INTEROIL CORPORATION UNDERWRITING AGREEMENT
November 5, 0000
Xxxxxx Xxxxxxx & Xx. Xxxxxxxxxxxx
Xxxxxxxxx Xxxxxxx (XXX) Inc.
Xxxxxxxxx Xxxxxxx (XXX) Inc.
c/o | Morgan Xxxxxxx & Co. Incorporated Incorporated 0000 Xxxxxxxx Xxx Xxxx, Xxx Xxxx 00000 |
Ladies and Gentlemen:
InterOil Corporation, a corporation organized and existing under the laws of the Yukon
Territory, Canada (the “Company”), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule I hereto (the “Underwriters”), for
whom you are acting as a representative (the “Representative”), $61 million principal amount of its
2.75% convertible debt securities (the “Firm Securities”) to be issued pursuant to the provisions
of a supplement indenture, dated as of November 10, 2010, between the Company and the Bank of New
York Mellon Trust Co, N.A., as trustee (the “Trustee”), to the indenture dated August 6, 2008,
between the Company and the Trustee (as so supplemented, the “Indenture”). The Company also
proposes to issue and sell to the Underwriters not more than an additional $9 million principal
amount of its 2.75% convertible debt securities (the “Additional Securities”) if and to the extent
that you, as Representative of the Underwriters, shall have determined to exercise, on behalf of
the Underwriters, the right to purchase such 2.75% convertible debt securities granted to the
Underwriters in Section 2 hereof. The Firm Securities and the Additional Securities are
hereinafter collectively referred to as the “Securities”. The Securities will be convertible into
common shares in the capital of the Company, without par value (the “Common Shares”). The Common
Shares into which the Securities may be converted as referred to herein as the “Underlying Shares.”
The Company has prepared and filed a preliminary short form base shelf prospectus dated
September 22, 2010 (the “Canadian Preliminary Base Shelf Prospectus”) and a final short form base
shelf prospectus dated November 2, 2010 (the “Canadian Final Base Shelf Prospectus”) providing for
the offer and sale, from time to time, of up to US$300,000,000 of the Company’s common shares,
preferred shares, warrants and debt securities and a preliminary prospectus supplement relating to
the Offering (the “Canadian Preliminary Prospectus”) with the Alberta Securities Commission, as
principal regulator pursuant to Multilateral Instrument 11-102 – Passport System (the “Reviewing
Authority”) and the Canadian securities regulatory authorities in each of the Canadian
Jurisdictions (as defined below) (collectively, the “Canadian Qualifying Authorities”); and the
Reviewing Authority has issued a prospectus receipt under National Policy 11-202 – Process for
Prospectus Reviews (a “Decision Document”) on behalf of the Canadian Qualifying Authorities for
each of the Canadian Preliminary Base Shelf Prospectus and the Canadian Final Base Shelf
Prospectus. The term “Canadian Jurisdictions” means Alberta, Ontario and British Columbia. The
term “Canadian Base Prospectus” means the
Canadian Final Base Shelf Prospectus, including the
documents incorporated therein by reference, for which the Reviewing Authority issued a Decision
Document with respect thereto in accordance with the rules and procedures established under all
applicable securities laws of each of the Canadian Jurisdictions and the respective regulations,
rules and instruments under such laws, together with applicable published policy statements,
notices and orders of the applicable securities regulatory authority in each of the Canadian
Jurisdictions (the “Canadian Securities Laws”), including National Instrument 44-101 — Short Form
Prospectus Distributions and National Instrument 44-102 — Shelf Distributions (together, the “Shelf
Procedures”). The term “Canadian Prospectus” means the Canadian Preliminary Prospectus until such
time as the prospectus supplement (the “Canadian Prospectus Supplement”) relating to the offering
of the Securities and the Underlying Shares, which includes certain pricing information, is filed
with the Canadian Qualifying Authorities in accordance with the Shelf Procedures, together with the
Canadian Base Prospectus, including all documents incorporated therein by reference.
The Company has prepared and filed with the Securities and Exchange Commission (the
“Commission”) a registration statement under the Securities Act of 1933, as amended (the
“Securities Act”) and the rules and regulations of the Commission (the “Rules and Regulations”) on
Form F-10 (No. 333-169536) on September 23, 2010, and Amendment No. 1 thereto on November 3, 2010
providing for the offer and sale, from time to time, of up to US$300,000,000 of the Company’s
common shares, preferred shares, warrants and debt securities. Such registration statement, as
amended, which includes the Canadian Base Prospectus (with such deletions therefrom and additions
thereto as are permitted or required by Form F-10 and the applicable Rules and Regulations),
including exhibits to such registration statement and all documents incorporated by reference
therein, became effective pursuant to Rule 467(b) under the Securities Act on November 3, 2010.
