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EXHIBIT 1.1
Draft: 4/2/97
Hugoton Energy Corporation
4,500,000 Shares (1)
Common Stock
(no par value)
Underwriting Agreement
April , 1997
Salomon Brothers Inc,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation,
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and
▇▇▇▇▇▇▇▇▇ & Company, Inc.
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
The persons named in Schedule II hereto (the "Selling
Stockholders") propose to sell to the underwriters named in Schedule I hereto
(the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 4,500,000 shares of Common Stock, no par value ("Common
Stock"), of Hugoton Energy Corporation, a Kansas corporation (the "Company")
(said shares to be sold by the Selling Stockholders collectively being
hereinafter called the "Underwritten Securities"). The Company and the Selling
Stockholders named in Schedule III hereto also propose to grant to the
Underwriters options to purchase up to 675,000 additional shares of Common
Stock (the "Option Securities"; the Option Securities, together with the
Underwritten Securities, being hereinafter called the "Securities").
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(1) Plus an option to purchase from the Company and the Selling
Stockholders named in Schedule III hereto up to 675,000 additional shares to
cover over-allotments.
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1. Representations and Warranties.
(a) The Company represents and warrants to, and agrees
with, each Underwriter as set forth below in this Section 1. Certain terms
used in this Section 1 are defined in paragraph (iii) hereof.
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration statement (file
number 333-22189) on Form S-2, including a related preliminary
prospectus, for the registration under the Securities Act of 1933 (the
"Act") of the offering and sale of the Securities. The Company may
have filed one or more amendments thereto, including the related
preliminary prospectus, each of which has previously been furnished to
you. The Company will next file with the Commission either (A) prior
to effectiveness of such registration statement, a further amendment
to such registration statement (including the form of final
prospectus) or (B) after effectiveness of such registration statement,
a final prospectus in accordance with Rules 430A and 424(b)(1) or (4).
In the case of clause (B), the Company has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in the Prospectus with respect to
the Securities and the offering thereof. As filed, such amendment and
form of final prospectus, or such final prospectus, shall contain all
Rule 430A Information, together with all other such required
information, with respect to the Securities and the offering thereof
and, except to the extent the Representatives shall agree in writing
to a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior
to the Execution Time, will be included or made therein.
(ii) On the Effective Date, the Registration Statement did
or will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects
with the applicable requirements of the Act and the rules thereunder;
on the Effective Date, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and, on the Effective
Date, the Prospectus, if not filed pursuant to Rule 424(b), did not or
will not, and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date, the Prospectus ( together with any supplement
thereto) will not, include any 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 Company makes
no representations or warranties as to the information contained in or
omitted from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives or by a Selling Stockholder
specifically for inclusion in the Registration Statement or the
Prospectus (or any supplement thereto).
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(iii) The terms which follow, when used in this Agreement,
shall have the meanings indicated. The term "the Effective Date"
shall mean each date that the Registration Statement and any
post-effective amendment or amendments thereto became or become
effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph (i) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that
omits Rule 430A Information. "Prospectus" shall mean the prospectus
(including all documents incorporated by reference therein) relating
to the Securities that is first filed pursuant to Rule 424(b) after
the Execution Time or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus relating to the
Securities included in the Registration Statement at the Effective
Date. "Registration Statement" shall mean the registration statement
referred to in paragraph (i) above (including all documents
incorporated by reference therein), exhibits and financial statements,
as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and,
in the event any post-effective amendment thereto becomes effective
prior to the Closing Date (as hereinafter defined), shall also mean
such registration statement as so amended. Such term shall include
Rule 430A Information deemed to be included therein at the Effective
Date as provided by Rule 430A. "Rule 424" and "Rule 430A" refer to
such rules under the Act. "Rule 430A Information" means information
with respect to the Securities and the offering thereof permitted to
be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A. If the Company files a registration statement
to register a portion of the Shares and relies on Rule 462(b) of the
rules and regulations under the Act for such registration statement to
become effective upon filing with the Commission, then any reference
to the "Registration Statement" shall be deemed to include the Rule
462 Registration Statement, as amended from time to time.
(iv) The financial statements, including the notes
thereto, and supporting schedules included in the Registration
Statement or incorporated by reference therein present fairly the
financial position of the Company and its consolidated subsidiaries as
at the dates indicated and the results of their operations for the
periods specified; except as otherwise stated in the Registration
Statement, such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included in the Registration
Statement or incorporated by reference therein present fairly the
information required to be stated therein.
