-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I9poHKUxAkPL0EoH7HDJU0/7FuM8V/5Ecjytbg80ZrXdM6d7gV3w/4Gvd4ImO2Jq xLV81s0TQbOKG4EtKmDAog== 0000320321-97-000010.txt : 19971017 0000320321-97-000010.hdr.sgml : 19971017 ACCESSION NUMBER: 0000320321-97-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971006 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971016 SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEAGULL ENERGY CORP CENTRAL INDEX KEY: 0000320321 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 741764876 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08094 FILM NUMBER: 97697009 BUSINESS ADDRESS: STREET 1: 1001 FANNIN STE 1700 CITY: HOUSTON STATE: TX ZIP: 77002-6714 BUSINESS PHONE: 7139514700 MAIL ADDRESS: STREET 1: 1001 FANNIN, SUITE 1700 CITY: HOUSTON STATE: TX ZIP: 77002-6714 FORMER COMPANY: FORMER CONFORMED NAME: SEAGULL PIPELINE CORP DATE OF NAME CHANGE: 19830815 8-K 1 8-K, SALE OF CANADIAN PROPERTIES UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 6, 1997 Seagull Energy Corporation (Exact name of registrant as specified in its charter) Texas 1-8094 74-1764876 (State or other jurisdiction of (Commission File (I.R.S. Employer incorporation or organization) Number) Identification No.) 1001 Fannin, Suite 1700, Houston, Texas 77002-6714 (Address of principal executive offices) (Zip code) (713) 951-4700 (Registrant's telephone number, including area code) None (Former name, former address and former fiscal year, if changed since last report) SEAGULL ENERGY CORPORATION Item 2. Acquisition or Disposition of Assets. On October 6, 1997, Seagull Energy Corporation, a Texas corporation ("Seagull" or the "Company"), sold its Canadian oil and gas subsidiary, Seagull Energy Canada Ltd. ("Seagull Canada"), to Rio Alto Exploration Ltd. ("Rio Alto"). The economic effective date for the disposition is July 1, 1997 (the "Effective Date"). Canadian Oil and Gas Operations The Company's operations in Canada consist of oil and gas exploration and production activities through interests in fields located in Alberta, Canada. As of December 31, 1996, the Company's proved reserves in Canada totaled 42,682 thousand barrels of oil equivalents representing 17% of the Company's reserves. Proceeds Under the Share Sale Agreement, Seagull realized approximately U.S. $182 million of sales proceeds, subject to final purchase price adjustments, and expects to realize an after-tax gain of approximately $13 million, or approximately 21 cents per share, in the fourth quarter of 1997. The Company is applying the sales proceeds to repay all of its U.S. and Canadian bank debt. Pro forma financial information is incorporated herein by reference to Exhibit 99.1 of Seagull's Current Report on Form 8-K filed on September 16, 1997. The pro forma financial information includes (i) unaudited pro forma statements of operations for the six months ended June 30, 1997 and the year ended December 31, 1996 as though the sale of Seagull Canada occurred on January 1, 1996 and (ii) an unaudited pro forma balance sheet as of June 30, 1997 as though the sale of Seagull Canada occurred on June 30, 1997. The descriptions of the share sale agreement pursuant to which Seagull sold its Canadian oil and gas operations set forth above are qualified by reference to the Share Sale Agreement which is incorporated herein by reference. Forward Looking Statements This document includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although Seagull believes that its expectations are based upon reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements include the resolution of various litigation matters, political developments in foreign countries, federal and state regulatory developments, the timing and extent of changes in commodity prices, the timing and extent of success in discovering, developing and producing or acquiring oil and gas reserves and conditions of the capital and equity markets during the periods covered by the forward looking statements. -2- SEAGULL ENERGY CORPORATION Item 5. Other Events On September 30, 1997, Seagull completed the sale of $150 million of 30-year Senior Notes offered by a group of underwriters. The Senior Notes have a coupon of 7 1/2% and are non-callable for the life of the Notes. The proceeds were used to repay existing debt and for general corporate purposes. Item 7. Financial Statements and Exhibits (b) Pro forma financial information. The pro forma financial statements required to be provided by Item 7(b) of Form 8-K is incorporated herein by reference to Exhibit 99.1 of Seagull's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 16, 1997. (c) Exhibits. 2.1 Share Sale Agreement, dated as of September 11, 1997, by and between Seagull Energy Canada Holding Company, Seagull Energy Corporation and Rio Alto Exploration Ltd. is incorporated herein by reference to Exhibit 2.1 of Seagull's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 16, 1997. *2.2 Underwriting Agreement, dated September 25, 1997 and related Terms and Agreements. *2.3 Resolutions of adopted by the Chairman of the Board of Directors establishing terms of 7 1/2% Senior Notes due 2027, including Form of 7 1/2% Senior Notes due 2027. * Filed herewith. -3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: October 16, 1997 SEAGULL ENERGY CORPORATION By: /s/ William L. Transier William L. Transier Senior Vice President and Chief Financial Officer (Principal Financial Officer) Exhibit Index Page 2.1 Share Sale Agreement, dated as of September 11, 1997, by and between Seagull Energy Canada Holding Company, Seagull Energy Corporation and Rio Alto Exploration Ltd. (incor- porated herein by reference to Exhibit 2.1 of Seagull's Current Report on Form 8-K filed with the Securities and Exchange Commission on September 16, 1997). 2.2 Underwriting Agreement, dated September 25, 1997 and related Terms Agreement. 2.3 Resolutions of adopted by the Chairman of the Board of Directors establishing terms of 7 1/2 % Senior Notes due 2027, including Form of 7 1/2% Senior Notes due 2027. EX-2.2 2 UNDERWRITING AGREEMENT Execution Copy SEAGULL ENERGY CORPORATION (a Texas corporation) Common Stock, Preferred Stock, Depositary Shares, Debt Securities and Warrants to Purchase Common Stock, Preferred Stock, Depositary Shares or Debt Securities UNDERWRITING AGREEMENT September 25, 1997 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower World Financial Center New York, New York 10281-1209 Ladies and Gentlemen: Seagull Energy Corporation, a Texas corporation (the "Company"), proposes to issue and sell (i) up to $300,000,100 aggregate initial public offering price of its (a) shares of common stock, par value $0.10 per share (the "Common Stock"), accompanied by rights to purchase Junior Participating Preferred Stock (the "Rights"), (b) shares of preferred stock, par value $1.00 per share, in one or more series (the "Preferred Stock"), which may be issued in the form of depositary shares evidenced by depositary receipts (the "Depositary Shares"), (c) unsecured senior or senior subordinated debt securities, in one or more series, consisting of notes, debentures or other evidences of indebtedness (the "Debt Securities") as more fully described below, or (d) warrants (the "Warrants") to purchase Common Stock, Preferred Stock, Depositary Shares or Debt Securities, or any combination thereof, and (ii) up to an additional $100,000,000 aggregate initial offering price of its Debt Securities, in each case, from time to time, in or pursuant to one or more offerings on terms to be determined at the time of sale. The Preferred Stock will be issued in one or more series and each series of Preferred Stock may vary, as applicable, as to the title, specific number of shares, rank, stated value, liquidation preference, dividend rate or rates (or method of calculation), dividend payment dates, redemption provisions, sinking fund requirements, conversion provisions (and terms of the related Underlying Securities (as defined below)) and any other variable terms as set forth in the applicable certificate of designations (each, the "Certificate of Designations") relating to such series of Preferred Stock. A series of Preferred Stock may be represented by Depositary Shares that are evidenced by depositary receipts (the "Depositary Receipts") issued pursuant to a deposit agreement (each, a "Deposit Agreement") among the Company, the depositary identified therein (the "Depositary") and the registered holders of the Depositary Receipts issued thereunder. The Debt Securities will be issued in one or more series as unsecured senior indebtedness (the "Senior Debt Securities") under an indenture dated as of 1, 1997 (the "Senior Indenture"), between the Company and The Bank of New York, as trustee (the "Senior Trustee"), or as senior subordinated indebtedness (the "Subordinated Debt Securities") under an indenture dated as of 1, 1997 (the "Subordinated Indenture", and collectively with the Senior Indenture, the "Indentures", and each, an "Indenture"), between the Company and The Bank of New York, as trustee (the "Subordinated Trustee", and collectively with the Senior Trustee, the "Trustees", and each, a "Trustee"). Each series of Debt Securities may vary, as applicable, as to title, aggregate principal amount, rank, interest rate or formula and timing of payments thereof, stated maturity date, redemption and/or repayment provisions, sinking fund requirements, conversion provisions (and terms of the related Underlying Securities) and any other variable terms established by or pursuant to the applicable Indenture. Each issue of Warrants will be issued pursuant to a separate warrant agreement (each, a "Warrant Agreement") between the Company and the warrant agent identified therein (each, a "Warrant Agent"). The Warrants may vary, as applicable, as to, among other terms, title, type, specific number, exercise dates or periods, exercise price(s), expiration date(s) and terms of the related Underlying Securities. As used herein, "Securities" shall mean the Common Stock, Preferred Stock, Depositary Shares, Senior Debt Securities, Subordinated Debt Securities, Warrants, or any combination thereof, initially issuable by the Company, and "Underlying Securities" shall mean the Common Stock, Preferred Stock, Depositary Shares, Senior Debt Securities or Subordinated Debt Securities issuable upon exercise of the Warrants, as applicable, or upon conversion of the Preferred Stock, Depositary Shares, Senior Debt Securities or Subordinated Debt Securities, as applicable. Whenever the Company determines to make an offering of Securities through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), or through an underwriting syndicate managed by Merrill Lynch, the Company will enter into an agreement (each, a "Terms Agreement") providing for the sale of such Securities to, and the purchase and offering thereof by, Merrill Lynch and such other underwriters, if any, selected by Merrill Lynch (the "Underwriters", which term shall include Merrill Lynch, whether acting as sole Underwriter or as a member of an underwriting syndicate, as well as any Underwriter substituted pursuant to Section 10 hereof). Notwithstanding the foregoing, except as expressly provided in any Terms Agreement, nothing in this Underwriting Agreement shall obligate the Company to designate Merrill Lynch as an underwriter with respect to the offer and sale of any of the Securities. The Terms Agreement relating to the offering of Securities shall specify the number or aggregate principal amount, as the case may be, of Securities to be initially issued (the "Initial Underwritten Securities"), the name of each Underwriter participating in such offering (subject to substitution as provided in Section 10 hereof) and the name of any Underwriter other than Merrill Lynch acting as co-manager in connection with such offering, the number or aggregate principal amount, as the case may be, of Initial Underwritten Securities which each such Underwriter severally agrees to purchase, whether such offering is on a fixed or variable price basis and, if on a fixed price basis, the initial offering price, the price at which the Initial Underwritten Securities are to be purchased by the Underwriters, the form, time, date and place of delivery and payment of the Initial Underwritten Securities and any other material variable terms of the Initial Underwritten Securities, as well as the material variable terms of any related Underlying Securities. In addition, if applicable, such Terms Agreement shall specify whether the Company has agreed to grant to the Underwriters an option to purchase additional Securities to cover over-allotments, if any, and the number or aggregate principal amount, as the case may be, of Securities subject to such option (the "Option Underwritten Securities"). As used herein, the term "Underwritten Securities" shall include the