UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 6, 1997
Seagull Energy Corporation
(Exact name of registrant as specified in its charter)
Texas 1-8094 74-1764876
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
1001 Fannin, Suite 1700, Houston, Texas 77002-6714
(Address of principal executive offices) (Zip code)
(713) 951-4700
(Registrant's telephone number, including area code)
None (Former name, former address and former fiscal year, if changed since last
report)
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SEAGULL ENERGY CORPORATION
Item 2. Acquisition or Disposition of Assets.
On October 6, 1997, Seagull Energy Corporation, a Texas corporation
("Seagull" or the "Company"), sold its Canadian oil and gas subsidiary, Seagull
Energy Canada Ltd. ("Seagull Canada"), to Rio Alto Exploration Ltd. ("Rio
Alto"). The economic effective date for the disposition is July 1, 1997 (the
"Effective Date").
Canadian Oil and Gas Operations
The Company's operations in Canada consist of oil and gas exploration and
production activities through interests in fields located in Alberta, Canada. As
of December 31, 1996, the Company's proved reserves in Canada totaled 42,682
thousand barrels of oil equivalents representing 17% of the Company's reserves.
Proceeds
Under the Share Sale Agreement, Seagull realized approximately U.S. $182
million of sales proceeds, subject to final purchase price adjustments, and
expects to realize an after-tax gain of approximately $13 million, or
approximately 21 cents per share, in the fourth quarter of 1997. The Company is
applying the sales proceeds to repay all of its U.S. and Canadian bank debt.
Pro forma financial information is incorporated herein by reference to
Exhibit 99.1 of Seagull's Current Report on Form 8-K filed on September 16,
1997. The pro forma financial information includes (i) unaudited pro forma
statements of operations for the six months ended June 30, 1997 and the year
ended December 31, 1996 as though the sale of Seagull Canada occurred on January
1, 1996 and (ii) an unaudited pro forma balance sheet as of June 30, 1997 as
though the sale of Seagull Canada occurred on June 30, 1997.
The descriptions of the share sale agreement pursuant to which Seagull sold
its Canadian oil and gas operations set forth above are qualified by reference
to the Share Sale Agreement which is incorporated herein by reference.
Forward Looking Statements
This document includes forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Although Seagull believes that its
expectations are based upon reasonable assumptions, it can give no assurance
that its goals will be achieved. Important factors that could cause actual
results to differ materially from those in the forward looking statements
include the resolution of various litigation matters, political developments in
foreign countries, federal and state regulatory developments, the timing and
extent of changes in commodity prices, the timing and extent of success in
discovering, developing and producing or acquiring oil and gas reserves and
conditions of the capital and equity markets during the periods covered by the
forward looking statements.
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SEAGULL ENERGY CORPORATION
Item 5. Other Events
On September 30, 1997, Seagull completed the sale of $150 million of
30-year Senior Notes offered by a group of underwriters. The Senior Notes have a
coupon of 7 1/2% and are non-callable for the life of the Notes. The proceeds
were used to repay existing debt and for general corporate purposes.
Item 7. Financial Statements and Exhibits
(b) Pro forma financial information.
The pro forma financial statements required to be provided by Item 7(b) of
Form 8-K is incorporated herein by reference to Exhibit 99.1 of Seagull's
Current Report on Form 8-K filed with the Securities and Exchange Commission on
September 16, 1997.
(c) Exhibits.
2.1 Share Sale Agreement, dated as of September 11, 1997, by and between
Seagull Energy Canada Holding Company, Seagull Energy Corporation and
Rio Alto Exploration Ltd. is incorporated herein by reference to
Exhibit 2.1 of Seagull's Current Report on Form 8-K filed with the
Securities and Exchange Commission on September 16, 1997.
*2.2 Underwriting Agreement, dated September 25, 1997 and related Terms and
Agreements.
*2.3 Resolutions of adopted by the Chairman of the Board of Directors
establishing terms of 7 1/2% Senior Notes due 2027, including Form of
7 1/2% Senior Notes due 2027.
* Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 16, 1997
SEAGULL ENERGY CORPORATION
By: /s/ William L. Transier
William L. Transier
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
<PAGE>
Exhibit Index
Page
2.1 Share Sale Agreement, dated as of September 11, 1997, by
and between Seagull Energy Canada Holding Company, Seagull
Energy Corporation and Rio Alto Exploration Ltd. (incor-
porated herein by reference to Exhibit 2.1 of Seagull's Current
Report on Form 8-K filed with the Securities and Exchange
Commission on September 16, 1997).
2.2 Underwriting Agreement, dated September 25, 1997 and
related Terms Agreement.
2.3 Resolutions of adopted by the Chairman of the Board
of Directors establishing terms of 7 1/2 % Senior Notes
due 2027, including Form of 7 1/2% Senior Notes due 2027.
Execution Copy
SEAGULL ENERGY CORPORATION
(a Texas corporation)
Common Stock, Preferred Stock,
Depositary Shares, Debt Securities
and Warrants to Purchase Common Stock,
Preferred Stock, Depositary Shares or Debt Securities
UNDERWRITING AGREEMENT
September 25, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Seagull Energy Corporation, a Texas corporation (the "Company"), proposes
to issue and sell (i) up to $300,000,100 aggregate initial public offering price
of its (a) shares of common stock, par value $0.10 per share (the "Common
Stock"), accompanied by rights to purchase Junior Participating Preferred Stock
(the "Rights"), (b) shares of preferred stock, par value $1.00 per share, in one
or more series (the "Preferred Stock"), which may be issued in the form of
depositary shares evidenced by depositary receipts (the "Depositary Shares"),
(c) unsecured senior or senior subordinated debt securities, in one or more
series, consisting of notes, debentures or other evidences of indebtedness (the
"Debt Securities") as more fully described below, or (d) warrants (the
"Warrants") to purchase Common Stock, Preferred Stock, Depositary Shares or Debt
Securities, or any combination thereof, and (ii) up to an additional
$100,000,000 aggregate initial offering price of its Debt Securities, in each
case, from time to time, in or pursuant to one or more offerings on terms to be
determined at the time of sale.
The Preferred Stock will be issued in one or more series and each series of
Preferred Stock may vary, as applicable, as to the title, specific number of
shares, rank, stated value, liquidation preference, dividend rate or rates (or
method of calculation), dividend payment dates, redemption provisions, sinking
fund requirements, conversion provisions (and terms of the related Underlying
Securities (as defined below)) and any other variable terms as set forth in the
applicable certificate of designations (each, the "Certificate of Designations")
relating to such series of Preferred Stock. A series of Preferred Stock may be
represented by Depositary Shares that are evidenced by depositary receipts (the
"Depositary Receipts") issued pursuant to a deposit agreement (each, a "Deposit
Agreement") among the Company, the depositary identified therein (the
"Depositary") and the registered holders of the Depositary Receipts issued
thereunder.
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The Debt Securities will be issued in one or more series as unsecured
senior indebtedness (the "Senior Debt Securities") under an indenture dated as
of 1, 1997 (the "Senior Indenture"), between the Company and The Bank of New
York, as trustee (the "Senior Trustee"), or as senior subordinated indebtedness
(the "Subordinated Debt Securities") under an indenture dated as of 1, 1997 (the
"Subordinated Indenture", and collectively with the Senior Indenture, the
"Indentures", and each, an "Indenture"), between the Company and The Bank of New
York, as trustee (the "Subordinated Trustee", and collectively with the Senior
Trustee, the "Trustees", and each, a "Trustee"). Each series of Debt Securities
may vary, as applicable, as to title, aggregate principal amount, rank, interest
rate or formula and timing of payments thereof, stated maturity date, redemption
and/or repayment provisions, sinking fund requirements, conversion provisions
(and terms of the related Underlying Securities) and any other variable terms
established by or pursuant to the applicable Indenture.
Each issue of Warrants will be issued pursuant to a separate warrant
agreement (each, a "Warrant Agreement") between the Company and the warrant
agent identified therein (each, a "Warrant Agent"). The Warrants may vary, as
applicable, as to, among other terms, title, type, specific number, exercise
dates or periods, exercise price(s), expiration date(s) and terms of the related
Underlying Securities.
As used herein, "Securities" shall mean the Common Stock, Preferred Stock,
Depositary Shares, Senior Debt Securities, Subordinated Debt Securities,
Warrants, or any combination thereof, initially issuable by the Company, and
"Underlying Securities" shall mean the Common Stock, Preferred Stock, Depositary
Shares, Senior Debt Securities or Subordinated Debt Securities issuable upon
exercise of the Warrants, as applicable, or upon conversion of the Preferred
Stock, Depositary Shares, Senior Debt Securities or Subordinated Debt
Securities, as applicable.
Whenever the Company determines to make an offering of Securities through
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), or through an underwriting syndicate managed by Merrill
Lynch, the Company will enter into an agreement (each, a "Terms Agreement")
providing for the sale of such Securities to, and the purchase and offering
thereof by, Merrill Lynch and such other underwriters, if any, selected by
Merrill Lynch (the "Underwriters", which term shall include Merrill Lynch,
whether acting as sole Underwriter or as a member of an underwriting syndicate,
as well as any Underwriter substituted pursuant to Section 10 hereof).
