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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): January 29, 1998
APACHE CORPORATION
(Exact name of registrant as specified in Charter)
DELAWARE 1-4300 41-0747868
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
2000 POST OAK BOULEVARD
SUITE 100
HOUSTON, TEXAS 77056-4400
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (713) 296-6000
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ITEM 5. OTHER EVENTS
On January 22, 1998, Apache Corporation ("Apache") filed a Registration
Statement (the "Registration Statement") on Form S-3 (Registration No.
333-44731) with the Securities and Exchange Commission ("SEC") under the
Securities Act of 1933, as amended (the "Act"). The Registration Statement,
which was declared effective by the SEC on January 28, 1998, covers debt
securities of Apache, for delayed or continuous offering pursuant to Rule 415
under the Act for an aggregate initial offering price not to exceed $300
million. Reference is made to the Registration Statement for further information
concerning the terms of such debt securities and the offering thereof. The debt
securities are issuable under an indenture, dated as of February 15, 1996 and
supplemented as of November 5, 1996 (the "Indenture"), between the Registrant
and The Chase Manhattan Bank (formerly known as Chemical Bank), as trustee.
Pursuant to a Terms Agreement dated January 29, 1998 and the
Underwriting Agreement Basic Terms incorporated by reference therein
(collectively, the "Underwriting Agreement"), by and among Apache and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., J. P. Morgan
Securities Inc. and Lehman Brothers Inc. (the "Underwriters"), Apache issued to
the Underwriters, for offering to the public, U.S. $150,000,000 principal amount
of 7% Senior Notes due 2018 (the "Senior Notes") under the Indenture. The
Underwriting Agreement and the form of 7% Senior Notes due 2018 are listed under
Item 7 as Exhibits 1.1 and 4.1, respectively, and are incorporated herein by
reference.
Apache's press release relating to the SeniorNotes is listed under Item
7 as Exhibit 99.1 and is incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
*1.1 Underwriting Agreement, dated January 29, 1998, among Apache
Corporation and the Underwriters.
*4.1 Form of 7% Senior Notes due 2018.
*99.1 Press Release, dated January 29, 1998, "Apache Offers $150
Million of Twenty-Year Senior Notes".
- ------------------
*filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this current report on Form 8-K to be signed on its
behalf by the undersigned thereunto duly authorized.
APACHE CORPORATION
Date: February 5, 1998 /s/ Z. S. KOBIASHVILI
---------------------------
Z. S. Kobiashvili
Vice President and General Counsel
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
*1.1 Underwriting Agreement, dated January 29, 1998, among Apache
Corporation and the Underwriters.
*4.1 Form of 7% Senior Notes due 2018.
*99.1 Press Release, dated January 29, 1998, "Apache Offers $150
Million of Twenty-Year Senior Notes".
- ------------------
*filed herewith
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EXHIBIT 1.1
TERMS AGREEMENT
January 29, 1998
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Dear Sirs:
The undersigned underwriters (the "Underwriters") understand that Apache
Corporation (the "Company") proposes to issue and sell $150,000,000 aggregate
principal amount of its debt securities (the "Offered Securities"). Subject to
the terms and conditions set forth herein or incorporated by reference herein,
the Underwriters offer to purchase, severally and not jointly, the principal
amount of Offered Securities set forth below opposite their respective names
at 97.930% of the principal amount thereof together with accrued interest
thereon from February 3, 1998 to the Closing Time:
<TABLE>
<CAPTION>
Principal
Amount of
Underwriter Debt Securities
----------- ---------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith $ 37,500,000
Incorporated
Goldman, Sache & Co. $ 37,500,000
J.P. Morgan Securities Inc. $ 37,500,000
Lehman Brothers Inc. $ 37,500,000
--------------
Total $ 150,000,000
==============
</TABLE>
The Offered Securities shall have the following terms:
Principal amount: $150,000,000
Form: registered book-entry form
Denomination: $1,000 and integral multiples
thereof
Date of maturity: February 1, 2018
Interest rate, rates or formula
(or method of calculation
of interest accrual): 7% per annum
Date from which interest accrues: February 3, 1998
Interest payment dates, if any: February 1 and August 1
(commencing August 1, 1998)
Initial price to public: $148,207,500 (98.805%)
Closing Time: February 3, 1998
Place of delivery: New York, New York
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Company account for wire
transfer of payment: Apache Corporation Master Account,
First National Bank of Chicago
No. 5577446; ABA No. 071000013
Redemption provisions, if any: none
Lock-up pursuant to Section 3(i)
of the Basic Terms, as defined
below:
Securities Exchanges, if any, on
which application will be made
to list the Offered Securities: none
Delayed Delivery Contracts: not authorized
Delivery date:
Expiration date:
Compensation to Underwriters:
Minimum contract:
Maximum aggregate principal amount:
Other terms, if any:
The Underwriters agree to pay the reasonable fees and disbursements of
counsel for the Underwriters pursuant to Section 5(e) of the Basic Terms.
All the provisions contained in "Apache Corporation-Debt
Securities--Underwriting Agreement Basic Terms" (the "Basic Terms"), filed as
an exhibit to the Registration Statement relating to the Offered Securities and
attached hereto as Annex A, are herein incorporated by reference in their
entirety 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.
Any notice by the Company to the Underwriters pursuant to this Terms
Agreement shall be sufficient if given in accordance with Section 11 of the
Basic Terms addressed to:
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281
Attention: George C. Francisco
Telecopy No.: (212) 449-6412
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which, for all purposes of this Agreement, shall be the "Representative".
Very truly yours,
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
LEHMAN BROTHERS INC.
By: MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
Acting for themselves and as
Representative of the
Underwriters
By:
-------------------------
Name:
Title:
Accepted:
APACHE CORPORATION
By:
---------------------
Name:
Title:
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ANNEX A
[Apache Corporation--Debt Securities--
Underwriting Agreement Basic Terms]
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APACHE CORPORATION
DEBT SECURITIES
UNDERWRITING AGREEMENT BASIC TERMS
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APACHE CORPORATION
Debt Securities
UNDERWRITING AGREEMENT BASIC TERMS
Apache Corporation, a Delaware corporation (the "Company"), may issue
and sell from time to time its debt securities (the "Debt Securities"). The
Debt Securities are issuable under an indenture, dated as of February 15, 1996
(the "Indenture"), between the Company and The Chase Manhattan Bank (formerly
known as Chemical Bank), as trustee (the "Trustee"). Each issue of Debt
Securities may vary as to series, aggregate principal amount, maturity,
interest rate or rates and timing of payments thereof, redemption provisions,
if any, and any other variable terms as set forth in the Terms Agreement (as
defined below) relating thereto which the Indenture contemplates may be set
forth in the Debt Securities as issued from time to time.
Whenever the Company determines to make an offering of Debt
Securities, the Company will enter into an agreement (the "Terms Agreement")
providing for the sale of such securities (the "Offered Securities") to, and
the purchase and offering thereof by, one or more underwriters specified in the
Terms Agreement (the "Underwriters", which term shall include any Underwriters
substituted pursuant to Section 10 hereof). The Terms Agreement relating to
the Offered Securities shall specify the names of the Underwriters
participating in such offering, the amount of Offered Securities which each
such Underwriter severally agrees to purchase, the price at which the Offered
Securities are to be purchased by the Underwriters from the Company, the
initial public offering price, the time and place of delivery and payment, such
other information as is indicated in Exhibit A hereto and such other terms as
are agreed by the Company and the Underwriters. In addition, each Terms
Agreement shall specify whether the Company has agreed to grant to the
Underwriters an option to purchase additional Offered Securities to cover
over-allotments, if any, and the amount of Offered Securities subject to such
option (the "Option Securities"). As used herein, the term "Offered
Securities" shall include the Option Securities, if any, and "Representatives"
shall mean the Underwriter or Underwriters so specified in the Terms Agreement
or, if no Underwriter is so specified, shall mean each Underwriter. The Terms
Agreement may be in the form of an exchange of any standard form of written
telecommunication between the Underwriters and the Company. The offering of
the Offered Securities will be governed by the Terms Agreement, as supplemented
hereby
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(collectively, this "Agreement"), and this Agreement shall inure to the benefit
of and be binding upon each Underwriter participating in the offering of the
Offered Securities.