Such registration statement, as amended, including all exhibits and all documents incorporated by
reference therein, as of the time it became effective, is referred to herein as the “Registration
Statement.” In connection with the filing of the Registration Statement, the Company has filed
with the Commission on September 23, 2010 an appointment of agent for service of process upon the
Company on Form F-X under the Securities Act. The prospectus included in the Registration
Statement at the time it became effective, including documents incorporated therein by reference,
is referred to herein as the “U.S. Base Prospectus.” The U.S. Base Prospectus, as supplemented by
the prospectus supplement specifically relating to the Securities and the Underlying Shares in the
form first used to confirm sales of the Securities and the Underlying Shares (or in the form first
made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule
173 under the Securities Act), including the documents, if any, incorporated by reference therein,
is hereinafter referred to as the “U.S. Prospectus,” and the term “U.S. preliminary prospectus”
means any preliminary form of the Prospectus.
For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule
405 under the Securities Act, “Time of Sale Prospectus” means the U.S. preliminary prospectus
together with the free writing prospectuses, if any, each identified in Schedule II hereto, and
“broadly available road show” means a “bona fide electronic road show” as defined in Rule 433(h)(5)
under the Securities Act that has been made available without restriction to any person. As used
herein, the terms “Registration Statement,” “U.S. preliminary prospectus,” “Time of Sale
Prospectus” and “U.S. Prospectus” shall include the documents, if any,
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incorporated by reference
therein; and any reference herein to any “amendment” or “supplement” with respect to any of the
U.S. Base Prospectus and the U.S. Prospectus shall be deemed to refer to and include (i) the filing
of any document with the Canadian Qualifying Authorities or the Commission incorporated or deemed
to be incorporated therein by reference after the date of filing of such U.S. Base Prospectus or
U.S. Prospectus and (ii) any such document so filed. The terms “supplement,” “amendment” and
“amend” as used herein with respect to the Registration Statement, the U.S. Prospectus, the Time of
Sale Prospectus or any free writing prospectus shall include all documents subsequently filed by
the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), that are deemed to be incorporated by reference therein. As used herein, “Base
Prospectuses” shall mean, collectively, the Canadian Base Prospectus and the U.S. Base Prospectus;
and “Prospectuses” shall mean, collectively, the Canadian Prospectus and the U.S. Prospectus.
All references in this Agreement to the Registration Statement, the U.S. Base Prospectus, the
U.S. preliminary prospectus, the U.S. Prospectus or any free writing prospectus, or any amendments
or supplements to any of the foregoing, shall be deemed to include any copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“XXXXX”).
1. Representations and Warranties. The Company represents and warrants to and agrees with
each of the Underwriters that:
(a) (i) The Registration Statement has become effective; no stop order suspending
the effectiveness of the Registration Statement is in effect, and no proceedings for such
purpose are pending before or threatened by the Commission.
(ii) No order suspending the distribution of the Securities or any other securities of the
Company has been issued by any of the Canadian Qualifying Authorities and no proceedings for that
purpose have been instituted or are pending, threatened or contemplated by the Canadian Qualifying
Authorities, and any request on the part of the Canadian Qualifying Authorities for additional
information has been complied with.
(b) (i) Each document, if any, filed or to be filed pursuant to the Exchange Act
and incorporated by reference in the Time of Sale Prospectus or the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (ii) each part of the Registration
Statement, when such part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) the Registration Statement as of the date hereof
does not contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading,
(iv) the Registration Statement and the U.S. Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder, (v) the Time of Sale
Prospectus does not, and at the time of each sale of the Securities in
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connection with the
offering when the U.S. Prospectus is not yet available to prospective purchasers and at the
Closing Date (as defined in Section 4), 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, (vi) each broadly
available road show, if any, when considered together with the Time of Sale Prospectus, does
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 and (vii) the U.S. Prospectus does not contain and, as amended or
supplemented, 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, except that the representations
and warranties set forth in this paragraph do not apply to statements or omissions in the
Registration Statement, the Time of Sale Prospectus or the U.S. Prospectus based upon
information relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein or that part of the Registration Statement
that constitutes the Statement of Eligibility (Form T-1) under the Trust Indenture Act of
1939, as amended (the “Trust Indenture Act”), of the Trustee.
(c) (i) The Company is qualified to file a short form prospectus pursuant to the
Shelf Procedures, as modified by the Decision of the Alberta Securities Decision dated
September 20, 2010 (InterOil Corporation, Re, 2010 ABASC 440) (the “Decision Document”).
