EXHIBIT 1.1
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POGO PRODUCING COMPANY
(a Delaware corporation)
6,135,664 Shares of Common Stock
PURCHASE AGREEMENT
Dated: November 1, 2001
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TABLE OF CONTENTS
<Table>
<Caption>
Page
Section 1. Representations and Warranties..................................................................2
(a) Representations and Warranties by the Company...................................................2
(b) Representations and Warranties by the Selling Stockholders......................................8
(c) Officer's Certificates.........................................................................12
Section 2. Sale and Delivery to Underwriters..............................................................12
(a) Initial Securities.............................................................................12
(b) Option Securities..............................................................................13
(c) Payment........................................................................................13
(d) Denominations; Registration....................................................................14
Section 3. Covenants of the Company.......................................................................14
(a) Compliance with Securities Regulations and Commission Requests.................................14
(b) Filing of Amendments...........................................................................14
(c) Delivery of Registration Statements............................................................14
(d) Delivery of Prospectus.........................................................................15
(e) Continued Compliance with Securities Laws......................................................15
(f) Blue Sky Qualifications........................................................................15
(g) Rule 158.......................................................................................15
(h) Restriction on Sale of Securities..............................................................16
(i) Reporting Requirements.........................................................................16
Section 4. Payment of Expenses............................................................................17
(a) Expenses.......................................................................................17
(b) Expenses of the Selling Stockholders...........................................................17
(c) Termination of Agreement.......................................................................17
Section 5. Conditions of Obligations of Underwriters and Selling Stockholders.............................17
(a) Effectiveness of Registration Statement........................................................18
(b) Opinion of Counsel for Company.................................................................18
(c) Opinion of Counsel for the Selling Stockholders................................................18
(d) Opinion of Counsel for Underwriters............................................................18
(e) Officers' Certificate..........................................................................18
(f) Certificate of Selling Stockholders............................................................19
(g) Accountant's Comfort Letter....................................................................19
(h) Bring-down Comfort Letter......................................................................19
(i) Conditions to Purchase of Option Securities....................................................19
(j) Additional Documents...........................................................................20
(k) Termination of Agreement.......................................................................20
Section 6. Indemnification................................................................................21
(a) Indemnification of Underwriters................................................................21
(b) Indemnification of the Company, Directors and Officers and Selling Stockholders................22
(c) Actions against Parties; Notification..........................................................22
(d) Settlement without Consent if Failure to Reimburse.............................................23
Section 7. Contribution...................................................................................23
</Table>
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<Table>
Section 8. Representations, Warranties and Agreements to Survive Delivery.................................24
Section 9. Termination of Agreement.......................................................................25
(a) Termination; General...........................................................................25
(b) Liabilities....................................................................................25
Section 10. Default by One or More of the Underwriters.....................................................25
Section 11. Default by One or More of the Selling Stockholders.............................................26
Section 12. Notices........................................................................................26
Section 13. Parties........................................................................................27
Section 14. Governing Law and Time.........................................................................27
Section 15. Effect of Headings.............................................................................27
SCHEDULES
Schedule A - List of Underwriters
Schedule B - Pricing Information
Schedule C - List of Selling Stockholders
</Table>
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POGO PRODUCING COMPANY
(a Delaware corporation)
6,135,664 Shares of Common Stock
(Par Value $1.00 Per Share)
PURCHASE AGREEMENT
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith, Incorporated
Goldman, Sachs & Co.
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith, Incorporated
World Financial Center, North Tower
New York, New York 10281-1209
Ladies and Gentlemen:
POGO PRODUCING COMPANY, a Delaware corporation (the "Company"), and the
selling stockholders listed on Schedule C hereto (collectively, the "Selling
Stockholders") confirm their agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith, Incorporated ("Merrill Lynch") and Goldman, Sachs & Co.
(collectively, the "Underwriters"), with respect to the sale by the Selling
Stockholders and the purchase by the Underwriters, acting severally and not
jointly, of the 6,135,664 shares of Common Stock, par value $1.00 per share, of
the Company ("Common Stock"), and with respect to the grant by the Selling
Stockholders to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 920,349
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 6,135,664 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 920,349 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities".
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Underwriters deems advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission"), a registration statement on Form S-3 (No. 333-67234) and
pre-effective amendment no. 1 thereto covering the registration of Common Stock
(including the Securities) under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering from time to time in accordance with Rule 415 of
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"). The registration statement, including any Rule 462(b)
Registration Statement (as defined below), was declared effective by the
Commission on September 13, 2001. Such registration statement (as so amended),
including the information, if any, deemed to be a part thereof pursuant to Rule
430A(b) of the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d)
of the 1933 Act Regulations (the "Rule 434 Information"), is referred to herein
collectively as the "Registration Statement," and the final
prospectus and the final prospectus supplement relating to the offering of the
Securities, in the forms first furnished to the Underwriters by the Company for
use in connection with the offering of the Securities, are collectively referred
to herein as the "Prospectus;" provided, however, that all references to the
"Registration Statement" and the "Prospectus" shall also be deemed to include
all documents incorporated therein by reference pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of
this Agreement; provided, further, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462(b) Registration Statement"), then all references to
"Registration Statement" shall also be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Company elects to
rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the forms first furnished to the Underwriters by the Company
in reliance upon Rule 434 of the 1933 Act Regulations, and all references to the
date of the Prospectus shall mean the date of the Term Sheet. A "preliminary
prospectus" shall be deemed to refer to (i) each prospectus used before the
Registration Statement became effective and (ii) any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after such effectiveness and prior to the initial delivery of the Prospectus to
the Underwriters by the Company. For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, Prospectus or preliminary prospectus shall be deemed to
mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration Statement,
Prospectus or preliminary prospectus, as the case may be, prior to the execution
of this Agreement; and all references in this Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary prospectus
shall be deemed to mean and include the filing of any document under the 1934
Act which is incorporated by reference in the Registration Statement, Prospectus
or preliminary prospectus, as the case may be, after the date of this Agreement.