Initial Underwritten Securities and all or any portion of any Option Underwritten Securities. The Terms Agreement, which shall be substantially in the form of Exhibit A hereto, may take the form of an exchange of any standard form of written telecommunication between the Company and Merrill Lynch, acting for itself and, if applicable, as representative of any other Underwriters. Each offering of Underwritten Securities through Merrill Lynch as sole Underwriter or through an underwriting syndicate managed by Merrill Lynch will be governed by this Underwriting Agreement, as supplemented by the applicable Terms Agreement. The Company has filed with the Securities and Exchange Commission (the "Commission") (i) a registration statement on Form S-3 (No. 33-65118), as amended (the "First Registration Statement"), (ii) a registration statement on Form S-3 (No. 33-64051), as amended (the "Second Registration Statement") and (iii) a registration statement on Form S-3 (No. 333-34841) and pre-effective amendment no. 1 thereto which acts as a post-effective amendment to each of the First Registration Statement and the Second Registration Statement, and pursuant to Rule 429 includes a combined prospectus for use with the securities covered by the First Registration Statement and the Second Registration Statement (the "Third Registration Statement"), for the registration of the Securities and the Underlying Securities under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"), and the Company has filed such post-effective amendments thereto as may be required prior to the execution of the applicable Terms Agreement. Such registration statements (as so amended, if applicable) have been declared effective by the Commission and each Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). The First Registration Statement, the Second Registration Statement and the Third Registration Statement (as so amended, if applicable), including the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434 Information"), are referred to herein as the "Registration Statements"; and the final prospectus and the final prospectus supplement relating to the offering of the Underwritten Securities, in the form first furnished to the Underwriters by the Company for use in connection with the offering of the Underwritten Securities, are collectively referred to herein as the "Prospectus"; provided, however, that all references to the "Registration Statements" and the "Prospectus" shall also be deemed to include all documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the execution of the applicable Terms Agreement; provided, further, that if the Company files a registration statement with the Commission pursuant to Rule 462(b) of the 1933 Act Regulations (the "Rule 462 Registration Statement"), then, after such filing, all references to "Registration Statements" shall also be deemed to include the Rule 462 Registration Statement; and provided, further, that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all references to "Prospectus" shall also be deemed to include the final or preliminary prospectus and the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as the case may be, in the form first furnished to the Underwriters by the Company in reliance upon Rule 434 of the 1933 Act Regulations, and all references in this Underwriting Agreement to the date of the Prospectus shall mean the date of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to any prospectus used before the registration statement became effective and any prospectus that omitted, as applicable, the Rule 430A Information, the Rule 434 Information or other information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used after such effectiveness and prior to the execution and delivery of the applicable Terms Agreement. For purposes of this Underwriting Agreement, all references to the Registration Statements, Prospectus, Term Sheet or preliminary prospectus or to any amendment or supplement to any of the foregoing shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR"). All references in this Underwriting Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" (or other references of like import) in the Registration Statements, Prospectus or preliminary prospectus shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statements, Prospectus or preliminary prospectus, as the case may be; and all references in this Underwriting Agreement to amendments or supplements to the Registration Statements, Prospectus or preliminary prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statements, Prospectus or preliminary prospectus, as the case may be. SECTION 1. Representations and Warranties.1. Representations and Warranties. (a) Representations and Warranties by the Company.a) Representations and Warranties by the Company. The Company represents and warrants to Merrill Lynch, as of the date hereof, and to each Underwriter named in the applicable Terms Agreement, as of the date thereof, as of the Closing Time (as defined below) and, if applicable, as of each Date of Delivery (as defined below) (in each case, a "Representation Date"), as follows: 1) Compliance with Registration Requirements. The Company meets the requirements for use of Form S-3 under the 1933 Act. Each of the Registration Statements and any Rule 462(b) Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statements or any Rule 462(b) Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have been instituted or are pending or, to the knowledge of the Company, are contemplated by the Commission, and any request on the part of the Commission for additional information has been complied with. In addition, each Indenture has been duly qualified under the 1939 Act. At the respective times each Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendments thereto (including the filing of the Company's most recent Annual Report on Form 10-K with the Commission (the "Annual Report on Form 10-K")) became effective and at each Representation Date, the Registration Statements, any Rule 462(b) Registration Statement and any amendments and supplements thereto complied and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act (the "1939 Act Regulations"), and did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the date of the Prospectus, at the Closing Time and at each Date of Delivery, if any, the Prospectus and any amendments and supplements thereto did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company elects to rely upon Rule 434 of the 1933 Act Regulations, the Company will comply with the requirements of Rule 434. Notwithstanding the foregoing, the representations and warranties in this subsection shall not apply to any statement contained in any Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through Merrill Lynch expressly for use in any Registration Statement or the Prospectus. Each preliminary prospectus and prospectus filed as part of the Registration Statements as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations, and each preliminary prospectus and the Prospectus delivered to the Underwriters for use in connection with the offering of Underwritten Securities will, at the time of such delivery, be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. 2) Incorporated Documents. Since the end of its latest fiscal year, the Company has filed all documents and amendments to previously filed documents required to be filed by it pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act. The documents incorporated or deemed to be incorporated by reference in the Registration Statements and the Prospectus, when they became effective or at the time they were or hereafter are filed with the Commission, were and will be timely filed and otherwise complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission thereunder (the "1934 Act Regulations") and, when read together with the other information in the Prospectus, at the date of the Prospectus, at the Closing Time and at each Date of Delivery, if any, did not and will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Copies of each of the documents incorporated by reference in the Registration Statements and the Prospectus prior to the date of this Underwriting Agreement and any applicable Terms Agreement, together with satisfactory evidence of the filing thereof, have been made available to the Underwriters. 3) Independent Accountants; Independent Petroleum Engineers. The accountants who certified the financial statements and any supporting schedules thereto included in the Registration Statements and the Prospectus are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. Ryder Scott Company, DeGolyer and MacNaughton and Netherland, Sewell & Associates, Inc., information derived from the reports of whom is set forth or incorporated by reference in the Registration Statements and the Prospectus, were, as of the date of each respective report, and are, as of the date hereof, independent petroleum engineers with respect to the Company and its subsidiaries. 4) Financial Statements. The financial statements of the Company included in the Registration Statements and the Prospectus, together with the related schedules and notes, as well as those financial statements, schedules and notes of any other entity included therein, present fairly the financial position of the Company and its consolidated subsidiaries, or such other entity, as the case may be, at the dates indicated and the statement of operations, shareholders' equity and cash flows of the Company and its consolidated subsidiaries, or such other entity, as the case may be, for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statements and the Prospectus present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statements and the Prospectus. In addition, any pro forma financial statements of the Company and its subsidiaries and the related notes thereto included in the Registration Statements and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with respect to pro forma financial statements and have been properly compiled on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. 5) No Material Adverse Change in Business. Since the respective dates as of which information is given in the Registration Statements and the Prospectus, except as otherwise stated therein, (A) there has been no material adverse change in, or any adverse development that materially affects, the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (B) there have been no transactions entered into by the Company or any of its subsidiaries, other than those arising in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise and (C) except for regular dividends on the Company's common stock or preferred stock, in amounts per share that are consistent with past practice or the applicable charter document or supplement thereto, respectively, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. 6) Good Standing of the Company. The Company has been duly organized and is validly existing as a Texas corporation in good standing under the laws of the State of Texas and has all corporate power and authority necessary to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under, or as contemplated under, this Underwriting Agreement and the applicable Terms Agreement. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. 7) Good Standing of Subsidiaries. Each subsidiary of the Company that is a corporation (a "Corporate Subsidiary") has been duly incorporated and each subsidiary of the Company that is a partnership (a "Partnership Subsidiary") has been duly organized and, in each case, is validly existing in good standing under the laws of the jurisdiction of its incorporation or organization, as applicable, has corporate or partnership power and authority, as applicable, to own, lease and operate its properties and to conduct its business as described in the Prospectus. Each Corporate Subsidiary is duly qualified as a foreign corporation and each Partnership Subsidiary that is a limited partnership is duly registered, in each case, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or be in good standing could not reasonably be expected, individually, or in the aggregate, to have a Material Adverse Effect. All of the issued and outstanding capital stock of each of the Corporate Subsidiaries has been duly authorized and is validly issued, fully paid and non-assessable, with no personal liability attaching to the ownership thereof and, except as otherwise stated in the Registration Statements and the Prospectus, all of such stock or other equity interests, as the case may be, of each subsidiary of the Company are owned by the Company, directly or indirectly, free and clear of any security interest, mortgage, pledge, lien, charge, encumbrance, claim or equity. 