(v) The information on the basis of which the reserve
estimates and related information included in the Registration
Statement or incorporated by reference therein were prepared by the
Company, its subsidiaries, ▇▇▇▇▇ ▇▇▇▇▇ Company Petroleum Engineers or
any other person is true and correct in all material respects.
(vi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there
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has been no material adverse change in the condition, financial or
otherwise, or the earnings, business or properties of the Company and
its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, (B) there have been no
transactions entered into by the Company or any of its subsidiaries
other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock.
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Kansas with corporate power and authority to own, lease and operate
its properties and conduct its business as described in the
Prospectus.
(viii) The authorized, issued and outstanding capital stock
of the Company is as set forth in the Prospectus under
"Capitalization" (except for issuances, if any, subsequent to the date
of the Prospectus pursuant to employee benefit plans); the shares of
issued and outstanding Common Stock have been duly authorized and
validly issued and are fully paid and nonassessable; the Securities to
be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale to pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement
against payment therefor, will be validly issued and fully paid and
non-assessable; the issuance of the Securities is not subject to
preemptive or other similar rights; and the Common Stock conforms to
all statements relating thereto contained in the Prospectus.
(ix) This Agreement has been duly and validly authorized
by the Company.
(x) The execution, delivery and performance of this
Agreement and the consummation of the transactions herein contemplated
have been duly and validly authorized by all necessary corporate
action and will not conflict with or constitute a breach or violation
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 of its subsidiaries is subject, nor will such action
result in any breach or violation of, or default under, the provisions
of the charter or by-laws of the Company or of any applicable law,
administrative regulation or administrative or court decree.
(b) Each Selling Stockholder represents and warrants to,
and agrees with, each Underwriter that:
(i) Such Selling Stockholder is the lawful owner of the
Securities to be sold by such Selling Stockholder hereunder and upon
sale and delivery of, and payment for, such Securities, as provided
herein, such Selling Stockholder will convey good and marketable
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title to such Securities, free and clear of all liens, encumbrances,
equities and claims whatsoever.
(ii) Such Selling Stockholder has not taken and will not
take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Securities and has not effected any sales of shares of
Common Stock which, if effected by the issuer, would be required to be
disclosed in response to Item 701 of Regulation S-K.
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
by such Selling Stockholder of the transactions contemplated herein,
except such as may have been obtained under the Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters and such other approvals as have been obtained.
(iv) Neither the sale of the Securities being sold by
such Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or the charter or by-laws of such Selling
Stockholder or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or any of its
subsidiaries is a party or bound, or any judgement, order or decree
applicable to such Selling Stockholder or any of its subsidiaries of
any court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over such Selling Stockholder or any
of its subsidiaries.
2. Purchase and Sale. (a) Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Selling Stockholders agree, severally and not jointly, to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Selling Stockholders, at a purchase price of $_____ per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company and the
Selling Stockholders named in Schedule III hereto hereby grant options to the
several Underwriters to purchase, severally and not jointly, up to 675,000
shares of the Option Securities at the same purchase price per share as the
Underwriters shall pay for the Underwritten Securities. Said options may be
exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said options may be exercised in whole or in
part at any time (but not more than two times) on or before the 30th day after
the date of the Prospectus upon written or telegraphic notice by the
Representatives to the Company and such Selling Stockholders setting forth the
number of shares of the Option Securities as to which the several Underwriters
are exercising the options and the settlement date. Delivery of certificates
for the shares of Option Securities by the Company and such Selling
Stockholders, and
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payment therefor to the Company and such Selling Stockholders, shall be made as
provided in Section 3 hereof. The maximum number of shares of the Option
Securities to be sold by the Company and the Selling Stockholders is set forth
in Schedule III hereto. In the event the Underwriters exercise their
over-allotment option for 337,500 shares or more of Option Securities, the
first 337,500 shares of Option Securities to be sold shall be sold by the
Selling Stockholders and any Option Securities in excess of 337,500 shares
shall be sold by the Company. In the event the Underwriters exercise their
over-allotment option for less than 337,500 shares, the number of shares of the
Option Securities to be sold by each Selling Stockholder listed in Schedule III
shall be, as nearly as practicable, in the same proportion to each other as are
the number of shares of the Option Securities listed opposite their respective
names in said Schedule III. The number of shares of the Option Securities to
be purchased by each Underwriter shall be the same percentage of the total
number of shares of the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten Securities,
subject to such adjustments as you in your absolute discretion shall make to
eliminate any fractional shares.