The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-44731) for the registration of Debt Securities, including the Offered
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 has prepared and filed such amendments thereto as may have
been required to the date hereof. Such registration statement, as amended, has
been declared effective by the Commission, and the Indenture has been qualified
under the Trust Indenture Act of 1939 (the "1939 Act"). As provided in Section
3(a), a prospectus supplement reflecting the terms of the Offered Securities,
the terms of the offering thereof and the other matters set forth therein has
been prepared and will be filed pursuant to Rule 424 under the 1933 Act. Such
prospectus supplement, in the form first filed after the date of the Terms
Agreement pursuant to Rule 424, is herein referred to as the "Prospectus
Supplement". Such registration statement, as amended at the date of the Terms
Agreement, including the exhibits thereto and the documents incorporated by
reference therein, is herein called the "Registration Statement". Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act
Regulations is herein referred to as the "Rule 462(b) Registration Statement,"
and after such filing the term "Registration Statement" shall include the Rule
462(b) Registration Statement. The basic prospectus included in the
Registration Statement relating to all offerings of Debt Securities under the
Registration Statement, as supplemented by the Prospectus Supplement, is herein
called the "Prospectus", except that, if such basic prospectus is amended or
supplemented on or prior to the date on which the Prospectus Supplement is
first filed pursuant to Rule 424, the term "Prospectus" shall refer to the
basic prospectus as so amended or supplemented and as supplemented by the
Prospectus Supplement or, if any revised prospectus shall be provided to the
Underwriters by the Company for their use in connection with the offering of
the Offered Securities which differs from such basic prospectus and Prospectus
Supplement (whether or not required to be filed by the Company pursuant to Rule
424), the term "Prospectus" shall refer to such revised prospectus (including
any prospectus supplement) from and after the time it is first provided to the
Underwriters for such use, in either case including the documents filed by the
Company with the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), that are incorporated by reference therein.
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SECTION 1. Representations and Warranties. The Company represents
and warrants to each Underwriter named in the Terms Agreement as of the date
thereof and as of the Closing Time referred to in Section 2(c) hereof, and as
of each Date of Delivery (if any) referred to in Section 2(b) hereof (in each
case, a "Representation Date"), as follows:
(a) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware with
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing in the
State of Texas and 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 and be in good
standing would not have a material adverse effect on the condition, financial
or otherwise, or the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
(b) Each "significant subsidiary" of the Company as defined in Rule
405 of Regulation C of the 1933 Act Regulations (collectively, the "Significant
Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except
where the failure to so qualify and be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and, except as described in
the Prospectus, all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and, except for directors' qualifying shares (if
applicable), is owned by the Company, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity.
(c) At the time the Registration Statement and the Rule 462(b)
Registration Statement, if any, became effective and
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as of each Representation Date, the Registration Statement and the Rule 462(b)
Registration Statement, if any, 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 promulgated
thereunder; the Registration Statement and the Rule 462(b) Registration
Statement, if any, each at the time it became effective, did not, and at each
time thereafter at which any amendment to the Registration Statement becomes
effective or any Annual Report on Form 10-K is filed by the Company with the
Commission and as of each Representation Date, 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; and
the Prospectus, as of each Representation Date, does not and will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement and the Rule 462(b)
Registration Statement, if any, or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriters expressly for use in the Registration Statement and the Rule
462(b) Registration Statement, if any, or the Prospectus.
(d) The documents incorporated by reference in the Prospectus, at the
time they were or hereafter are filed with the Commission, complied or when so
filed will comply, as the case may be, in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
promulgated thereunder (the "1934 Act Regulations"), and, when read together
and with the other information in the Prospectus, did not and will not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were or are made,
not misleading.
(e) The accountants who certified the financial statements included
or incorporated by reference in the Registration Statement and the Prospectus
are independent public accountants with respect to the Company as required by
the 1933 Act and the 1933 Act Regulations.
(f) The financial statements and any supporting schedules of the
Company and its subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the consolidated
financial position
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of the Company and its subsidiaries as of the dates indicated and the
consolidated results of their operations for the periods specified; except as
stated therein, said financial statements have been prepared in conformity with
U.S. generally accepted accounting principles applied on a consistent basis;
the supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the information
required to be stated therein; and the pro forma financial statements and the
related notes thereto, if any, included or incorporated by reference in the
Registration Statement and the Prospectuses 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.
(g) The petroleum engineers who have consented to being named as
having reviewed certain reserve data included or incorporated by reference in
the Prospectus are independent engineers with respect to the Company and its
subsidiaries.
(h) This Agreement and the applicable Delayed Delivery Contracts (as
defined below), if any, have been duly authorized, executed and delivered by
the Company and, upon execution and delivery by the Underwriters, will be valid
and legally binding agreements of the Company; on and after the Closing Time,
the Indenture will have been duly authorized, executed and delivered by the
Company and, assuming due execution and delivery by the Trustee, will be a
valid and legally binding agreement of the Company enforceable in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
enforcement of creditors' rights generally or by general equity principles, and
except further as enforcement thereof may be limited by (1) requirements that a
claim with respect to any Debt Securities denominated other than in U.S.
dollars (or a foreign currency 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 (2) governmental authority to
limit, delay or prohibit the making of payments outside the United States. The
Offered Securities have been duly and validly authorized for issuance, offer
and sale pursuant to this Agreement and each Delayed Delivery Contract, if any,
and when issued, authenticated and delivered pursuant to the provisions of this
Agreement and the Indenture against payment of the consideration therefor, the
Offered Securities will constitute valid and legally binding obligations
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of the Company enforceable in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of creditors'
rights generally or by general equity principles, and except further as
enforcement thereof may be limited by (1) requirements that a claim with
respect to any Offered Securities denominated other than in U.S. dollars (or a
foreign currency or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate or exchange prevailing on a date
determined pursuant to applicable law or (2) governmental authority to limit,
delay or prohibit the making of payments outside the United States. The
Offered Securities and the Indenture will be substantially in the form
heretofore delivered to the Underwriters and conform in all material respects
to all statements relating thereto contained in the Prospectus; and each Holder
(as defined in the Indenture) of Offered Securities will be entitled to the
benefits of the Indenture.
(i) Since the respective dates as of which information is given in
the Registration Statement, any Rule 462(b) Registration Statement and the
Prospectus, except as may otherwise be stated therein or contemplated thereby,
(1) there has been no material adverse change in the condition, financial or
otherwise, or in the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business and (2) there have
been no material transactions entered into by the Company or any of its
subsidiaries other than those in the ordinary course of business.
(j) Neither the Company nor any of its subsidiaries is in violation
of its charter or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other instrument to which
it is a party or by which it or any of them or their properties may be bound,
where the consequences of such violation or default would have a material
adverse effect on the condition, financial or otherwise, or the results of
operations, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; and the execution and delivery of
this Agreement, each Delayed Delivery Contract, if any, and the Indenture and
the consummation of the transactions contemplated herein and therein have been
duly authorized by all necessary corporate action of the Company and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan
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agreement, note, lease or other 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 subsidiary thereof is
subject, nor will such action result in any violation of the provisions of the
charter or by-laws of the Company or any law, administrative regulation or
administrative or court order or decree, where the consequences of such
conflict, breach, creation, imposition, violation or default would have a
material adverse effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
(k) No consent, approval, authorization, order or decree of any court
or governmental agency or body is required for the consummation by the Company
of the transactions contemplated by this Agreement or in connection with the
sale of Offered Securities hereunder, except such as have been obtained or
rendered, as the case may be, or as may be required under state securities laws
("Blue Sky").
(l) Except as may be included or incorporated by reference in the
Registration Statement and the Prospectus, there is no action, suit or
proceeding before or by any court or governmental agency or body, domestic or
foreign, now pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which might, in the opinion of
the Company, result in any material adverse change in the condition, financial
or otherwise, or in the results of operations, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, or
could reasonably be expected to materially and adversely affect the properties
or assets thereof or could reasonably be expected to materially and adversely
affect the consummation of this Agreement or the Indenture or any transaction
contemplated hereby or thereby.
(m) There are no contracts or documents of the Company or any of its
subsidiaries which are required to be filed as exhibits to the Registration
Statement by the 1933 Act or by the 1933 Act Regulations which have not been so
filed.
(n) Neither the Company nor any of its subsidiaries is in violation
of any law, ordinance, governmental rule or regulation or court decree to which
it may be subject or has failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of its property or
to the conduct of its business, which violation or failure would materially
adversely affect the condition, financial or otherwise, or the results of
operations, business
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affairs or business prospects of the Company and its subsidiaries considered as
one enterprise; and the Company and its subsidiaries own or possess or have
obtained all governmental licenses, permits, consents, orders, approvals and
other authorizations and have properly filed with the appropriate authorities
all notices, applications and other documents necessary to lease or own their
respective properties and to carry on their respective businesses as presently
conducted, except where the failure to possess such licenses or authorizations
or make such filings would not materially adversely affect the condition,
financial or otherwise, or the results of operations, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise.
