EXHIBIT 1.1
TERMS AGREEMENT
April 8, 2002
Apache Corporation
One Post Oak Central
2000 Post Oak Boulevard
Suite 100
Houston, Texas 77056-4400
Attention: Vice President and Treasurer
Ladies and Gentlemen:
The undersigned underwriters (the "Underwriters") understand that
Apache Corporation (the "Company") proposes to issue and sell $400,000,000
aggregate principal amount of its debt securities (the "Offered Securities").
Subject to the terms and conditions set forth herein or incorporated by
reference herein, the Underwriters offer to purchase, severally and not jointly,
the principal amount of Offered Securities set forth below opposite their
respective names at 98.638% of the principal amount thereof together with
accrued interest thereon from April 11, 2002 to the Closing Time:
<Table>
<Caption>
Principal
Amount of
Underwriter Debt Securities
----------- ---------------
Banc of America Securities LLC $121,000,000
J.P. Morgan Securities Inc. $121,000,000
BNP Paribas Securities Corp. $ 22,000,000
Deutsche Bank Securities Inc. $ 22,000,000
RBC Dominion Securities Corporation $ 22,000,000
Salomon Smith Barney Inc. $ 22,000,000
Banc One Capital Markets, Inc. $ 14,000,000
First Union Securities, Inc. $ 14,000,000
Scotia Capital (USA) Inc. $ 14,000,000
SG Cowen Securities Corporation $ 14,000,000
TD Securities (USA) Inc. $ 14,000,000
Total $400,000,000
============
</Table>
The Offered Securities shall have the following terms:
<Table>
Principal amount: $400,000,000
Form: Registered book-entry form
Denomination: $1,000
Date of maturity: April 15, 2012
Interest rate, rates or formula
(or method of calculation of interest accrual): 6.25% per annum
Date from which interest accrues: April 11, 2002
Interest payment dates, if any: April 15 and October 15
(commencing October 15, 2002)
Initial price to public: $397,152,000 (99.288%)
Closing Time: April 11, 2002
Place of delivery and payment: New York, New York
Company account for wire transfer of payment: Bank: Bank One, N.A.
City/State: Chicago, IL
ABA Number: 071000013
Account Number: 5577446
Account Name: Apache Corporation Master
Redemption provisions, if any: As described in the Prospectus
Supplement, dated the date hereof,
relating to the Offered Securities.
Lock-up pursuant to Section 3(i) of the
Basic Terms (as defined herein): Yes.
Securities Exchanges, if any, on which application will be
made to list the Offered Securities: None.
Delayed Delivery Contracts: Not authorized.
Delivery date:
Expiration date:
Compensation to Underwriters:
Minimum contract:
Maximum aggregate principal amount:
Other terms, if any:
</Table>
The Underwriters agree to reimburse the Company for certain of its
expenses in connection with the offering to which this Terms Agreement relates.
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All the provisions contained in "Apache Corporation-Debt
Securities--Underwriting Agreement Basic Terms" (the "Basic Terms"), to be filed
as an exhibit to the Registration Statement relating to the Offered Securities
and attached hereto as Annex A, are herein incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
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Any notice by the Company to the Underwriters pursuant to this Terms
Agreement shall be sufficient if given in accordance with Section 11 of the
Basic Terms addressed to:
J.P. Morgan Securities Inc.
270 Park Avenue, 7th Floor
New York, New York 10017
Attn: Transaction Execution Group
which, together with Banc of America Securities LLC, shall, for all purposes of
this Agreement, be the "Representatives".
Very truly yours,
BANC OF AMERICA SECURITIES LLC
By: /s/ Lily Chang
-------------------------------
Name: Lily Chang
Title: Principal
J.P. MORGAN SECURITIES INC.
By: /s/ Jose C. Padilla
-------------------------------
Name: Jose C. Padilla
Title: Vice President
Acting for themselves and as
Representatives of the
Underwriters listed in Annex B.
Accepted:
APACHE CORPORATION
By: /s/ Matthew W. Dundrea
--------------------------------------
Name: Matthew W. Dundrea
Title: Vice President and Treasurer
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ANNEX A
[Apache Corporation - Debt Securities - Basic Terms]
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ANNEX B
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
BNP PARIBAS SECURITIES CORP.
DEUTSCHE BANK SECURITIES INC.
RBC DOMINION SECURITIES CORPORATION
SALOMON SMITH BARNEY INC.
BANC ONE CAPITAL MARKETS, INC.
FIRST UNION SECURITIES INC.
SCOTIA CAPITAL (USA) INC.
SG COWEN SECURITIES CORPORATION
TD SECURITIES (USA) INC.
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APACHE CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT BASIC TERMS
APACHE CORPORATION
Debt Securities
UNDERWRITING AGREEMENT BASIC TERMS
Apache Corporation, a Delaware corporation (the "Company"), may issue
and sell from time to time its debt securities (the "Debt Securities"). The Debt
Securities are issuable under an indenture, dated as of February 15, 1996, as
supplemented and amended pursuant to a First Supplemental Indenture dated as of
November 5, 1996 (the "Indenture"), between the Company and JP Morgan Chase Bank
(formerly known as The Chase Manhattan Bank, formerly known as Chemical Bank),
as trustee (the "Trustee"). Each issue of Debt Securities may vary as to series,
aggregate principal amount, maturity, interest rate or rates and timing of
payments thereof, redemption provisions, if any, and any other variable terms as
set forth in the Terms Agreement (as defined below) relating thereto which the
Indenture contemplates may be set forth in the Debt Securities as issued from
time to time.
