EXECUTION COPY
================================================================================
EXHIBIT 4.1
Pogo Producing Company
$200,000,000
8 1/4% Senior Subordinated Notes Due 2011
Purchase Agreement
================================================================================
TABLE OF CONTENTS
SECTION 1. Representations and Warranties............................................................... 2
---------- ------------------------------
(a) Representations and Warranties by the Company................................................ 2
--- ---------------------------------------------
(i) Similar Offerings...................................................................... 2
--- -----------------
(ii) Offering Memorandum.................................................................... 2
---- -------------------
(iii) Incorporated Documents................................................................ 2
----- ----------------------
(iv) Independent Accountants................................................................ 2
---- -----------------------
(v) Financial Statements................................................................... 3
--- --------------------
(vi) No Material Adverse Change in Business................................................. 3
---- --------------------------------------
(vii) Good Standing of the Company.......................................................... 3
----- ----------------------------
(viii) Good Standing of Designated Subsidiaries............................................. 3
------ ----------------------------------------
(ix) Capitalization......................................................................... 4
---- --------------
(x) Authorization of Agreement............................................................. 4
--- --------------------------
(xi) Authorization of the Indenture......................................................... 4
---- ------------------------------
(xii) Authorization of the Securities....................................................... 4
----- -------------------------------
(xiii) Description of the Securities and the Indenture...................................... 4
------ -----------------------------------------------
(xiv) Absence of Defaults and Conflicts.................................................... 4
----- ---------------------------------
(xv) Absence of Labor Dispute.............................................................. 5
---- ------------------------
(xvi) Absence of Proceedings............................................................... 5
----- ----------------------
(xvii) Absence of Further Requirements...................................................... 5
------ -------------------------------
(xviii) Possession of Licenses and Permits.................................................. 5
------- ----------------------------------
(xix) Title to Property.................................................................... 5
----- -----------------
(xx) Environmental Laws.................................................................... 6
---- ------------------
(xxi) Investment Company Act............................................................... 6
----- ----------------------
(xxii) Rule 144A Eligibility................................................................ 6
------ ---------------------
(xxiii) No General Solicitation............................................................. 6
------- -----------------------
(xxiv) No Registration Required............................................................ 6
------ ------------------------
(xxv) Reporting Company.................................................................... 7
----- -----------------
(b) Officer's Certificates....................................................................... 7
--- ----------------------
SECTION 2. Sale and Delivery to Initial Purchaser; Closing.............................................. 7
---------- -----------------------------------------------
(a) Securities................................................................................... 7
--- ----------
(b) Payment...................................................................................... 7
--- -------
(c) Qualified Institutional Buyer................................................................ 7
--- -----------------------------
(d) Denominations; Registration.................................................................. 7
--- ---------------------------
SECTION 3. Covenants of the Company..................................................................... 7
---------- ------------------------
(a) Offering Memorandum.......................................................................... 7
--- -------------------
(b) Notice and Effect of Material Events......................................................... 7
--- ------------------------------------
(c) Amendment to Offering Memorandum and Supplements............................................. 8
--- ------------------------------------------------
(d) Qualification of Securities for Offer and Sale............................................... 8
--- ----------------------------------------------
(e) Rating of Securities......................................................................... 8
--- --------------------
(f) DTC.......................................................................................... 8
--- ---
(g) Use of Proceeds.............................................................................. 8
--- ---------------
(h) Restriction on Sale of Securities............................................................ 8
--- ---------------------------------
(i) PORTAL Designation........................................................................... 8
--- ------------------
(j) Reporting Requirements....................................................................... 8
--- ----------------------
SECTION 4. Payment of Expenses.......................................................................... 9
---------- -------------------
(a) Expenses..................................................................................... 9
--- --------
(b) Termination of Agreement..................................................................... 9
--- ------------------------
SECTION 5. Conditions of the Initial Purchaser's Obligations............................................ 9
---------- -------------------------------------------------
(a) Opinions of Counsel for Company.............................................................. 9
--- -------------------------------
(b) Opinion of Counsel for the Initial Purchaser................................................. 9
--- --------------------------------------------
(c) Officers' Certificate........................................................................ 9
--- ---------------------
(d) Accountant's Comfort Letter.................................................................. 10
--- ---------------------------
(e) Bring-down Comfort Letter.................................................................... 10
--- -------------------------
(f) Maintenance of Ratings....................................................................... 10
--- ----------------------
-i-
(g) PORTAL....................................................................................... 10
--- ------
(h) Additional Documents......................................................................... 10
--- --------------------
(i) Termination of Agreement..................................................................... 10
--- ------------------------
SECTION 6. Subsequent Offers and Resales of the Securities.............................................. 10
---------- -----------------------------------------------
