Callon Petroleum Company 9,000,000 Shares of Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
Xxxxxx Petroleum Company
9,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
February 10, 2011
XXXXXXX RICE & COMPANY L.L.C.
As representative of the several Underwriters
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
As representative of the several Underwriters
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Xxxxxx Petroleum Company, a Delaware corporation (the “Company”), proposes to issue and sell
to the several Underwriters listed in Schedule A hereto (the “Underwriters”), an aggregate of
9,000,000 shares of its common stock, par value $0.01 per share (the “Common Stock”) of the Company
(the “Firm Shares”) and, at the option of the Underwriters, up to an additional 1,350,000 shares of
Common Stock of the Company to cover over-allotments (the “Optional Shares”). The Firm Shares and
the Optional Shares are herein referred to as the “Securities.”
The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as the Underwriters deem advisable after this Agreement has been executed and
delivered. Xxxxxxx Xxxx & Company L.L.C. is acting as representative of the several Underwriters
and in such capacity is hereinafter referred to as the “Representative.”
Section 1. Registration Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) a shelf registration statement on Form S-3 (File
No. 333-148680), including a base prospectus, to be used in connection with the public offering and
sale of the Securities. Such registration statement, as amended, including the prospectus and
exhibits thereto, in the form in which it was declared effective by the Commission under the
Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the “Securities Act”), including all documents incorporated or deemed to be
incorporated by reference therein and any information deemed to be a part thereof at the time of
effectiveness pursuant to Rule 430B or Rule 430C (the “Rule 430 Information”) under the Securities
Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (collectively, the “Exchange Act”), is called the “Registration Statement.” The base
prospectus dated April 28, 2008 and filed with the Commission pursuant to Rule 424(b)(3) on
February 7, 2011 is herein called the “Base Prospectus.” The prospectus supplement used in
connection with the offering of the Securities that omitted Rule 430 Information, together with the
Base Prospectus, is herein called a “Preliminary Prospectus.” As used herein, the term “Prospectus”
means the Base Prospectus, as supplemented by a prospectus supplement containing Rule 430
Information in the form first made available to the Underwriter by the Company to confirm sales of
the Securities or in the form first made available to the Underwriter by the Company to meet
requests of purchasers pursuant to Rule 173 under the Securities Act. As used herein, “Applicable
Time” is 6:45 p.m. (New York time) on February 10, 2011. As used herein, “free writing prospectus”
has the meaning set forth in Rule 405 under the Securities Act, and “Time of Sale Prospectus” means
the Base Prospectus, as amended or supplemented immediately prior to the Applicable Time, together
with
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the Preliminary Prospectus and the free writing prospectuses, if any, identified on
Schedule B, which information may be conveyed orally by the Underwriter to purchasers of
the Securities at the Applicable Time. As used herein, the terms “Registration Statement,” “Base
Prospectus,” “Time of Sale Prospectus,” “Preliminary Prospectus” and “Prospectus” shall include the
documents incorporated and deemed to be incorporated by reference therein. All references in this
Agreement to amendments or supplements to the Registration Statement, the Base Prospectus, the Time
of Sale Prospectus, the Preliminary Prospectus or the Prospectus shall be deemed to mean and
include the filing of any document under the Exchange Act which is or is deemed to be incorporated
by reference in the Registration Statement, the Base Prospectus, the Time of Sale Prospectus, the
Preliminary Prospectus or the Prospectus, as the case may be. All references in this Agreement to
(i) the Registration Statement, the Base Prospectus, the Time of Sale Prospectus, the Preliminary
Prospectus or the Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System, or any successor system including the Next-Generation XXXXX System
(collectively, “XXXXX”) and (ii) the Prospectus shall be deemed to include the “electronic
Prospectus” provided for use in connection with the offering of the Securities as contemplated by
Section 4(n) of this Agreement. All references in this Agreement to financial statements and
schedules and other information that are “contained,” “included” or “stated” in the Registration
Statement, the Base Prospectus, the Time of Sale Prospectus, the Preliminary Prospectus or the
Prospectus (and all other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information that are or are deemed to be incorporated
by reference in the Registration Statement, the Base Prospectus, the Time of Sale Prospectus, the
Preliminary Prospectus or the Prospectus, as the case may be.
Section 2. Purchase, Sale and Delivery of the Securities.
(a) The Firm Shares. The Company agrees to issue and sell to the Underwriters the Firm Shares upon the
terms herein set forth. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth, the Underwriters
agree to purchase from the Company all of the Firm Shares. The purchase price to be paid by the
Underwriters to the Company for the Firm Shares shall be $7.3238 per share (reflecting an
underwriters’ discount of 5.50% from the public offering price of $7.75 per share).
(b) The First Closing Date. Delivery of the Firm Shares to be purchased by the Underwriters and
payment therefor shall be made at the offices of Xxxxxx Xxxxxx LLP at 0000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxx 00000 (or such other place as may be agreed to by the Company and the Underwriters) at 9:00
a.m. Houston time, on February 16, 2011, or such other time and date as shall be agreed upon by the
Representative and the Company (the time and date of such closing are called the “First Closing
Date”).
(c) The Optional Shares; Option Closing Date. In addition, on the basis of the representations,
warranties and agreements herein contained, and upon the terms but subject to the conditions herein
set forth, the Company hereby grants an option to the Underwriters to purchase up to an aggregate
of 1,350,000 Optional Shares from the Company at the purchase price per share to be paid by the
Underwriters for the Firm Shares. The option granted hereunder is for use by the Underwriters
solely in covering any over-allotments in connection with the sale and distribution of the Firm
Shares. The option granted hereunder may be exercised at any time and from time to time in whole
or in part upon notice by the Representative to the Company, which notice may be given at any time
within 30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate
number of Optional Shares as to which the Underwriters are exercising the option, (ii) the names
and denominations in which the Optional Shares are to be registered and (iii) the time, date and
place at which the Optional Shares will be delivered (which time and date may be simultaneous with,
but not earlier than, the First Closing Date; and in such
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case the term “First Closing Date” shall
refer to the time and date of delivery of certificates for the Firm Shares and such Optional
Shares). Such time and date of delivery, if subsequent to the First Closing Date, is called an
“Option Closing Date” and shall be determined by the Underwriters and shall not be earlier than two
or later than five full business days after delivery of such notice of exercise. The Underwriters
may cancel the option at any time prior to its expiration by giving written notice of such
cancellation to the Company.
(d) Public Offering of the Securities. The Underwriters hereby advise the Company that the
Underwriters intend to offer for sale to the public, initially on the terms set forth in the Time
of Sale Prospectus and the Prospectus, the Securities as soon after this Agreement has been
executed as the Representative, in its sole judgment, has determined is advisable and practicable.
(e) Payment for the Securities. Payment for the Firm Shares shall be made at the First Closing Date by
wire transfer of immediately available funds in U.S. dollars to the order of the Company. Payment
for the Optional Shares shall be made at the First Closing Date or the applicable Option Closing
Date, as the case may be, by wire transfer of immediately available funds to the order of the
Company.
(f) Delivery of the Securities. The Company, through the facilities of DTC, shall deliver, or cause to
be delivered, to the Underwriters the Firm Shares at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. The Company, through the facilities of DTC, shall deliver, or cause to be
delivered, to the Underwriters, the Optional Shares the Underwriters have agreed to purchase at the
First Closing Date or the applicable Option Closing Date, as the case may be, against the
irrevocable release of a wire transfer of immediately available funds for the amount of the
purchase price therefor. At least two full business days prior to the First Closing Date (or the
applicable Option Closing Date, as the case may be), the Company shall authorize the Company’s
transfer agent to arrange for the delivery of the Securities in accordance with the provisions of
this Section 2(f). The Securities shall be registered as the Underwriters shall have requested at
least one business day prior to the First Closing Date (or the applicable Option Closing Date, as
the case may be). Time shall be of the essence, and delivery at the time and place specified in
this Agreement is a further condition to the obligations of the Underwriters.
Section 3. Representations and Warranties
The Company hereby represents, warrants and covenants to the Underwriters as follows:
(a) Compliance with Registration Requirements. The Registration Statement has been declared effective
by the Commission under the Securities Act. The Company has complied with all requests of the
Commission for additional or supplemental information.
(i) The Preliminary Prospectus and the Prospectus when filed complied in all material respects
with the Securities Act and, if filed by electronic transmission pursuant to XXXXX (except as may
be permitted by Regulation S-T under the Securities Act), was identical to the copy thereof
delivered to the Underwriters for use in connection with the offer and sale of the Securities. The
Registration Statement and any post-effective amendment thereto, at the time it became effective
and at the First Closing Date (as defined in Section 3) and, if applicable, as of each Option
Closing Date (as defined in Section 3), complied and, as amended or supplemented, if applicable,
will, as of the date of such amendment or supplement, as applicable, comply in all material
respects with the Securities Act and did not and, as amended or supplemented, if applicable, will
not, as of the date of such amendment or supplement, as applicable, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. The Time of Sale Prospectus does not, and at the time of
each sale of the Securities in connection with the offering and
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at the First Closing Date and, if
applicable, the Option Closing Date (each as defined in Section 2), the Time of Sale Prospectus, as
then amended or supplemented by the Company, if applicable, will not, contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, provided, that the
Underwriters will notify the Company within a reasonable time prior to any sale occurring other
than at the Applicable Time. The Base Prospectus, as of its date, and at the First Closing Date
and, if applicable, as of each Option Closing Date, will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The representations
and warranties set forth in the four immediately preceding sentences do not apply to statements in
or omissions from the Registration Statement, or any post-effective amendment thereto, or the
Preliminary Prospectus, the Prospectus or the Time of Sale Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with information relating to the
Underwriters furnished to the Company in writing by the Representative expressly for use therein,
it being understood and agreed that the only such information furnished by the Underwriters to the
Company consists of the information described in Section 9(b) below. There are no contracts or
other documents required to be described in the Time of Sale Prospectus, the Preliminary Prospectus
or the Prospectus or to be filed as exhibits to the Registration Statement which have not been
described or filed as required.