(o) The Company and its subsidiaries own or possess, or can acquire
on reasonable terms, adequate trademarks, service marks and trade names
necessary to conduct the business now operated by them, except as set forth or
incorporated by reference in the Registration Statement or except where the
failure to own or possess the same would not materially adversely affect the
condition, financial or otherwise, or the results of operations, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted rights of
others with respect to any trademarks, service marks or trade names which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially adversely affect the condition, financial or
otherwise, or the results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise.
(p) The Company and its subsidiaries have legal, valid and defensible
title to all of their interests in oil and gas properties and to all other real
and personal property owned by them and any other real property and buildings
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases, in each case free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances and defects of any kind, except such as (1) are described in the
Prospectus, (2) liens and encumbrances under operating agreements, unitization
and pooling agreements, production sales contracts, farm-out agreements and
other oil and gas exploration and production agreements, in each case that
secure payment of amounts not yet due and payable for the performance of other
inchoate obligations and are of a scope and nature customary in connection with
similar drilling and producing operations or (3) those that do not have a
material adverse effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of
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the Company and its subsidiaries considered as one enterprise.
(q) The information underlying the estimates of oil and gas reserves
as described in the Prospectus is complete and accurate in all material
respects (or, with regard to any information underlying the estimates prepared
by any petroleum engineers retained by the seller of such oil and gas reserves,
is, to the best knowledge of the Company after reasonable investigation,
complete and accurate in all material respects); other than production of the
reserves in the ordinary course of business and intervening product price
fluctuations described in the Prospectus, the Company is not aware of any facts
or circumstances that would result in a material adverse change in the reserves
or the present value of future net cash flows therefrom as described in the
Prospectus. Estimates of such reserves and present values comply in all
material respects with the applicable requirements of Regulation S-X and
Industry Guide 2 under the 1933 Act.
(r) Neither the Company nor any of its subsidiaries is required to
be registered under the Investment Company Act of 1940, as amended (the "1940
Act").
(s) The Company has complied and will comply with the provisions
of Florida H.B. 1771, codified as Section 517.075 of the Florida Statutes,
1987, as amended, and all regulations promulgated thereunder relating to
issuers doing business in Cuba.
(t) Except as described in the Registration Statement, (1) neither
the Company nor any of its subsidiaries is in violation of any local or foreign
laws or regulations relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), except such violations as would not, singly or in the
aggregate, have a material adverse effect on the condition, financial or
otherwise, or the results of operations, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, and (2) to
the best of the Company's knowledge, there are no events or circumstances that
could reasonably be expected to be the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental
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body or agency, against or affecting the Company or any of its subsidiaries
relating to any Hazardous Materials or the violation of any Environmental Laws,
which, singly or in the aggregate, could reasonably be expected to have a
material adverse effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
Any certificate signed by any director or officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company as to the matters covered
thereby.
SECTION 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Offered Securities pursuant to this 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 and therein set forth. Offered
Securities which are subject to Delayed Delivery Contracts are herein sometimes
referred to as "Delayed Delivery Offered Securities" and Offered Securities
which are not subject to Delayed Delivery Contracts are herein sometimes
referred to as "Immediate Delivery Offered Securities".
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the Terms Agreement, an option to the
Underwriters named in the Terms Agreement, severally and not jointly, to
purchase up to the principal amount of Option Securities set forth therein at
the same price per security (plus, except as otherwise provided in the Terms
Agreement, interest, if any, accrued and unpaid from the Closing Time until the
applicable Date of Delivery), as is applicable to the Offered Securities. Such
option, if granted, will expire 30 days after the date of the Terms Agreement,
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Offered Securities upon notice by the Representatives
to the Company setting forth the principal amount of Option Securities as to
which the several Underwriters are then exercising the option and the time and
date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days and not
earlier than two full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined, unless otherwise
agreed upon by the
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Representatives and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally
and not jointly, will purchase the proportion of the total principal amount of
Option Securities then being purchased that the principal amount of Immediate
Delivery Offered Securities each such Underwriter has agreed to purchase, as
set forth in the Terms Agreement, bears to the total principal amount of
Immediate Delivery Offered Securities, subject to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases in less than authorized denominations.
(c) Payment of the purchase price for, and delivery of, the
Immediate Delivery Offered Securities to be purchased by the Underwriters shall
be made at the place set forth in the Terms Agreement, or at such other place
as shall be agreed upon by the Representatives and the Company, on the third
business day (unless postponed in accordance with the provisions of Section 10)
following the date of the Terms Agreement or such other time as shall be agreed
upon by the Underwriters and the Company (such time and date being referred to
as the "Closing Time"). Except as specified in the Terms Agreement, payment
shall be made to the Company by wire transfer in same day funds to the account
of the Company specified in the Terms Agreement against delivery to the
Underwriters for the respective accounts of the Underwriters of the Immediate
Delivery Offered Securities to be purchased by them (unless the Offered
Securities are issuable only in the form of one or more global instruments
registered in the name of a depository or a nominee of a depository, in which
event the Underwriters' interest in such global instrument shall be noted in a
manner satisfactory to the Underwriters and their counsel). In addition, in
the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
representing, such Option Securities shall be made at such place as shall be
agreed upon by the Representatives and the Company, on each Date of Delivery as
agreed by the Representatives and the Company. The Immediate Delivery Offered
Securities shall be in such denominations and registered in such names as the
Underwriters may request in writing at least two business days prior to the
Closing Time or relevant Date of Delivery, as the case may be. The Immediate
Delivery Offered Securities, which if agreed by the Representatives may be in
temporary form, will be made available for examination and packaging by the
Representatives on or before the first business day prior to the Closing Time
or relevant Date of Delivery, as the case may be.
(d) If authorized by the Terms Agreement, the Underwriters named
therein may solicit offers to purchase Offered Securities from the Company
pursuant to delayed delivery contracts ("Delayed
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<PAGE> 17
Delivery Contracts") substantially in the form of Exhibit B hereto, with such
changes therein as the Company may approve. As compensation for arranging
Delayed Delivery Contracts, the Company will pay to the Representatives at the
Closing Time, for the account of the Underwriters, a fee equal to that
percentage of the aggregate principal amount of Delayed Delivery Offered
Securities for which Delayed Delivery Contracts are made at the Closing Time as
is specified in the Terms Agreement. Any Delayed Delivery Contracts are to be
with institutional investors of the types set forth in the Prospectus
Supplement. At the Closing Time the Company will enter into Delayed Delivery
Contracts (for not less than the minimum principal amount of Delayed Delivery
Offered Securities per Delayed Delivery Contract specified in the Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate principal
amount of Offered Securities in excess of that specified in the Terms
Agreement. The Underwriters will not have any responsibility for the validity
or performance of Delayed Delivery Contracts.
(e) The Representatives are to submit to the Company, at least two
business days prior to the Closing Time, the names of any institutional
investors with which it is proposed that the Company will enter into Delayed
Delivery Contracts and the principal amount of Delayed Delivery Offered
Securities to be purchased by each of them, and the names of the institutions
with which the making of Delayed Delivery Contracts is approved by the Company
and the principal amount of Delayed Delivery Offered Securities to be covered
by each such Delayed Delivery Contract.
(f) The principal amount of Offered Securities agreed to be
purchased by the respective Underwriters pursuant to this Agreement shall be
reduced by the principal amount of Delayed Delivery Offered Securities covered
by Delayed Delivery Contracts, as to each Underwriter as set forth in a written
notice delivered by the Underwriters to the Company; provided, however, that
the total principal amount of Immediate Delivery Offered Securities to be
purchased by all Underwriters shall be the total amount of the Offered
Securities covered by this Agreement, less the total principal amount of
Delayed Delivery Offered Securities covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) Immediately following the execution of the Terms
Agreement, the Company will prepare a Prospectus Supplement in form approved by
the Representatives setting forth the principal amount of Offered Securities
and their terms not otherwise specified in the Indenture, if applicable, the
names of the
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<PAGE> 18
Underwriters and the principal amount of the Offered Securities which each
severally has agreed to purchase, the names of the Underwriters, the price at
which the Offered Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, the selling concession and
reallowance, if any, any delayed delivery arrangements, and such other
information as the Representatives and the Company deem appropriate in
connection with the offering of the Offered Securities. The Company will
promptly transmit copies of the Prospectus Supplement to the Commission for
filing pursuant to Rule 424 of the 1933 Act Regulations and will furnish to the
Underwriters named therein as many copies of the Prospectus (including the
Prospectus Supplement) as the Representatives shall reasonably request.