(a) Offer and Sale Procedures.................................................................... 10
--- -------------------------
(i) Offers and Sales only to Qualified Institutional Buyers................................ 10
--- -------------------------------------------------------
(ii) No General Solicitation................................................................ 11
---- -----------------------
(iii) Purchases by Non-Bank Fiduciaries..................................................... 11
----- ---------------------------------
(iv) Subsequent Purchaser Notification...................................................... 11
---- ---------------------------------
(v) Minimum Principal Amount............................................................... 11
--- ------------------------
(vi) Restrictions on Transfer............................................................... 11
---- ------------------------
(vii) Delivery of Offering Memorandum....................................................... 11
----- -------------------------------
(b) Covenants of the Company..................................................................... 11
--- ------------------------
(i) Due Diligence.......................................................................... 11
--- -------------
(ii) Rule 144A Information.................................................................. 12
---- ---------------------
(iii) Restriction on Repurchases............................................................ 12
----- --------------------------
SECTION 7. Indemnification.............................................................................. 12
---------- ---------------
(a) Indemnification of Initial Purchaser......................................................... 12
--- ------------------------------------
(b) Indemnification of Company, Directors and Officers........................................... 12
--- --------------------------------------------------
(c) Actions against Parties; Notification........................................................ 13
--- -------------------------------------
(d) Settlement without Consent if Failure to Reimburse........................................... 13
--- --------------------------------------------------
SECTION 8. Contribution................................................................................. 13
---------- ------------
SECTION 9. Representations, Warranties and Agreements to Survive Delivery............................... 14
---------- --------------------------------------------------------------
SECTION 10. Termination of Agreement..................................................................... 14
----------- ------------------------
(a) Termination; General......................................................................... 14
--- --------------------
(b) Liabilities.................................................................................. 15
--- -----------
SECTION 11. [Intentionally Omitted]...................................................................... 15
----------- -----------------------
SECTION 12. Notices...................................................................................... 15
----------- -------
SECTION 13. Parties...................................................................................... 15
----------- -------
SECTION 14. Governing Law and Time....................................................................... 15
----------- ----------------------
SECTION 15. Effect of Headings........................................................................... 15
----------- ------------------
-ii-
$200,000,000
Pogo Producing Company
(A Delaware Corporation)
8 1/4% Senior Subordinated Notes Due 2011
Purchase Agreement
------------------
April 4, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Pogo Producing Company, a Delaware corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (the "Initial Purchaser"), with respect to the issue
and sale by the Company and the purchase by the Initial Purchaser of
$200,000,000 aggregate principal amount of the Company's Senior Subordinated
Notes due 2011 (the "Securities"). The Securities are to be issued pursuant to
an indenture to be dated as of April 10, 2001 (the "Indenture") between the
Company and ▇▇▇▇▇ Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"). The Securities will be issued in book-entry form only and registered
in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC")
pursuant to a letter agreement, to be dated on or before the Closing Time (as
defined in Section 2(b)) (the "DTC Agreement"), among the Company, the Trustee
and DTC.
The Company understands that the Initial Purchaser proposes to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchaser may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers ("Subsequent
Purchasers") at any time after this Agreement has been executed and delivered.
The Securities are to be offered and sold through the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities
and the Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A ("Rule
144A") of the rules and regulations promulgated under the 1933 Act by the
Securities and Exchange Commission (the "Commission")).
The Company has prepared and will deliver to the Initial Purchaser, not
later than the second succeeding day, copies of a final offering memorandum
dated April 4, 2001 (the "Final Offering Memorandum"), for use by the Initial
Purchaser in connection with its solicitation of purchases of, or offering of,
the Securities. "Offering Memorandum" means, with respect to any date or time
referred to in this Agreement, the Final Offering Memorandum, as amended or
supplemented, including exhibits thereto and any documents incorporated therein
by reference, which has been prepared and delivered by the Company to the
Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be
deemed to mean and include all such financial statements and schedules and other
information which are incorporated by reference in the Offering Memorandum; and
all references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act") which is
incorporated by reference in the Offering Memorandum.
The Initial Purchaser and other holders (including subsequent
transferees) of Securities will be entitled to the benefits of the registration
rights agreement, to be dated as of the Closing Time (the "Registration Rights
Agreement") among the Company and the Initial Purchaser, in the form attached
hereto as Exhibit B. Pursuant to the Registration Rights Agreement, subject to
the terms and conditions thereof, the Company will agree, among other things, to
file with the Commission a registration statement pursuant to the 1933 Act in
connection with an offer to exchange the Securities for securities having
substantially identical terms as the Securities, and to effect such exchange
offer, or, in certain circumstances, to file a registration statement pursuant
to Rule 415 under the 1933 Act to permit the resale of the Securities.
SECTION 1 Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to the Initial Purchaser as of the date hereof and as of
the Closing Time referred to in Section 2(b) hereof, and agrees with the Initial
Purchaser as follows:
(i) Similar Offerings. Neither the Company nor any of its
-----------------
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
(each, an "Affiliate"), has, directly or indirectly, solicited any
offer to buy, sold or offered to sell or otherwise negotiated in
respect of, or will solicit any offer to buy, sell or offer to sell or
otherwise negotiate in respect of, in the United States or to any
United States citizen or resident, any security which is or would be
integrated with the sale of the Securities in a manner that would
require the Securities to be registered under the 1933 Act.