(ii) The Company meets, and at the time the Registration Statement was originally declared
effective the Company met, the applicable requirements for use of Form S-3 under the Securities
Act. The Company is not an “ineligible issuer” (as defined in Rule 405 under the Securities Act) in
connection with the offering of the Securities pursuant to Rules 164, 405 and 433 under the
Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule
433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with
the requirements of the Securities Act. The Time of Sale Prospectus complies in all material
respects with the requirements of the Securities Act, as of its date and at the First Closing Date
and, if applicable, as of each Option Closing Date. Each free writing prospectus that the Company
has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act. Except for the free writing
prospectuses, if any, identified on Schedule B, and electronic road shows, if any,
furnished to the Underwriters before first use, the Company has not prepared, used or referred to,
and will not, without the prior consent of the Representative, prepare, use or refer to, any free
writing prospectus.
(iii) The documents incorporated or deemed to be incorporated by reference in the Preliminary
Prospectus and the Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the applicable requirements of the Exchange
Act, and, when read together with the other information in the Preliminary Prospectus and the
Prospectus, at the time the Registration Statement and any amendments thereto become effective and
at the Closing Date will 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 facts 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.
(iv) As of the date hereof and upon delivery and payment for the Securities, the Company will
not be subject to Rule 419 under the Securities Act and none of the Company’s outstanding
securities will be deemed to be a “xxxxx stock” as defined in Rule 3a51-1 under the Exchange Act.
(b) No Stop Order. No stop order suspending the effectiveness of the Registration Statement or
any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been
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instituted or are pending or, to the best knowledge of the Company, are contemplated or threatened
by the Commission.
(c) Offering Materials Furnished to Underwriters. The Company has delivered to the Representative
conformed copies of the Registration Statement and of each consent and certificate of experts filed
as a part thereof, the Time of Sale Prospectus, the Preliminary Prospectus and the Prospectus, as
amended or supplemented, and any free writing prospectuses reviewed and consented to by the
Representative, in such quantities and at such places as the Representative has reasonably
requested.
(d) Distribution of Offering Material By the Company. The Company has not distributed and will not
distribute, prior to completion of the Underwriters’ distribution of the Securities, any offering
material in connection with the offering and sale of the Securities other than the Time of Sale
Prospectus, the Preliminary Prospectus, the Prospectus or the Registration Statement or any other
document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or
Rule 134 under the Securities Act.
(e) Independent Accountants. Ernst & Young LLP is an independent accountant with respect to the
Company as required by the Securities Act, and the rules and regulations thereunder, and the Public
Company Accounting Oversight Board (United States) (“PCAOB”).
(f) Financial Statements. The consolidated financial statements of the Company filed with the
Commission as a part of or incorporated by reference into the Registration Statement, the
Preliminary Prospectus, the Prospectus and Time of Sale Prospectus present fairly in all material
respects the financial condition of the Company and each of the subsidiaries (as such term is
defined in Rule 1-02 of Regulation S-X of the Commission) of the Company (each, a “Subsidiary,” and
together, the “Subsidiaries”) as of and at the dates indicated, and the consolidated statements of
operation, stockholders’ equity and cash flows of the Company and the Subsidiaries for the periods
specified; such financial statements have been prepared in conformity with generally accepted
accounting principles in the United States of America (“GAAP”) applied on a consistent basis
throughout the periods involved except to the extent disclosed in the notes thereto. There are no
financial statements (historical or pro forma) that are required to be included in the Registration
Statement, the Prospectus or the Time of Sale Prospectus that are not included as required. All
non-GAAP financial measures (as defined in Regulation G of the Commission) and ratios derived using
non-GAAP financial measures have been presented in compliance with Item 10 of Regulation S-K of the
Commission.
(g) Disclosure Controls and Procedures. The Company has established and maintains
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)),
which (i) are designed to ensure that material information relating to the Company is made known to
the Company’s principal executive officer and its principal financial officer by others within the
Company, particularly during the periods in which the periodic reports required under the Exchange
Act are being prepared; (ii) have been evaluated for effectiveness as of a date within 90 days
prior to the earlier of the date that the Company filed its most recent annual or quarterly report
with the Commission and the date of the Time of Sale Prospectus; and (iii) are effective in all
material respects to perform the functions for which they were established. Based on the most
recent evaluation of its disclosure controls and procedures, the Company is not aware of (a) any
significant deficiencies or material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information or (b) any fraud, whether or not
material, that involves executive officers or other employees who have a significant role in the
Company’s internal control over financial reporting. The Company is not aware of any change in its
internal control over financial reporting that has occurred during its most recent fiscal quarter
that has
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materially affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.
(h) No Material Adverse Change in Business. Except as disclosed in the Time of Sale Prospectus,
subsequent to the respective dates as of which information is given in the Time of Sale Prospectus,
there has been no (i) material adverse change in the condition, financial or otherwise, or in the
earnings, business or results of operations of the Company and its Subsidiaries taken as a whole
(the “Enterprise”), whether or not arising in the ordinary course of business (a “Material Adverse
Change”), (ii) transaction which is material to the Enterprise, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred by the Company or any
Subsidiary, which is material to the Enterprise, (iv) change in the capital stock of the Company or
any Subsidiary, (v) material change in the outstanding indebtedness of the Company or any
Subsidiary or (vi) dividend or distribution of any kind declared, paid or made on the capital stock
of the Company.
(i) Good Standing of the Company. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to own its properties and to conduct its business as described in the
Registration Statement, Preliminary Prospectus, Prospectus and Time of Sale Prospectus and to enter
into and perform its obligations under this Agreement. The Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other jurisdiction in which such
qualification is required, except where the failure to so qualify or to be in good standing would
not result in a Material Adverse Change.
(j) Good Standing of Subsidiaries. Each of the Subsidiaries is identified in Schedule C
to this Agreement. Each Subsidiary has been duly organized and is validly existing as a business
entity in good standing under the laws of the jurisdiction of its organization, has all requisite
power and authority to own, lease and operate its properties and to conduct its business as
described in the Time of Sale Prospectus, and is duly qualified as a foreign business entity
(corporate or otherwise) to transact business and is in good standing in each jurisdiction in which
such qualification is required, except where the failure so to qualify or to be in good standing
would not result in a Material Adverse Change. All of the issued and outstanding equity interests
of each Subsidiary have been duly authorized and validly issued, and are fully paid and
non-assessable; except as otherwise disclosed in the Time of Sale Prospectus, all such equity
interests are wholly owned by the Company, directly or through its Subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity, and none of the
outstanding equity interests of any Subsidiary was issued in violation of the preemptive or similar
rights of any security holder of such Subsidiary.
(k) Capitalization. The authorized capital stock of the Company and the issued and outstanding capital
stock of the Company as of February 10, 2011, are as set forth on Schedule D. The shares
of issued and outstanding capital stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or similar rights of any security holder of the
Company. The capital stock of the Company conforms in all material respects to the description
contained in the Time of Sale Prospectus, and such description conforms in all material respects to
the rights set forth in the instruments defining the same. The description of the Company’s stock
option, stock bonus and other stock plans or arrangements, and the options or other rights granted
thereunder, as described in the Registration Statement, the Preliminary Prospectus, the Prospectus
or in the Time of Sale Prospectus accurately and fairly present in all material respects the
information required to be shown with respect to such plans, arrangements, options and rights.
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(l) Other Securities. Except as disclosed in the Time of Sale Prospectus, there are no
outstanding (i) securities or obligations of the Company or any Subsidiary convertible into or
exchangeable for any equity interests of the Company or any Subsidiary, (ii) warrants, rights or
options to subscribe for or purchase from the Company or any Subsidiary any equity interests or any
such convertible or exchangeable securities or obligations, or (iii) obligations of the Company or
any Subsidiary to issue any equity interests, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(m) Stock Exchange Listing and Reporting Requirements. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange (the
“NYSE”) and the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the NYSE, and except as disclosed in the Time of Sale Prospectus, the Company has not
received any notification that the Commission, the NYSE is contemplating terminating such
registration or listing.
(n) Authorization of Agreement and Binding Effect. The Company has full right, power and
authority to execute and deliver this Agreement and to perform its obligations hereunder; and all
action required to be taken for the due and proper authorization, execution and delivery by it of
this Agreement and the consummation by it of the transactions contemplated hereby has been duly and
validly taken.
(o) Compliance with Laws. The Company and each Subsidiary are in compliance with all laws as
in effect on the date hereof applicable to the conduct of their business or operations, or
applicable to their employees, except where the failure to be in compliance would not cause a
Material Adverse Change. None of the Company or any Subsidiary has received notice of any
violation of any law, or any potential liability under any law, relating to the operation of its
business or to its employees or to any of the assets, operations, processes, employees or products
of the Company or any Subsidiary, except which such violation or potential liability would not
cause a Material Adverse Change.