Each document filed or to be filed with the Canadian Qualifying Authorities and
incorporated, or deemed to be incorporated, by reference in the Canadian Prospectus
complied, or will comply, when so filed in all material respects with the requirements of
the Canadian Securities Laws, and none of such documents contained, or will contain, at the
time of its filing any untrue statement of a material fact or omitted or will omit at the
time of its filing to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they were or are
made, not false or misleading. There are no reports or information that in accordance with
the requirements of the Canadian Securities Laws must be made publicly available in
connection with the offering of the Securities that have not been made publicly available as
required; there are no documents required to be filed as of the date hereof with the
Canadian Qualifying Authorities or with any other Canadian securities regulatory authority
in connection with the offering of the Securities that have not been filed as required.
(ii) The Canadian Base Prospectus did, and the Canadian Prospectus (and any further amendments
or supplements thereto) did or will, comply in all material respects with the applicable
requirements of the Canadian Securities Laws.
(iii) The Canadian Prospectus (and any further amendments or supplements thereto) did not and
will not, as of the time of filing thereof and through the Closing Date and the Option Closing
Date, as the case may be, include any untrue statement of a material fact or omit to state a
material fact that is required to be stated or necessary in order to make the statements
4
therein,
in the light of the circumstances under which they were made, not false or misleading, and the
Canadian Prospectus (and any further amendments or supplements thereto) did or will, as of the time
of filing thereof and through the Closing Date and the Option Closing Date, as the case may be,
constitute, full, true and plain disclosure of all material facts relating to the Securities and to
the Company, except that the representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Canadian Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you expressly for use
therein.
(d) The Company meets the general eligibility requirements for the use of Form F-10
under the Securities Act and is not an “ineligible issuer” in connection with the offering
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 and the applicable rules and regulations of the Commission thereunder. 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 and the applicable rules and regulations of the Commission thereunder.
Except for the free writing prospectuses, if any, identified in Schedule II hereto, and
electronic road shows, if any, each furnished to you before first use, the Company has not
prepared, used or referred to, and will not, without your prior consent, prepare, use or
refer to, any free writing prospectus.
(e) The Company has been duly incorporated, is a valid and subsisting corporation
in good standing with respect to the filing of all annual returns under the Business
Corporations Act (Yukon), has the corporate power and authority to own its property and to
conduct its business as described in the Time of Sale Prospectus and the Prospectuses and is
duly qualified to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition, financial or otherwise,
or in the prospects, earnings, business or operations of the Company and its subsidiaries,
taken as a whole (a “Material Adverse Effect”).
(f) Each subsidiary of the Company has been duly organized, is validly existing as
a corporation, partnership or limited liability company in good standing under the laws of
the jurisdiction of its organization, has the corporate power and authority to own its
property and to conduct its business as described in the Time of Sale Prospectus and the
Prospectuses and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a Material Adverse Effect; except as has been disclosed in
the Time of Sale Prospectus and the Prospectuses, all of the issued shares of capital stock
or other ownership interests of each subsidiary of the Company have been
5
duly and validly
authorized and issued, are fully paid and non-assessable and are owned directly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(g) This Agreement has been duly authorized, executed and delivered by the Company.
(h) The Indenture has been duly qualified under the Trust Indenture Act and has
been duly authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and equitable principles
of general applicability.
(i) The authorized capital of the Company conforms as to legal matters to the
description thereof contained in each of the Time of Sale Prospectus and the Prospectuses.
(j) The Common Shares outstanding prior to the issuance of the Securities have been
duly authorized and are validly issued, fully paid and non-assessable.
(k) The Securities have been duly authorized and, when executed and authenticated
in accordance with the provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be valid and binding
obligations of the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and
equitable principles of general applicability, and will be entitled to the benefits of the
Indenture.
(l) The Underlying Shares issuable upon conversion of the Securities have been duly
authorized and reserved and, when issued upon conversion of the Securities in accordance
with the terms of the Indenture and the Securities, will be validly issued, fully paid and
non-assessable, and the issuance of the Underlying Shares will not be subject to any
preemptive or similar rights.
(m) The execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement, the Indenture and the Securities will not
contravene any provision of applicable law or the articles of continuance or by-laws of the
Company or any agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, the Indenture and the Securities except
such as may be required by the Canadian Securities Laws or the securities or Blue Sky laws
of the various states in connection with the offer and sale of the Securities.
6
(n) The Company has made available to GLJ Petroleum Consultants (“GLJ”), prior to
the issuance of GLJ’s Report on Resources Data included in the Company’s Form 40-F for the
year ended December 31, 2008 filed with the Commission (the “2008 Report”) and GLJ’s Report
on Resources Data included in the Company’s Form 40-F for the year ended December 31, 2009
filed with the Commission (the “2009 Report” and, together with the 2008 Report, the
“Resources Reports”), for the purpose of preparing the Resources Reports, all information
requested by GLJ, which information did not at the time such information was provided
contain any material misrepresentation. The Company does not have any knowledge of a
material adverse change in any production, cost, price, reserves or other relevant
information provided to GLJ by the Company for the purpose of preparing the Resources
Reports since the date that such information was so provided. The Company believes that
each Resources Report reasonably presents the quantity of the gas and gas condensate
resources attributable to the natural gas and natural gas liquids evaluated in such report
as at the respective effective dates thereof based upon information available at the time
such resources information was prepared and the price assumptions contained therein.