Whenever the Company determines to make an offering of Debt Securities,
the Company will enter into an agreement (the "Terms Agreement") providing for
the sale of such securities (the "Offered Securities") to, and the purchase and
offering thereof by, one or more underwriters specified in the Terms Agreement
(the "Underwriters", which term shall include any Underwriters substituted
pursuant to Section 10 hereof). The Terms Agreement relating to the Offered
Securities shall specify the names of the Underwriters participating in such
offering, the amount of Offered Securities which each such Underwriter severally
agrees to purchase, the price at which the Offered Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, the time and place of delivery and payment, such other information as is
indicated in Exhibit A hereto and such other terms as are agreed by the Company
and the Underwriters. In addition, each Terms Agreement shall specify whether
the Company has agreed to grant to the Underwriters an option to purchase
additional Offered Securities to cover over-allotments, if any, and the amount
of Offered Securities subject to such option (the "Option Securities"). As used
herein, the term "Offered Securities" shall include the Option Securities, if
any, and "Representatives" shall mean the Underwriter or Underwriters so
specified in the Terms Agreement or, if no Underwriter is so specified, shall
mean each Underwriter. The Terms Agreement may be in the form of an exchange of
any standard form of written telecommunication between the Underwriters and the
Company. The offering of the Offered Securities will be governed by the Terms
Agreement, as supplemented hereby (collectively, this "Agreement"), and this
Agreement shall inure to the benefit of and be binding upon each Underwriter
participating in the offering of the Offered Securities.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-57785) for the registration of Debt Securities and other securities,
including the Offered Securities, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof 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"), and has prepared and filed such amendments thereto as
may have been required to
2
the date hereof. Such registration statement, as amended, has been declared
effective by the Commission, and the Indenture has been qualified under the
Trust Indenture Act of 1939 (the "1939 Act"). As provided in Section 3(a), a
prospectus supplement reflecting the terms of the Offered Securities, the terms
of the offering thereof and the other matters set forth therein has been
prepared and will be filed pursuant to Rule 424 under the 1933 Act. Such
prospectus supplement, in the form first filed after the date of the Terms
Agreement pursuant to Rule 424, is herein referred to as the "Prospectus
Supplement". Such registration statement, as amended at the date of the Terms
Agreement, including the exhibits thereto and the documents incorporated by
reference therein, is herein called the "Registration Statement". Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The basic prospectus included in the Registration
Statement relating to all offerings of Debt Securities under the Registration
Statement, as supplemented by the Prospectus Supplement, is herein called the
"Prospectus", except that, if such basic prospectus is amended or supplemented
on or prior to the date on which the Prospectus Supplement is first filed
pursuant to Rule 424, the term "Prospectus" shall refer to the basic prospectus
as so amended or supplemented and as supplemented by the Prospectus Supplement
or, if any revised prospectus shall be provided to the Underwriters by the
Company for their use in connection with the offering of the Offered Securities
which differs from such basic prospectus and Prospectus Supplement (whether or
not required to be filed by the Company pursuant to Rule 424), the term
"Prospectus" shall refer to such revised prospectus (including any prospectus
supplement) from and after the time it is first provided to the Underwriters for
such use, in either case including the documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), that are incorporated by reference therein.
SECTION 1. Representations and Warranties. The Company represents and
warrants to each Underwriter named in the Terms Agreement as of the date thereof
and as of the Closing Time referred to in Section 2(c) hereof, and as of each
Date of Delivery (if any) referred to in Section 2(b) hereof (in each case, a
"Representation Date"), as follows:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware with 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 foreign corporation to transact
business and is in good standing in the State of Texas and 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
to so qualify and be in good standing would not have a
material adverse effect on the condition, financial or
otherwise, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(b) Each "significant subsidiary" of the Company as defined in
Rule 405 of Regulation C of the 1933 Act Regulations
(collectively, the "Significant
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Subsidiaries") 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 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 to so qualify and be in good standing would
not have a material adverse effect on the condition, financial
or otherwise, or the results of operations, business affairs
or business prospects of the Company and its subsidiaries
considered as one enterprise; and, except as described in the
Prospectus, all of the issued and outstanding capital stock of
each Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, except
for directors' qualifying shares (if applicable), is owned by
the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
(c) At the time the Registration Statement and the Rule 462(b)
Registration Statement, if any, became effective and as of
each Representation Date, the Registration Statement and the
Rule 462(b) Registration Statement, if any, complied and will
comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the
rules and regulations of the Commission promulgated
thereunder; the Registration Statement and the Rule 462(b)
Registration Statement, if any, each at the time it became
effective, did not, and at each time thereafter at which any
amendment to the Registration Statement becomes effective or
any Annual Report on Form 10-K is filed by the Company with
the Commission and as of each Representation Date, 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; and
the Prospectus, as of each Representation Date, does not and
will not include an untrue statement of a material fact or
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; provided, however, that
the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration
Statement and the Rule 462(b) Registration Statement, if any,
or the Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by the
Underwriters expressly for use in the Registration Statement
and the Rule 462(b) Registration Statement, if any, or the
Prospectus.
(d) The documents incorporated by reference in the Prospectus,
at the time they were or hereafter are filed with the
Commission, complied or when so filed will comply, as the case
may be, in all material respects with the requirements of the
1934 Act and the rules and regulations of the Commission
promulgated thereunder (the "1934 Act Regulations"), and, when
read together and with the other information in the
Prospectus, did not and will not include an untrue
4
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances
under which they were or are made, not misleading.
(e) The accountants who certified the financial statements
included or incorporated by reference in the Registration
Statement and the Prospectus are independent public
accountants with respect to the Company as required by the
1933 Act and the 1933 Act Regulations.
(f) The accountants who have performed specified procedures
with respect to the latest available interim financial
statements of the Company and its indicated subsidiaries are
independent public accountants with respect to the Company as
required by the 1933 Act and the 1933 Act Regulations.
(g) The financial statements, and the related notes thereto,
and any supporting schedules of the Company and its
subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the consolidated
results of their operations for the periods specified; except
as stated therein, said financial statements have been
prepared in conformity with U.S. generally accepted accounting
principles applied on a consistent basis; the supporting
schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
information required to be stated therein; and the pro forma
financial statements and the related notes thereto, if any,
included or incorporated by reference in the Registration
Statement and the Prospectuses present fairly the information
shown therein, have been prepared 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 to give effect to the transactions and
circumstances referred to therein.
(h) The petroleum engineers who have consented to being named
as having reviewed certain reserve data included or
incorporated by reference in the Prospectus are independent
engineers with respect to the Company and its subsidiaries.
(i) This Agreement and the applicable Delayed Delivery
Contracts (as defined below), if any, have been duly
authorized, executed and delivered by the Company and, upon
execution and delivery by the Underwriters, will be valid and
legally binding agreements of the Company; on and after the
Closing Time, the Indenture will have been duly authorized,
executed and delivered by the Company and, assuming due
execution and delivery by the Trustee, will be a valid and
legally binding agreement of the Company enforceable in
accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement
of
5
creditors' rights generally or by general equity principles,
and except further as enforcement thereof may be limited by
(1) requirements that a claim with respect to any Debt
Securities denominated other than in U.S. dollars (or a
foreign currency or composite currency judgment in respect of
such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States.
The Offered Securities have been duly and validly authorized
for issuance, offer and sale pursuant to this Agreement and
each Delayed Delivery Contract, if any, and when issued,
authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture against payment of the
consideration therefor, the Offered Securities will constitute
valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by
general equity principles, and except further as enforcement
thereof may be limited by (1) requirements that a claim with
respect to any Offered Securities denominated other than in
U.S. dollars (or a foreign currency or composite currency
judgment in respect of such claim) be converted into U.S.
dollars at a rate or exchange prevailing on a date determined
pursuant to applicable law or (2) governmental authority to
limit, delay or prohibit the making of payments outside the
United States. The Offered Securities and the Indenture will
be substantially in the form heretofore delivered to the
Underwriters and conform in all material respects to all
statements relating thereto contained in the Prospectus; and
each Holder (as defined in the Indenture) of Offered
Securities will be entitled to the benefits of the Indenture.
(j) Since the respective dates as of which information is
given in the Registration Statement, any Rule 462(b)
Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, (1) there
has been no material adverse change in the condition,
financial or otherwise, or in the results of operations,
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 (2) there have
been no material transactions entered into by the Company or
any of its subsidiaries other than those in the ordinary
course of business.