Section 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and Selling Stockholder as of the
date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as
of the Date of Delivery (if any) referred to in Section 2(b) hereof, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement (including any Rule 462(b) Registration
Statement) became effective under the 1933 Act on September 13, 2001
and no stop order suspending the effectiveness of the Registration
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Statement (or such Rule 462(b) Registration Statement) has been issued
under the 1933 Act and, to the knowledge of the Company, no proceedings
for that purpose have been instituted or are pending or are
contemplated by the Commission, and there has been no request on the
part of the Commission for additional information.
At the respective times the Registration Statement (including
any Rule 462(b) Registration Statement) and any post-effective
amendments thereto became effective and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery), the
Registration Statement (including any Rule 462(b) Registration
Statement) and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will 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. At the date of the Prospectus or any amendments or
supplements thereto, at the Closing Time and at each Date of Delivery,
if any, neither the Prospectus nor any amendments or supplements
thereto included or will include an untrue statement of a material fact
or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Company elects to rely
upon Rule 434 of the 1933 Act Regulations, the Company will comply with
the requirements of Rule 434. The representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through Merrill Lynch or by a Selling Shareholder expressly
for use in the Registration Statement or the Prospectus.
Each preliminary prospectus and the Prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statements
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will 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.
(iii) Independent Accountants. To the Company's knowledge, the
accountants who certified the financial statements and supporting
schedules thereto included or incorporated by reference in the
Registration Statement and the Prospectus are
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independent public accountants as required by the 1933 Act and the 1933
Act Regulations.
(iv) Financial Statements. The financial statements included
in the Registration Statements and the Prospectus, together with the
related schedules and notes, as well as those financial statements of
any other entity included therein, present fairly in all material
respects the financial position of the Company and its consolidated
subsidiaries, or such other entity, at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries, or such other entity, for
the periods specified. Such financial statements have been prepared in
conformity with accounting principles generally accepted in the United
States ("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules, if any, included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly in accordance with GAAP the information required to be stated
therein. The selected financial data and the summary financial
information included or incorporated by reference in the Prospectus
present fairly in all material respects the information shown therein
and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement. The pro
forma financial statements and the related notes thereto included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly in all material respects the information
shown therein, have been prepared in all material respects in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements and have been properly compiled on the
bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate
in all material respects to give effect to the transactions and
circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for the $0.03 per share regular quarterly
dividends on the Common Stock and $0.8125 per security regular
quarterly dividend on its 6 1/2% Cumulative Quarterly Income
Convertible Preferred Securities Due 2029 paid by Pogo Trust I, a
Delaware business trust ("Pogo Trust I"), there has been no dividend or
distribution of any kind declared, paid or made by the Company or Pogo
Trust I on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the state of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
as a
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foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each corporate
"significant subsidiary" of the Company (as such term is defined in
Rule 1-02 of Regulation S-X) (each, a "Designated Subsidiary") has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus, and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of each Designated Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable
and (except for directors' qualifying shares or shares that are
required under the laws of any foreign jurisdiction to be owned by
others) is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, claim or
equity other than the preferential purchase rights granted pursuant to
Article 12.2 of the joint operating agreement governing the Company's
interests in its concession license covering Block B8/32 in the Gulf of
Thailand. None of the outstanding shares of capital stock of the
Designated Subsidiaries was issued in violation of any preemptive or
similar rights arising by operation of law, or under the charter or
by-laws of any Designated Subsidiary or under any agreement to which
the Company or any Designated Subsidiary is a party. The subsidiaries
of the Company other than the Designated Subsidiaries, considered in
the aggregate as a single subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the balance sheet of
the Company included in its Report on Form 10-Q for the calendar
quarter ended September 30, 2001 (except for subsequent issuances
pursuant to reservations, agreements or employee or director plans
referred to in the Prospectus, or pursuant to the exercise of
convertible securities or options referred to in the Prospectus). The
shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of
the Company, including the Securities to be purchased by the
Underwriters from the Selling Stockholders, was issued in violation of
the preemptive or other similar rights of any securityholder of the
Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Selling
Stockholders are validly authorized, validly issued, fully paid and
non-assessable; the Common Stock conforms to all
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statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments
defining the same; no holder of the Securities will be subject to
personal liability by reason of being such a holder; and the sale of
the Securities by the Selling Stockholders is not subject to the
preemptive or other similar rights of any securityholder of the
Company.
(xi) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such violations
or defaults that have not resulted or would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein
and in the Registration Statement as described in the Prospectus and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action, and do not and will not,
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or its subsidiaries pursuant to, the Agreements and Instruments
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that, singly or in the aggregate, have not resulted or
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter or by-laws of
the Company or its subsidiaries of any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or its subsidiaries or any of their
assets or properties. As used herein, a "Repayment Event" means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. Except as disclosed in the
Prospectus, there is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated by this Agreement or the performance by the Company of its
obligations hereunder.
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(xiv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement except such as have been already
obtained or as may be required under federal securities laws and under
state securities or "blue sky" laws of any jurisdiction.
(xv) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to possess such Governmental License would not,
singly or in the aggregate, have a Material Adverse Effect; the Company
and its subsidiaries are in compliance with the terms and conditions of
all such Governmental Licenses, except where the failure so to comply
would not, singly or in the aggregate, have a Material Adverse Effect;
all of the Governmental Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect
would not have a Material Adverse Effect; and neither the Company nor
any of its subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would reasonably be expected to result in
a Material Adverse Effect.