(o) All interests in material drilling or mining claims, concessions, exploration,
exploitation or extraction rights or similar rights (“Drilling Claims”) that are held by the
Company or any of its subsidiaries are valid and enforceable, are free and clear of any
material liens, encumbrances or charges, and no material royalty is currently payable in
respect of any of them, except as disclosed in the Time of Sale Prospectus and the
Prospectuses. Except as disclosed in the Time of Sale Prospectus and the Prospectuses, no
other property rights are necessary for the conduct of the Company’s business as described
therein, and there are no restrictions on the ability of the Company and its subsidiaries to
use, transfer or otherwise exploit any such property rights except as required by applicable
law except in each case as is not reasonably likely to have a Material Adverse Effect.
(p) Except as disclosed in the Time of Sale Prospectus and the Prospectuses, the
information relating to estimates by GLJ of resources associated with its oil and gas
projects contained in the Time of Sale Prospectus and the Prospectuses has been prepared in
all material respects in accordance with National Instrument 51-101- Standards of Disclosure
for Oil and Gas Activities (“NI 51-101”).
(q) PricewaterhouseCoopers Australia, the certified public accountants of the
Company (“PWC”) who have certified the financial statements (including the related notes and
supporting schedules thereto) filed as part of the Registration Statement, the Time of Sale
Prospectus and the Prospectuses (or any amendments or supplements thereto), are to the
Company’s knowledge independent with respect to the Company as required by the Canadian
Securities Laws and are independent public accountants as required by the Securities Act,
the Exchange Act and the Rules and Regulations.
(r) The financial statements, together with the related notes and supporting
schedules thereto, included in the Registration Statement, the Time of Sale Prospectus and
the Prospectuses (and any amendments or supplements thereto), present fairly the
7
financial
condition, results of operations, cash flows and changes in financial position of the
Company on the basis stated in the Registration Statement at the respective dates or for the
respective periods to which they apply; such statements and related notes and supporting
schedules thereto have been prepared in accordance with Canadian generally accepted
accounting principles consistently applied throughout the periods involved and have been
reconciled to United States generally accepted accounting principles in accordance with Item
18 of Form 20-F under the Exchange Act; and the other financial and statistical information
and data set forth in the Registration Statement, the Time of Sale Prospectus and the
Prospectuses (and any amendments or supplements thereto) is accurately presented and
prepared on a basis consistent with such financial statements and the books and records of
the Company. No other financial statements, notes or schedules are required to be included
in the Registration Statement, the Time of Sale Prospectus and the Prospectuses by the
Canadian Securities Laws, the Securities Act, the Exchange Act or the Rules and Regulations.
(s) The Company and its subsidiaries maintain disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) under the Exchange Act and under the Canadian
Securities Laws) that comply with the requirements of the Exchange Act and the Canadian
Securities Laws; such disclosure controls and procedures have been designed to ensure that
material information relating to the Company and its subsidiaries is made known to the
Company’s principal executive officer and principal financial officer by others within those
entities; and such disclosure controls and procedures are effective.
(t) There is and has been no failure on the part of the Company or any of its
directors or officers, in their capacities as such, to comply with any provision of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection
therewith, including, without limitation, Section 402 related to loans and Sections 302 and
906 related to certifications.
(u) The Company and its subsidiaries maintain insurance on such amounts and
covering such risks as the Company reasonably considers adequate for the conduct of its
business and property and is customary in the businesses in which they are engaged; there
are no material claims by the Company or any of its subsidiaries under any such policy or
instrument as to which any insurance company is denying liability or defending under a
reservation of rights clause; and neither the Company nor any of its subsidiaries has reason
to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that will not have a Material Adverse Effect.
(v) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or otherwise,
or in the prospects, earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Time of Sale Prospectus.
8
(w) There are no legal or governmental proceedings pending or threatened to which
the Company or any of its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject (i) other than proceedings accurately
described in all material respects in the Time of Sale Prospectus and proceedings that would
not have a Material Adverse Effect, or on the power or ability of the Company to perform its
obligations under this Agreement, the Indenture or the Securities or to consummate the
transactions contemplated by the Time of Sale Prospectus or (ii) that are required to be
described in the Registration Statement or the Prospectuses and are not so described; and
there are no statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectuses or to be filed as exhibits to
the Registration Statement that are not described or filed as required.
