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EXHIBIT 1
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MESA INC.
23,000,000 SHARES OF COMMON STOCK
PURCHASE AGREEMENT
Dated: __________ ___, 1994
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23,000,000 SHARES
MESA INC.
(a Texas corporation)
COMMON STOCK
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
_______, 1994
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Dear Sirs:
MESA Inc., Texas corporation (the "Company"), confirms its agreement
with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Bear, Stearns & Co. Inc. ("Bear Stearns"), PaineWebber
Incorporated ("PaineWebber"), Salomon Brothers Inc ("Salomon") and each of the
other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Bear
Stearns, PaineWebber and Salomon are acting as representatives (in such
capacity, Merrill Lynch, Bear Stearns, PaineWebber and Salomon shall
hereinafter be called the "Representatives"), with respect to the sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of shares of Common Stock, par value $.01 per share,
of the Company ("Common Stock") set forth in said Schedule A and with respect
to the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase up to
3,450,000 additional shares of Common Stock to cover over-allotments, in each
case except as may otherwise be provided in the Pricing Agreement, as
hereinafter defined. The 23,000,000 shares of Common Stock (the "Initial
Securities") to be purchased by the Underwriters and all or any of the
3,450,000 shares of Common Stock subject to the option described in Section
2(b) hereof (the "Option Securities") are collectively hereinafter called the
"Securities."
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Prior to the purchase and public offering of the Securities by the
several Underwriters, the Company and the Representatives, acting on behalf of
the several Underwriters, shall enter into an agreement substantially in the
form of Exhibit A hereto (the "Pricing Agreement"). The Pricing Agreement may
take the form of an exchange of any standard form of written telecommunication
between the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the
Securities will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the
Pricing Agreement, this Agreement shall be deemed to incorporate the Pricing
Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33- _______) and a
related preliminary prospectus for the registration of the Securities under the
Securities Act of 1933, as amended (the "1933 Act"), has filed each such
amendment thereto, if any, and each such amended prospectus as may have been
required to the date hereof, and will file such additional amendments thereto
and such amended prospectuses as may hereafter be required. Such registration
statement (as amended, if applicable) and the prospectus constituting a part
thereof (including in each case all documents filed by the Company pursuant to
the Securities Exchange Act of 1934, as amended (the "1934 Act"), that are
incorporated by reference therein and the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations")), as from time to
time amended or supplemented pursuant to the 1933 Act or otherwise, are
hereinafter referred to as the "Registration Statement" and the "Prospectus",
respectively, except that if any revised prospectus shall be provided to the
Underwriters by the Company in connection with the offering of the Securities
which differs from the Prospectus on file at the Commission at the time the
Registration Statement becomes effective (whether or not such revised
prospectus is required to be filed by the Company pursuant to Rule 424(b) of
the 1933 Act Regulations), the term "Prospectus" shall refer to such revised
prospectus from and after the time it is first provided to the Underwriters for
such use. All references in this Agreement to financial statements and
schedules and other information which are "contained," "included" or "stated"
in the Registration Statement or the Prospectus (and all other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which are or are deemed to be incorporated
by reference in the Registration Statement or the Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include
the filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
the Pricing Agreement has been executed and delivered.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each Underwriter as of
the date hereof and, if later than the date hereof, as of the date of the
Pricing Agreement (such latter date being hereinafter referred to as the
"Representation Date") as follows:
(1) At the time the Registration Statement becomes
effective and at the Representation Date, the Registration Statement
will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or
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necessary to make the statements therein not misleading. The
Prospectus, at the Representation Date and at each Closing Time
referred to in Section 2 hereof, 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 or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
Prospectus.
(2) The accountants who certified the financial
statements and financial statement schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(3) The consolidated financial statements, including the
notes thereto, and financial statement schedules included 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 results of their operations and cash
flows for the periods specified in conformity with generally accepted
accounting principles applied, except as otherwise stated in the
Registration Statement, on a consistent basis; and the financial
statement schedules included in the Registration Statement present
fairly the information required to be stated therein. The selected
financial data included in the Registration Statement and the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated
financial statements included therein.
(4) Since the respective dates as of which information is
given in the Prospectus, except as otherwise stated or contemplated
therein, (i) there has been no material adverse change in the
condition, financial or otherwise, or on the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, (ii) there have been no transactions entered into
by the Company or any of its subsidiaries, other than those in the
ordinary course of business, required to be disclosed therein, and
(iii) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(5) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas,
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 Pricing Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction, if any, in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
its business, except where the failure to so qualify or be in good
standing would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(6) Each corporate subsidiary of the Company which is a
significant subsidiary (each a "Significant Corporate Subsidiary") as
defined in Rule 405 of Regulation C of the 1933 Act Regulations is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and
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operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of its business, except where the
failure to so qualify or be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise; and all of the
outstanding shares of capital stock of each such Significant Corporate
Subsidiary have been duly authorized and validly issued, are fully
paid and nonassessable and are owned by the Company, directly or
through one or more subsidiaries, free and clear (except as otherwise
stated in the Prospectus) of any security interest, pledge or other
restriction on transferability or voting.