3. Delivery and Payment. Delivery of and payment for
the Underwritten Securities and the Option Securities (if the options provided
for in Section 2(b) hereof shall have been exercised on or before the third
business day prior to the Closing Date) shall be made at 10:00 AM, New York
City time, on April 9, 1997, or such later date (not later than April 16, 1997)
as the Representatives shall designate, which date and time may be postponed by
agreement among the Representatives, the Company and the Selling Stockholders
or as provided in Section 9 hereof (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through
the Representatives of the respective aggregate purchase prices of the
Securities being sold by the Company and each of the Selling Stockholders to or
upon the order of the Company and the Selling Stockholders by wire transfer of
same day funds to accounts designated by each of them. Delivery of the
Underwritten Securities and the Option Securities shall be made at such
location as the Representatives shall reasonably designate at least one
business day in advance of the applicable Closing Date and payment for such
Securities shall be made at the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., 2300 First
City Tower, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇. Certificates for the Securities shall
be registered in such names and in such denominations as the Representatives
may request not less than three full business days in advance of the Closing
Date.
The Company and the Selling Stockholders agree to have the
Securities available for inspection, checking and packaging by the
Representatives in New York, New York, not later than 1:00 PM on the business
day prior to the Closing Date.
Each Selling Stockholder will pay all applicable state
transfer taxes, if any, involved in the transfer to the several Underwriters of
the Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved
in further transfers.
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If the option provided for in Section 2(b) hereof is exercised
after the third business day prior to the Closing Date, the Company and the
Selling Stockholders identified in Schedule III will deliver (at the expense of
the Company) to the Representatives, at Seven World Trade Center, New York, New
York, on the date specified by the Representatives (which shall be within three
business days after exercise of said option), certificates for the Option
Securities in such names and denominations as the Representatives shall have
requested against payment of the purchase price thereof to or upon the order of
the Selling Stockholders identified in Schedule III and the Company by wire
transfer of same day funds to an account designated by each of them. If
settlement for the Option Securities occurs after the Closing Date, the Company
and the Selling Stockholders identified in Schedule III will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the
several Underwriters propose to offer the Securities for sale to the public as
set forth in the Prospectus.
5. Agreements.
(a) The Company agrees with the several Underwriters
that:
(i) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereof, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus without your prior consent. Subject to the foregoing
sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is
otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The
Company will promptly advise the Representatives (A) when the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective, (B) when the
Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b), (C) when, prior
to termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (D)
of any request by the Commission for any amendment of the Registration
Statement or supplement to the Prospectus or for any additional
information, (E) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (F)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
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(ii) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Prospectus to comply with the Act or the rules thereunder, the
Company promptly will (i) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or omission
or effect such compliance and (ii) supply any supplemented Prospectus
to you in such quantities as you may reasonably request.
(iii) As soon as practicable, the Company will make
generally available to its security holders and to the Representatives
an earnings statement or statements of the Company and its
subsidiaries which will satisfy the provisions of Section 11(a) of the
Act and Rule 158 under the Act.
(iv) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits
thereto) and, so long as delivery of a prospectus by an Underwriter or
dealer may be required by the Act, as many copies of each Preliminary
Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering.
(v) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, and will maintain such qualifications
in effect so long as required for the distribution of the Securities
and will pay the fee of the National Association of Securities
Dealers, Inc., in connection with its review of the offering.
