Barclays Capital
Inc.
Merrill Lynch, Pierce, Fenner
& Smith
Incorporated ,
As Representatives of the several
Underwriters named in Schedule 1
attached hereto,
c/o Barclays Capital Inc.
745 Seventh Avenue
New York, New York 10019
Stone
Energy Corporation, a Delaware corporation (the “
Company ”), proposes to sell 7,000,000 shares (the
“ Firm Stock ”) 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 (the “ Underwriters ”) named in
Schedule 1 attached to this agreement (this “
Agreement ”) an option to purchase up to 1,050,000
additional shares of the Common Stock on the terms set forth in
Section 2 (the “ Option Stock ”). The Firm
Stock and the Option Stock, if purchased, are hereinafter
collectively called the “ Stock .” This is to
confirm the agreement concerning the purchase of the Stock from the
Company by the Underwriters.
1.
Representations, Warranties and Agreements of the Company .
The Company represents, warrants and agrees that:
(a) A registration
statement on Form S-3 relating to the Stock has (i) been
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the “ Securities
Act ”), and the rules and regulations (the “
Rules and Regulations ”) of the Securities and
Exchange Commission (the “ Commission ”)
thereunder; (ii) been filed with the Commission under the
Securities Act; and (iii) become effective under the
Securities Act. Copies of such registration statement and any
amendment thereto have been made available by the Company to you as
the representatives (the “ Representatives ”) of
the Underwriters. As used in this Agreement:
(i) “
Applicable Time ” means 6:00 p.m. (New York City time)
June 10, 2009;
(ii) “
Effective Date ” means any date as of which any part
of such registration statement relating to the Stock became, or is
deemed to have become, effective under the Securities Act in
accordance with the Rules and Regulations;
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(iii) “
Issuer Free Writing Prospectus ” means each
“free writing prospectus” (as defined in Rule 405
of the Rules and Regulations) prepared by or on behalf of the
Company or used or referred to by the Company in connection with
the offering of the Stock;
(iv) “
Preliminary Prospectus ” means any preliminary
prospectus relating to the Stock included in such registration
statement or filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations, including any preliminary prospectus
supplement thereto relating to the Stock;
(v) “
Pricing Disclosure Package ” means, as of the
Applicable Time, the most recent Preliminary Prospectus, together
with the information included in Schedule 4 hereto and each
Issuer Free Writing Prospectus filed or used by the Company on or
before the Applicable Time, other than a road show that is an
Issuer Free Writing Prospectus under Rule 433 of the Rules and
Regulations;
(vi) “
Prospectus ” means the final prospectus relating to
the Stock, including any prospectus supplement thereto relating to
the Stock, as filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations; and
(vii) “
Registration Statement ” means, collectively, the
various parts of such registration statement, each as amended as of
the Effective Date for such part, including any Preliminary
Prospectus or the Prospectus and all exhibits to such registration
statement.
Any reference
to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents incorporated by reference
therein pursuant to Form S-3 under the Securities Act as of the
date of such Preliminary Prospectus or the Prospectus, as the case
may be. Any reference to the “ most recent Preliminary
Prospectus ” shall be deemed to refer to the latest
Preliminary Prospectus included in the Registration Statement or
filed pursuant to Rule 424(b) prior to or on the date hereof
(including, for purposes hereof, any documents incorporated by
reference therein prior to or on the date hereof). Any reference to
any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the
“ Exchange Act ”), after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the
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 on Form 10-K filed with the Commission
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
Effective Date that is incorporated by reference in the
Registration Statement. The Commission has not issued any order
preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending the effectiveness of the Registration
Statement, and no proceeding or examination for such purpose has
been instituted or threatened by the Commission.
(b) The
Company was not at the time of initial filing of the Registration
Statement and at the earliest time thereafter that the Company or
another offering
3
participant
made a bona fide offer (within the meaning of
Rule 164(h)(2) of the Rules and Regulations) of the Stock, is
not on the date hereof and will not be on the applicable Delivery
Date an “ineligible issuer” (as defined in
Rule 405). The Company has been since the time of initial
filing of the Registration Statement and continues to be eligible
to use Form S-3 for the offering of the Stock.