(x) The Company is a reporting issuer or an equivalent thereof in each of the
Canadian Jurisdictions and is not noted in default on the list of reporting issuers
maintained by the Canadian Qualifying Authorities.
(y) All offers and sales of the Company’s capital stock and other debt or other
securities prior to the date hereof were made in compliance with or were the subject of an
available exemption from the Canadian Securities Laws, the Securities Act and all other
applicable foreign, federal and state laws or regulations, or any actions under the
Securities Act, the Canadian Securities Laws or any foreign, federal or state laws or
regulations in respect of any such offers or sales are effectively barred by effective
waivers or statutes of limitation.
(z) Except as set forth in the Time of Sale Prospectus and the Prospectuses, there
are no transactions with “affiliates” (as defined in Rule 405 under the Securities Act) or
any officer, director or security holder of the Company (whether or not an affiliate) that
are required by the Canadian Securities Laws or the Securities Act to be disclosed in the
Registration Statement. Additionally, no relationship, direct or indirect, exists between
the Company or any of its subsidiaries on the one hand, and the directors, officers,
shareholders, customers or suppliers of the Company or any of its subsidiaries on the other
hand that is required by the Canadian Securities Laws or the Securities Act to be disclosed
in the Registration Statement, the Time of Sale Prospectus and the Prospectuses that is not
so disclosed.
(aa) There has not been any reportable event (within the meaning of National
Instrument 51-102 -Continuous Disclosure Obligations) between the Company and PWC.
(bb) Other than excepted activity pursuant to Regulation M under the Exchange Act,
the Company has not taken and will not take, directly or indirectly, any action that
constituted, or any action designed to, or that might reasonably be expected to cause or
result in or constitute, under the Securities Act, the Canadian Securities Laws or
otherwise, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or for any other purpose.
(cc) No dispute between the Company and any local, native or indigenous group
exists or is threatened or imminent with respect to any of the Company’s
9
properties, assets
or exploration activities that could reasonably be expected to have a Material Adverse
Effect.
(dd) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company’s knowledge, is imminent, and the Company
is not aware of any existing or imminent labor disturbances by the employees of the
principal suppliers, manufacturers, customers or contractors of the Company or any of its
subsidiaries, which, in either case (individually or in the aggregate), could reasonably be
expected to have a Material Adverse Effect.
(ee) The Company is, and upon completion of the transactions described herein, will
be, a “foreign private issuer” within the meaning of Rule 3b-4 under the Exchange Act.
(ff) The Common Shares have been registered pursuant to Section 12(b) of the
Exchange Act. The Common Shares of the Company are listed on the NYSE, and the Company has
taken no action designed to, or likely to have the effect of, terminating the registration
of the Common Shares of the Company under the Exchange Act or de-listing the common shares
of the Company from the NYSE, nor has the Company received any notification that the
Commission, the Canadian Qualifying Authorities or the NYSE is contemplating terminating
such registration or listing.
(gg) Each U.S. preliminary prospectus filed as part of the registration statement
as originally filed or as part of any amendment or supplement thereto, complied when so
filed in all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(hh) The Company and each of its subsidiaries have filed all federal, state, local
and foreign tax returns required to be filed through the date of this Agreement or have
requested extensions thereof (except where the failure to file would not, individually or in
the aggregate, have a Material Adverse Effect) and have paid all taxes required to be paid
thereon (except for cases in which the failure to file or pay would not have a Material
Adverse Effect, or, except as currently being contested in good faith and for which reserves
required by Canadian GAAP have been created in the financial statements of the Company), and
no tax deficiency has been determined adversely to the Company or any of its subsidiaries
which has had (nor does the Company nor any of its subsidiaries have any notice or knowledge
of any tax deficiency which could reasonably be expected to be determined adversely to the
Company or its subsidiaries and which could reasonably be expected to have) a Material
Adverse Effect.
(ii) 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 in the Prospectuses will
not be, required to register as an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.
(jj) The Company and its subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to the protection
10
of human health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses
or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses, and all such permits, licenses and other approvals are in full force
and effect, (iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or in the aggregate,
have a Material Adverse Effect, and (iv) have not treated, stored, disposed of, arranged for
or permitted the disposal of, transported, handled, released, or exposed any person to any
hazardous or toxic substances or wastes in a manner that would reasonably likely give rise
to liabilities under Environmental Laws.
(kk) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any reasonably forseeable
liabilities to third parties) which would, singly or in the aggregate, have a Material
Adverse Effect.