8) Capitalization. If the Prospectus contains a "Capitalization" section purporting to set forth the authorized, issued and outstanding shares of capital stock of the Company, then such information with respect to such shares is as set forth in the column entitled "Actual" under such section (except for subsequent issuances thereof, if any contemplated under this Underwriting Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Prospectus). If the Prospectus contains a "Capitalization" section purporting to set forth the authorized, issued and outstanding shares of capital stock of the Company as adjusted to give effect to the sale of Underwritten Securities and the application of the net proceeds therefrom, then such information with respect to such shares and such proceeds is as set forth in the column entitled "Adjusted" under such section. All issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued by the Company and are fully paid and non-assessable with no personal liability attaching to the ownership thereof, and none of such shares of capital stock was issued in violation of preemptive or other similar rights of any securityholder of the Company. 9) Authorization of this Underwriting Agreement and Terms Agreement. This Underwriting Agreement has been, and the applicable Terms Agreement as of the date thereof will have been, duly authorized, executed and delivered by the Company and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as rights to indemnity and contribution hereunder and thereunder may be limited by federal or state securities laws or the public policy underlying such laws, and except as enforceability may be limited by applicable bankruptcy, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 10) Authorization of Common Stock. If the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Common Stock, such Underwritten Securities have been, or as of the date of such Terms Agreement will have been, duly authorized by the Company for issuance and sale pursuant to this Underwriting Agreement and such Terms Agreement. Such Underwritten Securities, when issued and delivered by the Company pursuant to this Underwriting Agreement and such Terms Agreement against payment of the consideration therefor specified in such Terms Agreement, will be validly issued, fully paid and non-assessable and will not be subject to preemptive or other similar rights of any securityholder of the Company. No holder of such Underwritten Securities is or will be subject to personal liability by reason of being such a holder. 11) Authorization of Preferred Stock and/or Depositary Shares. If the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Preferred Stock and/or Depositary Shares, such Underwritten Securities have been, or as of the date of such Terms Agreement will have been, duly authorized by the Company for issuance and sale pursuant to this Underwriting Agreement and such Terms Agreement. The applicable Preferred Stock, when issued and delivered by the Company pursuant to this Underwriting Agreement and such Terms Agreement against payment of the consideration therefor, or for the related Depositary Shares, as the case may be, specified in such Terms Agreement, will be validly issued, fully paid and non-assessable and will not be subject to preemptive or other similar rights of any securityholder of the Company. In addition, upon deposit by the Company of any Preferred Stock represented by Depositary Shares with the applicable Depositary and the execution and delivery by such Depositary of the Depositary Receipts evidencing such Depositary Shares, in each case pursuant to the applicable Deposit Agreement, such Depositary Shares will represent legal and valid interests in such Preferred Stock. No holder of such Preferred Stock or Depositary Receipts evidencing Depositary Shares is or will be subject to personal liability by reason of being such a holder. The applicable Certificate of Designations will be in full force and effect prior to the Closing Time. 12) Authorization of Deposit Agreement. If the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Depositary Shares or if Debt Securities are convertible into Depositary Shares representing Preferred Stock, the applicable Deposit Agreement has been, or prior to the issuance of such Depositary Shares will have been, duly authorized, executed and delivered by the Company and, upon such authorization, execution and delivery, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). Each registered holder of a Depositary Receipt under the applicable Deposit Agreement will be entitled to the proportional rights, preferences and limitations of the Preferred Stock represented by the Depositary Shares evidenced by such Depositary Receipt and to such other rights as are granted to such registered holder in such Deposit Agreement. 13) Authorization of Senior Debt Securities and/or Subordinated Debt Securities. If the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Senior Debt Securities and/or Subordinated Debt Securities, such Underwritten Securities have been, or as of the date of such Terms Agreement will have been, duly authorized by the Company for issuance and sale pursuant to this Underwriting Agreement and such Terms Agreement. Such Underwritten Securities, when issued and authenticated in the manner provided for in the applicable Indenture and delivered against payment of the consideration therefor specified in such Terms Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law), and except further as enforcement thereof may be limited by (A) requirements that a claim with respect to any Debt Securities denominated other than in U.S. dollars (or a foreign or composite currency judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (B) governmental authority to limit, delay or prohibit the making of payments outside the United States. Such Underwritten Securities will be in the form contemplated by, and each registered holder thereof is entitled to the benefits of, the applicable Indenture. 14) Authorization of the Indentures. If the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Senior Debt Securities and/or Subordinated Debt Securities or if Preferred Stock is, or Depositary Shares representing Preferred Stock are, convertible into Debt Securities, each applicable Indenture has been, or prior to the issuance of the Debt Securities thereunder will have been, duly authorized, executed and delivered by the Company and, upon such authorization, execution and delivery, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (15) Authorization of Warrants. If the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Warrants, such Underwritten Securities have been, or as of the date of such Terms Agreement will have been, duly authorized by the Company for issuance and sale pursuant to this Underwriting Agreement and such Terms Agreement. Such Underwritten Securities, when issued and authenticated in the manner provided for the applicable Warrant Agreement and delivered against payment of the consideration therefor specified in such Terms Agreement, will constitute valid and legally binding obligations of the Company, entitled to the benefits provided by such Warrant Agreement and enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 16) Authorization of Warrant Agreement. If the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Warrants, each applicable Warrant Agreement has been, or prior to the issuance of such Underwritten Securities will have been, duly authorized, executed and delivered by the Company and, upon such authorization, execution and delivery, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 17) Authorization of Underlying Securities. If the Underlying Securities related to the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Common Stock, Preferred Stock or Depositary Shares, such Underlying Securities have been, or as of the date of such Terms Agreement will have been, duly authorized and reserved for issuance by the Company upon exercise of the Common Stock Warrants or Preferred Stock Warrants, as applicable, or upon conversion of the related Preferred Stock, Depositary Shares, Senior Debt Securities or Subordinated Debt Securities, as applicable. If the Underlying Securities include Common Stock or Preferred Stock, such Underlying Securities, when issued upon such exercise or conversion, as applicable, will be validly issued, fully paid and non-assessable and will not be subject to preemptive or other similar rights of any securityholder of the Company. If the Underlying Securities include Depositary Shares, such Underlying Securities, upon deposit by the Company of the Preferred Stock represented thereby with the applicable Depositary and the execution and delivery by such Depositary of the Depositary Receipts evidencing such Depositary Shares, in each case pursuant to the applicable Deposit Agreement, will represent legal and valid interests in such Preferred Stock. No holder of such Common Stock, Preferred Stock or Depositary Receipts evidencing Depository Shares is or will be subject to personal liability by reason of being such a holder. If the Underlying Securities related to the Underwritten Securities being sold pursuant to the applicable Terms Agreement include Senior Debt Securities and/or Subordinated Debt Securities, such Underlying Securities have been, or as of the date of such Terms Agreement will have been, duly authorized for issuance by the Company upon the exercise of the Debt Security Warrants or upon conversion of the related Preferred Stock or Depositary Shares, as applicable. Such Underlying Securities, when issued and authenticated in the manner provided for in the applicable Indenture and delivered in accordance with the terms of the Debt Security Warrants or the related Preferred Stock or Depositary Shares, as applicable, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law), and except further as enforcement thereof may be limited by (A) requirements that a claim with respect to any Debt Securities denominated other than in U.S. dollars (or a foreign or composite currency judgment in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law or (B) governmental authority to limit, delay or prohibit the making of payments outside the United States. (18) Descriptions of the Underwritten Securities, Underlying Securities, Indentures, Deposit Agreement and Warrant Agreement. The Underwritten Securities being sold pursuant to the applicable Terms Agreement and each applicable Indenture, Deposit Agreement and Warrant Agreement, as of the date of the Prospectus, and any Underlying Securities, when issued and delivered in accordance with the terms of the related Underwritten Securities, will conform in all material respects to the statements relating thereto contained in the Prospectus and will be in substantially the form filed or incorporated by reference, as the case may be, as an exhibit to the Registration Statement. 19) Absence of Defaults and Conflicts. Neither the Company nor any of its subsidiaries is in violation of its articles or certificate of incorporation or by-laws (or partnership agreement, in the case of Partnership Subsidiaries) or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (collectively, "Agreements and Instruments"), except for such defaults or violations the effect of which could not be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect. The execution, delivery and performance of this Underwriting Agreement, the applicable Terms Agreement and each applicable Indenture, Warrant Agreement and Deposit Agreement and any other agreement or instrument entered into or issued or to be entered into or issued by the Company in connection with the transactions contemplated hereby or thereby or in the Registration Statements and the Prospectus, and the consummation of the transactions contemplated herein and in the Registration Statements and the Prospectus (including the issuance and sale of the Underwritten Securities and the use of the proceeds from the sale of the Underwritten Securities as described under the caption "Use of Proceeds") and compliance by the Company with its obligations hereunder and thereunder, have been duly authorized by all necessary corporate action and do not and will not (except as disclosed in the Registration Statements and the Prospectus), whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any assets, properties or operations of the Company or any of its subsidiaries pursuant to the terms of any Agreements and Instruments (except for such conflicts, breaches, defaults, events or liens, charges or encumbrances that would not result in a Material Adverse Effect) nor will such action result in any violation of the articles or certificate of incorporation or by-laws of the Company or any of its subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality (including the Alaska Public Utilities Commission) or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries (or partnership agreement, in the case of Partnership Subsidiaries) or any of their assets, properties or operations. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries. 20) Absence of Proceedings. Except as set forth in the Registration Statements or the Prospectus, there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency or body, domestic or foreign, now pending, or to the knowledge of the Company threatened, against or affecting the Company or any of its subsidiaries which is required to be disclosed in the Registration Statements and the Prospectus, or which might reasonably be expected to result in a Material Adverse Effect or which might reasonably be expected to materially and adversely affect the consummation of the transactions contemplated under this Underwriting Agreement, the applicable Terms Agreement or any applicable Indenture, Warrant Agreement or Deposit Agreement or the performance by the Company of its obligations hereunder and thereunder. The aggregate of all pending legal or governmental proceedings to which the Company or any of its subsidiaries is a party or of which any of their respective assets, properties or operations is the subject which are not described in the Registration Statements and the Prospectus, including ordinary routine litigation incidental to the business, could not reasonably be expected to result in a Material Adverse Effect. 21) Accuracy of Exhibits. There are no contracts or documents which are required to be described in the Registration Statements, the Prospectus or the documents incorporated by reference therein or to be filed as exhibits thereto which have not been so described and filed as required. 22) Absence of Further Requirements. Except as required by the 1933 Act, the 1934 Act and applicable state or foreign securities laws, except for the qualification of each applicable Indenture under the Trust Indenture Act, and except such as already have been obtained, no filing with, or authorization, approval, consent, license, order registration, qualification or decree of, any court or governmental authority or agency, domestic or foreign, is necessary or required for the execution, delivery and performance by the Company of this Underwriting Agreement or the applicable Terms Agreement or in connection with the transactions contemplated under this Underwriting Agreement, such Terms Agreement or any applicable Indenture, Deposit Agreement or Warrant Agreement. 23) Possession of Licenses and Permits. The Company and each of its subsidiaries possess such permits, licenses, franchises, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to own, lease and operate their respective properties and to conduct the business now operated by them, except where the failure to so possess would not, singly or in the aggregate, result in a Material Adverse Effect. The Company and each of its subsidiaries have fulfilled and performed and are in compliance with the material terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly or in the aggregate, result in a Material Adverse Effect. All of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not result in a Material Adverse Effect, and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such Government License, except where such revocation, termination or other impairment would not, singly or in the aggregate, result in a Material Adverse Effect. 24) Title to Property. The Company and each of its subsidiaries owns or has valid rights to use all items of real and personal property which are material to the business of the Company and its subsidiaries, taken as a whole, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind which could reasonably be expected to have a Material Adverse Effect. All oil and gas leases to which the Company or any of its subsidiaries is a party are in full force and effect, and no default has occurred or is continuing thereunder which could reasonably be expected to have a Material Adverse Effect. 25) Investment Company Act; Public Utility Holding Company Act. The Company is not, and upon the issuance and sale of the Underwritten Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended or a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or the rules or regulations thereunder. 26) Environmental Laws. Except as otherwise stated in the Registration Statements and the Prospectus, neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof including any judicial or administrative order, consent, decree or judgment which violation could reasonably be expected to have a Material Adverse Effect. In the ordinary course of its business, the Company conducts a periodic review of the effect of any foreign, federal, state or local law or regulation relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws") on the business, operations and properties of the Company and its subsidiaries, in the course of which it identifies and evaluates associated costs and liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review, the Company has concluded that, except as set forth in the Registration Statements or in the Prospectus, such associated costs and liabilities could not reasonably be expected to, singly or in the aggregate, have a Material Adverse Effect. 27) Registration Rights. There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to include such securities in the securities registered pursuant to the Registration Statements. 28) Compliance with Cuba Act. The Company has complied with, and is and will be in compliance with, the provisions of that certain Florida act relating to disclosure of doing business with Cuba, codified as Section 517.075 of the Florida statutes, and the rules and regulations thereunder, or is exempt therefrom. (b) Officers' Certificates.(b) Officers' Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries on behalf of the Company or any such subsidiary and delivered to any Underwriter or to counsel for the Underwriters in connection with the offering of the Underwritten Securities shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby on the date of such certificate. SECTION 2. Sale and Delivery to Underwriters; Closing. (a) Underwritten Securities.a) Underwritten Securities. The several commitments of the Underwriters to purchase the Underwritten Securities pursuant to the applicable Terms Agreement shall be deemed to have been made on the basis of the representations and warranties herein contained and shall be subject to the terms and conditions herein set forth. (b) Option Underwritten Securities.b) Option Underwritten Securities. In addition, subject to the terms and conditions herein set forth, the Company may grant, if so provided in the applicable Terms Agreement, an option to the Underwriters, severally and not jointly, to purchase up to the number or aggregate principal amount, as the case may be, of the Option Underwritten Securities set forth therein at a price per Option Underwritten Security equal to the price per Initial Underwritten Security, less an amount equal to any dividends or distributions declared by the Company and paid or payable on the Initial Underwritten Securities but not payable on the Option Underwritten Securities. Such option, if granted, will expire 30 days after the date of such Terms Agreement, and may be exercised in whole or in part at one time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial Underwritten Securities upon notice by Merrill Lynch to the Company setting forth the number or aggregate principal amount, as the case may be, of Option Underwritten Securities as to which the several Underwriters are then exercising the option and the time, date and place of payment and delivery for such Option Underwritten Securities. Such time and date of payment and delivery ("Date of Delivery") shall be determined by Merrill Lynch, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time, unless otherwise agreed upon by Merrill Lynch and the Company. If the option is exercised as to all or any portion of the Option Underwritten Securities, each of the Underwriters, severally and not jointly, will purchase that proportion of the total number or aggregate principal amount, as the case may be, of Option Underwritten Securities then being purchased which the number or aggregate principal amount, as the case may be, of Initial Underwritten Securities each such Underwriter has severally agreed to purchase as set forth in such Terms Agreement bears to the total number or aggregate principal amount, as the case may be, of Initial Underwritten Securities, subject to such adjustments as Merrill Lynch in its discretion shall make to eliminate any sales or purchases of a fractional number or aggregate principal amount, as the case may be, of Option Underwritten Securities. (c) Payment.c) Payment. Payment of the purchase price for, and delivery of, the Initial Underwritten Securities shall be made at the offices of Vinson & Elkins L.L.P., 2300 First City Tower, Houston, Texas 77002, or at such other place as shall be agreed upon by Merrill Lynch and the Company, at 10:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day) business day after the date of the applicable Terms Agreement (unless postponed in accordance with the provisions of Section 10 hereof), or such other time not later than ten business days after such date as shall be agreed upon by Merrill Lynch and the Company (such time and date of payment and delivery being herein called "Closing Time"). In addition, in the event that the Underwriters have exercised their option, if any, to purchase any or all of the Option Underwritten Securities, payment of the purchase price for, and delivery of such Option Underwritten Securities, shall be made at the above-mentioned offices of Vinson & Elkins L.L.P., 2300 First City Tower, Houston, Texas 77002, or at such other place as shall be agreed upon by Merrill Lynch and the Company, on the relevant Date of Delivery as specified in the notice from Merrill Lynch to the Company. Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to Merrill Lynch for the respective accounts of the Underwriters of the Underwritten Securities to be purchased by them. It is understood that each Underwriter has authorized Merrill Lynch, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Underwritten Securities which it has severally agreed to purchase. Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Underwritten Securities to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder. (d) Denominations; Registration.d) Denominations; Registration. The Underwritten Securities, certificates for the Underwritten Securities or Depositary Receipts evidencing the Depositary Shares, as applicable, shall be in such denominations and registered in such names as Merrill Lynch may request in writing at least one full business day prior to the Closing Time or the relevant Date of Delivery, as the case may be. The Underwritten Securities, certificates for the Underwritten Securities or Depositary Receipts evidencing the Depositary Shares, as applicable, will be made available for examination and packaging by Merrill Lynch in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be. SECTION 3. Covenants of the Company. The Company covenants with Merrill Lynch and with each Underwriter participating in the offering of Underwritten Securities, as follows: a) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(b), will comply with the requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations, if and as applicable, and will notify the Representative(s) and/or counsel for the Underwriters immediately, and confirm the notice in writing, of (i) the effectiveness of any post-effective amendment to the Registration Statements or the filing of any supplement or amendment to the Prospectus, (ii) the receipt of any comments from the Commission, (iii) any request by the Commission for any amendment to the Registration Statements or any amendment or supplement to the Prospectus or for additional information with respect thereto, and (iv) the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Underwritten Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company will file the Prospectus with the Commission pursuant to and in accordance with subparagraph (2) (or, if applicable and if consented to by you, subparagraph (5)) of Rule 424(b) not later than the second business day following the execution and delivery of any Terms Agreement and otherwise will promptly effect the filings necessary pursuant to Rule 424 and will take such steps as it deems necessary to ascertain and notify the Representative(s) (and to confirm such notification in writing if requested by the Representative(s)) promptly whether the Prospectus transmitted for filing under Rule 424 was received for filing by the Commission and, in the event that it was not, it will promptly