(p) Authorization and Description of Securities. The Securities have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement. When the Company issues and delivers the
Securities pursuant to this Agreement against payment of the consideration set forth herein, the
Securities will be validly issued, fully paid and non-assessable. The issuance by the Company of
the Securities is not subject to preemptive or other similar rights of any security holder of the
Company, except for such rights as have been duly waived. The Company has authorized and available
a sufficient number of shares of Common Stock for issuance of the Securities pursuant to this
Agreement
(q) Absence of Defaults and Conflicts. Neither the Company nor any Subsidiary is (i) in violation of
its charter or by-laws, limited partnership agreement or limited liability company agreement, as
applicable, or (ii) in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which it is a party or by which it may
be bound, or to which any of the property or assets of the Company or any Subsidiary is subject
(collectively, “Agreements and Instruments”) except, in the case of clause (ii), for any defaults
which, singularly or in the aggregate, would not result in a Material Adverse Change; and the
execution, delivery and performance of this Agreement, the consummation of the transactions
contemplated by, and the compliance by the Company with its obligations under, this Agreement and
in the Time of Sale Prospectus including the sale of the Securities and the use of the proceeds
from the sale of the Securities as described therein under “Use of Proceeds,” do not and will not,
whether with or without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the properties or assets of
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the Company or any Subsidiary pursuant to the Agreements and Instruments except for such conflicts,
breaches, defaults, liens, charges or encumbrances which, singularly or in the aggregate, would not
result in a Material Adverse Change, nor will such action result in any violation of the provisions
of the certificate of incorporation, as amended, or bylaws of the Company or any related
constituent document of any Subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their assets, properties or
operations, except where such violation of any applicable law, statute, rule, regulation, judgment,
order, writ, or decree of any government, government instrumentality or court, domestic or foreign
would not result in a Material Adverse Change. As used herein, a “Repayment Event” means any event
or condition which gives the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder’s behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any Subsidiary.
(r) Absence of Labor Disputes. No labor dispute with the employees of the Company or any Subsidiary
exists or to the knowledge of the Company is imminent, and the Company is not aware of any existing
or imminent labor disturbance by the employees of any of its Subsidiaries, principal operators,
contractors, suppliers or customers, which, in any such case, would result in a Material Adverse
Change. The Company is not aware that any key employee or significant group of employees of the
Company or any Subsidiary plans to terminate employment with the Company or such Subsidiary.
(s) Absence of Proceedings. Except as disclosed in the Time of Sale Prospectus, there are no actions,
suits, proceedings, inquiries or investigations before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any Subsidiary, which is required to be disclosed in the
Registration Statement, or which might, individually or in the aggregate, result in a Material
Adverse Change, or which reasonably be expected to materially and adversely affect the properties
or assets of the Enterprise or the consummation of the transactions contemplated in this Agreement
or the performance by the Company of its obligations hereunder.
(t) Possession of Intellectual Property. The Company and the Subsidiaries own or possess, or can
acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, “Intellectual Property”) necessary to carry on the business
now operated by them, except where the failure to own or possess, or have the ability to acquire on
reasonable terms such Intellectual Property would not, singularly or in the aggregate, cause a
Material Adverse Change. Neither the Company nor any Subsidiary has received any notice and is not
otherwise aware of any infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any Subsidiary therein,
and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding)
or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Change.
(u) Absence of Further Requirements. No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental authority or agency is
necessary or required for the performance by the Company of its obligations hereunder, or in
connection with the performance by the Company of its obligations with respect to the offering or
sale of the Securities under this Agreement or the consummation of the transactions contemplated by
this Agreement except such as have been already obtained or as may be required under the Securities
Act or the regulations promulgated thereunder or state securities laws or by the NYSE.
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(v) No Price Stabilization or Manipulation; Compliance with Regulation M. Neither the Company nor any
Subsidiary has taken, directly or indirectly, any action designed to or that would be reasonably
expected to cause or result in stabilization or manipulation of the price of the Common Stock or
any other “reference security” (as defined in Rule 100 of Regulation M under the Exchange Act
(“Regulation M”)) whether to facilitate the sale or resale of the Securities or otherwise, and has
taken no action which would directly or indirectly violate Regulation M. The Company acknowledges
that the Underwriters may engage in passive market making transactions in the Securities on the
NYSE in accordance with Regulation M.
(w) Possession of Licenses and Permits. The Company and each Subsidiary possess such permits,
licenses, certificates, approvals, consents and other authorizations (collectively, “Governmental
Licenses”) issued by appropriate federal, state, local or foreign regulatory bodies necessary for
the ownership of their respective assets and to conduct the business now operated by them, except
where the failure to have obtained the same would not cause a Material Adverse Change. The Company
and each Subsidiary are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure to so comply would not singly or in the aggregate cause a
Material Adverse Change. All of the Governmental Licenses are valid and in full force and effect,
except where the invalidity or the failure to be in full force and effect would not singly or in
the aggregate cause a Material Adverse Change. Neither Company nor any Subsidiary has received any
notice of proceedings relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding
would result in a Material Adverse Change.
(x) Reserve Report Data. The oil and gas reserve estimates of the Company contained or
incorporated by reference into the Registration Statement and included in the Preliminary
Prospectus, Prospectus and Time of Sale Prospectus have been prepared by independent reserve
engineers in accordance with Commission guidelines, and the Company has no reason to believe that
such estimates do not fairly reflect the oil and gas reserves of the Company as of the dates
indicated. Other than production of the reserves in the ordinary course of business, intervening
product price fluctuations and as described in the Registration Statement, Prospectus and Time of
Sale Prospectus, the Company is not aware of any facts or circumstances that would cause a Material
Adverse Change in the reserves or the present value of future net cash flows therefrom as described
in the Registration Statement, Prospectus or Time of Sale Prospectus.
(y) Properties. Except as otherwise set forth in the Time of Sale Prospectus or such as in the
aggregate does not now cause or will in the future cause a Material Adverse Change, the Company and
each Subsidiary have title to their respective properties as follows: (a) with respect to xxxxx
(including leasehold interests and appurtenant personal property) and non-producing oil and gas
properties (including undeveloped locations on leases held by production and those leases not held
by production), such title is good and free and clear of all liens, security interests, pledges,
charges, encumbrances, mortgages and restrictions, (b) with respect to non-producing properties in
exploration prospects, such title was investigated in accordance with customary industry procedures
prior to the acquisition thereof by the Company or any Subsidiary; (c) with respect to real
property other than oil and gas interests, such title is good and marketable free and clear of all
liens, security interests, pledges, charges, encumbrances, mortgages and restrictions; and (d) with
respect to personal property other than that appurtenant to oil and gas interests, such title is
free and clear of all liens, security interests, pledges, charges, encumbrances, mortgages and
restrictions. No real property owned, leased, licensed, or used by the Company or any Subsidiary
lies in an area which is, or to the knowledge of the Company will be, subject to restrictions which
would prohibit, and no statements of facts relating to the actions or inaction of another person or
entity or his or its ownership, leasing, licensing, or use of any real or personal property exists
or will exist which would prevent, the continued effective ownership, leasing, licensing,
exploration, development or production or use of such real property in the business of the Company
or any Subsidiary as presently
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conducted or as the Registration Statement, the Preliminary Prospectus, the Prospectus or the
Time of Sale Prospectus indicates they contemplate conducting, except as may be properly described
in the Registration Statement, the Preliminary Prospectus, the Prospectus or the Time of Sale
Prospectus or such as in the aggregate do not now cause and will not in the future cause a Material
Adverse Change.
(z) Insurance. Except as otherwise set forth in the Registration Statement, the Preliminary
Prospectus, the Prospectus or the Time of Sale Prospectus, the Company and each Subsidiary, and
their respective material properties, are insured by insurers of recognized financial
responsibility or are self-insured against such losses and risks and in such amounts as the Company
believes are adequate for the conduct of their businesses; all such policies of insurance insuring
the Company and each Subsidiary, and their respective material properties, are in full force and
effect and the Company and each Subsidiary has no reason to believe that any of them will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business. Except as
otherwise set forth in the Registration Statement, the Preliminary Prospectus, the Prospectus or
the Time of Sale Prospectus, there are no material claims by the Company or any Subsidiary under
any such policy or instrument as to which any insurance company is denying liability or defending
under a reservation of rights clause.
(aa) Taxes. The Company and each of the Subsidiaries has filed on a timely basis all foreign, federal,
state and local tax returns that are required to be filed or have requested extensions thereof
(except in any case in which the failure so to file would not cause a Material Adverse Change) and
has paid all taxes required to be paid by it and any other assessment, fine or penalty levied
against it to the extent due and payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or would not cause a Material Adverse Change.
(bb) Investment Company Act. Neither the Company nor any Subsidiary is required, and upon the sale of
the Securities as herein contemplated and the application of the net proceeds therefrom as
described in the Time of Sale Prospectus will not be required, to register as an “investment
company” within the meaning of such term under the Investment Company Act of 1940, as amended, and
the rules and regulations of the Commission promulgated thereunder.
(cc) Environmental Laws. There has been no storage, disposal, generation, manufacture, refinement,
transportation, handling or treatment of hazardous substances or hazardous wastes by the Company or
any Subsidiary (or, to the knowledge of the Company, or any of its predecessors in interest), at,
upon or from any of the property now or previously owned, leased or operated by the Company or any
Subsidiary in violation of any applicable law, ordinance, rule, regulation, order, judgment, decree
or permit that would require the Company or any Subsidiary to undertake any remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any
violation or remedial action that would not, individually or in the aggregate with all such
violations and remedial actions, cause a Material Adverse Change. Except for abandonment and
similar costs incurred or to be incurred in the ordinary course of business of the Company or any
Subsidiary, there has been no material spill, discharge, leak, emission, injection, escape, dumping
or release of any kind onto any property now or previously owned, leased or operated by the Company
or any Subsidiary or into the environment surrounding such property of any hazardous substances or
hazardous wastes due to or caused by the Company or any Subsidiary (or, to the knowledge of the
Company, any of its predecessors in interest), except for any such spill, discharge, leak,
emission, injection, escape, dumping or release that would not, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes, dumpings and releases, result
in a Material Adverse Change; and the terms “hazardous substances,” and “hazardous wastes” shall be
construed broadly to include such terms and similar terms, all of which shall have the meanings
specified in any applicable local, state and federal laws or regulations with respect to
environmental protection. Except as set forth in the Time of Sale Prospectus, neither the Company
nor
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any Subsidiary has been named as a “potentially responsible party” under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended.
