EXHIBIT 1.A
EL PASO CORPORATION
10,000,000 9.00% Equity Security Units
Underwriting Agreement
June 20, 2002
Credit Suisse First Boston Corporation
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
As Representatives of the Several Underwriters
Ladies and Gentlemen:
El Paso Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "Underwriters") for whom Credit Suisse First Boston Corporation and
▇.▇. ▇▇▇▇▇▇ Securities Inc. are acting as representatives (the
"Representatives"), an aggregate of 10,000,000 of its 9.00% Equity Security
Units (the "Underwritten Securities") with a stated amount, per Equity Security
Unit, of $50 (the "Stated Amount"). Each Equity Security Unit will initially
consist of (a) a purchase contract (a "Purchase Contract") under which the
holder will agree to purchase from the Company not later than August 16, 2005
(the "Stock Purchase Date"), for an amount of cash equal to the Stated Amount, a
number of shares of common stock, $3.00 par value per share ("Common Stock"), of
the Company equal to the Settlement Rate (as defined in the Purchase Contract
Agreement) referred to below) and (b) $50 principal amount of the Company's
senior notes due August 16, 2007 (the "Notes") issued pursuant to the Indenture
(as defined below).
The Company also proposes to grant to the Underwriters an
option to purchase up to an additional 1,500,000 of its Equity Security Units to
cover over-allotments (the "Option Securities"); the Option Securities, together
with the Underwritten Securities are herein referred to as the "Securities." The
Notes that initially constitute a component of the Equity Security Units are
hereinafter sometimes referred to as the "Underlying Notes." In accordance with
the terms of the purchase contract agreement, to be dated as of June 26, 2002
(the "Purchase Contract Agreement"), between the Company and JPMorgan Chase
Bank, as
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purchase contract agent (the "Purchase Contract Agent"), pursuant to which the
Purchase Contracts will be issued, the Underlying Notes will be pledged by the
Purchase Contract Agent, on behalf of the holders of the Equity Security Units,
to The Bank of New York, as collateral agent (the "Collateral Agent"), pursuant
to the pledge agreement, to be dated as of June 26, 2002 (the "Pledge
Agreement"), among the Company, the Purchase Contract Agent, the Collateral
Agent and The Bank of New York, as custodial agent (the "Custodial Agent") and
as securities intermediary (the "Securities Intermediary") to secure the
holders' obligations to purchase Common Stock under the Purchase Contracts. The
shares of Common Stock issuable pursuant to the Purchase Contracts are
hereinafter called the "Shares." The rights and obligations of a holder of
Securities in respect of Notes (subject to the pledge thereof) and Purchase
Contracts will initially be evidenced by an Equity Security Unit Certificate (as
defined in the Purchase Contract Agreement).
The Notes will be issued pursuant to an indenture dated as of
May 10, 1999, as supplemented by eight supplemental indentures (collectively,
the "Indenture"), between the Company and JPMorgan Chase Bank (formerly The
Chase Manhattan Bank), as trustee (the "Trustee"). The Securities and the
Indenture are more fully described in the Prospectus referred to below.
Pursuant to a remarketing agreement (the "Remarketing
Agreement") to be dated as of June 26, 2002, among the Company, the Purchase
Contract Agent and Credit Suisse First Boston Corporation, as remarketing agent
(the "Remarketing Agent"), the Notes may be remarketed, subject to certain terms
and conditions.
As used in this Agreement, the term "Operative Documents"
means, collectively, the Purchase Contract Agreement, the Pledge Agreement, the
Remarketing Agreement and the Indenture.
The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (File No. 333-82412) including a prospectus, relating to the
Securities, the Purchase Contracts, the Underlying Notes and the Shares. The
registration statement as amended to the date of this Agreement is referred to
in this Agreement as the "Registration Statement." The term "Base Prospectus"
means the prospectus included in the Registration Statement. The Company has
filed with, or transmitted for filing to, or shall promptly hereafter file with
or transmit for filing to, the Commission a prospectus supplement (the
"Prospectus Supplement") specifically relating to the Securities, the Purchase
Contracts, the Underlying Notes and the Shares pursuant to Rule 424 under the
Securities Act. If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include
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such Rule 462 Registration Statement. The Base Prospectus as supplemented by any
applicable Prospectus Supplement specifically relating to the Securities in the
form first used to confirm sales of the Securities is hereinafter referred to as
the "Prospectus." Any reference in this Agreement to the Registration Statement,
the Base Prospectus, the Prospectus or any amendment or supplement thereto shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act, and any
reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Exchange Act") that are deemed to be
incorporated by reference therein.
The Company hereby agrees with the several Underwriters as
follows:
1. The Company agrees to issue and sell the Underwritten
Securities to the Underwriters as hereinafter provided, and the Underwriters,
severally and not jointly, upon the basis of the representations and warranties
herein contained, but subject to the terms and conditions hereinafter stated,
agree to purchase from the Company the Underwritten Securities at a purchase
price per Equity Security Unit of $48.50 (the "Purchase Price").
In addition, the Company agrees to issue and sell the Option
Securities to the Underwriters as hereinafter provided, and the Underwriters,
severally and not jointly on the basis of the representations and warranties
herein contained, but subject to the terms and conditions hereinafter stated,
shall have the option to purchase from the Company up to an aggregate of
1,500,000 Option Securities at the Purchase Price, for the sole purpose of
covering over-allotments (if any) in the sale of Underwritten Securities by the
Underwriters.
The Underwriters may exercise the option to purchase the
Option Securities at any time on or before the thirteenth day following the
Closing Date (as defined in Section 3 hereof), by written notice from both
Representatives to the Company. Such notice shall set forth the aggregate number
of Option Securities as to which the option is being exercised and the date and
time when the Option Securities are to be delivered and paid for which may be
the same date and time as the Closing Date (as hereinafter defined) but shall
not be earlier than the Closing Date nor later than three full Business Days (as
hereinafter defined) after the date of such notice (unless such time and date
are postponed in accordance with the provisions of Section 9 hereof), but in any
event not later than the thirteenth day following the Closing Date. Any such
notice shall be given at least two Business Days prior to the date and time of
delivery specified therein.
2. The Company understands that the Underwriters intend (i) to
make a public offering of the Securities as soon as in their judgment is
advisable after the parties
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hereto have executed and delivered this Agreement and (ii) initially to offer
the Securities upon the terms set forth in the Prospectus.
