Exhibit 1.1
Execution
Copy
12,000,000
Shares
PLAINS EXPLORATION &
PRODUCTION COMPANY
Common
Stock
UNDERWRITING
AGREEMENT
April 21, 2009
Barclays Capital Inc.
745 Seventh Avenue
New York, NY 10019
J.P. Morgan Securities
Inc.
270 Park Avenue
New York, NY 10017
Dear Ladies and
Gentlemen:
Plains Exploration &
Production Company, a Delaware corporation (the “
Company ”), proposes, upon the terms and
considerations set forth herein, to issue and sell to you, as the
underwriters (the “ Underwriters ”), 12,000,000
shares (the “ Firm Securities ”) of the
Company’s common stock, par value $0.01 per share (the
“ Common Stock ”). In addition, the Company
proposes to grant to the Underwriters an option to purchase up to
1,800,000 additional shares of the Common Stock on the terms set
forth in Section 2 (the “ Option Securities
”). The Firm Securities and the Option Securities, if
purchased, are hereinafter collectively called the “
Securities .” It is understood and agreed that this
Agreement amends, restates and replaces in its entirety the
Underwriting Agreement, dated April 21, 2009, among the
parties hereto for the purchase of 10,000,000 shares of Common
Stock.
This agreement (this “
Agreement ”) is to confirm the agreement concerning
the purchase of the Securities from the Company by the
Underwriters.
1. Representations, Warranties
and Agreements of the Company. The Company represents, warrants
and agrees that:
(a) The Company has prepared and
filed with the Securities and Exchange Commission (the “
Commission ”) (i) an “automatic shelf
registration statement” (as defined in Rule 405 of the
Securities Act of 1933, as amended (the “ Securities
Act ”)) on Form S-3 (File No. 333-141110) (the
“ Initial Registration Statement ”), including a
prospectus, relating to, among other securities, the Securities and
the offering thereof from time to time in accordance with Rule 415
under the rules and regulations of the Commission under the
Securities Act (the “ Rules and Regulations ”),
(ii) Post-Effective Amendment No. 1 thereto,
(iii) Post-Effective Amendment No. 2 thereto, and
(iv) Post-Effective Amendment No. 3 thereto. Each of the
Initial Registration Statement, Post-Effective
Amendment No. 1 thereto,
Post-Effective Amendment No. 2 thereto, and Post-Effective
Amendment No. 3 thereto has become effective upon filing with
the Commission under the Securities Act. The Company has furnished
to the Underwriters, for use by the Underwriters and by dealers,
copies of a preliminary prospectus supplement to the base
prospectus included in the Initial Registration Statement relating
to the Securities (together with such base prospectus, the “
Preliminary Prospectus ”). As provided in
Section 5(a), a final prospectus supplement reflecting the
terms of the offering of the Securities and the other matters set
forth therein has been prepared and will be filed pursuant to Rule
424 under the Rules and Regulations. Such final prospectus
supplement, in the form first filed pursuant to Rule 424 under the
Rules and Regulations and furnished by the Company for use by the
Underwriters and by dealers in connection with the offering of the
Securities, is herein referred to as the “ Prospectus
Supplement .” The Initial Registration Statement, as
amended at the Effective Time (including without limitation by
Post-Effective Amendment No. 1 thereto, Post-Effective
Amendment No. 2 thereto, and Post-Effective Amendment
No. 3 thereto), including the exhibits thereto and the
documents incorporated by reference therein, is herein called the
“ Registration Statement .” The Prospectus
Supplement, together with the base prospectus relating to all
offerings of securities under the Registration Statement, is
hereinafter called the “ Prospectus ,” in either
case including the documents filed by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”), that are
incorporated by reference therein. As used herein, “
Issuer Free Writing Prospectus ” means the documents
listed on Annex 1 hereto and each “road show” (as
defined in Rule 433 under the Rules and Regulations), if any,
related to the offering of the Securities that is a “written
communication” (as defined in Rule 405 under the Rules and
Regulations), and each such road show is referred to herein as a
“ Road Show .” As used herein, “
Pricing Disclosure Package ” means the Preliminary
Prospectus included in the Registration Statement immediately prior
to the Applicable Time, together with the information included in
Annex 2 hereto and each Issuer Free Writing Prospectus (other than
a Road Show), if any, issued at or prior to the Applicable Time. As
used herein, “ Effective Time ” means the date
and the time as of which the Initial Registration Statement, or the
