Exhibit 1.1
Pogo Producing Company
Pogo Trust I
6.50% CUMULATIVE QUARTERLY INCOME CONVERTIBLE PREFERRED
SECURITIES, SERIES A (LIQUIDATION AMOUNT $50 PER QUIPS)
FULLY AND UNCONDITIONALLY GUARANTEED BY
POGO PRODUCING COMPANY, TO THE EXTENT SET FORTH IN
THE GUARANTEE BY, AND CONVERTIBLE INTO
THE COMMON STOCK, PAR VALUE $1.00
PER SHARE OF, POGO PRODUCING COMPANY
UNDERWRITING AGREEMENT
May 26, 1999
Goldman, Sachs & Co.,
Credit Suisse First Boston
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004
Ladies and Gentlemen:
Pogo Trust I, a Delaware business trust, (the "Trust"), and Pogo
Producing Company (the "Company") a Delaware corporation, as sponsor of the
Trust and as guarantor, propose, subject to the terms and conditions stated
herein, that the Trust issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 3,000,000 6.50% Cumulative Quarterly
Income Convertible Preferred Securities, Series A ("QUIPS"), representing
undivided beneficial interests in the assets of the Trust and with a liquidation
preference $50 per QUIPS (the "Securities"). The Securities are convertible
into common stock, par value $1.00 per share, of the Company ("Common Stock"),
including associated rights, and are guaranteed by the Company as to the payment
obligations of the Securities, to the extent set forth in a guarantee agreement
(the "Guarantee") between the Company and Wilmington Trust Company, as trustee
(the "Guarantee Trustee"). The proceeds of the sale of the Securities will be
invested by the Trust in 6.50% junior subordinated convertible debentures,
Series A due 2029 (the "Debentures") of the Company to be issued pursuant to an
indenture dated as of June 1, 1999 between the Company and Wilmington Trust
Company, as trustee under the Indenture (the "Indenture Trustee"), as
supplemented by Supplemental Indenture No. 1 (as so supplemented, the
"Indenture").
1. Each of the Company and the Trust represent and warrant to, and
agree with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File Nos.
333-75105; 333-75105-01 and 333-7501-02) (the "Initial Registration
Statement") in respect of the Securities, the shares of the Common Stock
issuable upon conversion thereof and the Debentures has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and amendments numbers 1 and 2 thereto and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or, to the best of the Company's knowledge,
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the
Act, including the preliminary prospectus supplement dated May 17, 1999,
are hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto (but excluding any
Forms T-1, as amended) and including (i) the information contained in
the form of final prospectus filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof and deemed
by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective and (ii)
the documents incorporated by reference in the prospectus contained in
the Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, each as amended at the time
such part of the Initial Registration Statement became effective or such
part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, as will be supplemented by
the final prospectus supplement thereto, is hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; and any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Initial Registration
Statement that is incorporated by reference in the Registration
Statement;
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act, and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman,
Sachs & Co. expressly for use therein;
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were
made not misleading; PROVIDED, HOWEVER, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the
Company by an Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(d) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein
not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and
in conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in
the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Registration Statement and
the Prospectus, there has not been any change in the capital stock
(other than changes in the ordinary course of business in the
issuance of shares of capital stock pursuant to the exercise of
outstanding stock options under the Company's stock option plans) or
long-term debt (except for changes in long-term debt that are not in
excess of $10 million in the aggregate) of the Company or any of its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus;
(f) 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 all requisite corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or be in good standing would not
result in a material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise (a "Material Adverse Effect"),
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction;
(g) The Trust has been duly formed and is validly existing as
a business trust in good standing under the laws of the state of
Delaware with all requisite trust powers and authority to own its
property and conduct its business as described in the Prospectus. The
Trust has conducted no business to date, other than as contemplated by
this Agreement and the Trust Agreement (as defined below), and it will
conduct no business in the future that would be inconsistent with the
description of the Trust set forth in the Prospectus; the Trust is not a
party to or bound by any agreement or instrument other than this
Agreement, the Declaration of Trust dated March 17, 1999 among the
Company, and the Trustees named therein, which will be amended and
restated as contemplated by the Prospectus (the "Trust Agreement"), and
any other agreements contemplated by the Trust Agreement; the Trust has
no liabilities or obligations other than those arising out of the
transactions contemplated by this Agreement, the Trust Agreement and as
