Exhibit 1.1
J.P. MORGAN SECURITIES
INC.
ATP OIL & GAS
CORPORATION
5,300,000 Shares of Common
Stock
Underwriting Agreement
September 23, 2009
J.P. Morgan Securities
Inc.
Credit Suisse Securities (USA) LLC
As Representatives of the
several Underwriters
listed
in Schedule 1 hereto
c/o J.P. Morgan Securities Inc.
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
ATP Oil & Gas Corporation,
a Texas corporation (the “Company”), proposes to issue
and sell to the several Underwriters listed in Schedule 1 hereto
(the “Underwriters”), for whom you are acting as
representatives (the “Representatives”), an aggregate
of 5,300,000 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 795,000
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 referred to herein 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. 333-159614),
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
effectiveness, 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. Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Registration
Statement and the Prospectus.
At or prior to the Applicable Time
(as defined below), the Company had prepared the following
information (collectively with the pricing information set forth on
Annex B, the “Pricing Disclosure Package”): a
Preliminary Prospectus dated September 22, 2009 and each
“free-writing prospectus” (as defined pursuant to Rule
405 under the Securities Act) listed on Annex B hereto.
“Applicable Time” means
8:00 p.m. New York City time, on September 23,
2009.
2. Purchase of the Shares by the
Underwriters .
(a) The Company agrees to issue and
sell the Underwritten 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 $17.6675.
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 less an amount per share equal to any
dividends or distributions declared by the Company and payable on
the Underwritten Shares but not payable on the Option
Shares.
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.
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The Underwriters may exercise the
option to purchase Option Shares at any time in whole, or from time
to time in part, on or before the thirtieth day following the date
of the Prospectus, 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
or 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.
(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 Cahill Gordon &
Reindel LLP
at 10:00 A.M., New York City time,
on September 29, 2009, 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 for the respective accounts of the several
Underwriters of the Shares to be purchased on such date or the
Additional Closing Date, as the case may be, with any transfer
taxes payable in connection with the sale of such Shares duly paid
by the Company. Delivery of the Shares shall be made through the
facilities of The Depository Trust Company (“DTC”)
unless the Representatives shall otherwise instruct. The
certificates for the Shares will be made available for inspection
and packaging by the Representatives at the office of DTC or its
designated custodian 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
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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 included in the Pricing Disclosure Package, at the time
of filing thereof, complied in all material respects with the
Securities Act, and no Preliminary Prospectus, at the time of
filing thereof, contained any untrue statement of a material fact
or omitted 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 any Preliminary Prospectus, it being understood and
agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 7(b)
hereof.
(b) Pricing Disclosure
Package . The Pricing Disclosure Package as of the Applicable
Time did not, and as of 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 Pricing
Disclosure Package, it being understood and agreed that the only
such information furnished by any Underwriter consists of the
information described as such in Section 7(b)
hereof.
(c) Issuer Free Writing
Prospectus. Other than the Registration Statement, the
Preliminary Prospectus and the Prospectus, the Company (including
its agents and representatives, other than the Underwriters in
their capacity as such) has not prepared, used, authorized,
approved or referred to and will not prepare, 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, each electronic road show and any 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 or will
be (within the
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time period specified in Rule 433)
filed in accordance with the Securities Act (to the extent required
thereby) and, when taken together with the Preliminary Prospectus
accompanying, or delivered prior to delivery of, such Issuer Free
Writing Prospectus, did not, and as of 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 or
Preliminary 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 such Issuer Free Writing Prospectus or Preliminary
Prospectus, it being understood and agreed that the only such
information furnished by any Underwriter consists of the
information described as such in Section 7(b)
hereof.
(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 of the Shares has been initiated or threatened by the
Commission; as of the applicable effective date of the Registration
Statement and any post-effective amendment thereto, the
Registration Statement and any such post-effective amendment
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 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, it being understood and
agreed that the only such information furnished by any Underwriter
consists of the information described as such in Section 7(b)
hereof. The Company meets, and at the time the Registration
Statement was originally declared effective the Company met, the
applicable requirements for use of Form S-3 under the Securities
Act. The Company also meets the requirements for use of Form S-3
under the Securities Act referenced in Rule 5110(b)(7)(C)(i) of the
Financial Industry Regulatory Authority
(“FINRA”).
(e) Incorporated Documents.
