Document:

Exhibit 10.1

Pogo Producing Company

7.875% Senior
Subordinated Notes due 2013

Purchase
Agreement

June 1, 2006

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 $450,000,000 principal amount of
the notes specified above (the “Notes”). The Notes will be issued under the
Indenture to be dated as of June 6, 2006 (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).

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

(a)           A preliminary offering circular,
dated May 31, 2006 (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. The
Preliminary Offering Circular, as amended and supplemented immediately prior to
the Applicable Time (as defined in Section 1(b)), is hereinafter referred
to as the “Pricing Circular.”  Any
reference to the Preliminary Offering Circular, the Pricing 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 Report 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), 14 or 15(d) of the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”) after the date of such circular, and prior to
such specified date (excluding information therein that was furnished to (and
not filed with) the Commission) and (ii) any 

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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, the Pricing 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; and no such documents were filed with the
Commission since the Commission’s close of business on the business day
immediately prior to the date of this Agreement and prior to the execution of
this Agreement. The Preliminary Offering Circular did not, the Offering
Circular and any amendments or supplements thereto will not and the Exchange
Act Reports did not and will not, in each case 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)           For the purposes of this Agreement,
the “Applicable Time” is 7:25 pm (Eastern time) on the date of this Agreement;
the Pricing Circular as supplemented by the information set forth in Schedule
II hereto, taken together (collectively, the “Pricing Disclosure Package”) as
of the Applicable Time, did not include any 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, not
misleading;

(c)           Neither the Company nor any of its
subsidiaries has sustained since the date of the latest audited financial
statements included in the Pricing 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 Pricing Circular; and, since the date as of which information
is given in the Pricing 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 Pricing Circular;

(d)           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 Pricing 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 

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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”);

(e)           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 III 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 Pricing 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
Pricing Circular) are owned by the Company, directly or through subsidiaries,
free and clear of any non-intercompany 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;

(f)            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 Pricing 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 Pricing 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;

(g)           The authorized, issued and
outstanding capital stock of the Company is as set forth in the Pricing
Circular in the column entitled “Actual” under the caption “Capitalization” 

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(except as indicated in
the notes thereto with respect to any subsequent issuances pursuant to employee
or director benefit plans referred to in the Pricing Circular or pursuant to
the exercise of convertible securities or options referred to in the Pricing
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 stock of the
Company was issued in violation of the preemptive or other similar rights of
any securityholder of the Company;

(h)           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(i) 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);

(i)            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;

(j)            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;

(k)           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;

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(l)            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 (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 Pricing Circular (including the Registration Rights
Agreement) and the consummation of the transactions contemplated herein and
therein and in the Pricing Circular (but in the Pricing Circular only to the
extent such transactions relate to the offering and sale of the Notes and the
use of the proceeds therefrom) 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, 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 governmental agency or body 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;

(m)          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;

(n)           The statements set forth in the
Pricing Disclosure Package and the Offering Circular under the caption “Description
of the Notes”, insofar as they purport to constitute a summary of the terms of
the Notes, the Indenture and the Registration Rights Agreement, 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 

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caption “Underwriting”,
insofar as they purport to describe the provisions of this Agreement referred
to therein, are accurate and fair in all material respects;

(o)           Except as disclosed in the Pricing
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 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;

(p)           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;

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

(r)            The Company is not, and after giving
effect to the offering and sale of the Notes and the application of the net
proceeds therefrom, 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”);

(s)           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;

(t)            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 Company’s 6.875% Senior Subordinated Notes due 2017 issued
pursuant to a registered exchange offer; 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;

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(u)           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, 2005, and who have
audited certain financial statements of Northrock Resources Ltd., an Alberta
corporation (“Northrock”), are an independent registered public accounting firm
with respect to each of the Company and Northrock within the meaning of the Act
and the rules and regulations thereunder adopted by the Commission and the
Public Accounting Oversight Board (United States);

(v)           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, 2005;

(w)          Since December 31, 2005, the date
of the latest audited financial statements of the Company incorporated by
reference in the Pricing 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;

(x)            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;

(y)           The historical financial statements
of the Company, together with the related schedules and notes, included in the
Pricing 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;

(z)            To the knowledge of the Company, (i) the
historical financial statements of Northrock, together with the related
schedules and notes, included in the Pricing 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;

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(aa)         The pro forma financial information
included in the Pricing 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 described in the Pricing Circular to which it relates, gives
effect to assumptions made on a reasonable basis and fairly presents the
transactions described in the Pricing Circular to which it relates;

(bb)         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;

(cc)         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;

(dd)         Except as described in the Pricing
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 

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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;

(ee)         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

(ff)           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 Pricing 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 98.250% of the principal amount
thereof, plus accrued interest, if any, from June 6, 2006 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 June 6, 2006 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 

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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 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 

 10
 

 

provided for in or
required by 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, 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 Pricing Circular under the caption “Use
of Proceeds”.

 11
 

 

 

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, reproduction and filing of 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, (ii) Michael J.
Killelea, Senior 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, (iii)  Fraser Milner Casgrain LLP, Canadian 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-3 hereto, and (iv) Eamon Hurley, General
Counsel of Northrock, 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-4 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 

 12
 

 

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;

(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
Company’s and Northrock’s oil and natural gas properties 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 or letters 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 Pricing 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
Pricing Circular and (ii) since the date as of which information is given
in the Pricing 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 Pricing Circular, the
effect of which, in any such case described in clause (i) or (ii), is
in your judgment 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)           Immediately after the Applicable Time
(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)           Immediately after the Applicable Time
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 

 13
 

 

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 your
judgment 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;

(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, the Pricing Circular, 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, the Pricing Circular, the Offering Circular
or any such amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by any Purchaser through
Goldman, Sachs & Co. expressly for use therein.

 14
 

 

 

(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, the Pricing
Circular, 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, the Pricing Circular, 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 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 

 15
 

 

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 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

 16
 

 

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
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 

 17
 

 

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.

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.

 18
 

 

 

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.

  	
   

  	
  $

  	
  225,000,000

  	
   

  
	
  Banc of America
  Securities LLC

  	
   

  	
  45,000,000

  	
   

  
	
  Citigroup Global
  Markets Inc

  	
   

  	
  45,000,000

  	
   

  
	
  Harris Nesbitt
  Corp.

  	
   

  	
  45,000,000

  	
   

  
	
  BNP Paribas
  Securities Corp.

  	
   

  	
  22,500,000

  	
   

  
	
  Scotia Capital
  (USA) Inc.

  	
   

  	
  22,500,000

  	
   

  
	
  TD Securities
  (USA) LLC

  	
   

  	
  22,500,000

  	
   

  
	
  Wachovia Capital
  Markets, LLC

  	
   

  	
  22,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  450,000,000

  	
   

  

 

 Schedule I
  

 

 

SCHEDULE II

	
  Title of Purchased Securities:

  	
   

  	
  7.875% Senior Subordinated Notes due 2013

  
	
  Aggregate Principal
  Amount Offered:

  	
   

  	
  $450,000,000

  
	
  Price to Public:

  	
   

  	
  100.000%

  
	
  Settlement Date:

  	
   

  	
  June 6, 2006

  
	
  Managing Underwriters:

  	
   

  	
  Goldman,
  Sachs & Co.

  
	
  Purchase Price by
  Underwriters:

  	
   

  	
  98.250%

  
	
  Maturity Date:

  	
   

  	
  May 1, 2013

  
	
  Interest Rate:

  	
   

  	
  7.875%

  
	
  Interest Payment Dates:

  	
   

  	
  May 1 and
  November 1

  
	
  First Interest Payment
  Date:

  	
   

  	
  November 1, 2006

  
	
  Optional Redemption:

  	
   

  	
  The Notes will be
  redeemable by the Company, in whole or in part, on or after May 1, 2010,
  at the prices set forth below (expressed as percentages of the principal
  amount), plus accrued and unpaid interest:

  
	
   

  	
   

  	
  Date

  	
    Price

  
	
   

  	
   

  	
  May 1, 2010

  	
  103.938%

  
	
   

  	
   

  	
  May 1, 2011

  	
  101.969%

  
	
   

  	
   

  	
  May 1, 2012

  	
  100.000%

  
	
   

  	
   

  	
  Prior to May 1,
  2010, the Notes will be redeemable by the Company, in whole or in part, at a
  redemption price equal to the principal amount of the Notes plus a
  “make-whole” premium (Treasury Rate plus 50 basis points), plus accrued and
  unpaid interest.