described in the Prospectus; the Trust is not and will not based on
current law, be classified as an association taxable as a corporation
for United States federal income tax purposes; and the Trust is not a
party to or subject to any action, suit or proceeding of any nature;
(h) Each corporate "significant subsidiary" of the Company
(as such term is defined in Rule 1-02 of Regulation S-X) (each a
"Significant Subsidiary" and, collectively, the "Designated
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 to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing
of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect; 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 or shares representing an immaterial equity interest that are
required under the laws of any foreign jurisdiction to be owned by
others and except as otherwise set forth in the Prospectus) is owned by
the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity;
and none of the outstanding shares of capital stock of the Designated
Subsidiaries was issued in violation of any preemptive or similar rights
arising by operation of law, or under the charter or by-laws of any
Significant Subsidiary or under any agreement to which the Company or
any Significant Subsidiary is a party. The subsidiaries of the Company
other than Designated Subsidiaries, considered in the aggregate as a
single subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X;
(i) The Company has authorized, issued and outstanding
capital stock as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization," (except for subsequent
issues, if any, pursuant to employee or director benefit plans referred
to or referenced in documents incorporated by reference into the
Prospectus or pursuant to the exercise of convertible securities or
options referred to or incorporated by reference in the Prospectus) and
all of the issued shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and non-assessable;
the shares of Common Stock initially issuable upon conversion of the
Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the
provisions of the Securities, will be duly and validly issued, fully
paid and non-assessable and will conform in all material respects to the
description of the Common Stock contained in the Prospectus; and all of
the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and (except for directors' qualifying shares and except
as otherwise set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(j) The Securities have been duly and validly authorized by
the Trust Agreement and, when issued and delivered pursuant to this
Agreement, will have been duly issued and, subject to the qualifications
set forth herein, fully paid and non-assessable undivided beneficial
interests in the assets of the Trust (except to the extent otherwise
provided in Sections 3.12(c)(iv), 9.02 and 9.08 of the Trust Agreement)
and the Securities will conform in all material respects to the
description thereof in the Prospectus; the issuance of the Securities is
not subject to preemptive or other similar rights; the Securities will
have the rights set forth in the Trust Agreement; the Securityholders
will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware;
(k) The common securities of the Trust issued to the Company
(the "Trust Common Securities") have been duly and validly authorized by
the Trust Agreement and, when issued and delivered to the Company
against payment therefor as set forth in the Trust Agreement, will be
duly and validly issued and fully paid and non-assessable undivided
beneficial interests in the assets of the Trust and will conform in all
material respects to the description thereof contained in the
Prospectus; the issuance of the Common Trust Securities is not subject
to preemptive or other similar rights; and at the Time of Delivery (as
defined in Section 4 hereof), all of the issued and outstanding Common
Trust Securities will be directly or indirectly owned by the Company
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(l) The issue and sale of the Securities by the Trust, the
purchase of the Debentures by the Trust, the compliance by the Trust
with all of the provisions of this Agreement and the transactions
contemplated herein and in the Prospectus will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under (i) this Agreement or (ii) the Trust
Agreement;
(m) The issue and sale of the Securities and the Common Trust
Securities by the Trust, the issue by the Company of the Guarantee, the
issuance and sale by the Company of the Debentures, and the compliance
by each of the Trust and the Company with the provisions of this
Agreement, the Trust Agreement, the Debentures, the Indenture and the
Guarantee will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is 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 certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Guarantee or the Indenture, except
the registration under the Act of the Securities and the shares of
Common Stock issuable upon conversion thereof, the listing of the
Securities and the Common Stock issuable upon conversion of the
Securities on the New York Stock Exchange, such as have been obtained
under the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(n) Neither the Company nor any of its Significant
Subsidiaries is in violation of its Certificate of Incorporation or
By-laws or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound;
(o) The statements set forth in the Prospectus (1) under the
caption
"Description of the QUIPS", "Description of Capital Stock",
"Description of Debentures", and "Description of the Guarantee" insofar
as they purport to constitute a summary of the terms of the Securities
and the Common Stock, (2) under the caption "Federal Income Tax