(k) Neither the Company nor any of its subsidiaries is in
violation of its charter or in default in the performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which it is a
party or by which it or any of them or their properties may be
bound, where the consequences of such violation or default
would have a material adverse effect on the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the execution
and delivery of this Agreement, each Delayed Delivery
Contract, if any, and the Indenture and the consummation of
the transactions contemplated
6
herein and therein have been duly authorized by all necessary
corporate action of the Company and will not conflict with or
constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other 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 thereof is subject,
nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any law,
administrative regulation or administrative or court order or
decree, where the consequences of such conflict, breach,
creation, imposition, violation or default would have a
material adverse effect on the condition, financial or
otherwise, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(l) No consent, approval, authorization, order or decree of
any court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated
by this Agreement or in connection with the sale of Offered
Securities hereunder, except such as have been obtained or
rendered, as the case may be, or as may be required under
state securities laws ("Blue Sky").
(m) Except as may be included or incorporated by reference in
the Registration Statement and the Prospectus, there is no
action, suit or proceeding before or 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 of its subsidiaries which might,
in the opinion of the Company, result in any material adverse
change in the condition, financial or otherwise, or in the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise, or could reasonably be expected to materially and
adversely affect the properties or assets thereof or could
reasonably be expected to materially and adversely affect the
consummation of this Agreement or the Indenture or any
transaction contemplated hereby or thereby.
(n) There are no contracts or documents of the Company or any
of its subsidiaries which are required to be filed as exhibits
to the Registration Statement by the 1933 Act or by the 1933
Act Regulations which have not been so filed.
(o) Neither the Company nor any of its subsidiaries is in
violation of any law, ordinance, governmental rule or
regulation or court decree to which it may be subject or has
failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its
property or to the conduct of its business, which violation or
failure would materially adversely affect the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the Company and
its subsidiaries own or possess or have obtained
7
all governmental licenses, permits, consents, orders,
approvals and other authorizations and have properly filed
with the appropriate authorities all notices, applications and
other documents necessary to lease or own their respective
properties and to carry on their respective businesses as
presently conducted, except where the failure to possess such
licenses or authorizations or make such filings would not
materially adversely affect the condition, financial or
otherwise, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(p) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, adequate trademarks, service
marks and trade names necessary to conduct the business now
operated by them, except as set forth or incorporated by
reference in the Registration Statement or except where the
failure to own or possess the same would not materially
adversely affect the condition, financial or otherwise, or the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise, and neither the Company nor any of its
subsidiaries has received any notice of infringement of or
conflict with asserted rights of others with respect to any
trademarks, service marks or trade names which, singly or in
the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially adversely affect the
condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise.
(q) The Company and its subsidiaries have legal, valid and
defensible title to all of their interests in oil and gas
properties and to all other real and personal property owned
by them and any other real property and buildings held under
lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases, in each case
free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances and defects of
any kind, except such as (1) are described in the Prospectus,
(2) liens and encumbrances under operating agreements,
unitization and pooling agreements, production sales
contracts, farm-out agreements and other oil and gas
exploration and production agreements, in each case that
secure payment of amounts not yet due and payable for the
performance of other inchoate obligations and are of a scope
and nature customary in connection with similar drilling and
producing operations or (3) those that do not have a material
adverse effect on the condition, financial or otherwise, or
the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(r) The information underlying the estimates of oil and gas
reserves as described in the Prospectus is complete and
accurate in all material respects (or, with regard to any
information underlying the estimates prepared by any petroleum
engineers retained by the seller of such oil and gas reserves,
is, to the best knowledge of the Company after reasonable
investigation, complete and accurate in all material
respects); other than production of the reserves in the
ordinary course of business
8
and intervening product price fluctuations described in the
Prospectus, the Company is not aware of any facts or
circumstances that would result in a material adverse change
in the reserves or the present value of future net cash flows
therefrom as described in the Prospectus. Estimates of such
reserves and present values comply in all material respects
with the applicable requirements of Regulation S-X and
Industry Guide 2 under the 1933 Act.
(s) Neither the Company nor any of its subsidiaries is
required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act").
(t) The Company has complied and will comply with the
provisions of Florida H.B. 1771, codified as Section 517.075
of the Florida Statutes, 1987, as amended, and all regulations
promulgated thereunder relating to issuers doing business in
Cuba.
(u) Except as described in the Registration Statement, (1)
neither the Company nor any of its subsidiaries is in
violation of any local or foreign laws or regulations 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"),
except such violations as would not, singly or in the
aggregate, have a material adverse effect on the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, and (2) to the best
of the Company's knowledge, there are no events or
circumstances that could reasonably be expected to be 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 any Hazardous Materials or the
violation of any Environmental Laws, which, singly or in the
aggregate, could reasonably be expected to have a material
adverse effect on the condition, financial or otherwise, or
the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(v) No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries on the one hand,
and the directors, officers, stockholders, customers or
suppliers of the Company or any of its subsidiaries on the
other hand, which is required by the 1933 Act to be described
in the Registration Statement and the Prospectus and which is
not so described.
9
Any certificate signed by any director or officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company as to the matters covered
thereby.
SECTION 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the Offered
Securities pursuant to this Agreement shall be deemed to have been made on the
basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein and therein set forth. Offered
Securities which are subject to Delayed Delivery Contracts are herein sometimes
referred to as "Delayed Delivery Offered Securities" and Offered Securities
which are not subject to Delayed Delivery Contracts are herein sometimes
referred to as "Immediate Delivery Offered Securities".
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the Terms Agreement, an option to the
Underwriters named in the Terms Agreement, severally and not jointly, to
purchase up to the principal amount of Option Securities set forth therein at
the same price per security (plus, except as otherwise provided in the Terms
Agreement, interest, if any, accrued and unpaid from the Closing Time until the
applicable Date of Delivery), as is applicable to the Offered Securities. Such
option, if granted, will expire 30 days after the date of the Terms Agreement,
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Offered Securities upon notice by the Representatives to
the Company setting forth the principal amount of Option Securities as to which
the several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representatives, but
shall not be later than seven full business days and not earlier than two full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined, unless otherwise agreed upon by the
Representatives and the Company. 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 the proportion of the total principal amount of
Option Securities then being purchased that the principal amount of Immediate
Delivery Offered Securities each such Underwriter has agreed to purchase, as set
forth in the Terms Agreement, bears to the total principal amount of Immediate
Delivery Offered Securities, subject to such adjustments as the Representatives
in their discretion shall make to eliminate any sales or purchases in less than
authorized denominations.
(c) Payment of the purchase price for, and delivery of, the Immediate
Delivery Offered Securities to be purchased by the Underwriters shall be made at
the place set forth in the Terms Agreement, or at such other place as shall be
agreed upon by the Representatives and the Company, on the third business day
(unless postponed in accordance with the provisions of Section 10) following the
date of the Terms Agreement or such other time as shall be agreed upon by the
Underwriters and the Company (such time and date being referred to as the
"Closing Time"). Except as specified in the Terms Agreement, payment shall be
made to the Company by wire transfer in same day funds to the account of the
Company specified in the Terms Agreement
10
against delivery to the Underwriters for the respective accounts of the
Underwriters of the Immediate Delivery Offered Securities to be purchased by
them (unless the Offered Securities are issuable only in the form of one or more
global instruments registered in the name of a depository or a nominee of a
depository, in which event the Underwriters' interest in such global instrument
shall be noted in a manner satisfactory to the Underwriters and their counsel).