  
	
  Optional Redemption
  with Equity Proceeds:

  	
   

  	
  In addition, up to 35%
  of the Notes will be redeemable by the Company using proceeds from specified
  equity offerings before May 1, 2009, at a price equal to 107.875% of
  their principal amount, plus accrued and unpaid interest.

  

 

 Schedule II

 

 

SCHEDULE III

	
  Name of Designated
  Subsidiary

  	
   

  	
  Jurisdiction of Its Organization

  
	
  Pogo Finance, ULC

  	
   

  	
  Canada

  
	
  Pogo Alberta, ULC

  	
   

  	
  Canada

  
	
  Northrock Resources Ltd.

  	
   

  	
  Canada

  
	
  Northrock Resources P/S

  	
   

  	
  Canada

  

 

 

 Schedule III

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 

 Annex 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.

 Annex 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.

 

 Annex 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.

 Exhibit 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 registered public accountants of the Company at which the
contents of the Pricing Disclosure Package and 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 Pricing Disclosure Package and 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 (A) the Pricing
Disclosure Package, as of the Applicable Time (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 Pricing Disclosure Package and the exhibits to
the documents incorporated by reference therein, as to which we have not been
asked to comment), contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
or (B) 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, 

 Exhibit A-1-2
 

 

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).

 

 Exhibit A-1-3

 

 

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)          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.

(iv)          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 (but in the Offering Circular only to the extent such transactions
relate to the offering and sale of the Notes and the use of the proceeds from
the sale of the Notes as described therein under the caption “Use of Proceeds”).

(v)           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
therein and in the Offering Circular (but in the Offering Circular only to the
extent such transactions relate to the offering and sale of the Notes and the
use of the proceeds from the sale of the Notes as described therein under the
caption “Use of Proceeds”) 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
Covered Subsidiary (as defined below) 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 Covered
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 Covered Subsidiary 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
Covered Subsidiaries, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to me (other than federal and state
securities 

 Exhibit A-2-1
 

 

or
blue sky laws, as to which I express no opinion), of any governmental agency or
body or court, domestic or foreign, having jurisdiction over the Company or any
of its Covered Subsidiaries or any of their respective properties, assets or
operations. “Covered Subsidiaries” means the subsidiaries of the Company other
than those formed or organized under the laws of Canada.

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 registered public accountants of the Company
at which the contents of the Pricing Disclosure Package and 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 Pricing Disclosure Package and
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 (A) the
Pricing Disclosure Package, as of the Applicable Time (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 Pricing Disclosure Package and the exhibits to
the documents incorporated by reference therein, as to which I have not been
asked to comment), contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
or (B) 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).

 Exhibit A-2-2

 

Exhibit A-3

FORM OF OPINION OF FRASER MILNER CASGRAIN LLP

TO BE DELIVERED PURSUANT TO SECTION 7(b)(iii)

June 6, 2006

Goldman, Sachs & Co.,

As representative of the several Purchasers

named in Schedule I to the Purchase Agreement

referred to below

c/o Goldman, Sachs & Co.

85 Broad Street

New York, New York
10004

Ladies and Gentlemen:

We have acted as
local counsel to Pogo Producing Company (“Pogo”)
in connection with the issue and sale by Pogo of an aggregate of $450,000,000
principal amount of notes (the “Notes”)
pursuant to a purchase agreement (the “Purchase Agreement”)
dated June 1, 2006 among Goldman, Sachs & Co., as representative
of the several Purchasers named in Schedule I thereto, and Pogo.

Capitalized terms
used in this opinion that are not otherwise defined herein have the meanings
ascribed thereto in the Purchase Agreement.

This opinion is being
provided to you pursuant to Section 7(b) of the Purchase Agreement.

Examinations

We have examined
originals or copies, certified or otherwise identified to our satisfaction, of:

(a)                                  the Purchase
Agreement, the Indenture, the Registration Rights Agreement, the Notes and the
Offering Circular;

(b)                                 certificates of
status from the Registrar of Corporations under the Business Corporations Act (Alberta),
each dated June ·, 2006, in respect of Pogo Finance, ULC (“Pogo Finance”), Pogo Alberta, ULC (“Pogo Alberta”)
and Northrock Resources Ltd. (“Northrock”)
(Pogo Finance, Pogo Alberta and Northrock collectively referred to herein as
the “Corporations”), copies of which have
been provided to you (collectively, the “Certificates
of Status”);

(c)                                  certificates of
status from the Registrar of Corporations under the Business
Corporations Act (British Columbia) from the Director of
Corporations under the Business Corporations Act
(Saskatchewan) and 

 Exhibit A-3-1
 

 

the Deputy Registrar of Corporations under the Business Corporations Act (Northwest Territories), each
dated June ·, 2006, in respect of
Northrock, copies of which have been provided to you (collectively, the “Extra-Provincial Certificates of Status”)

(d)                                 certificates (the “Officers’ Certificates”) of an officer of each of the
Corporations, each dated June ·, 2006, with respect
to:

(i)                                     the articles and
by-laws of each of the Corporations;

(ii)                                  the jurisdictions in
which each of the Corporations carry on business in Canada, the completeness of
the minute books of the Corporations and certain other factual matters; and

(iii)                               in respect of such
certificates of an officer of each of Pogo Finance and Pogo Alberta,
identifying the contracts, agreements and other instruments to which Pogo
Finance or Pogo Alberta is a party or by which Pogo Finance or Pogo Alberta may
be bound, or to which any of the property or assets of Pogo Finance or Pogo
Alberta is subject;

copies of which certificates have been provided to
you;

(e)                                  a certificate (the “Northrock Officer’s Certificate”) of an officer of
Northrock, as managing partner of the Northrock Resources, (the “Partnership”) dated June ·, 2006 with respect to the partnership
agreement of the Partnership and certain other factual matters, a copy of which
certificate has been provided to you;

(f)                                    a certificate (the “Energy Officer’s Certificate”) of an officer of Northrock
Energy, ULC and a certificate (the “Prairie Officer’s
Certificate”) of an officer of Prairie Pacific Energy Corporation,
each dated June ·, 2006, with respect
to the articles and by-laws of such corporations and certain other factual
matters); and

(g)                                 a certificate (the “Pogo Officer’s Certificate”) of an officer of Pogo dated June ·, 2006 as to the
identity of the corporate subsidiaries of Pogo and any other subsidiaries of
Pogo which are incorporated under, or the governing documents of which are
governed by, the laws of the Province of Alberta or the federal laws of Canada
applicable therein (or the laws of any other jurisdiction in Canada)(the “Canadian Subsidiaries”), a copy of which certificate has
been provided to you.

We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such public and corporate records, certificates, including certificates of
public officials, instruments and other documents and have made or caused to be
made such searches and investigations and inquiries of officers or
representatives of the Canadian Subsidiaries and have considered such questions
of law as we have deemed relevant and necessary as a basis for the opinions
hereinafter expressed.

 Exhibit A-3-2
 

 

Whenever our opinion
is qualified by the phrase “of which we are aware”, it means the current actual
knowledge of the lawyers in the Calgary office of our firm who have been
involved in this transaction. We have not undertaken any special or independent
investigation with respect to any matters qualified by such phrase and no
inference as to our knowledge of the existence or absence of any facts and
circumstances relating to such matters should be drawn merely from our
representation of Pogo or any of the Canadian Subsidiaries.

Assumptions

For purposes of the
opinions expressed herein, we have assumed:

(a)                                  the genuineness of
all signatures (whether on originals or copies of documents);

(b)                                 the authenticity,
truth, accuracy and completeness of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
copies, whether facsimile, photostatic, certified or otherwise, the accuracy
and completeness of all facts set forth in certificates of officers referred to
herein and in official public records, certificates and documents supplied by
public officials or regulatory clerks or agents, or otherwise conveyed to us by
public officials or registry clerks or agents, and the veracity of all
information contained in those records, documents and certificates;

(c)                                  the legal capacity of
all individuals;

(d)                                 the accuracy and
currency of the indices and filing systems maintained at all public offices
where we made or conducted searches or inquiries or have caused searches or
inquiries to be made or conducted;

(e)                                  that persons
registered in the share registers of the Canadian Subsidiaries which are
corporations as the registered holder of the shares referred to therein is the
legal and beneficial owner of such shares; and

(f)                                    no offering or sale
of the Notes will take place in Canada.

Reliances

In expressing our
opinions set forth in paragraph 1(a) below, we have relied exclusively on
the Certificates of Status.