(dd) Registration Rights. There are no persons with registration rights or other similar rights to have
any securities of the Company registered pursuant to the Registration Statement or sold in the
offering contemplated by this Agreement, except for such rights as have been duly waived.
(ee) Internal Accounting. The Company maintains a system of “internal control over financial reporting”
(as defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by, or under the supervision of its principal executive and
principal financial officers, or persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles.
Except as disclosed in the Time of Sale Prospectus, there are no material weaknesses in the
Company’s internal controls. The audit committee of the Company’s board of directors and the
Company’s independent registered public accounting firm have been made aware of any significant
deficiencies in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability to record, process, summarize and
report financial information.
(ff) Off-Balance Sheet Arrangements. Except as disclosed in the Time of Sale Prospectus, the
Company is not party to any off-balance sheet transactions, arrangements, obligations (including
contingent obligations) or other relationships with unconsolidated entities or other persons that
may have a material current or future effect on the Company’s financial condition, changes in
financial condition, results of operations, liquidity, capital expenditures, capital resources or
significant components of revenues or expenses.
(gg) Certain Relationships and Related Transactions. No relationship, direct or indirect, exists
between or among the Company or any Subsidiary on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any Subsidiary on the other hand, which is
required to be described or incorporated by reference in the Prospectus and which is not so
described or incorporated. The Time of Sale Prospectus contains in all material respects the same
description of the matters set forth in the preceding sentence contained in the Prospectus.
(hh) Brokers. Neither the Company nor any Subsidiary is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim against the Company or the
Underwriters for a brokerage commission, finder’s fee or like payment in connection with the
offering and sale of the Securities.
(ii) Xxxxxxxx-Xxxxx Act of 2002. The Company is in compliance, in all material respects, with all
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof now applicable to it.
(jj) ERISA. The minimum funding standard under Section 302 of the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published interpretations thereunder
(“ERISA”), has been satisfied by each “pension plan” (as defined in Section 3(2) of ERISA) which
has been established or maintained by the Company, and the trust forming part of each such plan
which is intended to be qualified under Section 401 of the Internal Revenue Code of 1986, as
amended, is so qualified; each of the Company and the Subsidiaries has fulfilled its obligations,
if any, under Section 515 of ERISA; neither the Company nor any Subsidiary maintains and is
required to contribute to a “welfare plan” (as defined in Section 3(1) of ERISA) which provides
retiree or other post-employment welfare benefits or insurance coverage (other than “continuation
coverage” (as defined in Section 602 of
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ERISA)); each pension plan and welfare plan established or maintained by the Company and/or one of
the Subsidiaries is in compliance with the currently applicable provisions of ERISA, except where
the failure to comply would not cause a Material Adverse Change; and neither the Company nor any
Subsidiary has incurred or could reasonably be expected to incur any withdrawal liability under
Section 4201 of ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any other
liability under Title IV of ERISA.
(kk) Corporate Records. The minute books of the Company and each Subsidiary have been made
available to the Underwriters and counsel for the Underwriters, and such books (i) reflect all
meetings and actions of the board of directors (including each board committee) and stockholders
(or analogous governing bodies or interest holders) of the Company and each Subsidiary since the
time of its respective organization through the date of the latest meeting and action, and (ii)
accurately in all material respects reflect all transactions referred to in such minutes.
(ll) Margin Securities. Neither the Company nor any Subsidiary owns any “margin securities” as
that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the
“Federal Reserve Board”) and none of the proceeds of the sale of the Securities will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin security, for the
purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might cause any of the Securities to be
considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve
Board.
(mm) Transfer Taxes. There are no transfer taxes or other similar fees or charges under federal
law or laws of any state or any political subdivision thereof, required to be paid by the Company
in connection with the execution and delivery of this Agreement.
(nn) Certain Regulatory Matters.
(i) Foreign Corrupt Practices Act. Neither the Company, any officer of the
Company, nor, to the knowledge of the Company, any director, agent or affiliate of
the Company is aware of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the FCPA (as defined below), including,
without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise to give,
or authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official thereof
or any candidate for foreign political office, in contravention of the FCPA and the
Company and, to the knowledge of the Company, its affiliates have conducted their
businesses in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith. “FCPA” means Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder.
(ii) Money Laundering Laws. The operations of the Company are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, including the
Money Laundering Control Act of 1986, as amended, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or
- 12 -
any arbitrator involving the Company with respect to the Money Laundering Laws
is pending or, to the knowledge of the Company, threatened.
(iii) OFAC. Neither the Company, any officer of the Company, nor, to the
knowledge of the Company, any director, agent or affiliate of the Company is
currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”); and the Company (either directly
or through the Trust Account) will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(iv) Bank Secrecy Act; Money Laundering; Patriot Act. Neither the Company nor,
any officer or director has violated: (a) the Bank Secrecy Act, as amended, (b) the
Money Laundering Laws or (c) the Uniting and Strengthening of America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act
of 2001, and/or the rules and regulations promulgated under any such law or any
successor law.
Any certificate signed by any officer of the Company that is delivered to the Underwriters or to
counsel for the Underwriters pursuant to this Agreement shall be deemed a representation and
warranty by the Company to the Underwriters as to the matters covered thereby.
Section 4. Additional Covenants of the Company. The Company further covenants and agrees with the
Underwriters as follows:
(a) Delivery of Time of Sale Prospectus and Prospectus. Upon request, the Company shall furnish
to the Underwriters, without charge, prior to 10:00 a.m. New York City time on the business day
next succeeding the date of this Agreement and during the period mentioned in Section 4(e) or
Section 4(g) below, as many copies of the Time of Sale Prospectus, the Prospectus and any
supplements and amendments thereto as the Underwriters may reasonably request.
(b) Underwriters’ Review of Proposed Amendments and Supplements. Prior to amending or supplementing
the Registration Statement, the Time of Sale Prospectus, the Preliminary Prospectus or the
Prospectus, including any amendment or supplement through incorporation by reference of any report
filed under the Exchange Act, the Company shall furnish to the Underwriters for review a copy of
each such proposed amendment or supplement, and the Company shall not file any such proposed
amendment or supplement without the consent of the Underwriters, and shall file with the Commission
within the applicable period specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.
(c) Free Writing Prospectuses. The Company shall furnish to the Underwriters a copy of each proposed
free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company
and shall not use or refer to any proposed free writing prospectus to which the Underwriters
reasonably objects.
(d) Filing of Underwriters Free Writing Prospectuses. The Company shall not take any action that would
result in the Underwriters or the Company being required to file with the Commission pursuant to
Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the
Underwriters that the Underwriters otherwise would not have been required to file thereunder.
- 13 -
(e) Amendments and Supplements to Time of Sale Prospectus. If the Time of Sale Prospectus is being
used to solicit offers to buy the Securities at a time when the Prospectus is not yet available to
prospective purchasers and any event shall occur or condition exist as a result of which it is
necessary to amend or supplement the Time of Sale Prospectus so that the Time of Sale Prospectus
does not include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances when delivered to a
prospective purchaser, not misleading, or if any event shall occur or condition exist as a result
of which the Time of Sale Prospectus conflicts with the information contained in the Registration
Statement, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law, including the Securities Act,
the Company shall (subject to Sections 4(b) and 4(c)) forthwith prepare, file with the Commission
and furnish, at its own expense, to the Underwriters and to any dealer upon request, either
amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances when delivered to a prospective purchaser, not be misleading or so that the Time
of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration
Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with
applicable law including the Securities Act.
(f) Securities Act Compliance. After the date of this Agreement, the Company shall promptly advise the
Underwriters in writing (i) of the receipt of any comments of, or requests for additional or
supplemental information from, the Commission, (ii) of the time and date of any filing of any
post-effective amendment to the Registration Statement or any amendment or supplement to the Time
of Sale Prospectus, any free writing prospectus, the Preliminary Prospectus or the Prospectus,
(iii) of the time and date that any post-effective amendment to the Registration Statement becomes
effective and (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or any amendment or
supplement to the Time of Sale Prospectus, any free writing prospectus, the Preliminary Prospectus
or the Prospectus or of any order preventing or suspending the use of the Time of Sale Prospectus,
any free writing prospectus, the Preliminary Prospectus or the Prospectus, or of any proceedings to
remove, suspend or terminate from listing or quotation the Common Stock from any securities
exchange or automated quotation system upon which they are listed for trading or included or
designated for quotation, or of the threatening or initiation of any proceedings for any of such
purposes. If the Commission shall enter any such stop order at any time, the Company will use its
best efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the
Company agrees that it shall comply with the provisions of Rules 424(b), 433, 430A and 430B, as
applicable, under the Securities Act and will use its reasonable efforts to confirm that any
filings made by the Company under such Rules 424(b) or 433 were received in a timely manner by the
Commission.
(g) Amendments and Supplements to the Prospectus and Other Securities Act Matters. If the delivery of
a prospectus is required at any time after the date hereof and if at such time any event shall
occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus
so that the Prospectus does not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if in the opinion of the
Underwriters or counsel for the Underwriters it is otherwise necessary to amend or supplement the
Prospectus to comply with applicable law, including the Securities Act, the Company agrees to
promptly prepare (subject to Section 4(b) and 4(c)), file with the Commission and furnish at its
own expense to the Underwriters and to dealers, amendments or supplements to the Prospectus so that
the statements in the Prospectus as so amended or supplemented will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances when the
- 14 -
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with applicable law including the Securities Act. Neither the consent of
the Underwriters to, or delivery of, any such amendment or supplement shall constitute a waiver of
any of the Company’s obligations under Sections 4(b) or (c).