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 representing, such Option Securities shall be made at such place as
shall be agreed upon by the Representatives and the Company, on each Date of
Delivery as agreed by the Representatives and the Company. The Immediate
Delivery Offered Securities shall be in such denominations and registered in
such names as the Underwriters may request in writing at least two business days
prior to the Closing Time or relevant Date of Delivery, as the case may be. The
Immediate Delivery Offered Securities, which if agreed by the Representatives
may be in temporary form, will be made available for examination and packaging
by the Representatives on or before the first business day prior to the Closing
Time or relevant Date of Delivery, as the case may be.
(d) If authorized by the Terms Agreement, the Underwriters named
therein may solicit offers to purchase Offered Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto, with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to the Representatives at the Closing Time, for the account
of the Underwriters, a fee equal to that percentage of the aggregate principal
amount of Delayed Delivery Offered Securities for which Delayed Delivery
Contracts are made at the Closing Time as is specified in the Terms Agreement.
Any Delayed Delivery Contracts are to be with institutional investors of the
types set forth in the Prospectus Supplement. At the Closing Time the Company
will enter into Delayed Delivery Contracts (for not less than the minimum
principal amount of Delayed Delivery Offered Securities per Delayed Delivery
Contract specified in the Terms Agreement) with all purchasers proposed by the
Underwriters and previously approved by the Company as provided below, but not
for an aggregate principal amount of Offered Securities in excess of that
specified in the Terms Agreement. The Underwriters will not have any
responsibility for the validity or performance of Delayed Delivery Contracts.
(e) The Representatives are to submit to the Company, at least two
business days prior to the Closing Time, the names of any institutional
investors with which it is proposed that the Company will enter into Delayed
Delivery Contracts and the principal amount of Delayed Delivery Offered
Securities to be purchased by each of them, and the names of the institutions
with which the making of Delayed Delivery Contracts is approved by the Company
and the principal amount of Delayed Delivery Offered Securities to be covered by
each such Delayed Delivery Contract.
(f) The principal amount of Offered Securities agreed to be purchased
by the respective Underwriters pursuant to this Agreement shall be reduced by
the principal amount of Delayed Delivery Offered Securities covered by Delayed
Delivery Contracts, as to each Underwriter as set forth in a written notice
delivered by the Underwriters to the Company; provided, however, that the total
principal amount of Immediate Delivery Offered Securities to
11
be purchased by all Underwriters shall be the total amount of the Offered
Securities covered by this Agreement, less the total principal amount of Delayed
Delivery Offered Securities covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of the Terms
Agreement, the Company will prepare a Prospectus Supplement in
form approved by the Representatives setting forth the
principal amount of Offered Securities and their terms not
otherwise specified in the Indenture, if applicable, the names
of the Underwriters and the principal amount of the Offered
Securities which each severally has agreed to purchase, the
names of the Underwriters, the price at which the Offered
Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, the selling
concession and reallowance, if any, any delayed delivery
arrangements, and such other information as the
Representatives and the Company deem appropriate in connection
with the offering of the Offered Securities. The Company will
promptly transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424 of the 1933 Act
Regulations and will furnish to the Underwriters named therein
as many copies of the Prospectus (including the Prospectus
Supplement) as the Representatives shall reasonably request.
(b) If at any time when the Prospectus is required by the 1933
Act to be delivered in connection with sales of the Offered
Securities any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for
the Underwriters or counsel for the Company, to amend or
supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein not misleading in the light of the
circumstances existing at the time the Prospectus is delivered
to a purchaser, or if it shall be necessary, in the opinion of
either such counsel, to amend or supplement the Registration
Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the
Company will promptly amend the Registration Statement and the
Prospectus, whether by filing documents pursuant to the 1934
Act or the 1933 Act or otherwise, as may be necessary to
correct such untrue statement or omission or to make the
Registration Statement and the Prospectus comply with such
requirements.
(c) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days
after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158
of the 1933 Act Regulations) covering each twelve month period
beginning, in each case, not later than the first day of the
Company's fiscal quarter next following the "effective date"
(as defined in such Rule 158) of the Registration Statement
with respect to each sale of Offered Securities.
12
(d) While the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Securities,
the Company will give the Representatives notice of its
intention to file any additional registration statement with
respect to the registration of additional Debt Securities, any
amendment to the Registration Statement (including any filing
under Rule 462(b)) or any amendment or supplement to the
Prospectus, whether pursuant to the 1934 Act, the 1933 Act or
otherwise; will furnish the Underwriters with copies of any
such amendment or supplement or other documents proposed to be
filed a reasonable time in advance of such proposed filing or
use, as the case may be; and will not file any such amendment
or supplement or other documents in a form to which the
Representatives or counsel to the Underwriters reasonably
object.
(e) While the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Securities,
the Company will notify the Representatives immediately, and
promptly confirm the notice in writing, of (i) the
effectiveness of any amendment to the Registration Statement,
(ii) the transmittal to the Commission for filing of any
supplement to the Prospectus or any document to be filed
pursuant to the 1934 Act which will be incorporated by
reference into the Registration Statement or the Prospectus,
(iii) the receipt of any comments from the Commission with
respect to the Registration Statement, the Prospectus or the
Prospectus Supplement, (iv) any request by the Commission for
any amendment to the Registration Statement, or any amendment
or supplement to the Prospectus or for additional information,
(v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose and (vi)
any change in the rating assigned by any nationally recognized
statistical rating organization to any debt securities of the
Company or the public announcement by any nationally
recognized statistical rating organization that it has under
surveillance or review, with possible negative implications,
its rating of any debt securities of the Company. 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.
(f) The Company will deliver to each Underwriter one conformed
copy of the Registration Statement (as originally filed) and
of each amendment thereto (including exhibits filed therewith
or incorporated by reference therein and documents
incorporated by reference in the Prospectus) and will also
deliver to the Representatives as many conformed copies of the
Registration Statement as originally filed and of each
amendment thereto (without exhibits) as the Representatives
may reasonably request. While the Prospectus is required by
the 1933 Act to be delivered in connection with sales of the
Offered Securities, the Company will furnish to the
Representatives as many copies of the Prospectus (including
the Prospectus Supplement) as the Representatives reasonably
request.
(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Offered Securities for offering
and sale under the applicable securities laws of
13
such states and other jurisdictions of the United States as
the Underwriters may designate, and will maintain such
qualifications in effect for as long as may be required for
the distribution of the Offered Securities; 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 in any jurisdiction in which it is not so
qualified. The Company will file such statements and reports
as may be required by the laws of each jurisdiction in which
the Offered Securities have been qualified as above provided.
The Company will promptly advise the Representatives of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Offered Securities for
sale in any such state or jurisdiction or the initiating or
threatening of any proceeding for such purpose.
(h) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in
connection with sales of the Offered Securities, will file all
documents required to be filed with the Commission pursuant to
Sections 13, 14 or 15(d) of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act
Regulations.