Notwithstanding the foregoing, except as expressly provided in any Terms
Agreement, nothing in this Underwriting Agreement shall obligate the Company to
designate Merrill Lynch as an underwriter with respect to the offer and sale of
any of the Securities. The Terms Agreement relating to the offering of
Securities shall specify the number or aggregate principal amount, as the case
may be, of Securities to be initially issued (the "Initial Underwritten
Securities"), the name of each Underwriter participating in such offering
(subject to substitution as provided in Section 10 hereof) and the name of any
Underwriter other than Merrill Lynch acting as co-manager in connection with
such offering, the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities which each such Underwriter severally agrees to
purchase, whether such offering is on a fixed or variable price basis and, if on
a fixed price basis, the initial offering price, the price at which the Initial
Underwritten Securities are to be purchased by the Underwriters, the form, time,
date and place of delivery and payment of the Initial Underwritten Securities
and any other material variable terms of the Initial Underwritten Securities, as
well as the material variable terms of any related Underlying Securities. In
addition, if applicable, such Terms Agreement shall specify whether the Company
has agreed to grant to the Underwriters an option to purchase
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additional Securities to cover over-allotments, if any, and the number or
aggregate principal amount, as the case may be, of Securities subject to such
option (the "Option Underwritten Securities"). As used herein, the term
"Underwritten Securities" shall include the Initial Underwritten Securities and
all or any portion of any Option Underwritten Securities. The Terms Agreement,
which shall be substantially in the form of Exhibit A hereto, may take the form
of an exchange of any standard form of written telecommunication between the
Company and Merrill Lynch, acting for itself and, if applicable, as
representative of any other Underwriters. Each offering of Underwritten
Securities through Merrill Lynch as sole Underwriter or through an underwriting
syndicate managed by Merrill Lynch will be governed by this Underwriting
Agreement, as supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") (i) a registration statement on Form S-3 (No. 33-65118), as
amended (the "First Registration Statement"), (ii) a registration statement on
Form S-3 (No. 33-64051), as amended (the "Second Registration Statement") and
(iii) a registration statement on Form S-3 (No. 333-34841) and pre-effective
amendment no. 1 thereto which acts as a post-effective amendment to each of the
First Registration Statement and the Second Registration Statement, and pursuant
to Rule 429 includes a combined prospectus for use with the securities covered
by the First Registration Statement and the Second Registration Statement (the
"Third Registration Statement"), for the registration of the Securities and the
Underlying Securities under the Securities Act of 1933, as amended (the "1933
Act"), and the offering thereof from time to time in accordance with Rule 415 of
the rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations"), and the Company has filed such post-effective amendments thereto
as may be required prior to the execution of the applicable Terms Agreement.
Such registration statements (as so amended, if applicable) have been declared
effective by the Commission and each Indenture has been duly qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act"). The First Registration
Statement, the Second Registration Statement and the Third Registration
Statement (as so amended, if applicable), including the information, if any,
deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations
(the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the
"Rule 434 Information"), are referred to herein as the "Registration
Statements"; and the final prospectus and the final prospectus supplement
relating to the offering of the Underwritten Securities, in the form first
furnished to the Underwriters by the Company for use in connection with the
offering of the Underwritten Securities, are collectively referred to herein as
the "Prospectus"; provided, however, that all references to the "Registration
Statements" and the "Prospectus" shall also be deemed to include all documents
incorporated therein by reference pursuant to the Securities Exchange Act of
1934, as amended (the "1934 Act"), prior to the execution of the applicable
Terms Agreement; provided, further, that if the Company files a registration
statement with the Commission pursuant to Rule 462(b) of the 1933 Act
Regulations (the "Rule 462 Registration Statement"), then, after such filing,
all references to "Registration Statements" shall also be deemed to include the
Rule 462 Registration Statement; and provided, further, that if the Company
elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to
"Prospectus" shall also be deemed to include the final or preliminary prospectus
and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as
the case may be, in the form first furnished to the Underwriters by the Company
in reliance upon Rule 434 of the 1933 Act Regulations, and all references in
this Underwriting Agreement to the date of the Prospectus shall mean the date of
the Term Sheet. A "preliminary prospectus" shall be deemed to refer to any
prospectus used before the registration statement became effective and any
prospectus that omitted, as applicable, the Rule 430A Information, the Rule 434
<PAGE>
Information or other information to be included upon pricing in a form of
prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations, that was used after such effectiveness and prior to the execution
and delivery of the applicable Terms Agreement. For purposes of this
Underwriting Agreement, all references to the Registration Statements,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Underwriting Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" (or
other references of like import) in the Registration Statements, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated by
reference in the Registration Statements, Prospectus or preliminary prospectus,
as the case may be; and all references in this Underwriting Agreement to
amendments or supplements to the Registration Statements, Prospectus or
preliminary prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated by reference in the
Registration Statements, Prospectus or preliminary prospectus, as the case may
be.
SECTION 1. Representations and Warranties.1. Representations and
Warranties.
(a) Representations and Warranties by the Company.a) Representations and
Warranties by the Company. The Company represents and warrants to Merrill Lynch,
as of the date hereof, and to each Underwriter named in the applicable Terms
Agreement, as of the date thereof, as of the Closing Time (as defined below)
and, if applicable, as of each Date of Delivery (as defined below) (in each
case, a "Representation Date"), as follows:
1) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statements and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statements or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with. In addition, each Indenture has been duly qualified under
the 1939 Act.
At the respective times each Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto (including
the filing of the Company's most recent Annual Report on Form 10-K with the
Commission (the "Annual Report on Form 10-K")) became effective and at each
Representation Date, the Registration Statements, any Rule 462(b)
Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the Commission under the 1939 Act (the "1939 Act
Regulations"), and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. At the
date of the Prospectus, at the Closing Time and at each Date of Delivery,
if any, the Prospectus and any amendments and supplements thereto did not
and will not include an untrue statement of a material fact or omit to
state a material fact
<PAGE>
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company
elects to rely upon Rule 434 of the 1933 Act Regulations, the Company will
comply with the requirements of Rule 434. Notwithstanding the foregoing,
the representations and warranties in this subsection shall not apply to
any statement contained in any Registration Statement or the Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Merrill Lynch expressly for
use in any Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of the
Registration Statements as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations, and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with the offering of Underwritten Securities will, at the
time of such delivery, be identical to any electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
2) Incorporated Documents. Since the end of its latest fiscal year,
the Company has filed all documents and amendments to previously filed
documents required to be filed by it pursuant to Section 13(a), 13(c), 14
or 15(d) of the 1934 Act. The documents incorporated or deemed to be
incorporated by reference in the Registration Statements and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, were and will be timely filed and
otherwise complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations") and, when read together
with the other information in the Prospectus, at the date of the
Prospectus, at the Closing Time and at each Date of Delivery, if any, did
not and will not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Copies of each of the documents incorporated by reference in the
Registration Statements and the Prospectus prior to the date of this
Underwriting Agreement and any applicable Terms Agreement, together with
satisfactory evidence of the filing thereof, have been made available to
the Underwriters.
3) Independent Accountants; Independent Petroleum Engineers. The
accountants who certified the financial statements and any supporting
schedules thereto included in the Registration Statements and the
Prospectus are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations. Ryder Scott Company, DeGolyer and MacNaughton
and Netherland, Sewell & Associates, Inc., information derived from the
reports of whom is set forth or incorporated by reference in the
Registration Statements and the Prospectus, were, as of the date of each
respective report, and are, as of the date hereof, independent petroleum
engineers with respect to the Company and its subsidiaries.
4) Financial Statements. The financial statements of the Company
included in the Registration Statements and the Prospectus, together with
the related schedules and notes, as well as those financial statements,
schedules and notes of any other entity included therein, present fairly
the financial position of the Company and its consolidated subsidiaries, or
such other entity, as the case may be, at the dates indicated and the
statement of operations, shareholders' equity and
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cash flows of the Company and its consolidated subsidiaries, or such other
entity, as the case may be, for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the
Registration Statements and the Prospectus present fairly in accordance
with GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statements and the Prospectus. In
addition, any pro forma financial statements of the Company and its
subsidiaries and the related notes thereto included in the Registration
Statements and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein.
5) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statements and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in, or any adverse development that materially
affects, the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries taken as
a whole, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those arising in
the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise and (C) except
for regular dividends on the Company's common stock or preferred stock, in
amounts per share that are consistent with past practice or the applicable
charter document or supplement thereto, respectively, there has been no
dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock.
6) Good Standing of the Company. The Company has been duly organized
and is validly existing as a Texas corporation in good standing under the
laws of the State of Texas and has all corporate power and authority
necessary to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform its
obligations under, or as contemplated under, this Underwriting Agreement
and the applicable Terms Agreement. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or be in good standing could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
7) Good Standing of Subsidiaries. Each subsidiary of the Company that
is a corporation (a "Corporate Subsidiary") has been duly incorporated and
each subsidiary of the Company that is a partnership (a "Partnership
Subsidiary") has been duly organized and, in each case, is validly existing
in good standing under the laws of the jurisdiction of its incorporation or
organization, as applicable, has corporate or partnership power and
authority, as applicable, to own, lease and operate its
<PAGE>
properties and to conduct its business as described in the Prospectus. Each
Corporate Subsidiary is duly qualified as a foreign corporation and each
Partnership Subsidiary that is a limited partnership is duly registered, in
each case, to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing could not reasonably
be expected, individually, or in the aggregate, to have a Material Adverse
Effect. All of the issued and outstanding capital stock of each of the
Corporate Subsidiaries has been duly authorized and is validly issued,
fully paid and non-assessable, with no personal liability attaching to the
ownership thereof and, except as otherwise stated in the Registration
Statements and the Prospectus, all of such stock or other equity interests,
as the case may be, of each subsidiary of the Company are owned by the
Company, directly or indirectly, free and clear of any security interest,
mortgage, pledge, lien, charge, encumbrance, claim or equity.