3. Payment for the Securities shall be made by wire transfer
in immediately available funds to the account specified by the Company to the
Underwriters, in the case of the Underwritten Securities, at 10:00 a.m. (New
York City time) on June 26, 2002, or at such other time on the same or such
other date, not later than the fifth Business Day thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of the
Option Securities, on the date and time specified by the Representatives in the
written notice of the Underwriters' election to purchase such Option Securities.
The time and date of such payment for the Underwritten Securities are referred
to herein as the "Closing Date" and the time and date for such payment for the
Option Securities, if other than the Closing Date, are referred to herein as the
"Additional Closing Date." As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City.
Delivery of the Securities to be purchased on the Closing Date
or the Additional Closing Date, as the case may be, shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to the account specified by the Company. Delivery of the
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company ("DTC") unless the Representatives
shall otherwise instruct.
4. The Company represents and warrants to the several
Underwriters that:
(a) the Company and the transactions contemplated by this
Agreement meet the requirements and conditions for using a registration
statement on Form S-3 under the Securities Act, and the Registration
Statement has been declared effective by the Commission; no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been instituted or, to
the knowledge of the Company, threatened by the Commission;
(b) on the effective date of the Registration Statement, the
Registration Statement conformed in all material respects to the
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the applicable rules and regulations
thereunder, and did not include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; the
Registration Statement, as of the date of this Agreement, conforms and,
as amended or supplemented, if applicable, will conform in
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all material respects to the requirements of the Securities Act and the
rules and regulations on the Commission thereunder, and the Trust
Indenture Act, and the applicable rules and regulations thereunder, and
does not include and, as amended or supplemented, if applicable, will
not include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading; the Prospectus, as of the date
of its filing, and as amended or supplemented, if applicable, conforms
or will conform in all material respects to the requirements of the
Securities Act and the rules and regulations on the Commission
thereunder and, as of the date of its filing, did not or will not
include, and as of the Closing Date or the Additional Closing Date or
as amended or supplemented, if applicable, will not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that the foregoing representations and warranties
shall not apply to statements in or omissions from the Registration
Statement or the Prospectus made in reliance upon and in conformity
with information relating to the Underwriters furnished to the Company
in writing by the Underwriters expressly for use therein, it being
understood and agreed that the only such information is that described
as such in the second paragraph of Section 7 hereof;
(c) the documents incorporated or deemed to be incorporated by
reference in the Registration Statement and the Prospectus, when they
became effective or at the time they were or hereafter are filed with
the Commission, conformed and will conform in all material respects
with the requirements of the Securities Act, the Exchange Act or the
rules and regulations of the Commission thereunder, as applicable, and,
when read together with the other information in the Prospectus, at the
time the Registration Statement became effective, at the time the
Prospectus was filed and on the Closing Date and the Additional Closing
Date, as the case may be, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, and
with respect to the Prospectus, in light of the circumstances under
which they were made, not misleading;
(d) the Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with full corporate power and authority to own its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except
where the failure to be so qualified, individually or in the aggregate,
would not have a material adverse effect
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on the financial condition, business, properties or results of
operations of the Company and its subsidiaries taken as a whole
("Material Adverse Effect");
(e) each subsidiary set forth on Schedule II hereto (each, a
"Significant Subsidiary") of the Company has been duly incorporated or
formed, as the case may be, and is an existing corporation, limited
liability company or limited partnership in good standing under the
laws of the jurisdiction of its incorporation or formation, as the case
may be, with power and authority (corporate or other) to own its
properties and conduct its business as described in the Prospectus; and
each such Significant Subsidiary is duly qualified to do business as a
foreign corporation, limited liability company or limited partnership
in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified,
individually or in the aggregate, would not have a Material Adverse
Effect; all of the issued and outstanding equity interests of each
Significant Subsidiary have been duly authorized and validly issued and
are fully paid and nonassessable (other than the shares of Series A
Preferred Stock of El Paso Tennessee Pipeline Co. that are listed on
the New York Stock Exchange); and the equity interests of each
Significant Subsidiary owned by the Company, directly or through
subsidiaries, are owned free from liens, claims, or adverse interests
of any nature;
(f) except for the registration of the Securities, the
Purchase Contracts and the Notes under the Securities Act and such
consents, approvals, authorizations, registrations or qualifications as
may be required under the Trust Indenture Act, the Exchange Act and
applicable state securities laws and rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD") in connection
with the purchase and distribution of the Securities, the Purchase
Contracts or the Notes by the Underwriters or the issuance of the
Shares pursuant to the Purchase Contracts, no consent, approval,
authorization or order of, or filing or registration with, any such
court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby and thereby;
(g) the execution, delivery and performance of this Agreement,
the Purchase Contract Agreement (including the Purchase Contracts), the
Indenture, the Pledge Agreement and the Remarketing Agreement and the
issuance and sale of the Securities and compliance with the terms and
provisions of this Agreement, the Indenture and the other Operative
Documents, the Securities, the Notes and the Purchase Contracts will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, (i) any statute, any rule,
regulation or order of any governmental agency or body or any court,
domestic or foreign, having
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jurisdiction over the Company or any Significant Subsidiary or any of
their properties, or (ii) any agreement or instrument to which the
Company or any such Significant Subsidiary is a party or by which the
Company or any such Significant Subsidiary is bound or to which any of
the properties of the Company or any Significant Subsidiary is subject,
or (iii) the charter or by-laws of the Company or any such Significant
Subsidiary, except in the case of clauses (i) and (ii), for any such
breach or violation which would not, individually or in the aggregate,
have a Material Adverse Effect and the Company has full power and
authority to authorize, issue and sell the Securities as contemplated
by this Agreement;
(h) this Agreement has been duly authorized, executed and
delivered by the Company;
(i) the Shares to be issued and sold by the Company pursuant
to the Purchase Contracts have been duly authorized and reserved for
issuance, and when issued and delivered in accordance with the terms of
the Purchase Contracts, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights and will
conform to the description thereof contained in the Company's Form
8-A/A filed pursuant to the Exchange Act and incorporated by reference
in the Prospectus;
(j) the Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, and conform to the
description thereof contained in the Prospectus;
(k) the Remarketing Agreement has been duly authorized by the
Company and when executed and delivered by the Company and assuming due
authorization, execution and delivery thereof by the other parties
thereto, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by (i) the
effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) an implied
covenant of good faith and fair dealing; and will conform in all
material respects to the descriptions thereof in the Prospectus; in
addition, rights to indemnification thereunder may not be enforceable
due to considerations of public policy;
(l) each of the Purchase Contract Agreement and the Pledge