(xvi) Title to Property. Each of the Company and its
subsidiaries has (i) generally satisfactory title to its oil and gas
properties, title investigations having been carried out by the Company
in accordance with the practice in the oil and gas industry in the
areas in which the Company operates, (ii) good and marketable title to
all other real property owned by it to the extent necessary to carry on
its business and good title to all personal property owned by it, in
each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not materially
affect the value of properties of the Company and its subsidiaries,
considered as one enterprise, and do not interfere with the use made
and proposed to be made of such properties by the Company or its
subsidiaries, considered as one enterprise; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in full
force and effect, and, except as would not reasonably be expected to
have a Material Adverse Effect, neither the Company nor any of its
subsidiaries has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or its
subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any subsidiaries
thereof to the continued possession of the leased or subleased premises
under any such lease or sublease.
(xvii) Environmental Laws. Except as described in the
Prospectus and except for such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal,
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state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"); (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are no
events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or Environmental Laws.
(xviii) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities by the Selling Stockholders as
herein contemplated and the application of the net proceeds therefrom
as described in the Prospectus will not be, an "investment company" or
an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xix) Registration Rights. Other than the Registration Rights
Agreement dated as of March 14, 2001 entered into by the Company in
connection with its acquisition of NORIC Corporation (the "Registration
Rights Agreement"), there are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement under
the Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Act, other than
rights which have been waived, satisfied or not exercised in accordance
with the offering contemplated hereby. All obligations under such
agreements to include any securities of the Company in the Registration
Statement have been satisfied or waived.
(xx) Listing. The Securities have been listed on the New York
Stock Exchange.
(b) Representations and Warranties by the Selling Stockholders. Each
Selling Stockholder severally represents and warrants to each Underwriter and
the Company as of the date hereof with respect to itself, as of the Closing
Time, and, if the Selling Stockholder is selling
8
Option Securities on the Date of Delivery, as of the Date of Delivery, and
agrees with each Underwriter, as follows:
(i) Authorization of Agreements. Such Selling Stockholder has
the full right, power and authority to enter into this Agreement, and
an Irrevocable Power of Attorney (the "Power of Attorney") between it
and Goelet, LLC, as attorney-in-fact (the "Attorney-in-Fact"). The
execution and delivery of this Agreement and the Power of Attorney by
such Selling Stockholder and the sale and delivery of the Securities to
be sold by such Selling Stockholder and the consummation of the
transactions contemplated herein and compliance by such Selling
Stockholder with its obligations hereunder have been duly authorized by
such Selling Stockholder and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default under, or result in the creation
or imposition of any tax, lien, charge or encumbrance upon the
Securities to be sold by such Selling Stockholder or any property or
assets of such Selling Stockholder pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, license, lease
or other agreement or instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder may be bound, or to which
any of the property or assets of such Selling Stockholder is subject,
nor will such action result in any violation of the provisions of the
charter or by-laws or other organizational instrument of such Selling
Stockholder, if applicable, or any applicable treaty, law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over such Selling Stockholder or any of its properties.
(ii) Rights to Securities. The Securities to be sold by such
Selling Stockholder, before delivery thereof to Cede and Co. as nominee
for DTC (as defined in Section 2(c) hereof), pursuant to this Agreement
are certificated securities in registered form and, before delivery
thereof to Cede and Co. as nominee for DTC, are not held by or through
any securities intermediary (within the meaning of the Uniform
Commercial Code as in effect in the state of New York ("NYUCC"). Such
Selling Stockholder has, and, if Initial Securities are being sold by
such Selling Stockholder, at the Closing Time (and, if Option
Securities are being sold by such Selling Stockholder, on the Date of
Delivery) will have, full right, power and authority to hold, sell,
transfer and deliver the Securities then to be sold by such Selling
Stockholder hereunder, in each case, free and clear of any adverse
claim (as defined in Section 8-102(a)(1) of the NYUCC) to such
Securities or any security entitlement therein (within the meaning of
Section 8-501 of the NYUCC). Upon the delivery to DTC or its agent, by
or on behalf of such Selling Stockholder, of Securities registered in
the name of Cede & Co., as nominee for DTC, and the crediting by DTC of
such Securities to the securities account of Merrill Lynch with DTC
(all in accordance with the third paragraph of Section 2(c) hereof),
DTC will be a "protected purchaser" (as defined in Section 8-303 of the
NYUCC) of such Securities and will acquire its interest in such
Securities (including, without limitation, all rights that such Selling
Stockholder had or has the power to transfer in such Securities) free
of any adverse claim (as defined in Section 8-102(a)(1) of the NYUCC).
Upon the payment of the purchase price for such Securities and the
crediting by DTC of such Securities to the securities account of
Merrill Lynch with DTC (all in accordance with the third paragraph of
Section 2(c) hereof), Merrill Lynch will acquire a valid security
9
entitlement (within the meaning of Section 8-501 of the NYUCC) in
respect of such Securities, and no action (whether framed in
conversion, replevin, constructive trust, equitable lien or other
theory) based on an adverse claim to such security entitlement may be
asserted against Merrill Lynch.