(i) If specified in the Terms Agreement, between the date of
the Terms Agreement and the completion of the distribution of
the Offered Securities or the Closing Time, whichever is
later, or such other time as is specified in the Terms
Agreement, the Company will not, without the prior written
consent of the Representatives, offer or sell, grant any
option for the sale of, or enter into any agreement to sell,
any debt securities of the Company substantially similar to
the Offered Securities (other than the Offered Securities that
are to be sold pursuant to such agreement or commercial paper
in the ordinary course of business).
SECTION 4. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase Offered Securities pursuant to this Agreement are
subject to the accuracy of the representations and warranties on the part of the
Company herein contained, to the accuracy of the statements which the Company's
officers made in any certificate furnished pursuant to the provisions hereof, to
the performance by the Company of all of its covenants and other obligations
hereunder and under the Terms Agreement, and to the following further
conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement shall have been issued under the 1933
Act or proceedings therefor initiated or threatened by the
Commission.
(b) At the Closing Time, the Representatives shall have
received:
(1) The favorable opinion, dated as of the Closing
Time, of Chamberlain, Hrdlicka, White, Williams & Martin,
counsel to the Company, to the effect that:
14
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware.
(ii) This Agreement and the applicable Delayed
Delivery Contracts, if any, have been duly authorized,
executed and delivered by the Company.
(iii) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming the
Indenture has been duly authorized, executed and delivered by
the Trustee) constitutes a legal, valid and binding agreement
of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating
to or affecting enforcement of creditors' rights generally or
by general equity principles, and further as enforcement
thereof may be limited by (1) requirements that a claim with
respect to any Debt Securities denominated other than in U.S.
dollars (or a foreign currency or composite currency judgment
in respect of such claim) be converted into U.S. dollars at a
rate of exchange prevailing on a date determined pursuant to
applicable law or (2) governmental authority to limit, delay
or prohibit the making of payments outside the United States.
(iv) The Offered Securities, in the form(s) certified
by the Company as of the Closing Time, have been duly
authorized for issuance, offer and sale pursuant to this
Agreement and, when issued, authenticated and delivered
pursuant to the provisions of this Agreement, any Delayed
Delivery Contract and the Indenture against payment of the
consideration therefor, will constitute valid and legally
binding obligations of the Company, enforceable in accordance
with their terms, except as enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or affecting enforcement of creditors' rights
generally or by general equity principles, and except further
as enforcement thereof may be limited by (1) requirements that
a claim with respect to any Debt Securities denominated other
than in U.S. dollars (or a foreign currency or composite
currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (2) governmental
authority to limit, delay or prohibit the making of payments
outside the United States; and each holder of Offered
Securities will be entitled to the benefits of the Indenture.
(v) The Offered Securities and the Indenture conform
in all material respects to the statements relating thereto in
the Prospectus; and the statements in the Prospectus under the
captions "Description of Notes" and "Description of Debt
Securities", insofar as they purport to summarize certain
provisions of documents specifically referred to therein, are
accurate summaries of such provisions.
(vi) The Indenture has been duly qualified under the
1939 Act.
15
(vii) The Registration Statement, including any Rule
462(b) Registration Statement, has been declared effective by
the Commission under the 1933 Act and, to the best of such
counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the
Commission.
(viii) The Registration Statement, including any Rule
462(b) Registration Statement, and the Prospectus (except for
financial statements and engineering reports and other
financial or engineering data, and except for those parts of
the Registration Statement that constitute the Form T-1, as to
which such counsel need not express any opinion), as of their
respective effective or issue dates, appeared on their face to
be appropriately responsive to the requirements of the 1933
Act and the 1933 Act Regulations.
In rendering such opinion, counsel for the Company may rely
(i) as to matters of fact upon the representations of officers
of the Company contained in any certificate delivered to such
counsel and certificates of public officials, which
certificates shall be attached to or delivered with such
opinion and (ii) as to the laws of the State of New York
applicable to the enforceability of the Offered Securities and
the Indenture upon the opinion of Sidley Austin Brown & Wood
LLP. Such opinion shall be limited to the General Corporation
Law of the State of Delaware, the laws of the State of Texas
and the laws of the United States of America.
(2) The favorable opinion of Jeffrey B. King,
Attorney and Assistant Secretary of the Company, to the effect
that:
(i) The Company has the 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 Delayed
Delivery Contracts, if any.
(ii) To the best knowledge and information of such
counsel, the Company is duly qualified as a foreign
corporation to transact business and is in good standing in
the State of Texas and in each other jurisdiction in which
such qualification is required, except where the failure to so
qualify and be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or
the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(iii) Each Significant 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 conduct its business as
described in the Prospectus, and, to the best of such
counsel's knowledge and information, is duly qualified as a
foreign
16
corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required,
except where the failure to so qualify and be in good standing
would not have a material adverse effect on the condition,
financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and all of the
issued and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable, and is owned by the Company,
directly or indirectly, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity (except as
described in the Prospectus).
(iv) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus (except for
financial statements, supporting schedules and other financial
or statistical information as to which no opinion need be
rendered) appeared on their face to be appropriately
responsive when so filed to the requirements of the 1934 Act
and the 1934 Act Regulations.
(v) Neither the Company nor any of its subsidiaries
is required to be registered under the 1940 Act.
(vi) No consent, approval, authorization, order or
decree of any court or governmental authority or agency is
required that has not been obtained in connection with the
consummation by the Company of the transactions contemplated
by this Agreement, any Delayed Delivery Contract or the
Indenture, except such as have been obtained or rendered, as
the case may be, or as may be required under the 1933 Act, the
1933 Act Regulations, the 1934 Act, the 1934 Act Regulations
or state securities laws; and the execution and delivery of
this Agreement, the Delayed Delivery Contract, if applicable,
and the Indenture and the consummation of the transactions
contemplated herein and therein have been duly authorized by
all necessary corporate action of the Company and, to the best
knowledge and information of such counsel, will not conflict
with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other 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 such subsidiary is subject, nor
will such action result in any violation of the provisions of
the charter or by-laws of the Company or any applicable law,
administrative regulation or, to the best knowledge and
information of such counsel, administrative or court order or
decree.
(vii) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws.
(viii) To the best knowledge and information of such
counsel, neither the Company nor any of its subsidiaries is in
violation of any law, ordinance,
17
governmental rule or regulation or court decree to which it
may be subject or has failed to obtain any license, permit,
franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business,
which violation or failure would materially adversely affect
the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise;
and, to the best knowledge and information of such counsel,
the Company and its subsidiaries own or possess or have
obtained all governmental licenses, permits, consents, orders,
approvals and other authorizations necessary to lease or own
their respective properties and to carry on their respective
businesses as presently conducted, except where the failure to
obtain such authorizations would not have a material adverse
effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise.
(ix) To the best of such counsel's knowledge and
information, there is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or
foreign, now pending, or threatened against or affecting, the
Company or any of its subsidiaries, which would be reasonably
expected to result in any material adverse change in the
condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, or
would materially and adversely affect the properties or assets
thereof or would materially and adversely affect the
consummation of this Agreement, the Delayed Delivery
Contracts, if applicable, or the Indenture or any transaction
contemplated hereby or thereby.