(c) The
Registration Statement conformed and will conform in all material
respects on the Effective Date and on the applicable Delivery Date,
and any amendment to the Registration Statement filed after the
date hereof will conform in all material respects when filed, to
the requirements of the Securities Act and the Rules and
Regulations. The most recent Preliminary Prospectus conformed, and
the Prospectus will conform, in all material respects when filed
with the Commission pursuant to Rule 424(b) 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, in all material respects to the requirements of the
Exchange Act or the Securities Act, as applicable, and the rules
and regulations of the Commission thereunder.
(d) 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
through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein, which information is specified
in Section 8(e).
(e) 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 an Underwriter
or through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein, which information is specified
in Section 8(e).
(f) 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.
(g) The Pricing
Disclosure Package did not, as of the Applicable Time, contain an
untrue statement of a material fact or omit to state a material
fact required to
4
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 an Underwriter or through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein, which information is specified in
Section 8(e).
(h) Each Issuer
Free Writing Prospectus (including, without limitation, any road
show that is a free writing prospectus under Rule 433), when
considered together with the Pricing Disclosure Package as of the
Applicable Time, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
(i) Each Issuer
Free Writing Prospectus conformed or 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 filing requirements applicable to such Issuer
Free Writing Prospectus pursuant to the Rules and Regulations. The
Company has not made any offer relating to the Stock that would
constitute an Issuer Free Writing Prospectus without the prior
written consent of the Representatives, except as set forth on
Schedule 2 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.
(j) Each of the
Company and its subsidiaries (as defined in Section 17) has
been duly organized, 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, in the aggregate,
reasonably be expected to have a material adverse effect on the
financial condition, results of operations, stockholders’
equity, properties or business of the Company and its subsidiaries
taken as a whole (a “ Material Adverse Effect
”); each of the Company and its subsidiaries has all power
and authority necessary to own or hold its 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 in
Exhibit 21 to the Company’s Annual Report on Form 10-K
for the most recent fiscal year.
(k) The Company
has an authorized capitalization as set forth in each of the
Pricing Disclosure Package and the Prospectus, and all of the
issued shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable,
conform to the description thereof contained in the most recent
Preliminary Prospectus. 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
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Pricing
Disclosure Package. Except as set forth in the Pricing Disclosure
Package, all of the issued membership interests of each subsidiary
of the Company have been duly authorized and validly issued, are
fully paid and non-assessable (except as such nonassessability may
be affected by Section 18-607 of Delaware Limited Liability
Company Act) and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims,
except for such liens, encumbrances, equities or claims as would
not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(l) The shares of
the Stock to be issued and sold by the Company to the Underwriters
hereunder have been duly authorized and, upon payment and delivery
in accordance with this Agreement, will be validly issued, fully
paid and non-assessable, will conform to the description thereof
contained in the Pricing Disclosure Package.
(m) The Company
has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement. This Agreement
has been duly authorized and validly executed and delivered by the
Company.
(n) The execution,
delivery and performance of this Agreement by the Company, the
consummation of the transactions contemplated hereby and the
application of the proceeds from the sale of the Stock as described
under “Use of Proceeds” in the Pricing Disclosure
Package will not (i) result in a breach or violation of any of
the terms or provisions of, or constitute a default under, 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; (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 (iii) result in any violation of any 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, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(o) No consent,
approval, authorization or order of, or filing or registration
with, 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, the consummation of
the transactions contemplated hereby, the application of the
proceeds from the sale of the Stock as described under “Use
of Proceeds” in the Pricing Disclosure Package, except for
the registration of the Stock under the Securities Act and such
consents, approvals, authorizations, registrations or
qualifications as have been obtained or may be required under the
Exchange Act and applicable state or foreign securities laws in
connection with the purchase and sale of the Stock by the
Underwriters.