8) Capitalization. If the Prospectus contains a "Capitalization"
section purporting to set forth the authorized, issued and outstanding
shares of capital stock of the Company, then such information with respect
to such shares is as set forth in the column entitled "Actual" under such
section (except for subsequent issuances thereof, if any contemplated under
this Underwriting Agreement, pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in the
Prospectus). If the Prospectus contains a "Capitalization" section
purporting to set forth the authorized, issued and outstanding shares of
capital stock of the Company as adjusted to give effect to the sale of
Underwritten Securities and the application of the net proceeds therefrom,
then such information with respect to such shares and such proceeds is as
set forth in the column entitled "Adjusted" under such section. All issued
and outstanding shares of capital stock of the Company have been duly
authorized and validly issued by the Company and are fully paid and
non-assessable with no personal liability attaching to the ownership
thereof, and none of such shares of capital stock was issued in violation
of preemptive or other similar rights of any securityholder of the Company.
9) Authorization of this Underwriting Agreement and Terms Agreement.
This Underwriting Agreement has been, and the applicable Terms Agreement as
of the date thereof will have been, duly authorized, executed and delivered
by the Company and constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as rights to indemnity and contribution hereunder and thereunder may
be limited by federal or state securities laws or the public policy
underlying such laws, and except as enforceability may be limited by
applicable bankruptcy, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
10) Authorization of Common Stock. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Common Stock,
such Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and delivered by the Company pursuant
to this Underwriting Agreement and such Terms Agreement against payment of
the consideration therefor specified
<PAGE>
in such Terms Agreement, will be validly issued, fully paid and
non-assessable and will not be subject to preemptive or other similar
rights of any securityholder of the Company. No holder of such Underwritten
Securities is or will be subject to personal liability by reason of being
such a holder.
11) Authorization of Preferred Stock and/or Depositary Shares. If the
Underwritten Securities being sold pursuant to the applicable Terms
Agreement include Preferred Stock and/or Depositary Shares, such
Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. The
applicable Preferred Stock, when issued and delivered by the Company
pursuant to this Underwriting Agreement and such Terms Agreement against
payment of the consideration therefor, or for the related Depositary
Shares, as the case may be, specified in such Terms Agreement, will be
validly issued, fully paid and non-assessable and will not be subject to
preemptive or other similar rights of any securityholder of the Company. In
addition, upon deposit by the Company of any Preferred Stock represented by
Depositary Shares with the applicable Depositary and the execution and
delivery by such Depositary of the Depositary Receipts evidencing such
Depositary Shares, in each case pursuant to the applicable Deposit
Agreement, such Depositary Shares will represent legal and valid interests
in such Preferred Stock. No holder of such Preferred Stock or Depositary
Receipts evidencing Depositary Shares is or will be subject to personal
liability by reason of being such a holder. The applicable Certificate of
Designations will be in full force and effect prior to the Closing Time.
12) Authorization of Deposit Agreement. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Depositary
Shares or if Debt Securities are convertible into Depositary Shares
representing Preferred Stock, the applicable Deposit Agreement has been, or
prior to the issuance of such Depositary Shares will have been, duly
authorized, executed and delivered by the Company and, upon such
authorization, execution and delivery, will constitute a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in
equity or at law). Each registered holder of a Depositary Receipt under the
applicable Deposit Agreement will be entitled to the proportional rights,
preferences and limitations of the Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipt and to such other
rights as are granted to such registered holder in such Deposit Agreement.
13) Authorization of Senior Debt Securities and/or Subordinated Debt
Securities. If the Underwritten Securities being sold pursuant to the
applicable Terms Agreement include Senior Debt Securities and/or
Subordinated Debt Securities, such Underwritten Securities have been, or as
of the date of such Terms Agreement will have been, duly authorized by the
Company for issuance and sale pursuant to this Underwriting Agreement and
such Terms Agreement. Such Underwritten Securities, when issued and
authenticated in the manner provided for in the applicable Indenture and
delivered against payment of the consideration therefor specified in such
Terms Agreement, will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with
<PAGE>
their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law), and except further as enforcement thereof may be limited by (A)
requirements that a claim with respect to any Debt Securities denominated
other than in U.S. dollars (or a foreign or composite currency judgment in
respect of such claim) be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law or (B)
governmental authority to limit, delay or prohibit the making of payments
outside the United States. Such Underwritten Securities will be in the form
contemplated by, and each registered holder thereof is entitled to the
benefits of, the applicable Indenture.
14) Authorization of the Indentures. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Senior Debt
Securities and/or Subordinated Debt Securities or if Preferred Stock is, or
Depositary Shares representing Preferred Stock are, convertible into Debt
Securities, each applicable Indenture has been, or prior to the issuance of
the Debt Securities thereunder will have been, duly authorized, executed
and delivered by the Company and, upon such authorization, execution and
delivery, will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
(15) Authorization of Warrants. If the Underwritten Securities being
sold pursuant to the applicable Terms Agreement include Warrants, such
Underwritten Securities have been, or as of the date of such Terms
Agreement will have been, duly authorized by the Company for issuance and
sale pursuant to this Underwriting Agreement and such Terms Agreement. Such
Underwritten Securities, when issued and authenticated in the manner
provided for the applicable Warrant Agreement and delivered against payment
of the consideration therefor specified in such Terms Agreement, will
constitute valid and legally binding obligations of the Company, entitled
to the benefits provided by such Warrant Agreement and enforceable against
the Company in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings
in equity or at law).
16) Authorization of Warrant Agreement. If the Underwritten Securities
being sold pursuant to the applicable Terms Agreement include Warrants,
each applicable Warrant Agreement has been, or prior to the issuance of
such Underwritten Securities will have been, duly authorized, executed and
delivered by the Company and, upon such authorization, execution and
delivery, will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).
<PAGE>
17) Authorization of Underlying Securities. If the Underlying
Securities related to the Underwritten Securities being sold pursuant to
the applicable Terms Agreement include Common Stock, Preferred Stock or
Depositary Shares, such Underlying Securities have been, or as of the date
of such Terms Agreement will have been, duly authorized and reserved for
issuance by the Company upon exercise of the Common Stock Warrants or
Preferred Stock Warrants, as applicable, or upon conversion of the related
Preferred Stock, Depositary Shares, Senior Debt Securities or Subordinated
Debt Securities, as applicable. If the Underlying Securities include Common
Stock or Preferred Stock, such Underlying Securities, when issued upon such
exercise or conversion, as applicable, will be validly issued, fully paid
and non-assessable and will not be subject to preemptive or other similar
rights of any securityholder of the Company. If the Underlying Securities
include Depositary Shares, such Underlying Securities, upon deposit by the
Company of the Preferred Stock represented thereby with the applicable
Depositary and the execution and delivery by such Depositary of the
Depositary Receipts evidencing such Depositary Shares, in each case
pursuant to the applicable Deposit Agreement, will represent legal and
valid interests in such Preferred Stock. No holder of such Common Stock,
Preferred Stock or Depositary Receipts evidencing Depository Shares is or
will be subject to personal liability by reason of being such a holder. If
the Underlying Securities related to the Underwritten Securities being sold
pursuant to the applicable Terms Agreement include Senior Debt Securities
and/or Subordinated Debt Securities, such Underlying Securities have been,
or as of the date of such Terms Agreement will have been, duly authorized
for issuance by the Company upon the exercise of the Debt Security Warrants
or upon conversion of the related Preferred Stock or Depositary Shares, as
applicable. Such Underlying Securities, when issued and authenticated in
the manner provided for in the applicable Indenture and delivered in
accordance with the terms of the Debt Security Warrants or the related
Preferred Stock or Depositary Shares, as applicable, will constitute valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings
in equity or at law), and except further as enforcement thereof may be
limited by (A) requirements that a claim with respect to any Debt
Securities denominated other than in U.S. dollars (or a foreign or
composite currency judgment in respect of such claim) be converted into
U.S. dollars at a rate of exchange prevailing on a date determined pursuant
to applicable law or (B) governmental authority to limit, delay or prohibit
the making of payments outside the United States.
(18) Descriptions of the Underwritten Securities, Underlying
Securities, Indentures, Deposit Agreement and Warrant Agreement. The
Underwritten Securities being sold pursuant to the applicable Terms
Agreement and each applicable Indenture, Deposit Agreement and Warrant
Agreement, as of the date of the Prospectus, and any Underlying Securities,
when issued and delivered in accordance with the terms of the related
Underwritten Securities, will conform in all material respects to the
statements relating thereto contained in the Prospectus and will be in
substantially the form filed or incorporated by reference, as the case may
be, as an exhibit to the Registration Statement.
19) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its articles or certificate of
incorporation or by-laws (or
<PAGE>
partnership agreement, in the case of Partnership Subsidiaries) or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments"), except for such defaults or violations the
effect of which could not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect. The execution, delivery and
performance of this Underwriting Agreement, the applicable Terms Agreement
and each applicable Indenture, Warrant Agreement and Deposit Agreement and
any other agreement or instrument entered into or issued or to be entered
into or issued by the Company in connection with the transactions
contemplated hereby or thereby or in the Registration Statements and the
Prospectus, and the consummation of the transactions contemplated herein
and in the Registration Statements and the Prospectus (including the
issuance and sale of the Underwritten Securities and the use of the
proceeds from the sale of the Underwritten Securities as described under
the caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder and thereunder, have been duly authorized by all
necessary corporate action and do not and will not (except as disclosed in
the Registration Statements and the Prospectus), whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any assets, properties or operations of the Company or any
of its subsidiaries pursuant to the terms of any Agreements and Instruments
(except for such conflicts, breaches, defaults, events or liens, charges or
encumbrances that would not result in a Material Adverse Effect) nor will
such action result in any violation of the articles or certificate of
incorporation or by-laws of the Company or any of its subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality (including the Alaska Public
Utilities Commission) or court, domestic or foreign, having jurisdiction
over the Company or any of its subsidiaries (or partnership agreement, in
the case of Partnership Subsidiaries) or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
20) Absence of Proceedings. Except as set forth in the Registration
Statements or the Prospectus, there is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency or
body, domestic or foreign, now pending, or to the knowledge of the Company
threatened, against or affecting the Company or any of its subsidiaries
which is required to be disclosed in the Registration Statements and the
Prospectus, or which might reasonably be expected to result in a Material
Adverse Effect or which might reasonably be expected to materially and
adversely affect the consummation of the transactions contemplated under
this Underwriting Agreement, the applicable Terms Agreement or any
applicable Indenture, Warrant Agreement or Deposit Agreement or the
performance by the Company of its obligations hereunder and thereunder. The
aggregate of all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any of their
respective assets, properties or operations is the subject which are not
described in the Registration Statements
<PAGE>
and the Prospectus, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
21) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statements, the Prospectus
or the documents incorporated by reference therein or to be filed as
exhibits thereto which have not been so described and filed as required.
22) Absence of Further Requirements. Except as required by the 1933
Act, the 1934 Act and applicable state or foreign securities laws, except
for the qualification of each applicable Indenture under the Trust
Indenture Act, and except such as already have been obtained, no filing
with, or authorization, approval, consent, license, order registration,
qualification or decree of, any court or governmental authority or agency,
domestic or foreign, is necessary or required for the execution, delivery
and performance by the Company of this Underwriting Agreement or the
applicable Terms Agreement or in connection with the transactions
contemplated under this Underwriting Agreement, such Terms Agreement or any
applicable Indenture, Deposit Agreement or Warrant Agreement.
23) Possession of Licenses and Permits. The Company and each of its
subsidiaries possess such permits, licenses, franchises, approvals,
consents and other authorizations (collectively, "Governmental Licenses")
issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to own, lease and operate their respective
properties and to conduct the business now operated by them, except where
the failure to so possess would not, singly or in the aggregate, result in
a Material Adverse Effect. The Company and each of its subsidiaries have
fulfilled and performed and are in compliance with the material terms and
conditions of all such Governmental Licenses, except where the failure so
to comply would not, singly or in the aggregate, result in a Material
Adverse Effect. All of the Governmental Licenses are valid and in full
force and effect, except where the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not result in a Material Adverse Effect, and no event has occurred
which allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such Government License, except where such
revocation, termination or other impairment would not, singly or in the
aggregate, result in a Material Adverse Effect.
24) Title to Property. The Company and each of its subsidiaries owns
or has valid rights to use all items of real and personal property which
are material to the business of the Company and its subsidiaries, taken as
a whole, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind which
could reasonably be expected to have a Material Adverse Effect. All oil and
gas leases to which the Company or any of its subsidiaries is a party are
in full force and effect, and no default has occurred or is continuing
thereunder which could reasonably be expected to have a Material Adverse
Effect.
25) Investment Company Act; Public Utility Holding Company Act. The
Company is not, and upon the issuance and sale of the Underwritten
Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment
company" within the meaning of the
<PAGE>
Investment Company Act of 1940, as amended or a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended,
or the rules or regulations thereunder.
26) Environmental Laws. Except as otherwise stated in the Registration
Statements and the Prospectus, neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof including any
judicial or administrative order, consent, decree or judgment which
violation could reasonably be expected to have a Material Adverse Effect.
In the ordinary course of its business, the Company conducts a periodic
review of the effect of any foreign, federal, state or local law or
regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws") on the business, operations and
properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of
such review, the Company has concluded that, except as set forth in the
Registration Statements or in the Prospectus, such associated costs and
liabilities could not reasonably be expected to, singly or in the
aggregate, have a Material Adverse Effect.
27) Registration Rights. There are no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to include such securities in the securities
registered pursuant to the Registration Statements.
28) Compliance with Cuba Act. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder,
or is exempt therefrom.
(b) Officers' Certificates.(b) Officers' Certificates. Any certificate
signed by any officer of the Company or any of its subsidiaries on behalf of the
Company or any such subsidiary and delivered to any Underwriter or to counsel
for the Underwriters in connection with the offering of the Underwritten
Securities shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby on the date of such certificate.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Underwritten Securities.a) Underwritten Securities. The several
commitments of the Underwriters to purchase the Underwritten Securities pursuant
to the applicable Terms Agreement shall be deemed to have been made on the basis
of the representations and warranties herein contained and shall be subject to
the terms and conditions herein set forth.
(b) Option Underwritten Securities.b) Option Underwritten Securities. In
addition, subject to the terms and conditions herein set forth, the Company may
grant, if so provided in the applicable Terms Agreement, an option to the
Underwriters, severally and not jointly, to purchase up to the number or
aggregate principal amount, as the case may be, of the Option Underwritten
Securities set forth therein at a price per Option Underwritten Security equal
to the price per Initial
<PAGE>
Underwritten Security, less an amount equal to any dividends or distributions
declared by the Company and paid or payable on the Initial Underwritten
Securities but not payable on the Option Underwritten Securities. Such option,
if granted, will expire 30 days after the date of such Terms Agreement, and may
be exercised in whole or in part at one time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Underwritten Securities upon notice by Merrill Lynch
to the Company setting forth the number or aggregate principal amount, as the
case may be, of Option Underwritten Securities as to which the several
Underwriters are then exercising the option and the time, date and place of
payment and delivery for such Option Underwritten Securities. Such time and date
of payment and delivery ("Date of Delivery") shall be determined by Merrill
Lynch, but shall not be later than seven full business days after the exercise
of said option, nor in any event prior to the Closing Time, unless otherwise
agreed upon by Merrill Lynch and the Company. If the option is exercised as to
all or any portion of the Option Underwritten Securities, each of the
Underwriters, severally and not jointly, will purchase that proportion of the
total number or aggregate principal amount, as the case may be, of Option
Underwritten Securities then being purchased which the number or aggregate
principal amount, as the case may be, of Initial Underwritten Securities each
such Underwriter has severally agreed to purchase as set forth in such Terms
Agreement bears to the total number or aggregate principal amount, as the case
may be, of Initial Underwritten Securities, subject to such adjustments as
Merrill Lynch in its discretion shall make to eliminate any sales or purchases
of a fractional number or aggregate principal amount, as the case may be, of
Option Underwritten Securities.
(c) Payment.c) Payment. Payment of the purchase price for, and delivery of,
the Initial Underwritten Securities shall be made at the offices of Vinson &
Elkins L.L.P., 2300 First City Tower, Houston, Texas 77002, or at such other
place as shall be agreed upon by Merrill Lynch and the Company, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date of the applicable
Terms Agreement (unless postponed in accordance with the provisions of
Section 10 hereof), or such other time not later than ten business days after
such date as shall be agreed upon by Merrill Lynch and the Company (such time
and date of payment and delivery being herein called "Closing Time"). In
addition, in the event that the Underwriters have exercised their option, if
any, to purchase any or all of the Option Underwritten Securities, payment of
the purchase price for, and delivery of such Option Underwritten Securities,
shall be made at the above-mentioned offices of Vinson & Elkins L.L.P., 2300
First City Tower, Houston, Texas 77002, or at such other place as shall be
agreed upon by Merrill Lynch and the Company, on the relevant Date of Delivery
as specified in the notice from Merrill Lynch to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
Merrill Lynch for the respective accounts of the Underwriters of the
Underwritten Securities to be purchased by them. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery
of, receipt for, and make payment of the purchase price for, the Underwritten
Securities which it has severally agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Underwritten
Securities to be purchased by any Underwriter whose funds have not been received
by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such Underwriter from its obligations hereunder.
<PAGE>
(d) Denominations; Registration.d) Denominations; Registration. The
Underwritten Securities, certificates for the Underwritten Securities or
Depositary Receipts evidencing the Depositary Shares, as applicable, shall be in
such denominations and registered in such names as Merrill Lynch may request in
writing at least one full business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be. The Underwritten Securities, certificates
for the Underwritten Securities or Depositary Receipts evidencing the Depositary
Shares, as applicable, will be made available for examination and packaging by
Merrill Lynch in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with Merrill
Lynch and with each Underwriter participating in the offering of Underwritten
Securities, as follows:
a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act
Regulations, if and as applicable, and will notify the Representative(s)
and/or counsel for the Underwriters immediately, and confirm the notice in
writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statements or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statements
or any amendment or supplement to the Prospectus or for additional
information with respect thereto, and (iv) the issuance by the Commission
of any stop order suspending the effectiveness of any Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Underwritten Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (2) (or, if applicable and if consented to by
you, subparagraph (5)) of Rule 424(b) not later than the second business
day following the execution and delivery of any Terms Agreement and
otherwise will promptly effect the filings necessary pursuant to Rule 424
and will take such steps as it deems necessary to ascertain and notify the
Representative(s) (and to confirm such notification in writing if requested
by the Representative(s)) promptly whether the Prospectus transmitted for
filing under Rule 424 was received for filing by the Commission and, in the
event that it was not, it will promptly file the Prospectus. The Company
will make every reasonable effort to prevent the issuance of any stop order
and, if any stop order is issued, to obtain the lifting thereof as soon as
possible.