(7) Hugoton Capital Limited Partnership ("HCLP" and,
together with the Significant Corporate Subsidiaries, the "Significant
Subsidiaries"), is a limited partnership duly organized pursuant to
the Delaware Revised Uniform Limited Partnership Act, validly existing
as a limited partnership in good standing under the laws of the State
of Delaware, has partnership power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and is duly qualified as a foreign partnership 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 its business, except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise; and the entire partnership interest in HCLP is
owned by the Company, through subsidiaries, free and clear (except as
otherwise stated in the Prospectus) of any security interest, pledge
or other restriction on transferability or voting.
(8) Each of the subsidiaries of the Company has (i)
generally satisfactory title to all its interests in its oil and gas
properties, title investigations having been carried out by or on
behalf of such subsidiary in accordance with good practice in the oil
and gas industry in the areas in which such subsidiary operates, (ii)
good and marketable title to all other real property to the extent
necessary to carry on its business, and (iii) good and marketable
title to all personal property owned by such subsidiary, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its
subsidiaries considered as one enterprise.
(9) The authorized, issued and outstanding capital stock
of the Company is as set forth on the face of the Consolidated Balance
Sheet as of December 31, 1993 contained in the Prospectus (except for
subsequent issuances of Common Stock upon conversion of the remaining
general partner interests as described in Notes 1 and 7 to such
Consolidated Balance Sheet, or pursuant to employee stock options or
this Agreement); all shares of issued Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable;
the Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth in the Pricing Agreement, will be validly
issued and fully paid and nonassessable; the Common Stock conforms in
all material respects to all statements relating thereto contained in
the Prospectus (including the Company's Registration Statement on Form
8-A incorporated by reference therein); and the issuance of the
Securities is not subject to
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preemptive or other similar rights. The outstanding shares of Common
Stock are listed on the New York Stock Exchange.
(10) Neither the Company nor any of its subsidiaries is in
violation of its charter or partnership agreement, as the case may be,
or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in 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 of its subsidiaries is subject, which violation or
default would have a material adverse effect on the condition,
financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise; and the execution, delivery and performance of this
Agreement and the Pricing Agreement, and the consummation of the
transactions contemplated herein, have been duly authorized by all
necessary corporate action on the part of the Company and do not 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
of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the charter or bylaws of the Company or
any applicable law, administrative regulation or administrative or
court judgment, order or decree.
(11) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any court or governmental
authority or agency now pending, or, to the knowledge of the Company,
threatened, against the Company or any of its subsidiaries, which is
required to be disclosed in the Prospectus or which might materially
and adversely affect the consummation by the Company of the
transactions contemplated by this Agreement; and 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.
(12) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
sale of the Securities hereunder, except such as may be required under
the 1933 Act or the 1933 Act Regulations or state or foreign
securities laws.
(13) This Agreement has been, and, at the Representation
Date, the Pricing Agreement will have been, duly executed and
delivered by the Company.
(14) The Company and the Significant Subsidiaries possess
such valid franchises, certificates of convenience and necessity,
easements, rights-of-way, operating rights, licenses, permits,
consents, authorizations and orders of governmental authorities or
agencies as are necessary to carry on the respective business of each
as presently being conducted as described in the Prospectus.
(15) There are no persons with registration or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under
the 1933 Act as a result of the offering and sale of the Securities.
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(16) No forward looking statement (as defined in Rule 175
under the 1933 Act) contained in the Registration Statement has been
made or reaffirmed without a reasonable basis or has been disclosed
other than in good faith.
(17) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, or became effective under the
1934 Act, as the case may be, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement becomes
effective and at all times subsequent thereto to and including each
Closing Time, will not contain 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.
(18) Neither the Company nor any of its subsidiaries is a
"holding company" or a "subsidiary company" of a "holding company" or
an "affiliate" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(19) Each of the Company and its subsidiaries (i) is in
compliance with any and all applicable federal, state and local laws
and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or waste, pollutants
or contaminants ("Environmental Laws"), (ii) has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and (iii) is in compliance
with all terms and conditions of any such permit, license or approval,
except for such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals that would not, singly or in the aggregate, have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(20) Neither the Company nor any affiliate thereof does
business with the government of Cuba or with any person located in
Cuba.
