Document:

EXHIBIT 10.1

 

SEVENTH
AMENDMENT TO THE

CAREER
EDUCATION CORPORATION

1998
EMPLOYEE INCENTIVE COMPENSATION PLAN

 

WHEREAS, Career
Education Corporation (the “Company”) has established and maintains the Career
Education Corporation 1998 Employee Incentive Compensation Plan (the “Plan”),
effective as of April 1, 1998, as amended on July 29, 1998, February 17,
1999, January 24, 2000, April 5, 2002, May 19, 2003, and May 21,
2004; and

 

WHEREAS, the Company
desires to further amend the Plan to remove the provisions in the Plan granting
the Company the authority to, at the discretion of the Committee (as defined in
the Plan) (i) lend to the Participant (as defined in the Plan) a portion
of the Option Price (as defined in the Plan), or (ii) guarantee a loan
obtained by the Participant from a third-party for the purpose of tendering the
Option Price;

 

NOW, THEREFORE, BE IT RESOLVED
that, pursuant to the power and authority reserved to the Company by Section 13.1
of the Plan, and pursuant to the authority delegated to the Committee, the Plan
be and hereby is amended, effective July 22, 2005, in the following
manner:

 

1.               Section 6.3(e) is
hereby deleted in its entirety.

 

2.               Section 6.3(f) is
hereby amended by deleting the reference to “(f)” and replacing it with “(e)”.

 

3.               Section 6.3(g) is
hereby amended by deleting the reference to “(g)” and replacing it with “(f)”.

 

Except as provided herein, the Plan shall remain in full force and
effect.

 

IN WITNESS WHEREOF,
the Company has caused this amendment to be executed effective as of the 22nd
day of July, 2005.

 

 

	
   

  	
  CAREER EDUCATION CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John M. Larson

  	
   

  
	
   

  	
   

  	
  John M. Larson

  
	
   

  	
   

  	
  President and Chief Executive OfficerExhibit 10.1

 

Pogo Producing Company

 

6.875% Senior Subordinated Notes due 2017

 

Purchase Agreement

 

September 21, 2005

 

Goldman, Sachs & Co.,

As representative of the several
Purchasers

named in Schedule I hereto,

c/o Goldman, Sachs & Co.,

85 Broad Street,

New York, New York 10004

 

Ladies and Gentlemen:

 

Pogo Producing Company,
a Delaware corporation (the “Company”), proposes, subject to the terms and
conditions stated herein, to issue and sell to the Purchasers named in Schedule I
hereto (the “Purchasers”) an aggregate of $500,000,000 principal amount of the
notes specified above (the “Notes”).  The
Notes will be issued under the Indenture to be dated as of September 23,
2005 (the “Indenture”) between the Company and The Bank of New York Trust
Company, N.A., as trustee (the “Trustee”).

 

The Company also
proposes to use the net proceeds from its sale of the Notes pursuant to this
Purchase Agreement (this “Agreement”) as indicated in the Offering Circular (as
defined below), one of the potential uses being to finance part of the costs of
its acquisition of Northrock Resources Ltd., an Alberta corporation (“Northrock”)
and an indirect wholly-owned subsidiary of Unocal Corporation, a Delaware
corporation (“Unocal”), pursuant to the Share Purchase Agreement (herein so
called) dated as of July 8, 2005 among Unocal Canada Limited, Unocal
Canada Alberta Hub Limited, Unocal, Pogo Canada, ULC and the Company. Unless
otherwise expressly stated, references in this Agreement to the transactions “contemplated”
herein or hereby and other references of similar import shall not include the
pending acquisition of Northrock pursuant to the Share Purchase Agreement.

 

1.             The Company represents and warrants to, and
agrees with, each of the Purchasers that:

 

(a)           A preliminary offering circular, dated September 20,
2005 (the “Preliminary Offering Circular”) has been prepared, and an offering
circular, to be dated today (the “Offering Circular”), is being prepared, in
connection with the offering of the Notes. 
Any reference to the Preliminary Offering Circular or the Offering
Circular shall be deemed to refer to and include each of the Company’s Annual
Report on Form 10-K, its Quarterly Reports on Form 10-Q and its
Current Reports on Form 8-K (excluding information therein that was furnished
to (and not filed with) the United States Securities and Exchange Commission
(the “Commission”)) that is specifically incorporated by reference therein as
indicated therein under “Available Information,”

 

 

and any reference to the Preliminary Offering
Circular or the Offering Circular, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include (i) any

 

 

documents filed with the Commission
pursuant to Section 13(a), 13(c) or 15(d) of the United States
Securities Exchange Act of 1934, as amended (the “Exchange Act”) after the date
of the Preliminary Offering Circular or the Offering Circular, as the case may
be, and prior to such specified date (excluding information therein that was
furnished to (and not filed with) the Commission) and (ii) any Additional
Issuer Information (as defined in Section 5(e)) furnished by the Company
prior to the completion of the distribution by the Purchasers of the Notes; and
all documents filed under the Exchange Act and so deemed to be included in the
Preliminary Offering Circular or the Offering Circular, as the case may be, or
any amendment or supplement thereto are hereinafter called the “Exchange Act
Reports.”  The Exchange Act Reports, when
they were or are filed with the Commission, conformed or will conform in all
material respects to the applicable requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder.  The Preliminary Offering Circular or the
Offering Circular and any amendments or supplements thereto and the Exchange
Act Reports did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by a Purchaser through Goldman,
Sachs & Co. expressly for use therein;

 

(b)           Neither the Company nor any of its subsidiaries
has sustained since the date of the latest audited financial statements
included in the Offering Circular any material loss or material interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the Offering
Circular; and, since the respective dates as of which information is given in
the Offering Circular, there has not been any change in the capital stock
(other than regular quarterly dividends on the Company’s common stock or
pursuant to employee benefit plans or arrangements described in the Exchange
Act Reports and in effect on the date hereof) or long-term debt (other than
under the Company’s bank credit agreement or uncommitted money market lines of
credit in effect on the date hereof) of the Company or any of its subsidiaries,
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, shareholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Offering Circular;

 

(c)           The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware and has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Circular and to enter into and perform its obligations under this Agreement;
and the Company is duly qualified as a foreign corporation to transact business
and is in good standing in 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 so to qualify or to be in good
standing would not result in a material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a “Material Adverse
Effect”);

 