most recent post-effective amendment thereto, if any, became
effective, or the most recent deemed amendment was filed with the
Commission, including any deemed amendment under Rule 430B under
the Rules and Regulations. “ Effective Date ”
means the date of the Effective Time. Any reference to any deemed
amendment to the Registration Statement shall refer to and include
any filing of an annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act after the effective
date of the Initial Registration Statement that is incorporated by
reference in the Registration Statement as well as the other
documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Rules and Regulations. Reference
made herein to any Preliminary Prospectus or Prospectus shall be
deemed to refer to and include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
Rules and Regulations, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be, and any reference to
any amendment or supplement to any Preliminary Prospectus or
Prospectus shall be deemed to refer to and include such Preliminary
Prospectus or Prospectus as amended or supplemented in relation to
the Securities (including any final prospectus
supplement
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relating to the Securities) together
with any document filed under the Exchange Act after the date of
such Preliminary Prospectus or Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment
to the Registration Statement shall be deemed to include any annual
report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective
Time that is incorporated by reference in the Registration
Statement; and any reference to the “Prospectus as amended or
supplemented” shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Securities
(including any final prospectus supplement relating to the
Securities) in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Rules and Regulations in
accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing.
The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or Prospectus.
(b) The Company has been since the
time of initial filing of the Registration Statement and continues
to be a “well-known seasoned issuer” (as defined in
Rule 405 under the Rules and Regulations) eligible to use Form S-3
for the offering of the Securities, including not having been an
“ineligible issuer” (as defined in Rule 405 under the
Rules and Regulations) at any such time or date. No notice of
objection of the Commission to the use of the Registration
Statement or any post-effective amendment thereto pursuant to Rule
401(g)(2) under the Securities Act has been received by the
Company. No order suspending the effectiveness of the Registration
Statement has been issued by the Commission, and, to the
Company’s knowledge, 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.
(c) Both before and after giving
effect to the consummation of the transactions contemplated hereby,
neither the Company nor any subsidiary thereof is or will be an
“investment company” or a company
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended (the “ Investment Company Act ”) and the
rules and regulations of the Commission thereunder.
(d) The Registration Statement
conformed and will conform on the Effective Date and on the
applicable Delivery Date (as defined in Section 4), and any
amendment to the Registration Statement filed after the date hereof
will conform when filed, to the requirements of the Securities Act
and the Rules and Regulations. The Preliminary Prospectus
conformed, and the Prospectus will conform, when filed with the
Commission pursuant to Rule 424(b) under the Rules and Regulations
and on the applicable Delivery Date, to the requirements of the
Securities Act and the Rules and Regulations. The documents
incorporated by reference in any Preliminary Prospectus or the
Prospectus conformed, and any further documents so incorporated
will conform, when filed with the Commission, to the requirements
of the Exchange Act or the Securities Act, as applicable, and the
rules and regulations of the Commission thereunder.
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(e) The Registration Statement did
not, as of the Effective Date, contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is
made as to information contained in or omitted from the
Registration Statement in reliance upon and in conformity with
written information furnished to the Company by the Underwriters
specifically for inclusion therein, which information is specified
in Section 9(e).
(f) The Prospectus will not, as of
its date and on the applicable Delivery Date, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Underwriters
specifically for inclusion therein, which information is specified
in Section 9(e).
