5,000,000 Shares
SPINNAKER EXPLORATION COMPANY
Common Stock
UNDERWRITING AGREEMENT
March 27, 2002
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
DEUTSCHE BANC ALEX. BROWN INC.
SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC
RBC DAIN RAUSCHER INC.
SANDERS MORRIS HARRIS
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Dear Sirs:
1. Introductory. Spinnaker Exploration Company, a Delaware corporation (the
"Company"), proposes to issue and sell 5,000,000 shares ("Firm Securities") of
its common stock, par value $.01 per share ("Securities"), and also proposes to
issue and sell to the Underwriters, at the option of the Underwriters, an
aggregate of not more than 750,000 additional shares ("Optional Securities") of
its Securities as set forth below. The Firm Securities and the Optional
Securities are herein collectively called the "Offered Securities". The Company
hereby agrees with the several Underwriters named in Schedule A hereto
("Underwriters") as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement (No. 333-72238), including a prospectus,
relating to the Offered Securities has been filed with the Securities and
Exchange Commission ("Commission") and has become effective. Such
registration statement, as amended as of the date of this Agreement, is
hereinafter referred to as the "Registration Statement", and the prospectus
included in such Registration Statement, as supplemented to reflect the
terms of offering of the Offered Securities, as first filed on or after the
date of this Agreement with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933 ("Act"),
including all material incorporated by reference therein, is hereinafter
referred to as the "Prospectus". No document has been or will be prepared
or distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the Registration Statement, such
Registration Statement conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and on
the date of this Agreement, the Registration Statement and the Prospectus
conform in all material respects to the requirements of the Act and the
Rules and Regulations, and neither of such documents includes any 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, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to so qualify would not have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole ("Material
Adverse Effect").
(d) Each subsidiary of the Company has been duly incorporated or
otherwise organized and is an existing corporation or other entity in good
standing under the laws of the jurisdiction of its incorporation or
organization, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and
each subsidiary of the Company is duly qualified to do business as a
foreign corporation or other entity in good standing in all other
jurisdictions in which its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to so
qualify would not have a Material Adverse Effect; all of the issued and
outstanding capital stock or other ownership interest of each subsidiary of
the Company has been duly authorized and validly issued and is fully paid
and nonassessable; and, except as disclosed in the Prospectus, the capital
stock or other ownership interest of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens, encumbrances
and defects.
(e) The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly authorized; all outstanding shares of
capital stock of the Company are, and, when the Offered Securities have
been delivered and paid for in accordance with this Agreement on each
Closing Date (as defined below), such Offered Securities will have been,
validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectus; and the stockholders of
the Company have no preemptive rights with respect to the Securities.
(f) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment in connection with
this offering.
(g) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement (the relevant provisions
2
of which have not been waived) or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Act.
(h) The Securities have been approved for listing on The New York
Stock Exchange, subject to notice of issuance.
(i) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and such
as may be required under state securities laws and except for consents,
approvals, authorizations, orders or filings the failure to obtain or make
would not have a Material Adverse Effect.
(j) The execution, delivery and performance of this Agreement, and the
issuance and sale of the Offered Securities will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under (i) any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
the Company or any subsidiary of the Company or any of their properties, or
any agreement or instrument to which the Company or any such subsidiary is
a party or by which the Company or any such subsidiary is bound or to which
any of the properties of the Company or any such subsidiary is subject, or
(ii) the charter, by-laws or other organizational documents of the Company
or any such subsidiary other than, in the case of clause (i), such
breaches, violations or defaults that would not, individually or in the
aggregate, have a Material Adverse Effect, and the Company has full
corporate power and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) Except as described in the Prospectus, each of the Company and its
subsidiaries has (i) good and indefeasible title to all its interests in
its oil and gas properties, and title investigations have been carried out
by or on behalf of the Company in accordance with good practice in the oil
and gas industry in the areas in which the Company and its subsidiaries
operate and (ii) good and indefeasible title to all other real property and
marketable title to all other material properties and assets described in
the Prospectus as owned by the Company or such subsidiary and valid,
subsisting and enforceable leases for all properties and assets, real or
personal, described in the Prospectus as leased by them, in each case free
and clear of any imperfections of title, security interests, mortgages,
pledges, liens, encumbrances or charges of any kind, other than those
described in the Prospectus and those that could not, individually or in
the aggregate, have a Material Adverse Effect.