(b) If at any time when the Prospectus is required by the
1933 Act to be delivered in connection with sales of the Offered Securities any
event shall occur or condition exist as a result of which it is necessary, in
the opinion of counsel for the Underwriters or counsel for the Company, 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 any material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time the Prospectus is delivered to
a purchaser, or if it shall be necessary, in the opinion of either such
counsel, to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly amend the Registration Statement and the
Prospectus, whether by filing documents pursuant to the 1934 Act or the 1933
Act or otherwise, as may be necessary to correct such untrue statement or
omission or to make the Registration Statement and the Prospectus comply with
such requirements.
(c) The Company will make generally available to its security
holders as soon as practicable, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 of the 1933 Act Regulations) covering each twelve month
period beginning, in each case, not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in such Rule
158) of the Registration Statement with respect to each sale of Offered
Securities.
(d) While the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Securities, the Company will
give the Representatives notice of its intention to file any additional
registration statement with respect to the registration of additional Debt
Securities, any
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<PAGE> 19
amendment to the Registration Statement (including any filing under Rule
462(b)) or any amendment or supplement to the Prospectus, whether pursuant to
the 1934 Act, the 1933 Act or otherwise; will furnish the Underwriters with
copies of any such amendment or supplement or other documents proposed to be
filed a reasonable time in advance of such proposed filing or use, as the case
may be; and will not file any such amendment or supplement or other documents
in a form to which the Representatives or counsel to the Underwriters
reasonably object.
(e) While the Prospectus is required by the 1933 Act to be
delivered in connection with sales of the Offered Securities, the Company will
notify the Representatives immediately, and promptly confirm the notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any supplement
to the Prospectus or any document to be filed pursuant to the 1934 Act which
will be incorporated by reference into the Registration Statement or the
Prospectus, (iii) the receipt of any comments from the Commission with respect
to the Registration Statement, the Prospectus or the Prospectus Supplement,
(iv) any request by the Commission for any amendment to the Registration
Statement, or any amendment or supplement to the Prospectus or for additional
information, (v) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose and (vi) any change in the rating assigned by any
nationally recognized statistical rating organization to any debt securities of
the Company or the public announcement by any nationally recognized statistical
rating organization that it has under surveillance or review, with possible
negative implications, its rating of any debt securities of the Company. 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 at the
earliest possible moment.
(f) The Company will deliver to each Underwriter one
conformed copy of the Registration Statement (as originally filed) and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated by reference in the Prospectus)
and will also deliver to the Representatives as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) as the Representatives may reasonably request. While the
Prospectus is required by the 1933 Act to be delivered in connection with sales
of the Offered Securities, the Company will furnish to the Representatives as
many copies of the Prospectus (including the Prospectus Supplement) as the
Representatives reasonably request.
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<PAGE> 20
(g) The Company will endeavor, in cooperation with the
Underwriters, to qualify the Offered Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions of the United
States as the Underwriters may designate, and will maintain such qualifications
in effect for as long as may be required for the distribution of the Offered
Securities; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will file such statements and reports as may be required by the laws of each
jurisdiction in which the Offered Securities have been qualified as above
provided. The Company will promptly advise the Representatives of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Offered Securities for sale in any such state or
jurisdiction or the initiating or threatening of any proceeding for such
purpose.
(h) The Company, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act in connection with
sales of the Offered Securities, will file all documents required to be filed
with the Commission pursuant to Sections 13, 14 or 15(d) of the 1934 Act within
the time periods prescribed by the 1934 Act and the 1934 Act Regulations.
(i) If specified in the Terms Agreement, between the date of
the Terms Agreement and the completion of the distribution of the Offered
Securities or the Closing Time, whichever is later, or such other time as is
specified in the Terms Agreement, the Company will not, without the prior
written consent of the Representatives, offer or sell, grant any option for the
sale of, or enter into any agreement to sell, any debt securities of the
Company substantially similar to the Offered Securities (other than the Offered
Securities that are to be sold pursuant to such agreement or commercial paper
in the ordinary course of business).
SECTION 4. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase Offered Securities pursuant to this Agreement
are subject to the accuracy of the representations and warranties on the part
of the Company herein contained, to the accuracy of the statements which the
Company's officers made in any certificate furnished pursuant to the provisions
hereof, to the performance by the Company of all of its covenants and other
obligations hereunder and under the Terms Agreement, and to the following
further conditions:
(a) At the Closing Time, no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
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<PAGE> 21
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(b) At the Closing Time, the Representatives shall have
received:
(1) The favorable opinion, dated as of the Closing
Time, of Mayor, Day, Cadwell & Keeton, L.L.P., counsel to the Company, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware.
(ii) This Agreement and the applicable Delayed
Delivery Contracts, if any, have been duly authorized, executed and delivered
by the Company.
(iii) The Indenture has been duly authorized,
executed and delivered by the Company and (assuming the Indenture has been duly
authorized, executed and delivered by the Trustee) constitutes a legal, valid
and binding agreement of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting enforcement
of creditors' rights generally or by general equity principles.
(iv) The Offered Securities, in the form(s) certified
by the Company as of the Closing Time, have been duly authorized for issuance,
offer and sale pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement, any Delayed Delivery
Contract and the Indenture against payment of the consideration therefor, will
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by general equity
principles, and except further as enforcement thereof may be limited by (1)
requirements that a claim with respect to any Debt Securities denominated other
than in U.S.
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<PAGE> 22
dollars (or a foreign currency 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 (2) governmental authority to
limit, delay or prohibit the making of payments outside the United States; and
each holder of Offered Securities will be entitled to the benefits of the
Indenture.
(v) The Offered Securities and the Indenture conform
in all material respects to the statements relating thereto in the Prospectus;
and the statements in the Prospectus under the captions "Description of Notes"
and "Description of Debt Securities", insofar as they purport to summarize
certain provisions of documents specifically referred to therein, are accurate
summaries of such provisions.
(vi) The Indenture has been duly qualified under the
1939 Act.
(vii) The Registration Statement, including any Rule
462(b) Registration Statement, has been declared effective by the Commission
under the 1933 Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(viii) The Registration Statement, including any Rule
462(b) Registration Statement, and the Prospectus (except for financial
statements and engineering reports and other financial or engineering data, and
except for those parts of the Registration Statement that constitute the Form
T-1, as to which such counsel need not express any opinion), as of their
respective effective or issue dates, appeared on their face to be appropriately
responsive to the requirements of the 1933 Act and the 1933 Act Regulations.
(ix) The information contained in the Prospectus
under the caption "Certain United States Federal Income Tax Considerations", to
the extent that such information constitutes matters of law, summaries of legal
matters or legal conclusions, has been reviewed by such counsel and is correct.
In rendering such opinion, counsel for the Company may rely
(i) as to matters of fact upon the representations of officers of the Company
contained in any certificate delivered to such counsel and certificates of
public officials, which certificates shall be attached to or delivered with
such opinion and (ii) as to the laws of the State of New York applicable to the
enforceability of the Notes and the Indenture upon the
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<PAGE> 23
opinion of Brown & Wood LLP. Such opinion shall be limited to the General
Corporation Law of the State of Delaware, the laws of the State of Texas and
the laws of the United States of America.
(2) The favorable opinion of Zurab S.
Kobiashvili, General Counsel of the Company, to the effect that:
(i) The Company has the corporate power and authority
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
this Agreement and the Delayed Delivery Contracts, if any.
(ii) To the best knowledge and information of such
counsel, the Company is duly qualified as a foreign corporation to transact
business and is in good standing in the State of Texas and in each other
jurisdiction in which such qualification is required, except where the failure
to so qualify and be in good standing would not have a material adverse effect
on the condition, financial or otherwise, or the results of operations,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(iii) Each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and conduct its business as
described in the Prospectus, and, to the best of such counsel's knowledge and
information, is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify and be in good standing would
not have a material adverse effect on the condition, financial or otherwise, or
the results of operations, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise; and all of the
issued and outstanding capital stock of each Significant Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable, and is
owned by the Company, directly or indirectly, free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity (except as described in the
Prospectus).
(iv) Each document filed pursuant to the 1934 Act and
incorporated by reference in the Prospectus (except for financial statements,
supporting schedules and other financial or statistical information as to which
no opinion need be rendered) appeared on its face to be appropriately
responsive when so filed to the requirements of the 1934 Act and the 1934 Act
Regulations.
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<PAGE> 24
(v) Neither the Company nor any of its subsidiaries
is required to be registered under the 1940 Act.
