<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 1999
REGISTRATION NO. 333-83549
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------
ENRON CORP.
(Name of Registrant as specified in its charter)
<TABLE>
<S> <C>
OREGON 47-0255140
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
REX R. ROGERS
ENRON CORP.
VICE PRESIDENT AND
ASSOCIATE GENERAL COUNSEL
1400 SMITH STREET
HOUSTON, TEXAS 77002
TELEPHONE: (713) 853-3069
FACSIMILE: (713) 646-5847
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices and agent for service)
Copies to:
<TABLE>
<S> <C>
MICHAEL P. FINCH GARY W. ORLOFF
VINSON & ELKINS L.L.P. BRACEWELL & PATTERSON, L.L.P.
2300 FIRST CITY TOWER, 1001 FANNIN 711 LOUISIANA, SUITE 2900
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
TELEPHONE: (713) 758-2128 TELEPHONE: (713) 221-1306
FACSIMILE: (713) 615-5282 FACSIMILE: (713) 221-2166
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If any of the securities registered on this Form are being offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
The purpose of this Amendment No. 2 to Registration Statement on Form S-3
(No. 333-83549) of Enron Corp. is to file Exhibit No. 1.01 -- the form of
Underwriting Agreement. This Amendment No. 2 consists solely of Part II,
Information Not Required in Prospectus, and Exhibit 1.01.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth various expenses in connection with the sale
and distribution of the securities being registered, other than the underwriting
discounts and commissions. All amounts shown are estimates except the SEC
registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 62,742
Legal fees and expenses..................................... 80,000
Accounting fees and expenses................................ 50,000
Printing and engraving fees................................. 150,000
Trustee's fees and expenses................................. 15,000
Miscellaneous............................................... 17,258
--------
Total............................................. $375,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Enron Charter contains provisions under which Enron will indemnify, to
the fullest extent permitted by law, persons who are made a party to an action
or proceeding by virtue of the fact that the individual is or was a director,
officer, or, in certain circumstances, an employee or agent, of Enron or another
corporation at Enron's request. The Oregon Business Corporation Act generally
permits such indemnification to the extent that the individual acted in good
faith and in a manner which he reasonably believed to be in the best interest of
or not opposed to the corporation or, with respect to criminal matters, if the
individual had no reasonable cause to believe his or her conduct was unlawful.
In addition, the Enron Charter contains a provision that eliminates the personal
liability of a director to the corporation or its shareholders for monetary
damages for conduct as a director, except for liability of a director (1) for
breach of the duty of loyalty, (2) for actions or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3) for the
payment of improper dividends or redemptions, or (4) for any transaction from
which the director derived an improper personal benefit.
Enron has purchased liability insurance policies covering its directors and
officers to provide protection where Enron cannot legally indemnify a director
or officer and where a claim arises under the Employee Retirement Income
Security Act of 1974 against a director or officer based on an alleged breach of
fiduciary duty or other wrongful act.
II-1
<PAGE> 4
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
*1.01 Form of Underwriting Agreement.
3.01 Amended and Restated Articles of Incorporation of Enron
(Annex E to the Proxy Statement/Prospectus included in
Enron's Registration Statement on Form S-4 -- File No.
333-13791).
3.02 Articles of Merger of Enron Oregon Corp., an Oregon
corporation, and Enron Corp., a Delaware corporation
(Exhibit 3.02 to Post-Effective Amendment No. 1 to Enron's
Registration Statement on Form S-3 -- File No. 33-60417).
3.03 Articles of Merger of Enron Corp., an Oregon corporation,
and Portland General Corporation, an Oregon corporation
(Exhibit 3.03 to Post-Effective Amendment No. 1 to Enron's
Registration Statement on Form S-3 -- File No. 33-60417).
3.04 Bylaws of Enron (Exhibit 3.04 to Post-Effective Amendment
No. 1 to Enron's Registration Statement on Form S-3 -- File
No. 33-60417).
3.05 Form of Series Designation for the Enron Convertible
Preferred Stock (Annex F to the Proxy Statement/Prospectus
included in Enron's Registration Statement on Form
S-4 -- File No. 333-13791).
3.06 Form of Series Designation for the Enron 9.142% Preferred
Stock (Annex G to the Proxy Statement/Prospectus included in
Enron's Registration Statement on Form S-4 -- File No.
333-13791).
3.07 Form of Series Designation for the Enron Series A Junior
Voting Convertible Preferred Stock (Exhibit 3.07 to Enron's
Registration Statement on Form S-3 -- Form 333-44133).
3.08 Statement of Resolutions Establishing a Series of Preferred
Stock of Enron Corp. -- Mandatorily Convertible Single Reset
Preferred Stock, Series A (Exhibit 4.01 to Enron's Form 8-K
filed on January 26, 1999).
3.09 Statement of Resolutions Establishing a Series of Preferred
Stock of Enron Corp. -- Mandatorily Convertible Single Reset
Preferred Stock, Series B (Exhibit 4.02 to Enron's Form 8-K
filed on January 26, 1999).
4.01 Indenture dated November 1, 1985 between Enron and the
Trustee (Form T-3 Application for Qualification of
Indentures under the Trust Indenture Act of 1939, File No.
22-14390, filed on October 24, 1985).
4.02 First Supplemental Indenture dated as of December 1, 1995,
between Enron and the Trustee (Exhibit 4(b) to Enron's
Registration Statement on Form S-3 filed on November 8,
1995).
4.03 Supplemental Indenture, dated as of May 8, 1997, by and
among Enron Corp., Enron Oregon Corp. and Harris Trust and
Savings Bank, as Trustee (Exhibit 4.02 to Post-Effective
Amendment No. 1 to Enron's Registration Statement on Form
S-3, File No. 33-60417).
4.04 Form of Supplemental Indenture, dated as of September 1,
1997, between Enron Corp. and Harris Trust and Savings Bank,
as Trustee (Exhibit 4.03 to Enron's Registration Statement
on Form S-3, File No. 333-35549).
4.05 Form of supplemental indenture relating to the Exchangeable
Notes.
4.06 Form of Exchangeable Note (included in Exhibit 4.05).
5.01 Opinion of James V. Derrick, Jr., Esq., Executive Vice
President and General Counsel of Enron Corp.
8.01 Opinion of Vinson & Elkins L.L.P. as to certain tax matters.
10.01 Share Exchange Agreement dated as of July 19, 1999 between
Enron Corp. and Enron Oil & Gas Company (Exhibit 2 to Enron
Oil & Gas Company's Registration Statement on Form S-3, File
No. 333-83533).
12.01 Statement and Computation Showing the Ratio of Earnings to
Fixed Charges.
</TABLE>
II-2
<PAGE> 5
<TABLE>
<C> <S>
23.01 Consent of Arthur Andersen LLP.
23.02 Consent of DeGolyer and MacNaughton.
23.03 Consent of James V. Derrick, Jr., Esq. (included in Exhibit
5.01 above).
23.04 Consent of Vinson & Elkins L.L.P. (included in Exhibit 8.01
above).
24 Powers of Attorney of certain directors of Enron Corp.
25 Form T-1, Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank.
</TABLE>
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* Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Enron certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement or
amendment to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Houston and State of Texas, on the 10th day of August,
1999.
ENRON CORP.
By: /s/ RICHARD A. CAUSEY
------------------------------------
(Richard A. Causey)
Executive Vice President and
Chief Accounting Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment has been signed below by the following
persons in the capacities with Enron indicated and on the 30th day of July,
1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ KENNETH L. LAY Chairman of the Board, Chief Executive
- ----------------------------------------------------- Officer and Director (Principal Executive
(Kenneth L. Lay) Officer)
/s/ RICHARD A. CAUSEY Executive Vice President and Chief
- ----------------------------------------------------- Accounting Officer (Principal Accounting
(Richard A. Causey) Officer)
/s/ ANDREW S. FASTOW Executive Vice President and Chief Financial
- ----------------------------------------------------- Officer (Principal Financial Officer)
(Andrew S. Fastow)
* Director
- -----------------------------------------------------
(Robert A. Belfer)
* Director
- -----------------------------------------------------
(Norman P. Blake, Jr.)
* Director
- -----------------------------------------------------
(Ronnie C. Chan)
* Director
- -----------------------------------------------------
(John H. Duncan)
* Director
- -----------------------------------------------------
(Joe H. Foy)
* Director
- -----------------------------------------------------
(Wendy L. Gramm)
* Director
- -----------------------------------------------------
(Ken L. Harrison)
* Director
- -----------------------------------------------------
(Robert K. Jaedicke)
</TABLE>
II-4
<PAGE> 7
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
- -----------------------------------------------------
(Charles A. LeMaistre)
Director
- -----------------------------------------------------
(Rebecca P. Mark)
* Director
- -----------------------------------------------------
(John Mendelsohn)
Director
- -----------------------------------------------------
(Jerome J. Meyer)
* Director and President and Chief Operating
- ----------------------------------------------------- Officer
(Jeffrey K. Skilling)
* Director
- -----------------------------------------------------
(John A. Urquhart)
* Director
- -----------------------------------------------------
(John Wakeham)
* Director
- -----------------------------------------------------
(Herbert S. Winokur, Jr.)
*By: /s/ REBECCA C. CARTER
------------------------------------------------
(Rebecca C. Carter)
(Attorney-in-fact for persons indicated)
</TABLE>
II-5
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<C> <S>
*1.01 Form of Underwriting Agreement.
3.01 Amended and Restated Articles of Incorporation of Enron
(Annex E to the Proxy Statement/Prospectus included in
Enron's Registration Statement on Form S-4 -- File No.
333-13791).
3.02 Articles of Merger of Enron Oregon Corp., an Oregon
corporation, and Enron Corp., a Delaware corporation
(Exhibit 3.02 to Post-Effective Amendment No. 1 to Enron's
Registration Statement on Form S-3 -- File No. 33-60417).