(m) The Company and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them, except for
such certificates, authorities or permits with respect to which the lack of
possession would not, individually or in the aggregate, have a Material
Adverse Effect, and have not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit
that, if determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse Effect.
(n) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might reasonably be expected to have a Material Adverse Effect.
3
(o) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(p) Except as disclosed in the Prospectus, neither the Company nor any
of its subsidiaries is in violation of any statute, any rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or
is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware of
any pending investigation which might lead to such a claim.
(q) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect, or would materially and
adversely affect the ability of the Company to perform its obligations
under this Agreement, or which are otherwise material in the context of the
sale of the Offered Securities; and, to the Company's knowledge, no such
actions, suits or proceedings are threatened or contemplated.
(r) The financial statements included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries as of the dates
shown and their results of operations and cash flows for the periods shown,
and such financial statements have been prepared in conformity with the
generally accepted accounting principles in the United States applied on a
consistent basis.
(s) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(t) The information on the basis of which the reserve estimates and
related information included in the Registration Statement and the
Prospectus or incorporated by reference therein that was prepared by the
Company, its subsidiaries, Ryder Scott Company, L.P., independent oil and
natural gas engineers, or any other person, is true and correct in all
material respects.
(u) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded
4
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; and neither the Company nor any of its subsidiaries have any
reason to believe that they will not be able to renew their existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business
at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries, except as described in or
contemplated by the Prospectus.
(w) The Company is not and, after giving effect to the offering and
sale of the Offered Securities, will not be an "investment company" as
defined in the Investment Company Act of 1940.
(x) The Company has filed in a timely manner with the Commission each
document required to be filed by it pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), each such document at the time it
was filed conformed in all material respects to the requirements of the
Exchange Act and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company files
such reports with the Commission on the Electronic Data Gathering, Analysis
and Retrieval (EDGAR) system.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $39.63 per share, the respective
numbers of Firm Securities set forth opposite the names of the Underwriters in
Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives for the
accounts of the Underwriters, against payment of the purchase price in Federal
(same day) funds by official bank check or checks or wire transfer to an account
at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn
to the order of Spinnaker Exploration Company at the office of Baker Botts
L.L.P., One Shell Plaza, 910 Louisiana, Houston, Texas 77002, at 9:00 A.M., New
York time, on April 3, 2002, or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time being
herein referred to as the "First Closing Date". For purposes of Rule 15c6-1
under the Exchange Act, the First Closing Date (if later than the otherwise
applicable settlement date) shall be the settlement date for payment of funds
and delivery of securities for all the Offered Securities sold pursuant to the
offering. The certificates for the Firm Securities so to be delivered will be in
definitive form, in such denominations and registered in such names as CSFBC
requests and will be made available for checking and packaging at the office of
ComputerShare Investor Services, LLC, 2 North LaSalle Street, 3rd Floor,
Chicago, Illinois 60602 at least 24 hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectus, the
Underwriters may purchase all or less than all of the Optional Securities at the
purchase price per Security to be paid for the Firm Securities. The Company
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of shares of Firm Securities set forth opposite such Underwriter's name
bears to the total number of shares of Firm Securities (subject to adjustment by
CSFBC to eliminate fractions) and may be purchased by the
5
Underwriters only for the purpose of covering over-allotments made in connection
with the sale of the Firm Securities. No Optional Securities shall be sold or
delivered unless the Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional Securities or any
portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice
by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price in Federal (same day) funds by official bank check or checks
or wire transfer to an account at a bank acceptable to CSFBC drawn to the order
of Spinnaker Exploration Company, at the above office of Baker Botts L.L.P. The
certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as CSFBC requests upon reasonable notice prior to such Optional
Closing Date and will be made available for checking and packaging at the above
office of ComputerShare Investor Services, LLC at a reasonable time in advance
of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters
propose to offer the Offered Securities for sale to the public as set forth in
the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) The Company will file the Prospectus with the Commission pursuant
to and in accordance with Rule 424(b)(5) not later than the second business
day following the execution and delivery of this Agreement.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the Registration Statement or the Prospectus and will afford
CSFBC a reasonable opportunity to comment on such proposed amendment or
supplement; and the Company will also advise CSFBC promptly of the filing
of any amendment or supplementation of the Registration Statement or the
Prospectus and of the institution by the Commission of any stop order
proceedings in respect of the Registration Statement or any part thereof
and will use its reasonable best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of which
the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to
amend the Prospectus to comply with the Act, the Company will promptly
notify CSFBC of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither CSFBC's consent to, (c) nor the Underwriters' delivery
of, any such amendment or supplement shall constitute a waiver of any of
the conditions set forth in Section 6.
