificate authorizing the transactions, the execution and delivery of this Agreement and the other agreements and documents contemplated hereby and the taking of all actions contemplated hereby and thereby; (ii) the incumbency and true signatures of those officers duly authorized to act on behalf of each in connection with the transactions contemplated hereby and this Agreement and to execute and deliver this Agreement and other agreements and documents contemplated hereby on behalf of Buyer or Swift, as applicable, (iii) that the copy of Bylaws of each attached to such certificate is a true and correct copy of such Bylaws and that such Bylaws have not been amended except as reflected in such copy, and (iv) that all of their representations and warranties in this Agreement, whether made by Buyer or Swift, are true, accurate and complete as of the date hereof and as of the Closing Date as if made on and as of the Closing Date, and that each of their covenants and obligations to be performed pursuant to this Agreement at or prior to the Closing, whether by Buyer or Swift, have been duly performed and complied with; (c) five legended certificates each evidencing 60,000 of the Shares, and any and all documents to effect issuance of the Shares in accordance with the terms of this Agreement; 28 (d) a copy of the opinion letter referred to in Section 4.3(i) above to be delivered to the Transfer Agent by Swift's counsel and written confirmation from the Transfer Agent that such letter is satisfactory for the Transfer Agent's purpose, namely, to enable the Transfer Agent to complete the settlement of all Compliant Sales; (e) in the event that Swift is required to make any filing with, or provide notice to, the New York Stock Exchange with respect to the Shares, a copy of such notice or filing; and (f) other documents as necessary in connection with transferring the Interests. Section 7.4 Proceedings. At the Closing Date, no action, proceeding or order by any court or governmental body or agency or third party shall have been threatened in writing, asserted, instituted or entered, to restrain or prohibit the carrying out of the transactions contemplated by this Agreement or which would materially affect the ability of Bligh to consummate the transactions contemplated by this Agreement. Section 7.5 Consents. All consents, approvals, filings and notifications required to be obtained, made or given for the assignment of the Interests to Buyer, or as otherwise required for the consummation of the transactions contemplated hereby, shall have been obtained, including, but not limited to, (i) the consent of, notification to, approval of, or filing made with, (or a waiver of such issued by) the appropriate governmental agencies, specifically including the New Zealand Minister of Energy, and any other third parties if required, with respect to the transfer of the Interests, and (ii) a waiver of each preferential purchase right that affects the Interests, if any. Section 7.6 No Material Adverse Change. No material, adverse change in the assets, business, operations or financial condition of Swift shall have occurred prior to the Closing Date, provided that a change in the prices at which petroleum substances may be sold or changes affecting the oil and gas industry generally shall not be regarded as material adverse change. 29 ARTICLE VIII Indemnification Section 8.1 Bligh's Indemnity. Subject to the terms and conditions of this Article VIII and, specifically, Sections 8.5 and 8.8, Bligh Australia and Seller, jointly and severally, agree to indemnify, release, defend and hold Buyer, Swift and their officers, directors, agents, attorneys and affiliates harmless from and against all losses, claims, obligations, demands, assessments, penalties, liability, costs, damages, reasonable attorneys' fees and expenses, (collectively, "Damages", provided that Damages shall not include any losses to the extent caused by the gross negligence of the party to be indemnified or any losses to the extent covered by proceeds actually received by the party to be indemnified on insurance maintained by such party), asserted against or incurred by Buyer or Swift by reason of or resulting from any of the following: (a) A breach by Bligh of any representation, warranty or covenant contained herein or in any agreement executed pursuant hereto; (b) Any and all Damages incurred by virtue of ownership of, or in connection with, the Interests, and arising out of or relating to acts, events or omissions which occurred prior to the Closing Date, whether any such claims are asserted prior to or after the Closing Date, except for the Assumed Obligations; (c) Any and all liabilities or obligations of Bligh, whether arising prior to the Closing Date, except for the Assumed Obligations; or (d) Any tax filing or return or payment made, or position taken, by Bligh or Seller in relation to any direct or indirect tax or duty whatsoever, including, but not limited to, income tax, government