(h) Blue Sky Compliance. The Company shall cooperate with the Underwriters and counsel for the
Underwriters to qualify or register the Securities for sale under (or obtain exemptions from the
application of) the state securities or blue sky laws of those jurisdictions designated by the
Underwriters, shall comply with such laws and shall continue such qualifications, registrations and
exemptions in effect so long as required for the distribution of the Securities. The Company shall
not be required to qualify as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently qualified or where it
would be subject to taxation as a foreign corporation. The Company will advise the Underwriters
promptly of the suspension of the qualification or registration of (or any such exemption relating
to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat of
any proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its reasonable efforts to obtain
the withdrawal thereof at the earliest possible moment.
(i) Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities sold by it
in the manner described under the caption “Use of Proceeds” in the Prospectus.
(j) Transfer Agent. The Company shall continue to engage and maintain, at its expense, a registrar and
transfer agent for the Common Stock.
(k) Earnings Statement. As soon as practicable, the Company will make generally available to its
security holders and to the Underwriters an earnings statement (which need not be audited)
complying with Section 11(a) of the Securities Act and the rules and regulations of the Commission
thereunder.
(l) Periodic Reporting Obligations. The Company, during the period when the Prospectus is required to
be delivered under the Securities Act, shall file, on a timely basis, with the Commission and,
where required, the NYSE, all reports and documents required to be filed under the Exchange Act.
(m) Listing. The Company will use commercially reasonable efforts to effect and maintain the inclusion
and quotation of the Common Stock, including the Securities, on the NYSE, unless and until such
security is listed on another exchange or automated quotation system of at least comparable
reputation.
(n) Company to Provide Copy of the Prospectus in Form That May be Downloaded from the Internet. The
Company shall cause to be prepared and delivered, at its expense, within one business day from the
effective date of this Agreement, to the Underwriters an “electronic Prospectus” to be used by the
Underwriters in connection with the offering and sale of the Securities. As used herein, the term
“electronic Prospectus” means a form of Prospectus, and any amendment or supplement thereto, that
meets each of the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Underwriters, that may be transmitted electronically by the Underwriters to
offerees and purchasers of the Securities; (ii) it shall disclose the same information as the paper
Prospectus, except to the extent that graphic and image material cannot be disseminated
electronically, in which case such graphic and image material shall be replaced in the electronic
Prospectus with a fair and accurate narrative description or tabular representation of such
material, as appropriate; and (iii) it shall be in or convertible into a paper format or an
electronic format, satisfactory to the Underwriters, that will allow investors to store and have
- 15 -
continuously ready access to the Prospectus at any future time, without charge to investors (other
than any fee charged for subscription to the Internet as a whole and for on-line time). The
Company hereby confirms that it has included or will include in the Prospectus filed pursuant to
XXXXX or otherwise with the Commission and in the Registration Statement at the time it was
declared effective an undertaking that, upon receipt of a request by an investor or his or her
representative, the Company shall transmit or cause to be transmitted promptly, without charge, a
paper copy of the Prospectus.
(o) Agreement Not to Offer or Sell Additional Shares of Common Stock. During the period commencing on
the date hereof and ending on the 90th day following the date of the Prospectus (the “Lock-up
Period”), the Company will not, without the prior written consent of the Representative (which
consent may be withheld at the sole discretion of the Representative), directly or indirectly,
sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put
equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise
dispose of or transfer, or announce the offering of, or file any registration statement under the
Securities Act in respect of, any shares of Common Stock, options or warrants to acquire shares of
Common Stock or securities exchangeable or exercisable for or convertible into shares of Common
Stock (other than as contemplated by this Agreement with respect to the Securities); provided,
however, that the Company may (1) issue shares of Common Stock or options to purchase shares of its
Common Stock, or shares of Common Stock upon exercise of options, pursuant to any stock option,
stock bonus or other stock plan or arrangement described in the Prospectus or any amendment to or
replacement of such plan and (2) file one or more registration statements on Form S-8 or amendments
thereto relating to the issuance of shares of Common Stock or the issuance and exercise of options
to purchase shares of Common Stock granted under the employee benefit plans of the Company existing
on the date of the Prospectus or any amendment to or replacement of such plan. Notwithstanding the
foregoing, if (i) during the last 17 days of the Lock-up Period, the Company issues an earnings
release or material news or a material event relating to the Company occurs or (ii) prior to the
expiration of the Lock-up Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Lock-up Period, then in each case the
Lock-up Period will be extended until the expiration of the 18-day period beginning on the date of
the issuance of the earnings release or the occurrence of the material news or material event, as
applicable, except that such extension will not apply if, (i) within three business days prior to
the expiration of the Lock-up Period, the Company delivers to the Underwriters a certificate,
signed by the Chief Financial Officer or Chief Executive Officer of the Company, certifying on
behalf of the Company that the Common Stock is an “actively traded security” (as defined in
Regulation M) and (ii) that the Company meets the applicable requirements of paragraph (a)(1) of
Rule 139 under the Securities Act in the manner contemplated by NASD Rule 2711(f)(4) of the FINRA
Manual. The Company will provide the Representative with prior notice of any such announcement
that gives rise to an extension of the restricted period.
(p) Investment Limitation. The Company shall not invest, or otherwise use the proceeds received by the
Company from its sale of the Securities in such a manner as would require the Company to register
as an investment company under the Investment Company Act.
(q) No Stabilization or Manipulation; Compliance with Regulation M. Prior to the completion of the
distribution of the Securities, the Company will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in stabilization or
manipulation of the price of the Common Stock or any other reference security, whether to
facilitate the sale or resale of the Securities or otherwise, and the Company will, and shall cause
each of its affiliates to, comply with all applicable provisions of Regulation M. Prior to the
completion of the distribution of the Securities, if the limitations of Rule 102 of Regulation M
(“Rule 102”) do not apply with respect to the Securities or any other reference security pursuant
to any exception set forth in Section (d) of Rule 102, then promptly upon notice from the
Underwriters (or, if later, at the time stated in the notice), the Company will, and
- 16 -
shall cause each of its affiliates to, comply with Rule 102 as though such exception were not
available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.
Section 5. Payment of Expenses. The Company agrees to pay all costs, fees and expenses
incurred in connection with the performance of its obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses incident to the
issuance and delivery of the Securities (including all printing and engraving costs), (ii) all fees
and expenses of the Company’s transfer agent, (iii) all necessary issue, transfer and other stamp
taxes in connection with the issuance and sale of the Securities to the Underwriters, (iv) all fees
and expenses of the Company’s counsel, independent public or certified public accountants and other
advisors, (v) all costs and expenses incurred in connection with the preparation, printing, filing,
shipping and distribution of the Time of Sale Prospectus, the Preliminary Prospectus, the
Prospectus and any free writing prospectus prepared by or on behalf of, used by, or referred to by
the Company, and all amendments and supplements thereto, and this Agreement, (vi) all filing fees
and reasonable attorneys’ fees and expenses incurred by the Company or the Underwriters in
connection with qualifying or registering (or obtaining exemptions from the qualification or
registration of) all or any part of the Securities for offer and sale under the state securities or
blue sky laws, and, if requested by the Underwriters, preparing and printing a blue sky survey or
memorandum, and any supplements thereto, advising the Underwriters of such qualifications,
registrations, determinations and exemptions, (vii) the filing fees incident to, and the reasonable
fees and expenses of counsel for the Underwriters in connection with, FINRA’s review and approval
of the Underwriters’ participation in the offering and distribution of the Securities, (viii) the
fees and expenses associated with listing the Securities on the NYSE, and (ix) all other fees,
costs and expenses referred to in Item 14 of Part II of the Registration Statement. Except as
provided in this Section 5 or Section 8, Section 9 and Section 10 hereof, the Underwriters shall
pay its own expenses, including the fees and disbursements of its counsel.
Section 6. Covenant of the Underwriters. The Underwriters covenants with the Company not to take
any action that would result in the Company being required to file with the Commission under Rule
433(d) a free writing prospectus prepared by or on behalf of the Underwriters that otherwise would
not be required to be filed by the Company thereunder, but for the action of the Underwriters.
Section 7. Conditions of the Obligations of the Underwriters. The obligations of the Underwriters
to purchase and pay for the Firm Shares as provided herein on the First Closing Date and, with
respect to the Optional Shares, the Firm Closing Date or each Option Closing Date, as applicable,
shall be subject to the accuracy of the representations and warranties on the part of the Company
set forth in Section 1 hereof, as of the date hereof and as of the First Closing Date as though
then made and, with respect to the Optional Shares, as of the First Closing Date and each Option
Closing Date, as applicable, as though then made, to the timely performance by the Company of its
covenants and other obligations hereunder, and to each of the following additional conditions:
(a) Comfort Letters. On the date hereof, the Underwriters shall have received from:
x. Xxxxx & Xxxxx, LLP, independent certified public accountants for the
Company, a letter dated the date hereof addressed to the Underwriters, in form and
substance satisfactory to the Representative, (i) containing statements and
information of the type ordinarily included in accountant’s “comfort letters” to
underwriters, delivered according to AU Section 634 of the Interim Accounting
Standards of the PCAOB (or any successor bulletin), with respect to the audited and
unaudited financial statements and certain financial information incorporated by
reference in the Registration Statement, Time of Sale Prospectus, the Preliminary
Prospectus and the Prospectus, and (ii) confirming that they are (A) independent
public or certified public accountants as required by the
- 17 -
Securities Act, the Exchange Act and the PCAOB and (B) in compliance with the
applicable requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X; and
ii. Xxxxxxxxxx & Co., Inc., a letter effective as of the date hereof addressed
to the Underwriters, in form and substance satisfactory to the Representative,
stating the conclusions and findings of such firm with respect to the oil and
natural gas reserves of the Company.