(iii) Due Execution of Power of Attorney. Such Selling
Stockholder has duly executed and delivered, in the form heretofore
furnished to the Underwriters, the Power of Attorney; the
Attorney-in-Fact is authorized to deliver the Securities to be sold by
such Selling Stockholder hereunder and to accept payment therefor; and
the Attorney-in-Fact is authorized to execute and deliver this
Agreement and the certificate referred to in Section 5(f) or that may
be required pursuant to Section 5(m) on behalf of such Selling
Stockholder, to sell, assign and transfer to the Underwriters the
Securities to be sold by such Selling Stockholder hereunder, to
determine, subject to the limitations contained in the Power of
Attorney to which such Selling Stockholder is a party with respect to
the minimum price at which the Securities of such Selling Stockholders
may be sold and the maximum number of Securities of such Selling
Stockholder that may be sold, the purchase price to be paid by the
Underwriters to such Selling Stockholder, as provided in Section 2(a)
hereof, and otherwise to act on behalf of such Selling Stockholder in
connection with this Agreement to the extent provided in the Power of
Attorney.
(iv) Absence of Manipulation. Such Selling Stockholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(v) Absence of Knowledge of Material Adverse Developments.
Such Selling Stockholder's decision to sell Securities hereunder was
not based upon any knowledge of a material adverse development
affecting the Company that has not been publicly disclosed by the
Company in its filings with the Commission under the 1934 Act.
(vi) Absence of Further Requirements. No filing with, or
consent, approval, authorization, order, registration, qualification or
decree of, any court or governmental authority or agency, domestic or
foreign, is necessary or required for the performance by such Selling
Stockholder of its obligations hereunder or in the Power of Attorney,
or in connection with the sale and delivery of the Securities hereunder
or the consummation of the transactions contemplated by this Agreement,
except such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(vii) Restriction on Sale of Securities. Each Selling
Stockholder agrees that during a period of 90 days from the date of the
Prospectus, such Selling Stockholder will not, without the prior
written consent of Merrill Lynch, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or request or demand that the Company
file any
10
registration statement under the 1933 Act related to the Common Stock
or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the
Securities to be sold hereunder, (B) shares of Common Stock transferred
pursuant to a bona fide gift and the transferee of such shares agrees
with the Underwriters, in form and substance satisfactory to the
Underwriters, to the same restrictions as set forth in this paragraph
or (C) in the case of a Charity Selling Stockholder identified on
Schedule C, transactions in shares of Common Stock held as part of the
endowment of such Selling Stockholder (or otherwise held on its behalf)
by persons other than the Selling Stockholder who hold discretionary
investment power.
(viii) Certificates Suitable for Transfer. On or before the
date hereof, certificates for all of the Securities to be sold by such
Selling Stockholder pursuant to this Agreement, in suitable form for
transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank with signatures guaranteed, have been
placed in custody with the Attorney-in-Fact, and the Attorney-in-Fact
has placed such certificates in custody with the Company's transfer
agent, in each case with irrevocable conditional instructions to
deliver such Securities to Cede & Co., as nominee for DTC, for credit
to the account of Merrill Lynch with DTC for the benefit of the
Underwriters in accordance with the third paragraph of Section 2(c)
hereof.
(ix) Accurate Disclosure. On the date hereof and at the
Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), the Registration Statement and any amendments or
supplements thereto complied with and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will 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. At
the date of the Prospectus or any amendments or supplements thereto, at
the Closing Time and at the Date of Delivery, if any, neither the
Prospectus nor any amendments or supplements thereto included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The preceding two sentences apply with respect to a Selling
Stockholder only to the extent that any statements in or omissions from
the Registration Statement or the Prospectus are based on written
information furnished to the Company by or on behalf of such Selling
Stockholder specifically for use therein, it being understood and
agreed that, for purposes of this Agreement, the only such information
furnished by or on behalf of such Selling Stockholder consists of the
following information: (A) in the Registration Statement at the time it
became effective, under the caption "Selling Stockholders," the name of
such Selling Stockholder set forth in the table appearing in such
section, the number of shares of Common Stock owned by it on such date
appearing in such table, and the information in the second and third
sentences of footnote (1) to such table and in footnote (2) to such
table, in each case pertaining to such Selling Stockholder; (B) in the
Prospectus dated September 13, 2001, under the caption "Selling
11
Shareholders," the name of such Selling Stockholder set forth in the
table appearing on pages 9,10 and 11, the number of shares of Common
Stock owned by it on September 13, 2001 appearing in such table, and
the information in the second and third sentences of footnote (1) to
such table and in footnote (2) to such table, in each case pertaining
to such Selling Stockholder; and (C) in the Prospectus Supplement
included in the Prospectus, the name of such Selling Stockholder set
forth in the table appearing on pages S-11 and S-12, the other
information (excluding percentages) appearing in such table pertaining
to such Selling Stockholder, and the information in the second and
third sentences of footnote (1) to such table, in footnotes (2), (3)
and (4) to such table, and in the three paragraphs of text appearing
under the numbered footnotes on page S-12, in each case pertaining to
such Selling Stockholder; it being understood that it is the intention
of the Selling Stockholders, the Company and the Underwriters that each
item of information covered by (and not excluded from) the foregoing
clauses (A), (B) and (C) is being severally furnished by at least one
Selling Stockholder.
(x) No Association with NASD. Neither such Selling Stockholder
nor any of its affiliates directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
clause (dd) of Article I of the By-laws of the National Association of
Securities Dealers, Inc.), either of the Underwriters.
(c) Officer's Certificates. Any certificate signed by any officer of
the Company, or any of its subsidiaries delivered to the Underwriters or to
counsel for the Underwriters or to the Selling Stockholders or counsel for the
Selling Stockholders shall be deemed a representation and warranty by the
Company to each Underwriter or Selling Stockholder, as the case may be, as to
the matters covered thereby; and any certificate signed by or on behalf of any
Selling Stockholder, as such and delivered to the Underwriters, the Company,
counsel for the Underwriters or counsel for the Company pursuant to the terms of
this Agreement shall be deemed a representation and warranty by such Selling
Stockholder to the Underwriters or the Company, as applicable, as to the matters
covered thereby.