The documents incorporated by reference in the Registration
Statement, the Prospectus and the Pricing Disclosure Package, when
they were filed with the Commission conformed in all material
respects to the requirements of the Exchange Act, and none of such
documents contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in
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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 Pricing Disclosure Package, when such
documents are filed with the Commission, will conform in all
material respects to the requirements of the Exchange Act and will
not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(f) Financial Statements. The
financial statements (including the related notes thereto) of the
Company and its consolidated subsidiaries included or incorporated
by reference in the Registration Statement, the Pricing Disclosure
Package 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 consolidated 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 in the United States applied on a consistent basis
throughout the periods covered thereby, and any supporting
schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated
therein; and the other financial information included or
incorporated by reference in the Registration Statement, the
Pricing Disclosure Package and the Prospectus has been derived from
the accounting records of the Company and its consolidated
subsidiaries and presents fairly the information shown
thereby.
(g) No Material Adverse
Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus, (i) there has not been any material change in the
capital stock (other than the issuance of shares of Common Stock
upon exercise of stock options and warrants described as
outstanding in, and the grant of options and awards under existing
equity incentive plans described in, the Registration Statement,
the Pricing Disclosure Package and the Prospectus), short-term debt
or long-term debt of the Company or any of its subsidiaries, or any
dividend or distribution of any kind declared, set aside for
payment, paid or made by the Company on any class of capital stock,
or any material adverse change, or any development involving a
prospective 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 taken as a whole; (ii) neither the Company nor
any of its subsidiaries has entered into any transaction or
agreement (whether or not in the ordinary course of business) that
is material to the Company and its subsidiaries 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; and
(iii) neither the Company nor any of its subsidiaries has
sustained any loss or interference with its business that is
material to the Company and its subsidiaries taken as a whole and
that is either 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 otherwise disclosed in the Registration Statement, the
Pricing Disclosure Package and the Prospectus.
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(h) Organization and Good
Standing. The Company and each of its subsidiaries 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 in good standing or have such power or authority
would not, individually or in the aggregate, have a material
adverse effect on the business, financial position, or results of
operations of the Company and its subsidiaries taken as a whole or
on the performance by the Company of its obligations under this
Agreement (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 Pricing Disclosure Package 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
Pricing Disclosure Package 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 Pricing Disclosure Package and the Prospectus; and all the
outstanding shares of capital stock or other equity interests of
each subsidiary owned, directly or indirectly, by 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 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) Stock Options. With
respect to the stock options (the “Stock Options”)
granted pursuant to the stock-based compensation plans of the
Company and its subsidiaries (the “Company Stock
Plans”), (i) each Stock Option intended to qualify as an
“incentive stock option” under Section 422 of the
Code so qualifies, (ii) each grant of a Stock Option was duly
authorized no later than the date on which the grant of such Stock
Option was by its terms to be effective (the “Grant
Date”) by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company (or a
duly constituted and authorized committee thereof) and any required
stockholder approval by the necessary number of votes or written
consents, and the award agreement governing such grant (if any) was
duly executed and delivered by each party thereto, (iii) each
such grant was made in accordance with the terms of the Company
Stock Plans, the Exchange Act and all other applicable laws and
regulatory rules or requirements, including
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the rules of the Nasdaq Global
Select Market and any other exchange on which Company securities
are traded, and (iv) each such grant was properly accounted
for in accordance with GAAP in the financial statements (including
the related notes) of the Company and disclosed in the
Company’s filings with the Commission in accordance with the
Exchange Act and all other applicable laws. The Company has not
knowingly granted, and there is no and has been no policy or
practice of the Company of granting, Stock Options prior to, or
otherwise coordinating the grant of Stock Options with, the release
or other public announcement of material information regarding the
Company or its subsidiaries or their results of operations or
prospects.
(k) Due Authorization. The
Company has full right, power and authority to execute and deliver
this Agreement and to perform its obligations hereunder; and all
action required to be taken for the due and proper authorization,
execution and delivery by it of this Agreement and the consummation
by it of the transactions contemplated hereby has been duly and
validly taken.
(l) Underwriting Agreement.
This Agreement has been duly authorized, executed and delivered by
the Company.
(m) The Shares. The Shares to
be issued and sold by the Company hereunder have been duly
authorized and, when issued and delivered and paid for as provided
herein, will be duly and validly issued, will be fully paid and
nonassessable and will conform to the descriptions thereof in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus; and the issuance of the Shares is not subject to any
preemptive or similar rights.
(n) [Reserved] .
(o) Descriptions of this
Agreement and the Lock-up” Agreements. This Agreement and
each of the “lock-up” agreements executed and delivered
to the Representatives pursuant to Section 6(m) conforms in
all material respects to the description thereof contained in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus.
(p) No Violation or Default.