Consequences", and under the caption "Underwriting," insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(p) Other than as set forth in the Prospectus (including the
Company's Form 10-K for the year ended December 31, 1998 and Form 10-Q
for the quarter ended March 31, 1999), there are no legal or
governmental proceedings pending to which the Trust, or the Company or
any of its subsidiaries is a party or of which any property of the Trust
or the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect on the
Trust or on the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others;
(q) The Debentures have been duly and validly authorized and,
when executed and authenticated pursuant to the Indenture, and issued
and delivered against payment therefor as contemplated by this Agreement
will be duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other
laws of general applicability relating to or affecting creditors' rights
and to general equity principles (regardless of whether such enforcement
is considered in a proceeding in equity or at law); the Indenture has
been fully and validly authorized by the Company, is qualified under,
and complies with, the Trust Indenture Act and, when duly executed and
delivered by the Company and the Trustee, will constitute a valid and
legally binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and the Debentures and
the Indenture will conform in all material respects with the
descriptions thereof contained in the Prospectus;
(r) The Guarantee has been duly and validly authorized by the
Company and, when executed and delivered by the Company as contemplated
by this Agreement, will have been duly executed, issued and delivered,
and will constitute a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and general equity principles (regardless of whether
such enforcement is considered in a proceeding in equity or at law); and
the guarantee conforms in all material respects with the description
thereof contained in the Prospectus;
(s) The Trust Agreement has been duly and validly authorized
by the Company, is qualified under, and complies with, the Trust
Indenture Act and when
validly executed and delivered by the Company and the trustees
thereto, will constitute a valid and legally binding obligation
of the Company, enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles (regardless
of whether such enforcement is considered in a proceeding in equity or
at law); and the Trust Agreement conforms in all material respects to
the description thereof contained in the Prospectus;
(t) Neither the Company nor the Trust is and, after giving
effect to the offering and sale of the Securities, will be an
"investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(u) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(v) The Company and its subsidiaries possess such permits,
licenses, approvals, consents and other authorizations (collectively,
"Governmental Licenses") issued by the appropriate federal, state, local
or foreign regulatory agencies or bodies necessary to conduct the
business now operated by them, except where the failure to possess such
Governmental Licenses, would not, singly or in the aggregate, have a
Material Adverse Effect; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to result in a Material
Adverse Effect;
(w) Each of the Company and its subsidiaries has
(i) satisfactory title to its oil and gas properties, except for any
defects in such title as would not reasonably be expected to have a
Material Adverse Effect, (ii) good and marketable title to all other
real property owned by it to the extent necessary to carry on its
business, and (iii) good and marketable title to all personal property
owned by it, in each case free and clear of all liens, encumbrances and
defects except such as are described or incorporated by reference in the
Prospectus or such as do not materially affect the value of the
properties of the Company and its subsidiaries, considered as one
enterprise, and do not interfere with the use made and proposed to be
made of such properties, by the Company and its subsidiaries, considered
as one enterprise; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries holds
properties described in the Prospectus, are in full force and effect,
and neither the Company nor
any of its subsidiaries has any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights
of the Company or its subsidiaries under any of the leases or
subleases mentioned above, or affecting or questioning the rights of
such the Company or any subsidiary thereof to the continued possession
of the leased or subleased premises under any such lease or sublease;
(x) Except as described in the Prospectus or except for such
matters as would not, singly or in the aggregate, result in a Material
Adverse Effect, (A) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any
judicial or administrative thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with
their requirements, (C) there are no pending or, to the knowledge of the
Company, threatened administrative, regulatory or judicial actions,
suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigation or proceedings relating to any Environmental
Law against the Company or its subsidiaries and (D) there are no events
or circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or
affecting the Company or its subsidiaries relating to Hazardous
Materials or Environmental Laws;
(y) Within the preceding six months, none of the Trust, the
Company or any other person acting on behalf of the Trust or the Company
(other than the Underwriters, as to whom the Company makes no
representation) has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Underwriters hereunder; and
(z) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder, including,
without limitation, Regulations G, T, U, and X of the Board of Governors
of the Federal Reserve System.