file the Prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof as soon as possible. b) Filing of Amendments. For as long as a Prospectus is required to be delivered with respect to an offering of Underwritten Securities hereunder, the Company will give Merrill Lynch notice of its intention to file or prepare any amendment to the Registration Statements (including any filing under Rule 462(b) of the 1933 Act Regulations), any Term Sheet or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise (including by filing any documents that would be incorporated by reference), will furnish Merrill Lynch with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such amendment, supplement or revision to which Merrill Lynch or counsel for the Underwriters shall reasonably object in writing. c) Delivery of Registration Statements. The Company has furnished or will deliver to Merrill Lynch and counsel for the Underwriters, without charge, copies of the Registration Statements as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and copies of all consents and certificates of experts, and, as requested, will also deliver to Merrill Lynch, without charge, a sufficient number of conformed copies of the Registration Statements as originally filed and of each amendment thereto (without exhibits) for distribution of a copy to each of the other Underwriters. Copies of the Registration Statements and each amendment thereto furnished to the Underwriters will be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. d) Delivery of Prospectuses. The Company will deliver to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter may reasonably request, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (or, if applicable, of the Prospectus as amended or supplemented after the effective date of the Third Registration Statement) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T. e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the completion of the distribution of the Underwritten Securities as contemplated in this Underwriting Agreement and the applicable Terms Agreement and in the Registration Statements and the Prospectus. If at any time when the Prospectus is required by the 1933 Act or the 1934 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to amend any Registration Statement in order that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or to amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend any Registration Statement or amend or supplement the Prospectus in order to comply with any law, the Company will notify the Representative(s) promptly (and if requested by the Representative(s), confirm such notice in writing) and will promptly prepare and file with the Commission, subject to Section 3(b), such amendment or supplement as may be necessary to correct such statement or omission or to make such Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriters, without charge, such number of copies of such amendment or supplement as the Underwriters may reasonably request. f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Underwritten Securities and any related Underlying Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as Merrill Lynch may designate and to maintain such qualifications in effect as long as required for the distribution of such Securities; provided, however, that the Company shall not be obligated to consent to service of process (except service of process with respect to the offering and sale of such Securities) or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Underwritten Securities or any related Underlying Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect as long as required for the distribution of such Securities and to advise the Underwriters promptly of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. g) Earnings Statement. The Company will make generally available to its securityholders an earnings statement of the Company for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act covering a period of 12 months beginning after the effective date of the Third Registration Statement, as soon as is reasonably practicable after the termination of such 12-month period but not later than 90 days after such termination. h) Reservation of Securities. If the applicable Terms Agreement specifies that any related Underlying Securities include Common Stock, Preferred Stock and/or Depositary Shares, the Company will reserve and keep available at all times, free of preemptive or other similar rights, a sufficient number of shares of Common Stock and/or Preferred Stock, as applicable, for the purpose of enabling the Company to satisfy any obligations to issue such Underlying Securities upon exercise of the related Warrants, as applicable, or upon conversion of the Preferred Stock, Depositary Shares, Senior Debt Securities or Subordinated Debt Securities, as applicable. i) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Underwritten Securities in the manner specified in the Prospectus under "Use of Proceeds". j) Listing. The Company will use its best efforts to effect the listing of the Underwritten Securities and any related Underlying Securities, prior to the Closing Time, on any national securities exchange or quotation system if and as specified in the applicable Terms Agreement. k) Restriction on Sale of Securities. Between the date of the applicable Terms Agreement and the Closing Time or such other date specified in such Terms Agreement, the Company will not, without the prior written consent of Merrill Lynch, directly or indirectly, issue, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, the securities specified in such Terms Agreement. l) Reporting Requirements. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file all documents (and any amendments to previously filed documents) required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations. The Company also will, upon request, furnish to Merrill Lynch and each of the other Underwriters for a period of five years from the date of this Agreement (i) copies of any reports or other communications which the Company shall send to its stockholders or shall from time to time publish or publicly disseminate, (ii) copies of all annual, quarterly and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be designated by the Commission, and (iii) such other non-confidential information as the Underwriters may reasonably request regarding the Company or its subsidiaries. SECTION 4. Payment of Expenses.4. Payment of Expenses. (a) Expenses.a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Underwriting Agreement or the applicable Terms Agreement, including (i) the preparation, printing and filing of the Registration Statements (including financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this Underwriting Agreement, any Terms Agreement, any Agreement among Underwriters, the Indentures, any Deposit Agreement, any Warrant Agreement and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Underwritten Securities or any related Underlying Securities, (iii) the preparation, issuance and delivery of the Underwritten Securities and any related Underlying Securities, any certificates for the Underwritten Securities or such Underlying Securities or Depositary Receipts evidencing the Depositary Shares, as applicable, to the Underwriters, including any transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Underwritten Securities to the Underwriters, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors or agents (including transfer agents and registrars), as well as the fees and disbursements of the Trustees, any Depositary and any Warrant Agent, and their respective counsel, (v) the qualification of the Underwritten Securities and any related Underlying Securities under state securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation, printing and delivery of the Blue Sky Survey and any Legal Investment Survey, and any amendment thereto, (vi) the printing and delivery to the Underwriters of copies of each preliminary prospectus, any Term Sheet, and the Prospectus and any amendments or supplements thereto, (vii) the fees charged by nationally recognized statistical rating organizations for the rating of the Underwritten Securities and any related Underlying Securities, if applicable, (viii) the fees and expenses incurred with respect to the listing of the Underwritten Securities and any related Underlying Securities, if applicable, (ix) the filing fees incident to the review, if any, by the National Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Underwritten Securities and any related Underlying Securities, and (x) the fees and expenses of any Underwriter acting in the capacity of a "qualified independent underwriter" (as defined in Section 2(l) of Schedule E of the bylaws of the NASD), if applicable. Notwithstanding the foregoing, except as expressly provided in clause (v) above or by Section 4(b), all legal fees and disbursements of counsel to the Underwriters shall be the sole responsibility of the Underwriters. (b) Termination of Agreementb) Termination of Agreement. If the applicable Terms Agreement is terminated by Merrill Lynch in accordance with the provisions of Section 5 or Section 9(b)(i) hereof, the Company shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. SECTION 5. Conditions of Underwriters' Obligations.5. Conditions of Underwriters' Obligations. The obligations of the Underwriters to purchase and pay for the Underwritten Securities pursuant to the applicable Terms Agreement are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions: a) Effectiveness of Registration Statements. The Registration Statements, including any Rule 462(b) Registration Statement, have become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statements shall have been issued under the 1933 Act and no proceedings for that purpose shall have been initiated or be pending or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriters. A prospectus containing information relating to the description of the Underwritten Securities and any related Underlying Securities, the specific method of distribution and similar matters shall have been filed with the Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any required post-effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430A), or, if the Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a Term Sheet including the Rule 434 Information shall have been filed with the Commission in accordance with Rule 424(b)(7). b) Opinion of Counsel for Company. At Closing Time, Merrill Lynch shall have received the favorable opinions, dated as of Closing Time, of (i) Vinson & Elkins L.L.P., counsel for the Company (or other counsel acceptable to the Underwriters), and (ii) Janice K. Hartrick, Chief Counsel and Vice President, Environmental Affairs of the Company, in each case, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letters for each of the other Underwriters, to the effect set forth in Exhibit B hereto and to such further effect as counsel to the Underwriters may reasonably request. c) Opinion of Counsel for Underwriters. At Closing Time, Merrill Lynch shall have received the favorable opinion, dated as of Closing Time, of Simpson Thacher & Bartlett (a partnership which includes professional corporations), counsel for the Underwriters (or other counsel acceptable to the Underwriters), together with signed or reproduced copies of such letter for each of the other Underwriters, with respect to certain matters. In giving such opinion, such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York, the federal law of the United States and the General Corporation Law of the State of Delaware, upon the opinions of counsel satisfactory to Merrill Lynch. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials. d) Officers' Certificate. At Closing Time, there shall not have been, since the date of the applicable Terms Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change, or any adverse development that materially affects the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business, and Merrill Lynch shall have received a certificate of the President or a Vice President of the Company and of the chief financial officer or chief accounting officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1 are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time, and (iv) no stop order suspending the effectiveness of any of the Registration Statements has been issued and no proceedings for that purpose have been initiated or threatened by the Commission. e) Accountant's Comfort Letter. At the time of the execution of the applicable Terms Agreement, Merrill Lynch shall have received from KPMG Peat Marwick LLP (or such other accountants reasonably acceptable to the Underwriters) a letter dated such date, in form and substance satisfactory to Merrill Lynch, together with signed or reproduced copies of such letter for each of the other Underwriters, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statements and the Prospectus. f) Bring-down Comfort Letter. At Closing Time, Merrill Lynch shall have received from KPMG Peat Marwick LLP (or such other accountants reasonably acceptable to the Underwriters) a letter, dated as of Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (e) of this Section 5, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time. g) Ratings. At Closing Time and at any relevant Date of Delivery, the Underwritten Securities shall have the ratings accorded by any "nationally recognized statistical rating organization", as defined by the Commission for purposes of Rule 436(g)(2) of the 1933 Act Regulations, if and as specified in the applicable Terms Agreement, and the Company shall have delivered to Merrill Lynch a letter, dated as of such date, from each such rating organization, or other evidence satisfactory to Merrill Lynch, confirming that the Underwritten Securities have such ratings. Since the time of execution of such Terms Agreement, there shall not have occurred a downgrading in the rating assigned to the Underwritten Securities, if applicable, or any of the Company's other securities by any such rating organization, and no such rating organization shall have publicly announced that it has under surveillance or review its rating of the Underwritten Securities or any of the Company's other securities. h) Approval of Listing. At Closing Time, the Underwritten Securities shall have been approved for listing, subject only to official notice of issuance, if and as specified in the applicable Terms Agreement. i) Over-Allotment Option. In the event that the Underwriters are granted an over-allotment option by the Company in the applicable Terms Agreement and the Underwriters exercise their option to purchase all or any portion of the Option Underwritten Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company or any of its subsidiaries hereunder shall be true and correct as of each Date of Delivery, and, at the relevant Date of Delivery, Merrill Lynch shall have received: (1) A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and the chief financial officer or chief accounting officer of the Company, confirming that the certificate delivered at the Closing Time pursuant to Section 5(d) hereof remains true and correct as of such Date of Delivery. (2) The favorable opinion of Vinson & Elkins L.L.P., counsel for the Company (or other counsel acceptable to the Underwriters), in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Underwritten Securities and otherwise to the same effect as the opinion required by Section 5(b) hereof. (3) The favorable opinion of Simpson Thacher & Bartlett (a partnership which includes professional corporations), counsel for the Underwriters (or other counsel acceptable to the Underwriters), dated such Date of Delivery, relating to the Option Underwritten Securities and otherwise to the same effect as the opinion required by Section 5(c) hereof. (4) A letter from KPMG Peat Marwick LLP (or such other accountants reasonably acceptable to the Underwriters), in form and substance satisfactory to Merrill Lynch and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to Merrill Lynch pursuant to Section 5(f) hereof, except that the "specified date" on the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery. j) Additional Documents. At Closing Time and at each Date of Delivery, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Underwritten Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Underwritten Securities as herein contemplated shall be reasonably satisfactory in form and substance to Merrill Lynch and counsel for the Underwriters. k) Termination of Terms Agreement. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, the applicable Terms Agreement (or, with respect to the Underwriters' exercise of any applicable over-allotment option for the purchase of Option Underwritten Securities on a Date of Delivery after the Closing Time, the obligations of the Underwriters to purchase the Option Underwritten Securities on such Date of Delivery) may be terminated by Merrill Lynch by notice to the Company at any time at or prior to the Closing Time (or such Date of Delivery, as applicable), and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 6, 7 and 8 shall survive any such termination and remain in full force and effect. SECTION 6. Indemnification. Indemnification. a) Indemnification of Underwriters. The Company agrees to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (1) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statements (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information deemed to be a part thereof, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and (3) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Merrill Lynch expressly for use in the Registration Statements (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information deemed to be a part thereof, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). The foregoing indemnity with respect to any untrue statement or alleged untrue statement contained in or omission or alleged omission from a preliminary prospectus shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) from whom the person asserting any loss, liability, claim, damage or expense purchased any of the Underwritten Securities which are the subject thereof if the Company sustains the burden of proving that (i) such person was not sent or given a copy of the Prospectus (or the Prospectus as amended or supplemented), excluding documents incorporated by reference therein, at or prior to the written confirmation of sale of such Underwritten Securities to such person and (ii) the untrue statement contained in or omission from such preliminary prospectus was corrected in the Prospectus (or the Prospectus as amended or supplemented) and the Company had previously furnished copies thereof to such Underwriter. b)Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statements, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statements (or any amendment thereto), including the Rule 430A Information and the Rule 434 Information deemed to be a part thereof, if applicable, or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through Merrill Lynch expressly for use in the Registration Statements (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto). c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have (A) to the extent it considers such request to be reasonable, reimbursed such indemnified party in accordance with such request, and (B) to the extent it does not consider such request to be reasonable, provided written notice to the indemnified party to that effect explaining the reasons therefor, in each case prior to the date of such settlement. SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Underwritten Securities pursuant to the applicable Terms Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Underwritten Securities pursuant to the applicable Terms Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of such Underwritten Securities (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriters, in each case as set forth on the cover of the Prospectus, or, if Rule 434 is used, the corresponding location on the Term Sheet bear to the aggregate initial public offering price of such Underwritten Securities as set forth on such cover. The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Underwritten Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters' respective obligations to contribute pursuant to this Section 7 are several in proportion to the number or aggregate principal amount, as the case may be, of Initial Underwritten Securities set forth opposite their respective names in the applicable Terms Agreement, and not joint. SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Underwriting Agreement or the applicable Terms Agreement or in certificates of officers of the Company submitted pursuant hereto or thereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of and payment for the Underwritten Securities. SECTOPM 9. Termination. a) Underwriting Agreement. This Underwriting Agreement (excluding the applicable Terms Agreement) may be terminated for any reason at any time by the Company or by Merrill Lynch upon the giving of written notice of such termination to the other party hereto. b) Terms Agreement. Merrill Lynch may terminate the applicable Terms Agreement, by notice to the Company, at any time at or prior to the Closing Time or any relevant Date of Delivery, if, since the time of execution of such Terms Agreement, (i) there has been, since the respective dates as of which information is given in the Prospectus, any material adverse change in, or any adverse development that materially affects, the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole, whether or not arising in the ordinary course of business, or (ii) there has occurred any material adverse change in the financial markets in the United States or, if the Underwritten Securities or any related Underlying Securities include Debt Securities denominated or payable in, or indexed to, one or more foreign or composite currencies, in the international financial markets, or any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of Merrill Lynch, impracticable to market the Underwritten Securities or to enforce contracts for the sale of the Underwritten Securities, or (iii) trading in any securities of the Company has been suspended or limited by the Commission or the New York Stock Exchange, or if trading generally on the New York Stock Exchange or the American Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by either of said exchanges or by order of the Commission, the NASD or any other governmental authority, or (iv) a banking moratorium has been declared by either Federal or New York authorities or, if the Underwritten Securities or any related Underlying Securities include Debt Securities denominated or payable in, or indexed to, one or more foreign or composite currencies, by the relevant authorities in the related foreign country or countries. c) Liabilities. If this Underwriting Agreement or the applicable Terms Agreement is terminated pursuant to this Section 9, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 6, 7 and 8 shall survive such termination and remain in full force and effect. SECTION 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time or the relevant Date of Delivery, as the case may be, to purchase the Underwritten Securities which it or they are obligated to purchase under the applicable Terms Agreement (the "Defaulted Securities"), then Merrill Lynch shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, Merrill Lynch shall not have completed such arrangements within such 24-hour period, then: (a) if the number or aggregate principal amount, as the case may be, of Defaulted Securities does not exceed 10% of the number or aggregate principal amount, as the case may be, of Underwritten Securities to be purchased on such date pursuant to such Terms Agreement, the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations under such Terms Agreement bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the number or aggregate principal amount, as the case may be, of Defaulted Securities exceeds 10% of the number or aggregate principal amount, as the case may be, of Underwritten Securities to be purchased on such date pursuant to such Terms Agreement, such Terms Agreement (or, with respect to the Underwriters' exercise of any applicable over-allotment option for the purchase of Option Underwritten Securities on a Date of Delivery after the Closing Time, the obligations of the Underwriters to purchase, and the Company to sell, such Option Underwritten Securities on such Date of Delivery) shall terminate without liability on the part of any non-defaulting Underwriter. No action taken pursuant to this Section 10 shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in (i) a termination of the applicable Terms Agreement or (ii) in the case of a Date of Delivery after the Closing Time, a termination of the obligations of the Underwriters and the Company with respect to the related Option Underwritten Securities, as the case may be, either Merrill Lynch or the Company shall have the right to postpone the Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement or the Prospectus or in any other documents or arrangements. SECTION 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to Merrill Lynch at 1221 McKinney, Suite 2700, Houston, Texas 77010, attention of Alan J. Blackburn, Director, and notices to the Company shall be directed to it at 1001 Fannin, Suite 1700, Houston, Texas 77002-6714, attention of William L. Transier, Senior Vice President and Chief Financial Officer. SECTION 12. Parties. This Underwriting Agreement and the applicable Terms Agreement shall each inure to the benefit of and be binding upon the Company, Merrill Lynch and, upon execution of such Terms Agreement, any other Underwriters and their respective successors. Nothing expressed or mentioned in this Underwriting Agreement or such Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Underwriting Agreement or such Terms Agreement or any provision herein or therein contained. This Underwriting Agreement and such Terms Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the parties hereto and thereto and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Underwritten Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. SECTION 13. GOVERNING LAW AND TIME. THIS UNDERWRITING AGREEMENT AND ANY APPLICABLE TERMS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. SECTION 14. Effect of Headings. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 15. Counterparts. This Underwriting Agreement and any Terms Agreement may be executed in multiple counterparts, each of which taken together shall constitute one and the same instrument. If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this Underwriting Agreement, along with all counterparts, will become a binding agreement between Merrill Lynch and the Company in accordance with its terms. Very truly yours, SEAGULL ENERGY CORPORATION By:______________________ Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: Authorized Signatory Exhibit A SEAGULL ENERGY CORPORATION (a Texas corporation) [Type(s) of Underwritten Securities] TERMS AGREEMENT [Date] To: Seagull Energy Corporation 1001 Fannin, Suite 1700 Houston, Texas 77002-6714 Attn: [ ] Ladies and Gentlemen: We understand that Seagull Energy Corporation, a Texas corporation (the "Company"), proposes to issue and sell [ shares of its common stock, par value $0.10 per share (the "Common Stock")] [ shares of its preferred stock, par value $1.00 per share (the "Preferred Stock")] [in the form of depositary shares (the "Depositary Shares") each representing of a share of Preferred Stock] [$ aggregate principal amount of its [unsecured senior] [unsecured senior subordinated] debt securities (the "Debt Securities")] [ warrants (the "Common Stock Warrants") to purchase common stock, par value $0.10 per share] [ warrants (the "Preferred Stock Warrants") to purchase preferred stock, par value $1.00 per share [ warrants (the "Depositary Shares Warrants" to purchase Depositary Shares] [ warrants (the "Debt Security Warrants") to purchase $ aggregate principal amount of [unsecured senior] [senior subordinated] debt securities] ([such securities also being hereinafter referred to as] the "[Initial] Underwritten Securities"). Subject to the terms and conditions set forth or incorporated by reference herein, we [the underwriters named below (the "Underwriters")] offer to purchase [, severally and not jointly,] the [[number] [principal] [amount] of] Underwritten Securities [opposite their names set forth below] at the purchase price set forth below [, and a proportionate share of Option Underwritten Securities set forth below, to the extent any are purchased]. [Number] [Principal Amount] Underwriter of [Initial] Underwritten Securities ________________ Total [$] The Underwritten Securities shall have the following terms: [Common Stock] Title: Number of shares: Number of Option Underwritten Securities: Initial public offering price per share: $ Purchase price per share: $ Listing requirements: Black-out provisions: Lock-up provisions: Other terms and conditions: Closing date and location: [Preferred Stock] Title: Rank: Ratings: Number of shares: Number of Option Underwritten Securities: Dividend rate (or formula) per share: $ Dividend payment dates: Stated value: $ Liquidation preference per share: $ Redemption provisions: Sinking fund requirements: Conversion provisions: Listing requirements: Black-out provisions: Lock-up provisions: Initial public offering price per share: $___ plus accumulated dividends, if any, from _____ Purchase price per share: $___ plus accumulated dividends, if any, from _____ Other terms and conditions: Closing date and location: [Depositary Shares] Title: Fractional amount of Preferred Stock represented by each Depositary Share: Ratings: Rank: Number of shares: Number of Option Underwritten Securities: Dividend rate (or formula) per share: Dividend payment dates: Liquidation preference per share: Redemption provisions: Sinking fund requirements: Conversion provisions: Listing requirements: Black-out provisions: Lock-up provisions: Initial public offering price per share: $____ plus accumulated dividends, if any, from ___ Purchase price per share: $____ plus accumulated dividends, if any, from ___ Other terms and conditions: Closing date and location: [Debt Securities] Title: Rank: Ratings: Aggregate principal amount: Denominations: Currency of payment: Interest rate or formula: Interest payment dates: Regular record dates: Stated maturity date: Redemption provisions: Sinking fund requirements: Conversion provisions: Listing requirements: Black-out provisions: Fixed or Variable Price Offering: [Fixed] [Variable] Price Offering If Fixed Price Offering, initial public offering price per share: _____% of the principal amount, plus accrued interest [amortized original issue discount], if any, from _________________. Purchase price per share: _____% of principal amount, plus accrued interest [amortized original issue discount], if any, from _________________. Form: Other terms and conditions: Closing date and location: [Common Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrants Title: Type: Number: Warrant Agent: Issuable jointly with [Common Stock] [Preferred Stock] [Depositary Share] [Debt Securities]: [Yes] [No] Number of [Common Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrants issued with each [share of Common Stock] [share of Preferred Stock][Depositary Share] [$__________ principal amount of Debt Securities]: Date(s) from which or period(s) during which [Common Stock] [Preferred Stock] [Depositary Share][Debt Security] Warrants are exercisable: Date(s) on which [Common Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrants expire: Exercise price(s): Initial public offering price: $ Purchase price: $ Title of Underlying Securities: [Number of shares] [Principal amount] purchasable upon exercise of one [Common Stock] [Preferred Stock] [Depositary Share] [Debt Security] Warrant: Terms of Underlying Securities: Other terms and conditions: Closing date and location: [If the Registration Statement or the offering of the Underwritten Securities has been filed with the NASD for review, the obligations of the Underwriters to purchase and pay for the Underwritten Securities pursuant to this Terms Agreement are subject to the NASD not having raised any objection that has not been addressed with respect to the fairness and reasonableness of the underwriting terms and arrangements.] All of the provisions contained in the document attached as Annex I hereto entitled "Seagull Energy Corporation--Common Stock, Preferred Stock, Depositary Shares, Debt Securities and Warrants to Purchase Common Stock, Preferred Stock, Depositary Shares or Debt Securities--Underwriting Agreement" are hereby incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined. Please accept this offer no later than ____ o'clock P.M. (New York City time) on ______________ by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. Very truly yours, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: _________________________ Authorized Signatory [Acting on behalf of itself and the other named Underwriters.] Accepted: SEAGULL ENERGY CORPORATION By: _________________________ Name: Title: SEAGULL ENERGY CORPORATION (a Texas corporation) $150,000,000 7 1/2% Senior Notes due 2027 TERMS AGREEMENT September 25, 1997 To: Seagull Energy Corporation 1001 Fannin, Suite 1700 Houston, Texas 77002-6714 Attn: William L. Transier Ladies and Gentlemen: We understand that Seagull Energy Corporation, a Texas corporation (the "Company"), proposes to issue and sell $150,000,000 aggregate principal amount of its 7 1/2% unsecured senior debt securities due 2027 (the "Underwritten Securities"). Subject to the terms and conditions set forth or incorporated by reference herein, we the underwriters named below (the "Underwriters") offer to purchase, severally and not jointly, the principal amount of Underwritten Securities opposite our names set forth below at the purchase price set forth below. Principal Amount Underwriter of Underwritten Securities Merrill Lynch, Pierce, Fenner & Smith Incorporated....................................$84,000,000 Donaldson, Lufkin & Jenrette Securities Corporation..................................$16,500,000 J.P. Morgan Securities Inc.......................................$16,500,000 Salomon Brothers Inc.............................................$16,500,000 SBC Warburg Dillon Read Inc......................................$16,500,000 .................. ____________ Total $150,000,000 The Underwritten Securities shall have the following terms: Title: Senior Notes Rank: pari passu with all other unsecured, unsubordinated obligations of the Company Aggregate principal amount: $150,000,000 Denominations: $1,000 Currency of payment: U.S. dollars Interest rate: 7 1/2% per annum Interest payment dates: March 15 and September 15, commencing on March 15, 1998 Regular record dates: March 1 and September 1 Stated maturity date: September 15, 2027 Redemption provisions: None. Sinking fund requirements: None. Conversion provisions: None. Listing requirements: None. Black-out provisions: None. Purchase price to public per Senior Note: 99.544% of principal amount, plus accrued interest, if any, from September 30, 1997. Underwriting Discount: 1% Closing date and location: September 30, 1997; Houston, Texas. All of the provisions contained in the document attached as Annex I hereto entitled "Seagull Energy Corporation--Common Stock, Preferred Stock, Depositary Shares, Debt Securities and Warrants to Purchase Common Stock, Preferred Stock, Depositary Shares or Debt Securities--Underwriting Agreement" are hereby incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined. Please accept this offer no later than ____ o'clock P.M. (New York City time) on September _____, 1997 by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. Very truly yours, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: _________________________ Authorized Signatory Acting on behalf of itself and the other named Underwriters. Accepted: SEAGULL ENERGY CORPORATION By: _________________________ Name: Title: EX-2.3 3 RESOLUTIONS SEAGULL ENERGY CORPORATION RESOLUTIONS of the CHAIRMAN OF THE BOARD 7 1/2% Senior Notes due September 15, 2027 WHEREAS, on September 16, 1997, the Board of Directors of the Company approved the issuance by the Company, of up to $150,000,000 aggregate initial offering prices of bonds, debentures, notes and/or other debt obligations (collectively, the "Securities"); WHEREAS, the Board of Directors has authorized the Executive Committee of the Company or the Chairman of the Board of the Company to determine the terms and conditions of the Securities; NOW, THEREFORE, in furtherance of the foregoing, the Chairman of the Board of the Company hereby adopts the following resolutions: RESOLVED, that pursuant to the authority delegated to the Chairman of the Board by the Board of Directors of Seagull Energy Corporation (the "Company") by resolutions adopted on September 16, 1997, a series of Securities referred to in such resolutions shall be issued and designated under the Senior Indenture dated as of September 1, 1997 among the Company and The Bank of New York as trustee (the "Indenture"), as the Company's 7 1/2% Senior Notes Due September 15, 2027 (the "Senior Notes"); and FURTHER RESOLVED, that in addition to the terms provided in the Indenture with respect to Securities of a series issued thereunder, the terms of the Senior Notes shall be as follows (with all capitalized terms used below having the respective meanings ascribed thereto in the Indenture): (1) The aggregate principal amount of the Senior Notes shall be $150,000,000; (2) The stated maturity of the principal of the Senior Notes shall be September 15, 2027; (3) The Senior Notes shall bear interest at the rate of 7 1/2% per annum from September 30, 1997 or from the most recent interest payment date to which interest has been paid or duly provided for, which interest shall be calculated on the basis of a 360-day year comprised of twelve 30-day months; (4) The interest payment dates with respect to the Senior Notes shall be March 15 and September 15 in each year, commencing March 15, 1998, and the regular record dates for interest payable on any such