3.03 Articles of Merger of Enron Corp., an Oregon corporation,
and Portland General Corporation, an Oregon corporation
(Exhibit 3.03 to Post-Effective Amendment No. 1 to Enron's
Registration Statement on Form S-3 -- File No. 33-60417).
3.04 Bylaws of Enron (Exhibit 3.04 to Post-Effective Amendment
No. 1 to Enron's Registration Statement on Form S-3 -- File
No. 33-60417).
3.05 Form of Series Designation for the Enron Convertible
Preferred Stock (Annex F to the Proxy Statement/Prospectus
included in Enron's Registration Statement on Form
S-4 -- File No. 333-13791).
3.06 Form of Series Designation for the Enron 9.142% Preferred
Stock (Annex G to the Proxy Statement/Prospectus included in
Enron's Registration Statement on Form S-4 -- File No.
333-13791).
3.07 Form of Series Designation for the Enron Series A Junior
Voting Convertible Preferred Stock (Exhibit 3.07 to Enron's
Registration Statement on Form S-3 -- Form 333-44133).
3.08 Statement of Resolutions Establishing a Series of Preferred
Stock of Enron Corp. -- Mandatorily Convertible Single Reset
Preferred Stock, Series A (Exhibit 4.01 to Enron's Form 8-K
filed on January 26, 1999).
3.09 Statement of Resolutions Establishing a Series of Preferred
Stock of Enron Corp. -- Mandatorily Convertible Single Reset
Preferred Stock, Series B (Exhibit 4.02 to Enron's Form 8-K
filed on January 26, 1999).
4.01 Indenture dated November 1, 1985 between Enron and the
Trustee (Form T-3 Application for Qualification of
Indentures under the Trust Indenture Act of 1939, File No.
22-14390, filed on October 24, 1985).
4.02 First Supplemental Indenture dated as of December 1, 1995,
between Enron and the Trustee (Exhibit 4(b) to Enron's
Registration Statement on Form S-3 filed on November 8,
1995).
4.03 Supplemental Indenture, dated as of May 8, 1997, by and
among Enron Corp., Enron Oregon Corp. and Harris Trust and
Savings Bank, as Trustee (Exhibit 4.02 to Post-Effective
Amendment No. 1 to Enron's Registration Statement on Form
S-3, File No. 33-60417).
4.04 Form of Supplemental Indenture, dated as of September 1,
1997, between Enron Corp. and Harris Trust and Savings Bank,
as Trustee (Exhibit 4.03 to Enron's Registration Statement
on Form S-3, File No. 333-35549).
4.05 Form of supplemental indenture relating to the Exchangeable
Notes.
4.06 Form of Exchangeable Note (included in Exhibit 4.05).
5.01 Opinion of James V. Derrick, Jr., Esq., Executive Vice
President and General Counsel of Enron Corp.
8.01 Opinion of Vinson & Elkins L.L.P. as to certain tax matters.
10.01 Share Exchange Agreement dated as of July 19, 1999 between
Enron Corp. and Enron Oil & Gas Company (Exhibit 2 to Enron
Oil & Gas Company's Registration Statement on Form S-3, File
No. 333-83533).
12.01 Statement and Computation Showing the Ratio of Earnings to
Fixed Charges.
</TABLE>
II-6
<PAGE> 9
<TABLE>
<C> <S>
23.01 Consent of Arthur Andersen LLP.
23.02 Consent of DeGolyer and MacNaughton.
23.03 Consent of James V. Derrick, Jr., Esq. (included in Exhibit
5.01 above).
23.04 Consent of Vinson & Elkins L.L.P. (included in Exhibit 8.01
above).
24 Powers of Attorney of certain directors of Enron Corp.
25 Form T-1, Statement of Eligibility under the Trust Indenture
Act of 1939 of Harris Trust and Savings Bank.
</TABLE>
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* Filed herewith.
II-7
<PAGE> 1
EXHIBIT 1.01
ENRON CORP.
__% EXCHANGEABLE NOTES DUE ___________, 2002
_________________
UNDERWRITING AGREEMENT
__________________
August __, 1999
Goldman, Sachs & Co.
Bank of America Securities, L.L.C.
Salomon Smith Barney Inc.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
Enron Corp., an Oregon corporation (the "Company"), proposes, subject
to the terms and conditions stated herein, to sell to the Underwriters named in
Schedule I hereto (the "Underwriters") an aggregate of ___________________
Exchangeable Notes (the "Firm Notes") and, at the election of the Underwriters,
up to ____________________ additional Exchangeable Notes (the "Optional
Notes"), of __% Exchangeable Notes due ________________________, 2002 of the
Company ("Exchangeable Notes") (the Firm Notes and the Optional Notes which the
Underwriters elect to purchase pursuant to Section 2 hereof being collectively
called the "Notes"). At maturity (including as a result of acceleration or
otherwise), the principal amount of each Note will be mandatorily exchangeable
by the Company into shares of common stock of Enron Oil & Gas Company, a
Delaware corporation ("EOG"), $.01 par value ("EOG Common Stock"), at the rate
specified in the Company Prospectus (as defined below).
EOG and the Company are concurrently entering into an agreement (the
"Common Stock Underwriting Agreement") providing for the sale by EOG of
27,000,000 shares of EOG Common
<PAGE> 2
Stock and the sale by the Company of ________________________ Shares of EOG
Common Stock (_________________ additional shares being sold by the Company if
the underwriters' over-allotment option in such offering is exercised in full)
through Goldman, Sachs & Co., as representatives of the several underwriters
named therein. The closings under this Agreement are not conditioned on the
closings under the Common Stock Underwriting Agreement.
The registration statement of EOG first mentioned in Section 1(b)(i)
below filed with respect to the EOG Common Stock contains two forms of
prospectus, one relating to the sale of EOG Common Stock pursuant to the Common
Stock Underwriting Agreement and one relating to the EOG Common Stock
deliverable upon Maturity (as defined in the Indenture referred to in Section
1(a)(viii) below) of the Notes. The latter form of prospectus (which is part
of and included as Appendix A to the prospectus of the Company referred to
below related to the Notes) will be identical to the former except for certain
substitute pages as included in the registration statement of EOG and
amendments thereto mentioned below. Except as used in Sections 6 and 8 herein,
and except as the context may otherwise require, references hereinafter to any
prospectus of EOG, whether in preliminary or final form, and whether as amended
or supplemented, shall include only the version thereof related to the shares
deliverable upon exchange of the Notes.
1. (a) The Company represents and warrants to, and agrees
with, each of the Underwriters and EOG that:
(i) A registration statement on Form S-3 (File No.
333-83549), as amended to the date hereof (the "Initial Company
Registration Statement"), in respect of the Firm Notes and Optional
Notes has been filed or transmitted for filing with the Securities and
Exchange Commission (the "Commission"); the Initial Company
Registration Statement and any post-effective amendment thereto, each
in the form heretofore delivered to you, and, excluding exhibits
thereto but including all documents incorporated by reference in the
prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering ("Rule 462(b) Registration Statement"), filed pursuant
to Rule 462(b) under the Securities Act of 1933, as amended (the
"Act"), which became effective upon filing, no other document with
respect to the Initial Company Registration Statement or document
incorporated by reference therein has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Company Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to
the Company's knowledge, threatened by the Commission (any preliminary
prospectus included in the Initial Company Registration Statement or
filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act, is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Company
Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, including all exhibits
thereto but excluding the Form T-1 and including (1) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section
5(a)(i) hereof and deemed by virtue of Rule 430A under the Act to be
part of the registration statement at
-2-
<PAGE> 3
the time it was declared effective and (2) the documents incorporated
by reference in the prospectus contained in the Initial Company
Registration Statement at the time such part of the registration
statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
each as amended at the time such part of the registration statement
became effective, are hereinafter collectively called the "Company
Registration Statement"; such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, is hereinafter called the
"Company Prospectus"; any reference herein to any Company Preliminary
Prospectus or the Company Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Act, as of the date of such Company
Preliminary Prospectus or Company Prospectus, as the case may be; any
reference to any amendment or supplement to any Company Preliminary
Prospectus or the Company Prospectus shall be deemed to refer to and
include any documents filed after the date of such Company Preliminary
Prospectus or Company Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Company Preliminary Prospectus or
Company Prospectus, as the case may be; any reference to any amendment
to the Initial Company Registration Statement shall be deemed to refer
to and include any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective date of
the Company Registration Statement that is incorporated by reference
in the Registration Statement); and any references to the Company
Registration Statement, any Company Preliminary Prospectus, the
Company Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (EDGAR), which EDGAR copy is substantially identical
to the other copies of such material, except to the extent permitted
by Regulation S-T;
(ii) No order preventing or suspending the use of any
Company Preliminary Prospectus has been issued by the Commission, and
each Company Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and
the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder, and
did not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman,
Sachs & Co. expressly for use therein;
(iii) The documents incorporated by reference in the
Company Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Company Prospectus or any
-3-
<PAGE> 4
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through Goldman, Sachs & Co. expressly for use therein;
(iv) The Company Registration Statement conforms, and the
Company Prospectus and any further amendments or supplements to the
Company Registration Statement or the Company Prospectus will conform,
in all material respects, to the requirements of the Act and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective
date as to the Company Registration Statement and any amendment
thereto and as of the applicable filing date as to the Company
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(v) Neither the Company nor any of its subsidiaries
listed on Schedule II hereto ("Material Subsidiaries") has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Company 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 Company Prospectus; and,
since the respective dates as of which information is given in the
Company Registration Statement and the Company Prospectus, there has
not been any change in the capital stock (other than changes in common
stock resulting from employee benefit plan or dividend reinvestment
plan transactions, conversions of outstanding convertible securities,
or, if disclosed to the Underwriters in writing, purchases pursuant to
the Company's stock repurchase program and other changes occurring in
the ordinary course of business) or combined short-term and long-term
debt (except as incurred in the ordinary course of business, as
disclosed to the Underwriters in writing) of the Company or any change
in the capital stock of any of its Material Subsidiaries (other than
changes in the EOG Common Stock resulting from employee benefit plan
or dividend reinvestment plan transactions or, if disclosed to the
Underwriters in writing, purchases pursuant to EOG's stock repurchase
program) or any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its consolidated
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Company Prospectus;
-4-
<PAGE> 5
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Oregon, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Company
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each Material
Subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in
the Company Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(vii) The Company has an authorized capitalization as set
forth in the Company Prospectus, and all of the issued 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 of the capital stock contained in the Company Prospectus;
all of the issued shares of capital stock of EOG have been duly and
validly authorized and issued, are fully paid and non-assessable and,
prior to the sales to be effected pursuant to the Common Stock
Underwriting Agreement, approximately 53.5% of the capital stock of
EOG is owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims and the Company has good and valid
title to all of the shares of EOG Common Stock to be delivered upon
exchange of the Notes;
(viii) The Notes have been duly authorized and, when issued
