ENDEAVOUR INTERNATIONAL
CORPORATION
35,000,000 Shares of Common Stock,
par value $0.001 per share
J.P. Morgan
Securities Inc.
Credit Suisse Securities (USA) LLC
As Representatives of the
several Underwriters listed
in Schedule I hereto
c/o J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
Endeavour
International Corporation, a Nevada corporation (the
“Company”), proposes to issue and sell to the several
Underwriters listed in Schedule I hereto (the
“Underwriters”), for whom you are acting as
representatives (the “Representatives”), an aggregate
of 35,000,000 shares of common stock, par value $0.001 per share,
of the Company (the “Underwritten Shares”) and, at the
option of the Underwriters, up to an additional 5,250,000 shares of
common stock of the Company (the “Option Shares”). The
Underwritten Shares and the Option Shares are herein referred to as
the “Shares”. The shares of common stock of the Company
to be outstanding after giving effect to the sale of the Shares are
herein referred to as the “Stock”.
The Company hereby
confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
1.
Registration Statement . The Company has prepared and filed
with the Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Securities Act”), a registration
statement (File No. 333-130515) including a prospectus,
relating to the Shares. Such registration statement, as amended at
the time it became effective, including the information, if any,
deemed pursuant to Rule 430A, 430B or 430C under the
Securities Act to be part of the registration statement at the time
of its effectiveness (“Rule 430 Information”), is
referred to herein as the “Registration Statement”; and
as used herein, the term “Preliminary Prospectus” means
each prospectus included in such registration statement (and any
amendments thereto) before
it becomes
effective, any prospectus filed with the Commission pursuant to
Rule 424(a) under the Securities Act and the prospectus included in
the Registration Statement at the time of its effectiveness that
omits Rule 430 Information, and the term
“Prospectus” means the prospectus in the form first
used (or made available upon request of purchasers pursuant to
Rule 173 under the Securities Act) in connection with
confirmation of sales of the Shares. If the Company has filed an
abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the “Rule 462 Registration
Statement”), then any reference herein to the term
“Registration Statement” shall be deemed to include
such Rule 462 Registration Statement. Any reference in this
Agreement to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the
effective date of the Registration Statement or the date of such
Preliminary Prospectus or the Prospectus, as the case may be and
any reference to “amend”, “amendment” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date
under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder (collectively,
the “Exchange Act”) that are deemed to be incorporated
by reference therein.
At or prior to the
time when sales of the Shares were first made (the “Time of
Sale”), the Company had prepared the following information
(collectively with the pricing information set forth on Annex B,
the “Time of Sale Information”): a Preliminary
Prospectus dated October 11, 2006, and each
“free-writing prospectus” (as defined pursuant to
Rule 405 under the Securities Act) listed on Annex B
hereto.
2.
Purchase of the Shares by the Underwriters . (a) The
Company agrees to issue and sell the Shares to the several
Underwriters as provided in this Agreement, and each Underwriter,
on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein,
agrees, severally and not jointly, to purchase from the Company the
respective number of Underwritten Shares set forth opposite such
Underwriter’s name in Schedule 1 hereto at a price per
share (the “Purchase Price”) of $2.24425.
In addition, the
Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters,
on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, shall
have the option to purchase, severally and not jointly, from the
Company the Option Shares at the Purchase Price.
If any Option
Shares are to be purchased, the number of Option Shares to be
purchased by each Underwriter shall be the number of Option Shares
which bears the same ratio to the aggregate number of Option Shares
being purchased as the number of Underwritten Shares set forth
opposite the name of such Underwriter in Schedule 1 hereto (or
such number increased as set forth in Section 10 hereof) bears
to the aggregate number of Underwritten Shares being purchased from
the Company by the several Underwriters, subject, however, to such
adjustments to eliminate any fractional Shares as the
Representatives in their sole discretion shall make. The
Underwriters may exercise the option to purchase the Option Shares
at any time in whole, or from time to time in part, on or before
the thirtieth day following the date of this Agreement,
by
written notice
from the Representatives to the Company. Such notice shall set
forth the aggregate number of Option Shares as to which the option
is being exercised and the date and time when the Option Shares are
to be delivered and paid for which may be the same date and time as
the Closing Date (as hereinafter defined) but shall not be earlier
than the Closing Date nor later than the tenth full business day
(as hereinafter defined) after the date of such notice (unless such
time and date are postponed in accordance with the provisions of
Section 10 hereof). Any such notice shall be given at least
two Business Days prior to the date and time of delivery specified
therein.
