ENDEAVOUR INTERNATIONAL CORPORATION 35,000,000 Shares of Common Stock, par value $0.001 per share Underwriting Agreement
Exhibit 1.1
ENDEAVOUR INTERNATIONAL
CORPORATION
CORPORATION
35,000,000 Shares of Common Stock, par value $0.001 per share
Underwriting Agreement
October 19, 2006
X.X. Xxxxxx Securities Inc.
Credit Suisse Securities (USA) LLC
As Representatives of the
several Underwriters listed
in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse Securities (USA) LLC
As Representatives of the
several Underwriters listed
in Schedule I hereto
c/o X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Endeavour International Corporation, a Nevada corporation (the “Company”), proposes to issue
and sell to the several Underwriters listed in Schedule I hereto (the “Underwriters”), for whom you
are acting as representatives (the “Representatives”), an aggregate of 35,000,000 shares of common
stock, par value $0.001 per share, of the Company (the “Underwritten Shares”) and, at the option of
the Underwriters, up to an additional 5,250,000 shares of common stock of the Company (the “Option
Shares”). The Underwritten Shares and the Option Shares are herein referred to as the “Shares”.
The shares of common stock of the Company to be outstanding after giving effect to the sale of the
Shares are herein referred to as the “Stock”.
The Company hereby confirms its agreement with the several Underwriters concerning the
purchase and sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration
statement (File No. 333-130515) including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it became effective, including the information, if any, deemed
pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration
statement at the time of its effectiveness (“Rule 430 Information”), is referred to herein as the
“Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each
prospectus included in such registration statement (and any amendments thereto) before
it becomes effective, any prospectus filed with the Commission pursuant to Rule 424(a) under
the Securities Act and the prospectus included in the Registration Statement at the time of its
effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus in
the form first used (or made available upon request of purchasers pursuant to Rule 173 under the
Securities Act) in connection with confirmation of sales of the Shares. If the Company has filed
an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule
462 Registration Statement”), then any reference herein to the term “Registration Statement” shall
be deemed to include such Rule 462 Registration Statement. Any reference in this Agreement to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act, as of the effective date of the Registration Statement or the date of such
Preliminary Prospectus or the Prospectus, as the case may be and any reference to “amend”,
“amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents filed after such date under
the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by reference
therein.
At or prior to the time when sales of the Shares were first made (the “Time of Sale”), the
Company had prepared the following information (collectively with the pricing information set forth
on Annex B, the “Time of Sale Information”): a Preliminary Prospectus dated October 11, 2006, and
each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on
Annex B hereto.
2. Purchase of the Shares by the Underwriters. (a) The Company agrees to issue and
sell the Shares to the several Underwriters as provided in this Agreement, and each Underwriter, on
the basis of the representations, warranties and agreements set forth herein and subject to the
conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the
respective number of Underwritten Shares set forth opposite such Underwriter’s name in Schedule 1
hereto at a price per share (the “Purchase Price”) of $2.24425.
In addition, the Company agrees to issue and sell the Option Shares to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Company the Option
Shares at the Purchase Price.
If any Option Shares are to be purchased, the number of Option Shares to be purchased by each
Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number
of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name
of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 10
hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by
the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares
as the Representatives in their sole discretion shall make. The Underwriters may exercise the
option to purchase the Option Shares at any time in whole, or from time to time in part, on or
before the thirtieth day following the date of this Agreement, by
written notice from the Representatives to the Company. Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for which may be the same date and time as the Closing
Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than the
tenth full business day (as hereinafter defined) after the date of such notice (unless such time
and date are postponed in accordance with the provisions of Section 10 hereof). Any such notice
shall be given at least two Business Days prior to the date and time of delivery specified therein.
(b) The Company understands that the Underwriters intend to make a public offering of the
Shares as soon after the effectiveness of this Agreement as in the judgment of the Representatives
is advisable, and initially to offer the Shares on the terms set forth in the Prospectus. The
Company acknowledges and agrees that the Underwriters may offer and sell Shares to or through any
affiliate of an Underwriter and that any such affiliate may offer and sell Shares purchased by it
to or through any Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the account specified by the Company to the Representatives in the case of the Underwritten Shares,
at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 at 10:00
A.M. New York City time on October 25, 2006, or at such other time or place on the same or such
other date, not later than the fifth business day thereafter, as the Representatives and the
Company may agree upon in writing or, in the case of the Option Shares, on the date and at the time
and place specified by the Representatives in the written notice of the Underwriters’ election to
purchase such Option Shares. The time and date of such payment for the Underwritten Shares is
referred to herein as the “Closing Date” and the time and date for such payment for the Option
Shares, if other than the Closing Date, is herein referred to as the “Additional Closing Date”.
Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Representatives through the facilities of
the Depository Trust Company for the respective accounts of the several Underwriters of the Shares
to be purchased on such date, certificates for such shares should be in such denominations as the
Representatives shall request in writing not later than two full business days prior to the Closing
Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of the Shares duly paid by the Company. The certificates for the Shares
shall be registered in the names of Cede & Co. pursuant to an agreement with the Depository Trust
Company and will be made available for inspection and packaging by the Representatives at the
office of X.X. Xxxxxx Securities Inc. set forth above not later than 1:00 P.M., New York City time,
on the business day prior to the Closing Date or the Additional Closing Date, as the case may be.
(d) The Company acknowledges and agrees that the Underwriters are acting solely in the
capacity of an arm’s length contractual counterparty to the Company with respect to the offering of
Shares contemplated hereby (including in connection with determining the terms of the offering) and
not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, neither the Representatives nor any other Underwriter is advising the
Company or any other person as to any legal, tax, investment, accounting or regulatory matters
in any jurisdiction. The Company shall consult with its own advisors concerning such matters and
shall be responsible for making its own independent investigation and appraisal of the transactions
contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company
with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated
hereby or other matters relating to such transactions will be performed solely for the benefit of
the Underwriters and shall not be on behalf of the Company.
3. Representations and Warranties of the Company. The Company represents and warrants
to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of
filing thereof, complied in all material respects with the Securities Act and did not contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale did not, and
at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain
any untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with respect to
any statements or omissions made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in such Time of Sale Information. No statement of material fact
included in the Prospectus has been omitted from the Time of Sale Information and no statement of
material fact included in the Time of Sale Information that is required to be included in the
Prospectus has been omitted therefrom.