and delivered pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Indenture dated as of November 1, 1985
between the Company and Harris Trust and Savings Bank, as Trustee (the
"Trustee"), as supplemented through the Fourth Supplemental Indenture,
dated as of August __, 1999, by and between the Company and the
Trustee (the "Fourth Supplemental Indenture," such Indenture, as so
supplemented by the Fourth Supplemental Indenture, being herein
referred to as the "Indenture"), under which the Notes are to be
issued, which is substantially in the form filed as an exhibit to the
Company Registration Statement; the Indenture has been duly authorized
and duly qualified under the Trust Indenture Act; the Indenture dated
as of November 1, 1985 has been duly executed and delivered by the
Company and the Trustee, and when the Fourth Supplemental Indenture
has been executed and delivered by the Company and the Trustee, the
Indenture will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and the Notes and the Indenture will
conform to the descriptions thereof in the Company Prospectus;
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<PAGE> 6
(ix) The issue and sale of the Notes by the Company
hereunder and the compliance with all of the provisions of the Notes,
the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated (including the delivery
of the EOG Common Stock upon exchange of the Notes), and the sale by
the Company of the EOG Common Stock pursuant to the Common Stock
Underwriting Agreement, the compliance with all of the provisions of
the Common Stock Underwriting Agreement and the consummation of the
transactions therein contemplated, will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, nor will such
action result in any violation of the provisions of the Restated
Articles of Incorporation or By-laws of the Company or the charter or
by-laws of any of its subsidiaries or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the sale of the Notes or
the consummation by the Company of the transactions contemplated by
this Agreement (including the delivery of the EOG Common Stock upon
exchange of the Notes), except the registration under the Act of the
Notes and the EOG Common Stock deliverable upon exchange of the Notes,
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Trust Indenture Act or
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Notes by the Underwriters;
(x) Neither the Company nor any of its subsidiaries is in
violation of its Amended and Restated Articles of Incorporation or
charter, as the case may be, or By-laws or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound to
the extent such default would have a material adverse effect on the
consolidated financial position, stockholders' equity or results of
operations of the Company and its consolidated subsidiaries, taken as
a whole;
(xi) Other than as set forth or contemplated in the
Company Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or
of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
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<PAGE> 7
(xii) Neither the Company nor any of its subsidiaries has
taken or will take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in the
stabilization or manipulation of the price of the Notes or the EOG
Common Stock;
(xiii) The Company is not and, after giving effect to the
offering and sale of the Notes (and, if consummated, the sale of the
shares of EOG Common Stock pursuant to the Common Stock Underwriting
Agreement), will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(xiv) The statements set forth in the Company Prospectus
under the caption "Description of the Exchangeable Notes," insofar as
they purport to constitute a summary of the terms of the Exchangeable
Notes, are accurate, complete and fair in all material respects;
(xv) The information regarding the Year 2000 problem
contained in the Company's reports filed under the Exchange Act which
are incorporated by reference in the Company Prospectus are true in
all material respects as of the dates of such filings;
(xvi) The consummation of the transactions contemplated in
the Share Exchange Agreement, dated as of July 19, 1999 (the "Share
Exchange Agreement"), between the Company and EOG, either alone or in
combination with another event, will not result in any "parachute
payment" under Section 280G of the Internal Revenue Code of 1986, as
amended, whether or not such payment is considered to be reasonable
compensation for services rendered;
(xvii) The transactions contemplated by the Share Exchange
Agreement are intended to be tax-free to the Company, and the Company
shall take no action or position inconsistent with such tax treatment
unless required to do so pursuant to a determination; and
(xviii) To the best of the Company's knowledge after due
inquiry, Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder.
(b) EOG represents and warrants to, and agrees with, each
of the Underwriters and the Company that:
(i) A registration statement on Form S-3 (File No.
333-83533), as amended to the date hereof (the "Initial EOG
Registration Statement"), in respect of the EOG Common Stock
deliverable upon exchange of the Notes and the EOG Common Stock to be
sold pursuant to the Common Stock Underwriting Agreement has been
filed with the Commission; the Initial EOG Registration Statement and
any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared
effective by the Commission in such
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<PAGE> 8
form; other than a registration statement, if any, increasing the size
of the offering ("EOG Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Act, which became effective upon
filing, no other document with respect to the Initial EOG Registration
Statement or document incorporated by reference therein has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial EOG Registration Statement, any
post-effective amendment thereto or the EOG Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or, to EOG's knowledge, threatened by the
Commission (any preliminary prospectus included in the Initial EOG
Registration Statement or filed with the Commission pursuant to Rule
424(a) of the rules and regulations of the Commission under the Act,
is hereinafter called an "EOG Preliminary Prospectus"; the various
parts of the Initial EOG Registration Statement, any post-effective
amendment thereto or the EOG Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including (1) the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section
5(b)(i) hereof and deemed by virtue of Rule 430A under the Act to be
part of the registration statement at the time it was declared
effective and (2) the documents incorporated by reference in the
prospectus contained in the Initial EOG Registration Statement at the
time such part of the registration statement became effective or such
part of the EOG Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, each as amended at the time such part of
the registration statement became effective, are hereinafter
collectively called the "EOG Registration Statement"; such final
prospectus, in the form first filed pursuant to Rule 424(b) under the
Act, is hereinafter called the "EOG Prospectus"; any reference herein
to any EOG Preliminary Prospectus or the EOG Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such EOG Preliminary Prospectus or EOG Prospectus, as the case may
be; any reference to any amendment or supplement to any EOG
Preliminary Prospectus or the EOG Prospectus shall be deemed to refer
to and include any documents filed after the date of such EOG
Preliminary Prospectus or EOG Prospectus, as the case may be, under
the Exchange Act, and incorporated by reference in such EOG
Preliminary Prospectus or EOG Prospectus, as the case may be; any
reference to any amendment to the Initial EOG Registration Statement
shall be deemed to refer to and include any annual report of EOG filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the EOG Registration Statement that is incorporated
by reference in the EOG Registration Statement); and any references to
the EOG Registration Statement, any EOG preliminary prospectus, the
EOG Prospectus or any amendment or supplement to any of the foregoing
shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval System
(EDGAR), which EDGAR copy is substantially identical to the other
copies of such material, except to the extent permitted by Regulation
S-T;
(ii) No order preventing or suspending the use of any EOG
Preliminary Prospectus has been issued by the Commission, and each EOG
Preliminary Prospectus, at the time of filing thereof, conformed in
all material respects to the requirements of the Act, and the rules
and regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or
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<PAGE> 9
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to EOG by an Underwriter through
Goldman, Sachs & Co. expressly for use therein or by the Company
expressly for use in the preparation of the answers to Item 7 of Form
S-3;
(iii) The documents incorporated by reference in the EOG
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the EOG
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to EOG by an Underwriter through Goldman, Sachs & Co. expressly for
use therein;
(iv) The EOG Registration Statement conforms, and the EOG
Prospectus and any further amendments or supplements to the EOG
Registration Statement or the EOG Prospectus will conform, in all
material respects, to the requirements of the Act and the rules and
regulations of the Commission thereunder and do not and will not, as
of the applicable effective date as to the EOG Registration Statement
and any amendment thereto and as of the applicable filing date as to
the EOG Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to EOG by an Underwriter through Goldman, Sachs & Co. expressly for
use therein or by the Company expressly for use in the preparation of
the answers to Item 7 of Form S-3;
(v) Neither EOG nor any of its subsidiaries listed on
Schedule III hereto (the "EOG Material Subsidiaries") has sustained
since the date of the latest audited financial statements included or
incorporated by reference in the EOG 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 EOG Prospectus; and, since
the respective dates as of which information is given in the EOG
Registration Statement and the EOG Prospectus, there has not been any
change in the capital stock (other than changes in
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<PAGE> 10
the EOG Common Stock resulting from employee benefit plan or dividend
reinvestment plan transactions or, if disclosed to the Underwriters in
writing, purchases pursuant to EOG's stock repurchase program) or any
increase in long-term debt of the EOG or any of the EOG Material
Subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of EOG and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the EOG
Prospectus;
(vi) EOG has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the EOG
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each EOG
Material Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction
of incorporation, with power and authority (corporate and other) to
own its properties and conduct its business as described in the EOG
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require qualification, or is subject
to no material liability or disability by reason of the failure to be
so qualified in any such jurisdiction;
(vii) EOG and the EOG Material Subsidiaries have good and
indefeasible title to their producing oil and gas properties, free and
clear of all liens, encumbrances and defects, except (a) those
described in the EOG Prospectus, (b) liens securing taxes and other
governmental charges, or claims of materialmen, mechanics and similar
persons, not yet due and payable, (c) liens and encumbrances under
operating agreements, unitization and pooling agreements, and gas
sales contracts, securing payment of amounts not yet due and payable
and of a scope and nature customary in the oil and gas industry and
(d) liens, encumbrances and defects that do not, singly or in the
aggregate, materially affect the value of such oil and gas properties
or materially interfere with the use made or proposed to be made of
such properties by EOG and its subsidiaries;
(viii) EOG has an authorized capitalization as set forth in
the EOG Prospectus, and all of the issued shares of capital stock of
EOG (including the shares of EOG Common Stock deliverable upon
exchange of the Notes) have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the
description of the EOG capital stock contained in the EOG Prospectus;
and all of the issued shares of capital stock of each EOG Material
Subsidiary have been duly and validly authorized and issued, are fully
paid and non-assessable and (except for directors' qualifying shares)
are owned directly or indirectly by EOG, free and clear of all liens,
encumbrances, equities or claims;
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<PAGE> 11