2. Subject to the terms and conditions herein set forth, (a) the
Trust and the Company agree that the Trust shall issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $50.00 per QUIPS, plus accrued
distributions, if any, from June 2, 1999 to the Time of Delivery hereunder, the
number of Securities set forth opposite the name of such Underwriter in Schedule
I hereto; and (b) as compensation to the Underwriters for their commitments
hereunder, and in view of the fact that the proceeds of the sale of the
Securities will be used by the Trust to purchase the Debentures of the Company,
the Company at the Time of Delivery will
pay to Goldman, Sachs & Co., for the accounts of the several Underwriters, an
amount equal to $1.50 per Security by wire transfer of Federal (same day)
funds for the Securities to be delivered by the Company hereunder at the Time
of Delivery.
3. Upon the authorization by you of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus.
4. (a) (i) The Securities to be purchased by each Underwriter
hereunder will be represented by one or more definitive global Securities in
book-entry form which will be deposited by or on behalf of the Trust with The
Depository Trust Company ("DTC") or its designated custodian. The Company
will deliver each of the global Securities to Goldman, Sachs & Co. for the
account of each Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the Trust's account at Bank of America, Dallas, Texas
(Account No. 375-0015-300) (ABA No. 111-0000-12), by causing DTC to credit
the Securities to the account of Goldman, Sachs & Co. at DTC. The Company
will cause the certificates representing the Securities to be made available
to Goldman, Sachs & Co. for checking at least twenty-four hours prior to the
Time of Delivery (as defined below) at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Securities, 9:30 a.m., New York City
time, on June 2, 1999 or such other time and date as Goldman, Sachs & Co. and
the Company may agree upon in writing. Such time and date for delivery of the
Securities is herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery
by or on behalf of the parties hereto pursuant to Section 7 hereof, including
the cross-receipt for the Securities and any additional documents requested
by the Underwriters pursuant to Section 7(l) hereof, will be delivered at the
offices of Baker & Botts, L.L.P., 910 Louisiana, Houston, Texas 77002 (the
"Closing Location"), and the Securities will be delivered at the office of
the DTC or its designated custodian (the "Designated Office") at the Time of
Delivery. A meeting will be held at the Closing Location at 2:00 p.m.,
Houston time, on the Houston Business Day next preceding the Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "Houston Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in Houston are generally authorized or
obligated by law or executive order to close.
5. The Trust and the Company jointly and severally agree with
each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and
to file such Prospectus pursuant to Rule 424(b) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior
to the Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or
sale of the Securities; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or prospectus,
of the suspension of the qualification of the Securities or the shares of
Common Stock issuable upon conversion of the Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus or suspending any such qualification, to promptly use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities and the shares of Common
Stock issuable upon conversion of the Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings therein
in such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(c) Prior to 8:00 a.m., Houston time, on the Houston
Business Day next succeeding the date of this Agreement and from time to
time, to furnish the Underwriters with copies of the Prospectus in New York
City in such quantities as you may reasonably request, and, if the delivery
of a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Prospectus in connection with the
offering or sale of the Securities and the shares of Stock issuable upon
conversion of the Securities and if at such time any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify you and upon your request to file such document and
to prepare and furnish without charge to each Underwriter and to any dealer
in securities as many copies as you may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with sales of
any of the Securities and the shares of Common Stock issuable upon conversion
of the Securities at any time nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such Underwriter, to
prepare and deliver to such Underwriter as many copies as you may request of
an amended or supplemented Prospectus complying with Section 10(a)(3) of the
Act;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months after
the effective date of the Registration Statement (as defined in Rule 158(c)),
an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules
and regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(e) During the period of 90 days from the date hereof, not
to sell, offer to sell, grant any option (excluding options granted under the
Company's long-term employee incentive plans) for the sale of, or otherwise
dispose of any Securities, Common Trust Securities or Debentures, any
security convertible into or exchangeable into or exercisable for, the
Securities, Common Trust Securities or the Debentures or any debt
substantially similar to the Debentures or any equity securities
substantially similar to the Securities or the Common Trust Securities
(except as issued hereunder) or any Common Stock (except shares of Common
Stock issuable upon the exercise of options granted under the Company's long
term incentive plans) or any security convertible into or exchangeable into
or exercisable for Common Stock or any equity security substantially similar
to the Common Stock, without your prior written consent;
(f) To furnish to the holders of the Securities as soon as
practicable after the end of each fiscal year an annual report (including a
balance sheet and statements of income, shareholders' equity and cash flows
of the Company and its consolidated subsidiaries certified by independent
public accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of two years from the effective date of
the Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver
to you as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which the Securities or any class of securities of the
Company is listed;
(h) If the Company and the Trust elect to rely upon Rule
462(b), the Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of
such fee pursuant to Rule 111(b) under the Act;
(i) To file with the Commission such information on Form
10-Q or Form 10-K as may be required by Rule 463 under the Act and such
information and exhibits on Form 8-K as may be required under the Act;
(j) To reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to satisfy any obligations to issue shares of its Common Stock upon
conversion of the Securities;
(k) To use reasonable best efforts to list, subject to
notice of issuance, the Securities and the shares of Common Stock issuable
upon conversion of the Securities on the New York Stock Exchange (the
"Exchange");
(l) To use the net proceeds received by it from the sale of
the Securities, in the
case of the Trust, and the Debentures, in the case of the Company, as
contemplated in this Agreement in the manner specified in the Prospectus as
amended or supplemented under the caption "Use of Proceeds"; and
(m) In the case of the Company, to issue and deliver the
Guarantee and the Debentures concurrently with the issuance and sale of the
Securities.