(c) Issuer Free Writing Prospectus. Other than the Preliminary Prospectus and the Prospectus,
the Company (including its agents and representatives, other than the Underwriters in their
capacity as such) has not made, used, prepared, authorized, approved or referred to and will not
prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule
405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy
the Shares (each such communication by the Company or its agents and representatives (other than a
communication referred to in clause (i) below) an “Issuer Free Writing Prospectus”) other than (i)
any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or
Rule 134 under the Securities Act or (ii) the documents listed on Annex B hereto and other written
communications approved in writing in advance by the Representatives. Each such Issuer Free
Writing Prospectus complied in all material respects with the Securities Act, has been filed in
accordance with the Securities Act (to
the extent required thereby) and, when taken together with the Preliminary Prospectus filed
prior to the first use of such Issuer Free Writing Prospectus, did not, and at the Closing Date and
as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to any statements or omissions made
in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in any Issuer Free Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement has been declared
effective by the Commission. No order suspending the effectiveness of the Registration Statement
has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of
the Securities Act against the Company or related to the offering has been initiated or threatened
by the Commission; as of the applicable effective date of the Registration Statement and any
amendment thereto, the Registration Statement complied and will comply in all material respects
with the Securities Act, and did not and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and as of the date of the Prospectus and any amendment or
supplement thereto and as of the Closing Date and as of the Additional Closing Date, as the case
may be, the Prospectus will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to any statements or omissions made
in reliance upon and in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representatives expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated by reference in the Registration
Statement, the Prospectus or the Time of Sale Information, when they became effective or were filed
with the Commission, as the case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and none of such documents contained any
untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and any further documents so filed and incorporated by reference in
the Registration Statement, the Prospectus or the Time of Sale Information, when such documents
become effective or are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and will not contain
any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(f) Financial Statements. (i) The financial statements and the related notes thereto of the
Company and its consolidated subsidiaries included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus comply in all material
respects with the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and present fairly the financial position of the Company and its subsidiaries as of the
dates indicated and the results of their operations and the changes in their cash flows for the
periods specified; such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the periods covered
thereby, and the supporting schedules included or incorporated by reference in the Registration
Statement present fairly the information required to be stated therein; the other financial
information included or incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus has been derived from the accounting records of the Company and its
subsidiaries and presents fairly the information shown thereby; and the pro forma
financial information and the related notes thereto included or incorporated by reference in the
Registration Statement, the Time of Sale Information and the Prospectus have been prepared in
accordance with the applicable requirements of the Securities Act and the Exchange Act, as
applicable, and the assumptions underlying such pro forma financial information are
reasonable and are set forth in the Registration Statement, the Time of Sale Information and the
Prospectus; and (ii) to the knowledge of the Company, the statements of revenues and direct
operating expenses of the oil and gas properties (the “Acquisition Assets”) purchased by the
Company from Talisman Energy Inc. (“Talisman”) included in the Registration Statement, the Time of
Sale Information and the Prospectus present fairly the revenues and direct operating expenses of
the Acquisition Assets as of the dates indicated and for the periods specified; and such financial
statements have been prepared in conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods covered thereby.
(g) No Material Adverse Change. Since the date of the most recent financial statements of the
Company or of the Acquisition Assets included or incorporated by reference in the Registration
Statement, the Time of Sale Information and the Prospectus, (i) there has not been any change in
the capital stock or long-term debt of the Company or any of its subsidiaries or, to the knowledge
of the Company, of the Acquisition Assets, or any dividend or distribution of any kind declared,
set aside for payment, paid or made by the Company or, to the knowledge of the Company, Talisman on
any class of capital stock, or any material adverse change in or affecting the business,
properties, management, financial position, stockholders’ equity, results of operations or
prospects of the Company and its subsidiaries or, to the knowledge of the Company, the Acquisition
Assets, taken as a whole; (ii) neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, the Acquisition Assets has entered into any transaction or agreement that
is material to the Company and its subsidiaries taken as a whole or, to the knowledge of the
Company, to the Acquisition Assets taken as a whole or incurred any liability or obligation, direct
or contingent, that is material to the Company and its subsidiaries taken as a whole or, to the
knowledge of the Company, to the Acquisition Assets taken as a whole; and (iii) neither the Company
nor any of its subsidiaries nor, to the knowledge of the Company, the Acquisition Assets has
sustained any material loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any
action, order or decree of any court or arbitrator or governmental or regulatory authority, except
in each case as would not constitute, individually or in the aggregate, a Material Adverse Effect
(as defined below) or is otherwise disclosed in the Registration Statement, the Time of Sale
Information and the Prospectus.
(h) Organization and Good Standing. The Company and each of its subsidiaries, to the extent
applicable, have been duly organized and are validly existing and in good standing under the laws
of their respective jurisdictions of organization, are duly qualified to do business and are in
good standing in each jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct the businesses in
which they are engaged, except where the failure to be so qualified or have such power or authority
would not, individually or in the aggregate, have a material adverse effect on the business,
properties, management, financial position, stockholders’ equity, results of operations or
prospects of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”). The
Company does not own or control, directly or indirectly, any corporation, association or other
entity other than the subsidiaries listed in Exhibit 21 to the Registration Statement.
(i) Capitalization. The Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Information and the Prospectus under the heading
“Capitalization”; all the outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable and are not subject to any
pre-emptive or similar rights; except as described in or expressly contemplated by the Time of Sale
Information and the Prospectus, there are no outstanding rights (including, without limitation,
pre-emptive rights), warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind
relating to the issuance of any capital stock of the Company or any such subsidiary, any such
convertible or exchangeable securities or any such rights, warrants or options; the capital stock
of the Company conforms in all material respects to the description thereof contained in the
Registration Statement, the Time of Sale Information and the Prospectus; and all the outstanding
shares of capital stock or other equity interests of each subsidiary of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable (except, in the case of any
foreign subsidiary, for directors’ qualifying shares and except as otherwise described in the
Registration Statement, the Time of Sale Information and the Prospectus) and are owned directly or
indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party.