(g) The documents incorporated by
reference in any Preliminary Prospectus or the Prospectus did not,
and any further documents filed and incorporated by reference
therein will not, when filed with the Commission, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(h) The Pricing Disclosure Package
will not, as of the time when sales of the Securities are first
made (the “ Applicable Time ”), contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided that no
representation or warranty is made as to information contained in
or omitted from the Pricing Disclosure Package in reliance upon and
in conformity with written information furnished to the Company by
the Underwriters specifically for inclusion therein, which
information is specified in Section 9(e).
(i) No Issuer Free Writing
Prospectus will include any information that conflicts with the
information in the Registration Statement or the Preliminary
Prospectus and no Issuer Free Writing Prospectus, when considered
together with the Preliminary Prospectus as of the Applicable Time,
will contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(j) Each Issuer Free Writing
Prospectus will conform in all material respects to the
requirements of the Securities Act and the Rules and Regulations on
the date of first use, and the Company has complied with any
requirements of Rule 433 under the Rules and Regulations with
respect to each such Issuer Free Writing Prospectus pursuant to the
Rules and Regulations. The Company has not made any offer relating
to the
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Securities that would constitute an
Issuer Free Writing Prospectus (other than any Road Show) without
the prior written consent of the Underwriters. Any Issuer Free
Writing Prospectus other than any Road Show, the use of which has
been consented to by the Underwriters, is listed on Annex 1 hereto.
The Company has retained, in accordance with the Rules and
Regulations, all Issuer Free Writing Prospectuses that were not
required to be filed pursuant to the Rules and
Regulations.
(k) Each of the Company and its
subsidiaries has been duly organized and is validly existing and in
good standing as a corporation or other business entity under the
laws of its jurisdiction of organization and is duly qualified to
do business and in good standing as a foreign corporation or other
business entity in each jurisdiction in which its respective
ownership or lease of property or the conduct of its respective
businesses requires such qualification, except where the failure to
be so qualified or in good standing would not reasonably be
expected to have a material adverse effect on the general affairs,
management, business, stockholders’ equity, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole (“ Material Adverse
Effect ”), and has all power and authority necessary to
own or hold its respective properties and to conduct the businesses
in which it is engaged. The Company does not own or control,
directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed on Annex 3 attached to
this Agreement. None of the subsidiaries of the Company (other than
those identified as such on Annex 3) is a “significant
subsidiary” (as defined in Rule 405 under the Rules and
Regulations).
(l) The Company has an authorized
capitalization as set forth in the Pricing Disclosure Package and
the Prospectus, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable, conform to the description thereof
contained in the most recent Preliminary Prospectus and were issued
in compliance with federal and state securities laws. All of the
Company’s options, warrants and other rights to purchase or
exchange any securities for shares of the Company’s capital
stock have been duly authorized and validly issued, conform to the
description thereof contained in the most recent Preliminary
Prospectus and were issued in compliance with federal and state
securities laws. All of the issued shares of capital stock or other
equity interests of each subsidiary of the Company have been duly
and validly authorized and issued and are fully paid and (except
with respect to limited liability company interests, limited
partnership interests and general partnership interests, to the
extent provided by applicable law) non-assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (other than liens arising under
the Senior Credit Facility); and none of the outstanding shares of
capital stock or other equity interests of the Company or any of
its subsidiaries was issued in violation of the preemptive rights
or similar rights of any security holder of the Company or any of
its subsidiaries, respectively.
(m) The Securities have been duly
and validly authorized by the Company and, upon delivery to the
Underwriters against payment therefor in accordance with the terms
hereof, will have been validly issued, will be fully paid and
non-assessable, will conform to the description thereof contained
in the Preliminary Prospectus, will have been issued in compliance
with federal and state securities laws and will be free of
any
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preemptive or similar rights to
subscribe to or purchase the same arising by operation of law or
under the charter or bylaws of the Company or otherwise. The
Company has all requisite corporate power and authority to issue,
sell and deliver the Securities in accordance with and upon the
terms and conditions set forth in this Agreement and in the
Registration Statement, the Preliminary Prospectus and
Prospectus.
(n) This Agreement has been duly
authorized, executed and delivered by the Company.