b) Filing of Amendments. For as long as a Prospectus is required to be
delivered with respect to an offering of Underwritten Securities hereunder,
the Company will give Merrill Lynch notice of its intention to file or
prepare any amendment to the Registration Statements (including any filing
under Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise
(including by filing any documents that would be incorporated by
reference), will furnish Merrill Lynch with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case
may be,
<PAGE>
and will not file or use any such amendment, supplement or revision to
which Merrill Lynch or counsel for the Underwriters shall reasonably object
in writing.
c) Delivery of Registration Statements. The Company has furnished or
will deliver to Merrill Lynch and counsel for the Underwriters, without
charge, copies of the Registration Statements as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated
by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and copies of all consents and
certificates of experts, and, as requested, will also deliver to Merrill
Lynch, without charge, a sufficient number of conformed copies of the
Registration Statements as originally filed and of each amendment thereto
(without exhibits) for distribution of a copy to each of the other
Underwriters. Copies of the Registration Statements and each amendment
thereto furnished to the Underwriters will be identical to any
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
d) Delivery of Prospectuses. The Company will deliver to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter may reasonably request, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (or, if applicable, of
the Prospectus as amended or supplemented after the effective date of the
Third Registration Statement) as such Underwriter may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the
1934 Act Regulations so as to permit the completion of the distribution of
the Underwritten Securities as contemplated in this Underwriting Agreement
and the applicable Terms Agreement and in the Registration Statements and
the Prospectus. If at any time when the Prospectus is required by the 1933
Act or the 1934 Act to be delivered in connection with sales of the
Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or
for the Company, to amend any Registration Statement in order that such
Registration Statement 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 or to amend or
supplement the Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at
any such time to amend any Registration Statement or amend or supplement
the Prospectus in order to comply with any law, the Company will notify the
Representative(s) promptly (and if requested by the Representative(s),
confirm such notice in writing) and will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make such
Registration Statement or the Prospectus comply with such requirements, and
the Company will furnish to the Underwriters, without
<PAGE>
charge, such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Underwritten Securities
and any related Underlying Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic
or foreign) as Merrill Lynch may designate and to maintain such
qualifications in effect as long as required for the distribution of such
Securities; provided, however, that the Company shall not be obligated to
consent to service of process (except service of process with respect to
the offering and sale of such Securities) or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is
not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Underwritten Securities or any related
Underlying Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect as long as required for the
distribution of such Securities and to advise the Underwriters promptly of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose.
g) Earnings Statement. The Company will make generally available to
its securityholders an earnings statement of the Company for the purposes
of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act covering a period of 12 months beginning
after the effective date of the Third Registration Statement, as soon as is
reasonably practicable after the termination of such 12-month period but
not later than 90 days after such termination.
h) Reservation of Securities. If the applicable Terms Agreement
specifies that any related Underlying Securities include Common Stock,
Preferred Stock and/or Depositary Shares, the Company will reserve and keep
available at all times, free of preemptive or other similar rights, a
sufficient number of shares of Common Stock and/or Preferred Stock, as
applicable, for the purpose of enabling the Company to satisfy any
obligations to issue such Underlying Securities upon exercise of the
related Warrants, as applicable, or upon conversion of the Preferred Stock,
Depositary Shares, Senior Debt Securities or Subordinated Debt Securities,
as applicable.
i) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Underwritten Securities in the manner specified in
the Prospectus under "Use of Proceeds".
j) Listing. The Company will use its best efforts to effect the
listing of the Underwritten Securities and any related Underlying
Securities, prior to the Closing Time, on any national securities exchange
or quotation system if and as specified in the applicable Terms Agreement.
k) Restriction on Sale of Securities. Between the date of the
applicable Terms Agreement and the Closing Time or such other date
specified in such Terms Agreement, the Company will not, without the prior
written consent of Merrill
<PAGE>
Lynch, directly or indirectly, issue, sell, offer to sell, grant any option
for the sale of, or otherwise dispose of, the securities specified in such
Terms Agreement.
l) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents (and any amendments to previously filed documents)
required to be filed with the Commission pursuant to the 1934 Act within
the time periods required by the 1934 Act and the 1934 Act Regulations. The
Company also will, upon request, furnish to Merrill Lynch and each of the
other Underwriters for a period of five years from the date of this
Agreement (i) copies of any reports or other communications which the
Company shall send to its stockholders or shall from time to time publish
or publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar form as may be designated by the Commission, and (iii) such
other non-confidential information as the Underwriters may reasonably
request regarding the Company or its subsidiaries.
SECTION 4. Payment of Expenses.4. Payment of Expenses. (a) Expenses.a)
Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Underwriting Agreement or the applicable Terms Agreement,
including (i) the preparation, printing and filing of the Registration
Statements (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Underwriting Agreement, any Terms Agreement, any Agreement
among Underwriters, the Indentures, any Deposit Agreement, any Warrant Agreement
and such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Underwritten Securities or any
related Underlying Securities, (iii) the preparation, issuance and delivery of
the Underwritten Securities and any related Underlying Securities, any
certificates for the Underwritten Securities or such Underlying Securities or
Depositary Receipts evidencing the Depositary Shares, as applicable, to the
Underwriters, including any transfer taxes and any stamp or other duties payable
upon the sale, issuance or delivery of the Underwritten Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents (including transfer agents and
registrars), as well as the fees and disbursements of the Trustees, any
Depositary and any Warrant Agent, and their respective counsel, (v) the
qualification of the Underwritten Securities and any related Underlying
Securities under state securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation, printing and delivery of the Blue Sky Survey
and any Legal Investment Survey, and any amendment thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheet, and the Prospectus and any amendments or supplements thereto, (vii)
the fees charged by nationally recognized statistical rating organizations for
the rating of the Underwritten Securities and any related Underlying Securities,
if applicable, (viii) the fees and expenses incurred with respect to the listing
of the Underwritten Securities and any related Underlying Securities, if
applicable, (ix) the filing fees incident to the review, if any, by the National
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Underwritten Securities and any related Underlying Securities, and (x) the
fees and expenses of any Underwriter acting in the capacity of a "qualified
independent underwriter" (as defined in Section 2(l) of Schedule E of the bylaws
of the NASD), if applicable. Notwithstanding the foregoing, except as expressly
provided in clause (v) above or by Section 4(b), all legal fees and
disbursements of counsel to the Underwriters shall be the sole responsibility of
the Underwriters.
<PAGE>
(b) Termination of Agreementb) Termination of Agreement. If the applicable
Terms Agreement is terminated by Merrill Lynch in accordance with the provisions
of Section 5 or Section 9(b)(i) hereof, the Company shall reimburse the
Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.5. Conditions of
Underwriters' Obligations. The obligations of the Underwriters to purchase and
pay for the Underwritten Securities pursuant to the applicable Terms Agreement
are subject to the accuracy of the representations and warranties of the Company
contained in Section 1 hereof or in certificates of any officer of the Company
or any of its subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
a) Effectiveness of Registration Statements. The Registration
Statements, including any Rule 462(b) Registration Statement, have become
effective under the 1933 Act and no stop order suspending the effectiveness
of the Registration Statements shall have been issued under the 1933 Act
and no proceedings for that purpose shall have been initiated or be pending
or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus
containing information relating to the description of the Underwritten
Securities and any related Underlying Securities, the specific method of
distribution and similar matters shall have been filed with the Commission
in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or
any required post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of
Rule 430A), or, if the Company has elected to rely upon Rule 434 of the
1933 Act Regulations, a Term Sheet including the Rule 434 Information shall
have been filed with the Commission in accordance with Rule 424(b)(7).
b) Opinion of Counsel for Company. At Closing Time, Merrill Lynch
shall have received the favorable opinions, dated as of Closing Time, of
(i) Vinson & Elkins L.L.P., counsel for the Company (or other counsel
acceptable to the Underwriters), and (ii) Janice K. Hartrick, Chief Counsel
and Vice President, Environmental Affairs of the Company, in each case, in
form and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letters for each of the other
Underwriters, to the effect set forth in Exhibit B hereto and to such
further effect as counsel to the Underwriters may reasonably request.
c) Opinion of Counsel for Underwriters. At Closing Time, Merrill Lynch
shall have received the favorable opinion, dated as of Closing Time, of
Simpson Thacher & Bartlett (a partnership which includes professional
corporations), counsel for the Underwriters (or other counsel acceptable to
the Underwriters), together with signed or reproduced copies of such letter
for each of the other Underwriters, with respect to certain matters. In
giving such opinion, such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the law of the State of New York, the
federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to Merrill
Lynch. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
<PAGE>
d) Officers' Certificate. At Closing Time, there shall not have been,
since the date of the applicable Terms Agreement or since the respective
dates as of which information is given in the Prospectus, any material
adverse change, or any adverse development that materially affects the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, and Merrill
Lynch shall have received a certificate of the President or a Vice
President of the Company and of the chief financial officer or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 are true and correct with the
same force and effect as though expressly made at and as of the Closing
Time, (iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the
Closing Time, and (iv) no stop order suspending the effectiveness of any of
the Registration Statements has been issued and no proceedings for that
purpose have been initiated or threatened by the Commission.
e) Accountant's Comfort Letter. At the time of the execution of the
applicable Terms Agreement, Merrill Lynch shall have received from KPMG
Peat Marwick LLP (or such other accountants reasonably acceptable to the
Underwriters) a letter dated such date, in form and substance satisfactory
to Merrill Lynch, together with signed or reproduced copies of such letter
for each of the other Underwriters, containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statements and the Prospectus.
f) Bring-down Comfort Letter. At Closing Time, Merrill Lynch shall
have received from KPMG Peat Marwick LLP (or such other accountants
reasonably acceptable to the Underwriters) a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section 5, except that the
specified date referred to shall be a date not more than three business
days prior to the Closing Time.
g) Ratings. At Closing Time and at any relevant Date of Delivery, the
Underwritten Securities shall have the ratings accorded by any "nationally
recognized statistical rating organization", as defined by the Commission
for purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as
specified in the applicable Terms Agreement, and the Company shall have
delivered to Merrill Lynch a letter, dated as of such date, from each such
rating organization, or other evidence satisfactory to Merrill Lynch,
confirming that the Underwritten Securities have such ratings. Since the
time of execution of such Terms Agreement, there shall not have occurred a
downgrading in the rating assigned to the Underwritten Securities, if
applicable, or any of the Company's other securities by any such rating
organization, and no such rating organization shall have publicly announced
that it has under surveillance or review its rating of the Underwritten
Securities or any of the Company's other securities.
h) Approval of Listing. At Closing Time, the Underwritten Securities
shall have been approved for listing, subject only to official notice of
issuance, if and as specified in the applicable Terms Agreement.