(21) The Company has obtained and delivered to the
Representatives the agreements of its directors and executive officers
and the purchasers of directed shares to the effect that each such
person will not, for a period of 120 days from the Representation
Date, without the prior written consent of Merrill Lynch, directly or
indirectly, voluntarily offer, sell or otherwise voluntarily dispose
of, any shares of Common Stock or any securities convertible into or
exercisable for Common Stock owned by such person or with respect to
which such person has the power of disposition.
(b) Any certificate signed by any officer of the Company
and delivered to the Representatives or to counsel for the
Underwriters in connection with the offering of the Securities shall
be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
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SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and
not jointly, and each Underwriter, severally and not jointly, agrees
to purchase from the Company, at the price per share set forth in the
Pricing Agreement, the number of Initial Securities set forth in
Schedule A opposite the name of such Underwriter (except as otherwise
provided in the Pricing Agreement), plus any additional number of
Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof. The
purchase price per share to be paid by the several Underwriters for
the Securities shall be an amount equal to the initial public offering
price, less an amount per share to be determined by agreement between
the Representatives and the Company. The initial public offering
price per share of the Securities shall be a fixed price to be
determined by agreement between the Representatives and the Company.
The initial public offering price and the purchase price, when so
determined, shall be set forth in the Pricing Agreement and the
Prospectus. In the event that such prices have not been agreed upon
and the Pricing Agreement has not been executed and delivered by all
parties thereto by the close of business on the fourth business day
following the date of this Agreement, this Agreement shall terminate
forthwith, without liability of any party to any other party, unless
otherwise agreed to by the Company and the Representatives.
(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 hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an
additional 3,450,000 shares of Common Stock at the price per share set
forth in the Pricing Agreement. The option hereby granted will expire
30 days after the Representation Date, and may be exercised in whole
or in part at any time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option
Securities as to which the Underwriters are exercising the option and
the time and date of payment and delivery for such Option Securities.
Such time and date of delivery for the Option Securities (the "Second
Closing Time") shall be determined by the Representatives, but shall
not be later than seven full business days after the exercise of said
option, and in no event prior to the First Closing Time, as
hereinafter defined, unless otherwise agreed 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 that proportion of the total number of
Option Securities then being purchased which the number of Initial
Securities set forth in Schedule A opposite the name of such
Underwriter bears to the total number of Initial Securities (except as
otherwise provided in the Pricing Agreement), subject in each case to
such adjustments as the Representatives in their discretion shall make
to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office
of Merrill Lynch & Co., Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, New York 10281, or at such other
place as shall be agreed upon by the Representatives and the Company,
at 10:00 A.M. on the fifth business day after execution of the Pricing
Agreement, or such other time not later than ten business days after
such date as shall be agreed upon by the Representatives and the
Company (such time and date of payment and delivery being herein
called the "First Closing
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Time"). In addition, in the event that any or all of the Option
Securities are purchased by the Underwriters, payment of the purchase
price for, and delivery of certificates for, such Option Securities
shall be made at the above-mentioned offices of Merrill Lynch & Co.,
or at such other place as shall be agreed upon by the Representatives
and the Company, at the Second Closing Time as specified in the notice
from the Representatives to the Company. Each of the First Closing
Time and the Second Closing Time is herein called a "Closing Time."
Payment shall be made to the Company by certified or official bank
check or checks drawn in New York Clearing House funds, or by wire
transfer into one or more accounts designated by the Company or
similar next day funds payable to the order of the Company against
delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by
them. Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in
such names as the Representatives may request in writing at least two
business days before the Closing Time at which such certificates are
to be delivered. It is understood that each Underwriter has
authorized the Representatives, for their account, to accept delivery
of, receipt for and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has
agreed to purchase. The Representatives, individually and not as
representatives of the Underwriters, may (but shall not be obligated
to) make payment of the purchase price for the Initial Securities or
the Option Securities, if any, to be purchased by any Underwriter
whose check has not been received by the First Closing Time or the
Second Closing Time, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder. The
certificates for the Initial Securities and the Option Securities, if
any, will be made available for examination and packaging by the
Representatives not later than 10:00 A.M. on the last business day
prior to the Closing Time at which such certificates are to be
delivered.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) The Company will notify the Representatives
immediately, and confirm the notice in writing, (i) of the
effectiveness of the Registration Statement and any amendment thereto,
(ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose. The
Company will make every reasonable effort to prevent the issuance of
any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) The Company will give the Representatives notice of
its intention to file or prepare any amendment to the Registration
Statement (including any document incorporated by reference therein
and any post-effective amendment) or any amendment or supplement to
the Prospectus (including any document incorporated by reference
therein and any revised prospectus that the Company proposes for use
by the Underwriters in connection with the offering of the Securities
which differs from the prospectus on file at the Commission at the
time the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) of
the 1933 Act Regulations), will furnish the Representatives copies of
any such amendment or supplement a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file any
such amendment or supplement,
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except as required by Section 3(e), or use any such prospectus to
which the Representatives or counsel for the Underwriters shall
object.