In expressing our
opinions set forth in paragraph 1(c) below, we have relied exclusively on
the Extra-Provincial Certificates of Status and the Officers’ Certificates.

In expressing our
opinions set forth in paragraphs 2 (a), 2 (b), 4 (b), 5 (a) and 5 (c) below,
we have relied on the Northrock Officer’s Certificate.

In expressing our
opinions set forth in paragraphs 3, 4 (a), 5 (a) and 5 (c) below, we
have relied on the Officers’ Certificates.

 Exhibit A-3-3
 

 

In expressing our
opinions set forth in paragraphs 5 (a) and 5 (c) below, we have
relied on the Energy Officer’s Certificate and the Prairie Officer’s
Certificate.

In expressing our
opinions set forth in paragraph 5 (d) below, we have also relied on the
Pogo Officer’s Certificate.

Scope of Opinions

We are qualified to
render opinions as to, and this opinion is limited to, the laws of the Province
of Alberta and the federal laws of Canada applicable therein. We have not made
any independent examination of the laws of any jurisdiction other than the
Province of Alberta and the federal laws of Canada applicable therein and, in
our opinions set forth herein, we do not express or imply any opinion in
respect of the laws of any other jurisdiction. This opinion is limited to the
matters expressly stated herein and no opinions are to be inferred or may be
implied beyond the opinions expressly set forth herein.

The opinions
hereinafter expressed are based on legislation and regulations in effect on the
date hereof. We can give no assurance
that any of the opinions herein will not be affected by future amendments to,
or by regulations, rules, orders, rulings, policy statements or interpretation
notes made or issued pursuant to the laws of the Province of Alberta or federal
laws of Canada applicable therein. We assume no responsibility to update our
opinions if any of those laws are, subsequent to the date hereof, amended,
revoked, revised or supplemented in any way which impacts on the opinions
contained herein.

Opinions

Based and relying on
and subject to the foregoing, and subject to the qualifications hereinafter
expressed, we are of the opinion that:

2.                                      (a)          Each of the Corporations has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the Province of Alberta;

(b)                                 each of the
Corporations 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

(c)                                  each of the Corporations
is duly qualified as an extra-provincial 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.

3.                                      (a)          The Partnership has been duly formed
as a general partnership under the laws of the Province of Alberta; and

(b)                                 the Partnership has
the partnership power and authority to own, lease and operate its properties
and to conduct its business as described in the Offering Circular.

 Exhibit A-3-4
 

 

 

4.                                       All of the issued and
outstanding shares of each of the Corporations has been duly authorized and
validly issued as fully paid and non-assessable.

5.                                      (a)          Pogo or its directly or indirectly,
wholly-owned subsidiaries is registered in the share registers of the
Corporations as the holder of all of the issued and outstanding shares of the
Corporations; and

(b)                                 the current partners
of the Partnership are Northrock and Northrock Energy, ULC, each of which are
indirectly, wholly-owned subsidiaries of Pogo.

6.                                       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 therein and in the Offering Circular (but, with
respect to the Offering Circular, only to the extent such transactions directly
relate to the offering and sale of the Notes as described in the Offering
Circular and the use of the proceeds from the sale of the Notes as described in
the Offering Circular under the caption “Use of Proceeds”) will not:

(a)                                  result in any
violation of the provisions of the articles and by-laws of the Canadian Subsidiaries
which are corporations or the partnership agreement of the Partnership; or

(b)                                 result in any
violation of any applicable law, statute, rule or regulation in force in
the Province of Alberta or the federal laws of Canada applicable therein, or

(c)                                  result in any
violation of any judgement, order, writ or decree in effect in the Province of
Alberta of any Alberta or Canadian federal government, government
instrumentality or court having jurisdiction over the Canadian Subsidiaries or
any of their respective properties, assets or operations, in each such case, of
which we are aware; or

(d)                                 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 Pogo Finance or Pogo Alberta pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, of which we are aware, to which Pogo Finance or Pogo
Alberta is a party or by which Pogo Finance or Pogo Alberta may be bound, or to
which any of the property or assets of Pogo Finance or Pogo Alberta is subject
(except for such conflicts, breaches, Repayment Events, defaults, liens,
charges or encumbrances that would not have a Material Adverse Effect).

Benefit of Opinion

This opinion is
furnished solely for the benefit of the addressees hereof in connection with
the sale of the Notes and may not be circulated to, relied on by, quoted from
or distributed to any other person, or used for any other purpose, without our
express prior written consent.

Yours
truly,

 Exhibit A-3-5

 

Exhibit A-4

FORM OF OPINION OF EAMON HURLEY 

TO BE DELIVERED PURSUANT TO SECTION 7(b)(iv)

June 6, 2006

Goldman, Sachs & Co.,

As representative of the several Purchasers

named in Schedule I to the Purchase Agreement

referred to below

c/o Goldman, Sachs & Co.

85 Broad Street

New York, New York
10004

Ladies and Gentlemen:

I am General Counsel
and Corporate Secretary to Northrock Resources Ltd. (“Northrock”)
and am rendering this opinion in connection with the issue and sale by Pogo
Producing Company (“Pogo”) of an
aggregate of $450,000,000 principal amount of notes (the “Notes”)
pursuant to a purchase agreement (the “Purchase Agreement”)
dated June 1, 2006 among Goldman, Sachs & Co., as representative
of the several Purchasers named in Schedule I thereto, and Pogo.

Capitalized terms
used in this opinion that are not otherwise defined herein have the meanings
ascribed thereto in the Purchase Agreement.

This opinion is being
provided to you pursuant to Section 7(b) of the Purchase Agreement.

Examinations

I have examined
originals or copies, certified or otherwise identified to my satisfaction, of
the Purchase Agreement, the Indenture, the Registration Rights Agreement, the
Notes and the Offering Circular.

Whenever my opinion
is qualified by the phrase “of which I am aware”, it means the current actual
knowledge that I have. I have not undertaken any special or independent
investigation with respect to any matters qualified by such phrase and no
inference as to my knowledge of the existence or absence of any facts and
circumstances relating to such matters should be drawn merely from my position
as General Counsel and Corporate Secretary of Northrock.

Assumptions

For purposes of the
opinions expressed herein, I have assumed:

(a)                                  the genuineness of
all signatures (whether on originals or copies of documents); and

 Exhibit A-4-1
 

 

 

(b)                                 the authenticity,
truth, accuracy and completeness of all documents submitted to me as originals,
the conformity to original documents of all documents submitted to me as
copies, whether facsimile, photostatic, certified or otherwise.

Scope of Opinions

I am qualified to
render opinions as to the laws of the Province of Alberta and the federal laws
of Canada applicable therein. I have not made any independent examination of
the laws of any jurisdiction other than the Province of Alberta and the federal
laws of Canada applicable therein and, in my opinions set forth herein, I do
not express or imply any opinion in respect of the laws of any other
jurisdiction. This opinion is limited to the matters expressly stated herein
and no opinions are to be inferred or may be implied beyond the opinions
expressly set forth herein.

The opinions
hereinafter expressed are based on legislation and regulations in effect on the
date hereof. I can give no assurance
that any of the opinions herein will not be affected by future amendments to,
or by regulations, rules, orders, rulings, policy statements or interpretation
notes made or issued pursuant to the laws of the Province of Alberta or federal
laws of Canada applicable therein. I assume no responsibility to update my
opinions if any of those laws are, subsequent to the date hereof, amended,
revoked, revised or supplemented in any way which impacts on the opinions
contained herein.

Opinions

Based and relying on
and subject to the foregoing, and subject to the qualifications hereinafter
expressed, I am of the opinion that 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 therein and in
the Offering Circular (but, with respect to the Offering Circular, only to the
extent such transactions relate to the offering and sale of the Notes as
described in the Offering Circular and the use of the proceeds from the sale
of  the Notes as described in the
Offering Circular under the caption “Use of Proceeds”) 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 Northrock 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, of which I am aware, to which Northrock 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 Northrock 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).

Benefit of Opinion

This opinion is
furnished solely for the benefit of the addressees hereof in connection with
the sale of the Notes and may not be circulated to, relied on by, quoted from
or distributed to any other person, or used for any other purpose, without our
express prior written consent.

Yours truly,

 Exhibit A-4-2Exhibit
10.2

 

Execution Version

Goldman
Sachs Credit Partners L.P.