6. The Trust and the Company jointly covenant and agree with the
several Underwriters that they will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Company's and the Trust's
counsel and accountants in connection with the registration of the Securities
and the shares of Common Stock issuable upon conversion of the Securities
under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of reproducing any Agreement among Underwriters, this Agreement, the Trust
Agreement, the Indenture, the Blue Sky and Legal Investment Memoranda,
closing documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities and the shares of Common Stock issuable upon conversion of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the filing fees incident to,
and the fees and disbursements of counsel for the Underwriters in connection
with, any required review by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Securities; (vi) the cost of preparing
the Securities; (vii) the fees and expenses of the Trustee and any agent of
the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Securities; and (viii) all other costs
and expenses incident to the performance of its obligations hereunder which
are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees and expenses of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with
any offers they may make.
7. The obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company and the Trust herein are, at
and as of the Time of Delivery, true and correct, the condition that the
Company and the Trust shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) Vinson & Elkins L.L.P., counsel for the Underwriters,
shall have furnished to you such written opinion or opinions (a draft of each
such opinion is attached as Annex II(a) hereto), dated the Time of Delivery,
with respect to various matters as you may reasonably request, and such
counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Richards, Layton & Finger, special Delaware counsel to
the Trust and the Company, shall have furnished to you their written opinion
(a draft of such opinion is attached as Annex II(b) hereto), dated the Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act, and, under the Trust Agreement and
the Delaware Business Trust Act, has the trust power and
authority to own its properties and conduct its business as
described in the Prospectus; and all filings required under the
laws of Delaware with respect to the creation and valid
existence of the Trust as a business trust have been made;
(ii) The Trust Agreement constitutes a valid and
binding obligation of the Company and the trustees thereto;
enforceable against the Company and the trustees thereof in
accordance with its terms; and the Securities have the rights
set forth in the Trust Agreement subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iii) Under the Trust Agreement and the Delaware
Business Trust Act, the Trust has the trust power and authority
to (a) execute and deliver, and to perform its obligations
under this Agreement and (b) issue and perform its obligations
under the Securities and the Common Trust Securities;
(iv) The execution and delivery by the Trust of this
Agreement, and the performance by the Trust of its obligations
hereunder, have been duly authorized by all necessary action on
the part of the Trust and this Agreement has been duly
authorized, executed and delivered by the Trust;
(v) The Securities have been duly authorized and
validly issued; the Common Trust Securities have been duly and
validly authorized by the Trust and are duly and validly issued
and, subject to the qualifications set forth herein, fully paid
and non-assessable beneficial interests in the assets of the
Trust; the holders of such Securities, as beneficial owners of
the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State
of Delaware; provided that such counsel may note that such
holders may be obligated, pursuant to the Trust Agreement, to
(a) provide indemnity and/or security in connection with and
pay taxes or governmental charges arising from transfers or
exchanges of certificates and (b) provide security and
indemnity in connection with requests of or directions to the
Trustees to exercise its rights and powers under the Trust
Agreement;
(vi) Under the Trust Agreement and the Delaware
Business Act, the issuances of the Securities and the Common
Trust Securities are not subject to preemptive or other similar
rights;
(vii) No authorization, approval, consent or order of
any Delaware court or Delaware governmental authority or agency
is required to be obtained by the Trust solely in connection
with the issuance and sale of the securities and the common
securities; and
(viii) The holders of the Securities (other than those
holders who reside or are domiciled in the State of Delaware)
will have no liability for income taxes imposed by the State of
Delaware solely as a result of their participation in the
Trust, and the Trust will not be liable for any income tax
imposed by the State of Delaware.