(vi) No consent, approval, authorization, order or
decree of any court or governmental authority or agency is required that has
not been obtained in connection with the consummation by the Company of the
transactions contemplated by this Agreement, any Delayed Delivery Contract or
the Indenture, except such as have been obtained or rendered, as the case may
be, or as may be required under the 1933 Act, the 1933 Act Regulations, the
1934 Act, the 1934 Act Regulations or state securities laws; and the execution
and delivery of this Agreement, the Delayed Delivery Contract, if applicable,
and the Indenture and the consummation of the transactions contemplated herein
and therein have been duly authorized by all necessary corporate action of the
Company and, to the best knowledge and information of such counsel, will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other 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
such subsidiary is subject, nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any applicable law,
administrative regulation or, to the best knowledge and information of such
counsel, administrative or court order or decree.
(vii) Neither the Company nor any of its Significant
Subsidiaries is in violation of its charter or by-laws.
(viii) To the best knowledge and information of such
counsel, neither the Company nor any of its subsidiaries is in violation of any
law, ordinance, governmental rule or regulation or court decree to which it may
be subject or has failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure would materially adversely
affect the condition, financial or otherwise, or the results of operations,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and, to the best knowledge and information of
such counsel, the Company and its subsidiaries own or possess or have obtained
all governmental licenses, permits, consents, orders, approvals and other
authorizations necessary to lease or own their respective properties and to
carry on their respective businesses as presently conducted, except where the
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<PAGE> 25
failure to obtain such authorizations would not have a material adverse effect
on the condition, financial or otherwise, or the results of operations,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(ix) To the best of such counsel's knowledge and
information, there is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or threatened
against or affecting, the Company or any of its subsidiaries, which would be
reasonably expected to result in any material adverse change in the condition,
financial or otherwise, or in the results of operations, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, or would materially and adversely affect the properties or assets
thereof or would materially and adversely affect the consummation of this
Agreement, the Delayed Delivery Contracts, if applicable, or the Indenture or
any transaction contemplated hereby or thereby.
(x) To the best of such counsel's knowledge and
information, there are no contracts or other documents required to be described
or referred to in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, the descriptions thereof or references thereto
are correct in all material respects, and, to the best of such counsel's
knowledge and information, no default exists in the due performance or
observance of any material obligation, agreement, covenant or conditions
contained in any contract, or other documents so described, referred to, filed
or incorporated by reference where the consequences of such default would have
a material adverse effect on the condition, financial or otherwise, or the
results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise.
In rendering such opinion, Zurab S. Kobiashvili may
rely as to matters of fact upon the representations of officers of the Company
contained in any certificate delivered to such counsel and certificates of
public officials, which certificates shall be attached to or delivered with
such opinion. Such opinion shall be limited to the General Corporation Law of
the State of Delaware, the laws of the State of Texas and the laws of the
United States of America.
(3) The favorable opinion, dated as of the
Closing Time, of Brown & Wood LLP, counsel for the Underwriters, with respect
to the matters set forth in clauses (i) to (viii), inclusive, of subsection
(b)(1) of this Section.
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<PAGE> 26
(4) In giving their opinions required by
subsection (b)(1), (b)(2) and (b)(3), respectively, of this Section 4, Mayor,
Day, Caldwell & Keeton, L.L.P., Zurab S. Kobiashvili and Brown & Wood LLP shall
each additionally state that in the course of the preparation of the
Registration Statement and the Prospectus such counsel has considered the
information set forth therein in light of the matters required to be set forth
therein, and has participated in conferences with officers and representatives
of the Company including its independent public accountants, during the course
of which the contents of the Registration Statement and the Prospectus and
related matters were discussed. Such counsel need not independently check the
accuracy or completeness of, or otherwise verify, and accordingly need not pass
upon, and accordingly need not assume responsibility for, the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and such counsel may, in good faith, rely as to
materiality upon the judgment of officers and representatives of the Company.
Such counsel shall additionally state that, however, as a result of such
consideration and participation, nothing has come to such counsel's attention
which causes such counsel to believe that the Registration Statement, at the
time it became effective (or, if an amendment to the Registration Statement or
an Annual Report on Form 10-K has been filed by the Company with the Commission
subsequent to the effectiveness of the Registration Statement, then at the time
such amendment became effective or at the time of the most recent such filing,
as the case may be), contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the Prospectus or
any amendment or supplement thereto, at the time the Prospectus was issued at
the time any such amendment or supplement was issued or, at the Closing Time
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no opinion with respect to the
financial statements and engineering reports and other financial or engineering
data contained in the Registration Statement (including the Prospectus) or
those parts of the Registration Statement which constitute the Form T-1).
(c) At the Closing Time, there shall not have been, since
the date of the Terms Agreement or since the respective dates as of which
information is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
results of operations, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise, whether or not
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<PAGE> 27
arising in the ordinary course of business, and the Representatives shall have
received a certificate of the Chief Executive Officer, President or a Vice
President and the Treasurer, the Assistant Treasurer, the principal financial
officer or principal accounting officer of the Company, dated as of the Closing
Time, to the effect that (i) there has been no such material adverse change
with respect to the Company and its subsidiaries, (ii) the representations and
warranties of the Company contained in Section 1 are true and correct as of the
Closing Time, (iii) the Company has performed or complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the date of such certificate and (iv) no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission. As used in this Section 4(c), the
term "Prospectus" means the Prospectus in the form first provided to the
applicable Underwriter or Underwriters for use in confirming sales of the
Offered Securities.
(d)(1) On the date of the Terms Agreement, the Underwriters
shall have received a letter from Arthur Andersen LLP, dated as of the date
hereof and in form and substance satisfactory to the Underwriters, to the
effect that:
(i) They are independent accountants with respect to
the Company and its subsidiaries within the meaning of the 1933 Act, the 1933
Act Regulations, the 1934 Act and the 1934 Act Regulations.
(ii) It is their opinion that the consolidated
financial statements and supporting schedule(s) included or incorporated by
reference in the Registration Statement and the Prospectus and audited by them
and covered by their opinions therein comply in form in all material respects
with the applicable accounting requirements of the 1933 Act, the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations.
(iii) They have performed specified procedures, not
constituting an audit, including a reading of the latest available interim
financial statements of the Company and its indicated subsidiaries, a reading
of the minute books of the Company and such subsidiaries since the end of the
most recent fiscal year with respect to which an audit report has been issued,
inquiries of and discussions with certain officials of the Company and such
subsidiaries responsible for financial and accounting matters with respect to
the unaudited consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus and the latest
avail-
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able interim unaudited financial statements of the Company and its
subsidiaries, and such other inquiries and procedures as may be specified in
such letter, and on the basis of such inquiries and procedures, nothing came to
their attention that caused them to believe that: (A) any material
modifications should be made to the unaudited consolidated financial statements
of the Company and its subsidiaries included or incorporated by reference in
the Registration Statement and the Prospectus for them to be in conformity with
generally accepted accounting principles in the United States, (B) the
unaudited consolidated financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement and the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the 1934 Act Regulations
or (C) at a specified date not more than three days prior to the date of such
letter, there was any change in the consolidated capital stock, any increase in
consolidated long-term debt or any decrease in the consolidated net current
assets or consolidated net assets of the Company and its subsidiaries, in each
case as compared with the amounts shown on the most recent consolidated balance
sheet of the Company and its subsidiaries included or incorporated by reference
in the Registration Statement and the Prospectus or, during the period from the
date of such balance sheet to a specified date not more than three days prior
to the date of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenues or in the
total or per-share amounts of income before extraordinary items or of net
income of the Company and its subsidiaries, except in all instances for
changes, increases or decreases that the Registration Statement and the
Prospectus disclose have occurred or may occur or except for such exceptions
enumerated in such letter as shall have been agreed to by the Underwriters and
the Company.
(iv) They have performed specified procedures, not
constituting an audit, set forth in their letter, based upon which nothing came
to their attention that caused them to believe that the unaudited pro forma
consolidated condensed financial statements, if any, included or incorporated
by reference in the Registration Statement or the Prospectus do not comply as
to form in all material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X and that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements.
(v) In addition to the audit referred to in their
opinions and the limited procedures referred to in clauses (iii) and (iv)
above, they have carried out certain specified procedures, not constituting an
audit, with respect to certain
23
<PAGE> 29
amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and the Prospectus and
which are specified by the Underwriters, and have found such amounts,
percentages and financial information to be in agreement with the relevant
accounting, financial and other records of the Company and its subsidiaries
identified in such letter.
(2) At the Closing Time, the Underwriters shall
have received from Arthur Andersen LLP, a letter, dated as of the Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (d)(1) of this Section, except that the specified date
referred to shall be a date not more than three days prior to the Closing Time.