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(d)           Each “significant subsidiary” (as such term is
defined in Rule 1-02 of Regulation S-X under the Exchange Act) of the
Company as of the date hereof (each a “Designated Subsidiary” and,
collectively, the “Designated Subsidiaries”) is identified on Schedule II
hereto, has been duly formed or incorporated and is validly existing as a
corporation or other business entity in good standing under the laws of the
jurisdiction of its formation or incorporation, has the corporate, partnership
or company power and authority to own, lease and operate its properties and to
conduct its business as described in the Offering Circular and is duly
qualified as a foreign corporation or other business entity 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 so to qualify or
to be in good standing would not result in a Material Adverse Effect; all of
the issued and outstanding capital stock or equivalent equity interests of each
Designated Subsidiary have been duly authorized and validly issued, are fully
paid and non-assessable and (except for directors’ qualifying shares or shares
representing an immaterial equity interest that are required under the laws of
any foreign jurisdiction to be owned by others, and except as set forth in the
Offering Circular) are owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance or
claim; and none of the outstanding shares of capital stock or equivalent equity
interests of the Designated Subsidiaries were issued in violation of any
preemptive or similar rights arising by operation of law, or under the charter,
by-laws or other comparable organizational documents of any Designated
Subsidiary or under any agreement to which the Company or any Designated
Subsidiary is a party;

 

(e)           Each of the Company and its subsidiaries has (i) generally
satisfactory title to its oil and gas properties, title investigations having
been carried out by the Company or its subsidiaries in accordance with the
practice in the oil and gas industry in the areas in which the Company and its
subsidiaries operate, (ii) good and marketable title to all other real
property owned by it to the extent necessary to carry on its business and (iii) good
and marketable title to all personal property owned by it, in each case free
and clear of all liens, encumbrances and defects except such as are described
in the Offering Circular or such as do not materially affect the value of the
properties of the Company and its subsidiaries, considered as one enterprise,
and do not interfere with the use made and proposed to be made of such
properties, by the Company and its subsidiaries, considered as one enterprise;
and all of the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the Company or
any of its subsidiaries holds properties described in the Offering Circular,
are in full force and effect, and neither the Company nor any of its subsidiaries
has any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or its subsidiaries under any of
the leases or subleases mentioned above, or affecting or questioning the rights
of the Company or any subsidiary thereof to the continued possession of the
leased or subleased premises under any such lease or sublease;

 

(f)            The authorized, issued and outstanding capital
stock of the Company is as set forth in the Offering Circular in the column
entitled “Actual” under the caption “Capitalization” (except as indicated in
the notes thereto with respect to any subsequent issuances pursuant to employee
or director benefit plans referred to in the Offering Circular or pursuant to
the exercise of convertible securities or options referred to in the Offering
Circular); and the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable, and none of the outstanding shares of capital

 

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stock of the Company was issued in
violation of the preemptive or other similar rights of any securityholder of
the Company;

 

(g)           The Notes, and notes having terms substantially
identical to the Notes other than the payment of additional interest (the “Exchange
Notes”) issuable in exchange for the Notes in an exchange offer (the “Exchange
Offer”) pursuant to the Registration Rights Agreement (as defined in Section 1(h) below),
have been duly authorized and, when issued and delivered pursuant to this
Agreement (in the case of the Notes) or, if and when issued and delivered
pursuant to the Registration Rights Agreement (in the case of the Exchange
Notes) and duly authenticated pursuant to the Indenture, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits provided by
the Indenture; the Indenture has been duly authorized by the Company and upon
execution and delivery by the parties thereto will (assuming the due
authorization, execution and delivery by the Trustee) constitute a valid and
legally binding instrument of the Company, enforceable against the Company in
accordance with its terms, except as limited by bankruptcy, insolvency,
moratorium, fraudulent transfer, reorganization and other similar laws of
general application affecting the rights and remedies of creditors and by
general equity principles (regardless of whether enforceability is considered
in a proceeding in equity or at law);

 

(h)           This Agreement has been duly authorized,
executed and delivered by the Company, and the exchange and registration rights
agreement (the “Registration Rights Agreement”), to be dated as of the Time of
Delivery (as defined below), has been duly authorized by the Company and, when
duly executed and delivered by the Company and the other parties thereto
(assuming the due authorization, execution and delivery by each party thereto
other than the Company), will be the valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as limited by bankruptcy, insolvency, moratorium, fraudulent transfer,
reorganization and other similar laws of general application affecting the
rights and remedies of creditors and by general equity principles (regardless
of whether enforceability is considered in a proceeding in equity or at law)
and, as to rights of indemnification and contribution, subject to principles of
public policy or federal or state securities laws relating thereto;

 

(i)            None of the transactions contemplated by this
Agreement (including, without limitation, the use of the proceeds from the sale
of the Notes) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of the
Federal Reserve System;

 

(j)            Prior to the date of this Agreement, neither the
Company nor any of its affiliates has taken any action which is designed to or
which has constituted or which reasonably might have been expected to cause or
result in stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Notes;

 

(k)           Neither the Company nor any of its subsidiaries
is in violation of its charter, by-laws or other governing documents, as
applicable, 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 its subsidiaries is a party or
by which any of them may be bound, or to which any of the property or assets of
the Company or its subsidiaries is subject

 

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(collectively, “Agreements and
Instruments”) except for such violations or defaults that have not resulted or
would not result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture and the Notes 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 Offering Circular (including the Registration Rights Agreement) and
the consummation of the transactions contemplated herein and therein and in the
Offering Circular (including the issuance and sale of the Notes and the use of
the proceeds from the sale of the Notes as described in the Offering Circular
under the caption “Use of Proceeds”) and compliance by the Company with its
obligations hereunder do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a breach of,
or default or a Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or its subsidiaries pursuant to, the Agreements and
Instruments (including, without limitation, Section 13.2(d) of the
Share Purchase Agreement), except for such conflicts, breaches, Repayment
Events, defaults, liens, charges or encumbrances that, singly or in the
aggregate, have not resulted or would not result in a Material Adverse Effect,
nor will such action result in any violation of the provisions of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or its subsidiaries or any of their assets
or properties, except for such violations that, singly or in the aggregate,
have not resulted or would not result in a Material Adverse Effect, or any
violation of the provisions of the charter or by-laws of the Company or the
charter, by-laws or other comparable organizational documents of any of its
subsidiaries; 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 its subsidiaries;

 

(l)            No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Notes or the consummation by
the Company of the transactions contemplated by this Agreement or the Indenture,
except for the filing and effectiveness of one or more registration statements
by the Company with the Commission pursuant to the United States Securities Act
of 1933, as amended (the “Act”) pursuant to the Registration Rights Agreement,
the qualification of the Indenture under the Trust Indenture Act of 1939 (“Trust
Indenture Act”) and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Notes by the Purchasers;

 

(m)          The statements set forth in the Offering
Circular under the caption “Description of the Notes”, insofar as they purport
to constitute a summary of the terms of the Notes, under the caption “Certain
United States Federal Income Tax Considerations” insofar as they purport to
describe the provisions of the laws and documents referred to therein and under
the caption “Underwriting”, insofar as they purport to describe the provisions
of this Agreement referred to therein, are accurate and fair in all material
respects;

 

(n)           Except as disclosed in the Offering Circular,
there is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any subsidiary thereof
which might reasonably be expected to result in a Material Adverse Effect, or

 