Agreement has been duly authorized by the Company and, when executed
and delivered by the Company and assuming due authorization, execution
and delivery thereof by the other
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parties thereto, the Purchase Contract Agreement and the Pledge
Agreement will constitute valid and binding obligations of the Company
enforceable against the Company in accordance with their respective
terms, except to the extent that enforcement thereof may be limited by
(i) the effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) an implied
covenant of good faith and fair dealing; and each will conform in all
material respects to the descriptions thereof in the Prospectus;
(m) the Pledge Agreement creates, as collateral security for
the performance when due by the holders from time to time of the
Securities of their respective obligations under the Purchase Contracts
constituting part of such Securities, a legal, valid and perfected
security interest (as defined in the Uniform Commercial Code, as
adopted and in effect in the State of New York), in favor of the
Collateral Agent for the benefit of the Company, in the right, title
and interest of such holders in the securities and other assets and
interests pledged to the Collateral Agent pursuant to the Pledge
Agreement;
(n) the Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act, and constitutes the valid and binding obligations of the Company
enforceable against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by (i) the effects
of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors'
rights generally, (ii) general equitable principles (whether considered
in a proceeding in equity or at law) and (iii) an implied covenant of
good faith and fair dealing; and the Indenture will conform in all
material respects to the descriptions thereof in the Prospectus;
(o) the Notes have been duly authorized and when issued and
delivered and upon payment for the Securities, will have been duly
executed, authenticated (assuming due authentication by the Trustee),
issued and delivered, and will constitute the valid and binding
obligations of the Company, entitled to the benefits provided by the
Indenture, and enforceable against the Company in accordance with their
terms, except to the extent that enforcement thereof may be limited by
(i) the effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or affecting
creditors' rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) an implied
covenant of good faith and fair dealing; and the Notes will conform in
all material respects to the descriptions thereof in the Prospectus;
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(p) the Securities have been duly authorized by the Company
and at the Closing Date and the Additional Closing Date, as the case
may be, after payment therefor and execution and delivery thereof in
accordance with this Agreement, assuming due authentication thereof in
accordance with the terms of the Purchase Contract Agreement, due
authorization, execution and delivery thereof by the Purchase Contract
Agent as attorney-in-fact for the holders thereof, and due
authentication of the Notes by the Trustee will constitute the valid
and binding obligations of the Company enforceable against the Company
in accordance with their terms and entitled to the benefits of the
Purchase Contract Agreement, except to the extent that enforcement
thereof may be limited by (i) the effects of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally, (ii) general
equitable principles (whether considered in a proceeding in equity or
at law) and (iii) an implied covenant of good faith and fair dealing;
and the Securities will conform in all material respects to the
description thereof in the Prospectus. The Securities and the Shares
have been duly registered under the Exchange Act and have been approved
for listing on the New York Stock Exchange, subject to official notice
of issuance; and the issuance of the Securities is not subject to
preemptive or other similar rights.
(q) neither the Company nor any Significant Subsidiary is (i)
in violation of its respective charter or by-laws or (ii) in default in
the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its
subsidiaries, taken as a whole, to which the Company or any Significant
Subsidiary is a party or by which the Company or any Significant
Subsidiary or their respective property is bound, except in the case of
clause (ii) for any such default as would not, individually or in the
aggregate, have a Material Adverse Effect;
(r) except as disclosed in the Prospectus, the Company and its
Significant Subsidiaries have good and indefeasible title to all real
properties and all other properties and assets owned by them, in each
case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or
to be made thereof by them; and except as disclosed in the Prospectus,
the Company and its Significant Subsidiaries hold any leased real or
personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or to be made thereof
by them;
(s) except as disclosed in the Prospectus, neither the Company
nor any of its Significant Subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to
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the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site
disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would, individually or in
the aggregate, have a Material Adverse Effect; and, except as disclosed
in the Prospectus, the Company is not aware of any pending
investigation which could reasonably be expected by the Company to lead
to such a claim;
(t) except as disclosed in the Prospectus and the documents
incorporated by reference therein, there are no pending actions, suits
or proceedings against or affecting the Company, any of its Significant
Subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its Significant Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Securities; and no such
actions, suits or proceedings are, to the Company's knowledge,
threatened or contemplated;
(u) the financial statements incorporated by reference in the
Registration Statement and the Prospectus present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and
cash flows for the periods shown, and, except as otherwise disclosed in
the Prospectus, such consolidated financial statements have been
prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis; and the
schedules included in the Registration Statement present fairly the
information required to be stated therein; and the assumptions used in
preparing the pro forma financial statements incorporated by reference
in the Registration Statement and the Prospectus provide a reasonable
basis for presenting the significant effects directly attributable to
the transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement
amounts;
(v) except as disclosed in the Prospectus, since the date of
the latest audited financial statements incorporated by reference in
the Prospectus, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the financial condition, business, properties or results of
operations of the Company and its subsidiaries taken as a whole, and,
except as disclosed in or contemplated by the Prospectus, there has
been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock;
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(w) no "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act has indicated to the Company that it is considering (i)
the downgrading, suspension or withdrawal of, or any review for a
possible change that does not indicate the direction of the possible
change in, any rating assigned to the Company or any securities of the
Company or (ii) any change in the outlook for any rating of the Company
or any securities of the Company;
(x) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be (i) an "investment
company" as defined in the Investment Company Act of 1940, as amended,
or (ii) a "holding company" within the meaning of, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations promulgated by the Commission
thereunder;
(y) each of PricewaterhouseCoopers LLP and Deloitte & Touche
LLP, who have expressed their opinions on the audited financial
statements and related schedules included or incorporated by reference
in the Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act;
(z) the Company is subject to and in compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act. The Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the New York Stock Exchange and the
Pacific Exchange, and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the
Common Stock under the Exchange Act or delisting the Common Stock from
the New York Stock Exchange or the Pacific Exchange, nor has the
Company received any notification that the Commission or the NASD is
contemplating terminating such registration or listing; and the
Securities have been approved for listing on the New York Stock
Exchange, subject to notice of issuance; and
(aa) the Company has not distributed and, prior to the later
of (i) the Closing Date and (ii) the completion of the distribution of
the Securities, will not distribute any written offering material in
connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, or the Prospectus or
any amendment or supplement thereto, or other materials, if any,
permitted by the Securities Act.