(ll) Neither the Company nor any of its subsidiaries, nor any director, officer, or
employee, nor, to the Company’s knowledge, any affiliate, agent or representative of the
Company or of any of its subsidiaries or affiliates, has taken or will take any action in
furtherance of an offer, payment, promise to pay, or authorization or approval of the
payment or giving of money, property, gifts or anything else of value, directly or
indirectly, to any “government official” (including any officer or employee of a government
or government-owned or controlled entity or of a public international organization, or any
person acting in an official capacity for or on behalf of any of the foregoing, or any
political party or party official or candidate for political office) to influence official
action or secure an improper advantage; and the Company and its subsidiaries and affiliates
have conducted their businesses in compliance with applicable anti-corruption laws and have
instituted and maintain and will continue to maintain policies and procedures designed to
promote and achieve compliance with such laws and with the representation and warranty
contained herein.
(mm) The operations of the Company and its subsidiaries are and have been conducted
at all times in material compliance with all applicable financial recordkeeping and
reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money
laundering statutes of jurisdictions where the Company and its subsidiaries conduct
business, the rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any governmental agency (collectively,
the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries with respect to
11
the Anti-Money Laundering Laws is pending or, to the best
knowledge of the Company, threatened.
(nn) (i) The Company represents that neither the Company nor any of its
subsidiaries, nor any director, officer or employee thereof, nor, to the Company’s
knowledge, any agent, affiliate or representative of the Company or any of its subsidiaries,
is an individual or entity (“Person”) that is, or is owned or controlled by a Person that
is:
(A) the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United
Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury
(“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor
(B) located, organized or resident in a country or territory that is the
subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran,
North Korea, Sudan and Syria).
(ii) The Company represents and covenants that it 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:
(A) to fund or facilitate any activities or business of or with any Person or
in any country or territory that, at the time of such funding or facilitation, is
the subject of Sanctions; or
(B) in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as underwriter,
advisor, investor or otherwise).
(iii) The Company represents and covenants that for the past 5 years, it and its subsidiaries
have not knowingly engaged in, are not now knowingly engaged in, and will not engage in, any
dealings or transactions with any Person, or in any country or territory, that at the time of the
dealing or transaction is or was the subject of Sanctions.
(oo) The Company and each of its subsidiaries have filed all federal, state, local
and foreign tax returns required to be filed through the date of this Agreement or have
requested extensions thereof (except where the failure to file would not, individually or in
the aggregate, have a Material Adverse Effect) and have paid all taxes required to be paid
thereon (except for cases in which the failure to file or pay would not have a Material
Adverse Effect, or, except as currently being contested in good faith and for which reserves
required by Canadian GAAP have been created in the financial statements of the Company), and
no tax deficiency has been determined adversely to the Company or any of its subsidiaries
which has had (nor does the Company nor any of its subsidiaries have any notice or knowledge
of any tax deficiency which could reasonably be expected to be
12
determined adversely to the
Company or its subsidiaries and which could reasonably be expected to have) a Material
Adverse Effect.
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to the several
Underwriters, and each Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective principal amounts of Firm Securities set forth in
Schedule I hereto opposite its name at the purchase price set forth in Schedule I hereto (the
“Purchase Price”).
On the basis of the representations and warranties contained in this Agreement, and subject to
its terms and conditions, the Company grants an option to the Underwriters to purchase the
Additional Securities, and the Underwriters shall have the right to purchase, severally and not
jointly, up to the respective principal amounts of Additional Securities at the Purchase Price.
You may exercise this option on behalf of the Underwriters in whole or from time to time in part by
giving written notice not later than 30 days after the date of this Agreement. Any exercise notice
shall specify the number of Additional Securities to be purchased by the Underwriters and the date
on which such securities are to be purchased. Each purchase date must be at least two business
days after the written notice is given and may not be earlier than the Closing Date for the Firm
Securities nor later than ten business days after the date of such notice. Additional Securities
may be purchased as provided in Section 4 hereof solely for the purpose of covering over-allotments
made in connection with the offering of the Firm Securities. On each day, if any, that Additional
Securities are to be purchased (an “Option Closing Date”), each Underwriter agrees, severally and
not jointly, to purchase the number of Additional Securities that bears the same proportion to the
total number of Additional Securities to be purchased on such Option Closing Date as the number of
Firm Securities set forth in Schedule I hereto opposite the name of such Underwriter bears to the
total number of Firm Securities.
3. Terms of Public Offering. The Company is advised by you that the Underwriters propose
to make a public offering of their respective portions of the Securities as soon after this
Agreement has become effective as in your judgment is advisable. The Company is further advised by
you that the Securities are to be offered to the public upon the terms set forth in the U.S.
Prospectus.
4. Payment and Delivery. Payment for the Firm Securities, at 95% of their offering price,
shall be made to the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Securities for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on November 10, 2010 or at such other time on the same or such
other date, not later than November 12, 2010, as shall be designated in writing by you. The time
and date of such payment are hereinafter referred to as the “Closing Date.”