(ii) Offering Memorandum. The Offering Memorandum does not,
-------------------
and at the Closing Time will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided that this
representation, warranty and agreement shall not apply to statements in
or omissions from the Offering Memorandum made in reliance upon and in
conformity with information furnished to the Company in writing by the
Initial Purchaser expressly for use in the Offering Memorandum.
(iii) Incorporated Documents. The Offering Memorandum as
----------------------
delivered from time to time shall incorporate by reference the most
recent Annual Report of the Company on Form 10-K filed with the
Commission and each Quarterly Report of the Company on Form 10-Q and
each Current Report of the Company on Form 8-K filed with the
Commission since the filing of the end of the fiscal year to which such
Annual Report relates, together with any amendment to each such report.
The documents incorporated or deemed to be incorporated by reference in
the Offering Memorandum at the time they were or hereafter are filed
with the Commission complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of
the Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Offering Memorandum, at the
time the Offering Memorandum is issued and at the Closing Time, do not
and will not include 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 the light of the circumstances under
which they were made, not misleading.
(iv) Independent Accountants. The accountants who certified
-----------------------
the financial statements and supporting schedules included in the
Offering Memorandum are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of
Regulation S-X under the 1933 Act.
(v) Financial Statements. The financial statements,
--------------------
together with the related schedules and notes, included in the Offering
Memorandum present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
-2-
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included in the
Offering Memorandum present fairly in accordance with GAAP the
information required to be stated therein. The pro forma financial
statements of the Company and its subsidiaries and the related notes
thereto included in the Offering Memorandum present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(vi) No Material Adverse Change in Business. Since the
--------------------------------------
respective dates as of which information is given in the Offering
Memorandum, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business (a "Material Adverse Effect"), (B)
there have been no transactions entered into by the Company or its
subsidiaries, other than those in the ordinary course of business,
which are material with respect to the Company and its subsidiaries
considered as one enterprise, and (C) except for the $0.03 per share
regular quarterly dividends on the common stock, par value $1.00 per
share, of the Company (the "Common Stock"), there has been no dividend
or distribution of any kind declared, paid or made by the Company on
any class of its capital stock.
(vii) Good Standing of the Company. The Company has been
----------------------------
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has corporate
power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Memorandum and to
enter into and perform its obligations under this Agreement; and the
Company is duly qualified as a foreign corporation to transact business
and is in good standing in each other jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(viii) Good Standing of Designated Subsidiaries. Each
----------------------------------------
corporate "significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X) (each a "Designated Subsidiary"
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 Offering Memorandum and is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the Offering Memorandum, all of the
issued and outstanding capital stock of each Designated Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and (except for directors' qualifying shares or shares
representing an immaterial equity interest that are required under the
laws of any foreign jurisdiction to be owned by others) is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, 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 Designated Subsidiary or under any agreement to which
the Company or any Designated 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.
(ix) Capitalization. The authorized, issued and
--------------
outstanding capital stock of the Company is as set forth in the
Offering Memorandum in the column entitled "Actual" under the caption
"Capitalization" (except as indicated in the notes thereto with respect
to the subsequent issuances in connection with the acquisition of North
Central Oil Corporation and for subsequent issuances, if any, pursuant
to employee or director benefit plans referred to in the Offering
Memorandum or pursuant to the exercise of convertible securities or
options referred to in the Offering Memorandum). The shares of issued
and outstanding
-3-
capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, and none of the
outstanding shares of capital stock of the Company was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(x) Authorization of Agreement. This Agreement has been
--------------------------
duly authorized, executed and delivered by the Company.
(xi) Authorization of the Indenture. The Indenture has
------------------------------
been duly authorized by the Company and, at the Closing Time, will have
been duly executed and delivered by the Company and will (assuming due
authorization, execution and delivery by the Trustee) constitute a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement
of creditors' rights generally, or by general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xii) Authorization of the Securities. The Securities
-------------------------------
have been duly authorized and, at the Closing Time, the global
certificate representing the Securities will have been duly executed by
the Company and, when such global certificate has been authenticated in
the manner provided for the Indenture and the Securities have been
delivered through the facilities of DTC against payment of the purchase
price therefor as provided in this Agreement, the Securities will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers) reorganization, moratorium or other similar laws relating to
or affecting enforcement of creditors' rights generally, or by general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(xiii) Description of the Securities and the Indenture.
-----------------------------------------------
The Securities and the Indenture will conform in all material respects
to the respective statements relating thereto contained in the Offering
Memorandum and will be in substantially the respective forms previously
delivered to the Initial Purchaser.
(xiv) Absence of Defaults and Conflicts. Neither the
---------------------------------
Company nor any of its subsidiaries is in violation of its charter, by-
laws or other governing documents, as applicable, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or its subsidiaries is a party or by
which any of them may be bound, or to which any of the property or
assets of the Company or its subsidiaries is subject (collectively,
"Agreements and Instruments") except for such violations or defaults
that have not resulted or would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement,
the Indenture and the Securities and any other agreement or instrument
entered into or issued or to be entered into or issued by the Company
in connection with the transactions contemplated hereby or thereby or
in the Offering Memorandum (including the Registration Rights
Agreement) and the consummation of the transactions contemplated herein
and therein and in the Offering Memorandum (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Offering Memorandum under the caption
"Use of Proceeds") and compliance by the Company with its obligations
hereunder have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or a Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or its subsidiaries pursuant to, the
Agreements and Instruments except for such conflicts, breaches or
defaults or liens, charges or encumbrances that, singly or in the
aggregate, have not resulted or would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions
of the charter, by-laws or other governing documents of the Company or
its subsidiaries or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or its subsidiaries or any of their assets or properties.