interest payment date shall be March 1 or September 1 (whether or not a Business Day), as the case may be, next preceding such interest payment date; (5) Principal of (and premium, if any) and interest on the Senior Notes shall be payable at the Corporate Trust Office of the Trustee in New York, New York, and the Senior Notes may be surrendered for registration of transfer or exchange at such Corporate Trust Office, and notices and demands to or upon the Company in respect of the Senior Notes and the Indenture may be served at such Corporate Trust Office; (6) The Trustee shall act as paying agent, authenticating agent, transfer agent and security registrar with respect to the Senior Notes; (7) The Senior Notes shall not be redeemable prior to stated maturity; (8) The Senior Notes shall not be subject to a sinking fund requirement; (9) The Senior Notes shall be issuable in denominations of $1,000 and integral multiples thereof; (10) The Senior Notes shall be subject to defeasance as provided in Section 10(C) of the Indenture; (11) The Senior Notes will be issued wholly in the form of Global Securities, and The Depository Trust Company shall be the Depositary with respect thereto; and (12) The Senior Notes shall be in substantially the form attached hereto as Exhibit A; FURTHER RESOLVED, that the form of Underwriting Agreement and related Terms Agreement to be executed with the underwriters named below with respect to the offer and sale of the Senior Notes, in the form submitted to this meeting, and the form of Prospectus Supplement dated September 25, 1997 to the Company's Prospectus dated September 19, 1997, are hereby approved; and the execution and delivery on behalf of the Company of such Underwriting Agreement and Terms Agreement by the Chairman of the Board, the President or any Vice President of the Company is ratified and approved; and FURTHER RESOLVED, that Merrill Lynch, Pierce, Fenner & Smith, Donaldson Lufkin & Jenrette Securities Corporation, J.P. Morgan & Co., Salomon Brothers Inc and SBC Warburg Dillon Read Inc. are selected as the several underwriters (the "Underwriters") to which the Senior Notes shall be sold; that the sale of an aggregate of $150,000,000 of Senior Notes to such Underwriters is hereby authorized and approved; that the purchase price to be paid to the Company by the Underwriters shall be 98.544% of the principal amount of the Senior Notes; and that the initial public offering price shall be 99.544% of the principal amount of the Senior Notes; and FURTHER RESOLVED, that the Chairman of the Board, the President or any Vice President of the Company, or any of them, are hereby authorized, for and on behalf of the Company, to execute any agreements or take any other actions as such officer shall in his sole discretion deem necessary or advisable to arrange for the Senior Notes to be included as book-entry only security in the facilities of The Depository Trust Company; FURTHER RESOLVED, that the Chairman of the Board, the President or any Vice President of the Company, or any of them, are hereby authorized, for and on behalf of the Company, to execute and deliver all agreements, powers of attorney, certificates or other instruments and documents, and to take all other actions, as such officer shall in his sole discretion deem necessary or advisable to carry out the transactions approved in the preceding resolutions. EXECUTED and effective as of this 25th day of September, 1997. /s/ Barry J. Galt Barry J. Galt Chairman of the Board THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Company or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. SEAGULL ENERGY CORPORATION 7 1/2% Senior Notes due September 15, 2027 No. BE-1 CUSIP No. 812007AE2 SEAGULL ENERGY CORPORATION, a corporation duly organized and existing under the laws of the State of Texas (herein called the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000) on September 15, 2027, and to pay interest thereon from September 30, 1997 or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually in arrears on March 15 and September 15 in each year, commencing March 15, 1998, at the rate of 7 1/2% per annum, until the principal hereof is fully paid or made available for full payment. The interest so payable, and punctually paid or duly provided for, on any interest payment date will, as provided in such Indenture, be paid to the Person in whose name this Security is registered at the close of business on the March 1 or September 1 (whether or not a Business Day), as the case may be, next preceding such interest payment date (a "Regular Record Date"). Notwithstanding the foregoing, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and such defaulted interest shall instead be paid to the Person in whose name this Security is registered (a) at the close of business on a subsequent record date (which shall be not less than five Business Days prior to the date of payment of such defaulted interest) established by notice given by mail by or on behalf of the Company to the Holders of Securities not less than 15 days preceding such subsequent record date or (b) as determined by such other procedure as is mutually acceptable to the Company and the Trustee, all as more fully described in the Indenture. Payment of the principal of (and premium, if any) and interest on this Security shall be made at the Corporate Trust Office of the Trustee in New York, New York, or at such other office or agency of the Company as it may designate for such purpose pursuant to the Indenture hereinafter referred to, in such immediately available funds of the United States of America as at the time of payment are legal tender for payment of public and private debts. Reference is hereby made to the further provisions of this Security set forth below, which further provisions shall for all purposes have the same effect as if set forth in this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to below by manual signature of an authorized officer, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated: September 30, 1997 SEAGULL ENERGY CORPORATION By:_________________________ Barry J. Galt Chairman of the Board and Chief Executive Officer ATTEST: ______________________________________ Stephen A. Thorington Treasurer TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. THE BANK OF NEW YORK as Trustee By________________________________ Authorized Officer REVERSE OF SECURITY This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under the Senior Indenture, dated as of September 1, 1997 (herein called the "Indenture"), between the Company and The Bank of New York, as Trustee (herein called the "Trustee", which term includes any additional successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. Capitalized terms used but not defined herein are defined in the Indenture and used herein with the same meanings ascribed to them therein. This Security is a Global Security representing the entire principal amount of the series designated on the face hereof, limited in aggregate principal amount to $150,000,000. The Securities of this series are not redeemable prior to stated maturity. The Securities of this series shall not be subject to a sinking fund requirement. The Indenture contains provisions for defeasance of (a) the entire indebtedness of this Security and (b) certain restrictive covenants upon compliance by the Company with certain conditions set forth therein. If an Event of Default with respect to the Securities of this series shall occur and be continuing, the unpaid principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of each series of Securities then Outstanding under the Indenture and affected thereby, evidenced as provided in the Indenture, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Securities of such series; provided, however, that no such supplemental indenture shall (i) extend the stated final maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest hereon, or reduce or alter the method of computation of any amount payable on redemption, repayment or purchase by the Company, or change the coin or currency in which payments are to be made, or impair or affect the right of any Holder to institute suit for enforcement of any payment hereof or (ii) reduce the aforesaid percentage of any series of such Securities, without the consent of the Holders of each Security of any series so affected. It is also provided in the Indenture that the Holders of a majority in aggregate principal amount of the Securities of any series then Outstanding may on behalf of the Holders of all of the Securities of such series waive any past default or Event of Default under the Indenture and its consequences except a default in the payment of the principal of or interest on any of the Securities of such Series. Any such consent or waiver by the Holder of this Security (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Security and any Securities which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Security or such other Securities. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Security at the place, at the respective times, and at the rates and in the coin or currency herein provided. As set forth in, and subject to, the provisions of the Indenture, no Holder of any Security of this series shall have any right to institute any proceeding with respect to the Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of default and the continuance thereof, as provided in the Indenture, and unless the Holders of not less than 25% in principal amount of the Securities of this series then Outstanding shall have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as trustee, and the Trustee shall have failed to institute such proceeding within 60 days; provided, however, that such limitations shall not impair the right of a Holder hereof to institute suit for the enforcement of payment of the principal of or interest on this Security on or after the respective due dates expressed herein without the consent of such Holder. This Security shall be exchangeable for Securities of this series registered in the names of Persons other than the Depository with respect to such series or its nominee only as provided in this paragraph. This Security shall be so exchangeable if (i) such Depository notifies the Company that it is unwilling, unable or ineligible to continue as Depository for this Security and a successor Depository is not appointed by the Company within 90 days or (ii) the Company executes and delivers to the Trustee a written order providing that this Security shall be so exchangeable. Securities so issued in exchange for this Security shall be of the same series and of like tenor, in authorized denominations and in the aggregate having the same unpaid principal amount as this Security and registered in such names as such Depository shall direct. Individual Securities of this series so issued will be issued in registered form and denominations, unless otherwise specified by the Company, of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the security register maintained for that purpose, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon on or more new Securities of this series, and of like tenor, of authorized denominations and for the same aggregate unpaid principal amount, shall be issued to the designated transferee or transferees. At the date of the original issuance of this Security, such office or agency of the Company is maintained by the Trustee at its Corporate Trust Office, 101 Barclay Street, Floor 21 West, New York, New York. No service charge shall be made for any such exchange or registration of transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. All payments made to or upon the order of such registered Holder shall, to the extent of the sum or sums so paid, satisfy and discharge the liability for moneys payable on this Security. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused a CUSIP number to be printed on this Security as a convenience to the Holder hereof. No representation is made as to the accuracy of such number and reliance may be placed only on the other identifying information printed hereon. Interest on this Security shall be computed on the basis of a 360-day year comprised of twelve 30-day months. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York. ASSIGNMENT FORM I or we assign and transfer this Security to (Print or type name, address and zip code of assignee or transferee) (Insert Social Security or other identifying number of assignee or transferee) and irrevocably appoint agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Dated: ____________ Signed: ________________________________ Sign exactly as name appears above or on the other side of this Security) Signature Guarantee: _______ Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee) -----END PRIVACY-ENHANCED MESSAGE-----