Neither the Company nor any of its subsidiaries 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 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; 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.
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(q) No Conflicts. The
execution, delivery and performance by the Company of each of this
Agreement, the issuance and sale of the Shares and the consummation
of the transactions contemplated by this Agreement and described in
the Pricing Disclosure Package and Prospectus 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 pursuant to, 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 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, violation or
default that would not, individually or in the aggregate, have a
Material Adverse Effect.
(r) No Consents Required. No
consent, approval, authorization, order, license, registration or
qualification of or with any court or arbitrator or governmental or
regulatory authority is required for the execution, delivery and
performance by the Company of each of this Agreement, the issuance
and sale of the Shares and the consummation of the transactions
contemplated by this Agreement and described in the Pricing
Disclosure Package and Prospectus, except for the registration of
the Shares under the Securities Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may
be required by FINRA or The NASDAQ Global Select Market and under
applicable state securities laws in connection with the purchase
and distribution of the Shares by the Underwriters.
(s) Legal Proceedings. Except
as described in the Registration Statement, the Pricing Disclosure
Package 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 is or may be a party
or to which any property of the Company or any of its subsidiaries
is or may be the subject that, individually or in the aggregate, if
determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect; no
such investigations, actions, suits or proceedings are threatened
by any governmental or regulatory authority.
(t) Independent Accountants .
PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries and
Deloitte & Touche LLP, 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 Company
Accounting Oversight Board (United States) and as required by the
Securities Act.
(u) Title to Real and Personal
Property . Except as otherwise set forth in the Registration
Statement, the Pricing Disclosure Package or the Prospectus or such
as in the
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aggregate does not now cause nor
will it in the future cause a Material Adverse Effect, the Company
and its subsidiaries have title to their properties as follows:
(a) with respect to their wells (including leasehold interests
and appurtenant personal property) and their non-producing oil and
gas properties (including undeveloped locations on leases held by
production and those leases not held by production), such title is
valid and defensible and free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and
restrictions, (b) with respect to their non-producing
properties in exploration prospects, such title was investigated in
accordance with customary industry procedures prior to the Company
or its subsidiaries acquisition thereof; (c) with respect to
their 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 their personal property
other than that appurtenant to its 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 which 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 which would prevent,
the continued effective ownership, leasing, licensing, exploration,
development or production or use of such real property in the
business of the Company as presently conducted or as the
Registration Statement, the Pricing Disclosure Package or the
Prospectus indicates they contemplate conducting, except as may be
described in the Registration Statement, the Pricing Disclosure
Package or the Prospectus or such as in the aggregate do not now
cause and will not in the future reasonably be expected to cause a
Material Adverse Effect.
(v) Title to Intellectual
Property . The Company and its subsidiaries own or possess, or
can acquire on reasonable terms, adequate patents, patent rights,
licenses, inventions, copyrights, know-how, confidential
information, trademarks, service marks, trade names or other
intellectual property (collectively, “Intellectual
Property”) necessary to carry on the business now operated by
them, except where the failure to own or possess, or have the
ability to acquire on reasonable terms such Intellectual Property
would not, singularly or in the aggregate, reasonably be expected
to cause a Material Adverse Effect. Neither the Company nor any
subsidiary has received any notice of any infringement of or
conflict with asserted rights of others with respect to any
Intellectual Property that if determined adversely to the Company
would, singly or in the aggregate, result in a Material Adverse
Effect.
(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 Pricing Disclosure
Package 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, the “Investment Company
Act”).
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(x) Taxes. The Company and
its subsidiaries have on a timely basis paid all federal, state,
local and foreign taxes and filed all tax returns required to be
paid or filed through the date hereof (except in any case in which
the failure to file would not reasonably be expected to result in a
Material Adverse Effect); and except as otherwise disclosed in the
Registration Statement, the Pricing Disclosure Package 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 any of their respective properties or
assets, except for any tax deficiency that is currently being
contested in good faith or would not result in a Material Adverse
Effect.
(y) Licenses and Permits. The
Company and its subsidiaries possess all licenses, certificates,
permits and other authorizations issued by 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 Pricing Disclosure
Package 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; except as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, the
Company and its Subsidiaries are in compliance with the terms and
conditions of all such licenses, certificates, permits and
authorizations, except where the failure to so comply would not,
individually or in the aggregate, have a Material Adverse Effect;
and except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus, neither the Company nor any
of its subsidiaries has received notice of any revocation or
modification of any such license, certificate, permit or
authorization which, singly or in the aggregate, if subject to an
unfavorable decision, ruling or finding would result in a Material
Adverse Effect.