(d) As soon as practicable, but not later than 16 months, after the
date of this Agreement, the Company will make generally available to its
securityholders an earnings statement
6
covering a period of at least 12 months beginning after the later of (i)
the effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of this
Agreement and (ii) the date of the Company's most recent Annual Report on
Form 10-K filed with the Commission prior to the date of this Agreement,
which will satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, six of which will be signed and will include all
exhibits, each related preliminary prospectus supplement, and, so long as a
prospectus relating to the Offered Securities is required to be delivered
under the Act in connection with sales by any Underwriter or dealer, the
Prospectus and all amendments and supplements to such documents, in each
case in such quantities as CSFBC requests. The Prospectus shall be
furnished on or prior to 3:00 P.M., New York time, on the business day
following the execution and delivery of this Agreement. All other such
documents should be furnished as soon as available. The Company will pay
the expenses of printing and distributing to the Underwriters all such
documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
reasonably designates and will continue such qualifications in effect so
long as required for the distribution.
(g) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel to the Underwriters)
incurred in connection with qualification of the Offered Securities for
sale under the laws of such jurisdictions as CSFBC designates and the
printing of memoranda relating thereto, for the filing fee incident to, and
the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the National Association of Securities
Dealers, Inc. of the Offered Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers
of the Offered Securities, for expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters.
(h) For a period of 60 days after the date of the Prospectus, the
Company will not offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, or file with the Commission a registration
statement under the Act relating to, any additional shares of its
Securities or securities convertible into or exchangeable or exercisable
for any shares of its Securities, or publicly disclose the intention to
make any such offer, sale, pledge, disposition or filing, without the prior
written consent of CSFBC, except grants of employee or director stock
options, including pursuant to a stock purchase plan, pursuant to the terms
of a plan in effect on the date hereof, issuances of Securities pursuant to
the exercise of such options or the exercise of any other employee stock
options outstanding on the date hereof or issuances of Securities pursuant
to the Company's 401(k) plan as in effect on the date hereof.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which shall be on or prior to the date of this
Agreement), of Arthur Andersen LLP confirming that
7
they are independent public accountants within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating to
the effect that:
(i) in their opinion the financial statements examined by them
and included in the Registration Statement comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial information as described in Statement of Auditing Standards
No. 71, Interim Financial Information, on the unaudited financial
statements included in the Registration Statement, if any;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements included in the
Registration Statement, if any, do not comply as to form in all
material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations or any
material modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted
accounting principles;
(B) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of such letter, there
was any change in the capital stock or any increase in short-term
indebtedness or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the latest available
balance sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(C) for the period from the closing date of the latest
statement of operations included in the Prospectus to the closing
date of the latest available statement of operations read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year and a period of
corresponding length immediately preceding such period, in
consolidated net sales or net operating income) in the total or
per share amounts of consolidated net income.
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statement (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements included in material incorporated by
reference into the Registration Statement shall be deemed included in
the Prospectus for purposes of this subsection.
8
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) of this
Agreement. Prior to any Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, shall be contemplated by
the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as one enterprise which, in the judgment of a majority
in interest of the Underwriters including CSFBC, is material and adverse
and makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt
securities of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any material suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such exchange, or
any suspension of trading of any securities of the Company on any exchange
or in the over-the-counter market; (iv) any banking moratorium declared by
U.S. Federal or New York authorities or a material disruption in commercial
banking or securities settlement or clearance services in the United
States; or (v) any attack on, outbreak or escalation of hostilities or act
of terrorism involving the United States, any declaration of war by
Congress or any other national or international calamity or emergency, if,
in the judgment of a majority in interest of the Underwriters including
CSFBC, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the Offered Securities.
(d) The Representatives shall have received from Warburg, Pincus
Ventures, L.P. and each person who is a director or officer of the Company
who owns shares of Securities on the date of this Agreement an agreement to
the effect that, for a period of 60 days after the date of the Prospectus,
such person or entity will not offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any shares of Securities or
securities convertible into or exchangeable or exercisable for any shares
of Securities, or publicly disclose the intention to make any such offer,
sale, pledge or disposal, without the prior written consent of CSFBC.