(c) The Company will deliver to the Representatives five
signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed
to be incorporated by reference therein) and will also deliver to the
Representatives one conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for
each of the Underwriters.
(d) The Company will furnish to each Underwriter, from
time to time during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of
the Prospectus (as amended or supplemented) as such Underwriter may
reasonably request for the purposes contemplated by the 1933 Act or
the 1934 Act or the respective applicable rules and regulations of the
Commission thereunder.
(e) If any event shall occur as a result of which it is
necessary, in the opinion of counsel for the Company or counsel for
the Underwriters, to amend or supplement the Prospectus in order to
make the Prospectus not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, the Company will
forthwith amend or supplement the Prospectus so that, as so amended or
supplemented, the Prospectus will not include any 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
existing at the time it is delivered to a purchaser, not misleading,
and the Company will furnish to the Underwriters a reasonable number
of copies of such amendment or supplement.
(f) The Company will endeavor, in cooperation with the
Underwriters and their counsel, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representatives may
designate; provided, however, that the Company shall not be obligated
to qualify as a foreign corporation in any jurisdiction in which it is
not so qualified. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from
the effective date of the Registration Statement.
(g) The Company will make generally available to its
security holders as soon as practicable, but not later than 50 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 a period of at least twelve months beginning not
later than the first day of the Company's fiscal quarter next
following the effective date (as defined in said Rule 158) of the
Registration Statement.
(h) The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the
Prospectus under "Use of Proceeds."
(i) If, at the time that the Registration Statement
becomes effective, any information shall have been omitted therefrom
in reliance upon Rule 430A of the 1933 Act Regulations, then,
immediately following the execution of the Pricing Agreement, the
Company will prepare, and file or transmit for filing with the
Commission, in accordance with such Rule 430A and
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Rule 424(b) of the 1933 Act Regulations, copies of an amended
Prospectus or, if required by such Rule 430A, a post-effective
amendment to the Registration Statement (including an amended
Prospectus), containing all information so omitted.
(j) The Company will use its best efforts to cause the
Securities to be duly authorized for listing on the New York Stock
Exchange, subject to official notice of issuance, on or before the
Closing Time at which such Securities are to be delivered hereunder.
(k) For a period of five years from the Representation
Date, the Company will furnish to the Representatives as soon as they
are publicly available copies of all annual, quarterly and current
reports that it shall file with the Commission on Forms 10-K, 10-Q and
8-K or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall
be furnished by the Company to its public stockholders generally.
(l) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, will file
all documents required to be filed with the Commission pursuant to
Section 13, 14 or 15 of the 1934 Act within the time periods required
by the 1934 Act and the 1934 Act Regulations.
(m) During a period of 120 days from the Representation
Date, the Company will not, without Merrill Lynch's prior written
consent, directly or indirectly, offer, sell or otherwise dispose of
any shares of Common Stock or securities convertible into or
exercisable for Common Stock, except that the Company may, without
such consent, issue shares of Common Stock upon the exercise of
options under its stock option plan and may grant stock options
thereunder.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the reproduction of this
Agreement and the Pricing Agreement, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriters, (iv) the
fees and disbursements of the Company's counsel, engineers and accountants, (v)
the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(f) hereof, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky Survey, (vi) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, of each preliminary prospectus,
and of the Prospectus and any amendments or supplements thereto, (vii) the
reproduction and delivery to the Underwriters of copies of the Blue Sky Survey,
(viii) the fees of the National Association of Securities Dealers, Inc., and
(ix) the listing fees of the New York Stock Exchange.
If this Agreement is terminated by the Representatives in accordance
with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters hereunder to purchase and pay for the
Securities to be delivered at either Closing Time are subject to the accuracy
of the representations and warranties of the Company herein contained or in
certificates of any officer of the Company delivered pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder, and to
the following further conditions:
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(a) The Registration Statement shall have become
effective not later than 5:30 P.M. on the date hereof, or with the
consent of Merrill Lynch, at a later time and date, not later,
however, that 5:30 P.M. on the first business day following the date
hereof, or at such later time and date as may be approved by the
majority in interest of the Underwriters; and at such Closing Time no
stop order suspending the effectiveness of the Registration Statement
shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission. If the Company has elected
to rely upon Rule 430A of the 1933 Act Regulations, the price of the
Securities and any price-related information previously omitted from
the effective Registration Statement pursuant to such Rule 430A shall
have been transmitted to the Commission for filing pursuant to Rule
424(b) of the 1933 Act Regulations within the prescribed time period,
and prior to the First Closing Time the Company shall have provided
evidence satisfactory to the Underwriters of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A of the 1933 Act Regulations.