(vi) The Company will not, for a period of 90 days
following the Execution Time, without the prior written consent of
Salomon Brothers Inc, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering of, any
other shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock; provided, however, that the
Company may issue and sell Common Stock pursuant to any employee stock
option plan, stock ownership plan or dividend reinvestment plan of the
Company in effect at the Execution Time; and, provided, further, that
the Company may issue Common Stock in connection with an acquisition
provided that the recipient of such Common Stock agrees to the
foregoing restriction.
(b) Each Selling Stockholder agrees with the several
Underwriters that it will not during the period of 90 days following the
Execution Time, without the prior written consent of Salomon Brothers Inc,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly,
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or announce the offering of, any other shares of Common Stock beneficially
owned by such person, or any securities convertible into, or exchangeable for,
shares of Common Stock.
6. Conditions to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Underwritten Securities and
the Option Securities, as the case may be, shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and
any settlement date pursuant to Section 3 hereof, to the accuracy of the
statements of the Company and the Selling Stockholders made in any certificates
pursuant to the provisions hereof, to the performance by the Company and the
Selling Stockholders of their respective obligations hereunder and to the
following additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the Representatives
agree in writing to a later time, the Registration Statement will
become effective not later than (i) 6:00 PM New York City time on the
date of determination of the public offering price, if such
determination occurred at or prior to 3:00 PM New York City time on
such date or (ii) 12:00 Noon on the business day following the day on
which the public offering price was determined, if such determination
occurred after 3:00 PM New York City time on such date; if filing of
the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the Prospectus, and any such supplement, will be filed in
the manner and within the time period required by Rule 424(b); and no
stop order suspending the effectiveness of the Registration Statement
shall have been issued and no proceedings for that purpose shall have
been instituted or threatened.
(b) The Company shall have furnished to the
Representatives the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company,
dated the Closing Date, to the effect that:
(i) each of the Company and Hugoton Exploration Company,
HEC Trading Company, AmGas Corporation, and ▇▇▇▇▇▇▇ Gathering, Inc.
(individually a "Subsidiary" and collectively the "Subsidiaries") has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned of record by the Company either directly or
through wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after due
inquiry, any other security interests, claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as
set forth in the Prospectus; the capital stock of the Company conforms
to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock (including the Securities being
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sold hereunder by the Selling Stockholders) have been duly and validly
authorized and issued and are fully paid and nonassessable; the
Securities being sold hereunder by the Company have been duly and
validly authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the certificates for the Securities are in valid and
sufficient form; and the holders of outstanding shares of capital
stock of the Company are not entitled to preemptive or other rights to
subscribe for the Securities;
(iv) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract or
other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an exhibit,
which is not described or filed as required;
(v) the Registration Statement has become effective under
the Act; any required filing of the Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened and the Registration
Statement and the Prospectus (other than the financial statements and
other financial and statistical information and oil and gas reserve
reports and data contained therein as to which such counsel need
express no opinion) comply as to form in all material respects with
the applicable requirements of the Act and the rules thereunder; and
such counsel has no reason to believe that at the Effective Date and
as of the Closing Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) no consent, approval, authorization or order of any
court or governmental agency or body is required for the consummation
of the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky
laws of any jurisdiction or the National Association of Securities
Dealers, Inc. in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals (specified in
such opinion) as have been obtained;
(viii) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict
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with, result in a breach or violation of, or constitute a default
under any law or the charter or by-laws of the Company or the terms of
any indenture or other agreement or instrument known to such counsel
and to which the Company or any of its subsidiaries is a party or
bound or any judgment, order or decree known to such counsel to be
applicable to the Company or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company or any of its
subsidiaries; and
(ix) no holders of securities of the Company have rights
to the registration of such securities under the Registration
Statement except such holders who have elected not to participate in
the offering contemplated thereby.
In rendering such opinion, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of Delaware or
Texas or the United States, to the extent they deem proper and specified in
such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials. Reference to the
Prospectus in this paragraph (b) include any supplements thereto at the Closing
Date.