(d) Baker & Botts, L.L.P., counsel for the Company and the
Trust, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(d) hereto), dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(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, with corporate power and
authority to own its properties and conduct its business as
described in the Prospectus;
(ii) This Agreement has been duly authorized,
executed and delivered by the Company;
(iii) The Guarantee and the Debentures have been duly
authorized, executed and issued by the Company and (assuming
the due authentication thereof by the Trustee in accordance
with the terms of the Indenture) when delivered and paid for in
accordance with the terms of the Underwriting Agreement, will
constitute valid and legally binding obligations of the
Company; the Debentures are entitled to the benefits provided
by the Indenture; and the Guarantee, the Debentures and the
Indenture conform as to legal matters in all material respects
to the descriptions thereof in the Prospectus;
(iv) The Indenture has been duly authorized, executed
and delivered by the Company and constitutes a valid and
legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and the
Indenture has been duly qualified under the Trust Indenture Act;
(v) No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body is required for the issue and sale
of the Securities being issued at the Time of Delivery or the
consummation by the Company of the transactions contemplated by
this Agreement, the Guarantee, or the Indenture, except such as
have been obtained under the Act and the Trust Indenture Act,
such as may be required under the Act in connection with the
shares of Stock issuable upon conversion of the Securities and
such consents, approvals,
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Securities by the
Underwriters;
(vi) The statements set forth in the Prospectus under
the caption "Description of the Debentures" "Description of
Capital Stock" and "Description of the QUIPS," insofar as they
purport to describe legal matters, fairly present in all
material respects the matters set forth therein;
(vii) The Company is not an "investment company" or an
entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act; and
(viii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than (a) the
financial statements and related schedules therein, including
the notes thereto and the auditor's report thereon, (b) the
summary reserve report of Ryder Scott Petroleum Engineers
contained therein, (c) the other financial and reserve
information included or incorporated by reference therein and
(d) the exhibits thereto, as to which such counsel need express
no opinion) appeared on the face thereof as of the effective
date of the Registration Statement to be appropriately
responsive in all material respects to the requirements of the
Act and the rules and regulations thereunder; although they do
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus, except to the extent stated in
paragraph (vi) of this Section 7(d), no facts have come to such
counsel's attention which lead such counsel to believe that as
of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to the Time
of Delivery (other than (a) the financial statements and
related schedules therein, including the notes thereto and the
auditor's report thereon, (b) the summary reserve report of
Ryder Scott Petroleum Engineers contained therein, (c) the
other financial and reserve information included or
incorporated by reference therein and (d) the exhibits thereto,
as to which such counsel need not comment) 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 that, as of its date, the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than (a)
the financial statements and related schedules therein,
including the notes thereto and the auditor's report therein,
(b) the summary reserve report of Ryder Scott Petroleum
Engineers contained therein, (c) the other financial and
reserve information included or incorporated by reference
therein and (d) the exhibits thereto, as to which such counsel
need not comment) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading, and they do not know of
any contracts or other documents of a character required to be
filed as an exhibit to the Registration Statement or required
to be incorporated by reference into the Prospectus or required
to be described in the Registration Statement or the Prospectus
which are not filed or incorporated by reference or described.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States, the laws of the State of New York and the General Corporation
Law of the State of Delaware.
(e) Baker & Botts, L.L.P., special tax counsel for the
Company and the Trust, shall have furnished to you their written opinion,
dated the First Time of Delivery, in form and substance satisfactory to you,
to the effect that such firm confirms its opinion set forth in the final
supplemental prospectus under the caption "Federal Income Tax Consequences."