(ix) The issue and sale of the Notes by the Company, the
compliance by EOG with all of the provisions of this Agreement and the
consummation of the transactions herein and therein contemplated
(including the delivery of the EOG Common Stock upon exchange of the
Notes), and the sale by the Company of the EOG Common Stock pursuant
to the Common Stock Underwriting Agreement, the compliance with all of
the provisions of the Common Stock Underwriting Agreement and the
consummation of the transactions therein contemplated, will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which EOG or any of its subsidiaries is a party or by
which EOG or any of its subsidiaries is bound or to which any of the
property or assets of EOG or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of EOG or the charter or
by-laws of any of its subsidiaries or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over EOG or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required to be obtained by EOG for the
sale of the Notes or the consummation by EOG of the transactions
contemplated by this Agreement (including the delivery of the EOG
Common Stock upon exchange of the Notes), except the registration
under the Act of the EOG Common Stock deliverable upon exchange of the
Notes, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state or foreign securities or
Blue Sky laws in connection with the purchase and distribution of the
Notes by the Underwriters;
(x) Neither EOG nor any of its subsidiaries is (a) in
violation of its Certificate of Incorporation or charter, as the case
may be, or By-laws or (b) in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or
any of its properties may be bound to the extent such default would
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
consolidated subsidiaries, taken as a whole;
(xi) The shares of EOG Common Stock deliverable upon
exchange of the Notes have been duly and validly authorized and issued
and are fully paid and non-assessable and conform to the description
of the EOG Common Stock contained in the EOG Prospectus;
(xii) Other than as set forth or contemplated in the EOG
Prospectus, there are no legal or governmental proceedings pending to
which EOG or any of its subsidiaries is a party or of which any
property of EOG or any of its subsidiaries is the subject which, if
determined adversely to EOG or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
current or future consolidated financial position, stockholders'
equity or results of operations of EOG and its consolidated
subsidiaries, taken as a whole; and, to the best of EOG's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
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<PAGE> 12
(xiv) EOG is not and, after giving effect to the offering
and sale of the Notes (and, if consummated, the sale of the shares of
EOG Common Stock pursuant to the Common Stock Underwriting Agreement),
will not be an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment
Company Act;
(xv) The statements set forth in the EOG Prospectus under
the caption "Description of Capital Stock," insofar as they purport to
constitute a summary of the terms of the EOG Common Stock, are
accurate, complete and fair;
(xvi) The information regarding the Year 2000 problem
contained in EOG's reports filed under the Exchange Act which are
incorporated by reference in the EOG Prospectus are true in all
material respects as of the dates of such filings;
(xvii) The consummation of the transactions contemplated in
the Share Exchange Agreement either alone or in combination with
another event, will not result in any "parachute payment" under
Section 280G of the Internal Revenue Code of 1986, as amended, whether
or not such payment is considered to be reasonable compensation for
services rendered;
(xviii) The transactions contemplated by the Share Exchange
Agreement are intended to be tax-free to EOG, and EOG shall take no
action or position inconsistent with such tax treatment unless
required to do so pursuant to a determination; and
(xix) To the best of the Company's knowledge after due
inquiry, Arthur Andersen LLP, who have certified certain financial
statements of EOG and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder.
2. Subject to the terms and conditions herein set forth, (a) the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company,
at a purchase price per Note of $_____, the number of Firm Notes to be
purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Notes as
provided below, the Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at the purchase price per Note set forth in clause (a) of this
Section 2, that portion of the number of Optional Notes as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional Notes) determined by multiplying such number of Optional Notes by a
fraction the numerator of which is the maximum number of Optional Notes which
such Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Notes that all of the Underwriters are entitled to purchase
hereunder.
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<PAGE> 13
The Company hereby grants to the Underwriters the right to purchase at
their election up to ________________ Optional Notes, at the purchase price
per Note set forth in the paragraph above, for the sole purpose of covering
over- allotments in the sale of the Firm Notes. Any such election to purchase
Optional Notes may be exercised by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Notes to be purchased and the
date on which such Optional Notes are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm
Notes, the several Underwriters propose to offer the Firm Notes for sale upon
the terms and conditions set forth in the Company Prospectus.
4. (a) The Notes to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as Goldman, Sachs & Co. may request upon at least
forty-eight hours' prior notice to the Company shall be delivered by or on
behalf of the Company to Goldman, Sachs & Co., through the facilities of The
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of Federal (same-day) funds to the account specified by the
Company to Goldman, Sachs & Co. at least 48 hours in advance. The Company will
cause the certificates representing the Notes to be made available for checking
and packaging at least twenty-four hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of DTC or its designated
custodian (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Notes, 9:30 a.m., New York City
time, on August __, 1999 or on such other time and date as Goldman, Sachs & Co.
and the Company may agree upon in writing, and, with respect to the Optional
Notes, 9:30 a.m., New York City time, on the date specified by Goldman, Sachs &
Co. in the written notice given by Goldman, Sachs & Co. of the Underwriters'
election to purchase such Optional Notes, or such other time and date as
Goldman, Sachs & Co. and the Company may agree upon in writing. Such time and
date for delivery of the Firm Notes is herein called the "First Time of
Delivery," such time and date for delivery of the Optional Notes, if not the
First Time of Delivery, is herein called the "Second Time of Delivery," and
each such time and date for delivery is herein called a "Time of Delivery."
(b) The documents to be delivered at each Time of
Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross-receipt for the Notes and any additional documents
requested by the Underwriters pursuant to Section 7(m) hereof, will be
delivered at the offices of Bracewell & Patterson, L.L.P., 711 Louisiana
Street, Houston, Texas 77002 (the "Closing Location"), and the Notes will be
delivered at the Designated Office, all at each Time of Delivery. A meeting
will be held at the Closing Location at 2:00 p.m., New York City time, on the
New York Business Day next preceding each Time of Delivery, at which meeting
the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes
of this Section 4, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
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<PAGE> 14
5. (a) The Company agrees with each of the Underwriters:
(i) To prepare the Company Prospectus in a form approved
by you and to file such Company Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Company Registration Statement or Company Prospectus
prior to the last Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when any amendment to
the Company Registration Statement has been filed or becomes effective
or any supplement to the Company Prospectus or any amended Company
Prospectus has been filed and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Company Prospectus and for so long as
the delivery of a prospectus is required in connection with the
offering or sale of the Notes; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Company
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Notes for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Company Registration Statement or Company
Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Company Preliminary Prospectus or prospectus or
suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you
may reasonably request to qualify the Notes for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Notes, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(iii) From time to time, to furnish the Underwriters with
copies of the Company Prospectus in New York City at such times and in
such quantities as you may reasonably request, and, if the delivery of
a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Company Prospectus in connection
with the offering or sale of the Notes and if at such time any events
shall have occurred as a result of which the Company 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 the light of the circumstances under
which they were made when such Company Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Company Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Company Prospectus
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<PAGE> 15
in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to each Underwriter
and to any dealer in securities as many copies as you may from time to
time reasonably request of an amended Company Prospectus or a
supplement to the Company Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of
the Notes at any time nine months or more after the time of issue of
the Company Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Company Prospectus
complying with Section 10(a)(3) of the Act;
(iv) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the
Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act;
(v) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Company Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the
Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(vi) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
EOG Prospectus, not to, except pursuant to the Common Stock
Underwriting Agreement, (x) offer, sell, contract to sell or otherwise
dispose of or hedge any shares of EOG Common Stock, or securities
convertible into or exchangeable for EOG Common Stock, or rights or
warrants to acquire EOG Common Stock, or any other securities
substantially similar to EOG Common Stock or Notes except as may be
required pursuant to the Indenture, or (y) file any registration
statement under the Act with respect to securities convertible into or
exchangeable for EOG Common Stock, rights or warrants to acquire EOG
Common Stock, or any other securities substantially similar to EOG
Common Stock or Notes, in each case without the prior written consent
of Goldman, Sachs & Co.;
(vii) To deliver to EOG copies of the opinion and
certificates delivered pursuant to Sections 7(c) and (m), in each case
also addressed to EOG or otherwise entitling EOG to rely on such
opinions and certificates as if they were so addressed;
(viii) During a period of five years from the effective date
of the Company Registration Statement, to furnish to you copies of any
financial statements and other periodic and special reports as the
Company may from time to time distribute generally to its lenders or
to the holders of any class of its securities registered under Section
12 of the
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<PAGE> 16
Exchange Act and to furnish to you a copy of each annual or other
report it shall be required to file with the Commission;
(ix) To use the net proceeds received by it from the sale
of the Notes pursuant to this Agreement in the manner specified in the
Company Prospectus under the caption "Use of Proceeds";
(x) To use its best efforts to list, subject to notice of
issuance, the Notes on the New York Stock Exchange (the "Exchange");
and
(xi) To furnish to the holders of Notes, as soon as
practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, stockholders'
equity and cash flows of the Company and its subsidiaries certified by
independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the Company
Registration Statement), to make available to the holders of Notes
consolidated summary financial information of the Company and its
subsidiaries in reasonable detail.