(z) 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 imminent, 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.
(aa) Compliance with and
Liability under Environmental Laws. (i) The Company and
its subsidiaries (a) are, in compliance with any and all
applicable federal, state, local and foreign laws, rules,
regulations, requirements, decisions, judgments, decrees, and
orders relating to pollution or the protection of the environment,
natural resources or human health or safety, including those
relating to the generation, storage, treatment, use, handling,
transportation, Release or threat of Release of Hazardous Materials
(collectively, “Environmental Laws”), (b) 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, (c) have not received notice of any actual or
potential liability under or relating to, or actual or potential
violation of, any Environmental Laws, including for the
investigation or remediation of any Release or threat of Release of
Hazardous Materials, and have no knowledge of any event or
condition that would reasonably be expected to result in any such
notice, (d) are not conducting or paying for, in whole or in
part, any investigation, remediation or other corrective
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action pursuant to any Environmental
Law at any location, and (e) are not a party to any order,
decree or agreement that imposes any obligation or liability under
any Environmental Law, except for any such matter as would not,
individually or in the aggregate reasonably be expected to have a
Material Adverse Effect, and (ii) there are no costs or
liabilities associated with Environmental Laws of or relating to
the Company or its subsidiaries, except for any such matter as
would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and (iii) except as
described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, (a) there are no proceedings that
are pending, or that are known to be contemplated, against the
Company or any of its subsidiaries 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, and (b) the
Company and its subsidiaries are not aware of any facts or issues
regarding compliance with Environmental Laws, or liabilities or
other obligations under Environmental Laws, including the Release
or threat of Release of Hazardous Materials, that could reasonably
be expected to have a material effect on the capital expenditures,
earnings or competitive position of the Company and its
subsidiaries.
(bb) Hazardous Materials .
There has been no storage, generation, transportation, use,
handling, treatment, Release or threat of Release of Hazardous
Materials by, relating to or caused by the Company or any of its
subsidiaries (or, to the knowledge of the Company and its
subsidiaries, any other entity (including any predecessor) for
whose acts or omissions the Company or any of its subsidiaries is
or could reasonably be expected to be liable) at, on, under or from
any property or facility now or previously owned, operated or
leased by the Company or any of its subsidiaries, or at, on, under
or from any other property or facility, in violation of any
Environmental Laws or in a manner or amount or to a location that
could reasonably be expected to result in any liability of the
Company or any of its subsidiaries under any Environmental Law,
except for any violation or liability which would not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect. “Hazardous Materials” means any
material, chemical, substance ,waste, pollutant, contaminant,
compound, mixture, or constituent thereof, in any form or amount,
including petroleum (including crude oil or any fraction thereof)
and petroleum products, natural gas, natural gas liquids, asbestos
and asbestos containing materials, naturally occurring radioactive
materials, brine, and drilling mud, regulated or which can give
rise to liability under any Environmental Law.
“Release” means any spilling, leaking, seepage,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, disposing, depositing, dispersing, or
migrating in, into or through the environment, or in, into from or
through any building or structure.
(cc) Compliance with ERISA.
The minimum funding standard under Section 302 of the Employee
Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder
(“ERISA”), has been satisfied by each “pension
plan” (as defined in Section 3(2) of ERISA) which has
been established or maintained by the Company, and the trust
forming part of each such plan which is intended to be qualified
under Section 401 of the Internal Revenue Code of 1986, as
amended (the “Code”), is so qualified; each of the
Company and the Subsidiaries has fulfilled its obligations, if any,
under Section 515 of ERISA; neither the Company nor
any
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subsidiary maintains and is required
to contribute to a “welfare plan” (as defined in
Section 3(1) of ERISA) which provides retiree or other
post-employment welfare benefits or insurance coverage (other than
“continuation coverage” (as defined in Section 602
of ERISA)); each pension plan and welfare plan established or
maintained by the Company and/or one of the subsidiaries is in
compliance with the currently applicable provisions of ERISA,
except where the failure to comply would not cause a Material
Adverse Effect; no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any pension plan or welfare plan
(excluding transactions effected pursuant to statutory or
administrative exemption) that could reasonably be expected to
result in a material liability to the Company or its subsidiaries;
and neither the Company nor any Subsidiary has incurred or could
reasonably be expected to incur any withdrawal liability under
Section 4201 of ERISA, any liability under Section 4062,
4063, or 4064 of ERISA, or any other liability under Title IV of
ERISA.
(dd) Disclosure Controls .
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 complies with the
requirements of the Exchange Act and that has been 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.