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which might reasonably be expected to
materially and adversely affect the consummation of the transactions
contemplated by this Agreement (including the transactions contemplated by the
Registration Rights Agreement) or the performance by the Company of its
obligations hereunder;

 

(o)           When the Notes are issued and delivered pursuant
to this Agreement, no Notes will be of the same class (within the meaning of Rule 144A
under the Act) as securities which are listed on a national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system;

 

(p)           The Company is subject to Section 13 or 15(d) of
the Exchange Act;

 

(q)           The Company is not, and after giving effect to
the offering and sale of the Notes, will not be an “investment company” or an
entity “controlled” by an “investment company,” as such terms are defined in
the United States Investment Company Act of 1940, as amended (the “Investment
Company Act”);

 

(r)            Neither the Company nor any person acting on its
behalf (other than the Purchasers, for whom the Company makes no
representation) has offered or sold the Notes by means of any general
solicitation or general advertising within the meaning of Rule 502(c) under
the Act or, with respect to Notes sold outside the United States to non-U.S.
persons (as defined in Rule 902 under the Act), by means of any directed
selling efforts within the meaning of Rule 902 under the Act, and the
Company, any affiliate of the Company and any person acting on its or their
behalf (other than the Purchasers, for whom the Company makes no
representation) have complied with and will implement the “offering
restrictions” within the meaning of such Rule 902 to the extent applicable
to them;

 

(s)           Within the preceding six months, neither the
Company nor any other person acting on its behalf has offered or sold to any
person any Notes, or any securities of the Company of the same or a similar
class as the Notes, other than Notes offered or sold to the Purchasers
hereunder and the 2015 Notes (as defined in the Offering Circular); and the
Company will take reasonable precautions designed to insure that any offer or
sale, direct or indirect, in the United States or to any U.S. person (as
defined in Rule 902 under the Act) of any Notes or any substantially
similar security issued by the Company, within six months subsequent to the
date on which the distribution of the Notes has been completed (as notified to
the Company by Goldman, Sachs & Co. or, in the absence of any such
notification, such date shall be deemed to be 20 days after the Time of
Delivery), is made under restrictions and other circumstances reasonably
designed not to affect the status of the offer and sale of the Notes in the
United States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Act (it being acknowledged that
the Company may conduct an exchange offer with respect to, or otherwise cause
to be registered with the Commission for resale by the holders, the 2015 Notes
in accordance with the exchange and registration rights agreement relating
thereto);

 

(t)            PricewaterhouseCoopers LLP, who have audited
certain financial statements of the Company and its subsidiaries and have
audited the Company’s internal control over financial reporting and management’s
assessment thereof as of December 31, 2004 and who have audited certain
financial statements of Northrock and its subsidiaries, are an independent
registered public accounting firm with respect to each of the Company and
Northrock within the

 

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meaning of the Act and the rules and
regulations thereunder adopted by the Commission and the Public Accounting
Oversight Board (United States);

 

(u)           The Company maintains a system of internal
control over financial reporting (as such term is defined in Rule

13a-15(f) of the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer
and principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles; and based on the Company’s evaluation
of its internal control over financial reporting under the framework in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission, the
Company’s management concluded that its internal control over financial
reporting was effective as of December 31, 2004;

 

(v)           Since December 31, 2004, the date of the
latest audited financial statements of the Company incorporated by reference in
the Offering Circular, there has been no change in the Company’s internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting;

 

(w)          The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) of the Exchange
Act) that comply with the requirements of the Exchange Act, such disclosure
controls and procedures have been designed to ensure that material information
relating to the Company, including its consolidated subsidiaries, is made known
to the Company’s principal executive officer and principal financial officer by
others within those entities and such disclosure controls and procedures are
effective to ensure that the information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Commission rules and forms;

 

(x)            The historical financial statements of the
Company, together with the related schedules and notes, included in the
Offering Circular present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statements of
operations, shareholders’ equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; and said financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States (“GAAP”) applied on a consistent basis
throughout the periods involved, except as noted therein;

 

(y)           To the knowledge of the Company, (i) the
historical financial statements of Northrock, together with the related
schedules and notes, included in the Offering Circular present fairly the
financial position of Northrock and its consolidated subsidiaries at the dates
indicated and the statements of operations, shareholders’ equity and cash flows
of Northrock and its consolidated subsidiaries for the periods specified and (ii) said
financial statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved, except as noted therein;

 

(z)            The pro forma financial information included in
the Offering Circular has been prepared on a basis consistent with the
historical financial statements from which it has been derived, includes all
material adjustments to the historical financial information required by Rule 11-02
of Regulation S-X under the Act and the Exchange Act to reflect the
transactions

 

8

 

described in the Offering Circular, gives
effect to assumptions made on a reasonable basis and fairly presents the
transactions described in the Offering Circular;

 

(aa)         The Company and its subsidiaries possess such
permits, licenses, approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now operated by
them, except where the failure to possess such Governmental Licenses, would
not, singly or in the aggregate, have a Material Adverse Effect; the Company
and its subsidiaries are in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have 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 have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected to result
in a Material Adverse Effect;

 

(bb)         The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns or have
timely requested extensions thereof and have paid all taxes shown as due
thereon or made adequate reserve or provision therefor; and other than tax
deficiencies which the Company or any subsidiary is contesting in good faith
and for which the Company or such subsidiary has provided adequate reserves,
there is no tax deficiency that has been asserted against the Company or any
subsidiary that would individually or in the aggregate have a Material Adverse
Effect;

 

(cc)         Except as described in the Offering Circular and
except for such matters as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) 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, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous substances, petroleum or petroleum products
(collectively, “Hazardous Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, “Environmental Laws”), (B) the Company
and its subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the
Company, threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating to any Environmental Law against the Company
or any of its subsidiaries and (D) there are no events or circumstances
that might reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or Environmental Laws;

 

9

 

(dd)         No labor dispute with the employees of the
Company or its subsidiaries exists or, to the knowledge of the Company, is
imminent, which, in either case, may reasonably be expected to result in a
Material Adverse Effect; and

 

(ee)         Subject to compliance by the Purchasers with the
representations, warranties and agreements set forth in Section 3 and
Annex I, it is not necessary in connection with the offer, sale and
delivery of the Notes to the Purchasers and the Purchasers’ subsequent sales to
QIBs (as defined below) or pursuant to Annex I in the manner contemplated
by this Agreement and the Offering Circular to register the Notes under the Act
or to qualify the Indenture under the Trust Indenture Act.

 

2.             Subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Purchasers, and each
of the Purchasers agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 98.125% of the principal amount thereof, plus
accrued interest, if any, from September 23, 2005 to the Time of Delivery
hereunder, the principal amount of Notes set forth opposite the name of such
Purchaser in Schedule I hereto.