(j) Due Authorization. The Company has full right, power and authority to execute and deliver
this Agreement and, at the time of entering into the following agreements, (i) had full right,
power and authority to enter into and deliver the Put and Call Option Agreement between Paladin
Resources Limited, Endeavour Energy UK Limited and Endeavour International Corporation, dated May
26, 2006, the Hive-In Agreement between Talisman Energy (UK) Limited, Talisman Energy Alpha
Limited, Talisman North Sea Limited, Talisman Oil Trading Limited and Talisman Expro Limited, dated
May 26, 2006, the Hive-Out Agreement between Talisman Expro Limited and Paladin Resources
(Montrose) Limited, dated May 26, 2006, the Hive-Out Agreement between Talisman Expro Limited and
Talisman Petroleum Ltd., dated May 26, 2006, the Hive-Out Agreement between Talisman Expro Limited
and Talisman Oil Trading Limited, dated May 26, 2006, the Hive-Out Agreement between Talisman Expro
Limited and Talisman North Sea Limited, dated May 26, 2006, and the Hive-Out Agreement between
Talisman Expro Limited and Talisman Energy (UK) Limited, dated May 26, 2006 (the “Acquisition
Documents”), and (ii) will have full right, power and authority to enter into and deliver the
Secured Revolving Loan and Letter of Credit Facility Agreement among the Company and BNP Paribas
and the Governor and Company of the Bank of Scotland, as arrangers and lenders, the Second Lien
Credit Guarantee Agreement among Endeavour International Holding B.V. and Credit Suisse Securities
(USA) LLC, as arranger and lender, and the Subscription and Registration Rights Agreement among the
Company and the purchasers thereto relating to the Series A-1 Convertible Preferred Stock
(collectively, the “Financing Documents” and, together with the Acquisition Documents, the
“Transaction Documents”) and to perform its obligations hereunder and thereunder.
(k) Underwriting Agreement. This Agreement has been duly authorized, executed and delivered
by the Company.
(l) The Shares. The Shares to be issued and sold by the Company hereunder have been duly
authorized by the Company and, when issued and delivered and paid for as provided herein, will be
duly and validly issued and will be fully paid and nonassessable and will conform to the
descriptions thereof in the Time of Sale Information and the Prospectus; and the issuance of the
Shares is not subject to any preemptive or similar rights.
(m) Other Transaction Documents. The Transaction Documents (other than this Agreement) have
been duly authorized, and the Acquisition Documents have been duly executed and delivered by the
Company, and, to the knowledge of the Company, Talisman and constitute valid and legally binding
agreements of each of the Company and Talisman enforceable against each of the Company and Talisman
in accordance with their terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors’ rights generally or by equitable principles
relating to enforceability.
(n) Descriptions of the Series A-1 Convertible Preferred Stock. The Series A-1 Convertible
Preferred Stock conforms in all material respects to the description thereof contained in the
Registration Statement, the Time of Sale Information and the Prospectus.
(o) No Violation or Default. Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any of the Acquisition Assets is (i) in violation of its charter or
by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or any of its subsidiaries or,
to the knowledge of the Company, any of the Acquisition Assets is a party or by which the Company
or any of its subsidiaries or, to the knowledge of the Company, any of the Acquisition Assets is
bound or to which any of the property or assets of the Company or any of its subsidiaries or, to
the knowledge of the Company, any of the Acquisition Assets is subject; or (iii) in violation of
any law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any
such default or violation that would not, individually or in the aggregate, have a Material Adverse
Effect.
(p) No Conflicts. The execution, delivery and performance by the Company of each of the
Transaction Documents, the issuance and sale of the Shares and the consummation of the transactions
contemplated by the Transaction Documents will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries or, to the knowledge of the Company, any of the Acquisition
Assets pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries or, to the knowledge of the Company, any
of the Acquisition Assets is a party or by which the Company or any of its subsidiaries or, to the
knowledge of the Company, any of the Acquisition Assets is bound or to which any of the property or
assets of the Company or any of its subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets is subject, (ii) result in any violation of the provisions of the charter or
by-laws or similar organizational documents of the Company or any of its subsidiaries or, to the
knowledge of the Company, any of the Acquisition Assets, if applicable, or (iii) result in the
violation of any law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii)
above, for any such conflict, breach or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.
(q) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority (including
without limitation the Federal Energy Regulatory Commission) is required for the execution,
delivery and performance by the Company of each of the Transaction Documents, the issuance and sale
of the Shares and the consummation of the transactions contemplated by the Transaction Documents,
except for (i) the registration of the Shares under the Securities Act and such consents,
approvals, authorizations, orders and registrations or qualifications as may be required under
applicable state securities laws in connection with the purchase and distribution of the Shares by
the Underwriters; and (ii) with respect to the consummation of the transactions contemplated by the
Transaction Documents (other than this Agreement).
(r) Legal Proceedings. Except as described in the Registration Statement, the Time of Sale
Information and the Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of its subsidiaries or, to the
knowledge of the Company, any of the Acquisition Assets is or may be a party or to which any
property of the Company or any of its subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets is or may be the subject that, individually or in the aggregate, if determined
adversely to the Company or any of its subsidiaries or any of the Acquisition Assets, could
reasonably be expected to have a Material Adverse Effect or materially and adversely affect the
ability of the Company to perform their obligations under the Transaction Documents; no such
investigations, actions, suits or proceedings are threatened or, to the knowledge of the Company,
contemplated by any governmental or regulatory authority or threatened by others; and (i) there are
no current or pending legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Registration Statement that are not so
described in the Registration Statement, the Time of Sale Information and the Prospectus and (ii)
there are no statutes, regulations or contracts or other
documents that are required under the Securities Act to be filed as exhibits to the
Registration Statement or described in the Registration Statement or the Prospectus that are not so
filed as exhibits to the Registration Statement or described in the Registration Statement, the
Time of Sale Information and the Prospectus.
(s) Independent Accountants. (i) KPMG LLP and X X Xxxxxxxxx Associates, LLC, who have
certified certain financial statements of the Company and its subsidiaries are each an independent
registered public accounting firm with respect to the Company and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public Accounting Oversight
Board (United States) and as required by the Securities Act; and (ii) Ernst & Young LLP, who have
certified certain financial statements of the Acquisition Assets, are an independent registered
public accounting firm with respect to Talisman and its subsidiaries within the applicable rules
and regulations adopted by the Commission and the Public Accounting Oversight Board (United States)
and as required by the Securities Act.
(t) Title to Real. Neither the Company nor any of its subsidiaries own any real property
(other than oil and gas interests) that is material to the respective businesses of the Company and
its subsidiaries.
(u) Title to Intellectual Property. The Company and its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service xxxx registrations, copyrights, licenses and know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective businesses; and the conduct of
their respective businesses will not conflict in any material respect with any such rights of
others, and the Company and its subsidiaries have not received any notice of any claim of
infringement or conflict with any such rights of others.
(v) No Undisclosed Relationships. No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that
is required by the Securities Act to be described in the Registration Statement and the Prospectus
and that is not so described in such documents and in the Time of Sale Information.
(w) Investment Company Act. The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in the Registration
Statement, the Time of Sale Information and the Prospectus, will not be required to register as an
“investment company” or an entity “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder (collectively, “Investment Company Act”).
(x) Public Utility Holding Company Act. Neither the Company nor any of its subsidiaries is a
“holding company” or a “subsidiary company” of a holding company or an “affiliate” thereof within
the meaning of the Public Utility Holding Company Act of 2005, as amended.
(y) Taxes. The Company and its subsidiaries and, to the knowledge of the Company, the
Acquisition Assets have paid all federal, state, local and foreign taxes and filed all tax returns
required to be paid or filed through the date hereof; and except as otherwise disclosed in the
Registration Statement, the Time of Sale Information and the Prospectus, there is no tax deficiency
that has been, or could reasonably be expected to be, asserted against the Company or any of its
subsidiaries or, to the knowledge of the Company, the Acquisition Assets or any of their respective
properties or assets.
(z) Licenses and Permits. The Company and its subsidiaries and, to the knowledge of the
Company, the Acquisition Assets possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that are necessary for the ownership
or lease of their respective properties or the conduct of their respective businesses as described
in the Registration Statement, the Time of Sale Information and the Prospectus, except where the
failure to possess or make the same would not, individually or in the aggregate, have a Material
Adverse Effect; and except as described in the Registration Statement, the Time of Sale Information
and the Prospectus, neither the Company nor any of its subsidiaries nor, to the knowledge of the
Company, the Acquisition Assets has received notice of any revocation or modification of any such
license, certificate, permit or authorization or has any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the ordinary course.
(aa) No Labor Disputes. No labor disturbance by or dispute with employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is contemplated or threatened
and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the
employees of any of its or its subsidiaries’ principal suppliers, contractors or customers, except
as would not have a Material Adverse Effect.
(bb) Compliance With Environmental Laws. (i) The Company and its subsidiaries and, to the
knowledge of the Company, the Acquisition Assets (x) are in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, requirements, decisions and orders
relating to the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); and (y) have
received and are in compliance with all permits, licenses, certificates or other authorizations or
approvals required of them under applicable Environmental Laws to conduct their respective
businesses; (ii) there are no costs or liabilities associated with Environmental Laws of or
relating to the Company or its subsidiaries or, to the knowledge of the Company, any of the
Acquisition Assets, except in the case of each of (bb)(i)(x), (bb)(i)(y) and (bb)(ii) above, for
any such failure to comply, or failure to receive required permits, licenses or approvals, or cost
or liability, as would not, individually or in the aggregate, have a Material Adverse Effect; and
(iii) except as described in each of the Time of Sale Information and the Prospectus, (x) there are
no proceedings that are pending, or that are known to the Company to be contemplated, against the
Company or its subsidiaries or, to the knowledge of the Company, any Acquisition Assets under any
Environmental Laws in which a governmental entity is also a party, other than such proceedings
regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be
imposed, (y) the Company is not aware of any issues regarding compliance with
Environmental Laws, or Liabilities or other obligations under Environmental Laws or concerning
hazardous or toxic substances or wastes, pollutants or contaminants, that could, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, and (z) the Company does
not anticipate material capital expenditures relating to any Environmental Laws.
(cc) Compliance With ERISA. Each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained,
administered or contributed to by the Company or any of its affiliates for employees or former
employees of the Company and its affiliates has been maintained in compliance in all material
respects with its terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended
(the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975
of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to
a statutory or administrative exemption; and for each such plan that is subject to the funding
rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as
defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market
value of the assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued under such plan determined using
reasonable actuarial assumptions.
(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 is
designed to ensure that information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding required disclosure. The Company and
its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and
procedures as required by Rule 13a-15 of the Exchange Act.
(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,
in all material respects, 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 Time of Sale Information and the Prospectus, the
Company is not aware of any material weaknesses in the Company’s internal controls.
(ff) Insurance. The Company and its subsidiaries and, to the knowledge of the Company, the
Acquisition Assets 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 the Company reasonably believes are adequate to protect the
Company and its subsidiaries and the Acquisition Assets and their respective businesses; and
neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any of the
Acquisition Assets has (i) received notice from any insurer or agent of such insurer that any
material capital improvements or other expenditures are required or necessary to be made in order
to continue such insurance or (ii) any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage 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 or, to the knowledge of the Company, any
of the Acquisition Assets 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 and, to the knowledge of the Company, the Acquisition Assets 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 or, to the knowledge of the Company, any of the Acquisition Assets 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 or, to the knowledge of the Company, the Acquisition Assets 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.
(jj) No Restrictions on Subsidiaries. No subsidiary of the Company 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. Neither the issuance, sale and delivery of the Shares nor the application
of the proceeds thereof by the Company as described in the Registration Statement, the Time of Sale
Information and the Prospectus will 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) Forward-Looking Statements. No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration
Statement, the Time of Sale Information and the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(pp) Statistical and Market Data. Nothing has come to the attention of the Company that has
caused the Company to believe that the statistical and market-related data included in the
Registration Statement, the Time of Sale Information and the Prospectus is not based on or derived
from sources that are reliable and accurate in all material respects.
(qq) Xxxxxxxx-Xxxxx Act. There is and has been no failure on the part of the Company or, to
the knowledge of the Company, any of the Company’s directors or officers, in their capacities as
such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”), including Section 402 related to
loans and Sections 302 and 906 related to certifications.
(rr) Status under the Securities Act. The Company is not an ineligible issuer as defined
under the Securities Act, in each case at the times specified in the Securities Act in connection
with the offering of the Shares. The Company has paid the registration fee for this offering
pursuant to Rule 456 (b) (1) under the Securities Act or will pay such fees within the time period
required by such rule (without giving effect to the proviso therein) and in any event prior to the
Closing Date.
(ss) Reserve Report Data. (i) The oil and gas reserve estimates of the Company for the fiscal
years ended December 31, 2005 and 2004 contained in the Registration Statement, the Time of Sale
Information and the Prospectus are derived from reports that have been prepared by the energy
consulting firm as set forth therein, and the Company has no reason to believe that such reserve
estimates do not fairly reflect, in all material respects, the oil and gas reserves of the Company
at the dates indicated therein and are not in accordance with the Commission guidelines applicable
thereto applied on a consistent basis throughout the periods involved; and (ii) the oil and gas
reserve estimates of the Acquisition Assets for the fiscal year ended December 31, 2005 contained
in the Registration Statement, the Time of Sale Information and the Prospectus are derived from
reports that have been prepared by Netherland, Xxxxxx & Associates, Inc., and the Company has no
reason to believe that such reserve estimates do not fairly reflect, in all material respects, the
oil and gas reserves of Talisman at the dates indicated therein and are not in accordance with the
Commission guidelines applicable thereto applied on a consistent basis throughout the periods
involved.
(tt) Company’s Independent Reserve Engineering Firm. Xxxxxxx, Xxxxx & Associates, Ltd. who
has certified the oil and gas reserve estimates of the Company has represented to the Company that
it is, and the Company believes it to be, an independent petroleum engineering firm with respect to
the Company for the periods set forth in the Registration Statement, the Time of Sale Information
and the Prospectus.
(uu) Acquisition Assets’ Independent Reserve Engineering Firm. The Company believes that
Netherland, Xxxxxx & Associates, Inc. who has certified the oil and gas reserve estimates of the
Acquisition Assets is an independent petroleum engineering firm with respect to the Company and the
Acquisition Assets for the periods set forth in the Registration Statement, the Time of Sales
Information and the Prospectus.
(vv) The documents incorporated by reference in the Time of Sale Information and the
Prospectus or any further amendment or supplement thereto made by the Company prior to the Closing
Date or the Additional Closing Date, as the case may be, when they became effective or were filed
with the Commission, as the case may be, complied as to form in all material respects with the
requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder; and the Company has no reason to believe that any of such
documents, when such documents were so filed under the Exchange with the Commission, contained any
untrue statement of a material fact or omitted to state a material fact necessary in order to make
the statement therein, in the light of the circumstances under which they were made when such
documents were so filed, not misleading.
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) and Rule 430A, 430B or 430C under the Securities Act ,
will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the
Securities Act; and will file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering or sale of the Shares; and
the Company will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the
extent not previously delivered) to the Underwriters in New York City prior to 10:00 A.M., New York
City time, on the business day next succeeding the date of this Agreement in such quantities as the
Representatives may reasonably request.
(b) Delivery of Copies. The Company will deliver, without charge, to each Underwriter (A) a
conformed copy of the Registration Statement as originally filed and each amendment thereto
(without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as many copies
of the Prospectus (including all amendments and supplements thereto and documents incorporated by
reference therein) and each Issuer Free Writing Prospectus as the Representatives may reasonably
request. As used herein, the term “Prospectus Delivery Period” means such period of time after the
first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered (or required to be delivered
but for Rule 172 under the Securities Act) in connection with sales of the Shares by any
Underwriter or dealer.
(c) Amendments or Supplements, Issuer Free Writing Prospectuses. Before preparing, using,
authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before
filing any amendment or supplement to the Registration Statement or the Prospectus, the Company
will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer
Free Writing Prospectus, amendment or supplement for review and will not prepare, use, authorize,
approve, refer to or file any such Issuer Free Writing Prospectus or file any such proposed
amendment or supplement to which the Representatives reasonably objects.
(d) Notice to the Representatives. The Company will advise the Representatives promptly, and
confirm such advice in writing, (i) when any amendment to the Registration Statement has been filed
or becomes effective; (ii) when any supplement to the Prospectus or any Issuer Free Writing
Prospectus or any amendment to the Prospectus has been filed; (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or supplement to the
Prospectus or the receipt of any comments from the Commission relating to the Registration
Statement or any other request by the Commission for any additional information; (iv) of the
issuance by the Commission of any order suspending the effectiveness of the Registration Statement
or preventing or suspending the use of any Preliminary Prospectus or the Prospectus or the
initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the
Securities Act; (v) of the occurrence of any event within the Prospectus
Delivery Period as a result of which the Prospectus, the Time of Sale Information or any
Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances existing when the
Prospectus, the Time of Sale Information or any Issuer Free Writing Prospectus is delivered to a
purchaser, not misleading; and (vi) of the receipt by the Company of any notice with respect to any
suspension of the qualification of the Shares for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and the Company will use its
commercially reasonable efforts to prevent the issuance of any such order suspending the
effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification of the Shares and, if any such
order is issued, will obtain as soon as possible the withdrawal thereof.
(e) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event shall
occur or condition shall exist as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it
is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately
notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file
with the Commission and furnish to the Underwriters and to such dealers as the Representatives may
designate, such amendments or supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus will comply with law and (2) if at any time prior to the Closing Date (i) any event
shall occur or condition shall exist as a result of which the Time of Sale Information as then
amended or supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the circumstances,
not misleading or (ii) it is necessary to amend or supplement the Time of Sale Information to
comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare
and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish
to the Underwriters and to such dealers as the Representatives may designate, such amendments or
supplements to the Time of Sale Information as may be necessary so that the statements in the Time
of Sale Information as so amended or supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request
and will continue such qualifications in effect so long as required for distribution of the Shares;
provided that the Company shall not be required to (i) qualify as a foreign corporation or
other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be
required to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so
subject.
(g) Earning Statement. The Company will make generally available to its security holders and
the Representatives as soon as practicable an earning statement that satisfies the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering
a period of at least twelve months beginning with the first fiscal quarter of the Company occurring
after the “effective date” (as defined in Rule 158) of the Registration Statement.
(h) Clear Market. For a period of 180 days after the date of the initial public offering of
the Shares, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, any shares of Stock or any securities convertible into or exercisable or exchangeable
for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of the Stock, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of the Representatives, other than the Shares to be
sold hereunder and any shares of Stock of the Company issued upon (A) the exercise of options
granted under existing employee stock option plans, (B) the granting of options, restricted stock
or other securities under existing incentive plans; (C) the conversion of the Company’s Convertible
Notes due 2012, (D) the exercise of options or warrants for up to 1,645,000 shares of Stock not
under employee incentive plans and (E) the conversion of the Series A-1 Convertible Preferred Stock
and the issuance of Stock in connection with any dividends paid on the Series A-1 Convertible
Preferred Stock pursuant to the terms of the Subscription and Registration Rights Agreement among
the Company and the purchasers thereto. Notwithstanding the foregoing, if (1) during the last 17
days of the 180-day restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of the 180-day
restricted period, the Company announces that it will release earnings results during the 16-day
period beginning on the last day of the 180-day period, the restrictions imposed by this Agreement
shall continue to apply until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Shares as
described in the Registration Statement, the Time of Sale Information and the Prospectus under the
heading “Use of Proceeds”.
(j) No Stabilization. The Company will not take, 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.
(k) Exchange Listing. The Company will use its commercially reasonable efforts to list,
subject to notice of issuance, the Shares on the American Stock Exchange (the “Exchange”).
(l) Reports. So long as the Shares are outstanding, the Company will furnish to the
Representatives, as soon as they are available, copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities exchange or
automatic quotation system.
(m) Record Retention. The Company will, pursuant to reasonable procedures developed in good
faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission
in accordance with Rule 433 under the Securities Act.
5. Certain Agreements of the Underwriters. Each Underwriter hereby represents and
agrees that:
(a) It has not and will not use, authorize use of, refer to, or participate in the planning
for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which
term includes use of any written information furnished to the Commission by the Company and not
incorporated by reference into the Registration Statement and any press release issued by the
Company) other than (i) a free writing prospectus that contains no “issuer information” (as defined
in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation
by reference) in the Preliminary Prospectus or a previously filed Issuer Free Writing Prospectus,
(ii) any Issuer Free Writing Prospectus listed on Annex B or prepared pursuant to Section 3(c) or
Section 4(c) above, or (iii) any free writing prospectus prepared by such underwriter and approved
by the Company in advance in writing (each such free writing prospectus referred to in clauses (i)
or (iii), an “Underwriter Free Writing Prospectus”).
(b) It has not and will not distribute any Underwriter Free Writing Prospectus referred to in
clause (a)(i) in a manner reasonably designed to lead to its broad unrestricted dissemination.
(c) It has not and will not, without the prior written consent of the Company, use any free
writing prospectus that contains the final terms of the Shares unless such terms have previously
been included in a free writing prospectus filed with the Commission.
(d) It will, pursuant to reasonable procedures developed in good faith, retain copies of each
free writing prospectus used or referred to by it, in accordance with Rule 433 under the Securities
Act.
(e) It is not subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such proceeding against it is
initiated during the Prospectus Delivery Period).
6. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to
purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing
Date, as the case may be, as provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose or pursuant to
Section 8A under the Securities Act shall be pending before or threatened by the Commission;
the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the
Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the
extent required by Rule 433 under the Securities Act) and in accordance with Section 4(a) hereof;
and all requests by the Commission for additional information shall have been complied with to the
reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and on and as of the Closing Date or
the Additional Closing Date, as the case may be; and the statements of the Company and its officers
made in any certificates delivered pursuant to this Agreement shall be true and correct on and as
of the Closing Date or the Additional Closing Date, as the case may be.
(c) No Material Adverse Change. No event or condition of a type described in Section 3(g) No
Material Adverse Change representation hereof shall have occurred or shall exist, which event or
condition is not described in the Time of Sale Information (excluding any amendment or supplement
thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which
in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the
case may be, on the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Prospectus.
(d) Officer’s Certificate. The Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of the chief financial
officer or chief accounting officer of the Company and one additional senior executive officer of
the Company who is satisfactory to the Representatives (i) confirming that such officers have
carefully reviewed the Registration Statement, the Time of Sale Information and the Prospectus and,
to the best knowledge of such officers, the representations set forth in Sections 3(b) and 3(d)
hereof are true and correct, (ii) confirming that the other representations and warranties of the
Company in this Agreement are true and correct and that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or
prior to such Closing Date and (iii) to the effect set forth in paragraphs (a) and (c) above.
(e) Company Comfort Letters. On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, (i) KPMG LLP shall have furnished to the
Representatives, at the request of the Company, letters, dated the respective dates of delivery
thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type customarily included in
accountants’ “comfort letters” to underwriters with respect to the financial statements and certain
financial information contained or incorporated by reference in the Registration Statement, the
Time of Sale Information and the Prospectus relating to all periods subsequent to December 31,
2003; provided, that the letter delivered on the Closing Date or the Additional Closing
Date, as the case may be, shall use a “cut-off” date no more than three business days prior to such
Closing Date or such Additional Closing Date, as the case may be; and (ii) X X Xxxxxxxxx
Associates, LLC shall have furnished to the Representatives, at the request of the Company,
letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form and substance
reasonably satisfactory to the Representatives, containing statements and information of the type
customarily included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained or incorporated by reference in
the Registration Statement, the Time of Sale Information and the Prospectus relating to the year
ended December 31, 2003.
(f) Acquisition Assets Comfort Letters. On the date of this Agreement and on the Closing Date
or the Additional Closing Date, as the case may be, Ernst & Young LLP shall have furnished to the
Representatives, at the request of the Company, letters, dated the respective dates of delivery
thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the
Representatives, containing statements and information of the type customarily included in
accountants’ “comfort letters” to underwriters with respect to the financial statements and certain
financial information of the Acquisition Assets contained in the Registration Statement, the Time
of Sale Information and the Prospectus; provided that the letter delivered on the Closing
Date or the Additional Closing Date, as the case may be, shall use a “cut-off” date no more than
three business days prior to the Closing Date or such Additional Closing Date, as the case may be.
(g) Opinion of Counsel for the Company. (i) Xxxxxx & Xxxxxx LLP, counsel for the Company,
shall have furnished to the Representatives, at the request of the Company, their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the
Underwriters, in form and substance reasonably satisfactory to the Representatives, to the effect
set forth in Annex A-1 hereto; (ii) Xxxxxxxx and Wedge, Nevada counsel for the Company, shall have
furnished to the Representatives, at the request of the Company, their written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, and addressed to the Underwriters,
in form and substance reasonably satisfactory to the Representatives, to the effect set forth in
Annex A-2 hereto; and (iii) Xxx Xxxxxx, Executive Vice President, Administration, General Counsel
and Secretary of the Company shall have furnished to the Representatives, at the request of the
Company, his written opinion, dated the Closing Date or the Additional Closing Date, as the case
may be, and addressed to the Underwriters, in form and substance reasonably satisfactory to the
Representatives, to the effect set forth in Annex A-3 hereto.
(h) Opinion and Negative Assurance Statement of Counsel for the Underwriters. The
Representatives shall have received on and as of the Closing Date or the Additional Closing Date,
as the case may be, an opinion and negative assurance statement of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP,
counsel for the Underwriters, with respect to such matters as the Representatives may reasonably
request, and such counsel shall have received such documents and information as they may reasonably
request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance or Sale. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that would, as of the Closing Date or the Additional
Closing Date, as the case may be, prevent the issuance or sale of the Shares; and no injunction or
order of any federal, state or foreign court shall have been issued that would, as of
the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or
sale of the Shares.
(j) Good Standing. The Representatives shall have received on and as of the Closing Date or
the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the
Company and its material subsidiaries in their respective jurisdictions of organization and their
good standing as foreign entities in such other jurisdictions as the Representatives may reasonably
request, in each case in writing or any standard form of telecommunication from the appropriate
Governmental Authorities of such jurisdictions.
(k) Exchange Listing. The Shares to be delivered on the Closing Date or Additional Closing
Date, as the case may be, shall have been approved for listing on the Exchange, subject to official
notice of issuance.
(l) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of Exhibit A
hereto, between you and certain officers and directors of the Company relating to sales and certain
other dispositions of shares of Stock or certain other securities, delivered to you on or before
the date hereof, shall be full force and effect on the Closing Date or the Additional Closing Date,
as the case may be.
(m) Additional Documents. On or prior to the Closing Date or the Additional Closing Date, as
the case may be, the Company shall have furnished to the Representatives such further certificates
and documents as the Representatives may reasonably request.
(n) Reserve Report Confirmation Letters. On the Closing Date (i) Xxxxxxx, Xxxxx & Associates,
Ltd. shall have furnished to the Representatives, at the request of the Company, letters, dated the
respective dates of delivery thereof and addressed to the Underwriters, in form and substance
reasonably satisfactory to the Representatives, containing statements and information with respect
to the estimated oil and gas reserves of the Company as reported in letters to the Company; and
(ii) Netherland, Xxxxxx & Associates, Inc. shall have furnished to the Representatives, at the
request of the Company, letters, dated the respective dates of delivery thereof and addressed to
the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing
statements and information with respect to the estimated oil and gas reserves of the Acquisition
Assets as reported in letters to the Company.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless
each Underwriter, its affiliates, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities (including, without
limitation, legal fees and other expenses incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or
several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or necessary in order to
make the statements therein, not misleading, (ii) or any untrue statement or alleged untrue
statement of a material fact contained in the Prospectus (or any amendment or supplement thereto),
any Issuer Free Writing Prospectus or any Time of Sale Information (including any Time of Sale
Information that has subsequently been amended), or caused by any omission or alleged omission to
state therein a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, in each case except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in conformity with any
information relating to any Underwriter furnished to the Company in writing by such Underwriter
through the Representatives expressly for use therein, it being understood and agreed that the only
such information furnished by any Underwriter consists of the information described as such in
subsection (b) below.
(b) Indemnification of the Company. Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in
paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise
out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to such Underwriter furnished
to the Company in writing by such Underwriter through the Representatives expressly for use in the
Registration Statement, the Prospectus (or any amendment or supplement thereto), any Issuer Free
Writing Prospectus or any Time of Sale Information, it being understood and agreed upon that the
only such information furnished by any Underwriter consists of the following information in the
Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures
appearing in the third paragraph under the caption “Underwriting” and the information contained in
the thirteenth and fourteenth paragraphs under the caption “Underwriting.”
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such
person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under this Section 7 except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this Section 7. If any
such proceeding shall be brought or asserted against an Indemnified Person and it shall have
notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified
Person, be counsel to the Indemnifying Person) to
represent the Indemnified Person in such proceeding and shall pay the fees and expenses of
such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary or (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person. It is understood and agreed that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and
that all such fees and expenses shall be paid or reimbursed as they are incurred. Any such
separate firm for any Underwriter, its affiliates, directors and officers and any control persons
of such Underwriter shall be designated in writing by the Representatives, any such separate firm
for the Company, its directors, its officers who signed the Registration Statement and any control
persons of the Company shall be designated in writing by the Company. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such
request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person for
requested fees and expenses in accordance with such request (other than fees and expenses
reasonably objected to or otherwise contested in good faith by the Company) prior to the date of
such settlement. No Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnification could have been sought
hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such proceeding and (y) does
not include any statement as to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriters, on the other, from the offering of the Shares or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company, on the one
hand, and the Underwriters, on the other, shall be deemed to be in the same respective
proportions as the net proceeds (before deducting expenses) received by the Company from the sale
of the Shares and the total underwriting discounts and commissions received by the Underwriters in
connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear
to the aggregate offering price of the Shares. The relative fault of the Company, on the one hand,
and the Underwriters, on the other, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company or by the
Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) Limitation on Liability. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Underwriter be required to contribute any amount
in excess of the amount by which the total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Shares exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to
contribute pursuant to this Section 7 are several in proportion to their respective purchase
obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
8. Effectiveness of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9. Termination. This Agreement may be terminated in the absolute discretion of the
Representatives, by notice to the Company, if after the execution and delivery of this Agreement
and prior to the Closing Date or, in the case of the Option Shares, prior to the Additional Closing
Date (i) trading generally shall have been suspended or materially limited on or by any of the New
York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers,
Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade; (ii) trading of any securities issued or guaranteed by the Company shall have been suspended
on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking
activities shall have been declared by federal or New York State authorities; or (iv) there shall
have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis, either within or
outside the United States, that, in the judgment of the Representatives, is material and adverse
and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the
Shares on the Closing Date or the Additional Closing Date, as the case may be on the terms and in
the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.
10. Defaulting Underwriter. (a) If, on the Closing Date or the Additional Closing
Date, as the case may be, any Underwriter defaults on its obligation to purchase the Shares that it
has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their
discretion arrange for the purchase of such Shares by other persons satisfactory to the Company on
the terms contained in this Agreement. If, within 36 hours after any such default by any
Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then
the Company shall be entitled to a further period of 36 hours within which to procure other persons
satisfactory to the non-defaulting Underwriters to purchase such Shares on such terms. If other
persons become obligated or agree to purchase the Shares of a defaulting Underwriter, either the
non-defaulting Underwriters or the Company may postpone the Closing Date or the Additional Closing
Date, as the case may be, for up to five full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the
Registration Statement and the Prospectus or in any other document or arrangement, and the Company
agrees to promptly prepare any amendment or supplement to the Registration Statement and the
Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter”
includes, for all purposes of this Agreement unless the context otherwise requires, any person not
listed in Schedule I hereto that, pursuant to this Section 10, purchases Shares that a defaulting
Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or
the Additional Closing Date, as the case may be does not exceed one-eleventh of the aggregate
number of Shares to be purchased on such date, then the Company shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to
purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of
Shares that such Underwriter agreed to purchase on such date) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in
paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or
the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of
Shares to be purchased on such date, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the
obligation of the Underwriters to purchase Shares on the Additional Closing Date, as the case may
be, shall terminate without liability on the part of the non-defaulting Underwriters. Any
termination of this Agreement pursuant to this Section 10 shall be without liability on the part of
the Company, except that the Company will continue to be liable
for the payment of expenses as set forth in Section 11 hereof and except that the provisions
of Section 7 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its default.
11. Payment of Expenses. (a) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid
all costs and expenses incident to the performance of its obligations hereunder, including without
limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery
of the Shares and any taxes payable in that connection; (ii) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement, the Preliminary
Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information and the Prospectus
(including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii)
the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and
expenses of the Company’s counsel and independent accountants; (v) the fees and expenses incurred
in connection with the registration or qualification and determination of eligibility for
investment of the Shares under the laws of such jurisdictions as the Representatives may designate
and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees
and expenses of counsel for the Underwriters); (vi) the cost of preparing stock certificates; (vii)
the costs and charges of any transfer agent and any registrar; (viii) all expenses and application
fees incurred in connection with any filing with and clearance of the offering by, the National
Association of Securities Dealers, Inc.; (ix) all expenses incurred by the Company in connection
with any “road show” presentation to potential investors; and (x) all expenses and application fees
related to the listing of the Shares on the Exchange.
(b) If (i) this Agreement is terminated pursuant to subsection (ii) of Section 9 or (ii) the
Company for any reason fails to tender the Shares for delivery to the Underwriters or (iii) the
Underwriters decline to purchase the Shares for any reason permitted under this Agreement other
than pursuant to subsections (i), (iii) or (iv) of Section 9, the Company agrees to reimburse the
Underwriters for all out-of-pocket costs and expenses (including the fees and expenses of one
counsel for the Underwriters) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to in Section 7 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such
purchase.
13. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company and the Underwriters contained in this Agreement or made
by or on behalf of the Company or the Underwriters pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the Shares and
shall remain in full force and effect, regardless of any termination of this Agreement or any
investigation made by or on behalf of the Company or the Underwriters.
14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act.
15. Miscellaneous. (a) Authority of the Representatives. Any action by the
Underwriters hereunder may be taken by the Representatives on behalf of the Underwriters, and any
such action taken by the Representatives shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriters shall be given to the Representatives c/o X.X.
Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (fax: (000) 000-0000); Attention:
Equity Syndicate Desk and c/o Credit Suisse Securities (USA) LLC, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000; Attention: LCD-IBD. Notices to the Company shall be given to it at Endeavour
International Corporation, 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, (Fax: (000)
000-0000; Attention: General Counsel.
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
[Signature page follows]
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, ENDEAVOUR INTERNATIONAL CORPORATION |
||||
| By: | /s/ Xxx Xxxxxx | |||
| Name: Xxx Xxxxxx | ||||
| Title: Executive Vice President — Administrative General Counsel and Secretary | ||||
Accepted: October 19, 2006
X.X. XXXXXX SECURITIES INC.
CREDIT SUISSE SECURITIES (USA) LLC
as Representatives of the several Underwriters
listed in Schedule I hereto
CREDIT SUISSE SECURITIES (USA) LLC
as Representatives of the several Underwriters
listed in Schedule I hereto
X.X. XXXXXX SECURITIES INC.
For itself and on behalf of the several
Underwriters listed in Schedule I hereto.
Underwriters listed in Schedule I hereto.
By |
/s/ Xxx Xxxxxxx-Xxxxx | |||
CREDIT SUISSE SECURITIES (USA) LLC
For itself and on behalf of the several
Underwriters listed in Schedule I hereto.
Underwriters listed in Schedule I hereto.
By |
/s/ Xxxxxxx Xxxx | |||
Schedule I
| Underwriter | Number of Shares | |||||||
X.X. Xxxxxx Securities Inc. |
15,750,000 | |||||||
Credit Suisse Securities (USA) LLC |
12,250,000 | |||||||
Cannacord Xxxxx Inc. |
1,750,000 | |||||||
X.X. Xxxxxx & Company Inc. |
1,750,000 | |||||||
Xxxxxx, Xxxxx Xxxxx, Incorporated |
1,750,000 | |||||||
Natexis Bleichroeder Inc. |
1,750,000 | |||||||
| Total | 35,000,000 | |||||||