royalties, fringe benefit tax, energy resources levy, if applicable, and customs and excise duties, which any governmental authority challenges and which results in an assertion of Damages against Buyer or Swift. Section 8.2 Buyer's and Swift's Indemnity. Subject to the terms and conditions of this Article VIII, Buyer and Swift hereby agree to indemnify, release, defend and hold Bligh and Bligh's officers, directors, agents, attorneys and affiliates harmless from and against all Damages asserted against or incurred by Bligh by reason of or resulting from any of the following: (a) breach by Buyer or Swift of any representation, warranty or covenant contained herein or in any agreement executed pursuant hereto; (b) the failure of Buyer or Swift to pay, perform and/or discharge any of the Assumed Obligations; or (c) any and all Damages incurred by virtue of ownership of, or in connection with, the Interests, and arising out of or relating to acts, events or omissions which occurred on or after the Closing Date and which do not relate to a breach of Bligh's representations, warranties or covenants under this Agreement. 30 Section 8.3 Reclamation Obligations. The parties agree that all costs, expenses, risks, liabilities and obligations respecting the abandonment of any wells which are part of the Interests, closure, decommissioning and dismantling of any facilities associated therewith and reclamation and restoration of all sites shall be borne and paid for solely by Buyer and Swift, and Buyer and Swift shall, in respect thereof, jointly and severally, indemnify, defend and save harmless Bligh from and against any claims or demands by any person for or resulting in expense, liability, loss, costs, claims or damages, direct or indirect (including the effects of and the costs of complying with any order, direction, or claim of any government, or agency, department, official or tribunal thereof having jurisdiction) pertaining to the foregoing operations conducted or failed to be conducted by Buyer or Swift. Section 8.4 Securities Indemnification. (a) Indemnification by Swift. Swift agrees to indemnify and hold harmless, to the full extent permitted by law, Bligh, its officers, directors, trustees, stockholders, employees, agents and investment advisers, and each person who controls Bligh within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under common control with, or is controlled by, Bligh, together with the officers, directors, trustees, stockholders, employees and agents of such controlling person (collectively, the "Bligh Controlling Persons"), from and against all Damages to which Bligh and the Bligh Controlling Persons may become subject under the 1933 Act or otherwise, insofar as such Damages (or proceedings in respect thereto) arise out of or are based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement (or any amendment thereto) pursuant to which Shares were registered under the 1933 Act, including all documents incorporated therein by reference, or are caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein in light of the circumstances under which they were made not misleading, or are caused by any untrue statement or alleged untrue statement of a material fact contained in the prospectus included in the Registration Statement (as amended or supplemented if Swift shall have furnished any amendments or supplements thereto), or are caused by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such Damages arise out of or are based upon any such untrue statement or omission based upon information relating to Bligh furnished in writing to Swift by Bligh specifically for use therein. In connection with an underwritten offering, Swift will indemnify the underwriters thereof, their officers and directors and each person who controls such underwriters (within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act) to the same extent as provided above with respect to the indemnification of Bligh except with respect to information provided by the underwriter specifically for inclusion therein. (b) Indemnification by Bligh. Bligh agrees to indemnify and hold harmless Swift, its officers, directors, trustees, stockholders, employees, agents and investment advisers, and each person who controls Swift within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under common control with, or is controlled by, Swift, together with the officers, directors, trustees, stockholders, employees and agents of such controlling persons, to the same extent as the foregoing indemnity from Swift to Bligh, but only with reference to information relating to Bligh furnished to Swift in writing by Bligh specifically for use in the Registration Statement (or any amendment thereto) or the prospectus included in the Registration Statement (or any amendment or supplement thereto); provided, however, that Bligh shall not be obligated to provide such indemnity to the extent that such Damages result from the failure of Swift to promptly amend or take action to correct or supplement the Registration Statement or prospectus on the basis of corrected or supplemental information provided in writing by Bligh to Swift for such purpose. In no event shall the liability of Bligh hereunder be greater in amount than the amount of the proceeds received by Bligh upon the sale of the Shares giving rise to such indemnification obligation. 