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5. The Company covenants and agrees with the several
Underwriters as follows:
(a) to file the final Prospectus with the Commission within
the time period specified by Rule 424(b) under the Securities Act and
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; and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 10:00 a.m., New York City time,
on the Business Day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the
Underwriters signed copies of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits and
documents incorporated by reference therein, and as many copies of the
Prospectus (including all amendments and supplements thereto) and
documents incorporated by reference therein as the Representatives may
reasonably request;
(c) before filing any amendment or supplement to the
Registration Statement or the Prospectus during such period of time
after the first date of the public offering of the Securities a
prospectus relating to the Securities is required by law to be
delivered in connection with sales by the Underwriters or any dealer
(the "Distribution Period") to furnish to the Underwriters a copy of
the proposed amendment or supplement for review and not to file any
such proposed amendment or supplement to which the Representatives
reasonably and timely object;
(d) to advise both Representatives promptly, and to confirm
such advice in writing, (i) when any amendment to the Registration
Statement has been filed or becomes effective, (ii) when any supplement
to the Prospectus or any amended Prospectus has been filed and to
furnish the Underwriters with copies thereof, (iii) of any request by
the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of the Prospectus or any
supplemental prospectus or the initiation or, to the Company's
knowledge, threatening of any proceeding for that purpose, (v) of the
occurrence of any event, 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 when the Prospectus
is delivered to a purchaser, not misleading, and (vi) of the receipt by
the
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Company of any notification with respect to any suspension of the
registration or qualification of the Securities for offer and sale in
any jurisdiction or the initiation or, to the Company's knowledge,
threatening of any proceeding for such purpose, and to use its
commercially reasonable efforts to prevent the issuance of any such
stop order, or of any order preventing or suspending the use of the
Prospectus or any supplemental prospectus, or of any order suspending
any such registration or qualification of the Securities, or
notification of any such order thereof and, if issued, to obtain as
soon as possible the withdrawal thereof;
(e) if, during the Distribution Period, any event shall occur
as a result of which it is necessary for the Underwriters to amend or
supplement the Prospectus in order to make the statements therein, in
light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary for the Underwriters
to amend or supplement the Prospectus to comply with applicable law,
the Company shall use its commercially reasonable efforts forthwith to
prepare and furnish, at the expense of the Company, to the Underwriters
and to the dealers (whose names and addresses the Underwriters will
furnish to the Company) to which Securities may have been sold by the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in
light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with
law; neither the Representatives' consent to, nor the Underwriters'
delivery of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6 hereof;
(f) to endeavor to register or qualify the Securities for
offer and sale under the securities or blue sky laws of such
jurisdictions as the Representatives shall reasonably request and to
continue such registration or qualification in effect so long as
reasonably required for distribution of the Securities; provided that
the Company shall not be required to file a general consent to service
of process in any such jurisdiction or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified;
(g) to make generally available to its security holders and to
the Underwriters as soon as practicable an earnings statement covering
a period of at least twelve months beginning not later than the first
fiscal quarter of the Company occurring after the date hereof, which
shall satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 promulgated thereunder;
(h) during the period when the Prospectus is required to be
delivered under the Securities Act or the Exchange Act in connection
with sales of the Securities, to file all documents required to be
filed by it with the Commission pursuant to Section 13, 14 or 15 of the
Exchange Act within the time periods required by the Exchange Act;
-14-
(i) for a period of 90 days from the date of the public
offering of the Securities not to directly or indirectly (i) offer,
pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any
Securities, Purchase Contracts or Common Stock or any securities
substantially similar to Securities, Purchase Contracts or Common Stock
or any securities convertible into or exchangeable or exercisable for
Securities, Purchase Contracts or Common Stock or (ii) enter into any
swap, option, future, forward or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of the
Securities, Purchase Contracts or Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise
without the prior written consent of both Representatives, which shall
not be unreasonably withheld, other than (i) the Securities to be sold
hereunder, (ii) any shares of Common Stock of the Company issued upon
the conversion of any convertible debentures, convertible preferred
stock or other convertible securities or the exercise of options,
warrants and rights, in each case, outstanding on the date of the
Prospectus, (iii) stock issued upon the exercise of options or options
granted or under existing employee stock purchase or option plans or
(iv) shares issued under the Company's direct stock purchase and
dividend reinvestment plan;
(j) to use the net proceeds received by the Company from the
sale of the Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all reasonable costs and expenses incident to the
performance of its obligations hereunder, including without limiting
the generality of the foregoing, all costs and expenses (i) incident to
the preparation, issuance, execution and delivery of the Securities,
(ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any
supplemental prospectus (including in each case all exhibits,
amendments and supplements thereto), (iii) incurred in connection with
the registration or qualification of the Securities under the
securities or blue sky laws of such jurisdictions in the United States
as the Representatives may reasonably designate (including fees of
counsel for the Underwriters and its disbursements), (iv) in connection
with the listing of the Securities on the New York
-15-
Stock Exchange, (v) expenses related to any filing with the NASD, (vi)
in connection with the printing (including word processing and
duplication costs) and delivery of this Agreement, any blue sky survey
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including mailing and
shipping, as herein provided, (vii) any expenses incurred by the
Company in connection with a "road show" presentation to potential
investors, (viii) the cost of preparing certificates and (ix) the cost
and charges of any transfer agent and any registrar provided that,
except as otherwise provided herein, the Underwriters shall pay their
own costs and expenses including the fees and expenses of their counsel
and any transfer taxes on the Securities which they may sell and the
expenses of advertising any offering of the Securities made by the
Underwriters; and
(l) to use its best efforts, subject to official notice of
issuance, to list the Securities and Shares on the New York Stock
Exchange.