(o) The execution, delivery and
performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby, including, without
limitation, the issuance and delivery of the Securities, and the
application of the proceeds from the sale of the Securities as
described under “Use of proceeds” in each of the
Pricing Disclosure Package and the Prospectus will not result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, (i) any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject and that is required to be filed by the Company with the
Commission under Item 601 of Regulation S-K, (ii) the
provisions of the charter or bylaws (or similar organizational
documents) of the Company or any of its subsidiaries or
(iii) any law or statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties
or assets, except, in the case of the foregoing clauses
(i) and (iii), for such breaches or violations that would not
reasonably be expected to have a Material Adverse
Effect.
(p) No consent, approval,
authorization or order of, or filing or registration with, any
financial institution or any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or
any of their properties or assets is required for the execution,
delivery and performance of this Agreement by the Company or the
consummation of the transactions contemplated hereby, including,
without limitation, the issuance and delivery of the Securities by
the Company and the application of the proceeds from the sale of
the Securities as described under “Use of proceeds” in
each of the Pricing Disclosure Package and the Prospectus, except
for such consents, approvals, authorizations, registrations or
qualifications as have been obtained or may be required under the
Exchange Act or under applicable state securities laws in
connection with the purchase and sale of the Securities by the
Underwriters.
(q) No person has the right to
require the Company or any of its subsidiaries to register any
securities for sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the
issuance and sale of the Securities.
(r) The Company has not sold or
issued any securities that would be integrated with the offering of
the Securities contemplated by this Agreement pursuant to the
Securities Act, the Rules and Regulations or the interpretations
thereof by the Commission.
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(s) Neither the Company nor any of
its subsidiaries has sustained, since the date of the latest
audited financial statements included or incorporated by reference
in the Preliminary Prospectus and the Prospectus, 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 Disclosure Package
and the Prospectus; and, otherwise than as set forth in the Pricing
Disclosure Package and the Prospectus, since the date of the latest
audited financial statements included or incorporated by reference
in the Preliminary Prospectus, there has not been any change in the
capital stock or other equity interests or long-term debt of the
Company or any of its subsidiaries, except (i) pursuant to the
exercise of options or warrants or pursuant to the issuance of
Common Stock under the Company’s stock incentive plans,
(ii) for the issuance and sale of $565,000,000 aggregate
principal amount of 10% Senior Notes due 2016 issued by the Company
on March 6, 2009 and April 6, 2009 (and the subsidiary
guarantees of the Company’s obligations thereunder),
(iii) for any borrowing or repayments under the Amended and
Restated Credit Agreement dated as of November 6, 2007, among
the Company, as borrower, each of the lenders that is a signatory
thereto, and JPMorgan Chase Bank, N.A., as administrative agent (as
amended, the “ Senior Credit Facility ”), and
(iv) for any borrowing under the Company’s short-term
credit facility with Wells Fargo Bank, N.A. (as amended, the
“ Short-Term Credit Facility ”), in the ordinary
course of business for working capital purposes, or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management,
financial position, stockholders’ equity, results of
operations of the Company and its subsidiaries, taken as a
whole.
(t) The consolidated financial
statements (including the related notes and supporting schedules)
of the Company and Pogo Producing Company (“ Pogo
”) filed as part of the Registration Statement or included or
incorporated by reference in the Preliminary Prospectus and the
Prospectus comply as to form in all material respects with the
requirements of Regulation S-X under the Securities Act and present
fairly the financial condition and results of operations and cash
flows of the entities purported to be shown thereby, at the dates
and for the periods indicated, and have been prepared in conformity
with generally accepted accounting principles (“ GAAP
”) applied on a consistent basis throughout the periods
involved, except as otherwise stated therein and in the case of
unaudited financial statements, subject to year-end audit
adjustments; and the pro forma financial information (including the
related notes thereto) included or incorporated by reference in the
Preliminary Prospectus and the Prospectus complies as to form in
all material respects with, and has been prepared in accordance
with, the applicable requirements of the Securities Act and the
Exchange Act (including without limitation Regulation S-X under the
Securities Act), and the assumptions underlying such pro forma
financial information are reasonable and are set forth in the
Preliminary Prospectus and the Prospectus.