(p) Except as set
forth in the Pricing Disclosure Package, there are no contracts,
agreements or understandings between the Company and any person
granting
6
such person the
right (other than rights which have been waived in writing or
otherwise satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities
of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by
the Company under the Securities Act.
(q) Except as
described in the Pricing Disclosure Package, 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 Pricing Disclosure Package, any loss or
interference with its respective 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, and since such date, there has not been any change in the
capital stock, net current assets or long-term debt 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 financial condition, results of operations,
stockholders’ equity, properties, management or business of
the Company and its subsidiaries taken as a whole, in each case
except as would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(r) Since the date
as of which information is given in the most recent Preliminary
Prospectus, and except as may otherwise be disclosed in the Pricing
Disclosure Package, the Company has not (i) incurred any
material liability or obligation, direct or contingent, other than
liabilities and obligations that 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.
(s) The
consolidated financial statements (including the related notes and
supporting schedules) of the Company included or incorporated by
reference in the Pricing Disclosure Package 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, 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 accounting
principles generally accepted in the United States 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 amount adjustments.
(t) Ernst &
Young LLP, who have certified certain financial statements of the
Company and its consolidated subsidiaries, whose report appears in
the most recent Preliminary Prospectus or is incorporated by
reference therein are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(u) Netherland,
Sewell & Associates, Inc., whose report appears in the most
recent Preliminary Prospectus or is incorporated by reference
therein, was, as of the date of such report, and is, as of the date
hereof, an independent reserve engineer with respect to the
Company.
7
(v) Estimates of
proved reserves and present values as described in the Pricing
Disclosure Package and reflected in the letter referred to in
Section 7(i) hereof comply in all material respects with the
applicable requirements of Regulation S-X and Industry Guide 2
under the Securities Act.
(w) Neither the
Company nor any subsidiary is, and as of the applicable Delivery
Date and, after giving effect to the offer and sale of the Stock
and the application of the proceeds therefrom as described under
“Use of Proceeds” in the Pricing Disclosure Package,
none of them will be, (i) an “investment company”
within the meaning of such term under the Investment Company Act of
1940, as amended (the “ Investment Company Act
”), and the rules and regulations of the Commission
thereunder or (ii) a “business development
company” (as defined in Section 2(a)(48) of the
Investment Company Act).
(x) Except as
described in the Pricing Disclosure Package, 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, in the aggregate, reasonably be
expected to have a Material Adverse Effect or would, 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 others.
(y) 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 is required to be described in the Pricing Disclosure
Package which is not so described.
(z) 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.
(aa) (i) Each
“employee benefit plan” (within the meaning of
Section 3(3) of the Employee Retirement 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 material compliance with its terms and with 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, (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 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 or any member
8
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 PBGC 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 is so qualified and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(bb) 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, subject to permitted extensions, 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 U.S.
generally accepted accounting principles or those currently payable
without penalty or interest, and, other than disclosed in the
Pricing Disclosure Package, 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 deficiencies
which, if determined adversely, would, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(cc) Neither the
Company nor any of its subsidiaries (i) is in violation of its
charter or by-laws (or similar organizational documents),
(ii) is 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 it is a party
or by which it is bound or to which any of its properties or assets
is subject or (iii) is in violation of any statute or any
order, rule or regulation of any court or governmental agency or
governmental body having jurisdiction over it or its property or
assets 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,
except for breaches or defaults that would not, in the aggregate,
reasonably be expected to have a Material Adverse
Effect.
(dd) 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 and
the rules and regulations promulgated in connection
therewith.
(ee) The Company
and each of its subsidiaries have such permits, licenses, patents,
franchises, certificates of need and other approvals or
authorizations of governmental or regulatory authorities (“
Permits ”) as are necessary under applicable law to
own their properties and conduct their businesses in the manner
described in the Pricing Disclosure Package, except where the
failure to have such Permits would not, in the aggregate,
reasonably be expected to have a Material Adverse Effect; each of
the Company and its subsidiaries has fulfilled and performed all of
its obligations with respect to the Permits, and no event has
occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other
impairment of
9
the rights of
the holder or any such Permits, except for any of the foregoing
that would not reasonably be expected to have a Material Adverse
Effect.