(b) The
Company understands that the Underwriters intend to make a public
offering of the Shares as soon after the effectiveness of this
Agreement as in the judgment of the Representatives is advisable,
and initially to offer the Shares on the terms set forth in the
Prospectus. The Company acknowledges and agrees that the
Underwriters may offer and sell Shares to or through any affiliate
of an Underwriter and that any such affiliate may offer and sell
Shares purchased by it to or through any Underwriter.
(c) Payment
for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the
Representatives in the case of the Underwritten Shares, at the
offices of Simpson Thacher & Bartlett LLP, 425 Lexington
Avenue, New York, NY 10017 at 10:00 A.M. New York City time on
October 25, 2006, or at such other time or place on the same
or such other date, not later than the fifth business day
thereafter, as the Representatives and the Company may agree upon
in writing or, in the case of the Option Shares, on the date and at
the time and place specified by the Representatives in the written
notice of the Underwriters’ election to purchase such Option
Shares. The time and date of such payment for the Underwritten
Shares is referred to herein as the “Closing Date” and
the time and date for such payment for the Option Shares, if other
than the Closing Date, is herein referred to as the
“Additional Closing Date”.
Payment for the
Shares to be purchased on the Closing Date or the Additional
Closing Date, as the case may be, shall be made against delivery to
the Representatives through the facilities of the Depository Trust
Company for the respective accounts of the several Underwriters of
the Shares to be purchased on such date, certificates for such
shares should be in such denominations as the Representatives shall
request in writing not later than two full business days prior to
the Closing Date or the Additional Closing Date, as the case may
be, with any transfer taxes payable in connection with the sale of
the Shares duly paid by the Company. The certificates for the
Shares shall be registered in the names of Cede & Co. pursuant
to an agreement with the Depository Trust Company and will be made
available for inspection and packaging by the Representatives at
the office of J.P. Morgan Securities Inc. set forth above not later
than 1:00 P.M., New York City time, on the business day prior to
the Closing Date or the Additional Closing Date, as the case may
be.
(d) The
Company acknowledges and agrees that the Underwriters are acting
solely in the capacity of an arm’s length contractual
counterparty to the Company with respect to the offering of Shares
contemplated hereby (including in connection with determining the
terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company or any other person.
Additionally, neither the Representatives nor any other Underwriter
is advising the
Company or any
other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company shall consult
with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and
appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the
Company with respect thereto. Any review by the Underwriters of the
Company, the transactions contemplated hereby or other matters
relating to such transactions will be performed solely for the
benefit of the Underwriters and shall not be on behalf of the
Company.
3.
Representations and Warranties of the Company . The Company
represents and warrants to each Underwriter that:
(a)
Preliminary Prospectus. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission, and each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the Securities Act
and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in any Preliminary
Prospectus.
(b) Time
of Sale Information . The Time of Sale Information, at the Time
of Sale did not, and at the Closing Date and as of the Additional
Closing Date, as the case may be, will not, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided that the Company makes no representation and
warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in such Time of Sale
Information. No statement of material fact included in the
Prospectus has been omitted from the Time of Sale Information and
no statement of material fact included in the Time of Sale
Information that is required to be included in the Prospectus has
been omitted therefrom.
(c)
Issuer Free Writing Prospectus. Other than the Preliminary
Prospectus and the Prospectus, the Company (including its agents
and representatives, other than the Underwriters in their capacity
as such) has not made, used, prepared, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or
refer to any “written communication” (as defined in
Rule 405 under the Securities Act) that constitutes an offer to
sell or solicitation of an offer to buy the Shares (each such
communication by the Company or its agents and representatives
(other than a communication referred to in clause (i) below)
an “Issuer Free Writing Prospectus”) other than (i) any
document not constituting a prospectus pursuant to
Section 2(a)(10)(a) of the Securities Act or Rule 134
under the Securities Act or (ii) the documents listed on Annex
B hereto and other written communications approved in writing in
advance by the Representatives. Each such Issuer Free Writing
Prospectus complied in all material respects with the Securities
Act, has been filed in accordance with the Securities Act
(to
the extent
required thereby) and, when taken together with the Preliminary
Prospectus filed prior to the first use of such Issuer Free Writing
Prospectus, did not, and at the Closing Date and as of the
Additional Closing Date, as the case may be, will not, contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided that the Company makes no
representation and warranty with respect to any statements or
omissions made in each such Issuer Free Writing Prospectus in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in any Issuer Free
Writing Prospectus.