(b) All consents and approvals from any regulatory
authority having jurisdiction over the Company necessary for the
consummation of the transactions contemplated hereby shall have been
obtained by the Company and shall be in full force and effect at such
Closing Time.
(c) At such Closing Time, the Representatives shall have
received the favorable opinion of Baker & Botts, L.L.P., counsel to
the Company, dated as of such Closing Time, to the following effect:
(i) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Texas, with corporate power and authority under such
laws 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 the Purchase Agreement and
the Pricing Agreement.
(ii) Each Significant Corporate Subsidiary is a
corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority under such
laws to own, lease and operate its properties and to conduct
its business as described in the Prospectus.
(iii) HCLP is a limited partnership duly organized
pursuant to the provisions of the Delaware Revised Uniform
Limited Partnership Act and is validly existing as a limited
partnership in good standing under the laws of the State of
Delaware, with the power and authority under its partnership
agreement and such Act to own, lease and operate its
properties and to conduct its business as described in the
Prospectus.
(iv) All of the outstanding shares of capital stock
of each Significant Corporate Subsidiary have been duly
authorized and validly issued, are fully paid and
nonassessable and are owned of record and, to such counsel's
knowledge, beneficially by the Company, directly or through
one or more subsidiaries, free and clear (except as otherwise
stated in the Prospectus) of any pledge, security interest or
other restriction on transferability or voting. The entire
partnership interest in HCLP is owned of record and, to such
counsel's knowledge, beneficially by the Company, through
subsidiaries, free and clear (except as otherwise stated in
the Prospectus) of any pledge, security interest or other
restriction on transferability or voting.
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(v) The execution and delivery by the Company of the
Purchase Agreement and the Pricing Agreement, the issuance and
delivery of the Securities being delivered at such Closing
Time, the application by the Company of the proceeds of the
sale of such Securities as contemplated by the Prospectus and
compliance by the Company with the terms of the Purchase
Agreement, (A) do not and will not result in any violation of
the charter or by-laws of the Company, and (B) do not and will
not result in a breach of any of the terms or provisions of,
or constitute a 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 Significant
Subsidiary under (1) any indenture, mortgage, loan agreement,
note or other similar agreement or instrument known to such
counsel and to which the Company or any Significant Subsidiary
is a party or by which it may be bound or to which any of its
properties may be subject or (2) any existing applicable law,
rule or regulation or, to the knowledge of such counsel, any
judgment, order or decree (other than federal and state
securities or blue sky laws and anti-fraud laws, as to which
such counsel need express no opinion in this paragraph) of any
government, governmental instrumentality or court having
jurisdiction over the Company or any Significant Subsidiary or
any of its properties.
(vi) To their knowledge, there are no legal or
governmental proceedings pending or threatened against the
Company or its subsidiaries which are required to be disclosed
in the Prospectus other than those disclosed therein.
(vii) All of the outstanding shares of Common Stock
have been duly authorized and validly issued, are fully paid
and nonassessable and conform as to legal matters in all
material respects to the description of the Common Stock
contained in the Prospectus (including the Company's
Registration Statement on Form 8-A incorporated by reference
therein).
(viii) The Company is not a "holding company" as
defined in Section 2(a)(7) of the Public Utility Holding
Company Act of 1935, as amended.
(ix) The documents incorporated by reference in the
Prospectus, as of the dates they were filed with the
Commission or became effective under the 1934 Act, as the case
may be, appeared on the face thereof to comply, as to form in
all material respects with the requirements of the 1934 Act
and the 1934 Act Regulations (except that such counsel need
express no opinion as to the exhibits, financial statements,
schedules and other financial, reserve or statistical
information included or incorporated by reference in any such
document).
(x) The Purchase Agreement and the Pricing Agreement
have been duly authorized, executed and delivered by the
Company.
(xi) The Securities to be issued and sold by the
Company under the Purchase Agreement at such Closing Time have
been duly authorized and will, upon payment therefor as
contemplated by this Agreement, be validly issued, fully paid
and nonassessable; and there are no preemptive or similar
rights with respect to such issuance of such Securities.
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(xii) The Registration Statement has become effective
under the 1933 Act and, to their knowledge, no stop order
suspending the effectiveness of the Registration Statement has
been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission.
(xiii) At the time the Registration Statement became
effective, the Registration Statement appeared on its face to
comply as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations
(except that such counsel need express no opinion in this
paragraph (xiii) as to any documents incorporated therein by
reference or as to the exhibits, financial statements,
schedules and other financial, reserve or statistical
information contained in the Registration Statement or the
Prospectus or incorporated by reference therein).