(u) (i) PricewaterhouseCoopers LLP,
which has certified certain financial statements of the Company and
its consolidated subsidiaries, the report of which is incorporated
by reference into the Preliminary Prospectus and the Prospectus and
which has delivered the initial letter referred to in
Section 7(f) hereof, is an independent
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registered public accounting firm as
required by the Securities Act, the Rules and Regulations and the
rules and regulations of the Public Company Accounting Oversight
Board and was independent with respect to the Company as required
by the Securities Act, the Rules and Regulations and the rules and
regulations of the Public Company Accounting Oversight Board during
the periods covered by the financial statements on which it
reported incorporated by reference in the Preliminary Prospectus.
(ii) PricewaterhouseCoopers LLP, which has certified certain
financial statements of Pogo and its consolidated subsidiaries, the
report of which is incorporated by reference into the Preliminary
Prospectus and the Prospectus and which has delivered the initial
letter referred to in Section 7(g) hereof, is an independent
registered public accounting firm as required by the Securities
Act, the Rules and Regulations and the rules and regulations of the
Public Company Accounting Oversight Board and was independent with
respect to Pogo as required by the Securities Act, the Rules and
Regulations and the rules and regulations of the Public Company
Accounting Oversight Board during the periods covered by the
financial statements on which it reported incorporated by reference
in the Preliminary Prospectus.
(v) The Company and each subsidiary
thereof have good and indefeasible title in fee simple to all real
property and good title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects
except (i) royalties, overriding royalties and other burdens
under oil and gas leases, (ii) easements, restrictions,
rights-of-way and other matters that commonly affect property,
(iii) liens securing taxes and other governmental charges, or
claims of materialmen, mechanics and similar persons, not yet due
and payable, (iv) liens and encumbrances under operating
agreements, farm out agreements, unitization, pooling and
commutation agreements, declarations and orders, and gas sales
contracts, securing payment of amounts not yet due and payable and
of a scope and nature customary in the oil and gas industry,
(v) liens arising under the Senior Credit Facility and
(vi) liens, encumbrances and defects that do not in the
aggregate materially affect the value of the real property or
materially interfere with the use made or proposed to be made of
such real property by the Company. The working interests in oil,
gas and mineral leases or mineral interests which constitute a
portion of the real property held by the Company reflect in all
material respects the right of the Company to explore or receive
production from such real property, and the care taken by the
Company and its subsidiaries with respect to acquiring or otherwise
procuring such leases or mineral interests was generally consistent
with standard industry practices for acquiring or procuring leases
and interests therein to explore for hydrocarbons.
(w) The Company and each of the
subsidiaries of the Company carry, or are covered by, insurance in
such amounts and covering such risks as the Company believes is
adequate for the conduct of their respective businesses and the
value of their respective properties and as is customary for
companies engaged in similar businesses in similar
industries.
(x) Except as would not reasonably
be expected to have a Material Adverse Effect, the Company and each
of the subsidiaries of the Company (i) own or possess adequate
rights to use all material patents, patent applications,
trademarks, service marks,
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trade names, trademark
registrations, service mark registrations, copyrights and licenses
necessary for the conduct of their respective businesses and
(ii) have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of
others.
(y) Except as described in the
Pricing Disclosure Package and the Prospectus, there are no legal
or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property or assets of
the Company or any of its subsidiaries is the subject which, if
determined adversely, would have a Material Adverse Effect, or
could, in the aggregate, reasonably be expected to have a material
adverse effect on the performance of this Agreement or the
consummation of the transactions contemplated hereby; and to the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(z) No relationship, direct or
indirect, exists between or among the Company on the one hand, and
the directors, officers, stockholders, customers or suppliers of
the Company on the other hand, that would be required to be
described in the Pricing Disclosure Package or the Prospectus which
is not so described.