Payment for any Additional Securities, at 95% of their offering price, shall be made to the
Company in Federal or other funds immediately available in New York City against delivery of such
Additional Securities for the respective accounts of the several Underwriters at 10:00 a.m., New
York City time, on the date specified in the corresponding notice described in
13
Section 2 or at such
other time on the same or on such other date, in any event not later than December 12, 2010, as
shall be designated in writing by you.
The Firm Securities and Additional Securities shall be registered in such names and in such
denominations as you shall request in writing not later than one full business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be. The Firm Securities and
Additional Securities shall be delivered to you on the Closing Date or an Option Closing Date, as
the case may be, for the respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Securities to the Underwriters duly paid, against
payment of the Purchase Price therefor.
5. Conditions to the Underwriters’ Obligations. The obligations of the Company to sell
the Securities to the Underwriters and the several obligations of the Underwriters to purchase and
pay for the Securities on the Closing Date are subject to the condition that the Registration
Statement shall have become effective not later than 12:00 p.m. (New York City time) on the date
hereof.
The several obligations of the Underwriters are subject to the following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date:
(i) 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 of the securities of the Company or any of its subsidiaries by
any “nationally recognized statistical rating organization,” as such term is
defined for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Time of Sale Prospectus as of the date of this
Agreement that, in your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Securities on the terms and in the
manner contemplated in the Time of Sale Prospectus.
(b) The Underwriters shall have received on the Closing Date a certificate, dated
the Closing Date and signed by an executive officer of the Company, to the effect set forth
in Section 5(a) above and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of the conditions on its
part to be performed or satisfied hereunder on or before the Closing Date.
14
The officer signing and delivering such certificate may rely upon the best of his or her
knowledge as to proceedings threatened.
(c) The Underwriters shall have received, prior to the filing of the U.S.
preliminary prospectus with the Commission, the certificate of the Chief Financial Officer
of the Company, to the effect that he has reviewed the section of the U.S. preliminary
prospectus entitled “Recent Developments,” and the Company’s financial statements and other
data for the periods discussed in that section, and that the financial and other data
contained in that section is arithmetically accurate, complete and consistent with the
books and records of the Company in all material respects.
(d) The Underwriters shall have received the opinion of Xxxxxxx Xxxxx LLP and
Lackowicz, Xxxxx and Xxxxxxx, Xxxxxxx, Ontario and Yukon counsel for the Company,
respectively, (who may rely on the opinions of local counsel for any Canadian Jurisdictions
other than the Provinces of Alberta and Ontario and the Yukon Territory), dated the Closing
Date, substantially in the form of Exhibit B hereto.
(e) The Underwriters shall have received on the Closing Date the opinion of Xxxxxx
and Xxxxx LLP, substantially in the form of Exhibit C hereto.
(f) The Underwriters shall have received on the Closing Date the opinions of local
counsel in each jurisdiction in which a Significant Subsidiary, as defined in Rule 1-02 of
Regulation S-X, of the Company is organized, in each case identifying the relevant local
Significant Subsidiary on an attached schedule, substantially in the form of Exhibit D
hereto.
(g) The Underwriters shall have received on the Closing Date the opinion of
Xxxxxxxx & Xxxxxxxx LLP, counsel to the Underwriters, dated the Closing Date, substantially
in the form of Exhibit E hereto.
(h) The Underwriters shall have received on the Closing Date the opinion of Xxxxxx
& Xxxxxxx LLP, special product counsel to the Underwriters, dated the Closing Date,
substantially in the form of Exhibit F hereto.
The opinions described in Section 5(b), (c) and (e) above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(i) The Underwriters shall have received on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from PWC containing statements and information
of the type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained in the
Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the
letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date
hereof.
15
(j) The Underwriters shall have received on each of the date hereof and the Closing
Date, a letter dated the date hereof and the Closing Date, as the case may be, in form and
substance satisfactory to the Underwriters, from GLJ to the effect that:
(i) | The Resources Reports were true and correct in all material respects on the respective dates of such Resources Reports; | ||
(ii) | GLJ were, as of the dates of the Resources Reports, and are, as of the date hereof, independent petroleum engineers with respect to the Company; | ||
(iii) | estimates of such resources therefrom as disclosed in the Time of Sale Prospectus and the Prospectuses and reflected in the Resources Reports comply in all material respects to the definitions and guidelines in the COGE Handbook and NI 51-101, each as in effect as of the date reported. |
(k) The “lock-up” agreements, each substantially in the form of Exhibit A hereto,
between you and executive officers and directors of the Company relating to sales and
certain other dispositions of Common Shares or certain other securities, delivered to you on
or before the date hereof, shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Securities hereunder are
subject to the delivery to you on the applicable Option Closing Date of such documents as you may
reasonably request with respect to the good standing of the Company, the due authorization and
issuance of the Additional Securities to be sold on such Option Closing Date and other matters
related to the issuance of such Additional Securities.