(d)
Registration Statement and Prospectus. The Registration
Statement has been declared effective by the Commission. No order
suspending the effectiveness of the Registration Statement has been
issued by the Commission and no proceeding for that purpose or
pursuant to Section 8A of the Securities Act against the
Company or related to the offering has been initiated or threatened
by the Commission; as of the applicable effective date of the
Registration Statement and any amendment thereto, the Registration
Statement complied and will comply in all material respects with
the Securities Act, and did not and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the date of the
Prospectus and any amendment or supplement thereto and as of the
Closing Date and as of the Additional Closing Date, as the case may
be, the Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or
omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use in
the Registration Statement and the Prospectus and any amendment or
supplement thereto.
(e)
Incorporated Documents. The documents incorporated by
reference in the Registration Statement, the Prospectus or the Time
of Sale Information, when they became effective or were filed with
the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and none of such documents contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and
incorporated by reference in the Registration Statement, the
Prospectus or the Time of Sale Information, when such documents
become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and will not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(f)
Financial Statements. (i) The financial statements and
the related notes thereto of the Company and its consolidated
subsidiaries included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the
Prospectus comply in all material
respects with
the applicable requirements of the Securities Act and the Exchange
Act, as applicable, and present fairly the financial position of
the Company and its subsidiaries as of the dates indicated and the
results of their operations and the changes in their cash flows for
the periods specified; such financial statements have been prepared
in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods covered thereby, and
the supporting schedules included or incorporated by reference in
the Registration Statement present fairly the information required
to be stated therein; the other financial information included or
incorporated by reference in the Registration Statement, the Time
of Sale Information and the Prospectus has been derived from the
accounting records of the Company and its subsidiaries and presents
fairly the information shown thereby; and the pro
forma financial information and the related notes thereto
included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus have
been prepared in accordance with the applicable requirements of the
Securities Act and the Exchange Act, as applicable, and the
assumptions underlying such pro forma financial
information are reasonable and are set forth in the Registration
Statement, the Time of Sale Information and the Prospectus; and
(ii) to the knowledge of the Company, the statements of
revenues and direct operating expenses of the oil and gas
properties (the “Acquisition Assets”) purchased by the
Company from Talisman Energy Inc. (“Talisman”) included
in the Registration Statement, the Time of Sale Information and the
Prospectus present fairly the revenues and direct operating
expenses of the Acquisition Assets as of the dates indicated and
for the periods specified; and such financial statements have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
covered thereby.
(g) No
Material Adverse Change. Since the date of the most recent
financial statements of the Company or of the Acquisition Assets
included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus,
(i) there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or, to the
knowledge of the Company, of the Acquisition Assets, or any
dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company or, to the knowledge of the
Company, Talisman on any class of capital stock, or any material
adverse change in or affecting the business, properties,
management, financial position, stockholders’ equity, results
of operations or prospects of the Company and its subsidiaries or,
to the knowledge of the Company, the Acquisition Assets, taken as a
whole; (ii) neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, the Acquisition Assets has
entered into any transaction or agreement that is material to the
Company and its subsidiaries taken as a whole or, to the knowledge
of the Company, to the Acquisition Assets taken as a whole or
incurred any liability or obligation, direct or contingent, that is
material to the Company and its subsidiaries taken as a whole or,
to the knowledge of the Company, to the Acquisition Assets taken as
a whole; and (iii) neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, the Acquisition
Assets has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor disturbance or dispute
or any action, order or decree of any court or arbitrator or
governmental or regulatory authority, except in each case as would
not constitute, individually or in the aggregate, a Material
Adverse Effect (as defined below) or is otherwise disclosed in the
Registration Statement, the Time of Sale Information and the
Prospectus.