(b) EOG agrees with each of the Underwriters:
(i) To prepare the EOG Prospectus in a form approved by
you and to file such EOG Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under the Act; to make no further amendment or any
supplement to the EOG Registration Statement or EOG Prospectus prior
to the last Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when any amendment to
the EOG Registration Statement has been filed or becomes effective or
any supplement to the EOG Prospectus or any amended EOG Prospectus has
been filed and to furnish you with copies thereof; to file promptly
all reports and any definitive proxy or information statements
required to be filed by EOG with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of the EOG Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering or sale of the Notes; to
advise you, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any EOG Preliminary Prospectus or prospectus, of
the suspension of the qualification of the EOG Common Stock for
delivery in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the EOG Registration Statement or
EOG Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending
the use of any EOG Preliminary Prospectus or prospectus or suspending
any such qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
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<PAGE> 17
(ii) Promptly from time to time to take such action as you
may reasonably request to qualify the EOG Common Stock deliverable
upon exchange of the Notes under the securities laws of such
jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes, provided that in connection therewith EOG
shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(iii) From time to time, to furnish the Underwriters with
copies of the EOG Prospectus in New York City at such times and in
such quantities as you may reasonably request, and, if the delivery of
a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the EOG Prospectus in connection
with the offering or sale of the Notes and if at such time any events
shall have occurred as a result of which the EOG 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 the light of the circumstances under
which they were made when such EOG Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the EOG Prospectus or to file under
the Exchange Act any document incorporated by reference in the EOG
Prospectus in order to comply with the Act or the Exchange Act, to
notify you and upon your request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time reasonably
request of an amended EOG Prospectus or a supplement to the EOG
Prospectus which will correct such statement or omission or effect
such compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Notes at any time
nine months or more after the time of issue of the EOG Prospectus,
upon your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many copies as you may request of
an amended or supplemented EOG Prospectus complying with Section
10(a)(3) of the Act;
(iv) If EOG elects to rely upon Rule 462(b), EOG shall
file an EOG Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on
the date of this Agreement, and EOG shall at the time of filing either
pay to the Commission the filing fee for the EOG Rule 462(b)
Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act;
(v) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the EOG Registration Statement (as defined
in Rule 158(c) under the Act), an earnings statement of EOG and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);
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<PAGE> 18
(vi) During the period beginning from the date hereof and
continuing to and including the date 180 days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose
of or hedge, except as provided hereunder, other than pursuant to the
Common Stock Underwriting Agreement, any shares of EOG Common Stock or
any securities of EOG that are convertible into or exchangeable for,
or that represent the right to receive, shares of EOG Common Stock
(other than pursuant to employee stock option plans existing on the
date of this Agreement), without the prior written consent of Goldman,
Sachs & Co., and to cause EOG's executive officers to agree not to
offer, sell, contract to sell or otherwise dispose of or hedge any EOG
Common Stock, any securities of EOG substantially similar to the EOG
Common Stock, or any securities convertible into or exchangeable for
EOG Common Stock (other than pursuant to employee stock option plans
existing on the date of this Agreement), during such period, without
the prior written consent of Goldman, Sachs & Co.;
(vii) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a
balance sheet and statements of income, stockholders' equity and cash
flows of EOG and its subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the
first three quarters of each fiscal year (beginning with the fiscal
quarter ending after the effective date of the EOG Registration
Statement), to make available to its stockholders consolidated summary
financial information of EOG and its subsidiaries for such quarter in
reasonable detail;
(viii) To deliver to the Company copies of the opinion and
certificates delivered pursuant to Sections 7(d) and (m), in each case
also addressed to the Company or otherwise entitling the Company to
rely on such opinions and certificates as if they were so addressed;
and
(ix) During a period of five years from the effective date
of the Company Registration Statement to furnish to you copies of all
reports or other communications (financial or other) furnished to
securityholders, and to deliver to you (1) as soon as they are
available, copies of any reports and financial statements furnished to
or filed with the Commission or any national securities exchange on
which any class of securities of EOG is listed; and (2) such
additional information concerning the business and financial condition
of EOG as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent that the
accounts of EOG and its subsidiaries are consolidated in reports
furnished to its securityholders generally or to the Commission),
provided that prior to EOG's furnishing any such additional
information that is material and non-public you shall enter into such
agreement respecting the confidentiality thereof as EOG may reasonably
request.
6. The Company and EOG covenant and agree with one another and
the several Underwriters that (a) the Company will pay or cause to be paid the
following: (i) the fees, disbursements and expenses of the Company's counsel
and accountants in connection with the registration of the Notes under the Act
and all other expenses in connection with the preparation, printing and filing
of the Company Registration Statement, any Company Preliminary Prospectus,
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<PAGE> 19
the Company Prospectus and amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of printing or producing any Agreement among Underwriters, this Agreement, the
Selling Agreements, the Indenture, the Blue Sky Memorandum and any Legal
Investment Memorandum and any other documents in connection with the offering,
purchase, sale and delivery of the Notes; (iii) all expenses in connection with
the qualification of the Notes for offering and sale under state securities
laws as provided in Section 5(a)(ii) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and any legal investment
surveys; (iv) all fees and expenses in connection with listing the Notes on the
Exchange; (v) the filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the
sale of the Notes; (vi) the cost of preparing the Notes; (vii) the fees and
expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel to the Trustee in connection with the Indenture and
the Notes; (viii) any fees charged by securities rating agencies for rating the
Notes; and (ix) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section; and (b) EOG will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of EOG's counsel and accountants in connection with
the registration of the EOG Common Stock under the Act and all other expenses
in connection with the preparation, printing and filing of the EOG Registration
Statement, any EOG Preliminary Prospectus, the EOG Prospectus and amendments
and supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Blue Sky
Memorandum and any Legal Investment Memorandum and any other documents in
connection with the EOG Common Stock deliverable upon exchange of the Notes;
(iii) all expenses in connection with the qualification of the EOG Common Stock
deliverable upon exchange of the Notes under state securities laws as provided
in Section 5(b)(ii) hereof, including the fees and disbursements of counsel for
the Underwriters in connection with such qualification and in connection with
such Blue Sky or legal investment surveys; (iv) the cost of preparing stock
certificates; (v) the cost and charges of any transfer agent or registrar; (vi)
all fees and expenses in connection with listing the EOG Common Stock on the
Exchange; and (vii) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section. It is understood, however, that except as provided in this
Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their
own costs and expenses, including the fees and expenses of their counsel,
transfer taxes on any resale of the Notes by them, and any advertising expenses
connected with any offers they may make. If a separate agreement exists
between the Company and EOG which allocates such costs and expenses in a manner
different from that set forth above, such agreement shall control as between
the Company and EOG only, but such agreement shall not modify the obligations
of the Company and EOG to the Underwriters to cause the payment of costs and
expenses as set forth above.
7. The obligations of the Underwriters hereunder, as to the Notes
to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and of EOG herein, are, at and as of such Time of
Delivery, true and correct, the condition that the Company and EOG each shall
have performed all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
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<PAGE> 20
(a) Each of the Company Prospectus and the EOG Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the rules and regulations
under the Act and in accordance with Sections 5(a) and 5(b) hereof; if the
Company or EOG has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement and the EOG Rule 462(b) Registration Statement each
shall have become effective by 10:00 p.m., Washington, D.C. time, on the date
of this Agreement; no stop order suspending the effectiveness of the Company
Registration Statement or the EOG Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Bracewell & Patterson, L.L.P., counsel for the
Underwriters, shall have furnished to you such opinion or opinions, dated such
Time of Delivery, with respect to certain of the matters covered in paragraphs
(i), (iii), (iv) and (v) of subsection (c) below, in paragraphs (i) and (ii) of
subsection (d) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters. Such counsel shall also state in such opinion the following: Because
the primary purpose of our engagement was not to establish or confirm factual
matters or financial or accounting matters and because of the wholly or
partially non-legal character of many of the statements contained in the
Company Registration Statement, the EOG Registration Statement, the Company
Prospectus and the EOG Prospectus, we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Company Registration Statement, the EOG Registration
Statement, the Company Prospectus and the EOG Prospectus, and we have not
independently verified the accuracy, completeness or fairness of such
statements. Without limiting the foregoing, we assume no responsibility for,
have not independently verified and have not been asked to comment on the
accuracy, completeness or fairness of the financial statements, schedules and
other financial data or information pertaining to natural resource reserves
included in the Company Registration Statement or the EOG Registration
Statement or the exhibits to the Company Registration Statement or the EOG
Registration Statement, and we have not examined the accounting, financial or
other records from which such financial statements, schedules and other
financial data and information were derived. We note that, although certain
portions of the Company Registration Statement or the EOG Registration
Statement (including financial statements and supporting schedules and related
data and reports pertaining to natural resource reserves) have been included
therein on the authority of "experts" within the meaning of the Act, we are not
experts with respect to any portion of the Company Registration Statement or
the EOG Registration Statement, including, without limitation, such financial
statements and supporting schedules and related data and other financial or
accounting data and information pertaining to natural resource reserves
included therein. However, we have participated in conferences with officers
and other representatives of the Company, including its counsel, and of EOG,
including its counsel, representatives of the independent accountants of the
Company and EOG, and your representatives at which the contents of the Company
Registration Statement, the EOG Registration Statement, the Company Prospectus
and the EOG Prospectus and related matters were discussed. Based upon such
participation and review, and relying as to materiality in part upon the
factual statements of officers and other representatives of the Company and of
EOG and upon your representatives, we advise you that no facts have come to our
attention that have caused us to
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<PAGE> 21
believe that either the Company Registration Statement or the EOG Registration
Statement, and any further amendment thereto made by the Company or EOG, as the
case may be, prior to the date of this opinion (except for the financial
statements, schedules and related data and other financial or accounting data,
information pertaining to natural resource reserves or exhibits, as to which we
have not been asked to comment), at the time it became effective, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or that either the Company Prospectus or the EOG Prospectus, and
any further amendment or supplement thereto made by the Company or EOG, as the
case may be, prior to the date of this opinion (except for the financial
statements, schedules and related data and other financial or accounting data,
information pertaining to natural resource reserves or exhibits, as to which we
have not been asked to comment), as of the date of such Prospectus, and, as so
amended or supplemented, as of the date of this opinion, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(c) James V. Derrick, Jr., Executive Vice President and
General Counsel of the Company, shall have furnished to you his written
opinion, dated as of such Time of Delivery, in form and substance satisfactory
to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Oregon, with all necessary corporate power and authority to own its