(e) At the Closing Time, 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 Offered Securities as herein contemplated and related proceedings or in
order to evidence the accuracy and completeness of any of the representations
and 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 Offered Securities as herein and in the Terms Agreement
contemplated shall be satisfactory in form and substance to the
Representatives.
(f) In the event that the Terms Agreement provides for Option
Securities and the Underwriters exercise their option pursuant to Section 2(b)
hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery, and the Underwriters shall have
received:
(1) Unless the Date of Delivery is the Closing
Time, a certificate, dated such Date of Delivery, of the Chief Executive
Officer, President or a Vice President and the Treasurer, the Assistant
Treasurer, the principal financial officer or principal accounting officer of
the Company, in their capacities as such, confirming that the certificate
delivered at the Closing Time pursuant to Section 4(c) hereof remains true and
correct as of such Date of Delivery.
(2) The favorable opinion of Mayor, Day,
Caldwell & Keeton, L.L.P., counsel for the Company, and Zurab S. Kobiashvili,
General Counsel for the Company, in form and substance satisfactory to counsel
for the Underwriters, dated
24
<PAGE> 30
such Date of Delivery, relating to the Option Securities and otherwise
substantially to the same effect as the opinions required by subsections (1)
and (2) of Section 4(b) hereof.
(3) The favorable opinion of Brown & Wood LLP,
counsel for the Underwriters, dated such Date of Delivery, relating to the
Option Securities and otherwise to the same effect as the opinion required by
subsection (3) to Section 4(b) hereof.
(4) Unless the Date of Delivery is the Closing
Time, a letter from Arthur Andersen LLP, in form and substance satisfactory to
the Underwriters and dated such Date of Delivery, substantially the same in
scope and substance as the letter furnished to the Underwriters at the Closing
Time pursuant to Section 4(d) hereof, except that the "specified date" in the
letter shall be a date not more than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Representatives by notice to the Company at any time at or
prior to the Closing Time, and such termination shall be without liability of
any party to any other party except as provided in Section 5.
SECTION 5. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including:
(a) the preparation and filing of the Registration
Statement, including any Rule 462(b) Registration Statement, and all amendments
thereto and the Prospectus and any amendments or supplements thereto;
(b) the preparation, filing and reproduction of this
Agreement and the Delayed Delivery Contract(s), if applicable;
(c) the preparation, printing, issuance and delivery of
the Offered Securities, including any fees and expenses relating to the
eligibility and issuance of Offered Securities in book-entry form;
(d) the fees and disbursements of the Company's
accountants and counsel, of the Trustee and its counsel, and of any calculation
agent or exchange rate agent;
(e) except as otherwise provided in the Terms Agreement,
the reasonable fees and disbursements of counsel to the Underwriters;
25
<PAGE> 31
(f) the qualification of the Offered Securities under
state securities laws in accordance with the provisions of Section 3(k) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of any Blue Sky or Legal Investment Survey;
(g) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration Statement and
any amendments thereto, and of the Prospectus and any amendments or supplements
thereto, and the delivery by the Underwriters of the Prospectus and any
amendments or supplements thereto in connection with solicitations or
confirmations of sales of the Offered Securities;
(h) the preparation, reproducing and delivery to the
Underwriters of copies of the Indenture and all amendments, supplements and
modifications thereto;
(i) any fees charged by nationally recognized statistical
rating organizations for the rating of the Offered Securities;
(j) the fees and expenses incurred in connection with any
listing of Offered Securities on a securities exchange;
(k) the fees and expenses incurred with respect to any
filing with the National Association of Securities Dealers, Inc.;
(l) any out-of-pocket expenses of the Underwriters
incurred with the approval of the Company; and
(m) the cost of providing any CUSIP or other
identification numbers for the Offered Securities.
If this Agreement is terminated by the Underwriters in accordance with
the provisions of Section 9, 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 6. Indemnification. (a) 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 as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue
26
<PAGE> 32
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including any Rule 462(b)
Registration Statement, including information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) of the 1933 Act Regulations, 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,
unless such untrue statement or omission or such alleged untrue statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company by an Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto);
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or 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 such settlement is effected
with the written consent of the Company, which consent shall not be
unreasonably withheld; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and expenses of counsel chosen by such Underwriter), 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 (x)
the Company is required to do so under Section 6(c) below and (y) that any such
expense is not paid under (i) or (ii) above.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, but only with respect to untrue statements or
omissions, or alleged untrue statements or
27
<PAGE> 33
omissions, made in the Registration Statement (or any amendment thereto), any
Rule 462(b) Registration Statement 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 expressly for use in the Registration Statement (or any amendment
thereto), any Rule 462(b) Registration Statement or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) 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 it from any liability which it may have
otherwise than on account of this indemnity agreement. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
each Underwriter shall have the right to employ counsel to represent jointly
the Underwriters and their respective controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Underwriters against the Company under this Section if, in the judgment
of any of the Underwriters, it is advisable for such Underwriter or
Underwriters and controlling persons to be jointly represented by separate
counsel, and in that event the fees and expenses of such separate counsel shall
be paid by the Company. In no event shall the indemnifying parties be liable
for the 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 (which shall not unreasonably be withheld), 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
28
<PAGE> 34
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) For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus or the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include, without
limitation, any electronically transmitted copies thereof, including, without
limitation, any copies filed with the Commission pursuant to EDGAR.
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 Offered Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the 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 Offered
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Offered Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total commission or underwriting discount
received by each Underwriter, in each case as set forth on the cover of the
Prospectus Supplement, bear to the aggregate initial public offering price of
the Offered Securities sold to or through such Underwriter 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 the untrue or alleged untrue statement of a material fact or the
omission or alleged
29
<PAGE> 35
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. 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
Offered Securities sold to or through such Underwriter were offered to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 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 principal amount of Offered Securities sold to
or through each Underwriter and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto 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 of an Underwriter, or by or on behalf of the Company, and
shall survive each delivery of and payment for any
30
<PAGE> 36
Offered Securities.
SECTION 9. Termination.
(a) The Representatives may terminate this Agreement immediately upon
notice to the Company, at any time at or prior to the Closing Time if (i) there
has been, since the date of the Terms Agreement or since the respective dates
as of which information is given in the Registration Statement, any material
adverse change in the condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) there shall have occurred any material
adverse change in the financial markets in the United States or any outbreak or
escalation of hostilities or other national or international calamity or crisis
the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Offered Securities or enforce
contracts for the sale of the Offered Securities, or (iii) trading in any
securities of the Company has been suspended by the Commission or a national
securities exchange, or if trading generally on either the American Stock
Exchange or the New York Stock Exchange shall have been suspended, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by either of said exchanges or by order of the
Commission or any other governmental authority, or if a banking moratorium
shall have been declared by either Federal, New York or Texas authorities or if
a banking moratorium shall have been declared by the relevant authorities in
the country or countries of origin of any foreign currency or currencies in
which the Offered Securities are denominated or payable, or (iv) the rating
assigned by any nationally recognized statistical rating organization to any
debt securities of the Company as of the date of the Terms Agreement shall have
been lowered since that date or if any such rating organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any debt securities of the Company, or (v)
there shall have come to the attention of the Representatives any facts that
would cause them to reasonably believe that the Prospectus, at the time it was
required to be delivered to a purchaser of the Offered Securities, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances existing at the time of such delivery, not misleading. As used
in this Section 9, the term "Prospectus" means the Prospectus in the form first
provided to the applicable Underwriter or Underwriters for use in confirming
sales of the related Offered Securities.
31
<PAGE> 37
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 5. Notwithstanding any such termination, (i)
the covenants set forth in Section 3(b), (d), and (e) with respect to any
offering of Offered Securities shall remain in effect so long as any
Underwriter owns any such Offered Securities purchased from the Company
pursuant to this Agreement and during the period when the Prospectus is
required to be delivered in connection with sales of the Offered Securities and
(ii) the covenants set forth in Section 3(c), (g), (h) and, if applicable, (i),
the provisions of Section 5, the indemnity agreement set forth in Section 6,
the contribution provisions set forth in Section 7 and the provisions of
Sections 8, 11, 12 and 13 shall remain in effect.