85 Broad
Street

New York,
New York 10004

 

COMMITMENT LETTER

 

PERSONAL AND CONFIDENTIAL

 

April 18, 2006

 

Pogo Producing Company

5 Greenway Plaza

P.O. Box 2504

Houston,
Texas 77252-2504

Attention:            James P. Ulm, II

Senior Vice President and Chief Financial Officer

 

Ladies and Gentlemen:

 

We are pleased to confirm the arrangements under
which Goldman Sachs Credit Partners L.P. (“GSCP”
or the “Administrative Agent”) is exclusively
authorized by Pogo Producing Company (the “Company”) to
act as sole lead arranger, sole bookrunner, sole syndication agent and administrative agent in connection with the
bridge loans described herein, and, together with any other lenders set
forth on Schedule I hereto and any entities that become lenders in accordance
with the syndication arrangements set forth below (collectively with GSCP, the “Lenders”), commits to provide the bridge loans described
herein, in each case, on the terms and
subject to the conditions set forth in this letter, the attached Annex A and
Annex B (collectively, the “Commitment Letter”) and the Fee Letter (as defined below).

 

You have informed GSCP that the Company, a Delaware corporation,
intends to sign an agreement (the “Acquisition 

Agreement”) to acquire by merger
(the “Acquisition”) all of the capital stock of a
private company code-named Lambada (the “Seller”), as
specified in the Acquisition Agreement (the “Acquired Business”).
You have also informed us that the total purchase price for the Acquisition (including the
refinancing of certain debt of the Acquired Business, but excluding the payment of fees,
commissions and expenses in connection with the Acquisition) will be approximately $750.0 million
and that the Acquisition will be financed with (i) the issuance by the Company of up to
$500.0 million in aggregate principal amount of debt, equity or equity-linked
securities (the “Permanent Securities”) or, in the
event the Permanent Securities are not issued at the time the Acquisition is consummated,
borrowings by the Company of up to $500.0 million under senior unsecured increasing rate
bridge loans (the “Bridge Loans”) having the terms of set
forth in Annex B and (ii) borrowings by the Company of up to $375.0
million under its existing credit agreement, dated as of December 16,
2004, as amended on August 31, 2005, among the Company, as borrower,
certain commercial lending institutions, as the lenders, and Bank of Montreal,
acting through its Chicago, Illinois branch, as the administrative agent (the “Credit Facility”). On the Closing Date (as defined below),
neither the
Company nor any of its subsidiaries will have any debt for borrowed money or
equity outstanding,
except for (i) debt and equity outstanding as of the date hereof, (ii) borrowings
not to
exceed an amount to be agreed upon under the Credit Facility, (iii) equity
issued to management
and employees of the Company pursuant to existing equity compensation plans or (iv) as described
in this paragraph. In addition, the Acquired Business will have permanently repaid all of its
indebtedness on or before the Closing Date.

 

 

 

1.  Commitment.    GSCP
is pleased to confirm its commitment to act as sole lead arranger and sole
bookrunner to provide the Company with structuring advice in connection with
the Bridge Loans, to act as sole syndication
agent to provide the Company with syndication advice in connection with the Bridge Loans and to act as
administrative agent for the Bridge Loans. Each of the Lenders is pleased to confirm its commitment (each, a “Commitment” and, collectively,
the “Commitments”), severally and not
jointly, to provide the Bridge Loans having the terms set forth on Annex B, in each case, on the terms and subject
to the conditions contained in this
Commitment Letter and the Fee Letter. The Commitment of each Lender individually
is set forth opposite its name on Schedule 1 hereto; all of the Commitments
together equal up to $500.0 million. The
Company agrees that the Lenders will have the exclusive right during the term
of this Commitment Letter to provide any bridge or interim financing utilized
by the Company or any of its
affiliates to finance any portion of the Acquisition.

 

Each Lender’s commitment is subject, in its discretion, to the
conditions set forth in Annex B hereto and
there not having occurred any material adverse change, or any development involving
a prospective material adverse change, in or affecting the general affairs, management,
financial position, stockholders’ equity or results of operations of the Company
or the Acquired Business and their respective subsidiaries since December 31,
2005 (the date of the most recent audited financial statements for the Company
and the Acquired Business, respectively,
furnished by the Company to GSCP). Each Lender’s commitment is also subject, in its discretion, to the satisfactory
negotiation, execution and delivery of appropriate definitive documentation relating to the Bridge Loans,
including, without limitation, a bridge loan agreement (the “Bridge Loan Agreement”), to be based upon and substantially
consistent with the terms set forth in this
Commitment Letter. Our commitment is also conditioned upon and made subject to
our not becoming aware after the date hereof of any new or inconsistent information or other matter not previously
disclosed to us relating to the Company, the Acquired Business or the
Acquisition or the transactions contemplated by this Commitment Letter, which GSCP,
in its reasonable judgment, deems material and adverse relative to the
information or other matters disclosed to us prior to the date hereof

 

2.  Fees and Expenses.    The fees for these services are set forth
in a separate letter (the “Fee Letter”),
dated as of the date hereof, entered into by the Lenders and the Company. In addition, pursuant to an engagement letter (the “Engagement Letter”), dated as of the date hereof, between the Company and Goldman, Sachs &
Co. (“Goldman Sachs”), the Company has, among other things, offered Goldman Sachs the
right to act (or to have one of its affiliates act) as the sole placement
agent, sole purchaser or sole underwriter in connection with the sale of the
Permanent Securities.

 

3.  Syndication.    GSCP intends and reserves the right to
syndicate the Commitments and/or the Bridge Loans to other Lenders, commencing
on the earlier of 30 days after the Closing
Date and June 30, 2006 (or at any time during which the Company is not
diligently pursuing the issuance of
Permanent Securities or cooperating with GSCP in accordance with Section 4).
GSCP will select the Lenders after consultation with the Company. GSCP will
lead the syndication, including
determining the timing of all offers to potential Lenders and the acceptance of Commitments, any title of agent or
similar designations or roles awarded to Lenders, the amounts offered and the compensation provided to each
Lender from the amounts to be paid to GSCP pursuant to the terms of this
Commitment Letter and the Fee Letter. GSCP will determine the final Commitment allocations and will notify the
Company of such determinations. The
Company agrees to use all commercially reasonable efforts to ensure that

 

 

GSCP’s syndication efforts benefit from the existing lending
relationships of the Company. To facilitate
an orderly and successful syndication of the Bridge Loans, you agree that,
until the later of the termination of the syndication as determined by
GSCP and 120 days following the date of
initial funding under the Bridge Loans (the “Closing Date”),
the Company will not, and will use commercially reasonable efforts to
cause the Acquired Business to agree that it will not, syndicate or issue,
attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in
discussions concerning the syndication or issuance of, any debt facility or debt or preferred equity
security of the Company or any of its affiliates (other than the Bridge Loans, any Permanent Securities and other
indebtedness contemplated hereby), including any renewals or
refinancings of any existing debt facility or debt or preferred equity security, without the prior written consent
of GSCP.

 

4. Cooperation.    The Company agrees to cooperate with GSCP,
and to cause the Acquired Business to cooperate with GSCP, in each case
commencing promptly after the Closing Date, in connection with (i) the
preparation of an information package regarding the business, operations,
financial projections and prospects of the Company and the Acquired Business,
including, without limitation, the delivery of all information relating to the
transactions contemplated hereunder prepared by or on behalf of the Company or
the Acquired Business deemed reasonably necessary by GSCP to complete the
syndication of the Commitments and/or the Bridge Loans (including, without
limitation, obtaining and maintaining a credit rating by Moody’s Investor
Services, Inc. (“Moody’s”), and Standard &
Poor’s Ratings Group, a division of The McGraw Hill Corporation (“S&P”)) and (ii) the presentation of an information
package acceptable in format and content to GSCP in meetings and other
communications with prospective Lenders in connection with the syndication of
the Commitments and/or the Bridge Loans (including, without limitation, direct
contact between senior management and representatives of the Company with
prospective Lenders and participation of such persons in meetings). The Company
will be solely responsible for the contents of any such information package and
presentation and acknowledge that GSCP will be using and relying upon the
information contained in such information package and presentation without
independent verification thereof. The Company agrees that information regarding
the Bridge Loans and information provided by the Company, the Acquired Business
or their respective representatives to GSCP in connection with the Bridge Loans
(including, without limitation, draft and execution versions of the Loan
Documents, publicly filed financial statements, and draft or final offering
materials relating to contemporaneous or prior securities issuances by the
Company or the Acquired Business) may be disseminated to potential Lenders and
other persons through one or more internet sites (including an IntraLinks
workspace) created for purposes of syndicating the Bridge Loans or otherwise,
in accordance with GSCP’s standard syndication practices (including hard copy
and via electronic transmissions). Without limiting the foregoing, the Company
authorizes the use of its logos in connection with any such dissemination,

 

At the request of GSCP, the Company
agrees to prepare a version of the information package and presentation
that does not contain material non-public information concerning the Company or
the Acquired Business, their respective affiliates or their securities. In
addition, the Company agrees that unless
specifically labeled “Private—Contains Non-Public Information,” no information, documentation or other data
disseminated to prospective Lenders in connection with the syndication
of the Bridge Loans, whether through an internet site (including, without limitation, an IntraLinks workspace),
electronically, in presentations at meetings or otherwise, will contain any material non-public information
concerning the Company or the Acquired Business, their respective
affiliates or their securities.