(c) The Selling Stockholders shall have furnished to the
Representatives the opinion of ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., counsel for Odyssey
Partners, L.P., and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the other Selling
Stockholders (each with respect to the Selling Stockholder or Selling
Stockholders it represents), dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Selling Stockholder(s) and each Selling Stockholder
has full partnership power and authority to sell, transfer and deliver
in the manner provided in this Agreement the Securities being sold by
such Selling Stockholder hereunder;
(ii) each Underwriter that is a "bona fide purchaser"
(within the meaning of Section 8-302(1) of the New York Uniform
Commercial Code (the "NY-UCC")), will, upon delivery by such Selling
Stockholder to such Underwriter of certificates for the Securities
being sold hereunder by such Selling Stockholder against payment
therefor as provided herein, acquire such Securities free of any
"adverse claim" (within the meaning of Section 8-302(2) of the
NY-UCC);
(iii) no consent, approval, authorization or order of any
federal or New York governmental agency or body or, with respect to
First Reserve Secured Energy Asset Fund, Limited Partnership ("SEA")
or First Reserve Fund V, Limited Partnership ("Fund V"), any Delaware
governmental agency or body acting pursuant to the Delaware Limited
Partnership Act or, to such counsel's knowledge, any Federal or New
York court or, with respect to SEA or Fund V, any Delaware court
acting pursuant to the Delaware Limited Partnership Act is required
for the consummation by any such Selling Stockholder of the
transactions provided
-11-
12
for herein, except for registration under the Act and the Securities
Exchange Act of 1934, as amended, and such as may be required under
the blue sky laws of New York in connection with the purchase and
distribution of the Securities by the Underwriters and such other
approvals (specified in such opinion) as have been obtained; and
(iv) neither the sale of the Securities being sold by any
such Selling Stockholder nor the consummation of any other of the
transactions provided for herein by any such Selling Stockholder will
result in a violation of any federal or New York law or the Delaware
Limited Partnership Act or breach or result in a default under the
Agreement of Limited Partnership or Certificate of Limited Partnership
of such Selling Stockholder or the terms of any indenture or other
agreement or instrument known to such counsel and to which any such
Selling Stockholder is a party or bound, nor will such action violate
any judgment, order or decree known to such counsel to be issued
pursuant to any Federal or New York statute or the Delaware Limited
Partnership Act by any court, regulatory body, administrative agency
or governmental body having jurisdiction over any Selling Stockholder.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of the Selling Stockholders and public
officials.
(d) The Representatives shall have received from ▇▇▇▇▇ &
▇▇▇▇▇, L.L.P., counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the Securities, the
Registration Statement, the Prospectus (together with any supplement thereto)
and other related matters as the Representatives may reasonably require, and
the Company and each Selling Stockholder shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters.
(e) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the Chairman of the
Board or the President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Prospectus,
any supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the Closing
Date and the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
-12-
13
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or other), earnings, business or properties of the Company
and its subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(f) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Chairman of the Board or the
President or the principal financial or accounting officer (or a Managing
Director or comparable official of the general partner) of such Selling
Stockholder, dated the Closing Date, to the effect that the representations and
warranties of such Selling Stockholder in this Agreement are true and correct
in all material respects on and as of the Closing Date to the same effect as if
made on the Closing Date.
(g) At the Execution Time and at the Closing Date, Ernst
& Young shall have furnished to the Representatives a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the applicable
published rules and regulations thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement
and the Prospectus and reported on by them comply in form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards)
which would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and committees
of the Company and the Subsidiaries; and inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31, 1996, nothing came
to their attention which caused them to believe that:
(1) any unaudited financial statements included
in the Registration Statement and the Prospectus do not comply
in form in all material respects with applicable accounting
requirements of the Act and with the published rules and
regulations of the Commission with respect to registration
statements on Form S-2; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus; or
-13-
14
(2) with respect to the period subsequent to
December 31, 1996, there were any changes, at a specified date
not more than five business days prior to the date of the
letter, in the long-term debt of the Company and its
subsidiaries or capital stock of the Company or decreases in
the stockholders' equity of the Company as compared with the
amounts shown on the December 31, 1996 consolidated balance
sheet included in the Registration Statement and the
Prospectus, or for the period from December 31, 1996 to such
specified date there were any decreases, as compared with the
corresponding period in the preceding year, in net revenues or
income before income taxes or in total or per share amounts of
net income of the Company and its subsidiaries, except in all
instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives.