(x) To the best of such counsel's knowledge and
information, there are no contracts or other documents
required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or
references thereto are correct in all material respects, and,
to the best of such counsel's knowledge and information, no
default exists in the due performance or observance of any
material obligation, agreement, covenant or conditions
contained in any contract, or other documents so described,
referred to, filed or incorporated by reference where the
consequences of such default would have a material adverse
effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one
enterprise.
In rendering such opinion, Jeffrey B. King may rely
as to matters of fact upon the representations of officers of
the Company contained in any certificate delivered to such
counsel and certificates of public officials, which
certificates shall be attached to or delivered with such
opinion. Such opinion shall be limited to the General
Corporation Law of the State of Delaware, the laws of the
State of Texas and the laws of the United States of America.
18
(3) The favorable opinion, dated as of the Closing
Time, of Sidley Austin Brown & Wood LLP, counsel for the
Underwriters, with respect to the matters set forth in clauses
(i) to (viii), inclusive, of subsection (b)(1) of this
Section.
(4) In giving their opinions required by subsection
(b)(1), (b)(2) and (b)(3), respectively, of this Section 4,
Chamberlain, Hrdlicka, White, Williams & Martin, Jeffrey B.
King and Sidley Austin Brown & Wood LLP shall each
additionally state that in the course of the preparation of
the Registration Statement and the Prospectus such counsel has
considered the information set forth therein in light of the
matters required to be set forth therein, and has participated
in conferences with officers and representatives of the
Company including its independent public accountants, during
the course of which the contents of the Registration Statement
and the Prospectus and related matters were discussed. Such
counsel need not independently check the accuracy or
completeness of, or otherwise verify, and accordingly need not
pass upon, and accordingly need not assume responsibility for,
the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and
such counsel may, in good faith, rely as to facts necessary to
the determination of materiality upon the judgment of officers
and representatives of the Company. Such counsel shall
additionally state that, however, as a result of such
consideration and participation, nothing has come to such
counsel's attention which causes such counsel to believe that
the Registration Statement, at the time it became effective
(or, if an amendment to the Registration Statement or an
Annual Report on Form 10-K has been filed by the Company with
the Commission subsequent to the effectiveness of the
Registration Statement, then at the time such amendment became
effective or at the time of the most recent such filing, as
the case may be), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading or that the Prospectus or any amendment or
supplement thereto, at the time the Prospectus was issued at
the time any such amendment or supplement was issued or, at
the Closing Time included or includes an untrue statement of a
material fact or omitted or omits 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 (it being understood that such counsel need express
no opinion with respect to the financial statements and
engineering reports and other financial or engineering data
contained in the Registration Statement (including the
Prospectus) or those parts of the Registration Statement which
constitute the Form T-1).
(c) At the Closing Time, there shall not have been, since the
date of the Terms Agreement or since the respective dates as
of which information is given in the Registration Statement
and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the results of
operations, 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 Representatives shall have received a certificate of the
Chief Executive Officer,
19
President or Vice President and the Treasurer, the Assistant
Treasurer, the principal financial officer or principal
accounting officer of the Company, dated as of the Closing
Time, to the effect that (i) there has been no such material
adverse change with respect to the Company and its
subsidiaries, (ii) the representations and warranties of the
Company contained in Section 1 are true and correct as of the
Closing Time, (iii) the Company has performed or complied with
all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the date of such
certificate and (iv) no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued and no proceedings for
that purpose have been initiated or threatened by the
Commission. As used in this Section 4(c), the term
"Prospectus" means the Prospectus in the form first provided
to the applicable Underwriter or Underwriters for use in
confirming sales of the Offered Securities.
(d) (1) On the date of the Terms Agreement, the Underwriters
shall have received a letter from Arthur Andersen LLP, dated
as of the date thereof and in form and substance satisfactory
to the Underwriters, to the effect that:
(i) They are independent accountants with respect to
the Company and its subsidiaries within the meaning of the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations.
(ii) It is their opinion that the consolidated
financial statements and supporting schedule(s) included or
incorporated by reference in the Registration Statement and
the Prospectus and audited by them and covered by their
opinions therein comply in form in all material respects with
the applicable accounting requirements of the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations.
(iii) In addition to the audit referred to in their
opinion, they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information which are included or
incorporated by reference in the Registration Statement and
the Prospectus and which are specified by the Underwriters,
and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting,
financial and other records of the Company and its
subsidiaries identified in such letter.
(2) On the date of the Terms Agreement, the
Underwriters shall have received a letter from Ernst & Young
LLP, dated as of the date thereof and in form and substance
satisfactory to the Underwriters, to the effect that:
(i) They are independent accountants with respect to
the Company and its subsidiaries within the meaning of the
1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934
Act Regulations.
20
(ii) They have performed specified procedures, not
constituting an audit, including a reading of the latest
available interim financial statements of the Company and its
indicated subsidiaries, a reading of the minute books of the
Company and such subsidiaries since the end of the most recent
fiscal year with respect to which an audit report has been
issued, inquiries of and discussions with certain officials of
the Company and such subsidiaries responsible for financial
and accounting matters with respect to the latest available
interim unaudited financial statements of the Company and its
subsidiaries, and such other inquiries and procedures as may
be specified in such letter and setting forth the results of
such inquiries and procedures.
(3) At the Closing Time, the Underwriters 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 (d)(1) of
this Section, except that the specified date referred to shall
be a date not more than three days prior to the Closing Time.
(4) At the Closing Time, the Underwriters shall have
received from Ernst Young 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 (d)(2) of
this Section, except that the specified date referred to shall
be a date not more than three days prior to the Closing Time.
(e) On or before the date of the Terms Agreement and at the
Closing Time, the Underwriters shall have received from Arthur
Andersen LLP such assurances as the Underwriters may require
with respect to the maintenance by Arthur Andersen LLP of the
quality control system, standards and continuity of personnel
represented to in the representation letter of Arthur Andersen
LLP provided to the Company pursuant to Commission Release No.
33-8070 and referred to in Exhibit 99.1 to the Company's
Annual Report on Form 10-K for the year ended December 31,
2001.
(f) At the Closing Time, 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 Offered Securities as
herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of
the conditions, herein contained; and all proceedings taken by
the Company in connection with the issuance and sale of the
Offered Securities as herein and in the Terms Agreement
contemplated shall be satisfactory in form and substance to
the Representatives.
(g) In the event that the Terms Agreement provides for Option
Securities and the Underwriters exercise their option pursuant
to Section 2(b) hereof to purchase all or any portion of the
Option Securities, the representations and warranties of the
Company contained herein and the statements in any
certificates furnished by the
21
Company hereunder shall be true and correct as of each Date of
Delivery, and the Underwriters shall have received:
(1) Unless the Date of Delivery is the Closing Time,
a certificate, dated such Date of Delivery, of the Chief
Executive Officer, President or Vice President and the
Treasurer, the Assistant Treasurer, the principal financial
officer or principal accounting officer of the Company, in
their capacities as such, confirming that the certificate
delivered at the Closing Time pursuant to Section 4(c) hereof
remains true and correct as of such Date of Delivery.