(xiv) No authorization, approval or consent of any
court or governmental authority or agency (other than pursuant
to the securities or blue sky laws of the various states) is
required to be obtained by the Company for the sale of the
Securities being delivered at such Closing Time under the
Purchase Agreement, except for the order of the Commission
declaring the Registration Statement effective under the 1933
Act, which order has been obtained.
(d) At such Closing Time, the Representatives shall have
received the favorable opinion of Vinson & Elkins L.L.P., counsel for
the Underwriters, dated as of such Closing Time, with respect to the
incorporation of the Company, the validity of the Securities being
delivered at such Closing Time, the Registration Statement, the
Prospectus and such other related matters as the Representatives may
require. In giving their opinions required by subsections (c) and
(d), respectively, of this Section 5, Baker & Botts, L.L.P. and Vinson
& Elkins L.L.P. may rely, as to all matters governed by laws other
than the law of the State of Texas, the federal law of the United
States or the General Corporation Law of the State of Delaware, upon
the opinions of other counsel satisfactory to the Representatives.
Such counsel may also state that, insofar as such counsel's opinion
involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and certificates
of public officials. In giving such opinions, Baker & Botts, L.L.P.
and Vinson & Elkins L.L.P. shall each additionally state that they
have participated in conferences with officers and other
representatives of the Company, representatives of the independent
public accountants for the Company, representatives of the
Underwriters and other persons, at which conferences the contents of
the Registration Statement and the Prospectus and related matters were
discussed and, although such counsel are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus (except, in the case of Baker & Botts, L.L.P., as set forth
in paragraph (vii) of subsection (c) above) and have not made any
independent check or verification thereof, on the basis of the
foregoing (relying as to materiality to a large extent upon officers
and other representatives of the Company and upon the
Representatives), no facts have come to such counsel's attention that
lead them to believe that (A) the Registration Statement (including
documents incorporated by reference therein), at the time it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or (B) the Prospectus
(including documents incorporated by reference therein), at the time
it was issued or at such Closing Time, contained an untrue statement
of a material fact or omitted to state a material fact necessary to
make the statements therein, in light of the
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circumstances under which they were made, not misleading, except that
such counsel need not comment on the exhibits, financial statements,
schedules and other financial, reserve or statistical information
included in the Registration Statement or the Prospectus.
(e) At such Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary
course of business, and the Representatives shall have received a
certificate of the President or a Vice President of the Company and
the chief financial or chief accounting officer of the Company, dated
as of such Closing Time, to the effect that: (i) there has been no
such material adverse change, (ii) the representations and warranties
in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of such Closing Time, (iii)
the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
such Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and, to the best of each
such officer's knowledge, no proceedings for that purpose have been
initiated or threatened by the Commission. As used in this Section
5(e), the term "Prospectus" means the Prospectus in the form first
used to confirm sales of the Securities.
(f) At the time that this Agreement is executed by the
Company, the Representatives shall have received from Arthur Andersen
& Co. a letter, dated such date, in form and substance satisfactory to
the Representatives, confirming that they are independent public
accountants with respect to the Company and its subsidiaries within
the meaning of the 1933 Act and the 1933 Act Regulations, and stating
in effect that:
(i) in their opinion, the audited consolidated
financial statements and the related financial statement
schedules included in the Registration Statement comply as to
form in all material respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations;
(ii) on the basis of procedures (but not an audit
in accordance with generally accepted auditing standards)
consisting of a reading of the latest available unaudited
interim consolidated financial statements of the Company, a
reading of the minutes of all meetings of the stockholders and
directors of the Company and its subsidiaries and the Audit
and Compensation Committees of the Company's Board of
Directors from the date of the latest audited financial
statements of the Company and its subsidiaries, inquiries of
certain officials of the Company responsible for financial and
accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) any unaudited financial statements
included in the Registration Statement do not comply
as to form in all material respects with the
applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations or that such unaudited
financial statements are not presented in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of
audited financial statements referred to above,
except as disclosed in the notes to such unaudited
financial statements or as otherwise described in the
Registration Statement,
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(B) at a specified date not more than
five days prior to the date of this Agreement, there
was any change (other than as a result of issuance of
Common Stock related to employee stock options) in
the consolidated capital stock or any increase in the
consolidated long-term debt of the Company and its
subsidiaries or any decrease in the consolidated net
assets or common shareholders' equity of the Company
and its subsidiaries, in each case as compared with
amounts shown in the December 31, 1993 balance sheet
included in the Registration Statement, except in
each case for changes or decreases that the
Registration Statement discloses have occurred or may
occur, or
(C) for the period from January 1, 1994
to a specified date not more than five days prior to
the date of this Agreement, there was any decrease in
consolidated revenues, consolidated net income or
consolidated net income per share, in each case as
compared with the comparable period in the preceding
year, except in each case for any decreases that the
Registration Statement discloses have occurred or may
occur; and
(iii) in addition to the procedures referred to in
clause (ii) above, they have performed other specified
procedures, not constituting an audit, with respect to certain
amounts, percentages, numerical data and financial information
appearing in the Registration Statement, which have previously
been specified by the Representatives and which shall be
specified in such letter, and have compared certain of such
items with, and have found such items to be in agreement with,
the accounting and financial records of the Company and its
subsidiaries identified in such letter.