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature (which
is limited to accounting, financial or statistical information derived
from the general accounting records of the Company and its
subsidiaries) set forth in the Registration Statement and the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
(h) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement (exclusive
of any amendment thereof) and the Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (g) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment thereof)
and the Prospectus (exclusive of any supplement thereto).
(i) At the Execution Time, the Company shall have
furnished to the Representatives a letter substantially in the form of Exhibit
A hereto from each officer and director of the Company and Comdisco, Inc.
addressed to the Representatives, in which each such person agrees not to
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce an offering of, any shares of Common Stock beneficially
owned by such person or any securities convertible into, or exchangeable for,
shares of Common Stock for a period of 90 days following the Execution Time
without the prior written consent of the Representatives.
-14-
15
(j) At the Execution Time, ▇▇▇▇▇ ▇▇▇▇▇ Company Petroleum
Engineers shall have furnished to the Representatives a letter dated as of the
Execution Time substantially in the form heretofore approved by you.
(k) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company and
each Selling Stockholder in writing or by telephone or telegraph confirmed in
writing.
The documents required to be delivered by this Section 6 shall
be delivered on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale
of the Securities provided for herein is not consummated because any condition
to the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company or any Selling
Stockholder to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally upon demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities. If the Company is required to make any payments to the
Underwriters under this Section 7 because of any Selling Stockholder's refusal,
inability or failure to satisfy any condition to the obligations of the
Underwriters set forth in Section 6, such Selling Stockholders shall reimburse
the Company on demand for all amounts so paid, pro rata in proportion to the
percentage of Securities to be sold by each.
8. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Securities Exchange
Act of 1934 (the "Exchange Act") against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in the registration statement for the registration of the Securities as
originally filed or in any amendment thereof, or in any Preliminary Prospectus
or the Prospectus, or in any amendment thereof or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state
-15-
16
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Selling Stockholder, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act to the
same extent as the foregoing indemnity from the Company to each Underwriter,
but only with reference to written information furnished to the Company by or
on behalf of such Selling Stockholder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement
will be in addition to any liability which any Selling Stockholder may
otherwise have.
(c) Each Underwriter severally agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act and each Selling
Stockholder, to the same extent as the foregoing indemnity from the Company to
each Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have. The
Company and the Selling Stockholders acknowledge that the statements set forth
in the last paragraph of the cover page and under the heading "Underwriting" in
any Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the several Underwriters for inclusion
in any Preliminary Prospectus or the Prospectus, and you, as the
Representatives, confirm that such statements are correct.
(d) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a),
(b) or (c) above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a), (b) or (c) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not
-16-
17
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(e) In the event that the indemnity provided in paragraph
(a), (b) or (c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, then each indemnified party
agrees to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the
indemnified party may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Stockholders on the one hand and by the Underwriters on the other from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, each indemnified
party shall contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and the
Selling Stockholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and the Selling Stockholders shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses), and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information
provided by the Company, the Selling Stockholders or the Underwriters. The
Company, the Selling Stockholders and the Underwriters agree that it would not
be just and equitable if contribution were determined by pro rata allocation
-17-
18
or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (e), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes
of this Section 8, each person who controls an Underwriter within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company shall have
the same rights to contribution as the Company, subject in each case to the
applicable terms and conditions of this paragraph (e).
(f) The liability of each Selling Stockholder under such
Selling Stockholder's representations and warranties contained in Section 1
hereof and under the indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the initial public offering
price of the Securities sold by such Selling Stockholder to the Underwriters.
9. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule I hereto bears
to the aggregate amount of Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
event that the aggregate amount of Securities which the defaulting Underwriter
or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Underwriters
shall have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter, the Selling Stockholders or the Company. In the
event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding seven days, as
the Representatives shall determine in order that the required changes in the
Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company,
the Selling Stockholders and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Company's Common Stock shall have been suspended
by the Commission or the National Association of Securities Dealers National
Market System or trading in securities generally on the New York Stock Exchange
or the National Association of Securities Dealers National Market System shall
have been suspended or limited or
-18-
19
minimum prices shall have been established on either of such Exchange or Market
System, (ii) a banking moratorium shall have been declared either by Federal or
New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Prospectus (exclusive of any supplement
thereto).