<PAGE>
i) Over-Allotment Option. In the event that the Underwriters are
granted an over-allotment option by the Company in the applicable Terms
Agreement and the Underwriters exercise their option to purchase all or any
portion of the Option Underwritten Securities, the representations and
warranties of the Company contained herein and the statements in any
certificates furnished by the Company or any of its subsidiaries hereunder
shall be true and correct as of each Date of Delivery, and, at the relevant
Date of Delivery, Merrill Lynch shall have received:
(1) A certificate, dated such Date of Delivery, of the President
or a Vice President of the Company and the chief financial officer or
chief accounting officer of the Company, confirming that the
certificate delivered at the Closing Time pursuant to Section 5(d)
hereof remains true and correct as of such Date of Delivery.
(2) The favorable opinion of Vinson & Elkins L.L.P., counsel for
the Company (or other counsel acceptable to the Underwriters), in form
and substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Underwritten Securities and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(3) The favorable opinion of Simpson Thacher & Bartlett (a
partnership which includes professional corporations), counsel for the
Underwriters (or other counsel acceptable to the Underwriters), dated
such Date of Delivery, relating to the Option Underwritten Securities
and otherwise to the same effect as the opinion required by Section
5(c) hereof.
(4) A letter from KPMG Peat Marwick LLP (or such other
accountants reasonably acceptable to the Underwriters), in form and
substance satisfactory to Merrill Lynch and dated such Date of
Delivery, substantially in the same form and substance as the letter
furnished to Merrill Lynch pursuant to Section 5(f) hereof, except
that the "specified date" on the letter furnished pursuant to this
paragraph shall be a date not more than three business days prior to
such Date of Delivery.
j) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such documents
and opinions as they may reasonably require for the purpose of enabling
them to pass upon the issuance and sale of the Underwritten Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Underwritten Securities as herein
contemplated shall be reasonably satisfactory in form and substance to
Merrill Lynch and counsel for the Underwriters.
k) Termination of Terms Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be
fulfilled, the applicable Terms Agreement (or, with respect to the
Underwriters' exercise of any applicable over-allotment option for the
purchase of Option Underwritten Securities on a Date of Delivery after the
Closing Time, the obligations of the Underwriters to purchase the Option
Underwritten Securities on such Date of Delivery) may be terminated by
Merrill Lynch by notice to the Company at any time at or prior to the
Closing Time
<PAGE>
(or such Date of Delivery, as applicable), and such termination shall be
without liability of any party to any other party except as provided in
Section 4 and except that Sections 6, 7 and 8 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification. Indemnification.
a) Indemnification of Underwriters. The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statements (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information deemed to be a part thereof, if applicable, or
the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(3) against any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by Merrill Lynch), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statements (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information deemed to be a part thereof, if
applicable, or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto). The foregoing indemnity with respect to any untrue
statement or alleged untrue statement contained in or omission or alleged
omission from a preliminary prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any loss, liability, claim, damage or expense purchased any of the
Underwritten Securities which are the subject thereof if the Company sustains
the
<PAGE>
burden of proving that (i) such person was not sent or given a copy of the
Prospectus (or the Prospectus as amended or supplemented), excluding documents
incorporated by reference therein, at or prior to the written confirmation of
sale of such Underwritten Securities to such person and (ii) the untrue
statement contained in or omission from such preliminary prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented) and
the Company had previously furnished copies thereof to such Underwriter.
b)Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Company, its directors, each
of its officers who signed the Registration Statements, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statements
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through Merrill Lynch expressly for use in the
Registration Statements (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
c) Actions against Parties; Notification. Each indemnified party shall give
notice as promptly as reasonably practicable to each indemnifying party of any
action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable
<PAGE>
for any settlement of the nature contemplated by Section 6(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have (A) to the extent it considers such
request to be reasonable, reimbursed such indemnified party in accordance with
such request, and (B) to the extent it does not consider such request to be
reasonable, provided written notice to the indemnified party to that effect
explaining the reasons therefor, in each case prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other hand, from the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on
the one hand, and of the Underwriters, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from
the offering of such Underwritten Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of such Underwritten Securities as set
forth on such cover.
The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (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 Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
<PAGE>
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number or aggregate principal amount, as the case may be, of
Initial Underwritten Securities set forth opposite their respective names in the
applicable Terms Agreement, and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Underwriting
Agreement or the applicable Terms Agreement or in certificates of officers of
the Company submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of and payment for the Underwritten Securities.
SECTOPM 9. Termination.
a) Underwriting Agreement. This Underwriting Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company or by Merrill Lynch upon the giving of written notice of such
termination to the other party hereto.
b) Terms Agreement. Merrill Lynch may terminate the applicable Terms
Agreement, by notice to the Company, at any time at or prior to the Closing Time
or any relevant Date of Delivery, if, since the time of execution of such Terms
Agreement, (i) there has been, since the respective dates as of which
information is given in the Prospectus, any material adverse change in, or any
adverse development that materially affects, the condition, financial or
otherwise, or the earnings, business affairs or business prospects of the
Company and its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, or (ii) there has occurred any material adverse
change in the financial markets in the United States or, if the Underwritten
Securities or any related Underlying Securities include Debt Securities
denominated or payable in, or indexed to, one or more foreign or composite
currencies, in the international financial markets, or any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of Merrill
<PAGE>
Lynch, impracticable to market the Underwritten Securities or to enforce
contracts for the sale of the Underwritten Securities, or (iii) trading in any
securities of the Company has been suspended or limited by the Commission or the
New York Stock Exchange, or if trading generally on the New York Stock Exchange
or the American Stock Exchange or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by either of said
exchanges or by order of the Commission, the NASD or any other governmental
authority, or (iv) a banking moratorium has been declared by either Federal or
New York authorities or, if the Underwritten Securities or any related
Underlying Securities include Debt Securities denominated or payable in, or
indexed to, one or more foreign or composite currencies, by the relevant
authorities in the related foreign country or countries.
c) Liabilities. If this Underwriting Agreement or the applicable Terms
Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 6, 7 and 8 shall survive such
termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Underwritten Securities which it
or they are obligated to purchase under the applicable Terms Agreement (the
"Defaulted Securities"), then Merrill Lynch shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, Merrill Lynch shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities does not exceed 10% of the number or aggregate
principal amount, as the case may be, of Underwritten Securities to be
purchased on such date pursuant to such Terms Agreement, the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their respective underwriting
obligations under such Terms Agreement bear to the underwriting obligations
of all non-defaulting Underwriters, or
(b) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities exceeds 10% of the number or aggregate principal
amount, as the case may be, of Underwritten Securities to be purchased on
such date pursuant to such Terms Agreement, such Terms Agreement (or, with
respect to the Underwriters' exercise of any applicable over-allotment
option for the purchase of Option Underwritten Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters to
purchase, and the Company to sell, such Option Underwritten Securities on
such Date of Delivery) shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in (i) a termination
of the applicable Terms Agreement or (ii) in the case of a Date of Delivery
after the Closing Time, a termination of the obligations of the Underwriters and
the Company with respect to the
<PAGE>
related Option Underwritten Securities, as the case may be, either Merrill Lynch
or the Company shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at 1221 McKinney, Suite 2700,
Houston, Texas 77010, attention of Alan J. Blackburn, Director, and notices to
the Company shall be directed to it at 1001 Fannin, Suite 1700, Houston, Texas
77002-6714, attention of William L. Transier, Senior Vice President and Chief
Financial Officer.
SECTION 12. Parties. This Underwriting Agreement and the applicable Terms
Agreement shall each inure to the benefit of and be binding upon the Company,
Merrill Lynch and, upon execution of such Terms Agreement, any other
Underwriters and their respective successors. Nothing expressed or mentioned in
this Underwriting Agreement or such Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Underwriting Agreement or such Terms Agreement or any provision
herein or therein contained. This Underwriting Agreement and such Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Underwritten Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY
APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 15. Counterparts. This Underwriting Agreement and any Terms
Agreement may be executed in multiple counterparts, each of which taken together
shall constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Underwriting Agreement, along with all counterparts, will become a binding
agreement between Merrill Lynch and the Company in accordance with its terms.