(e) The Representatives shall have received an opinion, dated such
Closing Date, of Vinson & Elkins L.L.P., counsel for the Company, to the
effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Prospectus; the Company is duly
qualified to do business as a foreign corporation in the State of
Texas; Spinnaker Exploration Company, L.L.C. has been duly organized
and is an existing limited liability company in good standing under
the laws of the State of Delaware, with limited liability company
power and authority to own its properties and conduct its business as
presently conducted; Spinnaker Exploration Company, L.L.C. is duly
qualified to do business as a foreign limited liability company in the
States of Texas and Louisiana.
(ii) The Offered Securities conform in all material respects to
the description thereof contained in the Registration Statement and
the Prospectus; the Offered Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; stockholders of the Company are not entitled
to preemptive rights under the Company's Certificate of
9
Incorporation or Bylaws or under the Delaware General Corporation Law
or, to such counsel's knowledge, any contract to which the Company is
a party in connection with the issuance of the Offered Securities; all
outstanding shares of the capital stock of the Company (other than the
Offered Securities) have been duly authorized and validly issued and
are fully paid and nonassessable;
(iii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings known to such counsel between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement (the
relevant provisions of which have not been waived) or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act;
(iv) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance or sale of the Offered Securities by the
Company, except such as have been obtained and made under the Act and
such as may be required under state securities laws and except for
consents, approvals, authorizations, orders or filings the failure to
obtain or make would not have a Material Adverse Effect;
(v) The execution, delivery and performance of this Agreement and
the issuance and sale of the Offered Securities by the Company will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, (i) any statute, any rule or, to
the knowledge of such counsel, regulation or order of any governmental
agency or body or any court having jurisdiction over the Company or
any subsidiary of the Company or any of their properties (except that
such counsel need not express any opinion with respect to federal or
state securities laws or blue sky laws with respect to this
paragraph), or any material agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject known to such counsel, or
(ii) the charter, by-laws or other organizational documents of the
Company or any such subsidiary, other than with respect to clause (i)
such breaches, violations or defaults that would not, individually or
in the aggregate, have a Material Adverse Effect, and the Company has
full corporate power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement;
(vi) The Registration Statement was declared effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any part
thereof has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and such
counsel have no reason to believe that the Registration Statement and
the Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, was not appropriately responsive
in all material respects to the requirements of the Act and the Rules
and Regulations; such counsel have no reason to believe that any part
of the Registration Statement or any amendment thereto, as of its
effective date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus or any amendment or supplement thereto, as of its issue
date or as of such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; the descriptions in the
Prospectus or in the Company's most recent Annual Report on Form 10-K
filed with the Commission under the captions "Business--PGS Data
Agreement," "--Regulation," and "Description of Capital Stock" of
statutes, legal and governmental proceedings and contracts and other
documents are accurate in
10
all material respects and fairly presented; and such counsel do not
know of any legal or governmental proceedings required to be described
in the Registration Statement or the Prospectus which are not
described as required or of any contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
which are not described and filed as required; it being understood
that such counsel need express no opinion as to the financial
statements, schedules or other financial data or reserve information
or information that pertains or relates to estimated natural resources
reserves, estimated future net reserves therefrom or the discounted
net present value of such estimated future net reserves contained in
the Registration Statement or the Prospectus; and
(vii) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Representatives shall have received from Baker Botts L.L.P.,
counsel for the Underwriters, such opinion or opinions, dated such Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities delivered on such Closing Date, the Registration
Statement, the Prospectus and other related matters as CSFBC may require,
and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(g) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge, shall state that: the representations and
warranties of the Company in this Agreement are true and correct; the
Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; and, subsequent to the
date of the most recent financial statements incorporated by reference in
the Prospectus, there has been no material adverse change in, nor any
development or event that could be reasonably expected to have a material
adverse effect on, the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as a
whole except as set forth in or contemplated by the Prospectus or as
described in such certificate.
(h) The Representatives shall have received a letter (unless Arthur
Andersen LLP is unable or unwilling to deliver such a letter as a result of
events affecting Arthur Andersen LLP generally and not as a result of (1)
concerns or other matters specific to the Company or (2) the failure of the
Company to use commercially reasonable efforts to engage Arthur Andersen
LLP to deliver such letter to the Representatives and to provide Arthur
Andersen LLP with all information necessary to deliver such letter), dated
such Closing Date, of Arthur Andersen LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three days prior to such
Closing Date for the purposes of this subsection.