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers, of each Selling Stockholder and of
the Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter, any Selling Stockholder or the Company or any of the officers,
directors or controlling persons referred to in Section 8 hereof, and will
survive delivery of and payment for the Securities. The provisions of Sections
7 and 8 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to the Representatives,
will be mailed, delivered or telegraphed and confirmed to them, care of Salomon
Brothers Inc, at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇; or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, attention of the legal
department; or if sent to the Selling Stockholders, will be mailed, delivered
or telegraphed and confirmed to them at the addresses set forth in Schedule II
hereto.
13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in Section 8
hereof, and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by
and construed in accordance with the laws of the State of New York.
-19-
20
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
HUGOTON ENERGY CORPORATION
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ODYSSEY PARTNERS, L.P.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
FIRST RESERVE SECURED ENERGY ASSET FUND,
LIMITED PARTNERSHIP
FIRST RESERVE FUND V, LIMITED PARTNERSHIP
AMERICAN GAS & OIL INVESTORS LIMITED
PARTNERSHIP
AMERICAN GAS & OIL INVESTORS II LIMITED
PARTNERSHIP
By: FIRST RESERVE CORPORATION,
GENERAL PARTNER
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-20-
21
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation,
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and
▇▇▇▇▇▇▇▇▇ & Company, Inc.
By: Salomon Brothers Inc
By:
-------------------------------------
Vice President
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
-21-
22
SCHEDULE I
UNDERWRITERS
Underwriter Number of Underwritten
----------- Securities to be Purchased
--------------------------
Salomon Brothers Inc . . . . . . . . . . . . . .
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation . . . . . . . . .
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. . . . . . . . . . . . . . . . .
▇▇▇▇▇▇▇▇▇ & Company, Inc. . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . 4,500,000
=========
23
SCHEDULE II
SELLING STOCKHOLDERS
Name and Address Number of Underwritten
---------------- Securities to be Sold
---------------------
Odyssey Partners, L.P.
31 West 52nd Street . . . . . . . . . . . . . 2,142,800
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
First Reserve Secured Energy
Asset Fund, Limited Partnership . . . . . . . 1,233,956
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
First Reserve Fund V,
Limited Partnership . . . . . . . . . . . . . 619,764
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
American Gas & Oil Investors
Limited Partnership. . . . . . . . . . . . . 292,204
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
AmGO II, Limited Partnership . . . . . . . . . . 211,276
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------
Total . . . . . . . . . . . . . . . . . 4,500,000
===========
24
SCHEDULE III
OPTION SECURITIES
Name Number of
---- Option Securities
-----------------
Hugoton Energy Corporation . . . . . . . . . . . 337,500
Selling Stockholders:
First Reserve Secured Energy
Asset Fund, Limited Partnership . . . .
First Reserve Fund V,
Limited Partnership . . . . . . . . . .
American Gas & Oil Investors
Limited Partnership . . . . . . . . . .
-------
Total . . . . . . . . . . . . . . . . . 675,000
=======
25
EXHIBIT A
[Date]
Salomon Brothers Inc
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corp.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇▇ & Company Inc.
as Representatives of the several Underwriters,
c/o Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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Dear Sirs:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), among Hugoton
Energy Corporation, a Kansas corporation (the "Company"), the Selling
Stockholders named therein and each of you as representatives of a group of
Underwriters named therein, relating to an underwritten public offering of
shares of Common Stock, no par value of the Company ("Common Stock").
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned agrees not to offer, sell,
contract to sell or otherwise dispose of directly or indirectly, or announce an
offering of, any shares of Common Stock beneficially owed by the undersigned
Company or any security convertible into, or exchangeable for, shares of Common
Stock for a period of 90 days following the day on which the Underwriting
Agreement is executed without the prior written consent of Salomon Brothers
Inc, except that the undersigned shall be entitled to pledge, hypothecate or
otherwise encumber shares of Common Stock, subject to the foregoing
restrictions being agreed to by the pledgee of such shares.
If, for any reason, the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting
Agreement), the agreement set forth above shall likewise be terminated.
Very truly yours,