(2) The favorable opinion of Chamberlain, Hrdlicka,
White, Williams & Martin, counsel for the Company, and Jeffrey
B. King, Attorney and Assistant Secretary of the Company, in
form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise substantially to the same
effect as the opinions required by subsections (1) and (2) of
Section 4(b) hereof.
(3) The favorable opinion of Sidley Austin Brown &
Wood LLP, counsel for the Underwriters, dated such Date of
Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by subsection (3) to
Section 4(b) hereof.
(4) Unless the Date of Delivery is the Closing Time,
a letter from Arthur Andersen LLP, in form and substance
satisfactory to the Underwriters and dated such Date of
Delivery, substantially the same in scope and substance as the
letter furnished to the Underwriters at the Closing Time
pursuant to Section 4(d)(3) hereof, except that the "specified
date" in the letter shall be a date not more than three days
prior to such Date of Delivery.
(5) Unless the Date of Delivery is the Closing Time,
a letter from Ernst & Young LLP, in form and substance
satisfactory to the Underwriters and dated such Date of
Delivery, a substantially the same in scope and substance as
the letter furnished to the Underwriters at the Closing Time
pursuant to Section 4(d)(4) hereof, except that the "specified
date" in the letter shall be a date not more than three days
prior to such Date of Delivery
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Company at any time at or prior to the
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 5.
SECTION 5. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including:
22
(a) the preparation and filing of the Registration Statement,
including any Rule 462(b) Registration Statement, and all
amendments thereto and the Prospectus and any amendments or
supplements thereto;
(b) the preparation, filing and reproduction of this Agreement
and the Delayed Delivery Contract(s), if applicable;
(c) the preparation, printing, issuance and delivery of the
Offered Securities, including any fees and expenses relating
to the eligibility and issuance of Offered Securities in
book-entry form;
(d) the fees and disbursements of the Company's accountants
and counsel, of the Trustee and its counsel, and of any
calculation agent or exchange rate agent;
(e) except as otherwise provided in the Terms Agreement, the
reasonable fees and disbursements of counsel to the
Underwriters;
(f) the qualification of the Offered Securities under state
securities laws in accordance with the provisions of Section
3(k) 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 any Blue
Sky or Legal Investment Survey;
(g) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration
Statement and any amendments thereto, and of the Prospectus
and any amendments or supplements thereto, and the delivery by
the Underwriters of the Prospectus and any amendments or
supplements thereto in connection with solicitations or
confirmations of sales of the Offered Securities;
(h) the preparation, reproducing and delivery to the
Underwriters of copies of the Indenture and all amendments,
supplements and modifications thereto;
(i) any fees charged by nationally recognized statistical
rating organizations for the rating of the Offered Securities;
(j) the fees and expenses incurred in connection with any
listing of Offered Securities on a securities exchange;
(k) the fees and expenses incurred with respect to any filing
with the National Association of Securities Dealers, Inc.;
(l) any out-of-pocket expenses of the Underwriters incurred
with the approval of the Company; and
(m) the cost of providing any CUSIP or other identification
numbers for the Offered Securities.
23
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 9, 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 6. Indemnification. (a) The Company agrees 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 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 any Rule 462(b)
Registration Statement, including information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) of the 1933 Act
Regulations, 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, unless such untrue statement or omission or such
alleged untrue statement or omission was made in reliance upon and in
conformity with written information furnished to the Company by an
Underwriter expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto);
(ii) 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 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 such
settlement is effected with the written consent of the Company, which
consent shall not be unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and expenses of counsel chosen by such Underwriter),
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.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), any Rule 462(b) Registration Statement or
any preliminary prospectus or
24
the Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
expressly for use in the Registration Statement (or any amendment thereto), any
Rule 462(b) Registration Statement or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) 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 it from any liability which it may have
otherwise than on account of this indemnity agreement. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
each Underwriter shall have the right to employ counsel to represent jointly the
Underwriters and their respective controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Underwriters against the Company under this Section if, in the judgment
of any of the Underwriters, it is advisable for such Underwriter or Underwriters
and controlling persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall be paid by the
Company. In no event shall the indemnifying parties be liable for the 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 (which
shall not unreasonably be withheld), settle or compromise or consent to the
entry of any 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) For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus or the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include, without
limitation, any electronically transmitted copies thereof, including, without
limitation, any copies filed with the Commission pursuant to EDGAR.
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
25
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 on the one hand and the Underwriters on the other hand from the
offering of the Offered 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 the Company on the one
hand and of 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 the Company on the one hand and the Underwriters on the
other hand in connection with the offering of the Offered 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 Offered Securities pursuant to this
Agreement (before deducting expenses) received by the Company and the total
commission or underwriting discount received by each Underwriter, in each case
as set forth on the cover of the Prospectus Supplement, bear to the aggregate
initial public offering price of the Offered Securities sold to or through such
Underwriter as set forth on such cover. The relative fault of the Company on the
one hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company 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, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities sold to or through such Underwriter were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 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 an 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 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. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in
26
proportion to the principal amount of Offered Securities sold to or through each
Underwriter and not joint.
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 submitted pursuant
hereto or thereto shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person of an Underwriter, or by or on behalf of the Company, and
shall survive each delivery of and payment for any Offered Securities.
SECTION 9. Termination.
(a) The Representatives may terminate this Agreement immediately upon
notice to the Company, at any time at or prior to the Closing Time if (i) there
has been, since the date of the Terms Agreement or since the respective dates as
of which information is given in the Registration Statement, any material
adverse change in the condition, financial or otherwise, or in the results of
operations, 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) there shall have occurred any material
adverse change in the financial markets in the United States or any outbreak or
escalation of hostilities or other national or international calamity or crisis
the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Offered Securities
or enforce contracts for the sale of the Offered Securities, or (iii) trading in
any securities of the Company has been suspended by the Commission or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange shall have been suspended, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium shall
have been declared by either Federal, New York or Texas authorities or if a
banking moratorium shall have been declared by the relevant authorities in the
country or countries of origin of any foreign currency or currencies in which
the Offered Securities are denominated or payable, or (iv) the rating assigned
by any nationally recognized statistical rating organization to any debt
securities of the Company as of the date of the Terms Agreement shall have been
lowered since that date or if any such rating organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any debt securities of the Company, or (v) there
shall have come to the attention of the Representatives any facts that would
cause them to reasonably believe that the Prospectus, at the time it was
required to be delivered to a purchaser of the Offered Securities, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
existing at the time of such delivery, not misleading. As used in this Section
9, the term "Prospectus" means the Prospectus in the form first provided to the
applicable Underwriter or Underwriters for use in confirming sales of the
related Offered Securities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 5. Notwithstanding any such termination, (i)
the covenants set forth in Section 3(b), (d), and (e)
27
with respect to any offering of Offered Securities shall remain in effect so
long as any Underwriter owns any such Offered Securities purchased from the
Company pursuant to this Agreement and during the period when the Prospectus is
required to be delivered in connection with sales of the Offered Securities and
(ii) the covenants set forth in Section 3(c), (g), (h) and, if applicable, (i),
the provisions of Section 5, the indemnity agreement set forth in Section 6, the
contribution provisions set forth in Section 7 and the provisions of Sections 8,
11, 12 and 13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters shall fail at
the Closing Time or a Date of Delivery to purchase the Immediate Delivery
Offered Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), then the Representatives 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, during such 24 hours the
Representatives shall not have completed such arrangements for the purchase of
all of the Defaulted Securities, then:
(a) if the amount of Defaulted Securities does not exceed 10%
of the amount of Immediate Delivery Offered 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 amount of Defaulted Securities exceeds 10% of the
number of Immediate Delivery Offered Securities to be
purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company
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 10 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 Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company 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 the Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall be in
writing, either delivered by hand, by mail or by telex, telecopier or telegram,
and any such notice shall be effective when received at the address specified in
this Section 11. Notices to the
28
Underwriters shall be directed as provided in the Terms Agreement. Notices to
the Company shall be directed to Apache Corporation, 2000 Post Oak Boulevard,
Suite 100, Houston, Texas 77056-4400, Attention: Vice President and Treasurer,
with a copy to: Chamberlain, Hrdlicka, White, Williams & Martin, 1200 Smith
Street, Suite 1400, Houston, Texas 77002-4310, Attention: Ralph K. Miller, Jr.,
Esq. Any party to this Agreement may from time to time designate another address
to receive notice pursuant to this Agreement by notice duly given in accordance
with the terms of this Section 11.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company 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
parties hereto and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, 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 parties hereto and their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Offered Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. Governing Law. This Agreement and all the rights and
obligations of the parties hereto shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in such State.
SECTION 14. Counterparts. Any Terms Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts thereof shall constitute a single instrument.
29
EXHIBIT A
TERMS AGREEMENT
___________ __, 20__
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention: [Title]
Ladies and Gentlemen:
The undersigned underwriters (the "Underwriters") understand that
Apache Corporation (the "Company") proposes to issue and sell $__________
aggregate principal amount of its debt securities (the "Offered Securities").
Subject to the terms and conditions set forth herein or incorporated by
reference herein, the Underwriters offer to purchase, severally and not jointly,
the principal amount of Offered Securities set forth below opposite their
respective names at ___% of the principal amount thereof together with accrued
interest thereon from __________, 20__ to the Closing Time:
<Table>
<Caption>
Principal
Amount of
Underwriter Debt Securities
----------- ---------------
-------------
Total $
=============
</Table>
The Offered Securities shall have the following terms:
Principal amount:
Form and denomination:
Date of maturity:
Interest rate, rates or formula
(or method of calculation
of interest accrual):
Date from which interest accrues:
Interest payment dates, if any:
Initial price to public:
Closing Time:
30
Place of delivery and payment:
Company account for wire transfer of payment:
Redemption provisions, if any:
Lock-up pursuant to Section 3(i) of the
Underwriting Agreement Basic Terms:[yes] [no]
Securities Exchanges, if any, on which application will be made to list the
Offered Securities:
Delayed Delivery Contracts: [authorized] [not authorized]
Delivery date:
Expiration date:
Compensation to Underwriters:
Minimum contract:
Maximum aggregate principal amount:
Other terms, if any:
All the provisions contained in "Apache Corporation-Debt
Securities--Underwriting Agreement Basic Terms" (the "Basic Terms"), filed as an
exhibit to the Registration Statement relating to the Offered Securities and
attached hereto as Annex A, are herein incorporated by reference in their
entirety and shall be deemed to be a part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Terms defined in
such document are used herein as therein defined.
Any notice by the Company to the Underwriters pursuant to this Terms
Agreement shall be sufficient if given in accordance with Section 11 of the
Basic Terms addressed to: [insert name and address of the lead manager or
managers or, if only one underwriter is a party hereto, of such firm] which
shall, for all purposes of this Agreement, be the "Representatives".
Very truly yours,
REPRESENTATIVE[S]
By:
--------------------------------------------------
[Acting for themselves and as Representative[s] of
the Underwriters]
Accepted:
APACHE CORPORATION
By:
--------------------------------------------
Title:
31
ANNEX A
[Apache Corporation--Debt Securities--
Underwriting Agreement Basic Terms]
32
EXHIBIT B
APACHE CORPORATION
[Title of Offered Securities]
DELAYED DELIVERY CONTRACT
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention:
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from Apache Corporation (the
"Company"), and the Company agrees to sell to the undersigned on ____________,
20__ (the "Delivery Date"), $_____________ principal amount of the Company's __%
Offered Securities due ___________ __, 20__ (the "Offered Securities"), offered
by the Company's Prospectus dated _________ __, 20__, as supplemented by its
Prospectus Supplement dated __________ __, 20__, receipt of which is hereby
acknowledged, at a purchase price of _____% of the principal amount thereof,
plus accrued interest from __________, ______, to the Delivery Date, and on the
further terms and conditions set forth in this contract.
Payment for the securities which the undersigned has agreed to purchase
on the Delivery Date shall be made to the Company or its order by wire transfer
in immediately available funds on the Delivery Date, upon delivery to the
undersigned of the Offered Securities to be purchased by the undersigned in
definitive or global form and in such denominations and registered in such names
as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than three full business days prior to the
Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Offered Securities on the Delivery Date shall be subject only to the
conditions that (1) the purchase of Offered Securities to be made by the
undersigned shall not on the Delivery Date be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Company, on or
before ___________, ____, shall have sold to the Underwriters of the Offered
Securities (the "Underwriters") such principal amount of the Offered Securities
as is to be sold to them pursuant to the Terms Agreement dated ____________,
____ between the Company and the Underwriters. The obligation of the undersigned
to take delivery of and make payment for Offered Securities shall not be
affected by the failure of any purchaser to take delivery of and make payment
for Offered Securities pursuant to other contracts similar to this contract. The
undersigned represents and warrants to the Underwriters that its investment in
the Offered
33
Securities is not, as of the date hereof, prohibited under the laws of any
jurisdiction to which the undersigned is subject and which govern such
investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary corporate action for the due execution and delivery
of this contract and the payment for and purchase of the Offered Securities has
been taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for an aggregate principal amount of Offered Securities in excess of
$__________ and that the acceptance of any Delayed Delivery Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first come first-served basis. If this contract is acceptable to the Company, it
is requested that the Company sign the form of acceptance on a copy hereof and
mail or deliver a signed copy hereof to the undersigned at its address set forth
below. This will become a binding contract between the Company and the
undersigned when such copy is so mailed or delivered.
34
This Agreement shall be governed by the laws of the State New York
applicable to agreements made and performed in said State.
Yours very truly,
------------------------------
(Name of Purchaser)
By
----------------------------
(Title)
------------------------------
------------------------------
(Address)
Accepted as of the date
first above written.
Apache Corporation
By:
------------------------------
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date shall be discussed is as
follows: (Please print.)
<Table>
<Caption>
Telephone No.
Name (Including Area Code)
- ---- ---------------------
</Table>
35