(ee) Accounting Controls. The
Company and its subsidiaries maintain systems of “internal
control over financial reporting” (as defined in Rule
13a-15(f) of the Exchange Act) that comply with the requirements of
the Exchange Act and have been designed by, or under the
supervision of, their respective principal executive and principal
financial officers, or persons performing similar functions, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles, including, but not limited to, internal accounting
controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except
as disclosed in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, the Company is not aware of
(i) any significant deficiencies or material weaknesses in the
design or operation of internal controls or (ii) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal controls over financial reporting which are likely to
adversely affect the Company’s ability to record, process,
summarize and report financial information. The Company’s
auditors and the Audit
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Committee of the Board of Directors
of the Company have been advised of: (i) all significant
deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting which have adversely
affected or are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report
financial information; and (ii) any fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company’s internal controls over
financial reporting.
(ff) Insurance. The Company
and its subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are customary for the
businesses in which they are engaged; all such policies insuring
the Company and its subsidiaries are in full force and effect; and
neither the Company nor any of its subsidiaries has received notice
from any insurer or agent of such insurer that it will not be able
to renew insurance coverage as and when such coverage expires or to
obtain coverage acceptable to the Company at reasonable cost from
similar insurers as may be necessary to continue its
business.
(gg) No Unlawful Payments.
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 Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(hh) Compliance with Money
Laundering Laws . 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.
(ii) Compliance with OFAC.
None of the Company, any of its subsidiaries or, 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. Department of the Treasury
(“OFAC”); and the Company will not, directly or
indirectly, use the proceeds of the offering of the Shares
hereunder, 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.
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(jj) No Restrictions on
Subsidiaries . No subsidiary of the Company that is a party to
the Credit Agreement, dated June 27, 2008 to which the Company
is a party, is currently prohibited, directly or indirectly, under
any agreement or other instrument to which it is a party or is
subject, 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 properties or assets to the Company or any other
subsidiary of the Company.
(kk) No Broker’s Fees.
Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against the
Company or any of its subsidiaries or any Underwriter for a
brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Shares.
(ll) No Registration Rights .
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
Shares. ›
(mm) No Stabilization. The
Company has not taken, directly or indirectly, any action designed
to or that could reasonably be expected to cause or result in any
stabilization or manipulation of the price of the
Shares.
(nn) Margin Rules . The
application of the proceeds received by the Company from the
issuance, sale and delivery of the Shares as described in the
Registration Statement, the Pricing Disclosure Package and the
Prospectus will not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System or any other regulation of
such Board of Governors.
(oo) Status under the Securities
Act . At the time of filing the Registration Statement and any
post-effective amendment thereto, at the earliest time thereafter
that the Company or any offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) under the
Securities Act) of the Shares and at the date hereof, the Company
was not and is not an “ineligible issuer,” as defined
in Rule 405 under the Securities Act.
(pp) Reserve Report Data .
The oil and gas reserve estimates of the Company contained or
incorporated by reference into the Registration Statement, Pricing
Disclosure Package and the Prospectus have been prepared by
(i) Ryder Scott Company, L.P., (ii) Collarini Associates
and (iii) DeGolyer & MacNaughton (collectively, the
“ Engineers ”), and the Company has no reason to
believe that such estimates do not fairly reflect the oil and gas
reserves of the Company at the dates indicated. The information
underlying the estimates of the reserves of the Company and its
subsidiaries supplied by the
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Company to the Engineers, for the
purposes of preparing the reserve reports of Company and its
subsidiaries referenced in the Registration Statement, Pricing
Disclosure Package and Prospectus (the “ Reserve
Reports ”), was true and correct in all material respects
on the date of each such Reserve Report; the estimates of future
capital expenditures and other future exploration and development
costs supplied to the Engineers were prepared in good faith and
with a reasonable basis; the information provided to the Engineers
was prepared in good faith and with a reasonable basis. Other than
production of the reserves in the ordinary course of business and
intervening product price fluctuations described in the
Registration Statement, Pricing Disclosure Package and the
Prospectus, the Company is not aware of any facts or circumstances
that would cause a Material Adverse Change in the reserves or the
present value of future net cash flows therefrom as described in
the Registration Statement, Pricing Disclosure Package and the
Prospectus. Each of the Engineers is an independent reserve
engineer with respect to the Company and its
subsidiaries.
4. Further Agreements of the
Company . The Company covenants and agrees with each
Underwriter that:
(a) Required Filings. The
Company will file the final Prospectus with the Commission within
the time periods specified by Rule 424(b) an