As
-4-
used herein, a "Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right
to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or its subsidiaries. No default, or
condition that with notice or lapse of time or both would constitute a
default, exists with respect to any agreement or obligation that would
constitute "Senior Indebtedness" within the meaning of the Indenture.
(xv) Absence of Labor Dispute. No labor dispute with the
------------------------
employees of the Company or its subsidiaries exists or, to the
knowledge of the Company, is imminent, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xvi) Absence of Proceedings. Except as disclosed in the
----------------------
Offering Memorandum, there is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened, against or
affecting the Company or any subsidiary thereof which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated by this Agreement
(including the transactions contemplated by the Registration Rights
Agreement) or the performance by the Company of its obligations
hereunder.
(xvii) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or Governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement (including the transactions
contemplated by the Registration Rights Agreement), except such as have
been already obtained or as may be required under federal securities
laws in connection with the Registration Rights Agreement and under
state securities or "blue sky" laws of any jurisdiction.
(xviii) Possession of Licenses and Permits. The Company and
----------------------------------
its subsidiaries possess such permits, licenses, approvals, consents
and other authorizations (collectively, "Governmental Licenses") issued
by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them,
except where the failure to possess such Governmental 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 where 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.
(xix) Title to Property. Each of the Company and its
-----------------
subsidiaries has (i) generally satisfactory title to its oil and gas
properties, title investigations having been carried out by the Company
in accordance with the practice in the oil and gas industry in the
areas in which the Company operates, (ii) good and marketable title to
all other real property owned by it to the extent necessary to carry on
its business, and (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 Offering Memorandum 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 Offering Memorandum, 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
-5-
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.
(xx) Environmental Laws. Except as described in the Offering
------------------
Memorandum and except for such matters as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are no
events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or Environmental Laws.
(xxi) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) Rule 144A Eligibility. The Securities are eligible for
---------------------
resale pursuant to Rule 144A and will not be, at the Closing Time, of
the same class as securities listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a U.S.
automated interdealer quotation system.
(xxiii) No General Solicitation. None of the Company, its
-----------------------
Affiliates or any person acting on its or any of their behalf (other
than the Initial Purchaser, as to whom the Company makes no
representation) has engaged or will engage, in connection with the
offering of the Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the 1933
Act.
(xxiv) No Registration Required. Subject to compliance by the
------------------------
Initial Purchaser with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchaser and to each Subsequent Purchaser in
the manner contemplated by this Agreement and the Offering Memorandum
to register the Securities under the 1933 Act or to qualify the
Indenture under the Trust Indenture Act of 1939, as amended (the "1939
Act").
(xxv) Reporting Company. The Company is subject to the
-----------------
reporting requirements of Section 13 or Section 15(d) of the 1934 Act.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company delivered to the Initial Purchaser or to counsel for the Initial
Purchaser shall be deemed a representation and warranty by the Company to the
Initial Purchaser as to the matters covered thereby.
-6-
Section 2. Sale and Delivery to Initial Purchaser; Closing.
(a) Securities. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to sell to the Initial Purchaser and the Initial Purchaser agrees to
purchase from the Company, at the price set forth in Schedule A, $200,000,000
aggregate principal amount of Securities.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the office of ▇▇▇▇▇
▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as
shall be agreed upon by the Initial Purchaser and the Company, at 10:00 A.M. on
the fourth business day after the date hereof, or such other time not later than
ten business days after such date as shall be agreed upon by the Initial
Purchaser and the Company (such time and date of payment and delivery being
herein called the "Closing Time"). Payment shall be made to the Company by wire
transfer of immediately available funds to a bank account designated by the
Company, against delivery of the Securities in book-entry form only, through the
facilities of DTC, to the Initial Purchaser.
(c) Qualified Institutional Buyer. The Initial Purchaser represents and
warrants to, and agrees with, the Company that it is a "qualified institutional
buyer" within the meaning of Rule 144A under the 1933 Act (a "Qualified
Institutional Buyer").
(d) Denominations; Registration. A single global certificate representing
the Securities shall be registered in the name of Cede & Co. pursuant to the DTC
Agreement and shall be delivered to the Trustee, as custodian for DTC, at or
prior to the Closing Time.
Section 3. Covenants of the Company.
The Company covenants with the Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to the Initial Purchaser, without charge, such number of copies of the
Final Offering Memorandum and any amendments and supplements thereto and
documents incorporated by reference therein as the Initial Purchaser may
reasonably request.