 

3.             Upon the authorization by you of the release of
the Notes, the several Purchasers propose to offer the Notes for sale upon the
terms and conditions set forth in this Agreement and the Offering Circular and
each Purchaser hereby represents and warrants to, and agrees with the Company
that:

 

(a)           It will offer and sell the Notes only to:  (i) persons who it reasonably believes
are “qualified institutional buyers” (“QIBs”) within the meaning of Rule 144A
under the Act in transactions meeting the requirements of Rule 144A or (ii) upon
the terms and conditions set forth in Annex I to this Agreement;

 

(b)           It is an institutional “accredited investor”
within the meaning of Rule 501 under the Act; and

 

(c)           It will not offer or sell the Notes by any form
of general solicitation or general advertising, including but not limited to
the methods described in Rule 502(c) under the Act.

 

4.             (a)  The Notes to be purchased by each
Purchaser hereunder will be represented by one or more definitive global Notes
in book-entry form which will be deposited by or on behalf of the Company with
The Depository Trust Company (“DTC”) or its designated custodian.  The Company will deliver the Notes to
Goldman, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by
wire transfer to the account of the Company of same day funds, by causing DTC
to credit the Notes to the account of Goldman, Sachs & Co. at
DTC.  The time and date of such delivery
and payment shall be 9:30 a.m., New York City time, on September 23,
2005 or such other time and date as Goldman, Sachs & Co. and the
Company may agree upon in writing.  Such
time and date are herein called the “Time of Delivery”.

 

(b)           The documents to be delivered at the Time of
Delivery by or on behalf of the parties hereto pursuant to Section 7
hereof, including the cross-receipt for the Notes and any additional documents
requested by the Purchasers pursuant to Section 7(j) hereof, will be
delivered at such time and date at the offices of Baker Botts L.L.P., 910
Louisiana, Houston, Texas 77002 (the “Closing Location”), and the Notes will be
delivered to the Trustee as

 

10

 

custodian for DTC, all at the Time of
Delivery.  A meeting will be held at the
Closing Location at 5:00 p.m., Houston time, on the New York Business Day
next preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto.  For
the purposes of this Section 4, “New York Business Day” shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.

 

5.             The Company agrees with each of the Purchasers:

 

(a)           To prepare the Offering Circular in a form
approved by you; to make no amendment or any supplement to the Offering
Circular which shall be reasonably disapproved by you promptly after reasonable
notice thereof; and to furnish you with copies thereof;

 

(b)           Promptly from time to time to take such action
as you may reasonably request to qualify the Notes for offering and sale under
the securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for so long as may be necessary to complete the distribution of
the Notes, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction or to qualify as a dealer in securities
in any U.S. 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;

 

(c)           To furnish the Purchasers with copies of each
amendment or supplement to the Offering Circular and additional written and electronic copies of the Offering Circular and such
amendments or supplements in such quantities as you may from time to time
reasonably request, and if, at any time prior to the earlier of the
effectiveness of a registration statement filed in accordance with the
Registration Rights Agreement or the expiration of nine months after the date
of the Offering Circular, any event shall have occurred as a result of which
the Offering Circular as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon
your request to prepare and furnish without charge to each Purchaser and to any
dealer in Notes as many written and electronic
copies as you may from time to time reasonably request of an amended Offering
Circular or a supplement to the Offering Circular which will correct such
statement or omission or effect such compliance;

 

(d)           During the period beginning from the date hereof
and continuing for 90 days thereafter, the Company will not, and will not
permit any of its subsidiaries or other “affiliates” (as defined in Rule 405
under the Act) over which it exercises management or voting control or any person
acting on its behalf, to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any securities that are substantially similar to
the Notes (other than as provided for in the Registration Rights Agreement),
without the prior written consent of Goldman, Sachs & Co.;

 

(e)           At any time when the Company is not subject to Section 13
or 15(d) of the Exchange Act, for the benefit of holders from time to time
of Notes, to furnish at its expense,

 

11

 

upon request, to holders of Notes and
prospective purchasers of Notes, information (the “Additional Issuer
Information”) satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Act, unless all the Notes are no longer “restricted securities”
within the meaning of Rule 144(a)(3) under the Act or may be sold
under Rule 144(k) under the Act;

 

(f)            To execute and deliver the Registration Rights
Agreement in the form previously agreed upon and, if conducted, to comply with
all applicable federal and state securities laws in connection with the
Exchange Offer;

 

(g)           To use its reasonable best efforts to cause the
Notes to be eligible for the PORTAL trading system of the National Association
of Securities Dealers, Inc.;

 

(h)           During the period of five years after the Time
of Delivery, the Company will furnish or will make generally available via the
EDGAR System to Goldman, Sachs & Co. and, upon request, to each of the
other Purchasers, promptly upon their becoming available, copies of (i) all
reports or other publicly available information that the Company shall mail or
otherwise make available to its public stockholders and (ii) all reports,
financial statements and proxy or information statements filed by the Company
with the Commission or any national securities exchange and such other publicly
available information concerning the Company and its subsidiaries including,
without limitation, press releases, as the Purchasers may reasonably request;

 

(i)            During the period of two years after the Time of
Delivery, the Company will not, and will not permit any of its “affiliates” (as
defined in Rule 144 under the Act) to, resell any of the Notes which constitute “restricted securities” under Rule 144
that have been reacquired by any of them;

 

(j)            To comply with all agreements set forth in the
representation letter of the Company to DTC relating to the approval of the
Notes by DTC for “book-entry” transfer;

 

(k)           To advise the Purchasers promptly, and, if
requested by the Purchasers, confirm such advice in writing, of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption of any of the Notes for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purpose by any state securities
commission or other regulatory authority, and to use its reasonable best
efforts to prevent the issuance of any stop order or order suspending the
qualification or exemption of any of the Notes under any state securities or
Blue Sky laws, and if, at any time, any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption of any of the Notes under any state securities or Blue Sky laws, to
use its reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time; and

 

(l)            To use the net proceeds received by it from the
sale of the Notes pursuant to this Agreement in the manner specified in the
Offering Circular under the caption “Use of Proceeds”.

 

6.             The Company covenants and agrees with the
several Purchasers that the Company will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Company’s counsel and
accountants in connection with the issue of the Notes, and the Exchange Notes
and all other expenses in connection with the preparation, printing and filing
of

 

12

 

the Preliminary Offering Circular and the
Offering Circular and any amendments and supplements thereto and the mailing
and delivering of copies thereof to the Purchasers and dealers; (ii) the
cost of printing or producing any Agreement among Purchasers, this Agreement,
the Indenture, closing documents (including any compilations thereof) and any
other documents in connection with the offering, purchase, sale and delivery of
the Notes; (iii) all expenses in connection with the qualification of the
Notes for offering and sale under
state securities laws as provided in Section 5(b) hereof; (iv) any
fees charged by securities rating services for rating the Notes; (v) the
cost of preparing and delivering the Notes and the Exchange Notes; (vi) the
fees and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture, the
Notes and the Exchange Notes; (vii) any cost incurred in connection with
the designation of the Notes for trading in PORTAL and (viii) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section.  It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Purchasers
will pay all of their own costs and expenses, including the fees, disbursements
and expenses of their counsel, transfer taxes on resale of any of the Notes by them, and any advertising expenses
connected with any offers they may make.