(ff) Except as
would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect, the Company and each of 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,
know-how, software, systems and technology (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 Company and each of
its subsidiaries have no reason to believe that the conduct of
their respective businesses will conflict with, and have not
received any notice of any material claim of conflict with, any
such rights of others.
(gg) Except as
described in the Pricing Disclosure Package, the Company and each
of its subsidiaries (i) are in compliance with all applicable
laws, regulations, ordinances, rules, orders, judgments, decrees,
permits or other legally enforceable requirements of any
governmental authority having lawful jurisdiction over the assets
or operations of the Company or any of its subsidiaries, relating
to the protection of human health or safety (to the extent such
health or safety requirements relate to exposure to hazardous or
toxic substances or wastes, pollutants or contaminants), the
environment, or natural resources, or to hazardous or toxic
substances or wastes, pollutants or contaminants (“
Environmental Laws ”) applicable to such entity, which
compliance includes, without limitation, obtaining, maintaining and
complying with all permits and authorizations and approvals
required by Environmental Laws to conduct their respective
businesses as they are currently being conducted, and
(ii) have not received written notice of any actual or alleged
violation of Environmental Laws, or of any potential legally
enforceable liability for, or other legally enforceable obligation
under, Environmental Laws concerning the presence, disposal or
release of hazardous or toxic substances or wastes, pollutants or
contaminants, except in the case of each of clause (i) or
(ii) where such non-compliance, violation, liability, or other
obligation would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect. Except as described in the Pricing
Disclosure Package, (A) there are no legal proceedings that
are pending, or currently known to the Company to be contemplated,
against the Company or any of its subsidiaries under Environmental
Laws in which a governmental authority 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 and
(B) none of the Company and its subsidiaries anticipates
capital expenditures relating to Environmental Laws that would, in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(hh) No subsidiary
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.
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(ii) Neither the
Company nor any of its subsidiaries, nor, to the knowledge of the
Company, 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 U.S. Foreign Corrupt
Practices Act of 1977; or (iv) made any unlawful bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(jj) The
operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental
agency (collectively, the “ Money Laundering Laws
”) and no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to
the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened, except, in each case, as would not reasonably
be expected to have a Material Adverse Effect.
(kk) Neither the
Company nor any of its subsidiaries nor, to the knowledge of the
Company, any director, officer, agent, employee or affiliate of the
Company or any of its subsidiaries is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“ OFAC ”); and the
Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(ll) The Company
has not distributed and, prior to the later to occur of any
Delivery Date and completion of the distribution of the Stock, will
not distribute any offering material in connection with the
offering and sale of the Stock other than any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus to
which the Representatives have consented in accordance with Section
1(i) or 5(a)(vi) and any Issuer Free Writing Prospectus set forth
on Schedule 2 hereto.
(mm) The Company
has not taken and will not take, directly or indirectly, any action
designed to or that has constituted or that would reasonably be
expected to cause or result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the shares of the Stock.