 

 

The Company represents and
covenants that (i) all information (other than forward-looking statements
and data, including projections) provided directly or indirectly by the Company
to GSCP or the Lenders in connection with
the transactions contemplated hereunder is and will be, when taken as a whole, complete and correct in
all material respects and does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light
of the circumstances in which they were made, not misleading and (ii) the
projections that have been or will be made available to GSCP or the Lenders by the Acquired Business or the Company
have been and will be prepared in good faith based upon assumptions that are believed by the preparer thereof to be
reasonable at the time made. You agree that if at any time prior to the
Closing Date, any of the representations in the preceding sentence would be incorrect in any material respect if the
information and projections were being furnished, and such representations were
being made, at such time, then you will promptly supplement, or cause to
be supplemented, the information and projections so that such representations will be correct in all
material respects under those circumstances.

 

5.  Annex A.    In connection with arrangements such as
this, it is our firm’s policy to receive indemnification. The Company agrees to
the provisions with respect to our indemnity and other matters set forth in
Annex A, which is incorporated by reference into this Commitment Letter,

 

This Commitment Letter may not be assigned by you
without the prior written consent of GSCP (and any purported assignment
without such consent will be null and void), is intended to be solely for the
benefit of the parties hereto and is not intended to confer any benefits upon,
or create any rights in favor of, any person
other than the parties hereto. GSCP may assign its Commitment hereunder,
in whole or in part, to any of its affiliates or to any Lender, and upon such assignment, GSCP will be released from the
portion of its Commitment hereunder that has been assigned. This Commitment Letter (including the Annexes hereto)
may not be amended or any term or
provision hereof or thereof waived or modified, except by an instrument in
writing signed by each of the parties
hereto, and any term or provision hereof or thereof may be amended or waived only by a written agreement
executed and delivered by all parties hereto.

 

GSCP hereby notifies the Company
and the Acquired Business that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”)
it and each Lender may be required to obtain, verify and record information that identifies the Company and the Acquired
Business, which information includes the name and address of the Company
and the Acquired Business and other information that will allow GSCP and each Lender to identify the Company and
the Acquired Business in accordance with the Act. This notice is given
in accordance with the requirements of the Act and is effective for GSCP and each Lender.

 

6.  Confidentiality.    Please note that this Commitment Letter,
the Fee Letter and any written or oral advice provided by GSCP in connection
with this arrangement are exclusively for the information
of the Company and may not be disclosed to any third party or circulated or
referred to publicly without our
prior written consent, except, after providing written notice to GSCP, pursuant
to a subpoena or order issued by a court of competent jurisdiction or by a
judicial, administrative or
legislative body or committee. In addition, we hereby consent to your disclosure of (i) this Commitment Letter, the
Fee Letter and such advice to the Company’s officers, directors, agents and advisors who are directly involved in
the consideration of the Bridge Loans
to the extent such persons agree to hold the same in confidence, (ii) this
Commitment Letter or the information
contained herein (but not the Fee Letter or the information

 

 

contained therein) to the Acquired Business and the Seller to the
extent you notify such persons of their
obligations to keep such material confidential, and to the Acquired Business’s
and the Seller’s respective
officers, directors, agents and advisors who are directly involved in the consideration of the Bridge Loans; provided that you use commercially
reasonable efforts to cause such
persons to agree to hold the same in confidence, (iii) this Commitment
Letter and the Fee Letter as required
by applicable law (including regulations promulgated by the Securities and
Exchange Commission and rules of the New York Stock Exchange) or compulsory legal process (in which case you agree
to inform us promptly thereof) and (iv) the information contained in this Commitment Letter in any prospectus or
other offering memorandum relating to the Permanent Securities, The
provisions of this paragraph shall survive
any termination or completion of the arrangement provided by this Commitment
Letter.

 

7.  Additional Matters.    As you
know, GSCP may from time to time effect transactions, for its own
account or the account of customers, and hold positions in loans or options on
loans of the Company, the Acquired Business and other companies that may be the
subject of this arrangement. In addition,
Goldman Sachs is a full service securities firm and as such may from time
to time effect transactions, for its own account or the account of customers,
and hold positions in securities or options
on securities of the Company, the Acquired Business and other companies that may be the subject of this
arrangement. Each of GSCP and Goldman Sachs may have economic interests that
conflict with those of the Company. You acknowledge that the
transactions contemplated by this Commitment Letter and the Fee Letter are
arms-length commercial transactions and that each of GSCP and Goldman Sachs is
acting as principal and in its own best
interests. The Company is relying on its own experts and advisors to determine whether the transactions contemplated by this
Commitment Letter and the Fee Letter are in the Company’s best
interests. You agree that each of GSCP and Goldman Sachs will act under this Commitment Letter and the Fee Letter as an
independent contractor and that nothing in this Commitment Letter, the Fee
Letter, the nature of our services, or in any prior relationship will be deemed to create an advisory, fiduciary or agency
relationship between GSCP or Goldman Sachs,
on the one hand, and the Company, its stockholders or its affiliates, on the
other hand. In addition, GSCP may
employ the services of its affiliates in providing certain services hereunder and may exchange with such affiliates
information concerning the Company, the Acquired Business and other
companies that may be the subject of this arrangement, and such affiliates
shall be entitled to the benefits afforded to GSCP hereunder.

 

The Commitments hereunder will terminate upon the
first to occur of (i) the consummation of the Acquisition, (ii) the abandonment or termination of the Acquisition
Agreement, (iii) a material breach
by the Company under this Commitment Letter, the Fee Letter or the Engagement
Letter and (iv) June 30,
2006, unless the closing of the Bridge Loans, on the terms and subject to the
conditions contained herein, shall have been consummated prior to such date. In
addition, the Commitment hereunder will terminate upon the closing of the sale
of the Permanent Securities,

 

In addition, please note that
GSCP, Goldman Sachs and their affiliates do not provide accounting, tax
or legal advice. Notwithstanding anything herein to the contrary, the Company (and each employee, representative or other agent
of the Company) may disclose to any and all persons, without limitation
of any kind, the tax treatment and tax structure of the offering and all materials of any kind (including opinions or other
tax analyses) that are provided to the Company relating to such tax
treatment and tax structure. However, any information relating to the tax treatment or tax structure shall remain
subject to the confidentiality provisions hereof (and the foregoing sentence
shall not apply) to the extent reasonably necessary to enable the

 

 

parties hereto, their respective
affiliates, and their and their respective affiliates’ directors and employees
to comply with applicable securities laws. For this purpose, “tax treatment”
means US federal or state income tax treatment, and “tax structure” is limited
to any facts relevant to the US federal income tax treatment of the transactions
contemplated by this Commitment Letter but
does not include information relating to the identity of the parties hereto or
any of their respective affiliates.

 

All payments under this
Commitment Letter (including Annex A and Annex B) and the Fee Letter
will be made in U.S. dollars and without withholding or deduction of any tax,
assessment or other governmental charge
(collectively, “Tax”) unless required by law; and
if the Company will be required to
deduct or withhold any Tax, or if any Tax is required to be paid by any Lender solely on account of services performed hereunder
or under the Fee Letter, the Company will pay to such Lender such
additional amounts as will be required so that the net amount received by such
Lender from the Company after such deduction, withholding or payment will equal
the amounts otherwise due to such Lender hereunder or under the Fee Letter, as
applicable.