 

7.             The obligations of the Purchasers hereunder
shall be subject, in their discretion, to the condition that all
representations and warranties and other statements of the Company as set forth
herein are, at and as of the Time of Delivery, true and correct, the condition
that the Company shall have performed all of its obligations hereunder theretofore
to be performed, and the following additional conditions:

 

(a)           Vinson & Elkins L.L.P., counsel for the
Purchasers, shall have furnished to you such opinion or opinions, dated the
Time of Delivery, with respect to the matters covered in paragraphs (i),
(iii), (iv), (v), (vi) and (viii) of Exhibit A-1 hereto as well
as such other related matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters;

 

(b)           (i) Baker Botts L.L.P., counsel for the
Company, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance reasonably satisfactory to you, to the effect
set forth in Exhibit A-1 hereto and (ii) Michael J. Killelea, Vice
President and General Counsel of the Company, shall have furnished to you his
written opinion, dated the Time of Delivery, in form and substance reasonably
satisfactory to you, to the effect set forth in Exhibit A-2 hereto;

 

(c)           (i) On the date of the Offering Circular
prior to the execution of this Agreement, PricewaterhouseCoopers LLP shall have
furnished to you a letter or letters, dated the date of delivery thereof, in
form and substance reasonably satisfactory to you, containing statements and
information of the type ordinarily included in accountants’ “comfort letters”
to initial purchasers with respect to the financial statements of both the
Company and Northrock and certain other financial information contained in the
Offering Circular and (ii) at the Time of Delivery, PricewaterhouseCoopers
LLP shall have furnished to you a letter or letters, dated the date of delivery
thereof, to the effect that they reaffirm the statements made in their letter
or letters furnished pursuant to the preceding clause (i), except that the
specified date referred to shall be a date not more than three business days
prior to the Time of Delivery;

 

13

 

(d)           At the Time of Delivery, Ryder Scott Company,
L.P. shall have furnished to you a letter or letters regarding certain
information with respect to oil and natural gas reserves associated with the
oil and natural gas properties of each of the Company and Northrock, such
letter or letters to be dated the date of delivery thereof and in the form and
substance reasonably satisfactory to you;

 

(e)           At the Time of Delivery, Miller and Lents, Ltd.
shall have furnished to you a letter regarding certain information with respect
to oil and natural gas reserves associated with the Company’s oil and natural
gas properties dated the date of delivery thereof in the form and substance
reasonably satisfactory to you;

 

(f)            (i) Neither the Company nor any of its
subsidiaries shall have sustained since the date of the latest audited
financial statements included in the Offering Circular any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Circular and (ii) since the respective dates as of which
information is given in the Offering Circular, there shall not have been any
change in the capital stock (other than regular quarterly dividends on the
Company’s common stock or pursuant to employee benefit plans or arrangements
described in the Exchange Act Reports and in effect on the date hereof) or
long-term debt (other than under the Company’s bank credit agreement or uncommitted
money market lines of credit in effect on the date hereof) of the Company or
any of its subsidiaries, or any change, or any development involving a
prospective change, in or affecting the general affairs, management, financial
position, shareholders’ equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Offering Circular, the effect of which, in any such case described in
clause (i) or (ii), is in the judgment of the Purchasers so material
and adverse as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Notes on the terms and in the manner
contemplated in this Agreement and in the Offering Circular;

 

(g)           On or after the date hereof (i) no
downgrading shall have occurred in the rating accorded the Company’s debt
securities by any “nationally recognized statistical rating organization,” as
that term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act and (ii) no such organization shall have publicly announced that
it has under surveillance or review, with possible negative implications, its
rating of any of the Company’s debt securities;

 

(h)           On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange (“NYSE”); (ii) a
suspension or material limitation in trading in the Company’s common stock on
the NYSE; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York or Texas State authorities or a material
disruption in commercial banking or securities settlement or clearance services
in the United States; (iv) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war or (v) the occurrence of any other calamity or crisis or
any change in financial, political or economic conditions in the United States
or elsewhere, if the effect of any such event specified in clause (iv) or
(v) in the judgment of the Purchasers makes it impracticable or
inadvisable to proceed with the offering or the delivery of the Notes on the
terms and in the manner contemplated in the Offering Circular;

 

14

 

(i)            The Notes shall have been designated for trading
on PORTAL; and

 

(j)            The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of the
Company reasonably satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of the Time of
Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to the Time of Delivery, as to the
matters set forth in subsections (f) and (g) of this Section 7
and as to such other matters as you may reasonably request.

 

8.             (a) The Company will indemnify and hold
harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Offering Circular or the Offering Circular, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and will
reimburse each Purchaser for any legal or other expenses reasonably incurred by
such Purchaser in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Offering Circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by any Purchaser through Goldman,
Sachs & Co. expressly for use therein.

 

(b)           Each Purchaser will indemnify and hold harmless
the Company against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Offering Circular or the Offering Circular,
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Offering Circular or the Offering Circular
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by such Purchaser through Goldman,
Sachs & Co. expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred.

 

(c)           Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability
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 to any
indemnified party otherwise than under such subsection.  In case any such action

 

15

 

shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with a single counsel (in addition to
any local counsel) reasonably satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such subsection for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation.  No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party
from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.

 

(d)           If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Purchasers on the other from the offering of the Notes.  If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Purchasers on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations.  The relative benefits
received by the Company on the one hand and the Purchasers on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Purchasers, in each case
as set forth in the Offering Circular or herein.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
the Purchasers on the other and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.  The Company and the Purchasers
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). 
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action

 

16

 

or claim. 
Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Notes underwritten by it and distributed to investors
were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers’
obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

(e)           The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Purchaser within the meaning of the Act; and the obligations of
the Purchasers under this Section 8 shall be in addition to any liability
which the respective Purchasers may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of the Act.

 

9.             (a) If any Purchaser shall default in its
obligation to purchase the Notes which it has agreed to purchase hereunder, you
may in your discretion arrange for you or another party or other parties to
purchase such Notes on the terms contained herein.  If within thirty-six hours after such default
by any Purchaser you do not arrange for the purchase of such Notes, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Notes on such terms.  In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Notes, or the Company notifies you that it
has so arranged for the purchase of such Notes, you or the Company shall have
the right to postpone the Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Offering Circular, or in any other documents or arrangements, and the Company
agrees to prepare promptly any amendments to the Offering Circular which in
your opinion may thereby be made necessary. 
The term “Purchaser” as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Notes.

 

(b)           If, after giving effect to any arrangements for
the purchase of the Notes of a defaulting Purchaser or Purchasers by you and
the Company as provided in subsection (a) above, the aggregate
principal amount of such Notes which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Notes, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Notes which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Notes which such Purchaser agreed to
purchase hereunder) of the Notes of such defaulting Purchaser or Purchasers for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.