(b) Compliance with Registration Requirements; No Stop Order; No Objection from FINRA. For
the period from and after the date of this Agreement and prior to the First Closing Date and, with
respect to the Optional Shares, each Option Closing Date:
i. the Company shall have filed the Prospectus with the Commission (including
the information previously omitted from the Registration Statement pursuant to Rule
430B or Rule 430C under the Securities Act) in the manner and within the time period
required by Rule 424(b) under the Securities Act;
ii. no stop order suspending the effectiveness of the Registration Statement or
any post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or threatened by the
Commission; and
iii. FINRA shall have raised no objection to the fairness and reasonableness of
the underwriting terms and arrangements.
(c) No Material Adverse Change or Ratings Agency Change. For the period from and after the date of
this Agreement and prior to the First Closing Date and, with respect to the Optional Shares, each
Option Closing Date in the judgment of the Underwriters, there shall not have occurred, except as
contemplated by the Prospectus, any Material Adverse Change and there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of the possible change, in
the rating accorded any securities of the Company by any “nationally recognized statistical rating
organization” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act.
(d) Opinion of Counsel for the Company. On each of the First Closing Date and each Option Closing
Date, the Underwriters shall have received the opinion of Xxxxxx and Xxxxx, LLP, counsel for the
Company, dated as of such Closing Date, in substantially the form attached as Exhibit A.
(e) Opinion of Counsel for the Underwriters. On each of the First Closing Date and each Option
Closing Date, the Underwriters shall have received the opinion of Xxxxxx Xxxxxx LLP, counsel for
the Underwriters, in form and substance satisfactory to the Underwriters, dated as of such Closing
Date.
(f) Officers’ Certificate. On each of the First Closing Date and each Option Closing Date the
Underwriters shall have received a written certificate executed by the Chief Executive Officer or
President of the Company and the Chief Financial Officer of the Company, dated as of such Closing
Date, to the effect set forth in subsections (b) and (c) of this Section 7, and further to the
effect that:
| i. | for the period from and after the date of this Agreement and prior to such Closing Date, there has not occurred any Material Adverse Change; |
- 18 -
| ii. | the representations and warranties of the Company set forth in Section 1 of this Agreement are true and correct with the same force and effect as though expressly made on and as of such Closing Date; and | ||
| iii. | the Company has complied with all the agreements and covenants hereunder and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date. |
Each of Xxxxxx and Xxxxx, LLP, counsel for the Company, and Xxxxxx Xxxxxx LLP, counsel for the
Underwriters, shall be entitled to rely upon the certificate as required to be delivered by the
Company’s officers under this Section 7 in connection with any opinions delivered by such counsels
to the Underwriters.
(g) Bring-down Comfort Letters. On each of the First Closing Date and each Option Closing Date,
the Underwriters shall have received from:
| x. | Xxxxx & Xxxxx, LLP, independent certified public accountants for the Company, a letter dated such date, in form and substance satisfactory to the Representative, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a)(i) of this Section 7, except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the First Closing Date or the applicable Option Closing Date, as the case may be; and | ||
| ii. | Xxxxxxxxxx & Co., Inc., a letter dated such date, in form and substance satisfactory to the Representative, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a)(ii) of this Section 7. |
(h) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the date hereof,
the Company shall have furnished to the Underwriters an agreement in the form of Exhibit B
hereto from each of the Company’s officers and directors and such agreement shall be in full force
and effect on each of the First Closing Date and each Option Closing Date.
(i) Exchange Listing. The Securities shall have been approved for listing on the NYSE,
subject only to official notice of issuance, and satisfactory evidence of such actions shall have
been provided to the Underwriters.
(j) Additional Documents. On or before the First Closing Date and each Option Closing Date, the
Underwriters and counsel for the Underwriters shall have received such information, documents and
opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance
and sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of
the representations and warranties, or the satisfaction of any of the conditions or agreements,
herein contained.
If any condition specified in this Section 7 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Underwriters by notice to the Company at any
time on or prior to the First Closing Date and, with respect to the Optional Shares, at any time
prior to the applicable Option Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 5, Section 8, Section 9 and Section 10
shall at all times be effective and shall survive such termination.
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Section 8. Reimbursement of Underwriters’ Expenses. If this Agreement is terminated by the
Underwriters pursuant to Section 10, or if the sale to the Underwriters of the Securities on the
First Closing Date (or the applicable Option Closing Date) is not consummated because of any
refusal, inability or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the Underwriters upon demand for
all out-of-pocket expenses that shall have been actually incurred by the Underwriters in connection
with the proposed purchase and the offering and sale of the Securities, including but not limited
to reasonable fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.
Section 9. Indemnification.
(a) Indemnification of the Underwriters by the Company. The Company agrees to indemnify and hold
harmless the Underwriters, their officers and employees, and each person, if any, who controls the
Underwriters within the meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which the Underwriters or such officer, employee or
controlling person may become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise (including in settlement of any
litigation), insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement, or any amendment
thereto, including any information deemed to be a part thereof pursuant to Rule 430B or Rule 430C,
as applicable, under the Securities Act, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements therein not
misleading; or (ii) any untrue statement or alleged untrue statement of a material fact contained
in the Time of Sale Prospectus, any free writing prospectus that the Company has filed, or is
required to file, pursuant to Rule 430B or Rule 433(d) of the Securities Act, the Preliminary
Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and to reimburse the
Underwriters and each such officer, employee or controlling person for any and all expenses
(including the reasonable fees and disbursements of one counsel chosen by the Underwriters) as such
expenses are reasonably incurred by the Underwriters or such officer, employee or controlling
person in connection with investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with written information
furnished to the Company by the Underwriters expressly for use in the Registration Statement, the
Time of Sale Prospectus, any such free writing prospectus, the Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only
such information furnished by the Underwriters to the Company consists of the information described
in subsection (c) below. The indemnity agreement set forth in this Section 9(a) shall be in
addition to any liabilities that the Company may otherwise have.
(b) Indemnification of the Company and its Directors and Officers. The Underwriters agree to
indemnify and hold harmless the Company, each of its directors and each of its officers who signed
the Registration Statement, and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Company, or any such director, officer, or controlling person, may become
subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Underwriters), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue or
- 20 -
alleged untrue statement of a material fact contained in the Registration Statement, Time of
Sale Prospectus, any free writing prospectus that the Company has filed, or is required to file,
pursuant to Rule 430B or Rule 433(d) of the Securities Act, the Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto), or arises out of or is based upon the omission
or alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged omission was made in
the Registration Statement, Time of Sale Prospectus, any free writing prospectus that the Company
has filed, or is required to file, pursuant to Rule 430B or Rule 433(d) of the Securities Act, the
Preliminary Prospectus, the Prospectus (or such amendment or supplement thereto), in reliance upon
and in conformity with written information furnished to the Company by the Underwriters expressly
for use therein; and to reimburse the Company, or any such director, officer or controlling person,
for any legal and other expense reasonably incurred by the Company, or any such director, officer
or controlling person, in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The Company hereby acknowledges
that the only information that the Underwriters has furnished to the Company expressly for use in
the Registration Statement, Time of Sale Prospectus, any free writing prospectus that the Company
has filed, or is required to file, pursuant to Rule 430B or Rule 433(d) of the Securities Act, the
Preliminary Prospectus or the Prospectus (or any amendment or supplement thereto) are the
statements set forth in the third and ninth paragraphs under the caption “Underwriting” in the
Prospectus. The indemnity agreement set forth in this Section 9(b) shall be in addition to any
liabilities that the Underwriters may otherwise have.
(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an
indemnified party under this Section 9 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 9, notify the indemnifying party in writing of the commencement thereof, but the
omission so to notify the indemnifying party will not relieve it from any liability which it may
have to any indemnified party for contribution or otherwise than under the indemnity agreement
contained in this Section 9 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and such indemnified
party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be
entitled to participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise between the positions
of the indemnifying party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified party or parties.
Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying
party’s election so to assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party under this Section 9
for any legal or other expenses subsequently incurred by such indemnified party in connection with
the defense thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one separate counsel (together
with local counsel), approved by the indemnifying party, representing the indemnified parties who
are parties to such action) or (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within a reasonable time
after notice of
- 21 -
commencement of the action, in each of which cases the fees and expenses of counsel shall be
at the expense of the indemnifying party.
(d) Settlements. The indemnifying party under this Section 9 shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of judgment in any
pending or threatened action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit or
proceeding.
Section 10. Contribution. If the indemnification provided for in Section 9 is for any reason held
to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount paid or payable by such indemnified party, as
incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein
(i) in such proportion as is appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Underwriters, on the other hand, from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted
by 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, on the one hand, and
the Underwriters, on the other hand, in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, in connection with the offering of the Securities pursuant to this
Agreement shall be deemed to be in the same respective proportions as the total net proceeds from
the offering of the Securities pursuant to this Agreement (before deducting expenses) received by
the Company, and the total underwriting discount received by the Underwriters, in each case as set
forth on the front cover page of the Prospectus bear to the aggregate initial public offering price
of the Securities as set forth on such cover. The relative fault of the Company, on the one hand,
and the Underwriters, on the other hand, shall be determined by reference to, among other things,
whether any such 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, on the one hand,
or the Underwriters, on the other hand, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the limitations set forth in
Section 9(c), any legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in Section 9(c) with
respect to notice of commencement of any action shall apply if a claim for contribution is to be
made under this Section 10; provided, however, that no additional notice shall be required with
respect to any action for which notice has been given under Section 9(c) for purposes of
indemnification.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 10 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to in this Section
10.