(g) At such Closing Time, the Representatives shall have
received from Arthur Andersen & Co. a letter, in form and substance
satisfactory to them and dated as of such Closing Time, to the effect
that they reaffirm the statements made in the letter furnished
pursuant to Section 5(f), except that the specified date referred to
shall be a date not more than five days prior to such Closing Time.
(h) The Securities to be delivered hereunder at such
Closing Time shall have been duly authorized for listing by the New
York Stock Exchange, subject only to official notice of issuance.
(i) The Company shall have furnished to the
Representatives and counsel for the Underwriters, in form and
substance satisfactory to the Representatives and to such counsel,
such other documents, certificates and opinions as such counsel may
reasonably request for the purpose of enabling such counsel to pass
upon the matters referred to in Section 5(d) hereof and in order to
evidence the accuracy and completeness of any of the representations,
warranties or statements, the performance of any covenant by the
Company theretofore to be performed, or the compliance with any of the
conditions in this Agreement.
If any of the conditions specified in this Section 5 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by you on notice to the Company at any time at or
prior to such Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4 hereof .
Notwithstanding any such termination, the provisions of Sections 6, 7 and 8
hereof shall remain in effect.
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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 the
information deemed to be a 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 contained in any preliminary prospectus
or the Prospectus (or amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) 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, any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever, insofar as such litigation,
investigation, proceeding or claim is based upon such untrue statement
or omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements
of counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, any
investigation or proceeding by a governmental agency or body,
commenced or threatened, or any claim whatsoever, insofar as such
litigation, investigation, proceeding or claim is based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii) above;
provided, however, that (A) the foregoing indemnity agreement shall not apply
to any loss, liability, claim, damage or expense to the extent it arises out of
any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto) and (B) such
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting such loss, liability, claim, damage or expense
purchased the Securities which are the subject thereof if such person did not
receive a copy of the Prospectus at or prior to the confirmation of the sale of
such Securities to such person in any case where such delivery is required by
the 1933 Act and the untrue statement or omission of a material fact contained
in such preliminary prospectus was corrected in the Prospectus, provided the
Company has delivered the Prospectus to the Underwriters on a timely basis to
permit the Prospectus to be sent or given.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who
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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 as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) 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
so to notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of any such action. If it so elects within a reasonable time
after receipt of such notice, an indemnifying party, jointly with any other
parties receiving such notice, may assume the defense of such action with
counsel chosen by it and approved by the indemnified parties defendant in such
action, unless such indemnified parties reasonably object to such assumption on
the ground that there may be legal defenses available to them which are
different from or in addition to those available to such indemnifying party. If
an indemnifying party assumes the defense of such action, the indemnifying
parties shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action. In no
event shall any indemnifying party be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own counsel
for all indemnified parties in connection with any one action, or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
SECTION 7.Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and one or more Underwriters, as incurred, in such
proportions that the Underwriters are responsible for that portion represented
by the percentage that the underwriting discount appearing on the cover page of
the Prospectus bears to the initial public offering price appearing thereon and
the Company is responsible for the balance; provided, however, that 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,
each person, if any, who controls an Underwriter within the meaning of Section
15 of the 1933 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, shall have the same
rights to contribution as the Company.
SECTION 8. Representations, Warranties, Agreements to Survive
Delivery. The representations, warranties, indemnities, agreements and other
statements of the Company or its officers set forth in or made pursuant to this
Agreement will remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Company or any Underwriter or
controlling person and will survive delivery of and payment for the Securities.
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Section 9. Termination of Agreement. (a) The Representatives may
terminate this Agreement, by notice to the Company at any time at or prior to a
Closing Time, (i) if there has been, since the date of this Agreement or the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets, or any outbreak of hostilities or escalation
thereof or other calamity or crisis, the effect of which is such as to make it,
in the judgment of the Representatives, impracticable to market the Securities
or enforce contracts for the sale of the Securities or (iii) if trading in the
Common Stock has been suspended by the Commission or if trading generally on
the New York Stock Exchange has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by such exchange or by order of the
Commission, or any other governmental authority or (iv) if a banking moratorium
has been declared by federal or New York authorities.