SECTION 10. Default. If one or more of the Underwriters shall fail
at the Closing Time or a Date of Delivery to purchase the Immediate Delivery
Offered Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), then the Representatives 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, during such 24 hours
the Representatives shall not have completed such arrangements for the purchase
of all of the Defaulted Securities, then:
(a) if the amount of Defaulted Securities does not exceed
10% of the amount of Immediate Delivery Offered Securities to be purchased on
such date, each of 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 hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
(b) if the amount of Defaulted Securities exceeds 10% of
the number of Immediate Delivery Offered Securities to be purchased on such
date, this Agreement or, with respect to any Date of Delivery which occurs
after the Closing Time, the obligation of the Underwriters to purchase and of
the Company to sell the Option Securities to be purchased and sold 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 a
32
<PAGE> 38
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the Representatives 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. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing, either delivered by hand, by mail or by telex, telecopier
or telegram, and any such notice shall be effective when received at the
address specified in this Section 11. Notices to the Underwriters shall be
directed as provided in the Terms Agreement. Notices to the Company shall be
directed to Apache Corporation, 2000 Post Oak Boulevard, Suite 100, Houston,
Texas 77056-4400, Attention: Vice President and Treasurer, with a copy to:
Geoffrey K. Walker, Mayor, Day, Caldwell & Keeton, L.L.P., 700 Louisiana, Suite
1900, Houston, Texas 77002. Any party to this Agreement may from time to time
designate another address to receive notice pursuant to this Agreement by
notice duly given in accordance with the terms of this Section 11.
SECTION 12. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
parties hereto 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 Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the parties hereto 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 Offered Securities from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
SECTION 13. Governing Law. This Agreement and all the rights and
obligations of the parties hereto shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in such State.
33
<PAGE> 39
SECTION 14. Counterparts. Any Terms Agreement may be executed in one
or more counterparts and, if executed in more than one counterpart, the
executed counterparts thereof shall constitute a single instrument.
34
<PAGE> 40
EXHIBIT A
TERMS AGREEMENT
___________ __, 19__
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention: [Title]
Dear Sirs:
The undersigned underwriters (the "Underwriters") understand that
Apache Corporation (the "Company") proposes to issue and sell $__________
aggregate principal amount of its debt securities (the "Offered Securities").
Subject to the terms and conditions set forth herein or incorporated by
reference herein, the Underwriters offer to purchase, severally and not
jointly, the principal amount of Offered Securities set forth below opposite
their respective names at ___% of the principal amount thereof together with
accrued interest thereon from __________, 19__ to the Closing Time:
<TABLE>
<CAPTION>
Principal
Amount of
Underwriter Debt Securities
----------- ---------------
<S> <C>
_______________
Total $
</TABLE>
The Offered Securities shall have the following terms:
Principal amount:
Form and denomination:
Date of maturity:
Interest rate, rates or formula
(or method of calculation
A-1
<PAGE> 41
of interest accrual):
Date from which interest accrues:
Interest payment dates, if any:
Initial price to public:
Closing Time:
Place of delivery and payment:
Company account for wire transfer of payment:
Redemption provisions, if any:
Lock-up pursuant to Section 3(i) of the
Underwriting Agreement Basic Terms: [yes] [no]
Securities Exchanges, if any, on which application will be made to
list the Offered Securities:
Delayed Delivery Contracts: [authorized] [not authorized]
Delivery date:
Expiration date:
Compensation to Underwriters:
Minimum contract:
Maximum aggregate principal amount:
Other terms, if any:
All the provisions contained in "Apache Corporation-Debt
Securities--Underwriting Agreement Basic Terms" (the "Basic Terms"), filed as
an exhibit to the Registration Statement relating to the Offered Securities and
attached hereto as Annex A, are herein incorporated by reference in their
entirety 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.
Any notice by the Company to the Underwriters pursuant to this Terms
Agreement shall be sufficient if given in accordance with Section 11 of the
Basic Terms addressed to: [insert name and address of the lead manager or
managers or, if only one underwriter is a party hereto, of such firm] which
shall, for all purposes of this Agreement, be the "Representatives".
Very truly yours,
REPRESENTATIVE[S]
By:
------------------------------------
[Acting for themselves and as
Representative[s] of the
Underwriters]
Accepted:
APACHE CORPORATION
By: _______________________________________________
Title:
A-2
<PAGE> 42
APACHE CORPORATION
By: _______________________________________________
Title:
37
<PAGE> 43
ANNEX A
[Apache Corporation--Debt Securities--
Underwriting Agreement Basic Terms]
A-3
<PAGE> 44
EXHIBIT B
APACHE CORPORATION
[Title of Offered Securities]
DELAYED DELIVERY CONTRACT
Apache Corporation
2000 Post Oak Boulevard, Suite 100
Houston, Texas 77056-4400
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from Apache Corporation (the
"Company"), and the Company agrees to sell to the undersigned on ____________,
19__ (the "Delivery Date"), $_____________ principal amount of the Company's
__% Offered Securities due ___________ __, 19__ (the "Offered Securities"),
offered by the Company's Prospectus dated _________ __, 19__, as supplemented
by its Prospectus Supplement dated __________ __, 19__, receipt of which is
hereby acknowledged, at a purchase price of _____% of the principal amount
thereof, plus accrued interest from __________, ______, to the Delivery Date,
and on the further terms and conditions set forth in this contract.
Payment for the securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by wire
transfer in immediately available funds on the Delivery Date, upon delivery to
the undersigned of the Offered Securities to be purchased by the undersigned in
definitive or global form and in such denominations and registered in such
names as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than three full business days prior to the
Delivery Date.
B-1
<PAGE> 45
The obligation of the undersigned to take delivery of and make payment
for Offered Securities on the Delivery Date shall be subject only to the
conditions that (1) the purchase of Offered Securities to be made by the
undersigned shall not on the Delivery Date be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Company, on or
before ___________, ____, shall have sold to the Underwriters of the Offered
Securities (the "Underwriters") such principal amount of the Offered Securities
as is to be sold to them pursuant to the Terms Agreement dated ____________,
____ between the Company and the Underwriters. The obligation of the
undersigned to take delivery of and make payment for Offered Securities shall
not be affected by the failure of any purchaser to take delivery of and make
payment for Offered Securities pursuant to other contracts similar to this
contract. The undersigned represents and warrants to the Underwriters that its
investment in the Offered Securities is not, as of the date hereof, prohibited
under the laws of any jurisdiction to which the undersigned is subject and
which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice
to such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Company that all necessary corporate action for the due execution and
delivery of this contract and the payment for and purchase of the Offered
Securities has been taken by it and no further authorization or approval of any
governmental or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and mailing or delivery of a copy as provided below, this contract will
constitute a valid and binding agreement of the undersigned in accordance with
its terms.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for an aggregate principal amount of Offered Securities in excess of
$__________ and that the acceptance of any Delayed Delivery Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first come first-served basis. If this contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance on a copy hereof
and mail or deliver a signed copy
B-2
<PAGE> 46
hereof to the undersigned at its address set forth below. This will become a
binding contract between the Company and the undersigned when such copy is so
mailed or delivered. This Agreement shall be governed by the laws of the
State New York applicable to agreements made and performed in said State.
Yours very truly,
______________________________
(Name of Purchaser)
By____________________________
(Title)
______________________________
______________________________
(Address)
Accepted as of the date
first above written.
Apache Corporation
By:___________________________
PURCHASER -- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date shall be discussed is as
follows: (Please print.)
Telephone No.
Name (Including Area Code)
B-3
<PAGE> 1
EXHIBIT 4.1
FORM OF DEBT SECURITIES
(SENIOR NOTE)
UNLESS THIS SENIOR NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SENIOR NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY), 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.
REGISTERED PRINCIPAL AMOUNT
No: l $150,000,000.00
CUSIP: 037 411 AN5 APACHE CORPORATION
7 % SENIOR NOTE DUE 2018
APACHE CORPORATION, a corporation duly organized and existing under
the laws of the State of Delaware (the "Company", which term includes any
successor corporation 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 on February 1, 2018
("Stated Maturity") and to pay interest thereon from February 3, 1998 or from
the most recent date in respect of which interest has been paid or duly
provided for, on August 1 and February 1 of each year (each, an "Interest
Payment Date"), commencing August 1, 1998, and at Stated Maturity or upon such
other date on which the principal of this Senior Note becomes due and payable,
whether by declaration of acceleration or otherwise, and including any Change
in Control Purchase Date ("Maturity"), at the rate of 7% per annum, until the
principal hereof is paid or duly made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture referred to below, be paid to the Person in
whose name this Senior Note (or one or more Predecessor Securities) is
registered as of the close of business on January 15 or July 15 as the case may
be (whether or not a Business Day), next preceding such Interest Payment Date
(each such date, a "Regular Record Date"). Any such interest which is payable,
but is not punctually paid or duly provided for on any Interest Payment Date
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and shall be paid to the Person in whose name this Senior Note (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of this Senior Note not
less than 10 days prior to such Special Record Date, or may be paid in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Senior Notes may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture.