Section 2. Sale and Delivery to Underwriters.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, (i) each of the Selling Stockholders, acting severally and not jointly,
agrees to sell to each Underwriter, at the price per share set forth in Schedule
B, that portion of the number of Initial Securities set forth in Schedule C
opposite the name of such Selling Stockholder that the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof, bears to
the total number of Initial Securities and (ii) each of the Underwriters,
severally and not jointly, agrees to purchase from each Selling Stockholder, at
the price per share set forth in Schedule B, that portion of the number of
Initial Securities set forth in Schedule C opposite the name of such Selling
Stockholder that the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
Securities.
12
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Stockholders, acting severally and not jointly, hereby
grant an option to the Underwriters, severally and not jointly, to purchase,
from the Selling Stockholders, up to an additional 920,349 shares of Common
Stock, in the respective amounts set forth in Schedule C as to each Selling
Stockholder, at the price per share set forth in Schedule B, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part (but not more than once) only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities, upon at least one business day's notice
by the Underwriters to the Company and the Selling Stockholders setting forth
the number of Option Securities as to which the several Underwriters are
exercising the option and the time and date of payment and delivery for such
Option Securities. Such time and date of delivery (the "Date of Delivery") shall
be determined by the Underwriters, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Securities set forth
in Schedule A opposite the name of such Underwriter bears to the total number of
Initial Securities, subject in each case to such adjustments as the Underwriters
in their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Vinson
& Elkins L.L.P., 1001 Fannin Street, Houston, Texas, or at such other place as
shall be agreed upon by the Underwriters and the Company, at 9:00 A.M. (Eastern
standard time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern standard time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriters and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Underwriters, the
Company and the Selling Stockholders, on the Date of Delivery as specified in
the notice from the Underwriters to the Company and the Selling Stockholders.
Payment shall be made to the Selling Stockholders by wire transfer of
immediately available funds to a bank account designated by the Attorney-in-Fact
pursuant to each Selling Stockholder's Power of Attorney against delivery to the
Underwriters for the respective accounts of the Underwriters of the Securities
to be purchased by them in book entry form through the facilities of The
Depositary Trust Company, New York, New York ("DTC"). It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Initial
Securities and the Option Securities, if any, which it has agreed to purchase.
Merrill Lynch, individually and not as representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
13
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be as contemplated by the
letter agreement between the Selling Stockholders and the Company's transfer
agent, an executed copy of which has been provided to the Underwriters.
Section 3. Covenants of the Company. The Company covenants with each Underwriter
as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, to the extent applicable, and will notify the Underwriters
promptly, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt of any comments from the Commission, (iii) of any request by
the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriters notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to the prospectus included in the Registration Statement
at the time it became effective or to the Prospectus, will furnish the
Underwriters with copies of any such documents a reasonable amount of time prior
to such proposed filing or use, as the case may be, and will not file or use any
such document to which the Underwriters or counsel for the Underwriters shall
object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Underwriters and counsel for the Underwriters, without
charge, copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith) and signed copies of all
consents and certificates of experts or duplicates thereof, and will also
deliver to the Underwriters, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
14
(d) Delivery of Prospectus. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make such Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions in the United States and Canada as the Underwriters may designate
and to maintain such qualifications in effect for a period of not less than one
year from the date of this Agreement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date of this Agreement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
15
(h) Restriction on Sale of Securities. During a period of 60 days from
the date of the Prospectus, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any share of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or file any registration
statement under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i) or
(ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
any shares of Common Stock issued by the Company upon the exercise of an option,
warrant or right or the conversion or split of a security outstanding on the
date hereof and referred to in the Prospectus, (B) any shares of Common Stock
issued or options to purchase Common Stock granted pursuant to existing employee
benefit plans of the Company referred to in the Prospectus, or (C) any shares of
Common Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan. In addition, the second preceding sentence shall not restrict
the Company's ability to enter into any agreement to issue shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common
Stock in connection with an acquisition of assets, another company or business
or a merger or other business combination, provided that the issuance of such
shares of Common Stock or such other securities occurs after the expiration of
such 60-day period.
(i) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
16
Section 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, issuance and delivery of the certificates for the
Securities to be issued and sold by the Company to the Underwriters, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to the Underwriters, (iii) the fees
and disbursements of the Company's counsel, accountants and other advisors, (iv)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (v) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the Prospectus and any amendments
or supplements thereto, (vi) the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (vii)
the fees and expenses of any transfer agent or registrar for the Securities and
(viii) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange.
(b) Expenses of the Selling Stockholders. Each Selling Stockholder will
pay all expenses incident to the performance of such Selling Stockholder's
respective obligations under, and the consummation of the transactions
contemplated by, this Agreement, including the fees and disbursements of each
Selling Stockholder's outside counsel, the fees and disbursements of the
Shareholder Representative (as defined in the Registration Rights Agreement) and
the fees and disbursements of counsel for the Shareholder Representative. As
between the Company and the Selling Stockholders, this Section 4(b) shall not be
deemed to modify or supercede any existing written agreement between the Company
and any Selling Stockholder.
(c) Termination of Agreement. If this Agreement is terminated by the
Underwriters in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Obligations of Underwriters and Selling Stockholders.
The several obligations of the Selling Stockholders to sell the Initial
Securities to the Underwriters shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the Closing Time, the accuracy of the statements by the Company made in any
certificates delivered to the Selling Stockholders pursuant to the provisions
hereof and to the conditions set forth in Sections 5(b), (e), (g) and (h) below.
The obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Company and the
Selling Stockholders contained in Section 1 hereof or in certificates of any
officer of the Company or any subsidiary of the Company or on behalf of the
Selling Stockholders delivered pursuant to the provisions hereof, to the
performance by the Company and the Selling Stockholders of their covenants and
other obligations hereunder, and to the following further conditions:
17
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement thereto, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus shall
have been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been filed
with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company. At Closing Time, the Underwriters
and the Selling Stockholders shall have received the favorable opinion, dated as
of Closing Time, from (i) Baker Botts L.L.P., counsel for the Company, in form
and substance reasonably satisfactory to counsel for the Underwriters, to the
effect set forth in Exhibit A hereto and (ii) Gerald A. Morton, Vice
President-Law, Chief Regulatory Officer and Corporate Secretary of the Company,
in form and substance reasonably satisfactory to counsel for the Underwriters,
to the effect set forth in Exhibit B hereto. Such counsel may state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(c) Opinion of Counsel for the Selling Stockholders. At Closing Time,
the Underwriters and the Company shall have received the favorable opinion,
dated as of Closing Time, of Shearman & Sterling, counsel for the Selling
Stockholders, and Hinckley, Allen & Snyder L.L.P., Richards, Layton & Finger and
Randall K. Sadler & Associates, counsel for certain of the Selling Stockholders,
in form and substance satisfactory to counsel for the Underwriters, to the
effect set forth in Exhibits C, D, E and F, respectively, hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Underwriters shall have received the favorable opinion, dated as of Closing
Time, of Vinson & Elkins L.L.P., counsel for the Underwriters, with respect to
the matters set forth in clauses (i), (iv) and (vi) and the penultimate
paragraph of Exhibit A hereto. In giving such opinion such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Underwriters and the Selling
Stockholders shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of
18
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied at or prior to Closing
Time, and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of the Company, no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Stockholders. At Closing Time, the
Underwriters and the Company shall have received a certificate of the
Attorney-in-Fact on behalf of each Selling Stockholder, dated as of Closing
Time, to the effect that (i) the representations and warranties of such Selling
Stockholder contained in Section 1(b) hereof are true and correct in all
respects with the same force and effect as though expressly made at and as of
Closing Time and (ii) such Selling Stockholder has complied in all material
respects with all agreements and all conditions on its, his or her part to be
performed under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Underwriters and the Selling Stockholders shall have received
from Arthur Andersen LLP a letter dated such date, in form and substance
satisfactory to the Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the Underwriters and
the Selling Stockholders shall have received from Arthur Andersen LLP a letter,
dated as of the Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (g) of this Section, except
that the specified date referred to shall be a date not more than three business
days prior to Closing Time.
(i) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company and the Selling Stockholders contained herein and the statements
in any certificates furnished by the Company or any subsidiary of the Company
and the Selling Stockholders hereunder shall be true and correct as of the Date
of Delivery and, at the Date of Delivery, the Underwriters and, in the case of
clauses (i), (iii) and (vi), the Selling Stockholders, shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(e) hereof remains true and correct as of such Date of
Delivery.
(ii) Certificate of Selling Stockholders. A certificate, dated
such Date of Delivery, of each Selling Stockholder or the
Attorney-in-Fact on behalf of such Selling Stockholder confirming that
the certificate delivered at Closing Time pursuant to Section 5(f)
remains true and correct as of such Date of Delivery.
19
(iii) Opinion of Counsel for Company. The favorable opinion of
each of Baker Botts L.L.P., counsel for the Company, and Gerald A.
Morton, Vice President-Law, Chief Regulatory Officer and Corporate
Secretary of the Company, in form and substance reasonably satisfactory
to counsel for the Underwriters, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the respective opinions required by
Section 5(b) hereof.
(iv) Opinion of Counsel for Underwriters. The favorable
opinion of Vinson & Elkins L.L.P., counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(v) Opinion of Counsel for the Selling Stockholders. The
favorable opinion of Shearman & Sterling, counsel for the Selling
Stockholders, and of Hinckley, Allen & Snyder L.L.P., Richards, Layton
& Finger and Randall K. Sadler & Associates, counsel for certain of the
Selling Stockholders, in form and substance satisfactory to counsel for
the Underwriters, dated the Date of Delivery, relating to the Option
Securities to be purchased on the Date of Delivery and otherwise to the
same effect as the respective opinions required by Section 5(c) hereof.
(vi) Bring-down Comfort Letter. A letter from Arthur Andersen
LLP, in form and substance satisfactory to the Underwriters and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the Underwriters pursuant to Section 5(g)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(j) Additional Documents. At Closing Time and at each Date of Delivery,
Vinson & Elkins L.L.P, counsel for the Underwriters, shall have been furnished
with such documents and opinions as they may reasonably require for the purpose
of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company and the Selling Stockholders in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Underwriters and such
counsel.
(k) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on the Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Underwriters by notice to the Company at
any time at or prior to Closing Time or the Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
20
Section 6. Indemnification.
(a) Indemnification of Underwriters. The Company and each Selling
Stockholder, severally and not jointly, agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) from and against any and all loss, liability, claim
damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission; provided, that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
Merrill Lynch), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that each Selling Stockholder shall be obligated to indemnify
and hold harmless any Underwriter, and each person who controls any Underwriter
within meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, only
to the extent such loss, liability, claim, damage or expense arises out of an
untrue statement made in reliance upon and in conformity with written
information furnished to the Company or the Underwriters by such Selling
Stockholder with respect to such Selling Stockholder expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided
further, that this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A
21
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that the Company shall not be obligated to indemnify and hold harmless
any Underwriter, or any person who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the extent such
loss, liability, claim, damage or expense arises out of an untrue statement made
in reliance upon and in conformity with written information furnished to the
Company by any Selling Stockholder with respect to such Selling Stockholder
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto); and provided, further, that notwithstanding the foregoing provisions,
the aggregate amount of any Selling Stockholder's indemnity and contribution
obligations under this Section 6 shall not exceed an amount equal to the net
cash proceeds (before deducting expenses) received by such Selling Stockholder
from the sale of Securities pursuant to this Agreement. The provisions of this
Section 6(a) shall not affect any agreement between the Company and the Selling
Stockholders with respect to indemnification.