Very truly yours,
SEAGULL ENERGY CORPORATION
By:______________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Authorized Signatory
<PAGE>
Exhibit A
SEAGULL ENERGY CORPORATION
(a Texas corporation)
[Type(s) of Underwritten Securities]
TERMS AGREEMENT
[Date]
To: Seagull Energy Corporation
1001 Fannin, Suite 1700
Houston, Texas 77002-6714
Attn: [ ]
Ladies and Gentlemen:
We understand that Seagull Energy Corporation, a Texas corporation (the
"Company"), proposes to issue and sell [ shares of its common stock, par value
$0.10 per share (the "Common Stock")] [ shares of its preferred stock,
par value $1.00 per share (the "Preferred Stock")] [in the form of depositary
shares (the "Depositary Shares") each representing of a share of Preferred
Stock] [$ aggregate principal amount of its [unsecured senior] [unsecured senior
subordinated] debt securities (the "Debt Securities")] [ warrants (the "Common
Stock Warrants") to purchase common stock, par value $0.10 per share] [ warrants
(the "Preferred Stock Warrants") to purchase preferred stock, par value $1.00
per share [ warrants (the "Depositary Shares Warrants" to purchase Depositary
Shares] [ warrants (the "Debt Security Warrants") to purchase $ aggregate
principal amount of [unsecured senior] [senior subordinated] debt securities]
([such securities also being hereinafter referred to as] the "[Initial]
Underwritten Securities"). Subject to the terms and conditions set forth or
incorporated by reference herein, we [the underwriters named below (the
"Underwriters")] offer to purchase [, severally and not jointly,] the [[number]
[principal] [amount] of] Underwritten Securities [opposite their names set forth
below] at the purchase price set forth below [, and a proportionate share of
Option Underwritten Securities set forth below, to the extent any are
purchased].
[Number]
[Principal Amount]
Underwriter of [Initial] Underwritten Securities
________________
Total [$]
<PAGE>
The Underwritten Securities shall have the following terms:
[Common Stock]
Title:
Number of shares:
Number of Option Underwritten Securities:
Initial public offering price per share: $
Purchase price per share: $
Listing requirements:
Black-out provisions:
Lock-up provisions:
Other terms and conditions:
Closing date and location:
[Preferred Stock]
Title:
Rank:
Ratings:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share: $
Dividend payment dates:
Stated value: $
Liquidation preference per share: $
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Lock-up provisions:
Initial public offering price per share: $___ plus accumulated dividends,
if any, from _____
Purchase price per share: $___ plus accumulated dividends, if any, from _____
Other terms and conditions:
Closing date and location:
[Depositary Shares]
Title:
Fractional amount of Preferred Stock represented by each Depositary Share:
Ratings:
Rank:
Number of shares:
Number of Option Underwritten Securities:
Dividend rate (or formula) per share:
Dividend payment dates:
Liquidation preference per share:
<PAGE>
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Lock-up provisions:
Initial public offering price per share: $____ plus accumulated dividends, if
any, from ___
Purchase price per share: $____ plus accumulated dividends, if any, from ___
Other terms and conditions:
Closing date and location:
[Debt Securities]
Title:
Rank:
Ratings:
Aggregate principal amount:
Denominations:
Currency of payment:
Interest rate or formula:
Interest payment dates:
Regular record dates:
Stated maturity date:
Redemption provisions:
Sinking fund requirements:
Conversion provisions:
Listing requirements:
Black-out provisions:
Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering
If Fixed Price Offering, initial public offering price per share: _____%
of the principal amount,
plus accrued interest [amortized original issue discount], if any,
from _________________.
Purchase price per share: _____% of principal amount, plus accrued interest
[amortized original
issue discount], if any, from _________________.
Form:
Other terms and conditions:
Closing date and location:
[Common Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrants
Title:
Type:
Number:
Warrant Agent:
Issuable jointly with [Common Stock] [Preferred Stock] [Depositary Share] [Debt
Securities]: [Yes] [No]
Number of [Common Stock] [Preferred Stock] [Depositary Share] [Debt Security]
Warrants issued with each [share of Common Stock] [share of Preferred
Stock][Depositary Share]
<PAGE>
[$__________ principal amount of Debt Securities]:
Date(s) from which or period(s) during which [Common Stock] [Preferred Stock]
[Depositary Share][Debt Security] Warrants are exercisable:
Date(s) on which [Common Stock] [Preferred Stock] [Depositary Share] [Debt
Security] Warrants expire:
Exercise price(s):
Initial public offering price: $
Purchase price: $
Title of Underlying Securities:
[Number of shares] [Principal amount] purchasable upon exercise of one [Common
Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrant:
Terms of Underlying Securities:
Other terms and conditions:
Closing date and location:
[If the Registration Statement or the offering of the Underwritten
Securities has been filed with the NASD for review, the obligations of the
Underwriters to purchase and pay for the Underwritten Securities pursuant to
this Terms Agreement are subject to the NASD not having raised any objection
that has not been addressed with respect to the fairness and reasonableness of
the underwriting terms and arrangements.]
All of the provisions contained in the document attached as Annex I hereto
entitled "Seagull Energy Corporation--Common Stock, Preferred Stock, Depositary
Shares, Debt Securities and Warrants to Purchase Common Stock, Preferred Stock,
Depositary Shares or Debt Securities--Underwriting Agreement" are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined.
Please accept this offer no later than ____ o'clock P.M. (New York City
time) on ______________ by signing a copy of this Terms Agreement in the space
set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _________________________
Authorized Signatory
[Acting on behalf of itself and the other
named Underwriters.]
Accepted:
SEAGULL ENERGY CORPORATION
By: _________________________
Name:
Title:
<PAGE>
SEAGULL ENERGY CORPORATION
(a Texas corporation)
$150,000,000 7 1/2% Senior Notes due 2027
TERMS AGREEMENT
September 25, 1997
To: Seagull Energy Corporation
1001 Fannin, Suite 1700
Houston, Texas 77002-6714
Attn: William L. Transier
Ladies and Gentlemen:
We understand that Seagull Energy Corporation, a Texas corporation (the
"Company"), proposes to issue and sell $150,000,000 aggregate principal amount
of its 7 1/2% unsecured senior debt securities due 2027 (the "Underwritten
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, we the underwriters named below (the "Underwriters") offer to
purchase, severally and not jointly, the principal amount of Underwritten
Securities opposite our names set forth below at the purchase price set forth
below.
Principal Amount
Underwriter of Underwritten Securities
Merrill Lynch, Pierce, Fenner
& Smith Incorporated....................................$84,000,000
Donaldson, Lufkin & Jenrette
Securities Corporation..................................$16,500,000
J.P. Morgan Securities Inc.......................................$16,500,000
Salomon Brothers Inc.............................................$16,500,000
SBC Warburg Dillon Read Inc......................................$16,500,000
..................
____________
Total $150,000,000
<PAGE>
The Underwritten Securities shall have the following terms:
Title: Senior Notes
Rank: pari passu with all other unsecured, unsubordinated obligations of the
Company
Aggregate principal amount: $150,000,000
Denominations: $1,000
Currency of payment: U.S. dollars
Interest rate: 7 1/2% per annum
Interest payment dates: March 15 and September 15, commencing on March 15, 1998
Regular record dates: March 1 and September 1
Stated maturity date: September 15, 2027
Redemption provisions: None.
Sinking fund requirements: None.
Conversion provisions: None.
Listing requirements: None.
Black-out provisions: None.
Purchase price to public per Senior Note: 99.544% of principal amount, plus
accrued interest, if any, from September 30, 1997.
Underwriting Discount: 1%
Closing date and location: September 30, 1997; Houston, Texas.
All of the provisions contained in the document attached as Annex I hereto
entitled "Seagull Energy Corporation--Common Stock, Preferred Stock, Depositary
Shares, Debt Securities and Warrants to Purchase Common Stock, Preferred Stock,
Depositary Shares or Debt Securities--Underwriting Agreement" are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined.
<PAGE>
Please accept this offer no later than ____ o'clock P.M. (New York City
time) on September _____, 1997 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _________________________
Authorized Signatory
Acting on behalf of itself and the
other named Underwriters.