Payment of the principal of and interest on this Senior Note will be
made at the office or agency maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the Person in whose name this Senior
Note is registered at the close of business on the related Record Date;
provided further, that, notwithstanding anything else contained herein, if this
Senior Note is a Global Security and is held in book-entry form through the
facilities of the Depository, payments on this Senior Note will be made to the
Depository or its nominee in accordance with the arrangements then in effect
between the Trustee and the Depository.
Reference is hereby made to the further provisions of this Senior Note
set forth on the succeeding pages hereof, which further provisions shall for
all purposes have the same effect as if set forth herein.
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein,
referred to in the within mentioned Indenture.
The Chase Manhattan Bank, as Trustee
By:
------------------------------------------
Authorized Officer
<PAGE> 2
APACHE CORPORATION
7% SENIOR NOTE DUE 2018
This Senior Note is one of a duly authorized issue of Securities of
the Company issued under an Indenture, dated as of February 15, 1996 and
supplemented as of November 5, 1996 (the "Indenture"), between the Company and
The Chase Manhattan Bank (formerly known as Chemical Bank) (the "Trustee",
which term includes any successor trustee under the Indenture), designated as
the 7% Senior Notes due 2018 (the "Senior Notes"). Reference is made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Senior Notes and of the terms upon which the Senior Notes are, and are to
be, authenticated and delivered. All terms used in this Senior Notes which are
not defined herein and which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
The Indenture and this Senior Note shall be governed by and construed
in accordance with the laws of the State of New York.
The Indenture provides for the defeasance of the Senior Notes and
certain covenants in certain circumstances.
This Senior Note is unsecured as to payment of principal and interest,
and ranks pari passu with all other unsecured unsubordinated indebtedness of
the Company.
Interest payments on this Senior Note will include interest accrued to
but excluding the applicable Interest Payment Date or Maturity hereof, as the
case may be. Interest payments for this Senior Note shall be computed and paid
on the basis of a 360-day year of twelve 30-day months.
In the case where the applicable Interest Payment Date or Maturity
with respect hereto, as the case may be, does not fall on a Business Day,
payment of principal or interest otherwise payable on such day need not be made
on such day, but may be made on the next succeeding Business Day with the same
force and effect as if made on the Interest Payment Date or at Maturity and no
interest shall accrue with respect to such payment for the period from and
after the Interest Payment Date or such Maturity, as the case may be, to the
date of payment.
The Senior Notes are not redeemable prior to Maturity and will not be
subject to any sinking fund and, except as provided in the Indenture, will not
be repayable prior to their Stated Maturity.
If any Event of Default with respect to the Senior Notes shall occur
and be continuing, the principal of the Senior Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.
As set forth in, and subject to the provisions of, the Indenture, no
Holder of any Senior Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless (i) such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to the Senior Notes, (ii) the Holders of not less than
25% in principal amount of the Outstanding Senior Notes shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, (iii) the Trustee shall have failed to institute such
proceeding within 60 days after receipt of such written request and (iv) the
Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Senior Notes a direction inconsistent with such
request within such 60 day period; provided, however, that such limitations do
not apply to a suit instituted by the Holder hereof for the enforcement of
payment of the principal of and premium, if any, or any interest on this Senior
Note on or after the respective due dates expressed herein or to require the
purchase of its Senior Notes by the Company upon the occurrence of a Change in
Control in accordance with the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series
thereunder to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of such Securities then Outstanding of each series
to be affected. The Indenture also contains provisions permitting the Holders
of specified percentages in
2
<PAGE> 3
principal amount of the Securities of each series thereunder at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain restrictive provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Senior Note shall be
conclusive and binding upon such Holder and upon all future Holders of any
Senior Note issued upon the registration of transfer hereof or in exchange for
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Senior Note.
No reference to the Indenture and no provision of this Senior Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any interest on this
Senior Note at the times, places and rate, and in the coin or currency, herein
prescribed.
The Senior Notes are issuable only in fully registered form in
denominations of $1,000 and integral multiples in excess thereof. As provided
in the Indenture and subject to certain limitations therein set forth, this
Senior Note is exchangeable for a like aggregate principal amount of Senior
Notes of this series and of like tenor of any authorized denomination, as
requested by the Holder surrendering the same. As provided in the Indenture
and subject to certain limitations therein set forth, the transfer of this
Senior Note is registrable in the Security Register, upon surrender of this
Senior Note for registration of transfer at the office or agency of the Company
in any place where the principal of and any interest on this Senior Note are
payable or at such other offices or agencies as the Company may designate, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to, the Company and the Security Registrar or any transfer agent
duly executed by the registered owner hereof or his attorney duly authorized in
writing, and thereupon one or more new Senior Notes of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount
and Stated Maturity will be issued to the designated transferee or transferees.
Subject to the terms and conditions of the Indenture, if any Change in
Control occurs prior to the Stated Maturity of this Senior Note, the Company
shall, at the option of the Holders, purchase all Securities for which a Change
in Control Purchase Notice shall have been delivered as provided in the
Indenture and not withdrawn, by a date which shall be 35 Business Days after
the occurrence of such Change in Control, at a Change in Control Purchase Price
equal to 100% of the principal amount plus accrued interest to the Change in
Control Purchase Date, which Change in Control Purchase Price shall be paid in
cash.
Holders have the right to withdraw any Change in Control Purchase
Notice by delivering to the paying agent a written notice of withdrawal in
accordance with the provisions of the Indenture.
If cash sufficient to pay the Change in Control Purchase Price of all
Securities or portions thereof to be purchased on the Change in Control
Purchase Date is deposited with the Trustee on the Change in Control Purchase
Date, interest shall cease to accrue on such Securities (or portions thereof)
and on and after the Change in Control Purchase Date the Holders thereof shall
have no other rights as such (other than the right to receive the Change in
Control Purchase Price upon surrender of such Securities).
Subject to the terms of the Indenture, prior to due presentment of
this Senior Note 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
Senior Note is registered as the owner hereof for all purposes, whether or not
this Senior Note is overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.
No service charge shall be made for any registration of transfer or
exchange of this Senior Note, but, subject to certain limitations set forth in
the Indenture, the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
This Senior Note shall not be valid or become obligatory for any
purpose until the Trustee's Certificate of Authentication hereon shall have
been executed by the Trustee.
3
<PAGE> 4
IN WITNESS WHEREOF, APACHE CORPORATION has caused this instrument to
be duly executed under its corporate seal.
APACHE CORPORATION
[SEAL] BY
-------------------------------
Name: Matthew W. Dundrea
Title: Vice President and Treasurer
Attest:
BY
--------------------------------
Name: Cheri L. Peper
Title: Corporate Secretary
Date: February 3, 1998
4
<PAGE> 5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
- --------------------------------------------------------------------------------
Please insert Social Security or other identifying number of assignee
- --------------------------------------------------------------------------------
(please print or type name and address of assignee)
the within Security and all rights thereunder and does hereby irrevocably
constitute and appoint the aforesaid assignee attorney to transfer the within
Security on the books kept for registration thereof, with full power of
substitution in the premises.
Dated:
------------------------- ---------------------------
In the presence of:
- --------------------------------------------------------------------------------
NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Security in every particular, without
alteration or enlargement or any change whatever. When assignment is made by a
guardian, trustee, executor or administrator, an officer of a corporation, or
anyone in a representative capacity, proof of his authority to act must
accompany the Security. The signature must be guaranteed by an Institution
which is a member of one of the following recognized signature Guarantee
Programs: (i) The Securities Transfer Agent Medallion Program (STAMP); (ii)
The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) in such other guarantee program acceptable to
the Trustee.
5
<PAGE> 1
EXHIBIT 99.1
APACHE OFFERS $150 MILLION OF 20-YEAR SENIOR NOTES
CONTACTS:
(Media): Bill Mintz (713) 296-7276
(Investor): Robert Dye (713) 296-6662
Houston (January 29, 1998) -- Apache Corporation (NYSE: APA) today announced
that it has priced $150 million principal amount of 7.0 percent senior notes
that will mature on February 1, 2018. The notes were priced to yield 7.113
percent.
Net proceeds from the sale will be used to reduce existing short-term
obligations and for general corporate purposes. Closing of the offering is
expected to occur on February 3, 1998. Interest on the notes is payable
semi-annually, commencing on August 1, 1998. The notes are not redeemable prior
to maturity.
Merrill Lynch is the lead underwriter for the offering. Goldman, Sachs & Co.;
Lehman Brothers; and J.P. Morgan & Co. are co-managers.
Apache Corporation is a large oil and gas independent with operations in North
America, Egypt, Western Australia, Poland, People's Republic of China,
Indonesia and Cote d'Ivoire. Its shares are traded on the New York and Chicago
stock exchanges.
-end-