(b) Indemnification of the Company, Directors and Officers and Selling
Stockholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, each Selling Stockholder and each person, if any, who controls the
Company or such Selling Stockholder within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Merrill Lynch expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any
22
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim 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 any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
Section 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) 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 each of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by each of the Company and the Selling
Stockholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the Selling Stockholders and the total
underwriting discount received by the Underwriters, in each case as set forth on
the cover of the Prospectus, or, if Rule 434 is used, the corresponding location
on the Term Sheet, bear to the aggregate public offering price of the Securities
as set forth on such cover.
The relative fault of each of the Company and the Selling Stockholders
on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, by the Selling
23
Stockholders or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company, the Selling Stockholders and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, (i) 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 any such untrue or
alleged untrue statement or omission or alleged omission, and (ii) the aggregate
amount of any Selling Stockholder's contribution obligations under this Section
7 shall not exceed an amount equal to the net cash proceeds (before deducting
expenses) received by such Selling Stockholder from the sale of Securities
pursuant to this Agreement.
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.
For purposes of this Section 7, each person, if any, who controls a
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or any
Selling Stockholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Stockholder. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the number of Initial
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Stockholders with respect to contribution.
Section 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or any
Selling Stockholder submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Stockholders, and shall survive delivery of the Securities to the
Underwriters.
24
Section 9. Termination of Agreement.
(a) Termination; General. Merrill Lynch may terminate this Agreement,
by notice to the Company and the Selling Stockholders, at any time at or prior
to Closing Time (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus (exclusive of any supplement thereto), any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or the international financial markets, in which Merrill Lynch
conducts sales of equity securities, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Underwriters, impracticable or inadvisable to market the
Securities or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the Commission or the New York Stock Exchange, or if trading
generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States or
Canada or (iv) if a banking moratorium has been declared by either Federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
Section 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time or a Date of Delivery to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Underwriters shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Underwriters shall not have completed
such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery
25
which occurs after the Closing Time, the obligation of the Underwriters
to purchase and of the Selling Stockholders to sell the Option
Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Selling Stockholders to sell the relevant
Option Securities, as the case may be, either the Underwriters or the Company
and the Selling Stockholders shall have the right to postpone the Closing Time
or the relevant Date of Delivery, as the case may be, for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements. As used herein, the
term "Underwriter" includes any person substituted for a Underwriter under this
Section 10.
Section 11. Default by One or More of the Selling Stockholders. If a Selling
Stockholder shall fail at Closing Time or at the Date of Delivery to sell and
deliver the number of Securities which such Selling Stockholder is obligated to
sell hereunder, and the remaining Selling Stockholders do not exercise the right
hereby granted to increase, pro rata or otherwise, the number of Securities to
be sold by them hereunder to the total number to be sold by all Selling
Stockholders as set forth in Schedule C hereto, then the Underwriters may, by
notice from Merrill Lynch to the Company and the non-defaulting Selling
Stockholders, either (a) terminate this Agreement without any liability on the
fault of any non-defaulting party except that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect or (b) elect to purchase the
Securities which the non-defaulting Selling Stockholders have agreed to sell
hereunder. No action taken pursuant to this Section 11 shall relieve any Selling
Stockholder so defaulting from liability, if any, in respect of such default.
In the event of a default by any Selling Stockholder as referred to in
this Section 11, the Underwriters and the non-defaulting Selling Stockholders
shall have the right to postpone Closing Time or Date of Delivery for a period
not exceeding seven days in order to effect any required change in the
Registration Statement or Prospectus or in any other documents or arrangements.
Section 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Underwriters at Merrill Lynch, Pierce, Fenner & Smith
Incorporated, North Tower, World Financial Center, New York, New York
10281-1201, attention of Equity Capital Markets; notices to the Company shall be
directed to it at 5 Greenway Plaza, Suite 2700, Houston, Texas 77046-0504,
attention of Corporate Secretary; and notices to the Selling Stockholders shall
be directed to them, care of Goelet, LLC, 425 Park Avenue, 28th Floor, New York,
NY 10022, attention of Mr. Robert W. Kiley.
26
Section 13. Parties. This Agreement shall inure to the benefit of and be binding
upon the Underwriters and the Company and the Selling Stockholders and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and the Selling Stockholders and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal Underwriters, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters and the Company and the Selling Stockholders and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal Underwriters, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
Section 14. Governing Law and Time. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section 15. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Attorney-in-Fact for
the Selling Stockholders a counterpart hereof, whereupon this instrument, along
with all counterparts, will become a binding agreement among the Underwriters,
the Company and the Selling Stockholders in accordance with its terms.
Very truly yours,
POGO PRODUCING COMPANY
By: /s/ GERALD A. MORTON
----------------------------------------
Gerald A. Morton
Vice President-Law, Chief Regulatory
Officer and Corporate Secretary
SELLING STOCKHOLDERS, listed on
Schedule C hereto
By: GOELET, LLC
Attorney-in-Fact
By: /s/ ROBERT W. KILLEY
----------------------------------------
Robert W. Killey
President and Chief Operation Officer
By: /s/ MARK ROSENBAUM
----------------------------------------
Mark Rosenbaum
Chief Financial Officer and Treasurer
28
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Goldman, Sachs & Co.