31 Section 8.5 Conditions of Indemnification. The respective obligations and liabilities of Bligh and Buyer and Swift (the "indemnifying party") to the other (the "party to be indemnified") under Sections 8.1, 8.2, 8.3 and 8.4 hereof with respect to claims resulting from the assertion of liability by third parties shall be subject to the following terms and conditions: (a) Within 20 days (or such earlier time as might be required to avoid prejudicing the indemnifying party's position) after receipt of notice of commencement of any action evidenced by service of process or other legal pleading, or with reasonable promptness after the assertion in writing of any claim by a third party, the party to be indemnified shall give the indemnifying party written notice thereof together with a copy of such claim, process or other legal pleading, and the indemnifying party shall have the right to undertake the defense thereof by representatives of its own choosing and at its own expense; provided, however, that the party to be indemnified may participate in the defense with counsel of its own choice and at its own expense. (b) In the event that the party to be indemnified has not received written notice from the indemnifying party, which notice must be received by the 30th day after receipt of notice of any such claim (or, if earlier, by the 10th day preceding the day on which an answer or other pleading must be served in order to prevent judgment by default in favor of the person asserting such claim), that the indemnifying party has elected to defend against such claim, the party to be indemnified will (upon further notice to the indemnifying party) have the right to undertake the defense, compromise or settlement of such claim on behalf of and for the account and risk of the indemnifying party and at the indemnifying party's expense. (c) Anything in this Section 8.5 to the contrary notwithstanding, the indemnifying party shall not settle any claim without the consent of the party to be indemnified unless such settlement involves only the payment of money and the claimant provides to the party to be indemnified a release from all liability in respect of such claim. If the settlement of the claim involves more than the payment of money, the indemnifying party shall not settle the claim without the prior consent of the party to be indemnified. (d) The party to be indemnified and the indemnifying party will each cooperate with all reasonable requests of the other. Section 8.6 Contribution. To the extent that the indemnification provided for in paragraph (a) or (b) of Section 8.4 is unavailable to an indemnified party or insufficient in respect of any Damages, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such Damages in such proportion as is appropriate to reflect the relative fault of Swift on the one hand and Bligh on the other hand in connection with the statements or omissions that resulted in such Damages, as well as any other relevant equitable considerations. The relative fault of Swift on the one hand and of Bligh on the other hand shall be determined by a court of competent jurisdiction 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 Swift or by Bligh and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 32 Notwithstanding the provisions of this Section 8.6, Bligh shall not be required to contribute any amount in excess of the amount by which the total price at which Bligh's Shares were offered to the public (less any underwriting discounts and commissions) exceeds the amount of any damages which Bligh has otherwise been required to pay by reason of such untrue statement or omission. If indemnification is available under paragraph (a) or (b) of Section 8.4, the indemnifying parties shall indemnify each indemnified party to the full extent provided in such paragraphs without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section 8.6. Swift and Bligh agree that it would not be just or equitable if contribution pursuant to this Section 8.6 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the Damages referred to in this Section 8.6 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred (and not otherwise reimbursed) by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8.6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. Section 8.7 Remedies Not Exclusive. The remedies provided in this Article VIII shall not be exclusive of any other rights or remedies available by one party against the other, either at law or in equity. Section 8.8 Limitation on Liability. In no event shall the total liabilities, on the one hand of Bligh to Buyer and Swift, or on the other hand of Buyer and Swift to Bligh, under this Agreement, including without limitation any liabilities relating to breaches of their respective representations and warranties, exceed the Purchase Price as defined within and valued in accordance with Section 1.4 hereof. 