(h)
Organization and Good Standing. The Company and each of its
subsidiaries, to the extent applicable, have been duly organized
and are validly existing and in good standing under the laws of
their respective jurisdictions of organization, are duly qualified
to do business and are in good standing in each jurisdiction in
which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification,
and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they
are engaged, except where the failure to be so qualified or have
such power or authority would not, individually or in the
aggregate, have a material adverse effect on the business,
properties, management, financial position, stockholders’
equity, results of operations or prospects of the Company and its
subsidiaries taken as a whole (a “Material Adverse
Effect”). The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
the subsidiaries listed in Exhibit 21 to the Registration
Statement.
(i)
Capitalization. The Company has an authorized capitalization
as set forth in the Registration Statement, the Time of Sale
Information and the Prospectus under the heading
“Capitalization”; all the outstanding shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable and are not subject to
any pre-emptive or similar rights; except as described in or
expressly contemplated by the Time of Sale Information and the
Prospectus, there are no outstanding rights (including, without
limitation, pre-emptive rights), warrants or options to acquire, or
instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding
or arrangement of any kind relating to the issuance of any capital
stock of the Company or any such subsidiary, any such convertible
or exchangeable securities or any such rights, warrants or options;
the capital stock of the Company conforms in all material respects
to the description thereof contained in the Registration Statement,
the Time of Sale Information and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of
each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable (except,
in the case of any foreign subsidiary, for directors’
qualifying shares and except as otherwise described in the
Registration Statement, the Time of Sale Information and the
Prospectus) and are owned directly or indirectly by the Company,
free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third
party.
(j) Due
Authorization. The Company has full right, power and authority
to execute and deliver this Agreement and, at the time of entering
into the following agreements, (i) had full right, power and
authority to enter into and deliver the Put and Call Option
Agreement between Paladin Resources Limited, Endeavour Energy UK
Limited and Endeavour International Corporation, dated May 26,
2006, the Hive-In Agreement between Talisman Energy
(UK) Limited, Talisman Energy Alpha Limited, Talisman North
Sea Limited, Talisman Oil Trading Limited and Talisman Expro
Limited, dated May 26, 2006, the Hive-Out Agreement between
Talisman Expro Limited and Paladin Resources (Montrose) Limited,
dated May 26, 2006, the Hive-Out Agreement between Talisman
Expro Limited and Talisman Petroleum Ltd., dated May 26, 2006,
the Hive-Out Agreement between Talisman Expro Limited and Talisman
Oil Trading Limited, dated May 26, 2006, the Hive-Out
Agreement between Talisman Expro Limited and Talisman North Sea
Limited, dated May 26, 2006, and the Hive-Out Agreement
between
Talisman Expro
Limited and Talisman Energy (UK) Limited, dated May 26,
2006 (the “Acquisition Documents”), and (ii) will
have full right, power and authority to enter into and deliver the
Secured Revolving Loan and Letter of Credit Facility Agreement
among the Company and BNP Paribas and the Governor and Company of
the Bank of Scotland, as arrangers and lenders, the Second Lien
Credit Guarantee Agreement among Endeavour International Holding
B.V. and Credit Suisse Securities (USA) LLC, as arranger and
lender, and the Subscription and Registration Rights Agreement
among the Company and the purchasers thereto relating to the
Series A-1 Convertible Preferred Stock (collectively, the
“Financing Documents” and, together with the
Acquisition Documents, the “Transaction Documents”) and
to perform its obligations hereunder and thereunder.
(k)
Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(l) The
Shares. The Shares to be issued and sold by the Company
hereunder have been duly authorized by the Company and, when issued
and delivered and paid for as provided herein, will be duly and
validly issued and will be fully paid and nonassessable and will
conform to the descriptions thereof in the Time of Sale Information
and the Prospectus; and the issuance of the Shares is not subject
to any preemptive or similar rights.
(m) Other
Transaction Documents. The Transaction Documents (other than
this Agreement) have been duly authorized, and the Acquisition
Documents have been duly executed and delivered by the Company,
and, to the knowledge of the Company, Talisman and constitute valid
and legally binding agreements of each of the Company and Talisman
enforceable against each of the Company and Talisman in accordance
with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting
creditors’ rights generally or by equitable principles
relating to enforceability.