 

(c)           If, after giving effect to any arrangements for
the purchase of the Notes of a defaulting Purchaser or Purchasers by you and
the Company as provided in subsection (a) above, the aggregate
principal amount of Notes which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Notes, or if the Company shall not

 

17

 

exercise the right described in subsection (b) above
to require non-defaulting Purchasers to purchase Notes of a defaulting
Purchaser or Purchasers, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Purchaser or the Company, except
for the expenses to be borne by the Company and the Purchasers as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8 hereof;
but nothing herein shall relieve a defaulting Purchaser from liability for its
default.

 

10.           The respective indemnities, agreements,
representations, warranties and other statements of the Company and the several
Purchasers, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Purchaser or any controlling person of any
Purchaser, or the Company, or any officer or director or controlling person of
the Company, and shall survive delivery of and payment for the Notes.

 

11.           If this Agreement shall be terminated pursuant
to Section 9 hereof, the Company shall not then be under any liability to
any Purchaser except as provided in Sections 6 and 8 hereof; but, if for
any other reason, the Notes are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Purchasers through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Purchasers in making preparations
for the purchase, sale and delivery of the Notes, but the Company shall then be
under no further liability to any Purchaser except as provided in
Sections 6 and 8 hereof.

 

12.           In all dealings hereunder, you shall act on
behalf of each of the Purchasers, and the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Purchaser made or given by you jointly
or by Goldman, Sachs & Co. on behalf of you as the Purchasers.

 

All statements, requests,
notices and agreements hereunder shall be in writing, and if to the Purchasers
shall be delivered or sent by mail, telex or facsimile transmission to you as
the Purchasers in care of Goldman, Sachs & Co., 85 Broad Street,
New York, New York 10004, Attention: Registration Department; and if to the
Company shall be delivered or sent by mail or facsimile transmission to the
address of the Company set forth in the Offering Circular, Attention:
Secretary; provided, however,
that any notice to a Purchaser pursuant to Section 8(c) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such Purchaser
at its address set forth in its Purchasers’ Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
by you upon request.  Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.

 

13.           This Agreement shall be binding upon, and inure
solely to the benefit of, the Purchasers, the Company, and, to the extent provided
in Sections 8 and 10 hereof, the officers and directors of the Company and
each person who controls the Company, or any Purchaser, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Notes from any Purchaser shall be deemed a successor or
assign by reason merely of such purchase.

 

14.           Time shall be of the essence of this Agreement.

 

18

 

15.          This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.

 

16.           The Company acknowledges and agrees that (i) the
purchase and sale of the Notes pursuant to this Agreement is an arm’s-length
commercial transaction between the Company, on the one hand, and the several
Purchasers, on the other, (ii) in connection therewith and with the
process leading to such transaction each Purchaser is acting solely as a
principal and not the agent or fiduciary of the Company, (iii) no
Purchaser has assumed an advisory or fiduciary responsibility in favor of the
Company with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether such Purchaser has advised or is currently
advising the Company on other matters) or any other obligation to the Company
except the obligations expressly set forth in this Agreement and (iv) the
Company has consulted its own legal and financial advisors to the extent it
deemed appropriate.  The Company agrees
that it will not claim that the Purchasers, or any of them, has rendered
advisory services of any nature or respect, or owes a fiduciary or similar duty
to the Company, in connection with such transaction or the process leading thereto.

 

17.           This Agreement supersedes all prior agreements
and understandings (whether written or oral) between the Company and the
Purchasers, or any of them, with respect to the subject matter hereof.

 

18.           The Company and each of the Purchasers hereby
irrevocably waive, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby.

 

19.           Notwithstanding anything herein to the contrary,
the Company (and the Company’s employees, representatives, and other agents)
are authorized to disclose to any and all persons, the tax treatment and tax
structure of the potential transaction and all materials of any kind (including
tax opinions and other tax analyses) provided to the Company relating to that
treatment and structure, without the Purchasers’ imposing any limitation of any
kind. However, any information relating to the tax treatment and tax structure
shall remain confidential (and the foregoing sentence shall not apply) to the
extent necessary to enable any person to comply with securities laws. For this
purpose, “tax treatment” means U.S. federal and state income tax treatment, and
“tax structure” is limited to any facts that may be relevant to that treatment.

 

20.           This Agreement may be executed by any one or
more of the parties hereto in any number of counterparts, each of which shall
be deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.

 

[Signature page follows.]

 

19

 

If the foregoing is in
accordance with your understanding, please sign and return to us one for the
Company and each of you plus one for each counsel counterparts hereof, and upon
the acceptance hereof by you, on behalf of each of the Purchasers, this letter
and such acceptance hereof shall constitute a binding agreement between each of
the Purchasers and the Company.  It is
understood that your acceptance of this letter on behalf of each of the
Purchasers is pursuant to the authority set forth in a form of Agreement among
Purchasers, the form of which shall be submitted to the Company for examination
upon request, but without warranty on your part as to the authority of the
signers thereof.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Pogo Producing Company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Ulm, II

  
	
   

  	
   

  	
  James
  P. Ulm, II

  
	
   

  	
   

  	
  Senior
  Vice President and

  
	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted as of the date hereof:

  	
   

  
	
   

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  
	
  As
  representative of the several Purchasers

  	
   

  
	
  named
  in Schedule I hereto,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Goldman,
  Sachs & Co.

  	
   

  	
   

  
	
  (Goldman,
  Sachs & Co.)

  	
   

  
				

 

20

 

SCHEDULE I

 

	
  Purchaser

  	
   

  	
  Principal

  Amount of

  Notes to be

  Purchased

  	
   

  
	
  Goldman,
  Sachs & Co.

  	
   

  	
  $

  	
  250,000,000

  	
   

  
	
  Banc of
  America Securities LLC

  	
   

  	
  50,000,000

  	
   

  
	
  Citigroup
  Global Markets Inc.

  	
   

  	
  50,000,000

  	
   

  
	
  Harris
  Nesbitt Corp.

  	
   

  	
  50,000,000

  	
   

  
	
  BNP Paribas
  Securities Corp.

  	
   

  	
  25,000,000

  	
   

  
	
  Scotia
  Capital (USA) Inc.

  	
   

  	
  25,000,000

  	
   

  
	
  TD Securities
  (USA) LLC

  	
   

  	
  25,000,000

  	
   

  
	
  Wachovia
  Capital Markets, LLC

  	
   

  	
  25,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  500,000,000

  	
   

  

 

 

SCHEDULE II

 

	
  Name of Designated Subsidiary

  	
   

  	
  Jurisdiction of Its
  Organization

  	
   

  
	
  North
  Central Oil Corporation

  	
   

  	
  Delaware

  	
   

  
	
  Pogo Panhandle
  2004, L.P.