(f) Gerald A. Morton, Vice President - Law and Corporate
Secretary of the Company, shall have furnished to you his written opinion (a
draft of such opinion is attached as Annex 11(e) hereto), dated the Time of
Delivery, in form and substance satisfactory to you to the effect that:
(i) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
and the shares of Common Stock initially issuable upon
conversion of the Securities have been duly and validly
authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Securities,
will be duly and validly issued and fully paid and
non-assessable, and will conform in all material respects to
the description of the Common Stock contained in the
Prospectus;
(ii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties or conducts any business so as to
require such qualification or except where any such failure to
qualify would not have a Material Adverse Effect;
(iii) Each Significant Subsidiary of the Company has
been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and
issued, are fully paid and validly xand (except for directors'
qualifying shares or shares representing an immaterial equity
interest that are required under the laws of any foreign
jurisdiction to be owned by others and except as otherwise set
forth in the Prospectus) are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances,
equities or claims (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(iv) The issuance of the Guarantee and the Debentures
at the Time of Delivery and the compliance by the Company with
all of the provisions of the Guarantee and the Debentures, the
Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of
its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of
its subsidiaries is subject, nor will such actions result in
any violation of the provisions of the Restated Certificate of
Incorporation or Amended and Restated By-laws of the Company
or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties;
(v) To his knowledge, there are no legal or
governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to such counsel's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) Neither the Company nor any of its subsidiaries
is in violation of its certificate of incorporation or by-laws
or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it
or any of its properties may be bound;
(vii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the
financial statements and related schedules therein, as to which
such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may
be, complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder; and he
has no reason to believe that any of such documents, when such
documents became effective or were so filed, as the case may
be, contained, in the case of a registration statement which
became effective under the Act, 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, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and
(viii) The Registration Statement and the Prospectus
and any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
Trust Indenture Act and the rules and regulations thereunder;
although they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus, he has no
reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by
the Company prior to the Time of Delivery (other than the
financial statements and related schedules
therein, as to which such counsel need express no opinion) 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 that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company prior to the
Time of Delivery (other than the financial statements and related
schedules therein and the Forms T-1; as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein and the Forms T-1, in the light of the circumstances under which
they were made, not misleading or that, as of the Time of Delivery,
either the Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein and the Forms T-1, in the light
of the circumstances under which they were made, not misleading; and
they do not know of any amendment to the Registration Statement required
to be filed or of any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus or required
to be described in the Registration Statement or the Prospectus which
are not filed or incorporated by reference or described as required.
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than the federal laws of the
United States, the laws of the State of New York and the General Corporation Law
of the State of Delaware, except with respect to the matters set forth in (i),
(ii) and (iii) of this Section 7(f).
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at the Time of Delivery, Arthur Andersen LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of the Time of Delivery is
attached as Annex I(b) hereto");
(h) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being issued at the Time of Delivery on the terms and
in the manner contemplated in the
Prospectus;
(i) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(j) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York or Texas State authorities; or (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of the Underwriters makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being issued at the Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(k) The shares of Common Stock issuable upon conversion of the
Securities will be duly listed, subject to notice of issuance, on the New York
Stock Exchange;
(l) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the Houston
Business Day next succeeding the date of this Agreement;
(m) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of the Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to the Time of
Delivery, as to the matters set forth in subsections (a) and (e) of this Section
and as to such other matters as you may reasonably request; and
(n) During a period of 90 days from the date hereof, the Company and
the Trust will not, without the prior written consent of Goldman, Sachs & Co.,
sell, offer to sell, grant any option (excluding options granted under the
Company's long-term employee incentive plans) for the sale of, or otherwise
dispose of any Securities, Common Trust Securities or Debentures, any security
convertible into or exchangeable into or exercisable for, the Securities, Common
Trust Securities or the Debentures or any debt substantially similar to the
Debentures or any equity securities substantially similar to the Securities or
the Common Trust Securities (except as issued hereunder) or any Common Stock
(except shares of Common Stock issuable upon the exercise of options granted
under the Company's long term incentive plans) or any security convertible into
or exchangeable into or exercisable for Common Stock or any equity security
substantially similar to the Common Stock; and the Company shall have obtained a
written undertaking, for delivery to the Underwriters, signed by each director
and officer of the Company stating that such officer or director has agreed to
be bound by this provision.