6. The obligations of the several Underwriters hereunder to
purchase the Securities on the Closing Date or the Additional Closing Date, as
the case may be, are subject to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) no stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; 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 Securities Act and in accordance with Section 5(a) hereof; and all
requests for additional information shall have been complied with to
the satisfaction of the Underwriters;
(b) the representations and warranties of the Company
contained herein are true and correct on and as of the Closing Date or
the Additional Closing Date, as the case may be, as if made on and as
of the Closing Date or the Additional Closing Date, as the case may be,
and the Company shall have complied with all agreements and all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date or the Additional Closing Date, as the case
may be;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date or the Additional Closing Date, as the
case may be, there shall not have occurred any downgrading, nor shall
any notice have been given of (i) any downgrading, (ii) any intended or
potential downgrading or (iii) any review or possible change that does
not indicate an improvement, in the rating accorded any securities of
or guaranteed by the Company by any "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
-16-
(d) 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 material adverse change, or any development
involving a prospective material adverse change, in or affecting the
financial condition, business, properties or results of operations of
the Company and its subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus, the effect of which in the
judgment of a majority in interest of the Underwriters, including both
Representatives, makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Securities on the Closing
Date or the Additional Closing Date, as the case may be, on the terms
and in the manner contemplated in the Prospectus; and 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;
(e) the Underwriters shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a
certificate of an executive officer of the Company, with specific
knowledge about the Company's financial matters, satisfactory to the
Underwriters to the effect set forth in subsections (a) through (d) of
this Section and to the further effect that there has not occurred any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the financial condition,
business, properties or results of operations of the Company and its
subsidiaries taken as a whole from that set forth or contemplated in
the Registration Statement;
(f) ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Company, shall
have furnished to the Underwriters their written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, in
form and substance satisfactory to the Underwriters, to the effect
that:
(i) the Shares to be issued and sold by the Company pursuant
to the settlement of the Purchase Contracts, without regard to
the antidilution provisions thereof, have been duly authorized
and reserved for issuance, and when issued and delivered in
accordance with the terms of the Purchase Contract Agreement,
will be duly and validly issued, fully paid and non-assessable
and free of any preemptive or similar rights; and the
authorized capital stock of the Company conforms, as to legal
matters, in all material
-17-
respects to the description thereof contained in the Company's
Form 8-A/A filed pursuant to the Exchange Act and incorporated
by reference in the Prospectus;
(ii) no consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated
by this Agreement in connection with the issuance or sale of
the Securities, the Purchase Contracts or the Notes by the
Company or the issuance of the Shares pursuant to the Purchase
Contracts, except such as have been obtained and made under
the Securities Act, the Trust Indenture Act or the Exchange
Act and such as may be required under state securities laws,
as to which such counsel need not opine;
(iii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement, the Purchase Contract Agreement (including the
Purchase Contracts), the Indenture, the Pledge Agreement and
the Remarketing Agreement, and the issuance and sale by the
Company of the Securities, the Purchase Contracts and the
Notes will not violate (i) any provision of applicable United
States federal law, New York law or Delaware General
Corporation Law, or (ii) the Certificate of Incorporation or
Bylaws of the Company, and the Company has full power and
authority to authorize, issue and sell the Securities, the
Purchase Contracts and the Notes as contemplated by this
Agreement and to issue the Shares pursuant to the Purchase
Contracts;
(iv) the Registration Statement has become effective under the
Securities Act, the Prospectus was filed with the Commission
pursuant to Rule 424(b) of the rules and regulations of the
Commission thereunder, and to such counsel's knowledge, no
stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no
proceedings for that purpose have been instituted or are
pending or contemplated under the Securities Act, and the
Registration Statement, as of its effective date, and the
Prospectus, as of the date of this Agreement, and any
amendment or supplement thereto, as of its date, complied as
to form in all material respects with the requirements of the
Securities Act and the rules and regulations of the Commission
thereunder; the descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings and
contracts and other documents are accurate in all material
respects and fairly present in all material respects the
information required to be shown; and such counsel does not
know of any legal or governmental proceedings required to be
described in the Prospectus which are not described as
required or of any contracts or
-18-
documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement which are not described
and filed as required, it being understood that such counsel
need not express an opinion as to the financial statements and
schedules or other financial data contained in the
Registration Statement or the Prospectus;
(v) each document, if any, filed pursuant to the Exchange Act
and incorporated by reference in the Prospectus (except for
financial statements and schedules and other financial or
statistical data included or incorporated by reference therein
or omitted therefrom, as to which such counsel need not
express an opinion) appeared on its face to be appropriately
responsive in all material respects with the Exchange Act; and
the Registration Statement and Prospectus (except for
financial statements and schedules and other financial or
statistical data included or incorporated by reference therein
or omitted therefrom, as to which such counsel need not
express an opinion) appeared on their face to be appropriately
responsive in all material respects with the requirements of
the Securities Act;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the Company is not and, after giving effect to the
offering and sale of the Securities and the application of the
proceeds thereof as described in the Prospectus, will not be,
(i) an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended, or (ii) a "holding
company" within the meaning of, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations promulgated by the
Commission thereunder;
(viii) the Purchase Contract Agreement has been duly
authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by the
Purchase Contract Agent, constitutes a valid and legally
binding obligation of the Company enforceable against the
Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
(ix) the Securities have been duly authorized, executed and
issued by the Company and assuming (a) due execution of the
Securities by the Purchase Contract Agent, as attorney-in-fact
of the holders thereof, (b) due
-19-
authentication of the Securities by the Purchase Contract
Agent and (c) due authentication of the Notes by the Trustee,
upon payment and delivery thereof in accordance with the
Underwriting Agreement, the Securities 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 Purchase Contract Agreement,
except to the extent that enforcement thereof may be limited
by the effects of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in
equity or at law) or an implied covenant of good faith and
fair dealing; and the Securities conform in all material
respects, as to legal matters, to the statements with respect
thereto made in the Registration Statement and the Prospectus,
as supplemented by the Prospectus Supplement;
(x) the Pledge Agreement has been duly authorized, executed
and delivered by the Company, and assuming due authorization,
execution and delivery by the other parties thereto, the
Pledge Agreement constitutes a valid and legally binding
obligation of the Company enforceable against the Company in
accordance with its terms, except to the extent that
enforcement thereof may be limited by the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing;
(xi) the Remarketing Agreement has been duly authorized,
executed and delivered by the Company, and assuming due
authorization, execution and delivery by the Remarketing
Agent, the Remarketing Agreement constitutes a valid and
legally binding obligation of the Company enforceable against
the Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an
implied covenant of good faith and fair dealing; in addition,
rights to indemnification thereunder may not be enforceable
due to considerations of public policy;
(xii) the Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust
Indenture Act of 1939, as amended and, assuming due
authorization, execution and delivery by the Trustee,
constitutes a valid and binding obligation of the Company
enforceable
-20-
against the Company in accordance with its terms, except to
the extent that enforcement thereof may be limited by the
effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) or an implied covenant of good faith and fair dealing;
and
(xiii) the Senior Notes have been duly authorized, executed
and issued by the Company and, assuming due authentication
thereof by the Trustee, and upon payment thereof by you in
accordance with the Underwriting Agreement, will constitute
valid and legally binding obligations of the Company
enforceable against the Company in accordance with their
terms, except to the extent that enforcement thereof may be
limited by the effects of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law) or an implied covenant of
good faith and fair dealing; and the Senior Notes conform in
all material respects, as to legal matters, to the statements
with respect thereto made in the Registration Statement and
the Prospectus, as supplemented by the Prospectus Supplement.