(b) Notice and Effect of Material Events. The Company will immediately
notify the Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchaser as evidenced by a notice in
writing from the Initial Purchaser to the Company, any material changes in or
affecting the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise which (i) make any statement in the Offering Memorandum false or
misleading or (ii) are not disclosed in the Offering Memorandum. In such event
or if during such time any event shall occur as a result of which it is
necessary, in the reasonable opinion of any of the Company, its counsel, the
Initial Purchaser or counsel for the Initial Purchaser, to amend or supplement
the Final Offering Memorandum in order that the Final Offering Memorandum not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances then existing, the Company will forthwith amend or supplement
the Final Offering Memorandum by preparing and furnishing to the Initial
Purchaser an amendment or amendments of, or a supplement or supplements to, the
Final Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchaser) so that, as so amended or
supplemented, the Final Offering Memorandum will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances existing at the time
it is delivered to a Subsequent Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company will
advise the Initial Purchaser promptly of any proposal to amend or supplement the
Offering Memorandum and will not effect such amendment or supplement without the
consent of the Initial Purchaser. Neither the consent of the Initial Purchaser,
-7-
nor the Initial Purchaser's delivery of any such amendment or supplement, shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will use
its reasonable best efforts, in cooperation with the Initial Purchaser, to
qualify the Securities for offering and sale under the applicable securities
laws of such states or other jurisdictions as the Initial Purchaser may
designate and will maintain such qualifications in effect as long as required
for the sale of the Securities; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any U.S. jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject.
(e) Rating of Securities. The Company shall take all reasonable
action necessary to enable Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc. ("S&P"), and ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") to provide their respective credit ratings of the Securities.
(f) DTC. The Company will cooperate with the Initial Purchaser and use its
reasonable best efforts to permit the Securities to be eligible for clearance
and settlement through the facilities of DTC.
(g) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Offering
Memorandum under "Use of Proceeds."
(h) Restriction on Sale of Securities. During a period of 180 days
from the date of the Final Offering Memorandum, the Company will not, without
the prior written consent of the Initial Purchaser, directly or indirectly,
issue, sell, offer or agree to sell, grant any option for the sale of, or
otherwise dispose of, any debt securities of the Company or securities of the
Company that are convertible into, or exchangeable for, debt securities (in each
case, except as contemplated by the Registration Rights Agreement).
(i) PORTAL Designation. The Company will use its best efforts to permit
the Securities to be designated PORTAL securities in accordance with the rules
and regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in The Portal/SM/ Market.
(j) Reporting Requirements. The Company, during the period when the
Offering Memorandum is required to be delivered pursuant to Section 6(a)(vii)
hereof, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the 1934 Act Regulations.
Section 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing, delivery to the Initial Purchaser and any filing of the
Offering Memorandum (including financial statements and any schedules or
exhibits and any document incorporated therein by reference) and of each
amendment or supplement thereto, (ii) the printing or reproducing and delivery
to the Initial Purchaser of this Agreement, the Indenture, the Registration
Rights Agreement and such other documents as may be required in connection with
the offering, purchase, sale and delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Initial Purchaser, including any charges of DTC in connection therewith, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(d) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Initial Purchaser in
connection therewith and in connection with the preparation of the blue sky
survey or any supplement thereto, (vi) the fees and expenses of the Trustee,
including the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities, (vii) any fees payable in connection with
the rating of the Securities, and (viii) any fees payable to the review by the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the initial and continued designation of the Securities as PORTAL securities
under The Portal(SM) Market Rules pursuant to NASD Rule 5322.
-8-
(b) Termination of Agreement. If this Agreement is terminated by the
Initial Purchaser in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company shall reimburse the Initial Purchaser for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Initial Purchaser.
Section 5. Conditions of the Initial Purchaser's Obligations.
The obligations of the Initial Purchaser hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Opinions of Counsel for Company. At the Closing Time, the Initial
Purchaser shall have received the favorable opinions, dated as of the Closing
Time, of (i) ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Initial Purchaser, to the effect set
forth in Exhibit A-1 hereto, and (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President -- Law
and Corporate Secretary of the Company, in form and substance reasonably
satisfactory to counsel for the Initial Purchaser, to the effect set forth in
Exhibit A-2 hereto.
(b) Opinion of Counsel for the Initial Purchaser. At the Closing Time, the
Initial Purchaser shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Initial Purchaser, with
respect to the incorporation of the Company, the validity of the Indenture, the
Securities, the Offering Memorandum and other related matters as you may
reasonably request. The Company confirms that ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., by virtue
of its acting as counsel to the Initial Purchaser, has not established and is
not establishing an attorney-client relationship with the Company, as the
Company is separately represented in this transaction by counsel of its own
choosing; provided, however, that it is understood that, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.,
by virtue of its acting as counsel to the Initial Purchaser, has access to
material confidential information of the Company and that such access to that
information may preclude ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. from undertaking a legal
representation adverse to the Company.
(c) Officers' Certificate. At the Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Offering Memorandum, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Initial
Purchaser shall have received a certificate of the President or a Vice President
of the Company and of the chief financial or chief accounting officer of the
Company, dated as of the Closing Time, to the effect that (i) there has been no
such material adverse change, (ii) the representations and warranties in Section
1 hereof are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, and (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Time.