- 22 -
For purposes of this Section 10, each officer and employee of the Underwriters and each
person, if any, who controls the Underwriters within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Underwriters, and each director of
the Company, each officer of the Company who signed the Registration Statement, and each person, if
any, who controls the Company with the meaning of the Securities Act and the Exchange Act shall
have the same rights to contribution as the Company.
Section 11. Termination of this Agreement. The Underwriters, by notice given to the Company, shall
have the right to terminate this Agreement at any time prior to the First Closing Date or to
terminate the obligations of the Underwriters to purchase the Optional Shares at any time prior to
the Option Closing Date, as the case may be, if at any time (i)(a) trading or quotation in any of
the Company’s securities shall have been suspended or limited by the Commission, the NYSE or (b)
trading in securities generally on either the NYSE shall have been suspended or limited, or minimum
or maximum prices shall have been generally established on any of such stock exchanges by the
Commission or FINRA; (ii) a general banking moratorium shall have been declared by any of federal
or New York authorities; (iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development involving a prospective
substantial change in United States’ or international political, financial or economic conditions,
as in the judgment of the Underwriters is material and adverse and makes it impracticable to market
the Securities in the manner and on the terms described in the Time of Sale Prospectus or to
enforce contracts for the sale of securities; or (iv) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as in the judgment of
the Underwriters may interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured. Any termination pursuant
to this Section 11 shall be without liability on the part of (a) the Company to the Underwriters,
except that the Company shall be obligated to reimburse the expenses of the Underwriters to the
extent provided in Sections 5 and 8 hereof, (b) the Underwriters to the Company, or (c) of any
party hereto to any other party except that the provisions of Section 9 and Section 10 shall at all
times be effective and shall survive such termination.
Section 12. Defaulting Underwriter.
(a) If, on the Closing Date or the Option Closing Date, as the case may be, any Underwriter
defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder on
such date, the non-defaulting Underwriters may in their discretion arrange for the purchase of such
Securities by other persons satisfactory to the Company on the terms contained in this Agreement.
If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do
not arrange for the purchase of such Securities, then the Company shall be entitled to a further
period of 36 hours within which to procure other persons satisfactory to the non-defaulting
Underwriters to purchase such Securities on such terms. If other persons become obligated or agree
to purchase the Securities of a defaulting Underwriter, either the non-defaulting Underwriters or
the Company may postpone the Closing Date or the Option Closing Date, as the case may be, for up to
five full business days in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the Registration Statement and the
Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any
amendment or supplement to the Registration Statement and the Prospectus that effects any such
changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in Schedule A hereto that,
pursuant to this Section 12, purchases Securities that a defaulting Underwriter agreed but failed
to purchase.
- 23 -
(b) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as
provided in paragraph (a) above, the aggregate number of Securities that remain unpurchased on the
Closing Date or the Option Closing Date, as the case may be does not exceed one-eleventh of the
aggregate number of Securities to be purchased on such date, then the Company shall have the right
to require each non-defaulting Underwriter to purchase the number of Securities that such
Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based
on the number of Securities that such Underwriter agreed to purchase on such date) of the
Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been
made.
(c) If, after giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as
provided in paragraph (a) above, the aggregate number of Securities that remain unpurchased on the
Closing Date or the Option Closing Date, as the case may be, exceeds one-eleventh of the aggregate
amount of Securities to be purchased on such date, or if the Company shall not exercise the right
described in paragraph (b) above, then this Agreement or, with respect to any Option Closing Date,
the obligation of the Underwriters to purchase Securities on the Option Closing Date, as the case
may be, shall terminate without liability on the part of the non-defaulting Underwriters. Any
termination of this Agreement pursuant to this Section 9 shall be without liability on the part of
the Company, except that the Company will continue to be liable for the payment of expenses as set
forth in Section 8 hereof and except that the provisions of Section 9 hereof shall not terminate
and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may
have to the Company or any non-defaulting Underwriter for damages caused by its default.
Section 13. Representations and Indemnities to Survive Delivery. The respective indemnities,
agreements, representations, warranties and other statements of the Company, of its officers and of
the Underwriters set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Underwriters or the Company or
any of its or their partners, officers or directors or any controlling person, as the case may be,
and will survive delivery of and payment for the Securities sold hereunder and any termination of
this Agreement.
Section 14. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
If to the Underwriters:
Xxxxxxx Xxxx & Company L.L.C.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxx Xxxxxx LLP
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Attention: Xxxxxx X. Xxxxx
- 24 -
If to the Company:
Xxxxxx Petroleum Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: X. X. Xxxxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: X. X. Xxxxxxxxx
with a copy to:
Xxxxxx and Xxxxx, LLP
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Any party hereto may change the address for receipt of communications by giving written notice to
the others.
Section 15. Successors. This Agreement will inure to the benefit of and be binding upon the
parties hereto and to the benefit of the employees, officers and directors and controlling persons
referred to in Section 10 and Section 11, and in each case their respective successors, and no
other person will have any right or obligation hereunder. The term “successors” shall not include
any purchaser of the Securities as such from the Underwriters merely by reason of such purchase.
Section 16. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph
or provision of this Agreement shall not affect the validity or enforceability of any other
Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement
is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
Section 17. Governing Law Provisions. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York applicable to agreements made and to be
performed in such state. Any legal suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the
federal courts of the United States of America located in the Borough of Manhattan in the City of
New York or the courts of the State of New York in each case located in the Borough of Manhattan in
the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to
the jurisdiction of such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party’s address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such court. The parties
irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or
other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. With respect to any Related Proceeding, each
party irrevocably waives, to the fullest extent permitted by applicable law, all immunity (whether
on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both
before and after judgment) and execution to which it might otherwise be entitled in the Specified
Courts or any other court of competent jurisdiction, and will
- 25 -
not raise or claim or cause to be pleaded any such immunity at or in respect of any such Related
Proceeding, including, without limitation, any immunity pursuant to the United States Foreign
Sovereign Immunities Act of 1976, as amended.
Section 18. Entire Agreement; Execution in Counterpart. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit. The Section headings herein are for the convenience
of the parties only and shall not affect the construction or interpretation of this Agreement.
Section 19. No Fiduciary Relationship. Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during negotiations
regarding the provisions hereof, including, without limitation, the indemnification provisions of
Section 9 and the contribution provisions of Section 10, and is fully informed regarding said
provisions. Each of the parties hereto further acknowledges that the provisions of Sections 9 and
10 hereto fairly allocate the risks in light of the ability of the parties to investigate the
Company, its affairs and its business in order to assure that adequate disclosure has been made in
the Registration Statement, the Time of Sale Prospectus, each free writing prospectus, the
Preliminary Prospectus and the Prospectus (and any amendments and supplements thereto), as required
by the Securities Act and the Exchange Act.
The Company acknowledges and agrees that the Underwriters are acting solely in the capacity of
an arm’s length contractual counterparty to the Company with respect to the offering of Securities
contemplated hereby (including in connection with determining the terms of the offering) and not as
a fiduciary to, or an agent of, the Company or any other person. The Company shall consult with
its own advisors concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall
have no responsibility or liability to the Company with respect thereto. Any review by the
Underwriters of the Company, the transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the Underwriters and shall not be on
behalf of the Company.
Section 20. Authority of the Representative. Any action by the Underwriters hereunder may be
taken by the Representative on behalf of the Underwriters, and any such action taken by the
Representative shall be binding upon the Underwriters.
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If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Representative the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, Xxxxxx Petroleum Company |
||||
| By: | /s/ X. X. Xxxxxxxxx | |||
| Name: | X. X. Xxxxxxxxx | |||
| Title: | Chief Financial Officer | |||
The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representative as
of the date first above written.
| XXXXXXX XXXX & COMPANY L.L.C. As representative of the several underwriters |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxxx | |||
| Title: | Equity Member | |||
Signature Page to Underwriting Agreement
SCHEDULE A
Schedule of Underwriters
Xxxxxxx Rice & Company L.L.C.
Xxxxxx Xxxx Incorporated
Global Hunter Securities LLC
Schedule A
SCHEDULE B
Schedule of Free Writing Prospectuses included in the Time of Sale Prospectus
| - | Free Writing Prospectus filed with the SEC on February 10, 2011 |
Schedule B
SCHEDULE C
Subsidiaries of the Company
Callon Entrada Company
|
Delaware | |
Xxxxxx Offshore Production, Inc.
|
Mississippi | |
Xxxxxx Petroleum Operating Company
|
Delaware | |
Mississippi Marketing, Inc.
|
Mississippi |
Schedule C
SCHEDULE D
Capitalization of the Company
A. The Company has the authority to issue:
(i) 60,000,000 shares of Common Stock, par value $0.01 per share, of which 29,033,743 shares are
issued and outstanding, including 28,613 shares held in treasury, resulting in 29,005,130 net
shares outstanding.
(ii) 2,500,000 preferred shares, par value $0.01 per share, none of which are issued and
outstanding.
B. The Company has reserved for issuance 787,354 shares of Common Stock under the Company’s stock
incentive plans.