properties and conduct its business as described in the Company
Prospectus;
(ii) Each Material Subsidiary has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation, with all necessary
corporate power and authority to own its properties and conduct its
business as described in the Company Prospectus;
(iii) This Agreement has been duly authorized, executed and
delivered by the Company;
(iv) The Notes are in the form contemplated by the
Indenture and have been duly authorized by all necessary corporate
action on the part of the Company; the Notes, when executed and
authenticated as specified in the Indenture (which facts, such counsel
may state, such counsel has not determined by an inspection of the
individual Notes) and issued and delivered against payment pursuant to
this Agreement, will constitute valid and legally binding obligations
of the Company entitled to the benefits provided by the Indenture, and
enforceable against the Company in accordance with their respective
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws
relating to or affecting creditors' rights generally and to general
equity principles; and the Notes and the Indenture conform in all
material respects to the descriptions thereof in the Company
Prospectus;
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<PAGE> 22
(v) The Indenture has been duly authorized, executed and
delivered by the Company, and assuming due authorization, execution
and delivery by the Trustee, constitutes a valid and legally binding
instrument, enforceable against the Company in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws
relating to or affecting creditor's rights generally and to general
equity principles; and the Indenture has been duly qualified under the
Trust Indenture Act;
(vi) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this
clause upon certificates of public officials);
(vii) Each Material Subsidiary has been duly qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction; and,
prior to the sales to be effected pursuant to the Common Stock
Underwriting Agreement, approximately 53.5% of the capital stock of
EOG is owned directly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(viii) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of the Material
Subsidiaries is a party or of which any property of the Company or any
of the Material Subsidiaries is the subject which would be required to
be described in the Company Prospectus and is not described as
required;
(ix) The issue and sale of the Notes by the Company
hereunder and the compliance by the Company with all of the provisions
of the Notes, the Indenture and this Agreement and the consummation of
the transactions therein and herein contemplated (including the
delivery of the shares of EOG Common Stock upon exchange of the
Notes), will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Amended and Restated
Articles of Incorporation or By-laws of the Company or the charter or
by-laws of any of its subsidiaries or any statute or any order, rule
or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties;
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<PAGE> 23
(x) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Notes, the delivery of the EOG Common Stock upon exchange of the Notes
or the consummation by the Company of the transactions contemplated by
this Agreement or the Indenture, except such as have been obtained
under the Act or the Trust Indenture Act, and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Notes by the Underwriters;
(xi) The Company is not subject to, or is exempt from,
regulation as a "holding company" or a "subsidiary company" of a
"holding company," in each case as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended;
(xii) The documents incorporated by reference in the
Company Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and reports of experts
pertaining to natural resource reserves therein, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case maybe, complied as to form in
all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such
documents, when such documents became effective or were so filed, as
the case may be, contained, in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and
(xiii) The Company Registration Statement and the Company
Prospectus and any further amendments and supplements thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules and reports of experts pertaining to
natural resource reserves therein, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Act and the rules and regulations thereunder;
although he does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Company
Registration Statement or the Company Prospectus, nothing has come to
his attention that has caused him to believe that, as of its effective
date, the Company Registration Statement or any further amendment
thereto made by the Company prior to such Time of Delivery (other than
the financial statements and related schedules and reports of experts
pertaining to natural resource reserves therein, as to which such
counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Company Prospectus or any
further amendment or supplement thereto made by the Company
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<PAGE> 24
prior to such Time of Delivery (other than the financial statements
and related schedules and reports of experts pertaining to natural
resource reserves therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the Company
Registration Statement or the Company Prospectus or any further
amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
and reports of experts pertaining to natural resource reserves
therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and he does
not know of any amendment to the Company Registration Statement
required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Company
Registration Statement or required to be incorporated by reference
into the Prospectus or required to be described in the Company
Registration Statement or the Company Prospectus which are not filed
or incorporated by reference or described as required.
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than Texas, the General
Corporation Law of the State of Delaware, the Oregon Business Corporation Act
and the United States and, with respect to the opinion in paragraph (iii)
above, may rely, as to matters of New York law, upon the opinion of Vinson &
Elkins L.L.P. delivered pursuant to subsection 7(e) hereof.
(d) Fulbright & Jaworski L.L.P, counsel for EOG, shall
have furnished to you such written opinion, dated as of such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) EOG has an authorized capitalization as set forth in
the EOG Prospectus, (including the shares of EOG Common Stock
deliverable upon exchange of the Notes) and the Shares of EOG Common
Stock deliverable upon exchange of the Notes have been duly authorized
and validly issued and are fully paid and non-assessable and conform
to the description of such stock contained in the EOG Prospectus;
(ii) This Agreement has been duly authorized, executed and
delivered by EOG;
(iii) The statements set forth in the EOG Prospectus under
the caption "Description of Common Stock," insofar as they purport to
constitute a summary of the terms of the EOG Common Stock, are
accurate in all material respects;
(iv) EOG is not, and after the consummation of the sale of
the Notes contemplated by this Agreement will not be, an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act;
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<PAGE> 25
(v) EOG is not subject to, or is exempt from, regulation
as a "holding company" or a "subsidiary company" of a "holding
company," in each case as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended;
(vi) The EOG Registration Statement and the EOG Prospectus
and any further amendments and supplements thereto made by EOG prior
to such Time of Delivery (other than the financial statements and
related schedules and reports of experts pertaining to natural
resource reserves therein, as to which such counsel need express no
opinion) appear on their face to comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; and such counsel does not know of any
amendment to the EOG Registration Statement required to be filed.
Such counsel shall also state in such opinion the following: We have
participated in conferences with officers and other representatives of EOG and
counsel for and representatives of the Underwriters and the Company at which
the contents of the EOG Registration Statement and the EOG Prospectus and
related matters were discussed and, although we are not passing upon and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the EOG Registration Statement and the EOG Prospectus
(except to the extent specified in paragraph (iii) of this letter), on the
basis of the foregoing (relying, to the extent we deem appropriate, as to facts
necessary to the determination of materiality upon the opinions of officers and
other representatives of EOG), no facts have come to our attention that lead
us to believe that at its effective date the EOG Registration Statement
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that, as of the date of the EOG Prospectus or as of the date
hereof, the EOG Prospectus contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of circumstances under which they are
made, not misleading (except as to financial statements and schedules, natural
resource reserve reports or other financial and reserve data included in the
EOG Registration Statement or the EOG Prospectus, as to which we do not
comment).
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than Texas, the Delaware
General Corporation Law (the "DGCL") and the United States.
(e) Vinson & Elkins L.L.P., counsel to the Company, shall
have furnished to you such written opinion (a draft of each such opinion is
attached as Annex III(d) hereto) dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) This Agreement has been duly authorized, executed and
delivered by the Company;
(ii) The statements set forth in the Company Prospectus
under the caption "Description of Exchangeable Notes," insofar as they
purport to constitute a summary of the terms of the Exchangeable
Notes, and the statements set forth in the EOG Prospectus under
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<PAGE> 26
the caption "Description of Capital Stock," insofar as they purport to
constitute a summary of the terms of the EOG Common Stock, are
accurate in all material respects;
(iii) The Company is not, and after the consummation of the
sale of the Notes contemplated by this Agreement and the consummation
of the sale of the EOG Common Stock contemplated by the Common Stock
Underwriting Agreement will not be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act;
(iv) The documents incorporated by reference in the
Company Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the
financial statements and related schedules and reports of experts
pertaining to natural resource reserves and other information of a
financial or natural resource reserve nature included therein, as to
which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
appeared on their face to comply as to form in all material respects
with the requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder; and
(v) The Company Registration Statement and the Company
Prospectus and any further amendments and supplements thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules and reports of experts pertaining to
natural resource reserves therein, as to which such counsel need
express no opinion) appear on their face to comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; and such counsel does not know of any
contracts or other documents of a character required to be filed as an
exhibit to the Company Registration Statement or required to be
incorporated by reference into the Company Prospectus or required to
be described in the Company Registration Statement or the Company
Prospectus which are not so filed, incorporated by reference or
described, as the case may be.
Such counsel shall also state in such opinion the following: Because
the primary purpose of our engagement was not to establish or confirm factual
matters or financial, accounting, statistical or natural resource reserves
matters or related data and because of the wholly or partially non-legal
character of many of the statements contained in the Company Registration
Statement and the Company Prospectus, we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
in the Company Registration Statement and the Company Prospectus (except to the
extent specifically set forth in subparagraph (ii) above) and we have not
independently verified the accuracy, completeness or fairness of such
statements (except as aforesaid). Without limiting the foregoing, we assume no
responsibility for and have not independently verified the accuracy,
completeness or fairness of the financial statements and schedules, natural
resource reserve reports or other financial and reserve data included in the
Company Registration Statement and we have not examined the accounting,
financial, or natural resource reserve records from which such financial
statements, schedules, natural resource reserve and related data are derived.
We note that, although certain portions of the Company Registration
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Statement (including financial statements and schedules, natural resource
reserves and related data) have been included therein on the authority of
"experts" within the meaning of the Act, we are not experts with respect to any
portion of the Company Registration Statement. However, we have participated
in conferences with officers and other representatives of the Company and
representatives of the independent accountants of the Company, and with your
representatives and legal counsel, at which the contents of the Company
Registration Statement and the Company Prospectus and related matters were
discussed, exclusive of the EOG Prospectus included as Appendix A to the
Company Prospectus. We have also reviewed certain corporate documents
furnished to us by the Company and the EOG Prospectus included as Appendix A to
the Company Prospectus. Based on such participation and review (relying, to
the extent we deem appropriate, as to facts necessary to the determination of
materiality upon the officers and other representatives of the Company and upon
your representatives), and subject to the limitations described above, no
information has come to our attention that causes us to believe that the
Company Registration Statement, and any further amendment thereto made by the
Company, as the case may be, prior to the date of this opinion, at the time it
became effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Company Prospectus and any
further amendment or supplement thereto made by the Company, as the case may
be, prior to the date of this opinion, as of its date and, as so amended or
supplemented, as of the date of this opinion, contained an untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction outside the United States.