(xiv) the statements made in the Prospectus Supplement under
the captions "Prospectus Supplement Summary -The Offering",
"Description of the Equity Security Units" and "Description of
the Senior Notes" and the statements made in the Basic
Prospectus under the captions "Description of Capital Stock",
"Description of the Debt Securities", "Description of Purchase
Contracts" and "Description of Units", insofar as they purport
to constitute summaries of certain terms of documents referred
to therein, constitute accurate summaries of the terms of such
documents in all material respects.
(xv) subject to the qualifications, exceptions, assumptions
and limitations stated therein, the statements made in the
Prospectus Supplement under the caption "United States Federal
Income Tax Consequences", insofar as they purport to
constitute summaries of matters of United States federal tax
law and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein
in all material respects.
Such opinion shall state that the opinions set forth therein,
and, in particular, with respect to paragraphs (viii) through (xiii)
above, are subject (i) to the effects of bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar
laws relating to or affecting creditors' rights generally, (ii) general
equitable principles (whether considered in a proceeding in equity or
at law) and (iii) an implied
-21-
covenant of good faith and fair dealing; provided, however, that the
upon the occurrence of a Termination Event (as defined in the Purchase
Contract Agreement), the Bankruptcy Code (11 U.S.C. Sections 101-1330,
as amended) should not substantively limit the provisions of Sections
3.15 and 5.8 of the Purchase Contract Agreement and Section 4.3 of the
Pledge Agreement that require termination of the Purchase Contracts and
release of the Collateral Agent's security interest in, as the case may
be, (x) the Pledged Notes (as defined in the Pledge Agreement) , the
Pledged Treasury Consideration (as defined in the Pledge Agreement) and
the Pledged Applicable Ownership Interest in the Treasury Portfolio (as
defined in the Pledge Agreement), in the case of Equity Security Units,
or (y) the Pledged Treasury Securities (as defined in the Pledge
Agreement), in the case of Stripped Units (as defined in the Pledge
Agreement); and provided further, that no opinion is expressed as to
whether a court exercising bankruptcy jurisdiction might issue a
temporary restraining order or provide other interim relief that would
delay the exercise of such termination right for a period of time
pending final adjudication of any challenge to the exercise of such
right during a bankruptcy case involving the Company.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of the
United States and the States of Delaware, New York and Texas, to the
extent such counsel deems proper and to the extent specified in such
opinion, if at all, upon an opinion or opinions (in form and substance
reasonably satisfactory to Underwriters' counsel) of other counsel
reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; and (B) as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers of the
Company and certificates or other written statements of officials of
jurisdictions having custody of documents respecting the corporate
existence or good standing of the Company. The opinion of such counsel
for the Company shall state that the opinion of any such other counsel
upon which they relied is in form satisfactory to such counsel and, in
such counsel's opinion, the Underwriters and it is justified in relying
thereon.
In addition, such counsel shall state that in the course of
the preparation by the Company of the Registration Statement and the
Prospectus (including the documents incorporated by reference therein),
such counsel has participated in conferences with certain of the
officers and representatives of the Company, the Company's independent
accountants, the Underwriters and counsel for the Underwriters at which
the Registration Statement and the Prospectus were discussed. Between
the date of effectiveness of the Registration Statement, the Closing
Date and the Additional Closing Date, if applicable, such counsel
participated in additional conferences with certain officers and
representatives of the Company, the Company's independent accountants,
the Underwriters and counsel for the Underwriters at which portions of
-22-
the Registration Statement and the Prospectus were discussed. Such
counsel need not pass upon and or assume any responsibility for the
accuracy, completeness or fairness of the statements contained or
incorporated by reference in the Registration Statement or the
Prospectus nor make an independent check or verification thereof,
except as specifically described in the opinion in paragraphs (iv) and
(v) above. Such counsel shall further state that, subject to the
foregoing, no facts have come to such counsel's attention that have
caused them to believe that the Registration Statement, at the time it
became effective, contained or incorporated by reference any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, or that Prospectus, as of its date,
contained or incorporated by reference any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. Also, subject to the foregoing, such
counsel shall state that no facts have come to such counsel's attention
in the course of the proceedings described in the first and second
sentences of this paragraph that caused them to believe that the
Prospectus as of the Closing Date or Additional Closing Date, as
applicable, contains or incorporates by reference any untrue statement
of a material fact or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading. Such counsel need express no
belief, however, with respect to financial statements, schedules or
notes thereto or other financial data included or incorporated by
reference in or omitted from the Registration Statement or Prospectus.
The opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP described above shall
be rendered to the Underwriters at the request of the Company and shall
so state therein;
(g) ▇▇▇▇▇ ▇▇▇▇▇▇▇, Associate General Counsel for the Company,
shall have furnished to the Underwriters his written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, in
form and substance satisfactory to the Underwriters, to the effect
that:
(i) each of the Company and its Significant Subsidiaries has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to
own, lease and operate its properties and to conduct its
business as described in the Prospectus, and each is duly
qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except where the failure to be so
qualified or to be in good standing, individually or in the
aggregate, would not have a material adverse
-23-
effect on the business, properties, financial condition or
results of operations of the Company and its subsidiaries,
taken as a whole;
(ii) the execution, delivery and performance of this
Agreement, the Purchase Contract Agreement (including the
Purchase Contracts), the Indenture, the Notes, the Pledge
Agreement and the Remarketing Agreement, the compliance by the
Company with all the provisions hereof and thereof and the
consummation of the transactions contemplated hereby and
thereby will not, to such counsel's knowledge, (A) violate any
indenture, loan agreement, mortgage, lease or other agreement
or instrument to which the Company or any Significant
Subsidiary is a party or by which the Company or any
subsidiary or their respective property is bound or (B)
violate or conflict with any judgment, order or decree of any
court or any governmental body or agency having jurisdiction
over the Company, any subsidiary or their respective property,
except in each case, for such violations as would not have a
material adverse effect on the business, properties, financial
condition or results of operation of the Company and its
subsidiaries, taken as a whole;
(iii) to such counsel's knowledge after due inquiry, there are
no legal or governmental proceedings required to be described
in the Prospectus which are not described as required or of
any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements
or schedules or other financial data contained in the
Registration Statement or the Prospectus;
(iv) the statements under (A) the caption "Item 3 - Legal
Proceedings" of the Company's most recent annual report on
Form 10-K incorporated by reference into the Prospectus and
(B) the caption "Item 1 - Legal Proceedings" of Part II of the
Company's quarterly report on Form 10-Q filed since such
annual report, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present as of the date
of the applicable report the information disclosed therein in
all material respects; and
(v) (A) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement, the Purchase Contract Agreement (including the
Purchase Contracts), the Indenture, the Notes, the Pledge
Agreement and the Remarketing Agreement will not violate any
provisions of any applicable laws and regulations specifically
governing the generation, transportation, distribution or
delivery of natural gas, oil,
-24-
electricity or other related commodities or services,
including pipelines, transmission lines, storage facilities
and related facilities and equipment, or the import or export
of such commodities or services (collectively, the "Energy
Industry") and (B) no consent, approval, authorization or
order of or qualification with any United States federal body
or agency specifically regulating the Energy Industry is
required for the performance by the Company of its obligations
under this Agreement, except in each of the foregoing cases
for such violations or failures to obtain such consent,
approval, authorization, order or qualification as would not
have a material adverse effect on the business, properties,
financial condition or results of operation of the Company and
its subsidiaries, taken as a whole.
The opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ described above shall be rendered
to the Underwriters at the request of the Company and shall so state
therein;
(h) on the Closing Date or Additional Closing Date, each of
PricewaterhouseCoopers LLP and Deloitte and Touche LLP shall have
furnished to the Underwriters letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to the
Representatives, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
(i) the Underwriters shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, opinions
of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ Mayor, Day, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the Underwriters, with respect to such
matters as the Underwriters 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;
(j) the Underwriters shall have received on and as of the
Closing Date or Additional Closing Date, as the case may be, an opinion
of Cravath, Swaine & ▇▇▇▇▇, counsel to the Purchase Contract Agent,
with respect to such matters as the Underwriters may reasonably
request;
(k) the "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you on the one hand and each of the
executive officers and directors of the Company, on the other hand,
relating to sales and certain other dispositions of Securities,
Purchase Contracts, shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date or Additional Closing Date, as the case
may be; and
-25-
(l) on or prior to the Closing Date or Additional Closing
Date, as the case may be, the Company shall have furnished to the
Underwriters such further certificates and documents as the
Representatives shall reasonably request.
7. The Company agrees to indemnify and hold harmless each
Underwriter, each affiliate of any Underwriter which assists the Underwriters in
the distribution of the Securities and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, the legal fees and other
expenses reasonably incurred in connection with any suit, action or proceeding
or any claim asserted as such expenses are incurred) insofar as such losses,
claims, damages or liabilities are (i) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (the term Prospectus for the purpose of this Section 7 being
deemed to include the Prospectus and the Prospectus as amended or supplemented
if the Company shall have furnished any amendments or supplements thereto) or
(ii) caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided in any case that the Company shall not be liable to the
extent that such losses, claims, damages or liabilities are caused by any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information relating to any Underwriter furnished to
the Company in writing by the Underwriters expressly for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the paragraph
below.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the following information in the Prospectus furnished on
behalf of each Underwriter: the table in the first paragraph, the concession and
reallowance figures appearing in the third paragraph and the information in the
seventh paragraph, each under the caption "Underwriting."
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such
-26-
indemnity may be sought (the "Indemnifying Person") in writing, and the
Indemnifying Person, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such
proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary, (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) for
all Indemnified Persons, and that all such fees and expenses shall be reimbursed
as they are incurred. Any such separate firm for the Underwriters, each
affiliate of the Underwriters which assists the Underwriters in the distribution
of the Securities and such control persons of the Underwriters shall be
designated in writing by the Underwriters and any such separate firm for the
Company, its directors, its officers who sign the Registration Statement and
such control persons of the Company shall be designated in writing by the
Company. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff in any such action,
the Indemnifying Person agrees to indemnify and hold harmless any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the Indemnifying Person agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the indemnification provided for in the first or second
paragraphs of this Section 7 is unavailable to an Indemnified Person or
insufficient in respect of any losses,
-27-
claims, damages or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such Indemnified Person
thereunder, shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause (i) above 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 the Underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other hand shall be deemed to be in the same
respective proportions as the net proceeds from the offering (before deducting
expenses) received by the Company and the total underwriting discounts received
by the Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate public offering price of the Shares. The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall any
Underwriter 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 that
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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this paragraph to contribute are several in proportion to their underwriting
obligations and not joint.
-28-
The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company set forth in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Underwriters or any person controlling the Underwriters or by or
on behalf of the Company, its officers or directors or any other person
controlling the Company and (iii) acceptance of and payment for any of the
Securities.
8. Notwithstanding anything herein contained, this Agreement
(or the obligations of the Underwriters with respect to the Option Securities)
may be terminated in the mutual absolute discretion of both of the
Representatives, by notice given by both Representatives to the Company, if
after the execution and delivery of this Agreement and prior to the Closing Date
(or, in the case of the Option Securities, prior to the Additional Closing Date)
(i) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange or the American Stock
Exchange or the Nasdaq National Market, (ii) trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) any change in U.S. or international financial, political or
economic conditions or currency exchange rates or exchange controls as would in
the judgment of a majority in interest of the Underwriters including both
Representatives, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the Securities, whether in the primary market or
in respect of dealings in the secondary market, (iv) a general moratorium on
commercial banking activities in New York shall have been declared by either
federal or New York State authorities, or if there has been a material
disruption in securities settlement or clearance services in the United States,
or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis that, in the judgment
of a majority in interest of the Underwriters (including both Representatives),
is material and adverse and which, in the judgment of a majority in interest of
the Underwriters (including both Representatives), makes it impracticable or
inadvisable to market the Securities being delivered at the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated in the Prospectus.
9. This Agreement shall become effective upon execution and
delivery hereof by the parties hereto.