8. (a) The Company and the Trust will jointly and severally
indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; PROVIDED,
HOWEVER, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through Goldman, Sachs & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company and
the Trust against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through Goldman, Sachs
& Co. expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability arising
out of such action 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) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Trust on the one hand and the
Underwriters on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Trust on the one hand and the Underwriters on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the Trust on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Trust bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Trust on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) 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 subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company and the Trust under this Section 8
shall be in addition to any liability which the Company and the Trust may
otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and
the Trust (including any person who, with his or her consent, is named in the
Registration Statement as about to become a director of the Company) and to
each person, if any, who controls the Company or the Trust within the meaning
of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein at a Time of Delivery. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Securities, then the Company and the Trust shall be
entitled to a further period of thirty-six hours within which to procure another
party or other parties satisfactory to you to purchase such Securities on such
terms. In the event that, within the respective prescribed periods, you notify
the Company and the Trust that you have so arranged for the purchase of such
Securities, or the Company or the Trust notifies you that it has so arranged for
the purchase of such Securities, you or the Company or the Trust shall have the
right to postpone the Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company or the Trust as provided in subsection (a) above, the aggregate number
of such Securities which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Securities to be purchased at the Time of Delivery,
then the Company and the Trust shall have the right to require each
non-defaulting Underwriter to purchase the number of Securities which such
Underwriter agreed to purchase hereunder at the Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Securities which such Underwriter agreed to
purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company or the Trust as provided in subsection (a) above, the aggregate number
of Securities which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Securities to be purchased at the Time of Delivery, or if the
Company or the Trust shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Securities of a
defaulting Underwriter or Underwriters, then this Agreement shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter, the
Company or the Trust, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Trust and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, the Company or the Trust, or any officer or director or controlling
person of the Company or the Trust, and shall survive delivery of and payment
for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, the Company and the Trust shall not then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any other
reason, any Securities are not delivered by or on behalf of the Trust as
provided herein, the Company and the Trust will jointly and severally reimburse
the Underwriters through you for all out-of-pocket expenses approved in writing
by you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities, but the Company shall then be under no further liability to any
Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
Underwriters.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the Underwriters in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention: Registration
Department; if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary and if to the Trust shall be
delivered or sent by mail, telex or facsimile transmission to (713) 297-4970;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 8(c)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Company by you upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Trust, the Company and, to the extent provided
in Sections 8 and 10 hereof, the officers and directors of the Company and each
person who controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business, unless otherwise specified.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us one for the Company, the Trust and each of the Underwriters
plus one for each counsel counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
POGO TRUST I
BY: _____________________________
NAME:
TITLE:
POGO PRODUCING COMPANY
BY: _____________________________
NAME:
TITLE:
ACCEPTED AS OF THE DATE HEREOF:
GOLDMAN, SACHS & CO.
CREDIT SUISSE FIRST BOSTON CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
BY: _____________________________
(GOLDMAN, SACHS & CO.)
SCHEDULE I
NUMBER OF
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ----------
Goldman, Sachs & Co. 1,950,000
Credit Suisse First Boston 525,000
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 525,000
Total
3,000,000
ANNEX I
DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
prospective financial statements and/or pro forma financial information)
examined by them and included or incorporated by reference in the
Registration Statement or the Prospectus comply as to form in all
material respects with the applicable accounting requirements of the Act
or the Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies
of which have been [SEPARATELY] furnished to the representatives of the
Underwriters (the "Representatives")[AND ARE ATTACHED HERETO];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statement of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form
10-Q incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which [HAVE BEEN SEPARATELY FURNISHED TO THE
REPRESENTATIVES][ARE ATTACHED HERETO]; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in the related in all
material respects with the applicable accounting requirements of the
[ACT AND THE EXCHANGE] Act and the related published rules and
regulations, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable
accounting requirements of the [ACT AND THE EXCHANGE] Act and the
related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by
reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated
financial statements for such five fiscal years which were included
or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Company and
its subsidiaries 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) (i) the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus
and/or included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Exchange Act and
the related published rules and regulations, or (ii) any material
modifications should be made to the unaudited consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data
and balance sheet items included in the Prospectus
and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the
audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for
the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes in
the consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders'
equity or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except
in each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in the
Prospectus to the specified date referred to in clause (E) there
were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net
income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each
case as compared with the comparable period of the preceding year
and with any other period of corresponding length specified by
the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards,
with respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the
Company and its subsidiaries and have found them to be in agreement.