(aa) No labor disturbance by the
employees of the Company or its subsidiaries exists or, to the
knowledge of the Company, is imminent that would reasonably be
expected to have a Material Adverse Effect.
(bb) (i) Each “employee
benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
(“ ERISA ”)) for which the Company or any member
of its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the
meaning of Section 414 of the Internal Revenue Code of 1986,
as amended (the “ Code ”)) would have any
liability (each a “ Plan ”) has been maintained
in compliance in all material respects with its terms and the
requirements of all applicable statutes, rules and regulations
including ERISA and the Code; (ii) with respect to each Plan
subject to Title IV of ERISA (A) no “reportable
event” (within the meaning of Section 4043(c) of ERISA)
has occurred or is reasonably expected to occur for which the
Company and any member of its Controlled Group would have any
liability, (B) no “accumulated funding deficiency”
(within the meaning of Section 302 of ERISA or
Section 412 of the Code), whether or not waived, has occurred
or is reasonably expected to occur, (C) the fair market value
of the assets under each such Plan exceeds the present value of all
benefits accrued under such Plan (determined based on those
assumptions used to fund such Plan) and (D) neither the
Company nor any member of its Controlled Group has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA
(other than contributions to the Plan or premiums to the Pension
Benefit Guaranty Corporation in the ordinary course and without
default) in respect of a Plan (including a “multiemployer
plan”, within the meaning of Section 4001(c)(3) of
ERISA); and (iii) each Plan that is intended to be qualified
under Section 401(a) of the Code has received a favorable
determination letter to the effect that the form of such Plan
satisfies the requirements under Section 401(a) of the Code,
and neither the Company nor any member of its Controlled Group has
any reason to believe that anything has occurred, whether by action
or by failure to act, which would adversely affect such
qualification.
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(cc) The Company and each of its
subsidiaries have filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof
and have paid all taxes due thereon, other than those being
contested in good faith, those for which reserves have been
provided in accordance with GAAP or those currently payable without
penalty or interest; and other than as described in the Pricing
Disclosure Package and the Prospectus, no tax deficiency has been
determined adversely to the Company or any of its subsidiaries
which has had, nor does the Company have any knowledge of any tax
deficiency which, if determined adversely, would reasonably be
expected to have a Material Adverse Effect.
(dd) Since the date as of which
information is given in the Preliminary Prospectus and the
Prospectus, and except as may otherwise be disclosed or
contemplated in the Pricing Disclosure Package and the Prospectus,
the Company has not (i) incurred any material liability or
obligation, direct or contingent, other than liabilities and
obligations which were incurred in the ordinary course of business,
(ii) entered into any material transaction not in the ordinary
course of business or (iii) declared or paid any dividend on
its capital stock.
(ee) The Company (i) makes and
keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with
management’s authorization, (B) transactions are
recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets,
(C) access to its assets is permitted only in accordance with
management’s authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals. The Company and its subsidiaries maintain an
effective system of “disclosure controls and
procedures” (as defined in Rule 13a-15(e) of the Exchange
Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under
the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Commission’s rules
and forms, including controls and procedures designed to ensure
that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions
regarding required disclosure. The Company and its subsidiaries
have carried out evaluations of the effectiveness of their
disclosure controls and procedures as required by Rule 13a-15 of
the Exchange Act.
(ff) Neither the Company nor any of
its subsidiaries (i) is in violation of its charter or bylaws
(or similar organizational documents), (ii) is in default, and
no event has occurred which, 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 it is a party or by which it is
bound or to which any of its properties or assets is subject and
that is required to be filed by the Company with the Commission
under Item 601 of Regulation S-K or (iii) is in violation
of any law, ordinance, governmental rule,
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regulation or court decree to which
it or its property or assets may be subject or has failed to obtain
any license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its property
or to the conduct of its business, except, in the case of clauses
(ii) and (iii) above, for any such defaults or violations
that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
(gg) Neither the Company nor any of
its subsidiaries, nor any director, officer, agent, employee or
other person associated with or acting on behalf of the Company or
any of its subsidiaries, has: (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated, or
is in violation of, any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, unlawful rebate, payoff,
influence payment, kickback or other unlawful payment.