33 ARTICLE IX Termination Section 9.1 Termination by Buyer or Swift. Buyer or Swift may terminate this Agreement by written notice to Bligh prior to Closing if any of the conditions precedent to its obligation to close contained within Article VI either (a) have not been satisfied on or prior to the Closing Date, or were satisfied prior to the Closing Date but did not remain satisfied through the Closing Date, and (b) have not been waived on or prior to the Closing Date. Further, Buyer or Swift may terminate this Agreement if the Closing has not occurred on or before 1 November 2002 for any reason other than a failure by Buyer or Swift to satisfy (to the extent that satisfaction is within the control of Buyer or Swift) any of the conditions precedent to Bligh's obligation to close pursuant to Article VII. Section 9.2 Termination by Bligh. Bligh may terminate this Agreement by written notice to Buyer prior to Closing if any of the conditions precedent to its obligation to close contained within Article VII either (a) have not been satisfied on or prior to the Closing Date, or were satisfied prior to the Closing Date but did not remain satisfied through the Closing Date, and (b) have not been waived on or prior to the Closing Date. Further, Bligh may terminate this Agreement if the Closing has not occurred on or before 1 November 2002 for any reason other than a failure by Bligh to satisfy (to the extent that satisfaction is within the control of Bligh) any of the conditions precedent to Buyer's and Swift's obligation to close pursuant to Article VI. 34 ARTICLE X Miscellaneous Section 10.1 Amendment. This Agreement may be amended, modified or supplemented only by an instrument in writing executed by the party against which enforcement of the amendment, modification or supplement is sought. Section 0.2 Assignment. Neither this Agreement nor any right created hereby shall be assignable by any party hereto. Section 10.3 Notice. Any notice or communication must be in writing and given by depositing the same in the mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, or by delivering the same in person. Such notice shall be deemed received on the date on which it is hand-delivered or on the third business day following the date on which it is so mailed. For purposes of notice, the addresses of the parties shall be: If to Bligh: Bligh Oil & Minerals N.L. Level 10, Suite 1 100 William Street Sydney, NSW 2011 Australia Fax: (61) 2 9332 5050 For: Paul Nimmo in each case with a copy to: [Attorneys for Bligh] If to Buyer or Swift: Swift Energy New Zealand Ltd. Level 19, PWC Tower 113 119 The Terrace Wellington Fax: (64) 9 472 7401 For: Jim Mitchell In each case with a copy to: Simpson Grierson Simpson Grierson Building 92-96 Albert Street Private Bag 92518 Wellesley Street Auckland Fax: 64 9 977 5046 For: Rabin Rabindran Any party may change its address for notice by written notice given to the other parties. Section 10.4 Confidentiality. The parties shall keep this Agreement and its terms confidential. It is understood that Swift and Bligh Australia are publicly traded companies and are required to comply with public disclosure requirements of their respective jurisdictions. Swift and Buyer further understand that drafts of Bligh's public disclosures are subject to prior review by the Australian Stock Exchange. Neither Swift nor Bligh, nor their respective affiliates, shall make any public disclosures regarding the transactions contemplated by this Agreement without first obtaining the approval of the other party, which approval shall not be unreasonably withheld. The parties hereto agree that initial public disclosure of the transactions contemplated by this Agreement will occur no earlier than the date of signing of this Agreement. Swift and its affiliates, and Bligh and its affiliates, will issue separate public disclosures with respect to the transactions contemplated by this Agreement. 35 In the event that the transactions contemplated by this Agreement are not consummated for any reason whatsoever, the parties hereto agree not to disclose or use any confidential information they may have concerning the affairs of the other parties, except for information which is required by law to be disclosed. Confidential information includes, but is not limited to: customer lists and files, prices and costs, business and financial records, surveys, reports, plans, proposals, financial information, stock ownership, liabilities and litigation. Should the transactions contemplated hereby not be consummated, nothing contained in this Section 10.4 shall be construed to prohibit the parties hereto from operating a business in competition with