(nn) Except as
otherwise set forth in the Pricing Disclosure Package or such as in
the aggregate has not had and would not reasonably be expected to
have a Material Adverse Effect, the Company and its subsidiaries
have title to their respective properties as follows: (a) with
respect to wells (including leasehold interests and
appurtenant
11
personal
property) and non-producing oil and gas properties (including
undeveloped locations on leases held by production), such title is
good and free and clear of all liens, security interests, pledges,
charges, encumbrances, mortgages and restrictions; (b) with
respect to non-producing properties in exploration prospects, such
title was investigated in accordance with customary industry
procedures prior to the acquisition thereof by the Company or its
subsidiaries; (c) with respect to real property other than oil
and gas interests, such title is good and marketable free and clear
of all liens, security interests, pledges, charges, encumbrances,
mortgages and restrictions; and (d) with respect to personal
property other than that appurtenant to oil and gas interests, such
title is free and clear of all liens, security interests, pledges,
charges, encumbrances, mortgages and restrictions. No real property
owned, leased, licensed or used by the Company or its subsidiaries
lies in an area which is, or to the knowledge of the Company will
be, subject to restrictions that would prohibit, and no statements
of facts relating to the actions or inaction of another person or
entity or his or its ownership, leasing, licensing or use of any
real or personal property exists or will exist that would prevent,
the continued effective ownership, leasing, licensing, exploration,
development or production or use of such real property in the
business of the Company or its subsidiaries as presently conducted
or as the Registration Statement, the Preliminary Prospectus, the
Prospectus or the Pricing Disclosure Package indicates they
contemplate conducting, except as disclosed in the Registration
Statement, the Preliminary Prospectus, the Prospectus or the
Pricing Disclosure Package or such as in the aggregate has not had
and would not reasonably be expected to have a Material Adverse
Effect.
(oo) An
application for the listing of the Stock has been submitted to the
New York Stock Exchange.
Any
certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection
with the offering of the Stock shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each
Underwriter.
2.
Purchase of the Stock by the Underwriters. On the basis of
the representations, warranties and agreements of the Underwriters
contained in, and subject to the terms and conditions of, this
Agreement, the Company agrees to issue and sell
7,000,000 shares of the Firm Stock to the several
Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase the number of shares of the Firm Stock
set forth opposite that Underwriter’s name in Schedule
1 hereto. The respective purchase obligations of the
Underwriters with respect to the Firm Stock shall be rounded among
the Underwriters to avoid fractional shares, as the Representatives
may determine.
In
addition, the Company grants to the Underwriters an option to
purchase up to 1,050,000 additional shares of Option Stock.
Such option is exercisable in the event that the Underwriters sell
more shares of Common Stock than the number of Firm Stock 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 Stock (subject to such adjustments to
eliminate fractional shares as the Representatives may determine)
that bears the same proportion to the total number of shares of
Option Stock to be sold on such Delivery Date as the number of
shares
12
of Firm Stock
set forth in Schedule 1 hereto opposite the name of
such Underwriter bears to the total number of shares of Firm
Stock.
The
price of both the Firm Stock and any Option Stock purchased by the
Underwriters shall be $7.56 per share.
The
Company shall not be obligated to deliver any of the Firm Stock or
Option Stock to be delivered on the applicable Delivery Date,
except upon payment for all such Stock to be purchased on such
Delivery Date as provided herein.
The
Company hereby confirms its engagement of Tudor, Pickering, Holt
& Co. Securities, Inc. (the “ Independent
Underwriter ”) as, and the Independent Underwriter hereby
confirms its agreement with the Company to render services as, a
“qualified independent underwriter” within the meaning
of NASD Rule 2720(b)(15) of the Financial Industry Regulatory
Authority, Inc. (“FINRA”) with respect to the offering
and sale of the Stock. As compensation for the services of the
Independent Underwriter acting in such capacity hereunder, the
Company agrees to pay the Independent Underwriter $25,000 on the
Initial Delivery Date (as defined below). The public offering price
of the Firm Stock and the Option Stock, if any, is not in excess of
the price recommended by the Independent Underwriter, acting as a
“qualified independent underwriter” within the meaning
of NASD Rule 2720 of the FINRA.
3.
Offering of Stock by the Underwriters . Upon authorization
by the Representatives of the release of the Firm Stock, the
several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions to be set forth in the
Prospectus.
4.
Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at 10:00 A.M., New
York City 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 Representatives and the
Company. This date and time are sometimes referred to as the
“ Initial Delivery Date .” Delivery of the Firm
Stock shall be made to the Representatives for the account of each
Underwriter against payment by the several Underwriters through the
Representatives and of the respective aggregate purchase prices of
the Firm Stock being sold by the Company to or upon the order of
the Company of the purchase price by wire transfer in immediately
available funds to the accounts specified by the Company. Time
shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. The Compa
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