Schedule D
EXHIBIT A
FORM OF OPINION OF COUNSEL FOR THE COMPANY
(Xxxxxx & Xxxxx LLP)
(Xxxxxx & Xxxxx LLP)
| 1. | The Company is a corporation incorporated, validly existing and in good standing under the laws of the State of Delaware. Each of the subsidiaries of the Company formed under the laws of the State of Delaware listed on Exhibit C hereto (each, a “Delaware Subsidiary” and collectively, the “Delaware Subsidiaries”) is a corporation incorporated, validly existing and in good standing under the laws of the State of Delaware. | |
| 2. | The Company has the requisite power and authority to own, lease and operate its properties and to conduct its business as described in the Time of Sale Prospectus and Prospectus and to execute and deliver the Underwriting Agreement and to perform its obligations thereunder. Each of the Delaware Subsidiaries has the corporate or limited liability company power and authority to own, lease, hold and operate its properties under the laws of its state of incorporation or formation and to conduct the business in which it is engaged as described in the Time of Sale Prospectus and the Prospectus. | |
| 3. | The Securities to be issued and sold by the Company under the Underwriting Agreement have been duly authorized, and when delivered to and paid for by the Underwriters in accordance with the terms of the Underwriting Agreement, will be validly issued, fully paid and non-assessable. The form of stock certificate as filed with the Commission used to evidence the Securities is in a form that complies in all material respects with all applicable statutory requirements under the Delaware General Corporation Law. | |
| 4. | The authorized capital stock of the Company consists of (i) 60,000,000 shares of common stock and (ii) 2,500,000 shares of preferred stock, each par value $.01 per share. The Securities to be issued conform in all material respects to the descriptions thereof contained in the Registration Statement, the Prospectus and the Time of Sale Prospectus. Except as set forth in the Registration Statement, the Prospectus or the Time of Sale Prospectus, to our knowledge, no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Company are outstanding. The issuance of the Securities is not subject to any preemptive rights under (i) the Company Certificate or Bylaws (ii) any of the Filed Exhibits or (iii) the Delaware General Corporation Law. | |
| 5. | The Underwriting Agreement has been duly authorized, executed and delivered by the Company. | |
| 6. | The Registration Statement was declared effective under the Securities Act. Any required filing of each prospectus relating to the Securities (including the Prospectus) pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b) (without reference to Rule 424(b)(8)). To our knowledge, no stop order suspending the effectiveness of the Registration Statement has been issued under the Securities Act and no proceeding for such purpose is pending by the Commission. | |
| 7. | The Registration Statement, the Preliminary Prospectus and the Prospectus as of their respective effective or issue dates (other than (i) the financial statements and notes thereto and schedules included or incorporated by reference therein or omitted therefrom, (ii) the summary reserve report of the independent petroleum engineers included or incorporated by reference therein, or (iii) the other financial or statistical contained therein or omitted therefrom, as to which such |
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| counsel expresses no opinion) appear to be appropriately responsive in all material respects to the applicable requirements of the Securities Act. |
| 8. | Each document filed pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the financial statements and the notes thereto and related schedules, as to which we express no opinion) and incorporated by reference into the Prospectus when so filed under the Exchange Act appears to be appropriately responsive in all material respects to the applicable requirements of the Exchange Act as of the date such document was filed under the Exchange Act. | |
| 9. | The statements under the captions “Description of Capital Stock — Common Stock” in the Time of Sale Prospectus and Prospectus insofar as they purport to constitute summaries of the documents or legal matters referred to therein, fairly summarize the documents and matters therein described in all material respects, subject to the qualifications and assumptions stated therein. | |
| 10. | No filing, consent, approval, authorization, order, registration or qualification of or with any court, New York, Delaware or federal governmental authority by the Company is required for the execution, delivery and performance by the Company of the Underwriting Agreement or for the offering, issuance, sale or delivery of the Securities pursuant to the Underwriting Agreement, except for such filings, consents, approvals, authorizations, orders, registrations or qualifications as have already been obtained or made. | |
| 11. | The execution, delivery and performance by the Company of the Underwriting Agreement and compliance by the Company with the terms of, and the consummation of the transactions contemplated by, the Underwriting Agreement will not (i) with or without the giving of notice or the passage of time, conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any Subsidiary pursuant to, any of the Filed Exhibits or the exhibits listed on Exhibit D, (ii) result in any violation of the provisions of the Company Certificate or Company Bylaws or (iii) result in the violation of the Delaware General Corporation Law or any New York, or federal law or statute except, in the case of clause (i) above, for such conflict, breach or violation that would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the condition, financial or otherwise, or the earnings, business, operations or prospects of the Company and its subsidiaries, considered as one entity. | |
| 12. | The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described under the caption “Use of Proceeds” in the Prospectus, will not be an “investment company” within the meaning of the Investment Company Act of 1940, as amended. |
Negative Assurance
We have acted as counsel to the Company in connection with the preparation of the Registration
Statement and Prospectus, and based on our examination of the Registration Statement, the
Prospectus and the Time of Sale Prospectus and conferences with certain officers and employees of
and with representatives of the auditors and the reserve engineers for the Company, as well as
representatives of the Underwriters and their counsel, no facts have come to our attention that
lead us to believe that (i) the Registration Statement or any amendment thereto, as of its most
recent effective date and the date of the Applicable Time, insofar as it relates to the offering of
the Securities, contained any untrue statement of a
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material fact or omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, (ii) the Prospectus, as of its date and as of
the Closing Date, insofar as it relates to the offering of the Securities, contained or contains
any untrue statement of a material fact or omits to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they were made, not
misleading and (iii) the Time of Sale Prospectus, as of the Applicable Time, insofar as it relates
to the offering of the Securities, contained or contains any untrue statement of material fact or
omitted or omits to state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Notwithstanding anything to
the contrary contained in this paragraph, we express no belief with respect to the financial
statements and related notes and schedules thereto, and other financial, accounting and statistical
data derived from such financial data and any prospects, included in the Registration Statement,
the Prospectus or the Time of Sale Prospectus. Furthermore, because the primary purpose of our
professional engagement was not to establish or confirm factual matters or financial, accounting or
statistical information derived from such financial data, and because many determinations involved
in the preparation of the Registration Statement, the Prospectus and the Time of Sale Prospectus
and the documents incorporated by reference therein are of a wholly or partially non-legal
character or relate to legal matters outside the scope of our opinion letter, we are not passing
upon and do not assume any responsibility for the accuracy, completeness, fairness or
responsiveness of the statements contained in the Registration Statement, the Prospectus or the
Time of Sale Prospectus, including the documents incorporated by reference therein, and we make no
representation that we have independently verified the accuracy, completeness, fairness or
responsiveness of such statements, except to the extent set forth in Paragraphs 7, 8 and 9 above.
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EXHIBIT B
Form of Lock-Up Agreement
February ___, 2011
Xxxxxxx Rice & Company L.L.C.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
As Representative of the several
Underwriters
Underwriters
RE: Xxxxxx Petroleum Company (the “Company”)
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of common stock, par value
$.01 per share, of the Company (“Shares”) or securities convertible into or exchangeable or
exercisable for Shares. The Company proposes to carry out a public offering of Shares (the
“Offering”) for which you will act as the representative of the several underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the
Company. The undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into an underwriting arrangement with the Company with respect to the
Offering.
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not, and
will cause any spouse or immediate family member of the undersigned or such person living in the
undersigned’s household (a “Family Member”) not to, without your prior written consent, which
consent may be withheld in your sole discretion), directly or indirectly, sell, offer, contract or
grant any option to sell (including without limitation any short sale), pledge, transfer, establish
an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), enter into a swap or other derivatives transaction
that transfers to another, in whole or in part, any economic benefits or risk of ownership of such
Shares, or otherwise dispose of any Shares, options or warrants to acquire Shares, or securities
exchangeable or exercisable for or convertible into Shares currently or hereafter owned either of
record or beneficially (as defined in Rule 13d-3 under the Exchange Act by the undersigned (or such
spouse or family member), or publicly announce an intention to do any of the foregoing, for a
period commencing on the date hereof and continuing through the close of trading on the date 90
days after the date of the Prospectus (as defined in the Underwriting Agreement relating to the
Offering to which the Company is a party) (the “Lock-Up Period”); provided, that if (i) during the
last 17 days of the Lock-up Period, the Company issues an earnings release or material news or a
material event relating to the Company occurs or (ii) prior to the expiration of the Lock-up
Period, the Company announces that it will release earnings results during the 16-day period
beginning on the last day of the Lock-up Period, then in each case the Lock-up Period will be
extended until the expiration of the 18-day period beginning on the date of the issuance of the
earnings release or the occurrence of the material news or material event, as applicable, unless
you waive, in writing, such extension, except that such extension will not apply if, (i) at the
expiration of the Lock-up Period, the Shares are “actively traded securities” (as defined in
Securities and Exchange Commission Regulation M) and (ii) that the Company meets the applicable
requirements of paragraph (a)(1) of Rule 139 under the
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Securities Act of 1933, as amended, in the manner contemplated by NASD Rule 2711(f)(4) of the FINRA
Manual.
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of Shares or securities convertible
into or exchangeable or exercisable for Shares held by the undersigned except in compliance with
the foregoing restrictions. In furtherance of the forgoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer would constitute a
violation or breach of this letter agreement.
With respect to the Offering only, the undersigned waives any registration rights relating to
registration under the Securities Act of 1933, as amended, of any Shares owned either of record or
beneficially by the undersigned, including any rights to receive notice of the Offering.
It is understood that, if the Underwriting Agreement does not become effective, or if the
Underwriting Agreement (other than the provisions thereof which survive termination) shall
terminate or be terminated prior to payment for and delivery of the Shares, the undersigned shall
be released from all obligations under this letter agreement.
The undersigned hereby represents and warrants that the undersigned has full power and authority to
enter into this letter agreement and that, upon request, the undersigned will execute any
additional documents necessary in connection with the enforcement hereof.
This agreement is irrevocable and will be binding on the undersigned and the respective successors,
heirs, personal representatives, and assigns of the undersigned. This agreement shall be governed
by and construed in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in such state.
The undersigned acknowledges and agrees that whether or not any Offering actually occurs depends on
a number of factors, including market conditions. Any Offering will only be made pursuant to an
Underwriting Agreement, the terms of which are subject to negotiation between you and the Company.
| Printed Name of Holder |
|||
| By: | |||
| Signature | |||
| Printed Name of Person Signing | |||
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
signing as custodian, trustee, or on behalf
of an entity)
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