(hh) There is and has been no
failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply with
the provisions of the Sarbanes-Oxley Act of 2002 (the “
Sarbanes-Oxley Act ”) and the rules and regulations
promulgated in connection therewith. The Company has completed its
required assessment under Section 404 of the Sarbanes-Oxley
Act and the rules and regulations promulgated in connection
therewith (collectively “ Section 404 ”) and
included such assessment in its Annual Report on Form 10-K for the
fiscal year ended December 31, 2008 (the “
Form 10-K ”).
(ii) There has been no storage,
disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous
wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their
predecessors-in-interest) at, upon or from any of the properties
now or previously owned or leased by the Company or any of its
subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any
violation or remedial action which would not have, and could not
reasonably be expected to have, singularly or in the aggregate with
all such violations and remedial actions, a Material Adverse
Effect. There has been no spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such
property or into the environment surrounding such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or
hazardous substances due to or caused by the Company or any of its
subsidiaries or with respect to which the Company or any of its
subsidiaries has knowledge, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would
not have, and could not reasonably be expected to have, singularly
or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a Material
Adverse Effect; and the terms “hazardous wastes,”
“toxic wastes,” “hazardous substances” and
“medical wastes” shall have the meanings specified in
any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
11
(jj) The statements set forth in the
Preliminary Prospectus and the Prospectus under the caption
“Description of Common Stock,” insofar as they purport
to constitute summaries of the terms of statutes, rules or
regulations, or governing documents or other instruments,
constitute accurate summaries of the terms of such statutes, rules
and regulations, documents or instruments, in all material
respects. The statements set forth in the Preliminary Prospectus
and the Prospectus under the caption “United States Federal
Tax Considerations,” insofar as they purport to describe the
provisions of the laws referred to therein, are accurate and
complete in all material respects
(kk) No “significant
subsidiary” (as defined in Rule 405 of the Rules and
Regulations) of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s capital stock,
from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in the Pricing
Disclosure Package and the Prospectus.
(ll) The Company has not distributed
and, prior to the later to occur of any Delivery Date and
completion of the distribution of the Securities, will not
distribute any offering material in connection with the offering
and sale of the Securities other than any Preliminary Prospectus,
the Prospectus and any Issuer Free Writing Prospectus to which the
Underwriters have consented in accordance with Section 1(j) or
5(a)(vii) and any Issuer Free Writing Prospectus set forth on Annex
1 hereto.
(mm) The Company and its
subsidiaries have not taken, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or
result in, under the Exchange Act, the rules and regulations of the
Commission thereunder (including Regulation M under the Exchange
Act), or otherwise, stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
(nn) The information supplied by the
Company to its independent petroleum engineering consultants for
purposes of preparing the reserve reports used to calculate
estimates of reserves of the Company included in the Registration
Statement, Preliminary Prospectus and Prospectus, including,
without limitation, production, costs of operation and development,
current prices for production, agreements relating to current and
future operations and sales of production, was true and correct in
all material respects on the date supplied and was prepared in
accordance with customary industry practices. Netherland,
Sewell & Associates, Inc., Ryder Scott Company and Miller
and Lents, independent consulting petroleum engineers, each of
which prepared estimates of the extent and value of certain proved
oil and natural gas reserves, are independent with respect to the
Company.
(oo) There are no contracts or other
documents which are required by the Rules and Regulations to be
described in the Preliminary Prospectus and Prospectus or filed as
exhibits to the Registration Statement by the Securities Act or by
the Rules and Regulations that have not been described in such
Preliminary Prospectus and Prospectus or filed as exhibits to the
Registration Statement.
12
(pp) Other than the comments from
the Commission staff received on March 31, 2009, a copy of
which has been provided to the Underwriters and counsel for the
Underwriters, the Company has not received any written comments
from the Commission staff in connection with the Company’s
reports under the Exchange Act that remain unresolved.