 

This Commitment Letter may be executed in any number
of counterparts, each of which when executed
will be an original, and all of which, when taken together, will constitute one
agreement. Delivery of an executed counterpart of a signature page of
this Commitment Letter by facsimile
transmission will be effective as delivery of a manually executed counterpart
hereof. This Commitment Letter, the
Fee Letter and the Engagement Letter are the only agreements that have been entered into among the parties
hereto with respect to the Bridge Loans and set forth the entire understanding of the parties with respect thereto and
supersede any prior written or oral
agreements among the parties hereto with respect to the Bridge Loans.

 

[Remainder
of page intentionally left blank]

 

 

Please confirm that the foregoing is in accordance
with your understanding by signing and returning to GSCP the enclosed copies of
this Commitment Letter, together, if not previously executed and delivered,
with the Fee Letter and the Engagement Letter on or before the close of
business on the date hereof, whereupon this Commitment Letter, the Fee Letter
and the Engagement Letter shall become binding agreements between us. If not
signed and returned by that time, this offer will terminate at that time. We
look forward to working with you on this transaction.

 

 

Very truly yours,

 

	
  GOLDMAN SACHS CREDIT
  PARTNERS L.P.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ William W. Archer

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  

 

 

	
  

  	
  Confirmed as of the
  date above:

  
	
   

  	
   

  
	
   

  	
  POGO PRODUCING COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Ulm, II

  
	
   

  	
   

  	
  Name:

  	
  James P. Ulm, II

  
	
   

  	
   

  	
  Title:

  	
  SVP & CFO

  

 

 

SCHEDULE 1

 

(in millions)

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  
	
  Goldman Sachs
  Credit Partners L.P.

  	
   

  	
  $

  	
  500.0

  	
   

  
	
  Total

  	
   

  	
  $

  	
  500.0

  	
   

  

 

 

Annex A

In the event that any of the Lenders or the Administrative
Agent (each, an “Indemnified Party”) becomes
involved in any capacity in any action, proceeding or investigation brought by
or against any person, including stockholders, partners or
other equity holders of the Company or the Acquired Business, in
connection with or as a result of either this arrangement or any matter referred to in this
Commitment Letter or the Fee Letter (together, the “Letters”),
the Company periodically will reimburse such
Indemnified Party for its reasonable legal and other expenses (including the
cost of any investigation and preparation) incurred in connection therewith.  The Company
also will indemnify and hold each Indemnified Party harmless against any and
all losses, claims, damages or
liabilities to any such person in connection with or as a result of either this arrangement or any matter referred to
in the Letters and without regard to the exclusive or contributory negligence of any of the Indemnified Parties,
except to the extent that such have been found by a final, non-appealable
judgment of a court that any such loss, claim, damage or liability results from the gross negligence, willful misconduct
or bad faith of such Indemnified
Party in performing the services
that are the subject of the Letters. If for any reason the
foregoing indemnification is unavailable to any Indemnified Party or
insufficient to hold it harmless, then the Company shall
contribute to the amount paid or payable by such Indemnified Party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect the relative economic interests of the
Company and the Acquired Business and their respective affiliates, stockholders, partners or other equity holders,
on the one hand, and such Indemnified
Party, on the other hand, in the matters contemplated by the Letters as well as
the relative fault of the Company and
the Acquired Business and their respective affiliates, stockholders, partners or other equity holders, on
the one hand, and such Indemnified Party, on the other hand, with respect to such loss, claim, damage or liability
and any other relevant equitable considerations.  The reimbursement, indemnity and contribution
obligations of the Company under this paragraph
shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms
and conditions to any affiliate of any Indemnified
Party and the partners, directors, agents, employees and controlling persons
(if any), as the case may be, of such
Indemnified Party and any such affiliate, and shall be binding upon and inure
to the benefit of any successors, assigns, heirs and personal representatives
of the Company, such Indemnified
Party, any such affiliate and any such person.  The Company also agrees that neither any Indemnified Party nor any of such
affiliates, partners, directors, agents,
employees or controlling persons shall have any liability based on its or their
exclusive or contributory negligence or otherwise to the Company, the Acquired
Business or any person asserting
claims on behalf of or in right of the Company, the Acquired Business or any
other person in connection with or as a result of either this
arrangement or any matter referred to in the
Letters, except in the case of the Company, to the extent that any losses,
claims, damages, liabilities or
expenses incurred by the Company or its affiliates, stockholders, partners or
other equity holders have resulted from the gross negligence, willful
misconduct or bad faith of such Indemnified
Party in performing the services that are the subject of the Letters; provided,
however, that in no event shall such
Indemnified Party or such other parties have any liability for any indirect, consequential or punitive damages in
connection with or as a result of such Indemnified
Party’s or such other parties’ activities related to the Letters,  Any right
to trial by jury with respect to any action or proceeding arising in connection
with or as a result of either
this arrangement or any matter referred to in the Letters is hereby waived by
the parties hereto. The Company agrees that
any suit or proceeding arising in respect to this agreement or our
engagement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court
does not have subject matter jurisdiction, in any state court located in the
City of New York, and the Company agrees to submit to the jurisdiction of, and to venue in, such courts.
 The provisions of this Annex A shall

 A-1
 

 

survive any termination or completion of the
arrangement provided by the Letters, and this Commitment
Letter shall be governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of laws.

 A-2

 

 

Annex B

Pogo Producing Company Summary of Terms and
Conditions of the Bridge Loans

This Summary of Terms and Conditions outlines certain
terms of the Bridge Loans and the Bridge Loan Agreement referred to in the
Commitment Letter, of which this Annex B is a part. Certain capitalized terms
used herein are defined in the Commitment Letter.

	
  Borrower

  	
   

  	
  The Company.

  
	
   

  	
   

  	
   

  
	
  Guarantors

  	
   

  	
  Each of the Guarantors (if any) under the Credit
  Facility (collectively, the “Guarantors”)
  will guarantee (the “Guarantee”)
  all obligations under the Bridge Loans; provided,
  however, that the
  obligation of any particular subsidiary to issue a Guarantee will be
  suspended so long as that subsidiary has not guaranteed any other
  indebtedness of the Company or any of its subsidiaries (other than
  indebtedness under the Credit Facility).

  
	
   

  	
   

  	
   

  
	
  Ranking

  	
   

  	
  The Bridge Loans and the Guarantees will rank pari passu with all other senior existing and future indebtedness and
  guarantees of indebtedness of the Company and its subsidiaries, as the case
  may be (including, without limitation, the Acquired Business), including,
  without limitation, the indebtedness under the Credit Facility.

  
	
   

  	
   

  	
   

  
	
  Sole
  Lead Arranger, Sole

  Bookrunner, Sole Syndication Agent and Administrative

  	
   

  	
   

  
	
  Agent

  	
   

  	
  Goldman Sachs Credit Partners L.P. (“GSCP”; in its capacities as Sole Lead Arranger, Sole
  Bookrunner and Sole Syndication Agent, the “Arranger”;
  and, in its capacity as Administrative Agent, the “Administrative
  Agent”).

  
	
   

  	
   

  	
   

  
	
  Lenders

  	
   

  	
  GSCP and/or other financial institutions selected by
  GSCP (each, a “Lender” and, collectively, the “Lenders”).

  
	
   

  	
   

  	
   

  
	
  Loans

  	
   

  	
  Up to $500.0 million in aggregate principal amount
  of Senior Increasing Rate Loans due 2012 (the “Bridge
  Loans”); provided that
  the aggregate principal amount of the Bridge Loans will be reduced by an
  amount equal to the aggregate amount of any Permanent Securities sold on or
  before the date on which the Bridge Loans are made (in escrow or otherwise).

  
	
   

  	
   

  	
   

  
	
  Maturity

  	
   

  	
  Six years from the date of the making of the Bridge
  Loans. At any time on or after the first anniversary of the Closing Date, at
  the option of the applicable Lender, the Bridge Loans may be exchanged in
  whole or in part for Senior

  

 

 B-1
 

 

 

	
  

  	
   

  	
  Exchange Notes due 2012
  (the “Exchange Notes”) having an
  equal principal amount.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Exchange Notes will be
  issued pursuant to an Indenture that will have the terms set forth on
  Exhibit 1 to this Annex B.

  
	
   

  	
   

  	
   

  
	
  Interest

  	
   

  	
  The Bridge Loans will
  initially bear interest at a rate per
  annum equal to 6.875%. If the Bridge Loans are not repaid in whole
  within three months following the Closing Date, the interest rate on the
  Bridge Loans will increase by 50 basis points at the end of such three-month
  period and will increase by an additional 50 basis points at the end of each
  three-month period thereafter. Notwithstanding the foregoing, at no time will
  the interest rate in effect on the Bridge Loans be less than the rate in
  effect on the Credit Facility or exceed a per
  annum rate equal to the yield then in effect on United States
  Treasury Notes with a maturity of 10 years plus 600 basis points

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Interest will be payable
  quarterly in arrears and on the date of any prepayment of the Bridge Loans.