(d) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Initial Purchaser shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a
letter dated such date, in form and substance satisfactory to the Initial
Purchaser, containing statements and information of the type ordinarily included
in accountants' "comfort letters" to initial purchasers with respect to the
financial statements and certain financial information contained in the Offering
Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the Initial Purchaser
shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of the Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to the
Closing Time.
(f) Maintenance of Ratings. At the Closing Time, the Securities shall be
rated at least "B1" by Moody's and "BB" by S&P, and the Company shall have
delivered to the Initial Purchaser a letter dated the Closing Time, from each
such rating agency, or other evidence satisfactory to the Initial Purchaser,
confirming that the Securities have such ratings; and since the date of this
Agreement, there shall not have occurred a downgrading in the rating assigned to
the Securities or any of the Company's other debt securities by any nationally
recognized securities rating agency, and no such securities rating agency shall
have publicly announced that it has under
-9-
surveillance or review, with possible negative implications, its rating of the
Securities or any of the Company's other debt securities.
(g) PORTAL. At the Closing Time, the Securities shall have been designated
for trading on The Portal(SM) Market.
(h) Additional Documents. At the Closing Time, counsel for the Initial
Purchaser shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be satisfactory in form and substance to the Initial Purchaser and counsel
for the Initial Purchaser.
(i) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Initial Purchaser by notice to the Company at
any time at or prior to the Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 7 and 8 shall survive any such termination and remain in
full force and effect.
Section 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. The Initial Purchaser and the Company
hereby establish and agree to observe the following procedures in connection
with the offer and sale of the Securities:
(i) Offers and Sales only to Qualified Institutional Buyers.
-------------------------------------------------------
Offers and sales of the Securities will be made only by the Initial
Purchaser or Affiliates thereof qualified to do so in the jurisdiction in
which such offers or sales are made. Each such offer or sale shall only be
made to persons whom the offeror or seller reasonably believes to be
qualified institutional buyers (as defined in Rule 144A) in transactions
meeting the requirements of Rule 144A.
(ii) No General Solicitation. No general solicitation or general
-----------------------
advertising (within the meaning of Rule 502(c) under the ▇▇▇▇ ▇▇▇) will be
used in the United States in connection with the offering or sale of the
Securities.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
---------------------------------
Subsequent Purchaser of a Security acting as a fiduciary for one or more
third parties, each third party shall, in the judgment of the Initial
Purchaser, be a Qualified Institutional Buyer.
(iv) Subsequent Purchaser Notification. The Initial Purchaser will
---------------------------------
take reasonable steps to inform, and cause its U.S. Affiliates to take
reasonable steps to inform, persons acquiring Securities from the Initial
Purchaser or Affiliates, as the case may be, in the United States that the
Securities (A) have not been and will not be registered under the 1933 Act,
(B) are being sold to them without registration under the 1933 Act in
reliance on Rule 144A or in accordance with another exemption from
registration under the 1933 Act, as the case may be, and (C) may not be
offered, sold or otherwise transferred except (1) to the Company, (2)
outside the United States in accordance with Regulation S, or (3) inside
the United States in accordance with (x) Rule 144A to a person whom the
seller reasonably believes is a Qualified Institutional Buyer that is
purchasing such Securities for its own account or for the account of a
Qualified Institutional Buyer to whom notice is given that the offer, sale
or transfer is being made in reliance on Rule 144A or (y) pursuant to
another available exemption from registration under the 1933 Act.
(v) Minimum Principal Amount. No sale of the Securities to any one
------------------------
Subsequent Purchaser will be for less than U.S. $100,000 principal amount
and no Security will be issued in a smaller principal amount. If the
Subsequent Purchaser is a non-bank fiduciary acting on behalf of others,
each person for whom it is acting must purchase at least U.S. $100,000
principal amount of the Securities.
-10-
(vi) Restrictions on Transfer. The transfer restrictions and
------------------------
the other provisions set forth in Section 2.7 of the Indenture,
including the legend required thereby, shall apply to the Securities
except as otherwise agreed by the Company and the Initial Purchaser.
Following the sale of the Securities by the Initial Purchaser to
Subsequent Purchasers pursuant to the terms hereof, the Initial
Purchaser shall not be liable or responsible to the Company for any
losses, damages or liabilities suffered or incurred by the Company,
including any losses, damages or liabilities under the 1933 Act,
arising from or relating to any resale or transfer of any Security.
(vii) Delivery of Offering Memorandum. The Initial Purchaser
-------------------------------
will deliver to each purchaser of the Securities, in connection with
its original distribution of the Securities, a copy of the Offering
Memorandum, as amended and supplemented at the date of such delivery.
(b) Covenants of the Company. The Company covenants with the
Initial Purchaser as follows:
(i) Due Diligence. In connection with the original
-------------
distribution of the Securities, the Company agrees that, prior to any
offer or resale of the Securities by the Initial Purchaser, the Initial
Purchaser and counsel for the Initial Purchaser shall have the right to
make reasonable inquiries into the business of the Company and its
subsidiaries. The Company also agrees to provide answers to each
prospective Subsequent Purchaser of Securities who so requests
concerning the Company and its subsidiaries (to the extent that such
information is available and has been previously provided to the public
and can be acquired and made available to prospective Subsequent
Purchasers without unreasonable effort or expense and to the extent the
provision thereof is not prohibited by contract or applicable law) and
the terms and conditions of the offering of the Securities, as provided
in the Offering Memorandum.