(qq) At the Initial Delivery Date,
the Securities shall have been approved for listing on the New York
Stock Exchange, subject only to official notice of
issuance.
2. Purchase of the Securities by
the Underwriters. The Company hereby agrees, on the basis of
the representations, warranties and agreements of the Underwriters
contained herein and subject to all of the terms and conditions set
forth herein, to issue and sell to each of the Underwriters and,
upon the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and
not jointly, to purchase from the Company, the number of shares of
the Firm Securities set forth opposite that Underwriter’s
name in Schedule I hereto. The respective purchase obligations of
the Underwriters with respect to the Firm Securities shall be
rounded among the Underwriters to avoid fractional
shares.
In addition, the Company grants to
the Underwriters an option to purchase up to 1,800,000 additional
shares of Option Securities. Such option is exercisable in the
event that the Underwriters sell more shares of Common Stock than
the number of Firm Securities in the offering and as set forth in
Section 4 hereof. Each Underwriter agrees, severally and not
jointly, to purchase the number of shares of Option Securities
(subject to such adjustments to eliminate fractional shares) that
bears the same proportion to the total number of shares of Option
Securities to be sold on such Delivery Date as the number of shares
of Firm Securities set forth in Schedule I hereto opposite the name
of such Underwriter bears to the total number of shares of Firm
Securities.
The price of both the Firm
Securities and any Option Securities purchased by the Underwriters
shall be as set forth in Annex 4 hereto.
The Company shall not be obligated
to deliver any of the Firm Securities or Option Securities to be
delivered hereunder on the applicable Delivery Date, except upon
payment for all such Securities to be purchased on such Delivery
Date as provided herein.
3. Offering of Securities by the
Underwriters. The Underwriters propose to offer the Securities
for sale upon the terms and conditions to be set forth in the
Prospectus.
4. Delivery of and Payment for
the Securities. Delivery to the Underwriters of, and payment
for, the Firm Securities shall be made at the offices of Andrews
Kurth LLP, 600 Travis, Suite 4200, Houston, Texas at 9:00 a.m.,
Houston time, on the fourth full business day following the date of
this Agreement or at such other date or place as shall be
determined by agreement between the Underwriters and the Company.
This date and time are sometimes referred to as the “
Initial Delivery Date .” The Firm Securities will be
delivered to the Underwriters against payment of the purchase price
therefor in immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to
this Agreement is a further
13
condition of the obligation of each Underwriter
hereunder. The Company shall deliver the Firm Securities through
the facilities of The Depository Trust Company (“ DTC
”) unless the Underwriters shall otherwise
instruct.
The option granted in Section 2
will expire 30 days after the date of this Agreement and may be
exercised in whole or from time to time in part by written notice
being given to the Company by the Underwriters; provided
that if such date falls on a day that is not a business day, the
option granted in Section 2 will expire on the next succeeding
business day. Such notice shall set forth the aggregate number of
shares of Option Securities as to which the option is being
exercised, the names in which the shares of Option Securities are
to be registered, the denominations in which the shares of Option
Securities are to be issued and the date and time, as determined by
the Underwriters, when the shares of Option Securities are to be
delivered; provided , however , that this date and
time shall not be earlier than the Initial Delivery Date nor
earlier than the second business day after the date on which the
option shall have been exercised nor later than the fifth business
day after the date on which the option shall have been exercised.
Each date and time the shares of Option Securities are delivered is
sometimes referred to as an “ Option Securities Delivery
Date ,” and the Initial Delivery Date and any Option
Securities Delivery Date are sometimes each referred to as a
“ Delivery Date .”
Delivery to the Underwriters of any
payment for the Option Securities shall be made at the offices of
Andrews Kurth LLP, 600 Travis, Suite 4200, Houston, Texas at 9:00
a.m., Houston time, on the date specified in the corresponding
notice described in the preceding paragraph or at such other date
or place as shall be determined by agreement between the
Unde