  	
   

  	
  Texas

  	
   

  
	
  Pogo
  Producing (Texas Panhandle) Company

  	
   

  	
  Texas

  	
   

  
	
  Pogo Energy, Inc.

  	
   

  	
  Texas

  	
   

  

 

 

ANNEX I

 

(1)           The
Notes have not been and will not be registered under the Act and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an exemption from the registration requirements of the Act.  Each Purchaser represents and agrees that it
has offered and sold the Notes, and will offer and sell the Notes (i) as
part of their distribution at any time and (ii) otherwise until
40 days after the later of the commencement of the offering and the Time
of Delivery (the “restricted period”), only in accordance with Rule 903 of
Regulation S or Rule 144A under the Act.  Accordingly, each Purchaser agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts with respect to the Notes,
and it and they have complied and will comply with the offering restriction
requirements of Regulation S.  Each
Purchaser agrees that, at or prior to confirmation of sale of Notes (other than
a sale pursuant to Rule 144A), it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other remuneration that
purchases Notes from it during the restricted period a confirmation or notice
to substantially the following effect:

 

“The Notes covered hereby have not been
registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may
not be offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and the
closing date, except in either case in accordance with Regulation S (or Rule 144A
if available) under the Securities Act. 
Terms used above have the meaning given to them by Regulation S.”

 

Terms
used in this paragraph have the meanings given to them by Regulation S.

 

Each Purchaser further
agrees that it and each of its affiliates has not entered and will not enter
into any contractual arrangement with respect to the distribution or delivery
of the Notes, except with its affiliates or with the prior written consent of
the Company.

 

In addition,

 

(A)          except to the extent permitted under U.S. Treas.
Reg. § 1.163-5(c)(2)(i)(D) (the “D Rules”), (i) each Purchaser
agrees that it has not offered or sold, and during the restricted period will
not offer or sell, Notes in bearer form to a person who is within the United
States or its possessions or to a U.S. person, and (ii) it has not
delivered and will not deliver within the United States or its possessions
definitive Notes in bearer form that are sold during the restricted period;

 

(B)           each Purchaser represents and agrees that it
has, and throughout the restricted period will have, in effect procedures
reasonably designed to ensure that its employees or agents who are directly
engaged in selling Notes in bearer form are aware that such Notes may not be
offered or sold during the restricted period to a person who is within the
United States or its possessions or to a United States person, except as
permitted by the D Rules;

 

(C)           if it is a United States person, each such
Purchaser represents that it is acquiring the Notes in bearer form for purposes
of resale in connection with their original

 

I-1

 

issuance and if
it retains Notes in bearer form for its own account, it will only do so in
accordance with the requirements of U.S. Treas. Reg. § 1.163-5(c)(2)(i)(D)(6);
and

 

(D)          with respect to each affiliate that acquires
from it Notes in bearer form for the purpose of offering or selling such Notes
during the restricted period, such Purchaser either (i) repeats and
confirms the representations and agreements contained in clauses (A), (B) and
(C) on its behalf or (ii) agrees that it will obtain from such
affiliate for the Company’s benefit the representations and agreements
contained in clauses (A), (B) and (C).

 

Terms
used in this paragraph have the meanings given to them by the United States
Internal Revenue Code and regulations thereunder, including the D Rules.

 

(2)           Notwithstanding
the foregoing, Notes in registered form may be offered, sold and delivered by
the Purchasers in the United States and to U.S. persons pursuant to Section 3
of this Agreement without delivery of the written statement required by
paragraph (1) above.

 

(3)           Each
Purchaser represents, warrants and agrees that: (i) it has only
communicated or caused to be communicated and will only communicate or cause to
be communicated any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the Financial Services and Markets
Act 2000 (“FSMA”)) received by it in connection with the issue or sale of any
Notes in circumstances in which section 21(1) of the FSMA does not
apply to the Company; and (ii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Notes in, from or otherwise involving the United Kingdom.

 

(4)           In
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a “Relevant Member State”), each
Purchaser represents, warrants and agrees that with effect from and including
the date on which the Prospectus Directive is implemented in that Relevant
Member State (the “Relevant Implementation Date”) it has not made and will not
make an offer of Notes to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the Notes which has been approved by
the competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of Notes to the public in that Relevant
Member State at any time:

 

(a)           to
legal entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;

 

(b)           to
any legal entity which has two or more of (1) an average of at least 250
employees during the last financial year; (2) a total balance sheet of
more than €43,000,000 and (3) an annual net turnover of more than
€50,000,000, as shown in its last annual or consolidated accounts; or

 

(c)           in
any other circumstances which do not require the publication by the Issuer of a
prospectus pursuant to Article 3 of the Prospectus Directive.

 

I-2

 

For the purposes of this
provision, the expression an “offer of Notes to the public” in relation to any
Notes in any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the Notes to
be offered so as to enable an investor to decide to purchase or subscribe the
Notes, as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State, and the
expression “Prospectus Directive” means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State.

 

(5)           Each
Purchaser agrees that it will not offer, sell or deliver any of the Notes in
Hong Kong, Singapore, Japan or any other jurisdiction outside the United States
except under circumstances (including those described in the “Underwriting” section of
the Offering Circular in relation to Hong Kong, Singapore and Japan) that will
result in compliance with the applicable laws thereof, and that it will take at
its own expense whatever action is required to permit its purchase and resale
of the Notes in such jurisdictions.  Each
Purchaser understands that no action has been taken to permit a public offering
in any jurisdiction outside the United States where action would be required
for such purpose.  Each Purchaser agrees
not to cause any advertisement of the Notes to be published in any newspaper or
periodical or posted in any public place and not to issue any circular relating
to the Notes, except in any such case with Goldman, Sachs & Co.’s
express written consent and then only at its own risk and expense.

 

I-3

 

Exhibit A-1

 

FORM OF OPINION OF BAKER BOTTS L.L.P.

TO BE DELIVERED PURSUANT TO

SECTION 7(b)(i)

 

(i)            The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware.

 

(ii)           The
Company has corporate power and authority to own its properties and to conduct
its business as described in the Offering Circular and to enter into and
perform its obligations under the Purchase Agreement and the Registration
Rights Agreement.

 

(iii)          The
Purchase Agreement and the Registration Rights Agreement have been duly
authorized, executed and delivered by the Company.

 

(iv)          The
Indenture has been duly authorized, executed and delivered by the Company and
(assuming the due authorization, execution and delivery thereof by the Trustee)
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or other similar
laws relating to or affecting enforcement of creditors’ rights generally, or by
general principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law).

 

(v)           The
Notes have been duly authorized by the Company, each global certificate
representing the Notes is in the form contemplated by the Indenture and has
been duly executed by the Company and, when such global certificate has been
authenticated by the Trustee in the manner provided in the Indenture (assuming
the due authorization, execution and delivery of the Indenture by the Trustee)
and the Notes have been delivered through the facilities of DTC against payment
of the purchase price therefor, the Notes will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors’ rights generally, or by general principles
of equity (regardless of whether enforcement is considered in a proceeding in
equity or at law), and will be entitled to the benefits of the Indenture.