(ii) Rule 144A Information. The Company agrees that, in order
---------------------
to render the Securities eligible for resale pursuant to Rule 144A
under the 1933 Act, while any of the Securities remains outstanding, it
will make available, upon request, to any holder of Securities or
prospective purchasers of Securities the information specified in Rule
144A(d)(4), unless the Company furnishes information to the Commission
pursuant to Section 13 or 15(d) of the 1934 Act.
(iii) Restriction on Repurchases. Until the expiration of two
--------------------------
years after the original issuance of the Securities, the Company will
not, and will cause its Affiliates not to, resell any Securities which
are "restricted securities" (as such term is defined under Rule
144(a)(3) under the 1933 Act), whether as beneficial owner or otherwise
(except as agent acting as a securities broker on behalf of and for the
account of customers in the ordinary course of business in unsolicited
broker's transactions).
Section 7. Indemnification.
(a) Indemnification of Initial Purchaser. The Company agrees to
indemnify and hold harmless the Initial Purchaser and each person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Final
Offering Memorandum (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 7(d) below) any such settlement is effected
with the written consent of the Company; and
-11-
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Initial Purchaser),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
thereto).
(b) Indemnification of Company, Directors and Officers. The Initial
Purchaser agrees to indemnify and hold harmless the Company, each officer and
director of the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Offering Memorandum in reliance upon and in conformity
with written information furnished to the Company by the Initial Purchaser
expressly for use in the Offering Memorandum.
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 7(a) above,
counsel to the indemnified parties shall be selected by the Initial Purchaser,
and, in the case of parties indemnified pursuant to Section 7(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 7(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 7(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent the indemnifying
party considers such request to be reasonable and (ii) provided written notice
to the indemnified party substantiating the unpaid balance as unreasonable, in
each case prior to the date of such settlement.
-12-
Section 8. Contribution.
If the indemnification provided for in Section 7 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Initial
Purchaser on the other hand from the offering of the Securities pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Initial Purchaser on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Initial Purchaser on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total initial purchaser's discount received by the Initial
Purchaser, bear to the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial Purchaser
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchaser and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchaser agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 8. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 8 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 8, the Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities purchased and sold by it hereunder
exceeds the amount of any damages which the Initial Purchaser 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls the
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Initial
Purchaser, and each officer and director of the Company and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Company.
Section 9. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Company submitted pursuant hereto, shall
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Initial Purchaser or controlling person, or by or on
behalf of the Company, and shall survive delivery of the Securities to the
Initial Purchaser.
-13-
Section 10. Termination of Agreement.
(a) Termination; General. The Initial Purchaser may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Initial Purchaser, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities of the Company has been suspended or limited by the Commission or the
New York Stock Exchange, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the NASDAQ National Market System has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 7 and
8 shall survive such termination and remain in full force and effect.
Section 11. [Intentionally Omitted].
Section 12. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchaser shall be directed to
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated at North Tower, World
Financial Center, New York, New York 10281-1201, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇;
notices to the Company shall be directed to it at Pogo Producing Company, ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention: Corporate
Secretary.
Section 13. Parties.
This Agreement shall each inure to the benefit of and be binding upon the
Initial Purchaser and the Company and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Initial Purchaser and the
Company and their respective successors and the controlling persons and officers
and directors referred to in Sections 7 and 8 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Initial Purchaser and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from the Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.
Section 14. Governing Law and Time.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. EXCEPT AS OTHERWISE SET FORTH HEREIN SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
-14-
Section 15. Effect of Headings.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
-15-
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchaser and the Company in accordance with its terms.
Very truly yours,
POGO PRODUCING COMPANY
By/s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇, ▇▇
Title: Vice President and Chief
Financial Officer
Confirmed and Accepted,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By__________________________________
Authorized Signatory
-16-
SCHEDULE A
POGO PRODUCING COMPANY
$200,000,000 Senior Subordinated Notes due 2011
1. The initial public offering price of the Securities shall be 100% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchaser for the
Securities shall be 98% of the principal amount thereof.
3. Interest on the Securities shall be payable at the rate of 8 1/4% per
annum, and shall be payable semi-annually in arrears on April 15 and October 15
of each year, commencing October 15, 2001.
4. The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after April 15, 2006, at the redemption
prices (expressed as percentages of the principal amount) set forth below, plus
accrued and unpaid interest, if any, to the redemption date, if redeemed during
the 12-month period beginning on April 15 of the years indicated below:
Year Price
---- -----
2006........................... 104.125%
2007........................... 102.750%
2008........................... 101.375%
2009........................... 100.000%
-▇▇-
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇▇ L.L.P.
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(i)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own its properties
and to conduct its business as described in the Offering Memorandum and to enter
into and perform its obligations under the Purchase Agreement and the
Registration Rights Agreement.
(iii) The Purchase Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company.