(n)
Descriptions of the Series A-1 Convertible Preferred
Stock. The Series A-1 Convertible Preferred Stock conforms
in all material respects to the description thereof contained in
the Registration Statement, the Time of Sale Information and the
Prospectus.
(o) No
Violation or Default. Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any of the
Acquisition Assets is (i) in violation of its charter or
by-laws or similar organizational documents; (ii) in default,
and no event has occurred that, with notice or lapse of time or
both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets is a party or by which the Company or any of its
subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets is bound or to which any of the property or
assets of the Company or any of its subsidiaries or, to the
knowledge of the Company, any of the Acquisition Assets is subject;
or (iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of
clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(p) No
Conflicts. The execution, delivery and performance by the
Company of each of the Transaction Documents, the issuance and sale
of the Shares and the consummation of the transactions contemplated
by the Transaction Documents will not (i) conflict with or
result in a breach or violation of any of the terms or provisions
of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries or, to the
knowledge of the Company, any of the Acquisition Assets pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets is a party or by which the Company or any of its
subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets is bound or to which any of the property or
assets of the Company or any of its subsidiaries or, to the
knowledge of the Company, any of the Acquisition Assets is subject,
(ii) result in any violation of the provisions of the charter
or by-laws or similar organizational documents of the Company or
any of its subsidiaries or, to the knowledge of the Company, any of
the Acquisition Assets, if applicable, or (iii) result in the
violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory
authority, except, in the case of clauses (i) and (iii) above,
for any such conflict, breach or violation that would not,
individually or in the aggregate, have a Material Adverse
Effect.
(q) No
Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or
governmental or regulatory authority (including without limitation
the Federal Energy Regulatory Commission) is required for the
execution, delivery and performance by the Company of each of the
Transaction Documents, the issuance and sale of the Shares and the
consummation of the transactions contemplated by the Transaction
Documents, except for (i) the registration of the Shares under
the Securities Act and such consents, approvals, authorizations,
orders and registrations or qualifications as may be required under
applicable state securities laws in connection with the purchase
and distribution of the Shares by the Underwriters; and
(ii) with respect to the consummation of the transactions
contemplated by the Transaction Documents (other than this
Agreement).
(r) Legal
Proceedings. Except as described in the Registration Statement,
the Time of Sale Information and the Prospectus, there are no
legal, governmental or regulatory investigations, actions, suits or
proceedings pending to which the Company or any of its subsidiaries
or, to the knowledge of the Company, any of the Acquisition Assets
is or may be a party or to which any property of the Company or any
of its subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets is or may be the subject that, individually or
in the aggregate, if determined adversely to the Company or any of
its subsidiaries or any of the Acquisition Assets, could reasonably
be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform their
obligations under the Transaction Documents; no such
investigations, actions, suits or proceedings are threatened or, to
the knowledge of the Company, contemplated by any governmental or
regulatory authority or threatened by others; and (i) there
are no current or pending legal, governmental or regulatory
actions, suits or proceedings that are required under the
Securities Act to be described in the Registration Statement that
are not so described in the Registration Statement, the Time of
Sale Information and the Prospectus and (ii) there are no statutes,
regulations or contracts or other
documents that
are required under the Securities Act to be filed as exhibits to
the Registration Statement or described in the Registration
Statement or the Prospectus that are not so filed as exhibits to
the Registration Statement or described in the Registration
Statement, the Time of Sale Information and the
Prospectus.
(s)
Independent Accountants. (i) KPMG LLP and L J Soldinger
Associates, LLC, who have certified certain financial statements of
the Company and its subsidiaries are each an independent registered
public accounting firm with respect to the Company and its
subsidiaries within the applicable rules and regulations adopted by
the Commission and the Public Accounting Oversight Board (United
States) and as required by the Securities Act; and (ii) Ernst
& Young LLP, who have certified certain financial statements of
the Acquisition Assets, are an independent registered public
accounting firm with respect to Talisman and its subsidiaries
within the applicable rules and regulations adopted by the
Commission and the Public Accounting Oversight Board (United
States) and as required by the Securities Act.