  
	
   

  	
   

  	
   

  
	
  Mandatory

  Repayment

  	
   

  	
  The net proceeds to the
  Company, any parent holding company of the Company or any subsidiary of the
  Company (including, without limitation, the Acquired Business following the
  Closing Date) from (i) any direct or indirect public offering or private
  placement of any debt or equity securities (other than issuances pursuant to
  employee stock plans), (ii) any future bank borrowings other than under
  the Credit Facility (including the increase of commitments permitted
  thereunder) as in effect on the Closing Date and borrowings of up to $100
  million under money market lines and (iii) subject to certain ordinary
  course exceptions (including any required pro rata prepayment of pari passu debt pursuant to the “asset
  sale” covenant contained in the indentures governing the Company’s existing
  senior subordinated notes), any future asset sales or receipt of casualty
  insurance proceeds will be used to redeem the Bridge Loans subject, except in
  the case of a Qualifying Refinancing Transaction (to be defined), to the
  required prior repayment of any amount outstanding under the Credit Facility,
  in each case, at 100% of the principal amount of the Bridge Loans redeemed
  plus accrued interest to the date of the redemption.

  
	
   

  	
   

  	
   

  
	
  Change of

  Control

  	
   

  	
  Each holder of Bridge
  Loans will be entitled to require the Company, and the Company must offer, to
  repay the

  

 

 B-2
 

 

 

	
  

  	
   

  	
  Bridge Loans held by such holder at a price of 100%
  of principal amount, plus accrued interest, upon the occurrence of a Change
  of Control (as defined in the indenture governing the Company’s 6.875% Senior
  Subordinated Notes due 2017 (the “2005 Indenture”)).
  Prior to making the repayment offer, the Company will, within 30 days of the
  Change of Control, repay all obligations under the Credit Facility or obtain
  any required consent of the lenders under the Credit Facility to make such
  repayment of the Bridge Loans.

  
	
   

  	
   

  	
   

  
	
  Optional

  Repayment

  	
   

  	
  The Bridge Loans may be prepaid, in whole or in
  part, at the option of the Company at any time upon three business days’
  written notice at a price equal to 100% of the principal amount thereof plus
  accrued interest to the date of redemption.

  
	
   

  	
   

  	
   

  
	
  Payments

  	
   

  	
  Payments by the Company will be made by wire
  transfer of immediately available funds.

  
	
   

  	
   

  	
   

  
	
  Representations

  and Warranties

  	
   

  	
  The Bridge Loan Agreement will contain such
  representations and warranties by the Company (with respect to the Company
  and the Acquired Business) as are usual and customary for financings of this
  kind or as are otherwise deemed appropriate by the Arranger for this transaction
  in particular (in its sole discretion).

  
	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  	
  The Bridge Loan Agreement will contain such
  covenants by the Company (with respect to the Company and its subsidiaries)
  as are usual and customary for financings of this kind or as are otherwise
  deemed appropriate by the Arranger for this transaction in particular (in its
  sole discretion), based upon (and substantially identical to) the covenants
  in the 2005 Indenture. In addition, the Bridge Loan Agreement will contain a
  covenant that prohibits the Company from consummating any acquisition of
  assets or businesses for a purchase price that, individually or in the
  aggregate, exceeds $100.0 million (excluding like-kind exchanges or asset
  swaps).

  

 

 B-3
 

 

 

	
  Events of

  Default

  	
   

  	
  The Bridge Loan Agreement
  will include such events of default (and, as appropriate, grace periods) as are
  usual and customary for financings of this kind or as are otherwise deemed
  appropriate by the Arranger for this transaction in particular (in its sole
  discretion), based upon (and substantially identical to) the events of
  default in the 2005 Indenture.

  
	
   

  	
   

  	
   

  
	
  Conditions Precedent

  	
   

  	
  The several obligations of the Lenders to make, or
  cause one of their respective affiliates to make, the Bridge Loans will be
  subject to closing conditions deemed appropriate by the Arranger for
  financings of this kind generally and for this transaction in particular,
  including, without limitation, the following closing conditions:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.                                       Concurrent
  Transactions.  The Acquisition shall
  have been consummated pursuant to the Acquisition Agreement and all
  conditions precedent to the consummation of the Acquisition shall have been
  satisfied or, with the prior approval of the Arranger, waived. The terms of
  the Acquisition Agreement and the Bridge Loan Agreement shall be satisfactory
  in all respects to the Arranger and its counsel. The pro forma capitalization of the Company
  shall be as described in the Commitment Letter. There shall not exist (pro forma for the Acquisition and the
  financing thereof) any default or event of default under the Credit Facility,
  the Bridge Loans, the Bridge Loan Agreement or any of the other Loan
  Documents (as defined), or under any other material indebtedness of the
  Company or its subsidiaries.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.                                       Confirmatory
  Due Diligence.  The Arranger shall
  not have become aware of any information relating to conditions or events not
  previously described to the Arranger or constituting new information or
  additional developments concerning conditions or events previously disclosed
  to the Arranger which it, in its judgment, believe may have a material
  adverse effect on the condition (financial or otherwise), assets, liabilities
  (contingent or otherwise), properties, solvency. business, management or
  prospects of the Company or the Acquired Business.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.                                       Financial Statements. At least five days prior to the Closing
  Date, the Arranger shall have received audited financial statements of the
  Company for

  

 

 B-4
 

 

 

	
  

  	
   

  	
  each
  of the three fiscal years immediately preceding the Acquisition and any
  appropriate available unaudited financial statements for any interim period
  or periods of the Company and all other recent, probable or pending
  acquisitions.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.                                       Approvals
  and Consents. All necessary governmental, shareholder and third-party approvals and consents necessary or
  desirable in connection with the Acquisition and the financing thereof and
  the transactions contemplated thereby and otherwise referred to herein shall
  have been received and shall be in full force and effect, and all applicable
  waiting periods shall have expired without any action being taken by any
  applicable authority. The Arranger, in its sole discretion, shall be
  satisfied that the borrowings under the Bridge Loans and the performance by
  the Company of the transactions contemplated by the Commitment Letter, the
  Fee Letter and the Engagement Letter, including, but not limited to, the
  issuance of the Permanent Securities and the repayment of the Bridge Loans at
  maturity or upon a mandatory repayment event, will not conflict with, result
  in a breach or violation of any of the terms or provisions of, require a
  waiver or amendment to, or constitute a default under the Credit Facility,
  the indentures governing the Company’s senior subordinated notes or any other
  agreement governing material indebtedness of the Company or its subsidiaries.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.                                       Litigation, etc. There shall not exist any action, suit,
  investigation, litigation or proceeding pending or threatened in any court or
  before any arbitrator or governmental authority that, in the opinion of the
  Arranger, materially affects the Acquisition, the financing thereof or any of
  the other transactions contemplated hereby, or that has had or could have a
  material adverse effect on the Company or the Acquired Business or their
  respective subsidiaries, the Acquisition, the financing thereof, or any of
  the transactions contemplated hereby.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.                                       Availability under Credit Facility. After giving effect to the consummation
  of the Acquisition, the Company shall have availability under the Credit
  Facility in an amount to be agreed upon.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.                                       Performance of Obligations. All costs, fees, expenses (including,
  without limitation, legal fees and expenses) and other compensation

  

 

 B-5
 

 

 

	
  

  	
   

  	
  contemplated
  by the Commitment Letter, the Fee Letter and the Engagement Letter payable to
  GSCP, Goldman Sachs, the Arranger, the Administrative Agent or the Lenders
  shall have been paid to the extent due and the Company shall have complied in
  all material respects with all of its other obligations under the Commitment
  Letter, the Fee Letter and the Engagement Letter.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.                                       Funding Notice. The Lenders shall have received not less
  than three business days’ prior written notice of the Closing Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.                                       Corporate Structure: Organizational
  Documents. All agreements
  relating to, and the corporate structure and management of, the Company and
  its subsidiaries (including,    without
  limitation, the Acquired Business), and all organizational documents of such
  entities, shall be satisfactory to the Arranger.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.                                 Environmental Matters. 
  The Lenders shall have received reports and other information in form,
  scope and substance satisfactory to the Arranger concerning any environmental
  liabilities.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.                                 Customary Closing Documents. All documents required to be delivered
  under the definitive financing documents, including customary legal opinions,
  corporate records and documents from public officials and officers’
  certificates shall have been delivered. The Arranger shall have received all
  documentation and other information required by bank regulatory authorities
  under applicable “know-your-customer” and anti-money laundering rules and
  regulations, including the U.S.A. Patriot Act.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.                                 Solvency.  The Lenders shall have
  received a certificate from the chief financial officer of the Company, in
  form and substance satisfactory to the Arranger, supporting the conclusions
  that after giving effect to the Acquisition and the related transactions
  contemplated hereby, the Company will not be insolvent or be rendered
  insolvent by the indebtedness incurred in connection therewith, or be left
  with unreasonably small capital with which to engage in its businesses, or
  have incurred debts beyond its ability to pay such debts as they mature.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.                                 Satisfactory Documentation. 
  The definitive documentation evidencing the Bridge Loans shall

  

 

 B-6
 

 

 

	
  

  	
   

  	
  be prepared by counsel
  to the Arranger and shall be in form and substance satisfactory to the
  Arranger and the Lenders.