(iv) The Indenture has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery thereof
by the Trustee) constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws relating to or affecting enforcement of
creditors' rights generally, or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
(v) The Securities have been duly authorized by the Company, the global
certificate representing the Securities is in the form contemplated by the
Indenture and has been duly executed by the Company and, when such global
certificate has been authenticated by the Trustee in the manner provided in the
Indenture (assuming the due authorization, execution and delivery of the
Indenture by the Trustee) and the Securities have been delivered through the
facilities of DTC against payment of the purchase price therefor, the Securities
will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium
(including, without limitation, all laws relating to fraudulent transfers), or
other similar laws relating to or affecting enforcement of creditor's rights
generally, or by general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law), and will be entitled to the
benefits of the Indenture.
(vi) The Securities, the Indenture and the Registration Rights Agreement
conform, as to legal matters, in all material respects to the descriptions
thereof contained in the Offering Memorandum.
(vii) No authorization, approval, consent or order of any court or
governmental authority or agency other than such as may be required under the
applicable securities laws of the various jurisdictions in which the Securities
will be offered or sold (as to which we express no opinion) is required to be
obtained by the Company in connection with the due authorization, execution and
delivery of the Purchase Agreement or the due execution, delivery or performance
of the Indenture by the Company or for the offering, issuance, sale or delivery
of the Securities to the Initial Purchaser or the resale by the Initial
Purchaser in accordance with the Purchase Agreement.
(viii) It is not necessary in connection with the offer, sale and delivery
of the Securities to the Initial Purchaser and to each Subsequent Purchaser in
the manner contemplated by the Purchase Agreement and the Offering Memorandum to
register the Notes under the 1933 Act or to qualify the Indenture under the
Trust Indenture Act.
(ix) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
We have participated in conferences with certain officers and
representatives of the Company, representatives of the Initial Purchaser,
counsel to the Initial Purchaser and representatives of the independent public
accountants of the Company at which the contents of the Offering Memorandum and
related matters were discussed and, although we are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, on the basis of the foregoing,
no facts have come to our attention that have caused us to believe that the
Offering Memorandum (other than the reserve information, financial statements
and other financial data included or incorporated by reference in the Offering
Memorandum, as to which we have not been asked to comment), as of its date or as
of the date hereof, contained or contains any 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.
The opinions set forth above are limited in all respects to matters of the
laws of the State of Texas, the General Corporation Law of the State of
Delaware, the contract law of the State of New York and the applicable federal
laws of the United States, each as in effect on the date hereof.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(ii)
(i) The Company 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.
(ii) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Offering Memorandum in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances, if any, pursuant
to the Purchase Agreement or pursuant to reservations, agreements, employee or
director benefit plans or the exercise of convertible securities or options
referred to in the Offering Memorandum). The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable, and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(iii) Each Designated Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum 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 Designated 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 set forth in the Offering Memorandum) is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity other than the preferential
purchase rights granted pursuant to Article 12.2 of the joint operating
agreement governing the Company's interests in its concession license covering
Block B8/32 in the Gulf of Thailand.
(iv) The documents filed with the Commission pursuant to the 1934 Act that
are incorporated by reference in the Offering Memorandum (other than the
financial statements, other financial information and reserve information and
supporting schedules therein, as to which I express no opinion), when filed with
the Commission, complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder.
(v) There is not pending or, to the best of my knowledge, threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
thereof is subject, before or brought by any court or governmental agency or
body, which might reasonably be expected to result in a Material Adverse Effect,
or which might reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in the Purchase Agreement or the
performance by the Company of its obligations thereunder or the transactions
contemplated by the Offering Memorandum;
(vi) The execution, delivery and performance of the Purchase Agreement,
the DTC Agreement, the Indenture, the Registration Rights Agreement and the
Securities and the consummation of the transactions contemplated in the Purchase
Agreement, the Registration Rights Agreement and in the Offering Memorandum
(including the use of the proceeds from the sale of the Securities as described
in the Offering Memorandum under the caption "Use of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement, the
Registration Rights Agreement, the Indenture and the Securities will not,
whether with or without the giving of notice or lapse of time or both, conflict
with or
constitute a breach of, or default or Repayment Event under or result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary thereof pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or any other agreement or instrument, known to me, to which the
Company or its subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
subsidiary thereof is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the
provisions of the charter, by-laws or other governing document, as
applicable, of the Company or its subsidiaries, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to me
(other than federal and state securities or blue sky laws, as to which I
express no opinion), of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of
its subsidiaries or any of their respective properties, assets or
operations.
In addition, I have participated in the preparation of the Offering
Memorandum (except for the financial statements and other financial and reserve
information contained or incorporated by reference therein, as to which I
express no opinion) and nothing has come to my attention that leads me to
believe that the Offering Memorandum contained as of its date, or contains as of
the date of this opinion, an untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent he deems proper, on certificates of
responsible officers of the Company and public officials. Such opinion shall not
state that it is to be governed or qualified by, or that it is otherwise subject
to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
A-2-2
Exhibit B
FORM OF REGISTRATION RIGHTS AGREEMENT