each other. In the event that the transactions contemplated by this Agreement are consummated, Bligh, as well as any of Bligh's other affiliated entities, recognize and acknowledge that they have had, currently have, and through the Closing Date will have, access to and familiarity with the Data included in the Interests, the Joint Data, the Records included in the Interests, and the Joint Records. Bligh, as well as any of Bligh's other affiliated entities, also recognize and acknowledge that the Data included in the Interests, the Joint Data, the Records included in the Interests, and the Joint Records, are valuable, special and unique assets. Bligh, as well as any of Bligh's other affiliated entities, agree that on and after the Closing Date they shall not use in any way or disclose any of the Data included in the Interests, the Joint Data, the Records included in the Interests, or the Joint Records, directly or indirectly, except as required by law. Bligh, as well as any of Bligh's other affiliated entities, agree that on the Closing Date they will either deliver to Buyer in Wellington, New Zealand or destroy (and, in the case of destruction, will produce a certificate to that effect from a responsible officer of Bligh) any and all Data included in the Interests, the Joint Data, the Records included in the Interests, and the Joint Records which are in writing or other tangible form and which are in their possession, including any and all excerpts and copies thereof together with any related analyses, compilations or summaries. In the event that a disclosure is required by law, Bligh will provide written notice to Swift, prior to such disclosure if possible. As of the Closing Date, the Data included in the Interests, the Joint Data, the Records included in the Interests, and the Joint Records, shall be and remain the exclusive property of Buyer and Swift. Bligh acknowledges and recognizes that the enforcement of the provisions of this Section 10.4 is necessary to ensure the preservation and continuity of the ownership of the Interests purchased by Buyer pursuant hereto. Without limiting any other remedy of Buyer and Swift, in the event of a breach or threatened breach of the provisions of this Section, Buyer and Swift will be entitled to an injunction restraining such breach, in whole or in part. Because of the difficulty of measuring economic losses as a result of a breach of the provisions of this Section and the immediate and irreparable damage that would be caused for which Buyer and Swift would have no other adequate remedy, Bligh agrees that such agreement may be enforced against them by injunctions, restraining orders and other equitable actions. Section 10.5 Entire Agreement. This Agreement, the exhibits hereto, constitute the entire understanding among the parties with respect to this subject matter hereof, and supersede all prior agreements and understandings relating to the subject matter hereof, except that the obligations of any party under any agreement executed pursuant to this Agreement shall not be affected by this Section 10.5. 36 Section 10.6 Costs, Expenses and Legal Fees. Whether or not the transactions contemplated hereby are consummated, and except as provided in Section 5.7(a) and Section 5.7(b), each party hereto shall bear its own costs and expenses (including attorneys' fees) of preparation, negotiation and consummation of this Agreement and the transactions contemplated hereby. Section 10.7 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement, a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. Section 10.8 Survival of Representations, Warranties and Covenants. Notwithstanding any investigation by any party thereto, the representations, warranties, covenants, and other agreements contained herein shall survive the Closing for a period (such period being referred to as the "Survival Period") ending on the expiration of twenty four calendar months following the month in which the Closing shall occur, and to the extent that any claims are asserted on or before the expiration of the Survival Period with respect to any representations or warranties, such representations or warranties shall continue to survive after the Survival Period until such claim is finally resolved. In the absence of fraud, however, no claim or action shall be commenced with respect to a breach of any such representation or warranty, unless, within the Survival Period, written notice specifying such breach in reasonable detail has been provided to the party which made such representation or warranty. Section 10.9 Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed, construed and enforced in accordance with the laws of New Zealand. Section 10.10 Captions. The captions in this Agreement are for convenience of reference only and shall not limit or otherwise affect any of the terms or provisions hereof. Section 10.11 Counterparts; Facsimile Execution. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. A telecopy or facsimile transmission of a signed counterpart of this Agreement shall be sufficient to bind the party or parties whose signature(s) appear(s) thereon. 37 IN WITNESS WHEREOF, the undersigned parties have hereunto duly executed this Agreement as of the date first written above. SWIFT ENERGY NEW ZEALAND LIMITED BUYER: By: ------------------------------------ Its: ------------------------------------ SWIFT ENERGY COMPANY PARENT CORPORATION OF BUYER: By: ------------------------------------ Its: ------------------------------------ BLIGH OIL & MINERALS N.L. PARENT CORPORATION OF BLIGH By: ------------------------------------ Its: ------------------------------------ MARABELLA ENTERPRISES LIMITED SELLER: By: ------------------------------------ Its: ------------------------------------ BLIGH OIL & MINERALS (NZ) LIMITED SELLER: By: ------------------------------------ Its: ------------------------------------ 38 EX-5 4 opinion.txt J&G OPINION LETTER FROM JUDY GECHMAN EXHIBIT 5 Jenkens & Gilchrist AUSTIN, TEXAS A PROFESSIONAL CORPORATION (512) 499-3800 CHICAGO, ILLINOIS 1100 LOUISIANA (312) 425-3900 SUITE 1800 DALLAS, TEXAS HOUSTON, TEXAS 77002 (214) 855-4500 LOS ANGELES, CALIFORNIA (713) 951-3300 (310) 820-8800 FACSIMILE (713) 951-3314 NEW YORK, NEW YORK (212) 704-6000 PASADENA, CALIFORNIA Judy G. Gechman www.jenkens.com (626) 578-7400 (713) 951-3356 SAN ANTONIO, TEXAS jgechman@jenkens.com (210) 246-5000 WASHINGTON, D.C. (202) 326-1500 October 1, 2002 Swift Energy Company Suite 400 16825 Northchase Drive Houston, Texas 77060 Re: Opinion as to Legality of Certain Securities of Swift Energy Company Ladies and Gentlemen: We have acted as counsel to Swift Energy Company, a Texas corporation (the "Company"), in connection with its registration under the Securities Act of 1933, as amended (the "Securities Act"), for resale under the Securities Act of 300,000 shares of the Company's Common Stock, par value $.01 per share (the "Shares"). The terms and conditions of such offering are described in a prospectus (the "Prospectus") contained in a Registration Statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission (the "Commission") today. We have examined the Prospectus and the Registration Statement and such other records, documents, opinions, and instruments as in our judgment are necessary or appropriate to enable us to render this opinion. In conducting our examination, we have assumed the genuineness of all signatures, the legal capacity of all individual signatories, the accuracy of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as copies. In addition, we have assumed and without independent investigation have relied upon the factual accuracy of the representations, warranties and other information contained in the items we examined. We have made such legal and factual determinations as we have deemed relevant. Based upon the foregoing, and having regard for such legal considerations as we deem relevant, we are of the opinion that the Shares are duly authorized and validly issued and are fully paid and nonassessable securities of the Company. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to reference being made to our firm under the caption "Legal Opinion" in the Prospectus. We also consent to the filing of this opinion with state securities officials in connection with the registration of the Shares under applicable state securities laws. In giving this consent, this firm does not thereby admit that it comes into the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. We express no opinion as to the laws of any jurisdiction other than the State of Texas and the federal laws of the United States of America. The opinions expressed herein are given as of the date hereof and we undertake no obligations to supplement this letter if any applicable law changes after such date or if we become aware of any facts that might change the opinions expressed herein after such date or for any other reason. Sincerely yours, JENKENS & GILCHRIST, A Professional Corporation By: /s/ Judy G. Gechman ----------------------- Judy G. Gechman Authorized Signatory EX-23 5 gruy.txt H.J. GRUY CONSENT LETTER H.J. GRUY AND ASSOCIATES, INC. - -------------------------------------------------------------------------------- 333 Clay Street, Suite 3850, Houston, Texas 77002 TEL.(713) 739-1000 FAX (713) 739-6112 Exhibit 23.1 CONSENT OF H.J. GRUY AND ASSOCIATES, INC. We hereby consent to the use of the name H.J. Gruy and Associates, Inc. and of references to H.J. Gruy and Associates, Inc. and to the inclusion of and references to our report, or information contained therein, dated February 14, 2002, prepared for Swift Energy Company in the Registration Statement on Form S-3 of Swift Energy Company for the filing dated on or about September 30, 2002. H.J. GRUY AND ASSOCIATES, INC. By: /s/Marilyn Wilson -------------------------- Marilyn Wilson President and Chief Operating Officer Houston, Texas September 25, 2002 -----END PRIVACY-ENHANCED MESSAGE-----