Accepted:
SEAGULL ENERGY CORPORATION
By: _________________________
Name:
Title:
SEAGULL ENERGY CORPORATION
RESOLUTIONS
of the
CHAIRMAN OF THE BOARD
7 1/2% Senior Notes due
September 15, 2027
WHEREAS, on September 16, 1997, the Board of Directors of the Company
approved the issuance by the Company, of up to $150,000,000 aggregate initial
offering prices of bonds, debentures, notes and/or other debt obligations
(collectively, the "Securities");
WHEREAS, the Board of Directors has authorized the Executive Committee of
the Company or the Chairman of the Board of the Company to determine the terms
and conditions of the Securities;
NOW, THEREFORE, in furtherance of the foregoing, the Chairman of the Board
of the Company hereby adopts the following resolutions:
RESOLVED, that pursuant to the authority delegated to the Chairman of the Board
by the Board of Directors of Seagull Energy Corporation (the "Company") by
resolutions adopted on September 16, 1997, a series of Securities referred to in
such resolutions shall be issued and designated under the Senior Indenture dated
as of September 1, 1997 among the Company and The Bank of New York as trustee
(the "Indenture"), as the Company's 7 1/2% Senior Notes Due September 15, 2027
(the "Senior Notes"); and
FURTHER RESOLVED, that in addition to the terms provided in the Indenture
with respect to Securities of a series issued thereunder, the terms of the
Senior Notes shall be as follows (with all capitalized terms used below having
the respective meanings ascribed thereto in the Indenture):
(1) The aggregate principal amount of the Senior Notes shall be
$150,000,000;
(2) The stated maturity of the principal of the Senior Notes shall be
September 15, 2027;
(3) The Senior Notes shall bear interest at the rate of 7 1/2% per
annum from September 30, 1997 or from the most recent interest payment date
to which interest has been paid or duly provided for, which interest shall
be calculated on the basis of a 360-day year comprised of twelve 30-day
months;
<PAGE>
(4) The interest payment dates with respect to the Senior Notes shall
be March 15 and September 15 in each year, commencing March 15, 1998, and
the regular record dates for interest payable on any such interest payment
date shall be March 1 or September 1 (whether or not a Business Day), as
the case may be, next preceding such interest payment date;
(5) Principal of (and premium, if any) and interest on the Senior
Notes shall be payable at the Corporate Trust Office of the Trustee in New
York, New York, and the Senior Notes may be surrendered for registration of
transfer or exchange at such Corporate Trust Office, and notices and
demands to or upon the Company in respect of the Senior Notes and the
Indenture may be served at such Corporate Trust Office;
(6) The Trustee shall act as paying agent, authenticating agent,
transfer agent and security registrar with respect to the Senior Notes;
(7) The Senior Notes shall not be redeemable prior to stated maturity;
(8) The Senior Notes shall not be subject to a sinking fund
requirement;
(9) The Senior Notes shall be issuable in denominations of $1,000 and
integral multiples thereof;
(10) The Senior Notes shall be subject to defeasance as provided in
Section 10(C) of the Indenture;
(11) The Senior Notes will be issued wholly in the form of Global
Securities, and The Depository Trust Company shall be the Depositary with
respect thereto; and
(12) The Senior Notes shall be in substantially the form attached
hereto as Exhibit A;
FURTHER RESOLVED, that the form of Underwriting Agreement and related Terms
Agreement to be executed with the underwriters named below with respect to the
offer and sale of the Senior Notes, in the form submitted to this meeting, and
the form of Prospectus Supplement dated September 25, 1997 to the Company's
Prospectus dated September 19, 1997, are hereby approved; and the execution and
delivery on behalf of the Company of such Underwriting Agreement and Terms
Agreement by the Chairman of the Board, the President or any Vice President of
the Company is ratified and approved; and
FURTHER RESOLVED, that Merrill Lynch, Pierce, Fenner & Smith, Donaldson
Lufkin & Jenrette Securities Corporation, J.P. Morgan & Co., Salomon Brothers
Inc and SBC Warburg Dillon Read Inc. are selected as the several underwriters
(the "Underwriters") to which the Senior Notes shall be sold; that the sale of
an aggregate of $150,000,000 of Senior Notes to such Underwriters is hereby
authorized and approved; that the purchase price to be paid to the Company by
the Underwriters shall be 98.544% of the principal amount of the Senior Notes;
and that the initial public offering price shall be 99.544% of the principal
amount of the Senior Notes; and
<PAGE>
FURTHER RESOLVED, that the Chairman of the Board, the President or any Vice
President of the Company, or any of them, are hereby authorized, for and on
behalf of the Company, to execute any agreements or take any other actions as
such officer shall in his sole discretion deem necessary or advisable to arrange
for the Senior Notes to be included as book-entry only security in the
facilities of The Depository Trust Company;
FURTHER RESOLVED, that the Chairman of the Board, the President or any Vice
President of the Company, or any of them, are hereby authorized, for and on
behalf of the Company, to execute and deliver all agreements, powers of
attorney, certificates or other instruments and documents, and to take all other
actions, as such officer shall in his sole discretion deem necessary or
advisable to carry out the transactions approved in the preceding resolutions.
EXECUTED and effective as of this 25th day of September, 1997.
/s/ Barry J. Galt
Barry J. Galt
Chairman of the Board
<PAGE>
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
SEAGULL ENERGY CORPORATION
7 1/2% Senior Notes due September 15, 2027
No. BE-1 CUSIP No. 812007AE2
SEAGULL ENERGY CORPORATION, a corporation duly organized and existing under the
laws of the State of Texas (herein called the "Company," which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000) on September
15, 2027, and to pay interest thereon from September 30, 1997 or from the most
recent interest payment date to which interest has been paid or duly provided
for, semiannually in arrears on March 15 and September 15 in each year,
commencing March 15, 1998, at the rate of 7 1/2% per annum, until the principal
hereof is fully paid or made available for full payment. The interest so
payable, and punctually paid or duly provided for, on any interest payment date
will, as provided in such Indenture, be paid to the Person in whose name this
Security is registered at the close of business on the March 1 or September 1
(whether or not a Business Day), as the case may be, next preceding such
interest payment date (a "Regular Record Date"). Notwithstanding the foregoing,
if and to the extent the Company shall default in the payment of the interest
due on such interest payment date, any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and such defaulted interest shall instead be paid to the
Person in whose name this Security is registered (a) at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest)
<PAGE>
established by notice given by mail by or on behalf of the Company to the
Holders of Securities not less than 15 days preceding such subsequent record
date or (b) as determined by such other procedure as is mutually acceptable to
the Company and the Trustee, all as more fully described in the Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security shall be made at the Corporate Trust Office of the Trustee in New York,
New York, or at such other office or agency of the Company as it may designate
for such purpose pursuant to the Indenture hereinafter referred to, in such
immediately available funds of the United States of America as at the time of
payment are legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Security set
forth below, which further provisions shall for all purposes have the same
effect as if set forth in this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to below by manual signature of an authorized officer, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: September 30, 1997
SEAGULL ENERGY CORPORATION
By:_________________________
Barry J. Galt
Chairman of the Board and
Chief Executive Officer
ATTEST:
______________________________________
Stephen A. Thorington
Treasurer
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By________________________________
Authorized Officer
<PAGE>
REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under the Senior Indenture, dated as of September 1, 1997 (herein called
the "Indenture"), between the Company and The Bank of New York, as Trustee
(herein called the "Trustee", which term includes any additional successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitation of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. Capitalized terms
used but not defined herein are defined in the Indenture and used herein with
the same meanings ascribed to them therein. This Security is a Global Security
representing the entire principal amount of the series designated on the face
hereof, limited in aggregate principal amount to $150,000,000.
The Securities of this series are not redeemable prior to stated maturity.
The Securities of this series shall not be subject to a sinking fund
requirement.
The Indenture contains provisions for defeasance of (a) the entire
indebtedness of this Security and (b) certain restrictive covenants upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this series shall
occur and be continuing, the unpaid principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture contains provisions permitting the Company and the Trustee
with the consent of the Holders of not less than a majority in aggregate
principal amount of each series of Securities then Outstanding under the
Indenture and affected thereby, evidenced as provided in the Indenture, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of
the Securities of such series; provided, however, that no such supplemental
indenture shall (i) extend the stated final maturity of any Security, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment
of interest hereon, or reduce or alter the method of computation of any amount
payable on redemption, repayment or purchase by the Company, or change the coin
or currency in which payments are to be made, or impair or affect the right of
any Holder to institute suit for enforcement of any payment hereof or
(ii) reduce the aforesaid percentage of any series of such Securities, without
the consent of the Holders of each Security of any series so affected. It is
also provided in the Indenture that the Holders of a majority in aggregate
principal amount of the Securities of any series then Outstanding may on behalf
of the Holders of all of the Securities of such series waive any past default or
Event of Default under the Indenture and its consequences except a default in
the payment of the principal of or interest on any of the Securities of such
<PAGE>
Series. Any such consent or waiver by the Holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Security and any
Securities which may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Security or such other
Securities.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the place, at the respective times, and at the rates and in the coin
or currency herein provided.
As set forth in, and subject to, the provisions of the Indenture, no Holder
of any Security of this series shall have any right to institute any proceeding
with respect to the Indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of default and the
continuance thereof, as provided in the Indenture, and unless the Holders of not
less than 25% in principal amount of the Securities of this series then
Outstanding shall have made written request, and offered reasonable indemnity,
to the Trustee to institute such proceeding as trustee, and the Trustee shall
have failed to institute such proceeding within 60 days; provided, however, that
such limitations shall not impair the right of a Holder hereof to institute suit
for the enforcement of payment of the principal of or interest on this Security
on or after the respective due dates expressed herein without the consent of
such Holder.
This Security shall be exchangeable for Securities of this series
registered in the names of Persons other than the Depository with respect to
such series or its nominee only as provided in this paragraph. This Security
shall be so exchangeable if (i) such Depository notifies the Company that it is
unwilling, unable or ineligible to continue as Depository for this Security and
a successor Depository is not appointed by the Company within 90 days or
(ii) the Company executes and delivers to the Trustee a written order providing
that this Security shall be so exchangeable. Securities so issued in exchange
for this Security shall be of the same series and of like tenor, in authorized
denominations and in the aggregate having the same unpaid principal amount as
this Security and registered in such names as such Depository shall direct.
Individual Securities of this series so issued will be issued in registered form
and denominations, unless otherwise specified by the Company, of $1,000 and
integral multiples thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the security register
maintained for that purpose, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium, if any) and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder hereof
or its attorney duly authorized in writing, and thereupon on or more new
Securities of this series, and of like tenor, of authorized denominations and
for the same aggregate unpaid principal amount, shall be issued to the
designated transferee or transferees. At the date of the original issuance of
this Security, such
<PAGE>
office or agency of the Company is maintained by the Trustee at its Corporate
Trust Office, 101 Barclay Street, Floor 21 West, New York, New York.
No service charge shall be made for any such exchange or registration of
transfer, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary. All
payments made to or upon the order of such registered Holder shall, to the
extent of the sum or sums so paid, satisfy and discharge the liability for
moneys payable on this Security.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused a CUSIP number to be
printed on this Security as a convenience to the Holder hereof. No
representation is made as to the accuracy of such number and reliance may be
placed only on the other identifying information printed hereon.
Interest on this Security shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee or transferee)
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
Dated: ____________ Signed: ________________________________
Sign exactly as name appears above or on
the other side of this Security)
Signature Guarantee: _______
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