10. If any Underwriter or Underwriters default in their
obligations to purchase Securities hereunder on the Closing Date or the
Additional Closing Date, as the case may be, and the aggregate stated amount of
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total stated amount of
-29-
Securities that the Underwriters are obligated to purchase on such Closing Date,
the Representatives may make arrangements satisfactory to the Company for the
purchase of such Securities by other persons, including any of the Underwriters,
but if no such arrangements are made by such Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any
Underwriter or Underwriters so default and the aggregate stated amount of
Securities with respect to which such default or defaults occur exceeds 10% of
the total stated amount of Securities that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to the
Representatives and the Company for the purchase of such Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter from liability for its default.
11. If this Agreement shall be terminated by the Underwriters
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters for all out-of-pocket expenses
(including the fees and expenses of its counsel) reasonably incurred by the
Underwriters in connection with this Agreement or the offering contemplated
hereunder and upon demand the Company shall pay the full amount thereof to the
Underwriters.
12. This Agreement shall inure to the benefit of and be
binding upon the Company, the Underwriters, each affiliate of the Underwriters
which assists the Underwriters in the distribution of the Securities, directors
and officers of the Company any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Securities
from the Underwriters shall be deemed to be a successor by reason merely of such
purchase.
13. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
given to Credit Suisse First Boston Corporation at Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telefax: 212-325-4296); Attention: Transactions Advisory
Group, and to ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (telefax: 212-648-5552); Attention: Syndicate
-30-
Department. Notices to the Company shall be given to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; Attention: Legal Department (telefax:
713-420-4099).
14. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
15. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York.
16. The Company hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
17. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and neuter
genders and the singular and plural include one another. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company and the Underwriters.
-31-
If the foregoing is in accordance with your understanding, please sign and
return nine counterparts hereof.
Very truly yours,
EL PASO CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and
Treasurer
Accepted as of the date first written above:
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
On behalf of the Several Underwriters
named in Schedule I of the Underwriting Agreement
SCHEDULE I
Number of Number of
Underwriter Underwritten Securities Option Securities
----------- ----------------------- -----------------
Credit Suisse First Boston Corporation................ 3,250,000 487,500
▇.▇. ▇▇▇▇▇▇ Securities Inc............................ 3,250,000 487,500
Banc of America Securities LLC........................ 875,000 131,250
▇▇▇▇▇▇ Brothers Inc................................... 875,000 131,250
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated..................... 875,000 131,250
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.............................. 875,000 131,250
---------- ---------
Total........................................ 10,000,000 1,500,000
---------- =========
SCHEDULE II
El Paso Natural Gas Company
El Paso Tennessee Pipeline Co.
Southern Natural Gas Company
El Paso Production Holding Company
El Paso CGP Company
EXHIBIT A
[Form of Lock-Up Agreement]
Credit Suisse First Boston Corporation
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ Securities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
On behalf of the Several Underwriters
named in Schedule I to the
Underwriting Agreement
Re: El Paso Corporation - Equity Security Units
Offering
Ladies and Gentlemen:
The undersigned understands that you have entered into an
Underwriting Agreement (the "
Underwriting Agreement") with El Paso Corporation,
a Delaware corporation (the "Company"), providing for the public offering (the
"Public Offering") by you (the "Underwriters") of 9.00% Equity Security Units
(the "Securities"), of the Company. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the
Underwriting
Agreement.
In consideration of your agreement to purchase and make the
Public Offering of the Securities, and for other good and valuable consideration
receipt of which is hereby acknowledged, the undersigned hereby agrees that,
without your prior written consent, which shall not be unreasonably withheld,
the undersigned will not, during the period (the "Lock-Up Period") ending 45
days after the date of the prospectus relating to the Public Offering (the
"Prospectus"), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any Securities, Purchase
Contracts or shares of Common Stock of the Company or any securities of the
Company which are substantially similar to Securities, Purchase Contracts or
shares of Common Stock of the Company or any securities convertible into or
exercisable or exchangeable for Securities, Purchase Contracts or Common Stock
of the Company (including, but not limited to, Common Stock which may be deemed
to be beneficially owned by the undersigned in accordance with the rules and
regulations of the Securities and
-2-
Exchange Commission and securities which may be issued upon exercise of a stock
option or warrant) other than (a) as a bona fide gift or bona fide gifts,
provided, however, that the recipient of such bona fide gift or bona fide gifts
shall execute a copy of and be bound by the terms of, this Agreement prior to
such transfer, (b) the sale of any shares of Common Stock acquired upon the
exercise of options granted under the Company's stock option or stock incentive
plans that would otherwise expire during the Lock-Up Period or (c) the adoption
of a written plan for trading securities consistent with Rule 10b5-1 of the
Securities Exchange Act of 1934, as amended, as long as any sales under such
written plan occur after the Lock-Up Period (2) enter into any swap, option,
future, forward or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of the Securities, Purchase Contracts or
Common Stock of the Company or any securities of the Company which are
substantially similar to the Securities, Purchase Contracts or Common Stock of
the Company or any security convertible into or exercisable or exchangeable for
Securities, Purchase Contracts or Common Stock of the Company, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Securities, Purchase Contracts or Common Stock or such other securities, in cash
or otherwise. In addition, the undersigned agrees that, without the prior
written consent of both Representatives, which shall not be unreasonably
withheld, it will not, during the period ending 45 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any Securities, Purchase Contracts or shares of Common Stock or
any securities of the Company which are substantially similar to Securities,
Purchase Contracts or Common Stock or any security convertible into or
exercisable or exchangeable for Securities, Purchase Contracts or Common Stock.
In furtherance of the foregoing, the Company and any duly
appointed transfer agent for the registration or transfer of the securities
described herein are hereby authorized to decline to make any transfer of
securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to enter into this Lock-Up Agreement.
All authority herein conferred or agreed to be conferred and any obligations of
the undersigned shall be binding upon the successors, assigns, heirs or personal
representatives of the undersigned.
The undersigned understands that, if the
Underwriting
Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Securities
to be sold thereunder, this Lock-Up Agreement shall terminate and be of no
further force or effect, and the undersigned shall be released from all
obligations under this Lock-Up Agreement.
The undersigned understands that the Underwriters propose to
proceed with the Public Offering in reliance upon this Lock-Up Agreement.
-3-
THIS LOCK-UP AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
Very truly yours,
By:
---------------------------------
Name:
Title: