PLAINS EXPLORATION & PRODUCTION COMPANY 7¾% Senior Notes due 2005 UNDERWRITING AGREEMENT
Exhibit
1.1
$600,000,000
PLAINS
EXPLORATION & PRODUCTION
COMPANY
7¾%
Senior Notes due 2005
June 13, 2007
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇▇▇▇ Brothers Inc.
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
Plains Exploration &
Production Company, a Delaware
corporation (the “Company”),
proposes, upon the terms and considerations set forth herein, to issue and
sell
to you, as the underwriters (the “Underwriters”), for whom ▇.▇.
▇▇▇▇▇▇ Securities Inc. (“JPMorgan”) and ▇▇▇▇▇▇ Brothers Inc.
(“▇▇▇▇▇▇ Brothers”) are acting as the representatives (the
“Representatives”), $600,000,000 in aggregate principal
amount
of its 7¾% Senior Notes due 2015 (the “Notes”). The
Company’s obligations under the Notes, including the payment of principal,
premium, if any, and interest with respect to the Notes, will be unconditionally
guaranteed (the “Guarantees”) byArguello Inc., a Delaware
corporation, ▇▇▇▇▇ PXP Properties, LLC, a Texas limited liability company,
Nuevo
Ghana Inc., a Delaware corporation, Nuevo International Inc., a Delaware
corporation, Nuevo Offshore Company, a Delaware corporation, Nuevo Resources
Inc., a Delaware corporation, Pacific Interstate Offshore Company, a California
corporation, Plains Acquisition Corporation, a Delaware corporation, Plains
Louisiana Inc., a Delaware corporation, Plains Resources Inc., a Delaware
corporation, Plains Resources International Inc., a Delaware corporation, PXP
Brush Creek LLC, a Delaware limited liability company, PXP CV Pipeline LLC,
a
Delaware limited liability company, PXP Deepwater L.L.C., a Delaware limited
liability company, PXP East Plateau LLC, a Delaware limited liability company,
PXP Gulf Coast Inc., a Delaware corporation, PXP Hell’s Gulch LLC, a Delaware
limited liability company, PXP Louisiana L.L.C., a Delaware limited liability
company, PXP Permian Inc., a Delaware corporation, PXP Piceance LLC, a Delaware
limited liability company, PXP Texas Inc., a Delaware corporation and PXP Texas
Limited Partnership, a Texas limited partnership (collectively, the
“Guarantors”). The Notes and the Guarantees are
hereinafter collectively called the “Securities.” The
Securities (i) will have terms and provisions which are summarized in the
Prospectus Supplement (as defined below) dated as of the date hereof and (ii)
are to be issued pursuant to an Indenture dated as of March 13, 2007 (the
“Base Indenture”), by and between the Company and ▇▇▇▇▇ Fargo
Bank, N.A., as trustee (the “Trustee”), as supplemented and
amended by the Third Supplemental Indenture thereto to be dated as of June
19,
2007 (the “Supplemental Indenture”), by and among the Company,
the Guarantors and the Trustee (relating to the Notes). The Base
Indenture, as supplemented and amended by the Supplemental Indenture, is
referred to herein as the “Indenture”. This is to
confirm the agreement
concerning the purchase of the Securities from the Company by the
Underwriters.
1. Representations,
Warranties and Agreements of the Company and the Guarantors. The
Company and each of the Guarantors, jointly and severally, represents, warrants
and agrees that:
(a)
The Company has
prepared and filed with the Securities and Exchange Commission
(the “Commission”) (i) an “automatic shelf registration
statement” (as defined in Rule 405 of the Securities Act of 1933, as amended
(the “Securities Act”)) on Form S-3 (File No. 333-141110) (the
“Initial Registration Statement”), including a prospectus,
relating to, among other securities, the Securities and the offering thereof
from time to time in accordance with Rule 415 under the rules and regulations
of
the Commission under the Securities Act (the “Rules and
Regulations”) and (ii) Post-Effective Amendment No. 1 thereto. Each of
the Initial Registration Statement and Post-Effective Amendment No. 1 thereto
has become effective upon filing with the Commission under the Securities Act.
The Company has furnished to you, for use by the Underwriters and by dealers,
copies of a preliminary prospectus supplement to the base prospectus included
in
the Initial Registration Statement relating to the Securities (together with
such base prospectus, the “Preliminary Prospectus”). As
provided in Section 5(a), a final prospectus supplement reflecting the terms
of
the offering of the Securities and the other matters set forth therein has
been
prepared and will be filed pursuant to Rule 424 under the Rules and Regulations.
Such final prospectus supplement, in the form first filed pursuant to Rule
424
under the Rules and Regulations and furnished by the Company for use by the
Underwriters and by dealers in connection with the offering of the Securities,
is herein referred to as the “Prospectus Supplement.” The
Initial Registration Statement, as amended at the Effective Time (including
without limitation by Post-Effective Amendment No. 1 thereto), including the
exhibits thereto and the documents incorporated by reference therein is herein
called the “Registration Statement.” The Prospectus
Supplement, together with the base prospectus relating to all offerings of
securities under the Registration Statement, is hereinafter called the
“Prospectus,” in either case including the documents filed by
the Company with the Commission pursuant to the Securities Exchange Act of
1934,
as amended (the “Exchange Act”), that are incorporated by
reference therein. As used herein, “Issuer Free Writing
Prospectus” means the documents listed on Annex 1 hereof and each “road
show” (as defined in Rule 433 under the Rules and Regulations), if any, related
to the offering of the Securities that is a “written communication” (as defined
in Rule 405 under the Rules and Regulations), and each such road show is
referred to herein as a “Road Show”, including the final term
sheet prepared pursuant to Section 5(a)(i) hereof and attached to this Agreement
as Annex 2 (the “Final Term Sheet”). As used herein,
“Pricing Disclosure Package” means the Preliminary Prospectus
included in the Registration Statement immediately prior to the Applicable
Time
and each Issuer Free Writing Prospectus (other than a Road Show), if any, issued
at or prior to the Applicable Time. As used herein, “Effective
Time” means the date and the time as of which the Initial Registration
Statement, or the most recent post-effective amendment thereto, if any, became
effective, or the most recent deemed amendment was filed with the Commission,
including any deemed amendment under Rule 430B under the Rules and
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Regulations.
“Effective
Date” means the date of the Effective Time.
Any reference to any deemed amendment to the Registration Statement
shall refer
to and include any filing of an annual report of the Company filed pursuant
to
Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement as well as the other documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Rules and Regulations.
Reference made herein to any Preliminary Prospectus or Prospectus shall be
deemed to refer to and include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Rules and Regulations, as of the
date
of such Preliminary Prospectus or Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus or
Prospectus shall be deemed to refer to and include such Preliminary Prospectus
or Prospectus as amended or supplemented in relation to the Securities
(including any final prospectus supplement relating to the Securities) together
with any document filed under the Exchange Act after the date of such
Preliminary Prospectus or Prospectus, as the case may be, and incorporated
by
reference in such Preliminary Prospectus or Prospectus, as the case may be;
and
any reference to any amendment to the Registration Statement shall be deemed
to
include any annual report of the Company filed with the Commission pursuant
to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement; and any reference
to
the “Prospectus as amended or supplemented” shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable Securities
(including any final prospectus supplement relating to the Securities) in the
form in which it is filed with the Commission pursuant to Rule 424(b) under
the
Rules and Regulations in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such filing.
The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus.
(b)
The Company has
been since the time of initial filing of the Registration
Statement and continues to be a “well-known seasoned issuer” (as defined in Rule
405 under the Rules and Regulations) eligible to use Form S-3 for the offering
of the Securities, including not having been an “ineligible issuer” (as defined
in Rule 405 under the Rules and Regulations) at any such time or date. No
notice of objection of the Commission to the use of the Registration Statement
or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the
Securities act has been received by the Company. No order suspending the
effectiveness of the Registration Statement has been issued by the Commission,
and, to the Company’s knowledge, no proceeding for that purpose or pursuant to
Section 8A of the Securities Act against the Company or related to the offering
has been initiated or threatened by the Commission.
(c)
Both before and
after giving effect to the consummation of the transactions
contemplated hereby, neither the Company nor any Guarantor is or will be an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended (the
“Investment Company Act”) and the rules and regulations of the
Commission thereunder.
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(d)
The Registration
Statement conformed and will conform on the Effective Date and
on the Closing Date, and any amendment to the Registration Statement filed
after
the date hereof will conform when filed, to the requirements of the Securities
Act and the Rules and Regulations. The Preliminary Prospectus conformed,
and the Prospectus will conform, when filed with the Commission pursuant to
Rule
424(b) under the Rules and Regulations and on the Closing Date to the
requirements of the Securities Act and the Rules and Regulations. The
documents incorporated by reference in any Preliminary Prospectus or the
Prospectus conformed, and any further documents so incorporated will conform,
when filed with the Commission, to the requirements of the Exchange Act or
the
Securities Act, as applicable, and the rules and regulations of the Commission
thereunder.
(e)
The Registration
Statement did not, as of the Effective Date, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided that no representation or warranty is made as to information contained
in or omitted from the Registration Statement in reliance upon and in conformity
with written information furnished to the Company through the Representatives
by
or on behalf of any Underwriter specifically for inclusion therein, which
information is specified in Section 9(e).
(f)
The Prospectus will
not, as of its date and on the Closing Date, contain an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein, in the light
of
the circumstances under which they were made, not misleading; provided that
no
representation or warranty is made as to information contained in or omitted
from the Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein, which information is specified
in Section 9(e).
(g)
The documents incorporated
by reference in any Preliminary Prospectus or the
Prospectus did not, and any further documents filed and incorporated by
reference therein will not, when filed with the Commission, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the
circumstances under which they were made, not misleading.
(h)
The Pricing Disclosure
Package did not, as of the time when sales of the
Securities were first made on the date of this Agreement (the
“Applicable Time”), contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that no representation or warranty
is
made as to information contained in or omitted from the Pricing Disclosure
Package in reliance upon and in conformity with written information furnished
to
the Company through the Representatives by or on behalf of any
4
Underwriter
specifically for inclusion therein, which information is specified in Section
9(e).
(i)
Each Issuer Free
Writing Prospectus did not, and on the Closing Date will not,
include any information that conflicts with the information in the Registration
Statement or the Pricing Disclosure Package and, when considered together with
the Pricing Disclosure Package as of the Applicable Time, did not contain an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein, in the light
of
the circumstances under which they were made, not misleading.
(j)
Each Issuer Free
Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations
on the date of first use, and the Company has complied with any requirements
of
Rule 433 under the Rules and Regulations with respect to each such Issuer Free
Writing Prospectus pursuant to the Rules and Regulations. The Company has
not made any offer relating to the Securities that would constitute an Issuer
Free Writing Prospectus (other than the Final Term Sheet and the Road Show)
without the prior written consent of the Representatives. Any Issuer Free
Writing Prospectus, the use of which as been consented to by the
Representatives, is listed on Annex 1 hereto. The Company has retained in
accordance with the Rules and Regulations all Issuer Free Writing Prospectuses
that were not required to be filed pursuant to the Rules and Regulations.
(k)
Each of the Company
and the Guarantors has been duly organized and is validly
existing and in good standing as a corporation or other business entity under
the laws of its jurisdiction of organization and is duly qualified to do
business and in good standing as a foreign corporation or other business entity
in each jurisdiction in which its respective ownership or lease of property
or
the conduct of its respective businesses requires such qualification, except
where the failure to be so qualified would not reasonably be expected to have
a
material adverse effect on the general affairs, management, business, financial
condition or results of operations of the Company and its subsidiaries, taken
as
a whole (“Material Adverse Effect”), and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed on Annex 3 attached to this Agreement.
None of the subsidiaries of the Company (other than those identified as such
on
Annex 3) is a “significant subsidiary” (as defined in Rule 405 under the Rules
and Regulations).
(l)
The Company has
an authorized capitalization as set forth in the Preliminary
Prospectus and the Prospectus, and all of the issued shares of capital stock
of
the Company have been duly and validly authorized and issued, and are fully
paid
and non-assessable. All of the issued shares of capital stock or other
equity interests of each Guarantor have been duly and validly authorized and
issued and are fully paid and (except with respect to limited liability company
interests, limited partnership interests and general partnership interests,
to
the extent provided by applicable law) non-
5
assessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims; and none of the outstanding shares of capital
stock or other equity interests of the Company or any of its subsidiaries was
issued in violation of the preemptive rights or similar rights of any security
holder of the Company or any of its subsidiaries, respectively.
(m)
The Base Indenture
has been duly and validly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery thereof
by the Trustee, constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that the
enforceability of the Company’s obligations thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium,
and
other similar laws relating to or affecting creditors’ rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law). The Supplemental
Indenture has been duly and validly authorized by the Company and the
Guarantors, and upon its execution and delivery and, assuming due authorization,
execution and delivery thereof by the Trustee, will constitute the valid and
binding agreement of the Company and the Guarantors, enforceable against the
Company and the Guarantors in accordance with its terms, except that the
enforceability of the Company’s and the Guarantors’ obligations thereunder may
be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other similar laws relating to or affecting creditors’ rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
Base Indenture is duly qualified under the Trust Indenture Act of 1939, as
amended (the “Trust Indenture Act”). The Indenture
conforms with the requirements of the Trust Indenture Act and the rules and
regulations thereunder and conforms, or will conform, to the description thereof
in the Registration Statement, the Preliminary Prospectus and the
Prospectus.
(n)
The Notes have been
duly and validly authorized by the Company and when duly
executed by the Company in accordance with the terms of the Indenture and,
assuming due authentication of the Notes by the Trustee, upon delivery to the
Underwriters against payment therefor in accordance with the terms hereof,
will
have been validly issued and delivered, free of any preemptive or similar rights
to subscribe to or purchase the same arising by operation of law or under the
charter or bylaws of the Company or otherwise, and will constitute valid and
binding obligations of the Company entitled to the benefits of the Indenture,
enforceable against the Company in accordance with their terms, except that
the
enforceability of the Company’s obligations thereunder may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium,
and
other similar laws relating to or affecting creditors’ rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law). The Company has all
requisite corporate power and authority to issue, sell and deliver the Notes
in
accordance with and upon the terms and conditions set forth in this Agreement
and in the Registration Statement, the Preliminary Prospectus and
Prospectus.
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(o)
The Guarantees have
been duly and validly authorized by the Guarantors and when
the Supplemental Indenture is duly executed and delivered by the Guarantors
and
upon the due execution, authentication and delivery of the Notes in accordance
with the Indenture and the delivery of the Notes to the Underwriters against
payment therefor in accordance with the terms hereof, will constitute valid
and
binding obligations of the Guarantors, enforceable against the Guarantors in
accordance with their terms, except that the enforceability of the Guarantors’
obligations thereunder may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium, and other similar laws relating to
or
affecting creditors’ rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). Each Guarantor has all requisite corporate, limited
liability company or other power and authority to issue and deliver its
respective Guarantee in accordance with and upon the terms and conditions set
forth in this Agreement and in the Registration Statement, the Preliminary
Prospectus and Prospectus.
(p)
This Agreement has
been duly authorized, executed and delivered by the Company
and the Guarantors.
(q)
The execution, delivery
and performance of this Agreement and the Indenture by
the Company and the Guarantors and the consummation of the transactions
contemplated hereby and thereby, including, without limitation, the issuance
and
delivery of the Securities, and the application of the proceeds from the sale
of
the Securities as described under “Use of proceeds” in each of the Preliminary
Prospectus and the Prospectus will not result in a breach or violation of any
of
the terms or provisions of, or constitute a default under, (i) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets
of
the Company or any of its subsidiaries is subject and that is required to be
filed by the Company with the Commission under Item 601 of Regulation S-K,
(ii)
the provisions of the charter or bylaws (or similar organizational documents)
of
the Company or any of its subsidiaries or (iii) any law, statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets, except, in the case of the foregoing clauses (i) and
(iii), for such conflicts, breaches or violations that would not reasonably
be
expected to have a Material Adverse Effect.
(r)
No consent, approval,
authorization or order of, or filing or registration with,
any financial institution or any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets is required for the execution, delivery and performance
of
this Agreement or the Indenture by the Company or any Guarantor, the
consummation of the transactions contemplated hereby and thereby, including,
without limitation, the issuance and delivery of the Securities, by the Company
and the Guarantors, the application of the proceeds from the sale of the
Securities as described under “Use of proceeds” in each of the Preliminary
Prospectus and the Prospectus, except for such consents, approvals,
authorizations, registrations or qualifications as have been obtained or may
be
required
7
under the Exchange Act
or under applicable state securities laws in connection with the purchase and
sale of the Securities by the Underwriters.
(s)
No person has the
right to require the Company or any of its subsidiaries to
register any securities for sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issuance and
sale of the Securities.
(t)
Neither the Company
nor any of its subsidiaries has sustained, since the date of
the latest audited financial statements included or incorporated by reference
in
the Preliminary Prospectus and the Prospectus, any loss or interference with
its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Preliminary
Prospectus and the Prospectus; and, otherwise than as set forth in the
Preliminary Prospectus and the Prospectus, since the date of the latest audited
financial statements included or incorporated by reference in the Preliminary
Prospectus, there has not been any change in the capital stock or other equity
interests or long-term debt of the Company or any of its subsidiaries, except
(i) pursuant to the exercise of options or warrants or pursuant to the issuance
of common stock under the Company’s stock incentive plans, (ii) for the
repurchase by the Company of 1,025,900 shares of the Company’s common stock
pursuant to the Company’s stock repurchase program, (iii) for any borrowing
under the Amended and Restated Credit Agreement dated as of May 31, 2007, among
the Company, as borrower, each of the lenders that is a signatory thereto,
and
JPMorgan Chase Bank, N.A., as administrative agent (as amended, the
“Senior Credit Facility”), and (iv) for any borrowing under the
Company’s short-term credit facility with ▇▇▇▇▇ Fargo Bank, N.A. (as amended,
the “Short-Term Credit Facility”), in the ordinary course of
business for working capital purposes, or any material adverse change, or any
development involving a prospective material adverse change, in or affecting
the
general affairs, management, financial position, stockholders’ equity, results
of operations of the Company and its subsidiaries, taken as a whole.
(u)
The Company’s consolidated financial
statements (including the related notes and
supporting schedules) and Laramie’s consolidated financial statements (including
the related notes and supporting schedules), in each case, filed as part of
the
Registration Statement or included or incorporated by reference in the
Preliminary Prospectus and the Prospectus comply as to form in all material
respects with the requirements of Regulation S-X under the Securities Act and
present fairly the financial condition and results of operations and cash flows
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles (“GAAP”) applied on a consistent basis
throughout the periods involved, except as otherwise stated therein and in
the
case of unaudited financial statements, subject to year-end audit adjustments;
and the pro forma financial information (including the related notes thereto)
included or incorporated by reference in the Preliminary Prospectus and the
Prospectus complies as to form in all material respects with, and has been
prepared in accordance with, the applicable requirements of the Securities
Act
and the Exchange Act (including without limitation Regulation S-X under the
Securities Act), and the assumptions underlying such pro forma
8
financial information
are reasonable and are set forth in the Preliminary Prospectus and the
Prospectus.
(v)
PricewaterhouseCoopers
LLP, who have certified certain financial statements of
the Company and its consolidated subsidiaries, whose report is incorporated
by
reference into the Preliminary Prospectus and the Prospectus and who have
delivered the initial letter referred to in Section 7(f) hereof, is an
independent registered public accounting firm as required by the Securities
Act,
the Rules and Regulations and the rules and regulations of the Public Company
Accounting Oversight Board and were independent with respect to the Company
as
required by the Securities Act, the Rules and Regulations and the rules and
regulations of the Public Company Accounting Oversight Board during the periods
covered by the financial statements on which they reported incorporated by
reference in the Preliminary Prospectus. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ PC, who have certified certain financial statements of Laramie and
its
consolidated subsidiaries, whose report is incorporated by reference into the
Preliminary Prospectus and the Prospectus and who have delivered the initial
letter referred to in Section 7(h) hereof, is an independent registered public
accounting firm as required by the Securities Act, the Rules and Regulations
and
the rules and regulations of the Public Company Accounting Oversight Board
and
were independent with respect to Laramie as required by the Securities Act,
the
Rules and Regulations and the rules and regulations of the Public Company
Accounting Oversight Board during the periods covered by the financial
statements on which they reported incorporated by reference in the Preliminary
Prospectus.
(w)
The Company and
each Guarantor have good and indefeasible title in fee simple to
all real property and good title to all personal property owned by them, in
each
case free and clear of all liens, encumbrances and defects except (i) royalties,
overriding royalties and other burdens under oil and gas leases, (ii) easements,
restrictions, rights-of-way and other matters that commonly affect property,
(iii) liens securing taxes and other governmental charges, or claims of
materialmen, mechanics and similar persons, not yet due and payable, (iv) liens
and encumbrances under operating agreements, farm out agreements, unitization,
pooling and commutation agreements, declarations and orders, and gas sales
contracts, securing payment of amounts not yet due and payable and of a scope
and nature customary in the oil and gas industry and (v) liens, encumbrances
and
defects that do not in the aggregate materially affect the value of the real
property or materially interfere with the use made or proposed to be made of
such real property by the Company. The working interests in oil, gas and
mineral leases or mineral interests which constitute a portion of the real
property held by the Company reflect in all material respects the right of
the
Company to explore or receive production from such real property, and the care
taken by the Company and its subsidiaries with respect to acquiring or otherwise
procuring such leases or mineral interests was generally consistent with
standard industry practices for acquiring or procuring leases and interests
therein to explore for hydrocarbons.
(x)
The Company and
each of the Guarantors carry, or are covered by, insurance in
such amounts and covering such risks as the Company believes is adequate
9
for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar
industries.
(y)
Except as would
not reasonably be expected to have a Material Adverse Effect,
the Company and each of the Guarantors (i) own or possess adequate rights to
use
all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service ▇▇▇▇ registrations, copyrights and
licenses necessary for the conduct of their respective businesses and (ii)
have
no reason to believe that the conduct of their respective businesses will
conflict with, and have not received any notice of any claim of conflict with,
any such rights of others.
(z)
Except as described
in the Preliminary Prospectus and the Prospectus, there are
no legal or governmental proceedings pending to which the Company or any of
its
subsidiaries is a party or of which any property or assets of the Company or
any
of its subsidiaries is the subject which, if determined adversely, would have
a
Material Adverse Effect, or could, in the aggregate, reasonably be expected
to
have a material adverse effect, on the performance of this Agreement or the
consummation of the transactions contemplated hereby; and to the Company’s
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(aa)
No relationship,
direct or indirect, exists between or among the Company or any
Guarantor on the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company on the other hand, that would be required to be
described in the Preliminary Prospectus or the Prospectus which is not so
described.
(bb)
No labor disturbance
by the employees of the Company or its subsidiaries exists
or, to the knowledge of the Company, is imminent that would reasonably be
expected to have a Material Adverse Effect.
(cc)
(i) Each “employee benefit
plan” (within the meaning of Section 3(3) of the
Employee Retirement Security Act of 1974, as amended (“ERISA”))
for which the Company or any member of its “Controlled Group” (defined as any
organization which is a member of a controlled group of corporations within
the
meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the
“Code”)) would have any liability (each a
“Plan”) has been maintained in compliance in
all material
respects with its terms and the requirements of all applicable statutes, rules
and regulations including ERISA and the Code; (ii) with respect to each Plan
subject to Title IV of ERISA (a) no “reportable event” (within the meaning of
Section 4043(c) of ERISA) has occurred or is reasonably expected to occur for
which the Company and any member of its Controlled Group would have any
liability, (b) no “accumulated funding deficiency” (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, has
occurred or is reasonably expected to occur, (c) the fair market value of the
assets under each such Plan exceeds the present value of all benefits accrued
under such Plan (determined based on those assumptions used to fund such Plan)
and (d) neither the Company nor any member of its Controlled Group has incurred,
or reasonably expects to incur, any liability under Title IV of ERISA (other
than contributions to the Plan or premiums to the Pension
10
Benefit Guaranty
Corporation in the ordinary course and without default) in respect of a Plan
(including a “multiemployer plan”, within the meaning of Section 4001(c)(3) of
ERISA); and (iii) each Plan that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter to the effect
that the form of such Plan satisfies the requirements under Section 401(a)
of
the Code, and neither the Company nor any member of its Controlled Group has
any
reason to believe that anything has occurred, whether by action or by failure
to
act, which would adversely affect such qualification.
(dd)
The Company and
the Guarantors have filed all federal, state and local income
and franchise tax returns required to be filed through the date hereof and
have
paid all taxes due thereon, other than those being contested in good faith,
those for which reserves have been provided in accordance with GAAP or those
currently payable without penalty or interest; other than as described in the
Preliminary Prospectus and the Prospectus, no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does
the
Company have any knowledge of) any tax deficiency which, if determined
adversely, would reasonably be expected to have a Material Adverse Effect.
(ee)
Since the date as
of which information is given in the Preliminary Prospectus
and the Prospectus, and except as may otherwise be disclosed or contemplated
in
the Preliminary Prospectus and the Prospectus, the Company has not (i) incurred
any material liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (ii) entered into any material transaction not in the ordinary course
of business or (iii) declared or paid any dividend on its capital stock.
(ff)
The Company (i)
makes and keeps accurate books and records and (ii) maintains
internal accounting controls which provide reasonable assurance that (A)
transactions are executed in accordance with management’s authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management’s authorization and (D)
the reported accountability for its assets is compared with existing assets
at
reasonable intervals. The Company and its subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to
the
Company’s management as appropriate to allow timely decisions regarding required
disclosure. The Company and its subsidiaries have carried out evaluations
of the effectiveness of their disclosure controls and procedures as required
by
Rule 13a-15 of the Exchange Act.
(gg)
Neither the Company
nor any Guarantor (i) is in violation of its charter or
bylaws (or similar organizational documents), (ii) is in default, and no event
has occurred
11
which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its properties
or
assets is subject and that is required to be filed by the Company with the
Commission under Item 601 of Regulation S-K or (iii) is in violation of any
law,
ordinance, governmental rule, regulation or court decree to which it or its
property or assets may be subject or has failed to obtain any license, permit,
certificate, franchise or other governmental authorization or permit necessary
to the ownership of its property or to the conduct of its business, except,
in
the case of clause (iii) above, for any such defaults or violations that,
individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect.
(hh)
Neither the Company
nor any of its subsidiaries, nor any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any of its subsidiaries, has: (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating
to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated, or is in violation of, any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any bribe, unlawful rebate, payoff, influence payment,
kickback or other unlawful payment.
(ii)
There is and has
been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with the
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations
promulgated in connection therewith. The Company has completed its
required assessment under Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules
and regulations promulgated in connection therewith (collectively
“Section 404”) and included such assessment in its Annual
Report on Form 10-K for the fiscal year ended December 31, 2006 (the
“Form 10-K”). The Company’s assessment under Section 404
concluded that its internal control over financial reporting was effective
as of
December 31, 2006, and this assessment has been audited by
PricewaterhouseCoopers LLP as stated in their report which was included in
the
Form 10-K.
(jj)
There has been no
storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of toxic wastes, medical wastes, hazardous
wastes or hazardous substances by the Company or any of its subsidiaries (or,
to
the knowledge of the Company, any of their predecessors-in-interest) at, upon
or
from any of the properties now or previously owned or leased by the Company
or
any of its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial
action under any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit, except for any violation or remedial action which would not
have, or could not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a Material Adverse Effect.
There has been no spill, discharge, leak, emission, injection, escape, dumping
or release of any kind onto such property or into the environment surrounding
such property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or
12
caused by the Company
or
any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have, or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms “hazardous wastes,” “toxic
wastes,” “hazardous substances” and “medical wastes” shall have the meanings
specified in any applicable local, state, federal and foreign laws or
regulations with respect to environmental protection.
(kk)
The statements set
forth in the Preliminary Prospectus and the Prospectus under
the caption “Description of notes,” insofar as they purport to constitute a
summary of the terms of the Securities, and under the caption “United States
federal income tax considerations,” insofar as they purport to describe the
provisions of the laws referred to therein, are accurate and complete in all
material respects.
(ll)
The Company has
not distributed and, prior to the later to occur of the Closing
Date and completion of the distribution of the Securities, will not distribute
any offering material in connection with the offering and sale of the Securities
other than any Preliminary Prospectus, the Final Term Sheet, the Prospectus
and
any Issuer Free Writing Prospectus to which the Representatives have consented
in accordance with Section 1(j) or 5(a)(vii).
(mm)
None of the transactions
contemplated by this Agreement (including, without
limitation, the use of the proceeds from the sale of the Securities) will
violate or result in violation of Section 7 of the Exchange Act or any
regulation promulgated thereunder. Each of the Company and its
subsidiaries does not own, and none of the proceeds from the sale of Securities
contemplated hereby will be used directly or indirectly to purchase or carry,
any “margin stock” as defined in Regulation U promulgated by the Board of
Governors of the Federal Reserve System, except for shares of stock of the
Company that do not and will not in the aggregate constitute more than 25%
of
the consolidated total assets of the Company and its subsidiaries.
(nn)
The Company and
its subsidiaries have not taken, directly or indirectly, any
action designed to, or that might reasonably be expected to, cause or result
in
stabilization or manipulation of the price of the Securities to facilitate
the
sale or resale of the Securities.
(oo)
The information
supplied by the Company to its independent petroleum engineering
consultants for purposes of preparing the reserve reports used to calculate
estimates of reserves of the Company included in the Registration Statement,
Preliminary Prospectus and Prospectus, including, without limitation,
production, costs of operation and development, current prices for production,
agreements relating to current and future operations and sales of production,
was true and correct in all material respects on the date supplied and was
prepared in accordance with customary industry practices. Netherland,
▇▇▇▇▇▇ & Associates, Inc., independent consulting petroleum engineers, who
13
prepared estimates of
the extent and value of proved oil and natural gas reserves, are independent
with respect to the Company.
(pp)
There are no contracts
or other documents which are required by the Rules and
Regulations to be described in the Preliminary Prospectus and Prospectus or
filed as exhibits to the Registration Statement by the Securities Act or by
the
Rules and Regulations which have not been described in such Preliminary
Prospectus and Prospectus or filed as exhibits to the Registration
Statement.
(qq)
The Company has
not received any written comments from the Commission staff in
connection with the Company’s reports under the Exchange Act that remain
unresolved.
(rr)
On and immediately
after the Closing Date, the Company (after giving effect to
the issuance of the Securities and the other transactions related thereto as
described in the Pricing Disclosure Package and the Prospectus) will be
Solvent. As used in this paragraph, the term “Solvent” means, with respect
to a particular date, that on such date (i) the present fair market value (or
present fair saleable value) of the assets of the Company is not less than
the
total amount required to pay the liabilities of the Company on its total
existing debts and liabilities (including contingent liabilities) as they become
absolute and matured; (ii) the Company is able to realize upon its assets and
pay its debts and other liabilities, contingent obligations and commitments
as
they mature and become due in the normal course of business; (iii) assuming
consummation of the issuance of the Securities as contemplated by this
Agreement, the Pricing Disclosure Package and the Prospectus, the Company is
not
incurring debts or liabilities beyond its ability to pay as such debts and
liabilities mature; and (iv) the Company is not engaged in any business or
transaction, and does not propose to engage in any business or transaction,
for
which its property would constitute unreasonably small capital after giving
due
consideration to the prevailing practice in the industry in which the Company
is
engaged.
2. Purchase of the Securities
by the Underwriters. The Company hereby agrees, on the basis of the
representations, warranties and agreements of the Underwriters contained herein
and subject to all of the terms and conditions set forth herein, to issue and
sell to the Underwriters and, upon the basis of the representations, warranties
and agreements of the Company and the Guarantors herein contained and subject
to
all the terms and conditions set forth herein, each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price
of
99.0% of the principal amount of the Notes, the principal amount of the Notes
set forth opposite the name of such Underwriter in Schedule I hereto. The
Company shall not be obligated to deliver any of the Notes to be delivered
hereunder except upon payment for all of the Notes to be purchased as provided
herein.
3. Offering of Securities by
the Underwriters. Upon authorization by the Representatives of the
release of the Securities, the several Underwriters propose to offer the
Securities for sale upon the terms and conditions to be set forth in the
Prospectus.
14
4. Delivery of and Payment
for the Securities. (a) Delivery to the Underwriters of and payment
for the Securities shall be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ at 9:00 a.m., Houston time, on the fourth
full business day following the date of this Agreement or at such other date
or
place as shall be determined by agreement between the Representatives and the
Company. This date and time are sometimes referred to as the
“Closing Date.” The Securities will be delivered to the
Underwriters against payment of the purchase price therefor in immediately
available funds. Time shall be of the essence, and delivery at the time
and place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. The Notes will be evidenced by
one or more global securities in definitive form (the “Global
Notes”) and/or by additional definitive securities, and will be
registered, in the case of the Global Notes, in the name of Cede & Co. as
nominee of The Depository Trust Company (“DTC”), and in the
other cases, in such names and in such denominations as the Underwriters shall
request prior to 8:30 a. m., Houston time, on the second business day preceding
the Closing Date. The Notes to be delivered to the Underwriters shall be
made available to the Underwriters in Houston for inspection and packaging
not
later than 11:00 a.m., Houston time, on the business day next preceding the
Closing Date.
5. Agreements of the Company
and the Guarantors. (a) The Company and the Guarantors, jointly and
severally, agree with each of the Underwriters as follows:
(i)
To prepare the Prospectus
in a form approved by the Representatives and to file
such Prospectus pursuant to Rule 424(b) under the Rules and Regulations not
later than the Commission’s close of business on the second business day
following the execution and delivery of this Agreement; to make no further
amendment or any supplement to the Registration Statement or the Prospectus
prior to the Closing Date except as provided herein; to advise the
Representatives, promptly after it receives notice thereof, of the time when
any
amendment or supplement to the Registration Statement or the Prospectus has
been
filed and to furnish the Representatives with copies thereof; to prepare one
or
more final term sheets substantially in the form attached hereto as Annex 2
and
agreed by the Representatives and file it with the Commission pursuant to,
and
within the time period prescribed by, Rule 433; to file promptly all reports
and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 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 Securities (or would be required but for Rule 172 under the Rules and
Regulations); to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of the Prospectus, the Pricing Disclosure
Package or any Issuer Free Writing Prospectus, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, of
the
initiation or threatening of any proceeding or examination for any such purpose
or pursuant to Section 8A of the Securities Act, of any notice from the
Commission (pursuant to Rule 401(g)(2) under the Rules and Regulations)
objecting to the use of the form of the Registration Statement or any
post-effective amendment thereto
15
or of any request by
the
Commission for the amending or supplementing of the Registration Statement,
the
Prospectus, the Pricing Disclosure Package or any Issuer Free Writing Prospectus
or for additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of the Prospectus, the
Pricing Disclosure Package or any Issuer Free Writing Prospectus or suspending
any such qualification or pursuant to Section 8A of the Securities Act, to
use
promptly all commercially reasonable efforts to obtain its withdrawal;
(ii)
To pay the applicable
Commission filing fees relating to the Securities within
the time required by Rule 456(b)(1) under the Rules and Regulations without
regard to the proviso therein;
(iii)
To furnish promptly
to the Representatives and to counsel for the Underwriters a
signed copy of the Registration Statement as originally filed with the
Commission, and each amendment thereto filed with the Commission, including
all
consents and exhibits filed therewith, except in each case to the extent
available on the Commission’s ▇▇▇▇▇ website (“▇▇▇▇▇”);
(iv)
To deliver promptly
to the Representatives such number of the following
documents as the Representatives shall reasonably request: (A) conformed copies
of the Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits other than this Agreement
and
the computation of ratios of earnings to fixed charges), (B) each Preliminary
Prospectus, the Prospectus and any amended or supplemented Prospectus, (C)
each
Issuer Free Writing Prospectus and (D) any document incorporated by reference
in
any Preliminary Prospectus or the Prospectus; and, if the delivery of a
prospectus is required (or would be required but for Rule 172 under the Rules
and Regulations) at any time after the date hereof in connection with the
offering or sale of the Securities or any other securities relating thereto
and
if at such time any events shall have occurred as a result of which the Pricing
Disclosure Package or the Prospectus as then amended or supplemented would
include an 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 under which they were made when such Pricing Disclosure Package
or
the Prospectus was or is delivered (or would have been required to have been
delivered but for Rule 172 under the Rules and Regulations), not misleading,
or,
if for any other reason it shall be necessary to amend or supplement the Pricing
Disclosure Package or the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Pricing Disclosure Package or the
Prospectus in order to comply with the Securities Act or the Exchange Act,
to
notify the Representatives and, upon their request, to file such document and
to
prepare and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended or supplemented Pricing Disclosure
16
Package or Prospectus
that will correct such statement or omission or effect such compliance;
(v)
To file promptly with
the Commission any amendment or supplement to the
Registration Statement, the Pricing Disclosure Package or the Prospectus that
may, in the judgment of the Company or the Representatives, be required by
the
Securities Act or requested by the Commission;
(vi)
Prior to filing with
the Commission any amendment or supplement to the
Registration Statement or the Prospectus, any document incorporated by reference
in the Prospectus or any amendment to any document incorporated by reference
in
the Prospectus, to furnish a copy thereof to the Representatives and counsel
for
the Underwriters and to obtain the consent of the Representatives to the filing
(such consent not to be unreasonably withheld);
(vii)
Not to make any offer
relating to the Securities that would constitute an Issuer
Free Writing Prospectus without the prior written consent of the Representatives
and to comply with any requirements of Rule 433 under the Rules and Regulations
with respect to each such Issuer Free Writing Prospectus pursuant to the Rules
and Regulations;
(viii)
To retain in accordance
with the Rules and Regulations all Issuer Free Writing
Prospectuses not required to be filed pursuant to the Rules and Regulations;
and
if at any time after the date hereof, any events shall have occurred as a result
of which any Issuer Free Writing Prospectus, as then amended or supplemented,
would conflict with the information in the Registration Statement, the
Preliminary Prospectus or the Prospectus or would include an 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 under which they
were
made, not misleading, or, if for any other reason it shall be necessary to
amend
or supplement any Issuer Free Writing Prospectus, to notify the Representatives
and, upon their request, to file such document and to prepare and furnish
without charge to each Underwriter as many copies as the Representatives may
from time to time reasonably request of an amended or supplemented Issuer Free
Writing Prospectus that will correct such conflict, statement or omission or
effect such compliance;
(ix)
As soon as practicable
after the Effective Date and in any event not later than
16 months after the date hereof, to make generally available to the Company’s
security holders and to the Representatives an earnings statement of the Company
and its subsidiaries (which need not be audited) complying with Section 11(a)
of
the Securities Act and the Rules and Regulations;
(x)
The Company and each
of the Guarantors will cooperate with the Underwriters and
with their counsel in connection with the qualification of the Securities for
offering and sale by the Underwriters and by dealers under the
17
securities laws of such
jurisdictions as the Underwriters may designate and will file such consents
to
service of process or other documents necessary or appropriate in order to
effect such qualification; provided, that in no event shall the Company or
any
of the Guarantors be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject
it to
service of process in suits, other than those arising out of the offering or
sale of the Securities, in any jurisdiction where it is not now so
subject;
(xi)
The Company and the
Guarantors will apply the net proceeds from the sale of the
Securities to be sold hereunder substantially in accordance with the description
set forth in the Prospectus under the caption “Use of proceeds”;
(xii)
The Company and the
Guarantors will not take, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of the Securities to facilitate
the
sale or resale of the Securities;
(xiii)
The Company and the
Guarantors agree to comply with all of the terms and
conditions of all agreements set forth in the representation letters of the
Company and the Guarantors to DTC relating to the approval of the Securities
by
DTC for “book entry” transfer;
(xiv)
For a period of 45
days after the date of the Prospectus Supplement, the Company
will not offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, or file with the Commission a registration statement under the
Securities Act relating to, any United States dollar-denominated debt securities
issued or guaranteed by the Company and having a maturity of more than one
year
from the date of issue, or publicly disclose the intention to make any such
offer, sale, pledge, disposition or filing, without the prior written consent
of
JPMorgan.
(xv)
The Company and the
Guarantors will do and perform all things required or
necessary to be done and performed under this Agreement by them prior to the
Closing Date, and to satisfy all conditions precedent to the Underwriters’
obligations hereunder to purchase the Securities.
(b)
Each Underwriter
severally agrees with the Company and each other Underwriter
that such Underwriter has not made, and will not make, any offer relating to
the
Securities that would constitute a “free writing prospectus” (as defined in Rule
405 under the Rules and Regulations) required to be filed with the Commission
without the prior consent of the Company and the Representatives (other than
one
or more term sheets relating to the Securities containing customary information
and conveyed to purchasers of Securities).
6. Expenses.
Whether or not the transactions contemplated
by this Agreement are consummated
or this Agreement is terminated, the Company and the Guarantors agree to pay
all
18
costs, expenses, fees and
taxes incident to and in connection with: (i) the authorization, issuance,
sale
and delivery of the Securities and any stamp duties or other taxes payable
in
that connection, (ii) the preparation, printing and filing under the Securities
Act of the Registration Statement (including any exhibits thereto), any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus
and
any amendment or supplement thereto; (iii) the distribution of the Registration
Statement (including any exhibits thereto), any Preliminary Prospectus, the
Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement
thereto, or any document incorporated by reference therein, all as provided
in
this Agreement; (iv) the issuance and delivery by the Company of the Securities;
(v) the preparation, printing (including, without limitation, word processing
and duplication costs) and delivery of this Agreement, the Indenture, and all
other agreements, memoranda, correspondence and other documents printed and
delivered in connection therewith (but not, however, legal fees and expenses
of
counsel to the Underwriters incurred in connection with any of the foregoing);
(vi) the preparation of certificates for the Securities; (vii) if necessary,
qualification of the Securities under the securities laws of the several
jurisdictions as provided in Section 5(a)(x) and the preparation, printing
and
distribution of a Blue Sky Memorandum (including related fees and expenses
of
counsel to the Underwriters); (viii) all fees and expenses (including fees
and
expenses of counsel) of the Company and the Guarantors in connection with
approval of the Securities by DTC for “book-entry” transfer; (ix) all fees and
expenses of the Company and the Guarantors incurred in connection with any
roadshow, (x) the performance by the Company and the Guarantors of their other
obligations under this Agreement and (xi) any Independent Underwriter (as
defined in Section 9(f)); provided, that, except as provided in this Section
6,
Section 9 and Section 12, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel, any transfer taxes
on the Securities which they may sell and the expenses of advertising any
offering of the Securities made by the Underwriters.
7. Conditions of
Underwriters’ Obligations. The respective obligations of the
Underwriters hereunder are subject to the accuracy, when made and on the Closing
Date, of the representations and warranties of the Company and the Guarantors
contained herein, to the performance by the Company and the Guarantors of their
respective obligations hereunder, and to each of the following additional terms
and conditions:
(a)
The Prospectus shall
have been timely filed with the Commission in accordance
with Section 5(a)(i); the Final Term Sheet shall have been prepared and timely
filed pursuant to Section 5(a)(i); the Company shall have complied with all
filing requirements applicable to any Issuer Free Writing Prospectus used or
referred to after the date hereof; no stop order suspending the effectiveness
of
the Registration Statement or preventing or suspending the use of the Prospectus
or any Issuer Free Writing Prospectus shall have been issued and no proceeding
or examination for such purpose or pursuant to Section 8A under the Securities
Act shall have been initiated or threatened by the Commission; any request
of
the Commission for inclusion of additional information in the Registration
Statement, the Pricing Disclosure Package or the Prospectus or otherwise shall
have been complied with; and the Commission shall not have notified the Company
of any objection under Rule 401(g)(2) under the Rules and Regulations to the
use
of the form of the Registration Statement.
19
(b)
No Underwriter shall
have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Prospectus or the Pricing
Disclosure Package, or any amendment or supplement thereto, contains an untrue
statement of a fact which, in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for
the
Underwriters, is material or omits to state a fact which, in the opinion of
such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(c)
All corporate proceedings
and other legal matters incident to the authorization,
form and validity of this Agreement, the Indenture, the Securities, the
Registration Statement, the Prospectus and any Issuer Free Writing Prospectus,
and all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material respects
to
▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for the Underwriters, and the Company and the
Guarantors shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(d)
Akin Gump ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ LLP shall have furnished to the Underwriters its
written opinion, as counsel to the Company, addressed to the Underwriters and
dated the Closing Date, in form and substance reasonably satisfactory to the
Representatives, substantially in the form attached hereto as Annex 4.
(e)
The Underwriters
shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇ LLP, counsel for the
Underwriters, such opinion or opinions, dated the Closing Date, with respect
to
the issuance and sale of the Securities, the Registration Statement, the
Prospectus and the Pricing Disclosure Package and other related matters as
the
Underwriters may reasonably require, and the Company and the Guarantors shall
have furnished to such counsel such documents as they reasonably request for
the
purpose of enabling them to pass upon such matters.
(f)
At the time of execution
of this Agreement, the Underwriters shall have received
from PricewaterhouseCoopers LLP, independent registered public accountant for
the Company, a letter, in form and substance satisfactory to the Underwriters,
addressed to the Underwriters and dated the date hereof (i) confirming that
they
are independent registered public accountants within the meaning of the
Securities Act and the rules and regulations of the Public Company Accounting
Oversight Board and are in compliance with the applicable requirements relating
to the qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission, (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Preliminary Prospectus, as
of a
date not more than three days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants’ “comfort letters” to underwriters in
connection with registered public offerings.
20
(g)
At the time of execution
of this Agreement, the Underwriters shall have received
from Netherland, ▇▇▇▇▇▇ & Associates, Inc., independent petroleum engineers
for the Company, a letter, in form and substance reasonably satisfactory to
the
Underwriters and their counsel, addressed to the Underwriters and dated the
date
hereof confirming that, with respect to the Company, they are independent
petroleum engineers, and confirming such information related to the proved
reserves of the Company as counsel to the Underwriters shall reasonably
request.
(h)
At the time of execution
of this Agreement, the Underwriters shall have received
from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ PC, independent registered public
accountant for Laramie Energy, LLC (“Laramie”), a letter, in
form and substance satisfactory to the Underwriters, addressed to the
Underwriters and dated the date hereof (i) confirming that they are independent
registered public accountants within the meaning of the Securities Act and
the
rules and regulations of the Public Company Accounting Oversight Board and
are
in compliance with the applicable requirements relating to the qualification
of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Preliminary Prospectus, as of a date not more than
three days prior to the date hereof), the conclusions and findings of such
firm
with respect to the financial information and other matters ordinarily covered
by accountants’ “comfort letters” to underwriters in connection with registered
public offerings.
(i)
With respect to the
letter of PricewaterhouseCoopers LLP referred to in
paragraph (f) above and delivered to the Underwriters concurrently with the
execution of this Agreement (the “PricewaterhouseCoopers initial
letter”), the Company shall have furnished to the Underwriters a letter
(the “PricewaterhouseCoopers bring-down letter”) of such
accountants, addressed to the Underwriters and dated the Closing Date
(i) confirming that they are independent registered public accountants
within the meaning of the Securities Act and the rules and regulations of the
Public Company Accounting Oversight Board and are in compliance with the
applicable requirements relating to the qualification of accountants under
Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of
the PricewaterhouseCoopers bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than three days prior to the date of the PricewaterhouseCoopers bring-down
letter), the conclusions and findings of such firm with respect to the financial
information and other matters covered by the PricewaterhouseCoopers initial
letter and (iii) confirming in all material respects the conclusions and
findings set forth in the PricewaterhouseCoopers initial letter.
(j)
With respect to the
letter of Netherland, ▇▇▇▇▇▇ & Associates, Inc. referred
to in paragraph (g) above and delivered to the Underwriters concurrently with
the execution of this Agreement (the “Netherland initial
letter”), the Company shall have furnished to the Underwriters a letter
(the “Netherland bring-down letter”) of such independent
petroleum engineers, addressed to the Underwriters and dated the Closing
21
Date (i) confirming
that, with respect to the Company, they are independent petroleum engineers,
(ii) stating, as of the date of the Netherland bring-down letter (or, with
respect to matters involving changes or developments since the respective dates
as of which information related to proved reserves in given in the Prospectus,
as of a date not more than three days prior to the date of the Netherland
bring-down letter), the conclusions and findings of such firm with respect
to
the proved reserves of the Company and other matters covered by the Netherland
initial letter and (iii) confirming in all material respects the conclusions
and
findings set forth in the Netherland initial letter.
(k)
With respect to the
letter of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ PC referred
to in paragraph (h) above and delivered to the Underwriters concurrently with
the execution of this Agreement (the “EKSH initial letter”),
the Company shall have furnished to the Underwriters a letter (the “EKSH
bring-down letter”) of such accountants, addressed to the Underwriters
and dated the Closing Date (i) confirming that they are independent registered
public accountants within the meaning of the Securities Act and the rules and
regulations of the Public Company Accounting Oversight Board and are in
compliance with the applicable requirements relating to the qualification of
accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating,
as of the date of the EKSH bring-down letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not
more than three days prior to the date of the EKSH bring-down letter), the
conclusions and findings of such firm with respect to the financial information
and other matters covered by the EKSH initial letter and (iii) confirming in
all
material respects the conclusions and findings set forth in the EKSH initial
letter.
(l)
The Company shall
have furnished to the Underwriters a certificate, dated the
Closing Date, of its Executive Vice President, General Counsel and Corporate
Secretary and its Executive Vice President and Chief Financial Officer stating
that:
(i)
The representations
and warranties of the Company and the Guarantors in Section
1 are true and correct in all material respects as of the Closing Date and
the
Company and the Guarantors have performed in all material respects all of their
obligations hereunder to be performed at or prior to the Closing Date; and
(ii)
No stop order suspending
the effectiveness of the Registration Statement has
been issued; no proceedings or examination for that purpose or pursuant to
Section 8A under the Securities Act have been instituted or, to the knowledge
of
such officers, threatened; and the Commission has not notified the Company
of
any objection to the use of the form of the Registration Statement or any
post-effective amendment thereto.
(m)
(A) Neither the Company
nor any of its subsidiaries shall have sustained, since
the date of the latest audited financial statements included or incorporated
by
reference in the Preliminary Prospectus and the Prospectus, any loss or
interference with
22
its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus and (B) since such date
there shall not have been any change in the capital stock or long-term debt
of
the Company or any of its subsidiaries (except (i) pursuant to the exercise
of
options or warrants or pursuant to the issuance of common stock under the
Company’s stock incentive plans, (ii) for the repurchase by the Company of
1,025,900 shares of the Company’s common stock pursuant to the Company’s stock
repurchase program, and (iii) for any borrowing under the Senior Credit Facility
and the Short-Term Credit Facility) or any change, or any development involving
a prospective change, in or affecting the general affairs, management, financial
position, stockholders’ equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Preliminary
Prospectus and the Prospectus, the effect of which, in any such case described
in clause (A) or (B), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Notes being delivered on the Closing
Date
on the terms and in the manner contemplated in the Preliminary Prospectus and
the Prospectus.
(n)
Subsequent to the
execution and delivery of this Agreement (i) no downgrading
shall have occurred in the rating accorded the Company’s debt securities by any
“nationally recognized statistical rating organization,” as that term is defined
by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations
and (ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any
of the Company’s debt securities.
(o)
Subsequent to the
execution and delivery of this Agreement, there shall not have
occurred any of the following: (i) trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall
have
been established on any such exchange or such market by the Commission, by
such
exchange or by any other regulatory body or governmental authority having
jurisdiction; (ii) a banking moratorium shall have been declared by Federal
or
state authorities; (iii) there shall have occurred a material disruption in
commercial banking or securities settlement or clearance services in the United
States; (iv) the United States shall have become engaged in hostilities, there
shall have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by the United
States; or (v) there shall have occurred such a material adverse change in
general economic, political or financial conditions, including, without
limitation, as a result of terrorist activities after the date hereof (or the
effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering, sale or delivery
of
the Securities being delivered on the Closing Date on the terms and in the
manner contemplated in the Preliminary Prospectus and the Prospectus.
(p)
The Securities shall
be eligible for clearance and settlement through DTC.
23
All opinions, letters,
evidence and certificates 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.
8.
Representations, Warranties
and Agreements of Underwriters. Each
Underwriter, severally and not jointly, agrees with the Company that:
(a)
In relation to each
Member State of the European Economic Area (each, a
“Relevant Member State”), it has not made and will not make an
offer of the Securities to the public in that Relevant Member State that would
require the publication or approval of a prospectus in relation to the
Securities in that Relevant Member State, or where appropriate, another Relevant
Member State; subject to such restriction, it may make an offer of Securities
to
the public in that Relevant Member State at any time: (i) to legal entities
that
are authorized or regulated to operate in the financial markets or, if not
so
authorized or regulated, whose corporate purpose is solely to invest in
securities; (ii) to any legal entity that has two or more of (1) an average
of
at least 250 employees during the last financial year; (2) a total balance
sheet
of more than €43,000,000 and (3) an annual net turnover of more than
€50,000,000, as shown in its last annual or consolidated accounts; or (iii)
in
any other circumstances that do not require the publication by the Company
or
any Guarantor of a prospectus pursuant to Article 3 of the Prospectus
Directive.
For purposes of this Section 8(a), the expression
an “offer of
Securities to the public” in relation to any Securities in any Relevant
Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Securities to be offered so as
to
enable an investor to decide to purchase or subscribe for the Securities, as
the
same may be varied in that Relevant Member State by any measure implementing
the
Prospectus Directive in that Relevant Member State, and the expression
“Prospectus Directive” means Directive 2003/71/EC and includes
any relevant implementing measure in each Relevant Member State.
(b)
It will comply with
applicable laws and regulations in each jurisdiction in
which it acquires, offers, sells or delivers Securities, or has in its
possession or distributes any Free Writing Prospectus, any Preliminary
Prospectus or the Prospectus.
(c)
It has only communicated
or caused to be communicated, and will only communicate
or cause to be communicated, an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial Services and Markets
▇▇▇ ▇▇▇▇ (the “FSMA”)) received by it in connection with the
issue or sale of the Securities in circumstances in which Section 21(1) of
the
FSMA does not apply to the Company or the Guarantors.
(d)
It has complied and
will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom.
24
9. Indemnification and
Contribution.
(a)
The Company and each
Guarantor, jointly and severally, shall indemnify and hold
harmless each Underwriter, its directors, officers and employees and each
person, if any, who controls any Underwriter within the meaning of Section
15 of
the Securities Act, from and against any loss, claim, damage or liability,
joint
or several, or any action in respect thereof (including, but not limited to,
any
loss, claim, damage, liability or action relating to purchases and sales of
Securities), to which that Underwriter, director, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or
is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in (A) the Preliminary Prospectus, the Registration Statement,
the Prospectus, the Pricing Disclosure Package or in any amendment or supplement
thereto, (B) any Issuer Free Writing Prospectus or in any amendment or
supplement thereto or (C) any “issuer information” (as defined in Rule 433
under the Rules and Regulations) in any “free writing prospectus” (as defined in
Rule 405 under the Rules and Regulations) with respect to whose use the Company
has given its consent (“Permitted Issuer Information”) used or
referred to in any “free writing prospectus” (as defined in Rule 405 under the
Rules and Regulations) that is used or referred to by any Underwriter,
(D) any “road show” (as defined in Rule 433 under the Rules and
Regulations) not constituting an Issuer Free Writing Prospectus (a
“Non-Prospectus Road Show”) or (E) any Blue Sky
application or other document prepared or executed by the Company (or based
upon
any written information furnished by the Company for use therein) specifically
for the purpose of qualifying any or all of the Securities under the securities
laws of any state or other jurisdiction (any such application, document or
information being hereinafter called a “Blue Sky Application”)
or (ii) the omission or alleged omission to state in the Preliminary Prospectus,
the Registration Statement, the Prospectus, the Pricing Disclosure Package,
any
Issuer Free Writing Prospectus or in any amendment or supplement thereto or
in
any Permitted Issuer Information, any Non-Prospectus Road Show or any Blue
Sky
Application, any material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse each Underwriter
and each such director, officer, employee or controlling person promptly upon
demand for any legal or other expenses reasonably incurred by that Underwriter,
director, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Guarantors shall not be liable in any such case to
the
extent that any such loss, claim, damage, liability or action arises out of,
or
is based upon, any untrue statement or alleged untrue statement or omission
or
alleged omission made in the Preliminary Prospectus, the Registration Statement,
the Prospectus, the Pricing Disclosure Package, any Issuer Free Writing
Prospectus or in any such amendment or supplement thereto or in any Permitted
Issuer Information, any Non-Prospectus Road Show or any Blue Sky Application,
in
reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on behalf
of any Underwriter specifically for inclusion therein, which information
consists solely of
25
the information
specified in Section 9(e). The foregoing indemnity agreement is in
addition to any liability which the Company or the Guarantors may otherwise
have
to any Underwriter or to any director, officer, employee or controlling person
of that Underwriter.
(b)
Each Underwriter,
severally and not jointly, shall indemnify and hold harmless
the Company and the Guarantors, their respective directors, officers and
employees and each person, if any, who controls the Company or the Guarantors
within the meaning of Section 15 of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company or the Guarantors or any such director, officer,
employee or controlling person may become subject, under the Rules and
Regulations or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
the
Registration Statement, the Prospectus, the Pricing Disclosure Package, any
Issuer Free Writing Prospectus or in any amendment or supplement thereto or
in
any Non-Prospectus Road Show or Blue Sky Application, or (ii) the omission
or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement, the Prospectus, the Pricing Disclosure Package, any Issuer Free
Writing Prospectus or in any amendment or supplement thereto or in any
Non-Prospectus Road Show or Blue Sky Application, any material fact required
to
be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Underwriter furnished to
the
Company through the Representatives by or on behalf of that Underwriter
specifically for inclusion therein, which information is limited to the
information set forth in Section 9(e), and shall reimburse the Company or the
Guarantors and any such director, officer, employee or controlling person for
any legal or other expenses reasonably incurred by the Company or the Guarantors
or any such director, officer, employee or controlling person in connection
with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Underwriter may
otherwise have to the Company or the Guarantors or any such director, officer,
employee or controlling person.
(c)
Promptly after receipt
by an indemnified party under this Section 9 of notice of
any claim or the commencement of any action, the indemnified party shall, if
a
claim in respect thereof is to be made against the indemnifying party under
this
Section 9, notify the indemnifying party in writing of the claim or the
commencement of that action; provided, however, that the failure to notify
the
indemnifying party shall not relieve it from any liability which it may have
under paragraph (a) or (b) of this Section 9 except to the extent it has been
materially prejudiced by such failure; provided, further, that the failure
to
notify the indemnifying party shall not relieve it from any liability which
it
may have to an indemnified party otherwise than under paragraph (a) or (b)
of
this Section 9. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly
26
notified indemnifying
party, to assume the defense thereof with counsel reasonably satisfactory
to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action,
the indemnifying party shall not be liable to the indemnified party under
this
Section 9 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that an indemnified party shall
have
the right to employ counsel in any such action, but the fees, expenses
and other
charges of such counsel for the indemnified party will be at the expense
of the
indemnified party unless (i) the indemnifying party and the indemnified
party
shall have mutually agreed to the contrary; (ii) the indemnifying party
shall
have failed within a reasonable time to retain counsel reasonably satisfactory
to the indemnified party; (iii) the indemnified party shall have reasonably
concluded (based on advice of counsel to the indemnified party) that there
may
be legal defenses available to it that are different from or in addition
to
those available to the indemnifying party; or (iv) the named parties in
any such
proceeding (including any impleaded parties) include both the indemnified
party
and the indemnifying party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them, and in any such event the fees and expenses of such separate
counsel shall be paid by the indemnifying party. Any such separate counsel
for any Underwriter, its directors, officers, employees and any controlling
persons of such Underwriter shall be designated in writing by JPMorgan,
and any
such separate counsel for the Company, the Guarantors, their directors,
officers, employees and any controlling persons of the Company and the
Guarantors shall be designated in writing by the Company. No indemnifying
party shall (i) without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect
to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional
release
of each indemnified party from all liability arising out of such claim,
action,
suit or proceeding and does not include any findings of fact or admissions
of
fault or culpability as to the indemnified party, or (ii) be liable for
any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent
of
the indemnifying party or if there be a final judgment for the plaintiff
in any
such action, the indemnifying party agrees to indemnify and hold harmless
any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d)
If the indemnification
provided for in this Section 9 shall for any reason be
unavailable to, or insufficient to hold harmless, an indemnified party under
Section 9(a) or 9(b) in respect of any loss, claim, damage or liability, or
any
action in respect thereof, referred to therein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company
and the Guarantors on the one hand, and the Underwriters, on the other, from
the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by
27
applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Guarantors, on the one hand, and the Underwriters, on the other, with respect
to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Underwriters, on the other, with respect
to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by the Company and the Guarantors, as
set
forth in the table on the cover page of the Prospectus, on the one hand, and
the
total underwriting discounts and commissions received by the Underwriters with
respect to the Securities purchased under this Agreement, as set forth in the
table on the cover page of the Prospectus, on the other hand. The relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company and the Guarantors or the
Underwriter, the intent of the parties and their relative knowledge, access
to
information and opportunity to correct or prevent such statement or
omission. The Company, the Guarantors and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 9(d)
were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in respect thereof, referred
to
above in this Section 9(d) shall be deemed to include, for purposes of this
Section 9(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 9(d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the net proceeds from the sale of the Securities underwritten by it
exceeds the amount of any damages that such Underwriter has otherwise paid
or
become liable to pay by reason of any 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
as provided in this Section 9(d) are several in proportion to their respective
underwriter obligations and not joint.
(e)
The Underwriters
severally confirm, and the Company and each Guarantor
acknowledges and agrees, that the statements regarding the concession and
reallowance figures appearing in the third paragraph, and the information
relating to stabilization by the Underwriters in the ninth paragraph, all
appearing under the caption “Underwriting” in the Preliminary Prospectus and the
Prospectus, are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Pricing Disclosure Package, any
Issuer Free
28
Writing Prospectus or
in
any amendment or supplement thereto or in any Non-Prospectus Road Show.
(f)
Without limitation
of and in addition to their obligations under the other
paragraphs of this Section 9, the Company and the Guarantors, jointly and
severally, agrees to indemnify and hold harmless ▇▇▇▇▇▇ Brothers (in the
capacity described in this paragraph, the “Independent
Underwriter”), its directors, officers and employees and each person,
if any, who controls the Independent Underwriter within the meaning of Section
15 of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and
sales
of Securities), to which the Independent Underwriter, director, officer,
employee or controlling person may become subject, under the Securities Act
or
otherwise, insofar as such loss, claim, damage, liability or action arises
out
of, or is based upon, the Independent Underwriter’s acting as a “qualified
independent underwriter” (within the meaning of NASD Conduct Rule 2720) in
connection with the offering contemplated by this Agreement, and agrees to
reimburse each such indemnified party promptly upon demand for any legal or
other expenses reasonably incurred by them in connection with investigating
or
defending or preparing to defend any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company and
the Guarantors shall not be liable in any such case to the extent that it is
determined in a final judgment by a court of competent jurisdiction that such
loss, claim, damage, liability or action resulted directly from the gross
negligence or willful misconduct of the Independent Underwriter. The
relative benefits received by the Independent Underwriter with respect to the
offering contemplated by this Agreement shall, for purposes of Section 9(d),
be
deemed to be equal to the compensation received by the Independent Underwriter
for acting in such capacity. In addition, notwithstanding the provisions
of Section 9(d), the Independent Underwriter shall not be required to contribute
any amount in excess of the compensation received by the Independent Underwriter
for acting in such capacity.
10. Defaulting Underwriters.
If, on the Closing Date, any Underwriter
defaults in the performance of its
obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Securities which the defaulting Underwriters
agreed but failed to purchase on the Closing Date in the respective proportions
which the number of the Securities set forth opposite the name of each remaining
non-defaulting Underwriter in Schedule I hereto bears to the total number of
the
Securities set forth opposite the names of all of the remaining non-defaulting
Underwriters in Schedule I hereto; provided, however, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the
Securities on the Closing Date if the total amount of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total amount of Securities to be purchased on the
Closing Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the amount of Securities which it agreed
to purchase on the Closing Date pursuant to the terms of Section 2. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters,
or
those other underwriters satisfactory to the Underwriters who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion
as
may be agreed upon among them, all of the Securities to be purchased on the
29
Closing Date. If the remaining
Underwriters or other underwriters satisfactory to the Underwriters do not
elect
to purchase the Securities which the defaulting Underwriters or Underwriter
agreed but failed to purchase on the Closing Date, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or
the
Company or the Guarantors, except that the Company will continue to be liable
for the payment of expenses to the extent set forth in Sections 6 and 12.
As used in this Agreement, the term “Underwriter” includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed
in
Schedule I hereto that, pursuant to this Section 10, purchases Securities that
a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a
defaulting Underwriter of any liability it may have to the Company or the
Guarantors for damages caused by its default. If other Underwriters are
obligated or agree to purchase the Securities of a defaulting or withdrawing
Underwriter, the Company may postpone the Closing Date for up to seven full
business days in order to effect any changes that in the opinion of counsel
for
the Company or counsel for the Underwriter may be necessary in the Registration
Statement, the Prospectus or in any other document or arrangement.
11. Termination. The
obligations of the Underwriters hereunder may be terminated by the Underwriters
by notice given to and received by the Company prior to delivery of and payment
for the Securities if, prior to that time, any of the events described in
Sections 7(n) and 7(o), shall have occurred or if the Underwriters shall decline
to purchase the Securities for any reason permitted under this Agreement.
12. Reimbursement of Underwriters’
Expenses. If the Company shall fail to tender
the Securities for
delivery to the Underwriters by reason of any failure, refusal or inability
on
the part of the Company or the Guarantors to perform any agreement on their
part
to be performed, or because any other condition of the obligations hereunder
required to be fulfilled by the Company or the Guarantors is not fulfilled
for
any reason, the Company or the Guarantors will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Securities, and upon demand the
Company or the Guarantors shall pay the full amount thereof to the
Underwriters. If this Agreement is terminated pursuant to Section 10 by
reason of the default of one or more Underwriters, the Company or the Guarantors
shall not be obligated to reimburse any Underwriter on account of those
expenses.
13. Research Analyst
Independence. Each of the Company and the Guarantors acknowledges that
the Underwriters’ research analysts and research departments are required to be
independent from their respective investment banking divisions and are subject
to certain regulations and internal policies, and that such Underwriters’
research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company
and/or the offering that differ from the views of their respective investment
banking divisions. Each of the Company and the Guarantors hereby waives
and releases, to the fullest extent permitted by law, any claims that the
Company or the Guarantors may have against the Underwriters with respect to
any
conflict of interest that may arise from the fact that the views expressed
by
their independent research analysts and research departments may be different
from or inconsistent with the views or advice communicated to the Company or
the
Guarantors by such Underwriters’ investment banking divisions. Each of the
Company and
30
the Guarantors acknowledges that each of the
Underwriters is a full service securities firm and as such from time to time,
subject to applicable securities laws, may effect transactions for its own
account or the account of its customers and hold long or short positions in
debt
or equity securities of the companies that may be the subject of the
transactions contemplated by this Agreement.
14. No Fiduciary Duty. Each of
the Company and the Guarantors acknowledges and agrees that in connection with
this offering, sale of the Securities or any other services the Underwriters
may
be deemed to be providing hereunder, notwithstanding any preexisting
relationship, advisory or otherwise, between the parties or any oral
representations or assurances previously or subsequently made by the
Underwriters: (i) no fiduciary or agency relationship between the Company,
the
Guarantors and any other person, on the one hand, and the Underwriters, on
the
other, exists; (ii) the Underwriters are not acting as advisors, expert or
otherwise, to any of the Company or the Guarantors, including, without
limitation, with respect to the determination of the public offering price
of
the Securities, and such relationship between the Company and the Guarantors,
on
the one hand, and the Underwriters, on the other, is entirely and solely
commercial, based on arms-length negotiations; (iii) any duties and obligations
that the Underwriters may have to the Company or the Guarantors shall be limited
to those duties and obligations specifically stated herein; and (iv) the
Underwriters and their respective affiliates may have interests that differ
from
those of the Company and the Guarantors. Each of the Company and the
Guarantors hereby waives any claims that the Company or the Guarantors may
have
against the Underwriters with respect to any breach of fiduciary duty in
connection with this offering.
15. Notices, etc. All
statements, requests, notices and agreements hereunder shall be in writing,
and:
(a)
if to the Underwriters,
shall be delivered or sent by mail, telex or facsimile
transmission to ▇.▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b)
if to the Company,
shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. (Fax: (▇▇▇) ▇▇▇-▇▇▇▇); with a copy
to
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., Akin Gump ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (Fax: (▇▇▇) ▇▇▇-▇▇▇▇).
The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Underwriters by JPMorgan.
16. Persons Entitled to Benefit of
Agreement. This Agreement shall inure to the benefit of and be binding
upon the Underwriters, the Company, the Guarantors and their respective
successors. This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company and the Guarantors
contained in this Agreement shall also be deemed to be for the benefit of the
directors, officers and employees of the Underwriters and
31
each person or persons, if any, who control
any
Underwriter within the meaning of Section 15 of the Securities Act and (B)
the
indemnity agreement of the Underwriters contained in Section 9(b) of this
Agreement shall be deemed to be for the benefit of the directors, officers
and
employees of the Company and the Guarantors and any person controlling the
Company and the Guarantors within the meaning of Section 15 of the Securities
Act. Nothing in this Agreement is intended or shall be construed to give
any person, other than the persons referred to in this Section 16, any legal
or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
17. Survival. The respective
indemnities, representations, warranties and agreements of the Company, the
Guarantors and the Underwriters contained in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them
or
any person controlling any of them.
18. Definition of the Terms “Business
Day” and “Subsidiary.” For purposes of this Agreement, (a) “business
day” means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) “subsidiary” has the meaning set forth in
Rule 405 under the Rules and Regulations.
19. Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
20. Counterparts. This
Agreement may be executed in one or more counterparts and, if executed in more
than one counterpart, the executed counterparts shall each be deemed to be
an
original, but all such counterparts shall together constitute one and the same
instrument.
21. Headings. The headings
herein are inserted 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]
32
If the foregoing correctly sets forth the
agreement among the Company, the Guarantors and the Underwriters, please
indicate your acceptance in the space provided for that purpose below.
|
Very truly yours,
|
|||
|
PLAINS EXPLORATION & PRODUCTION
COMPANY
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
||
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|||
|
Executive Vice President & Chief
Financial Officer
|
|||
|
▇▇▇▇▇▇▇▇ INC.
|
|||
|
▇▇▇▇▇ PXP PROPERTIES, LLC
|
|||
|
NUEVO GHANA INC.
|
|||
|
NUEVO INTERNATIONAL INC.
|
|||
|
NUEVO OFFSHORE COMPANY
|
|||
|
NUEVO RESOURCES INC.
|
|||
|
PACIFIC INTERSTATE OFFSHORE
COMPANY
|
|||
|
PLAINS ACQUISITION
CORPORATION
|
|||
|
PLAINS LOUISIANA INC.
|
|||
|
PLAINS RESOURCES INC.
|
|||
|
PLAINS RESOURCES INTERNATIONAL
INC.
|
|||
|
PXP BRUSH CREEK LLC
|
|||
|
By:
|
Plains Resources Inc., its sole
member
|
||
|
PXP CV PIPELINE LLC
|
|||
|
By:
|
Plains Resources Inc., its sole
member
|
||
|
PXP EAST PLATEAU LLC
|
|||
|
By:
|
Plains Resources Inc., its sole
member
|
||
|
PXP GULF COAST INC.
|
|||
|
PXP HELL’S GULCH LLC
|
|||
|
By:
|
Plains Resources Inc., its sole
member
|
||
|
PXP LOUISIANA L.L.C.
|
|||
|
By:
|
Plains Louisiana Inc., its sole
member
|
||
|
PXP PERMIAN INC.
|
|||
|
PXP PICEANCE LLC
|
|||
|
|
By:
|
Plains Resources Inc., its sole
member
|
|
|
PXP TEXAS INC.
|
|||
|
PXP TEXAS LIMITED PARTNERSHIP
|
|||
|
|
By:
|
PXP Texas Inc., its general
partner
|
|
|
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
|
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
||
|
|
Vice President &
Treasurer
|
||
|
PXP DEEPWATER L.L.C.
|
|||
|
By:
|
Plains Exploration & Production
Company, its sole member
|
||
|
By:
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
||
|
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|||
|
|
Executive Vice President & Chief
Financial Officer
|
||
33
Accepted:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
For itself and as Representative of the several
Underwriters named in Schedule I hereto
|
By:
|
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
Authorized
Representative
|
34
SCHEDULE
I
PURCHASED
AMOUNTS
|
Underwriter
|
Principal
Amount
|
|
▇.▇.
▇▇▇▇▇▇ Securities I nc........................................
|
$
198,000,000
|
|
▇▇▇▇▇▇
Brothers Inc..................................................
|
60,000,000
|
|
BMO
Capital Markets Corp......................................
|
36,000,000
|
|
BNP
Paribas Securities
Corp.....................................
|
36,000,000
|
|
Citigroup
Global Markets Inc...................................
|
36,000,000
|
|
Greenwich
Capital Markets,
Inc...............................
|
36,000,000
|
|
Scotia
Capital (USA) Inc...........................................
|
36,000,000
|
|
TD
Securities (USA)
LLC..........................................
|
36,000,000
|
|
Wachovia
Capital Markets,
LLC..............................
|
36,000,000
|
|
Calyon
Securities (USA) Inc.....................................
|
18,000,000
|
|
Comerica
Securities, Inc............................................
|
18,000,000
|
|
Deutsche
Bank Securities Inc...................................
|
18,000,000
|
|
Fortis
Securities LLC..................................................
|
18,000,000
|
|
▇▇▇▇▇
Fargo Securities,
LLC.....................................
|
18,000,000
|
|
|
|
|
Total.................................................................................................................
|
$
600,000,00
|
S-I-1
ANNEX
1
ISSUER
FREE WRITING PROSPECTUS
Pricing Term
Sheet dated June 13, 2007
▇-▇-▇
▇▇▇▇▇
▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
[See attached]
▇-▇-▇
▇▇▇▇▇
▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇ LTD
▇▇▇▇▇▇▇▇▇ Oil And Gas Company
Plains Resources International Inc.
Nuevo Ghana Inc.
Nuevo Tunisia LTD
Cane River Development Company LLC
▇▇▇▇▇▇ Grande Land Company LLC
Pacific Interstate Offshore Company
Nuevo Offshore Company
PXP Gulf Coast Inc.*
Nuevo Resources Inc.*
PXP Permian Inc.*
PXP Texas Inc.
PXP Texas Limited Partnership*
▇▇▇▇▇ PXP Properties, LLC
Plains Louisiana Inc.
PXP Louisiana L.L.C.
Lompoc Land Company LLC
Montebello Land Company LLC
PXP Deepwater L.L.C.
Plains Acquisition Corporation
Gaviota Gas Plant Company
Point ▇▇▇▇▇▇▇▇ Natural Gas Line Company
Point ▇▇▇▇▇▇▇▇ Pipeline Company
Point ▇▇▇▇▇▇▇▇ Terminal Company
Nuevo International Inc.
Nuevo Energy Company
Plains Resources Inc.
PXP CV Pipeline LLC
PXP Brush Creek LLC
PXP Hell’s Gulch LLC
PXP Piceance LLC*
PXP East Plateau LLC
* “significant subsidiary” (as defined in
Rule 405 under the Rules and Regulations)
▇-▇-▇
▇▇▇▇▇
▇
▇▇▇▇
▇▇ ▇▇▇▇▇ OPINION OF COMPANY COUNSEL
[See attached]