(f) On the respective dates of the Company Prospectus and
the EOG Prospectus at a time prior to the execution of this Agreement, at 9:30
a.m., New York City time, on the respective effective dates of any
post-effective amendment to the Company Registration Statement or the EOG
Registration Statement and also at each Time of Delivery, Arthur Andersen LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto in the case of the Company and Annex II hereto in the
case of EOG (the executed copy of the letter in respect of the Company
Registration Statement delivered prior to the execution of this Agreement is
attached as Annex I(a) hereto and the executed copy of the letter in respect of
the EOG Registration Statement delivered prior to the execution of this
Agreement is attached as Annex II(a) hereto, and a draft of the form of letter
to be delivered on the effective date of any post-effective amendment to the
Company Registration Statement and as of each Time of Delivery is attached as
Annex I(b) hereto and a draft of the form of letter to be delivered on the
effective date of any post-effective amendment to the EOG Registration
Statement and as of each Time of Delivery is attached as Annex II(b) hereto);
(g) The Company and EOG shall have complied with the
provisions of Section 5(a)(iii) and 5(b)(iii), as the case may be, with respect
to the furnishing of prospectuses on the New York Business Day next succeeding
the date of this Agreement;
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<PAGE> 28
(h) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Company Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Company Prospectus; (ii) since the respective dates as of
which information is given in the Company Prospectus there shall not have been
any change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Company
Prospectus; (iii) neither EOG nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the EOG Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the EOG
Prospectus; and (iv) since the respective dates as of which information is
given in the EOG Prospectus there shall not have been any change in the capital
stock or long-term debt of EOG or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of EOG and its subsidiaries, otherwise than as set forth or
contemplated in the EOG Prospectus, the effect of which, in any such case
described in Clause (i), (ii), (iii) or (iv), is in the judgment of the
representatives of the Underwriters (the "Representatives") so material and
adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Company Prospectus;
(i) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's or EOG's debt securities by
any "nationally recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's or EOG's debt securities;
(j) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the Exchange; (ii) a suspension or material
limitation in trading in the Company's or EOG's securities on the Exchange;
(iii) a general moratorium on commercial banking activities declared by either
Federal or New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this Clause (iv) in the judgment of the Representatives makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the Notes
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(k) The Notes, subject to notice of issuance, and the EOG
Common Stock to be delivered by the Company upon exchange of the Notes, shall
have been duly listed on the Exchange;
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<PAGE> 29
(l) EOG has obtained and delivered to the Underwriters
executed copies of an agreement from EOG's executive officers to the effect set
forth in Subsection 5(b)(vi) hereof in form and substance satisfactory to you;
(m) The Company and EOG shall have furnished or caused to
be furnished to you at such Time of Delivery certificates of officers of the
Company and of EOG respectively, satisfactory to you as to the accuracy of the
representations and warranties of the Company and EOG respectively, herein at
and as of such Time of Delivery, as to the performance by the Company and EOG
of all of their respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company and EOG shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (h) of this
Section, and as to such other matters as you may reasonably request; and
(n) The closing of the transactions contemplated by the
Share Exchange Agreement shall have been completed.
(o) Barry Hunsaker, Jr., Senior Vice President and
General Counsel of EOG, shall have furnished to you such written opinion, dated
as of such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) EOG has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with all necessary corporate power and authority to own
its properties and conduct its business as described in the EOG
Prospectus;
(ii) EOG has an authorized capitalization as set forth in
the EOG Prospectus, and all of the issued shares of capital stock of
EOG (including the shares of EOG Common Stock deliverable upon
exchange of the Notes) have been duly and validly authorized and
issued and are fully paid and non-assessable; and the EOG Common Stock
conforms to the description of such stock contained in the EOG
Prospectus;
(iii) EOG has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of failure to
be so qualified in any such jurisdiction (such counsel being entitled
to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates of
officers of EOG, provided that such counsel shall state that such
counsel believes that both you and such counsel are justified in
relying upon such opinions and certificates);
(iv) Each Material Subsidiary of EOG has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties, or conducts any business, so as to
require such qualification, or is subject to no material
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<PAGE> 30
liability or disability by reason of failure to be so qualified in any
such jurisdiction; and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable, and (except for directors'
qualifying shares) are owned directly or indirectly by EOG, free and
clear of all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon
certificates of officers of EOG or its subsidiaries, provided that
such counsel shall state that such counsel believes that both you and
such counsel are justified in relying upon such opinions and
certificates);
(v) To such counsel's knowledge and other than as set
forth in the EOG Prospectus, there are no legal or governmental
proceedings pending to which EOG or any of its subsidiaries is a party
or of which any property of EOG or any of its subsidiaries is the
subject which, if determined adversely to EOG or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, stockholders' equity or results of operations of EOG and its
consolidated subsidiaries, taken as a whole; and, to such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by EOG;
(vii) The compliance by EOG with all of the provisions of
this Agreement and the consummation of the transactions contemplated
herein and in the Notes and the Indenture (including the delivery of
the EOG Common Stock upon exchange of the Notes), will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument known
to such counsel to which EOG or any of its subsidiaries is a party or
by which EOG or any of its subsidiaries is bound or to which any of
the property or assets of EOG or any of its subsidiaries is subject,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of EOG or the charter or
by-laws of any of its subsidiaries or any statute or any order, rule
or regulation known to such counsel of any court or governmental
agency or body having jurisdiction over EOG or any of its subsidiaries
or any of their properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required in connection with the
consummation by EOG of the transactions contemplated by this
Agreement, except such as have been obtained under the Act, and such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the registration of the EOG Common Stock deliverable
upon the exchange of the Notes;
(ix) The documents incorporated by reference in the EOG
Prospectus or any further amendment or supplement thereto made by EOG
prior to such Time of Delivery (other than the financial statements
and related schedules and reports of experts pertaining to natural
resource reserves therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, appeared on
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their face to comply as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and
In rendering such opinion, such counsel may state that he expresses no
opinion as to the laws of any jurisdiction other than Texas, the DGCL and the
United States.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Company
Preliminary Prospectus, the Company Registration Statement or the Company
Prospectus (in each case including any EOG Preliminary Prospectus or EOG
Prospectus included therein), or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Company Preliminary Prospectus, the Company
Registration Statement or the Company Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by any Underwriter through Goldman, Sachs & Co.
expressly for use therein; and provided, further, that the Company shall not be
liable to any Underwriter under this indemnity agreement in this subsection (a)
with respect to any Company Preliminary Prospectus to the extent that any such
loss, claim, damage or liability of such Underwriter results from the fact such
Underwriter sold Notes to a person as to whom it shall be established that
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Company Prospectus or of the Company Prospectus as then
amended or supplemented in any case where such delivery is required by the Act
if the Company has previously furnished copies thereof to such Underwriter and
the loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in the Company Preliminary
Prospectus which was corrected in the Company Prospectus or in the Company
Prospectus as then amended or supplemented and delivered to the Underwriter.
(b) EOG will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any EOG Preliminary Prospectus, the EOG
Registration Statement or the EOG Prospectus (in each case including any EOG
Preliminary Prospectus or EOG Prospectus included in any Company Preliminary
Prospectus or Company Prospectus), or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter
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<PAGE> 32
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that EOG shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any EOG Preliminary Prospectus, the EOG
Registration Statement or the EOG Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to EOG by any Underwriter through Goldman, Sachs & Co. expressly for
use therein; and provided, further, that EOG shall not be liable to any
Underwriter under this indemnity agreement in this subsection (b) with respect
to any EOG Preliminary Prospectus to the extent that any such loss, claim,
damage or liability of such Underwriter results from the fact such Underwriter
sold Notes to a person as to whom it shall be established that there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the EOG Prospectus or of the EOG Prospectus as then amended or supplemented in
any case where such delivery is required by the Act if EOG has previously
furnished copies thereof to such Underwriter and the loss, claim, damage or
liability of such Underwriter results from an untrue statement or omission of a
material fact contained in the EOG Preliminary Prospectus which was corrected
in the EOG Prospectus or the EOG Prospectus as then amended or supplemented and
delivered to the Underwriter.
(c) Each Underwriter will indemnify and hold harmless the
Company and EOG against any losses, claims, damages or liabilities to which the
Company or EOG may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Company or EOG Preliminary Prospectus, the
Company or EOG Registration Statement or the Company or EOG Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Company or EOG Preliminary Prospectus, the Company or EOG Registration
Statement or the Company or EOG Prospectus or any such amendment or supplement
in reliance upon and in conformity with written information furnished to the
Company or EOG by such Underwriter through Goldman, Sachs & Co. expressly for
use therein; and will reimburse the Company and EOG for any legal or other
expenses reasonably incurred by the Company or EOG in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(d) Promptly after receipt by an indemnified party under
subsection (a), (b) or (c) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against an indemnifying party under such subsection, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified
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party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified party,
in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any indemnified party. Further, an indemnifying party shall not be liable for
any settlement of any action or claim effected without its consent, which
consent shall not be unreasonably withheld.