(t) Title
to Real. Neither the Company nor any of its subsidiaries own
any real property (other than oil and gas interests) that is
material to the respective businesses of the Company and its
subsidiaries.
(u) Title
to Intellectual Property. The Company and its subsidiaries own
or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark
registrations, service mark registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) necessary for the conduct of their respective
businesses; and the conduct of their respective businesses will not
conflict in any material respect with any such rights of others,
and the Company and its subsidiaries have not received any notice
of any claim of infringement or conflict with any such rights of
others.
(v) No
Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on
the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company or any of its subsidiaries, on the
other, that is required by the Securities Act to be described in
the Registration Statement and the Prospectus and that is not so
described in such documents and in the Time of Sale
Information.
(w)
Investment Company Act. The Company is not and, after giving
effect to the offering and sale of the Shares and the application
of the proceeds thereof as described in the Registration Statement,
the Time of Sale Information and the Prospectus, will not be
required to register as an “investment company” or an
entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of
1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, “Investment Company
Act”).
(x)
Public Utility Holding Company Act. Neither the Company nor
any of its subsidiaries is a “holding company” or a
“subsidiary company” of a holding company or an
“affiliate” thereof within the meaning of the Public
Utility Holding Company Act of 2005, as amended.
(y)
Taxes. The Company and its subsidiaries and, to the
knowledge of the Company, the Acquisition Assets have paid all
federal, state, local and foreign taxes and filed all tax returns
required to be paid or filed through the date hereof; and except as
otherwise disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus, there is no tax deficiency that has
been, or could reasonably be expected to be, asserted against the
Company or any of its subsidiaries or, to the knowledge of the
Company, the Acquisition Assets or any of their respective
properties or assets.
(z)
Licenses and Permits. The Company and its subsidiaries and,
to the knowledge of the Company, the Acquisition Assets possess all
licenses, certificates, permits and other authorizations issued by,
and have made all declarations and filings with, the appropriate
federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses
as described in the Registration Statement, the Time of Sale
Information and the Prospectus, except where the failure to possess
or make the same would not, individually or in the aggregate, have
a Material Adverse Effect; and except as described in the
Registration Statement, the Time of Sale Information and the
Prospectus, neither the Company nor any of its subsidiaries nor, to
the knowledge of the Company, the Acquisition Assets has received
notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe
that any such license, certificate, permit or authorization will
not be renewed in the ordinary course.
(aa) No
Labor Disputes. No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to
the knowledge of the Company, is contemplated or threatened and the
Company is not aware of any existing or imminent labor disturbance
by, or dispute with, the employees of any of its or its
subsidiaries’ principal suppliers, contractors or customers,
except as would not have a Material Adverse Effect.
(bb)
Compliance With Environmental Laws. (i) The Company and
its subsidiaries and, to the knowledge of the Company, the
Acquisition Assets (x) are in compliance with any and all
applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions and orders relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); and (y) have
received and are in compliance with all permits, licenses,
certificates or other authorizations or approvals required of them
under applicable Environmental Laws to conduct their respective
businesses; (ii) there are no costs or liabilities associated
with Environmental Laws of or relating to the Company or its
subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets, except in the case of each of (bb)(i)(x),
(bb)(i)(y) and (bb)(ii) above, for any such failure to comply, or
failure to receive required permits, licenses or approvals, or cost
or liability, as would not, individually or in the aggregate, have
a Material Adverse Effect; and (iii) except as described in
each of the Time of Sale Information and the Prospectus,
(x) there are no proceedings that are pending, or that are
known to the Company to be contemplated, against the Company or its
subsidiaries or, to the knowledge of the Company, any Acquisition
Assets under any Environmental Laws in which a governmental entity
is also a party, other than such proceedings regarding which it is
reasonably believed no monetary sanctions of $100,000 or more will
be imposed, (y) the Company is not aware of any issues
regarding compliance with
Environmental
Laws, or Liabilities or other obligations under Environmental Laws
or concerning hazardous or toxic substances or wastes, pollutants
or contaminants, that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and
(z) the Company does not anticipate material capital
expenditures relating to any Environmental Laws.
(cc)
Compliance With ERISA. Each employee benefit plan, within
the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”), that is
maintained, adminis
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