  
	
   

  	
   

  	
   

  
	
  Transferability
  and

  Participations

  	
   

  	
  Each of the Lenders will be free to sell or transfer
  all or any part of or any participation in any of the Bridge Loans to any
  third party with the consent of the Arranger and to pledge any or all of the
  Bridge Loans to any commercial bank or other institutional lender, to the
  extent permitted by law.

  
	
   

  	
   

  	
   

  
	
  Modification
  of the Bridge Loans

  	
   

  	
  Modification of the Bridge Loans may be made with
  the consent of Lenders holding greater than 50% of the Bridge Loans then
  outstanding, except that no modification or change may extend the maturity of
  any Bridge Loan or change the time of payment of interest on any Bridge Loan,
  reduce the rate of interest or the principal amount of any Bridge Loan, alter
  the redemption provisions of any Bridge Loan or reduce the percentage of
  holders necessary to modify or change the Bridge Loans, without the consent
  of Lenders holding 100% of the Bridge Loans affected thereby.

  
	
   

  	
   

  	
   

  
	
  Taxes,
  Reserve Requirements and Indemnities

  	
   

  	
  The Bridge Loan Agreement will provide that all
  payments will be made free and clear of any taxes (other than franchise taxes
  and taxes on overall net income), imposts, assessments, withholdings or other
  deductions whatsoever. Any foreign lenders will be required to furnish to the
  Arranger appropriate certificates or other evidence of exemption from U.S.
  federal tax withholding.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Company will indemnify the Lenders against all increased
  costs of capital resulting from reserve requirements or otherwise imposed, in
  each case subject to customary increased costs, capital adequacy and similar
  provisions to the extent not taken into account in the calculation of the
  Base Rate or the reserve adjusted Eurodollar Rate.

  
	
   

  	
   

  	
   

  
	
  Indemnity

  	
   

  	
  The Bridge Loan Agreement will contain customary and
  appropriate provisions relating to indemnity and related matters in a form
  reasonably satisfactory to the Arranger.

  
	
   

  	
   

  	
   

  
	
  Governing Law and

  Jurisdiction

  	
   

  	
  The Bridge Loan Agreement will provide that the
  Company will submit to the non-exclusive jurisdiction and venue of the
  federal and state courts of the State of New York and

  

 

 B-7
 

 

 

	
  

  	
   

  	
  will waive any right to
  trial by jury. New York law will govern the Loan Documents.

  
	
   

  	
   

  	
   

  
	
  Counsel
  to the Arranger and

  Administrative
  Agent

  	
   

  	
  Latham & Watkins
  LLP.

  

 

The foregoing is intended to summarize certain basic
terms of the Bridge Loans. It is not intended to be a definitive list of all of
the requirements of the Lenders in connection with the Bridge Loans.

 B-8

 

 

Exhibit 1
to Annex B

Summary of Terms and Conditions
of Exchange Notes

This Summary of
Terms and Conditions of Exchange Notes outlines certain terms of the Exchange Notes referred to in Annex B to the
Commitment Letter, of which this Exhibit 1 is a part. Capitalized terms used herein have the
meanings assigned to them in Annex B to the Commitment Letter.

At any time on or after the
first anniversary of the Closing Date, upon five or more business days prior notice, the Bridge Loans may, at the
option of a Lender, be exchanged for a principal amount of Exchange
Notes equal to 100% of the aggregate principal amount of the Bridge Loans so exchanged. No Exchange Notes will be
issued until the Company receives requests to issue at least $50.0 million in aggregate principal amount of
Exchange Notes. The Company will issue Exchange Notes under an indenture (the “Indenture”) that complies with the Trust Indenture Act of
1939, as amended. The Company will appoint a trustee reasonably acceptable to the Lenders.

	
  Maturity

  	
   

  	
  The Exchange Notes will mature on the sixth
  anniversary of the Closing Date.

  
	
   

  	
   

  	
   

  
	
  Interest Rate

  	
   

  	
  Each Exchange Note will bear interest at a fixed
  rate equal to the interest rate on the
  Bridge Loan surrendered in exchange
  for such Exchange Note as of the date of such exchange. Interest will be
  payable in arrears at the end of each fiscal quarter of the Company.

  
	
   

  	
   

  	
   

  
	
  Optional Redemption

  	
   

  	
  Exchange Notes will be non-callable until the fourth
  anniversary of the Closing Date. Thereafter,
  each Exchange Note will be callable
  at par plus accrued interest plus a premium equal to (i) one half of the
  coupon on such Exchange Note
  commencing on the fourth anniversary of the Closing Date and (ii) one quarter of the coupon on such Exchange Note commencing on the fifth
  anniversary of the Closing Date. In
  addition, prior to the third anniversary
  of the Closing Date, up to 35% of the original principal amount of each series of the Exchange Notes may be redeemed from the proceeds of a
  qualifying equity offer by the
  Company at a redemption price equal to par plus the coupon and accrued interest.

  
	
   

  	
   

  	
   

  
	
  Defeasance Provisions
  of Exchange Notes

  	
   

  	
  Customary.

  
	
   

  	
   

  	
   

  
	
  Modification

  	
   

  	
  Customary.

  
	
   

  	
   

  	
   

  
	
  Change of Control

  	
   

  	
  Customary at 101%.

  

 1
 

 

 

	
  Registration Rights

  	
   

  	
  The Company will file within 30 days after the first
  anniversary of the Closing Date and will use its best efforts to cause to
  become effective as soon thereafter as practicable, a shelf registration
  statement with respect to the Exchange Notes (a “Shelf
  Registration Statement”). If a Shelf Registration Statement is
  filed, the Company will keep such registration statement effective and
  available (subject to customary exceptions) until it is no longer needed to
  permit unrestricted resales of all of the Exchange Notes. If within 90 days
  from such first anniversary of the Closing Date (the “Effectiveness
  Date”) a Shelf Registration Statement for the Exchange Notes has
  not been declared effective, then the Company will pay liquidated damages in
  the form of increased interest of 50 basis points per annum
  on the principal amount of Exchange Notes and Bridge Loans outstanding to
  holders of such Exchange Notes and Bridge Loans who are unable freely to
  transfer Exchange Notes from and including the 91st day after such first
  anniversary of the Closing Date to but excluding the effective date of such
  Shelf Registration Statement. On the 90th day after the Effectiveness Date,
  the liquidated damages shall increase by 50 basis points per annum,
  and on each 90 day anniversary of the Effectiveness Date thereafter, shall
  increase by 50 basis points per annum, to
  a maximum increase in interest of 200 basis points per annum.
  The Company will also pay such liquidated damages for any period of time
  (subject to customary exceptions) following the effectiveness of a Shelf
  Registration Statement that such Shelf Registration Statement is not
  available for sales thereunder. All accrued liquidated damages will be paid
  on each quarterly interest payment date.

  
	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  	
  The indenture relating to the
  Exchange Notes will contain covenants
  substantially identical to those contained in the 2005 Indenture.

  
	
   

  	
   

  	
   

  
	
  Events
  of Default

  	
   

  	
  The indenture relating to the
  Exchange Notes will provide for
  Events of Default substantially identical to those contained in the 2005 Indenture.

  

 

The foregoing is intended to summarize certain basic terms of the
Exchange Notes. It is not intended to be a definitive list of all of the
requirements of the Lenders in connection with the Exchange Notes.

 2

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