(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 4 hereof. Notwithstanding any such
termination, the provisions of Sections 6, 7 and 8 hereof shall remain in
effect.
(c) This Agreement may also terminate pursuant to the provisions
of Section 5 hereof, with the effect stated in such Section.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. (a) If
one or more of the Underwriters shall fail at either Closing Time to purchase
the Securities which it or they are obligated to purchase under this Agreement
and the Pricing Agreement (the "Defaulted Securities"), 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,
the Representatives shall not have completed such arrangements within such
24-hour period, then:
(i) if the number of Defaulted Securities does
not exceed 10% of the number of such Securities, the non-
defaulting Underwriters shall be obligated 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
(ii) if the number of Defaulted Securities exceeds
10% of the number of such Securities, this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriter.
(b) No action taken pursuant to this Section shall
relieve any defaulting Underwriter from liability in respect of its
default.
(c) In the event of any such default which does not
result in a termination of this Agreement, both the Representatives and the
Company shall have the right to postpone such Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
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SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to
the Underwriters shall be directed to the Representatives at Merrill Lynch
World Headquarters, North Tower, World Financial Center, New York, New York
10281-1201, attention of the Equity Syndicate Department; notices to the
Company shall be directed to it at 2600 Trammell Crow Center, 2001 Ross Avenue,
Dallas, Texas 75201, attention of ______________________ (telecopy no. (214)
969-2228).
SECTION 12. PARTIES. This Agreement and the Pricing Agreement
shall each 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 or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters and the
Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 hereof and their heirs
and legal representatives, any legal or equitable right, remedy or claim under
or in respect of this Agreement or the Pricing Agreement or any provision
herein or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole
and exclusive benefit of the Underwriters and the Company 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 Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW. This Agreement and the Pricing
Agreement 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 said
State, without giving effect to the principles of conflict of laws thereof.
SECTION 14. TIME. Specified times of day refer to New York City
time.
SECTION 15. COUNTERPARTS. This Agreement may be executed in one
or more counterparts and when a counterpart has been executed by each party,
all such counterparts taken together shall constitute one and the same
agreement.
SECTION 16. CONSENT AS TO COMPANY COUNSEL. The Underwriters
acknowledge that Baker & Botts, L.L.P., which will be acting as counsel to the
Company in connection with offer and sale of the Securities, also acts as
counsel from time to time to one or more of the Underwriters in connection with
unrelated matters. The Company and the Underwriters consent to such firm's so
acting as counsel to the Company.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
MESA INC.
By ___________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
AS OF THE DATE FIRST ABOVE WRITTEN:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
BY: MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By _____________________________________
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
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EXHIBIT A
23,000,000 SHARES
MESA INC.
(a Texas corporation)
COMMON STOCK
(Par Value $.01 Per Share)
PRICING AGREEMENT
_____________ , 1994
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
as Representatives of the several Underwriters
named in the within-mentioned Purchase
Agreement
c/o Merrill Lynch & Co.
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1201
Dear Sirs:
Reference is made to the Purchase Agreement dated ____________, 1994
(the "Purchase Agreement") relating to the purchase by the several Underwriters
named in Schedule A thereto, for whom Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co. Inc., PaineWebber
Incorporated and Salomon Brothers Inc are acting as representatives (the
"Representatives"), of the above shares of Common Stock (the "Securities"), of
MESA Inc., a Texas corporation (the "Company").
Pursuant to Section 2 of the Purchase Agreement, the Company agrees
with each Underwriter as follows:
1. The initial public offering price per share for the
Securities, determined as provided in said Section 2, shall be $_____.
2. The purchase price per share for the Securities to be
paid by the several Underwriters shall be $____, being an amount equal
to the initial public offering price set forth above less $____ per
share.
23
; provided that the purchase price per share for any Option Securities
(as defined in the Purchase Agreement) purchased upon exercise of the
over-allotment option described in Section 2(b) of the Purchase
Agreement shall be reduced by an amount per share equal to any
dividends declared by the Company and payable on the Initial
Securities (as defined in the Purchase Agreement) but not payable on
the Option Securities.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours,
MESA INC.
By __________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
AS OF THE DATE FIRST ABOVE WRITTEN:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
SALOMON BROTHERS INC
BY: MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By __________________________________________
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in the Purchase
Agreement.
-2-
24
SCHEDULE A
Number of
Initial Securities
Name of Underwriter to be Purchased
- ------------------- ------------------
Merrill Lynch, Pierce, Fenner & Smith Incorporated . . .
Bear, Stearns & Co. Inc. . . . . . . . . . . . . . . . .
PaineWebber Incorporated . . . . . . . . . . . . . . . .
Salomon Brothers Inc . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . 23,000,000
==========
Sch A - 1