 

(vi)          The
Notes, the Indenture and the Registration Rights Agreement conform, as to legal
matters, in all material respects to the descriptions thereof contained in the
Offering Circular, and the statements set forth in the Offering Circular under
the caption “Certain United States Federal Income Tax Considerations” insofar
as they purport to describe the provisions of the law referred to therein are
complete, accurate and fair in all material respects.

 

(vii)         No
authorization, approval, consent or order of any court or governmental
authority or agency other than such as have been obtained or made or as may be
required under the applicable securities laws of the various jurisdictions in
which the Notes will be offered or sold (as to which we express no opinion) is
required to be obtained by the Company in connection with the due
authorization, execution and delivery of the Purchase Agreement or the due
execution, delivery or performance of the Indenture by the Company or for the
offering, issuance, sale or delivery of the Notes to the Purchasers or the
initial resale of the Notes by the Purchasers in accordance with the Purchase
Agreement.

 

A-1-1

 

(viii)        Assuming
the accuracy of the representations and warranties of the Company and the
Purchasers as to matters of fact contained in the Purchase Agreement, the
performance by them of the agreements contained therein and compliance with the
related procedures set forth in the Offering Circular, it is not necessary in
connection with the offer, sale and initial resale of the Notes in the manner
contemplated by the Purchase Agreement and the Offering Circular to register
the Notes under the Act or to qualify the Indenture under the Trust Indenture
Act.

 

(ix)           The
Company is not an “investment company,” as such term is defined in the 1940
Act.

 

We have participated in
conferences with certain officers and representatives of the Company,
representatives of the Purchasers, counsel to the Purchasers and
representatives of the independent public accountants of the Company at which
the contents of the Offering Circular and related matters were discussed.  Although we have not undertaken to determine
independently, are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained or
incorporated by reference in the Offering Circular, we advise you that, on the
basis of the foregoing, no facts have come to our attention that have caused us
to believe that the Offering Circular (other than the reserve information,
financial statements (including the notes and schedules thereto and auditors’
reports thereon), and other financial data included or incorporated by
reference in the Offering Circular and the exhibits to the documents
incorporated by reference therein, as to which we have not been asked to
comment), as of its date or as of the date hereof, contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

The opinions set forth
above are limited in all respects to matters of the laws of the State of Texas,
the General Corporation Law of the State of Delaware, the contract law of the
State of New York and the applicable federal laws of the United States, each as
in effect on the date hereof.

 

 

In rendering such
opinion, such counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. Such opinion may include a
statement that any tax advice embodied therein is not intended or written to be
used, and cannot be used, by any taxpayer for the purpose of avoiding penalties
that may be imposed on the taxpayer, that it was written to support the
promotion or marketing of the Notes, and that any affected taxpayer should seek
advice based on the taxpayer’s particular circumstances from an independent tax
advisor. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).

 

A-1-2

 

Exhibit A-2

 

FORM OF OPINION OF MICHAEL J. KILLELEA

TO BE DELIVERED PURSUANT TO

SECTION 7(b)(ii)

 

(i)            The
Company is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Effect.

 

(ii)           The
shares of issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and nonassessable, and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive or other similar rights of any securityholder of the Company.

 

(iii)          Each
Designated Subsidiary has been duly formed or incorporated and is validly
existing as a corporation or other business entity in good standing under the
laws of the jurisdiction of its formation or incorporation, has corporate,
partnership or company power and authority to own, lease and operate its
properties and to conduct its business as described in the Offering Circular
and is duly qualified as a foreign corporation or other business entity 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 so to qualify or
to be in good standing would not result in a Material Adverse Effect; and all
of the issued and outstanding capital stock or equivalent equity interests of
each Designated Subsidiary have been duly authorized and validly issued, are
fully paid and non-assessable and (except for directors’ qualifying shares or
shares representing an immaterial equity interest that are required under the
laws of any foreign jurisdiction to be owned by others, and except as set forth
in the Offering Circular) are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim.

 

(iv)          The
documents filed with the Commission pursuant to the Exchange Act that are
incorporated by reference in the Offering Circular (other than the financial
statements, including the notes thereto and auditors’ reports thereon, other
financial information and reserve information and supporting schedules therein,
as to which I express no opinion), when filed with the Commission, complied as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder.

 

(v)           There
is not pending or, to my knowledge, threatened any action, suit, proceeding,
inquiry or investigation, to which the Company or any subsidiary is a party, or
to which the property of the Company or any subsidiary thereof is subject,
before or brought by any court or governmental agency or body, which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the ability of the
Company to consummate the transactions contemplated in the Purchase Agreement
or the performance by the Company of its obligations thereunder or the
transactions contemplated by the Offering Circular.

 

(vi)          The
execution, delivery and performance of the Purchase Agreement, the Indenture,
the Registration Rights Agreement and the Notes and the consummation of the
transactions contemplated in the Purchase Agreement, the Registration Rights
Agreement and in the Offering Circular (including the use of the proceeds from
the sale of the Notes as

 

A-2-1

 

described
in the Offering Circular under the caption “Use of Proceeds”) and compliance by
the Company with its obligations under the Purchase Agreement, the Registration
Rights Agreement, the Indenture and the Notes will not, whether with or without
the giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company
or any subsidiary thereof pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to me, to which the Company or its subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary thereof is subject (except for such
conflicts, breaches, Repayment Events, defaults, liens, charges or encumbrances
that would not have a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter, by-laws or other governing
document, as applicable, of the Company or its subsidiaries, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to me
(other than federal and state securities or blue sky laws, as to which I
express no opinion), of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their respective properties, assets or operations.

 

In addition, I have
participated in conferences with certain officers and representatives of the
Company, representatives of the Purchasers, counsel to the Purchasers and
representatives of the independent public accountants of the Company at which
the contents of the Offering Circular and related matters were discussed.
Although I have not undertaken to determine independently, am not passing upon
and do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained or incorporated by reference in the Offering
Circular, I advise you that, on the basis of the foregoing, no facts have come
to my attention that have caused me to believe that the Offering Circular
(other than the reserve information, financial statements (including the notes
and schedules thereto and auditors’ reports thereon), other financial data
included or incorporated by reference in the Offering Circular and the exhibits
to the documents incorporated by reference therein, as to which I have not been
asked to comment), as of its date or as of the date hereof, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 

The opinions set forth
above are limited in all respects to matters of the laws of the State of Texas,
the General Corporation Law of the State of Delaware and the applicable federal
laws of the United States, each as in effect on the date hereof.

 

 

In rendering such
opinion, such counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent he deems proper, on certificates of responsible
officers of the Company and public officials. 
Such opinion shall not state that it is to be governed or qualified by,
or that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).

 

A-2-2

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