As Underwriters
By: MERRILL LYNCH, PIERCE, FENNER &
SMITH, INCORPORATED
By: /s/ BRAD BYNUM
-----------------------------------------------
Brad Bynum
Authorized Signatory
29
SCHEDULE A
<Table>
<Caption>
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
------------------- ------------------
Merrill Lynch Pierce Fenner & Smith, Incorporated 3,834,790
Goldman, Sachs & Co. 2,300,874
---------
Total 6,135,664
=========
</Table>
Schedule A-1
SCHEDULE B
POGO PRODUCING COMPANY
6,135,664 Shares of Common Stock
(Par Value $1.00 Per Share)
1. The public offering price per share for the Securities, determined as
provided in said Section 2, shall be $25.50.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $24.353, being an amount equal to the
public offering price set forth above less $1.147 per share; provided
that the purchase price per share for any Option Securities purchased
upon the exercise of the over-allotment option described in Section
2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities.
Schedule B-1
SCHEDULE C
<Table>
<Caption>
NUMBER OF NUMBER OF
INITIAL OPTION
NAME OF SELLING SHAREHOLDER SECURITIES SECURITIES
--------------------------- ---------- ----------
Robert G. Goelet, Philip Goelet, Edmond
de La Haye Jousselin, John H. Manice and
Pamela Manice, as Trustees of the Trust under
Agreement dated August 26, 1930 for the
benefit of Beatrice G. Manice(1)...................... 773,284 115,993
Robert G. Goelet, Philip Goelet, Edmond
de La Haye Jousselin, John H. Manice and
Pamela Manice, as Trustees of the Trust under
Agreement dated July 27, 1935 for the
benefit of Beatrice G. Manice(1)...................... 248,555 37,284
Robert G. Goelet, Philip Goelet, Edmond
de La Haye Jousselin, John H. Manice and
Pamela Manice, as Trustees of the Trust
under the Will of Robert Walton Goelet for
the benefit of Beatrice G. Manice(1).................. 165,705 24,855
Alexandra C. Goelet, Philip Goelet and
Edmond de La Haye Jousselin, as Trustees of the Trust
under Agreement dated August 26, 1930 for
the benefit of Robert G. Goelet(1).................... 773,284 115,993
Alexandra C. Goelet, Philip Goelet and
Edmond de La Haye Jousselin, as Trustees of the Trust
under Agreement dated July 27, 1935 for
the benefit of Robert G. Goelet(1).................... 248,555 37,284
Robert G. Goelet, Alexandra C. Goelet, Philip
Goelet and Edmond de La Haye Jousselin,
as Trustees of the Trust under the
Will of Robert Walton Goelet for the
benefit of Robert G. Goelet(1)........................ 248,556 37,283
Robert G. Goelet, Philip Goelet and Edmond
de La Haye Jousselin, as Trustees of the
Trust under Agreement dated July 27, 1935
for the benefit of Francis Goelet(1).................. 248,555 37,284
Robert G. Goelet, Philip Goelet, Christopher
Goelet, Edmond de La Haye Jousselin and
Robert S. Rich, as Trustees of the
Trust under Agreement dated December 18,
1931 for the benefit of John Goelet(1)................ 773,284 115,993
Henrietta Goelet and Robert S. Rich, as
Trustees of the Trust under Agreement
dated December 17, 1976 for the benefit
of grandchildren of John Goelet(1).................... 289,982 43,497
Robert G. Goelet, Philip Goelet, Christopher
Goelet, Edmond de La Haye Jousselin and
Robert S. Rich, as Trustees of the Trust
under Agreement dated July 27, 1935 for
the benefit of John Goelet(1)......................... 331,408 49,711
</Table>
Exhibit E-1
<Table>
Robert G. Goelet, Philip Goelet, Christopher
Goelet, Edmond de La Haye Jousselin and
Robert S. Rich, as Trustees of the Trust under
the Will of Robert Walton Goelet for the
benefit of John Goelet(1)............................. 276,173 41,426
RGG Limited Partnership(2).............................. 338,070 50,711
John H. Manice(3)....................................... 35,389 5,308
Philip Goelet, Edmond de La Haye Jousselin and
Amelia M. Berkowitz, as Trustees of the Trust
under Agreement dated September 4, 1980,
as amended, for the benefit of Anne de La Haye
Jousselin(1).......................................... 35,981 5,397
Robert G. Manice(3)..................................... 16,956 2,543
Robert E. Manice, as custodian for
Henry W. Manice under the New York
Uniform Transfers to Minors Act(3).................... 1,627 244
Robert E. Manice, as custodian for
Emily P. Manice under the New York
Uniform Transfers to Minors Act(3).................... 1,627 244
Robert E. Manice, as custodian for
Harriet W. Manice under the New York
Uniform Transfers to Minors Act(3).................... 1,627 244
Amelia M. Berkowitz(3).................................. 33,883 5,832
Pamela Manice(3)........................................ 45,558 6,833
Philip Goelet(3)........................................ 114,377 17,157
Christopher Goelet(3)................................... 111,289 16,693
Gilbert Kerlin(3)....................................... -- 151,604
Windward Oil & Gas Corporation(2)....................... 590,698 -
Wave Hill Incorporated(2)............................... 160,000 -
Bank Street College of Education(4)..................... 160,000 -
Putney School(4)........................................ 40,000 -
Trustees of Columbia University(4)...................... 60,000 -
Arthur N. Field(3)...................................... 6,241 936
----------- ------------
Total................................................... 6,135,664 920,349
============
</Table>
Exhibit E-2
---------------------
(1) Trust Selling Stockholder.
(2) Non-Trust Entity Selling Stockholder.
(3) Individual Selling Stockholder.
(4) Charity Selling Stockholder.
Exhibit E-3