(i) The Representatives shall have received from Ryder Scott Company,
L.P., independent natural gas and oil engineers, letters dated,
respectively, the date of this Agreement and the Closing Date, in form and
substance satisfactory to the Representatives, each stating, as of the date
of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which information regarding
the natural gas and oil reserves and future net cash flows is given in the
Prospectus, as of the date not more than three days prior to the date of
such letter), the conclusions and findings of such firm with respect to the
natural gas and oil reserves of the Company and such other matters as the
Representatives reasonably may request.
(j) If Arthur Andersen LLP is unable or unwilling to deliver a letter
meeting the requirements of Section 6(a) of this Agreement on and as of the
Closing Date, then the Representatives shall have received a certificate,
dated such Closing Date, of the principal financial officer and the
principal
11
accounting officer of the Company in which such officers shall confirm the
substance of the provisions of Sections 6(a)(iii)(B) and 6(a)(iii)(C) of
this Agreement to the extent and for the periods that Arthur Andersen LLP
has not provided a letter to the Representatives covering such information.
The Company will furnish the Underwriters with such conformed copies of
such opinions, certificates, letters and documents as CSFBC reasonably
requests. CSFBC may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through CSFBC
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in subsection (b) below.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus supplement, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through CSFBC specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the fourth
paragraph and paragraphs nine and ten under the caption "Underwriting."
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
12
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an
indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Securities
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
has signed the Registration Statement and to each person, if any, who controls
the Company within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, then CSFBC
may make arrangements satisfactory to the Company for the purchase of such
Offered Securities by other persons, including any of the Underwriters, but if
no such arrangements are made by such Closing Date, then the non-defaulting
Underwriters shall be
13
obligated severally, in proportion to their respective commitments hereunder, to
purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase on such Closing Date. If any Underwriter or Underwriters so
default and the aggregate number of shares of Offered Securities with respect to
which such default or defaults occur exceeds 10% of the total number of shares
of Offered Securities that the Underwriters are obligated to purchase on such
Closing Date and arrangements satisfactory to CSFBC and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, then this Agreement will terminate without liability
on the part of any non-defaulting Underwriter or the Company, except as provided
in Section 9 (provided that if such default occurs with respect to Optional
Securities after the First Closing Date, then this Agreement will not terminate
as to the Firm Securities or any Optional Securities purchased prior to such
termination). As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Underwriters pursuant to Section 7 shall
remain in effect, and if any Offered Securities have been purchased hereunder
the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. If the purchase of the Offered Securities
by the Underwriters is not consummated for any reason other than solely because
of the termination of this Agreement pursuant to Section 8 or the occurrence of
any event specified in clause (iii), (iv) or (v) of Section 6(c), the Company
will reimburse the Underwriters for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered, telegraphed, or sent by
facsimile transmission with receipt confirmed to the Representatives, c/o Credit
Suisse First Boston Corporation, Eleven Madison Avenue, New York, NY 10010-3629,
Attention: Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at 1200 Smith Street, Suite
800, Houston, Texas 77002, Attention: Roger L. Jarvis; provided, however, that
any notice to an Underwriter pursuant to Section 7 will be mailed, delivered or
telegraphed and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other person
will have any right or obligation hereunder.
12. Representation. CSFBC will act for the several Underwriters in
connection with the transactions contemplated by this Agreement, and any action
under this Agreement taken by CSFBC will be binding upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
14
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
15
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement among the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
SPINNAKER EXPLORATION COMPANY
By: /s/ Roger L. Jarvis
-------------------------------------
President and Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
Acting on behalf of themselves and as the Representatives of the
several Underwriters.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Robert A Hansen
------------------------------------------------------------
Director
16
SCHEDULE A
Number of
Underwriter Firm Securities
----------- to be Purchased
----------------
Credit Suisse First Boston Corporation ............. 875,000
Goldman, Sachs & Co. ............................... 875,000
Deutsche Banc Alex. Brown Inc. ..................... 700,000
Salomon Smith Barney Inc. .......................... 700,000
Banc of America Securities LLC ..................... 700,000
RBC Dain Rauscher Inc. ............................. 700,000
Sanders Morris Harris .............................. 350,000
BMO Nesbitt Burns Corp. ............................ 100,000
---------
Total ..................................... 5,000,000
=========
A-1