(e) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and EOG on the one hand and the
Underwriters on the other from the offering of the Notes. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (d) above, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and EOG on the one hand and the Underwriters on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and EOG on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Notes purchased under this Agreement (before deducting expenses)
received by the Company and EOG bear to the total underwriting discounts and
commissions received by the Underwriters with respect to the Notes purchased
under this Agreement, in each case as set forth in the table on the cover page
of the Company Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or EOG on the one hand or the
Underwriters on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission. The Company, EOG and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (e) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (e). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include any legal
or other
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<PAGE> 34
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Notes underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and EOG under this
Section 8 shall be in addition to any liability which the Company and EOG may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in addition
to any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company or EOG and to each person, if any, who controls the Company or EOG
within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Notes which it has agreed to purchase hereunder at a Time of
Delivery, you may in your discretion arrange for you or another party or other
parties to purchase such Notes on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Notes, then the Company shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Notes on such terms. In the event
that, within the respective prescribed periods, you notify the Company that you
have so arranged for the purchase of such Notes, or the Company notifies you
that they have so arranged for the purchase of such Notes, you or the Company
shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Company or EOG Registration Statement or the Company or EOG
Prospectus, or in any other documents or arrangements, and the Company and EOG
agree to file promptly any amendments to the Company or EOG Registration
Statement or the Company or EOG Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person
had originally been a party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the
purchase of the Notes of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Notes which remains unpurchased does not exceed one-eleventh of the aggregate
number of all of the Notes to be purchased at such Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Notes which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Notes which such Underwriter agreed to purchase hereunder) of the Notes of
such
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<PAGE> 35
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Notes of a defaulting Underwriter or Underwriters by you and
the Company as provided in subsection (a) above, the aggregate number of such
Notes which remains unpurchased exceeds one-eleventh of the aggregate number of
all of the Notes to be purchased at such Time of Delivery, or if the Company
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Notes of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Company to
sell the Optional Notes) shall thereupon terminate, without liability on the
part of any non-defaulting Underwriter or the Company or EOG except for the
expenses to be borne by the Company and EOG and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, EOG and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, or EOG, or any officer or director or
controlling person of the Company or of EOG, and shall survive delivery of and
payment for the Notes.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor EOG shall then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any
other reason any Notes are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Notes not so delivered,
but the Company and EOG shall then be under no further liability to any
Underwriter in respect of the Notes not so delivered except as provided in
Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by Goldman, Sachs & Co. on behalf of you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex
or facsimile transmission to you as the representatives in care of Goldman,
Sachs & Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention:
Registration Department, Facsimile Number (212) 357-1500; if to the Company
shall be delivered or sent by mail, telex or facsimile transmission to the
Company Attention: Senior Vice President-Finance and Treasurer, at its address
set forth in the Company Registration Statement (Facsimile Number (713)
646-5930); and if to EOG shall be delivered or sent by mail, telex or facsimile
transmission to the address of EOG set forth in the EOG Registration Statement,
Attention: Senior Vice President and Chief Financial Officer (Facsimile Number
(713) 646-2113); provided, however, that any notice to an Underwriter pursuant
to Section 8(d) hereof shall be delivered or sent by mail, telex or
-35-
<PAGE> 36
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire or telex constituting such Questionnaire, which
address will be supplied to the Company or EOG by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company and EOG and, to the extent provided
in Sections 8 and 10 hereof, the officers and directors of the Company and EOG
and each person who controls the Company, EOG or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Notes from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement among each of the Underwriters, the
Company and EOG. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in a
form of Agreement among Underwriters, the form of which shall be submitted to
the Company and EOG for examination upon request, but without warranty on your
part as to the authority of the signers thereof.
-36-
<PAGE> 37
Very truly yours,
Enron Corp.
By:_____________________________________
Name:
Title:
Enron Oil & Gas Company
By:_____________________________________
Name:
Title:
Accepted as of the date hereof at New York, New York:
Goldman, Sachs & Co.
Bank of America Securities L.L.C.
Salomon Smith Barney Inc.
By:________________________________________________
(Goldman, Sachs & Co.)
-37-
<PAGE> 38
<TABLE>
<CAPTION>
SCHEDULE I
NUMBER OF OPTIONAL
NOTES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM NOTES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- ------------------ -------------------------
<S> <C> <C>
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . .
Bank of America Securities L.L.C.
Salomon Smith Barney Inc.
---------- ----------
Total
</TABLE>
<PAGE> 39
SCHEDULE II
MATERIAL SUBSIDIARIES OF THE COMPANY
Citrus Corp.
Enron Capital & Trade Resources Corp.
Enron International Inc.
Enron Oil & Gas Company
Florida Gas Transmission Company
Houston Pipe Line Company
Northern Natural Gas Company
Portland General Electric Company
Transwestern Pipeline Company
<PAGE> 40
SCHEDULE III
EOG MATERIAL SUBSIDIARIES
Enron Oil & Gas International, Inc.
EOG-Canada, Inc.
Enron Gas & Oil Trinidad Limited
Enron Oil Canada, Ltd.
Enron Oil & Gas India Ltd.
Enron Oil & Gas Marketing, Inc.
<PAGE> 41
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited by
them and included or incorporated by reference in the Company
Registration Statement or the Company Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act or the Exchange Act, as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports
thereon, copies of which have been separately furnished to the
Representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Company Prospectus and/or included in the Company's
Quarterly Reports on Form 10-Q incorporated by reference into the
Company Prospectus; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited
condensed consolidated financial statements referred to in paragraph
(v)(A)(i) below comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Company for the five most recent fiscal years included
in the Company Prospectus and included or incorporated by reference in
Item 6 of the Company's Annual Report on Form 10-K for the most recent
fiscal year agrees with the corresponding amounts (after restatement
where applicable) in the audited consolidated financial statements for
such five fiscal years which were included or incorporated by
reference in the Company's Annual Reports on Form 10-K for such fiscal
years;
<PAGE> 42
(v) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and certain of its
subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Company Prospectus,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (1) the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Company Prospectus and/or
included or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q incorporated by reference in the Company
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations, or (2) any material modifications
should be made to the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Company Prospectus or included in the
Company's Quarterly Reports on Form 10-Q incorporated by reference in
the Company Prospectus, for them to be in conformity with generally
accepted accounting principles;
(B) any unaudited pro forma consolidated
condensed financial statements included or incorporated by reference
in the Company Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of those statements;
(C) as of a specified date not more than five
days prior to the date of such letter, there have been any changes in
the consolidated capital stock or any increase in the consolidated
short-term and long-term debt of the Company and its subsidiaries, or
any decreases in consolidated net assets (shareholders' equity) or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Company Prospectus, except in each case for changes,
increases or decreases which the Company Prospectus discloses have
occurred or may occur or which are described in such letter; and
(D) for the period from the date of the latest
financial statements included or incorporated by reference in the
Company Prospectus to the specified date referred to in Clause (C)
there were any decreases in consolidated operating revenues, net
income or earnings per share of common stock or other items specified
by the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the
-2-
<PAGE> 43
Company Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vi) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Company
Prospectus and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (v)
above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries,
which appear in the Company Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Company Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Company Prospectus specified by the Representatives, and have compared
certain of such amounts, percentages and financial information with
the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
-3-
<PAGE> 44
ANNEX II
Pursuant to Section 7(f) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to EOG and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) audited by
them and included or incorporated by reference in the EOG Registration
Statement or the EOG Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act or the
Exchange Act, as applicable, and the related published rules and
regulations thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
financial forecasts and/or condensed financial statements derived from
audited financial statements of EOG for the periods specified in such
letter, as indicated in their reports thereon, copies of which have
been separately furnished to the Representatives;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the EOG Prospectus and/or included in EOG's Quarterly
Reports on Form 10-Q incorporated by reference into the EOG
Prospectus; and on the basis of specified procedures including
inquiries of officials of EOG who have responsibility for financial
and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (v)(A)(1)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the
related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of EOG for the five most recent fiscal years included in the
EOG Prospectus and included or incorporated by reference in Item 6 of
EOG's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
EOG's Annual Reports on Form 10-K for such fiscal years;
<PAGE> 45
(v) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and
other information referred to below, a reading of the latest available
interim financial statements of EOG and its subsidiaries, inspection
of the minute books of EOG and certain of its subsidiaries since the
date of the latest audited financial statements included or
incorporated by reference in the EOG Prospectus, inquiries of
officials of EOG and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) (1) the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the EOG Prospectus and/or
included or incorporated by reference in EOG's Quarterly Reports on
Form 10-Q incorporated by reference in the EOG Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related published
rules and regulations, or (2) any material modifications should be
made to the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the EOG Prospectus or included in EOG's Quarterly Reports
on Form 10-Q incorporated by reference in the EOG Prospectus, for them
to be in conformity with generally accepted accounting principles;
(B) any unaudited pro forma consolidated
condensed financial statements included or incorporated by reference
in the EOG Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts
in the compilation of those statements;
(C) as of a specified date not more than five
days prior to the date of such letter, there have been any changes in
the consolidated capital stock or any increase in the consolidated
long-term debt of EOG and its subsidiaries, or any decreases in
consolidated net assets or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the EOG
Prospectus, except in each case for changes, increases or decreases
which the EOG Prospectus discloses have occurred or may occur or which
are described in such letter; and
(D) for the period from the date of the latest
financial statements included or incorporated by reference in the EOG
Prospectus to the specified date referred to in Clause (C) there were
any decreases in consolidated net operating revenues or operating
income or the total or per share amounts of consolidated net income or
other items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared with
the comparable period of the preceding year and with any other period
of corresponding length specified by the Representatives, except in
each case for increases or decreases which the EOG Prospectus
discloses have occurred or may occur or which are described in such
letter; and
-2-
<PAGE> 46
(vi) In addition to the audit referred to in their
report(s) included or incorporated by reference in the EOG Prospectus
and the limited procedures, inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii) and (v) above, they
have carried out certain specified procedures, not constituting an
audit in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of EOG and its subsidiaries, which appear in the
EOG Prospectus (excluding documents incorporated by reference) or in
Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives or in documents
incorporated by reference in the EOG Prospectus specified by the
Representatives, and have compared certain of such amounts,
percentages and financial information with the accounting records of
EOG and its subsidiaries and have found them to be in agreement.
-3-