6. Covenants of the Company. The Company covenants with each Underwriter as follows:
(a) The Company will prepare and file with the Canadian Qualifying Authorities,
promptly after the execution of this Agreement, and in any event no later than 5:00 p.m.
(New York time) on the second business day following the date of this Agreement, and in
conformity in all material respects with applicable Canadian Securities Laws, the Canadian
Prospectus Supplement.
(b) To furnish to you, without charge, conformed copies of the Registration
Statement (including exhibits thereto and documents incorporated by reference) and for
delivery to each other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto but including documents incorporated by reference) and to furnish to you in
New York City, 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 6(f)
or 6(g) below, as many copies of the Time of Sale Prospectus, the Prospectuses, any
documents incorporated by reference therein and any supplements and amendments thereto or to
the Registration Statement as you may reasonably request.
16
(c) The Company will comply with the Shelf Procedures, the Decision Document and
General Instruction II.L of Form F-10 under the Securities Act. Prior to the later of the
last date on which an Option Closing Date, if any, may occur, and the termination of the
offering of the Securities, the Company will not file any amendment to the Registration
Statement or supplement or amendment to the Prospectuses unless the Company has furnished a
copy to the Representative and its legal counsel for their review and comment prior to
filing and will not file any such proposed amendment or supplement to which the
Representative reasonably objects. The Company will cause the Prospectuses, properly
completed, and any supplement thereto to be filed, each in a form approved by the
Representative with the Canadian Qualifying Authorities in accordance with the Shelf
Procedures, the Decision Document (in the case of the Canadian Prospectus) and with the
Commission pursuant to General Instruction II.L of Form F-10 (in the case of the U.S.
Prospectus) within the time period prescribed and will provide evidence satisfactory to the
Representative of such timely filings. The Company will promptly advise the Representative
(i) when the U.S. Prospectus and any supplement thereto shall have been filed with the
Commission pursuant to General Instruction II.L of Form F-10, (ii) when the Canadian
Prospectus shall have been filed with the Canadian Qualifying Authorities pursuant to the
Shelf Procedures, (iii) when, prior to the termination of the offering of the Securities,
any amendment or supplement to the Registration Statement, the U.S. Prospectus or the
Canadian Prospectus shall have been filed or become effective or a Decision Document in
respect of any such amendment or supplement has been issued, as the case may be, (iv) of any
request by the Canadian Qualifying Authorities or the Commission for any amendment of or
supplement to the Canadian Prospectus, the Registration Statement or the U.S. Prospectus, as
applicable, or for any additional information, (v) of the Company’s intention to file, or
prepare any supplement or amendment to, the Registration Statement, the Prospectuses or any
Issuer Free Writing Prospectus, (vi) of the time when any amendment of or supplement to the
Canadian Prospectus has been filed with or receipted by the Reviewing Authority, or of the
filing with or mailing or the delivery to the Commission for filing of any amendment of or
supplement to the Registration Statement or the U.S. Prospectus, (vii) of the issuance by
the Canadian Qualifying Authorities or the Commission of any cease trade order or any stop
order suspending the effectiveness of the Canadian Prospectus or the Registration Statement,
as applicable, or any post-effective amendment thereto, or suspending the use of any
Prospectuses or any Issuer Free Writing Prospectus or, in each case, of the initiation or
threatening of any proceedings therefor, (viii) of the receipt of any comments or
communications from the Canadian Qualifying Authorities, the Commission or any other
regulatory authority relating to the Prospectuses or the Registration Statement, and (ix) of
the receipt by the Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for that purpose. If the Canadian Qualifying Authorities or
the Commission shall propose or enter a cease trade order or a stop order at any time, the
Company will use its reasonable best efforts to prevent the issuance of any such cease trade
order or stop order and, if issued, to obtain the lifting of such order as soon as possible.
17
(d) To furnish to you 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 not to use or refer
to any proposed free writing prospectus to which you reasonably object.
(e) Not to take any action that would result in an Underwriter 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 Underwriter that the Underwriter
otherwise would not have been required to file thereunder.
(f) If the Time of Sale Prospectus is being used to solicit offers to buy the
Securities at a time when the U.S. 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 in order to make the statements therein, in the
light of the circumstances, 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 then on file, 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, forthwith to 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, in the light of the circumstances when
the Time of Sale Prospectus is delivered to a prospective purchaser, 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.
(g) If, during such period after the first date of the public offering of the
Securities as in the opinion of counsel for the Underwriters the U.S. Prospectus (or in lieu
thereof the notice referred to in Rule 173(a) of the Securities Act) is required by law to
be delivered in connection with sales by an Underwriter or dealer, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
U.S. Prospectus in order to make the statements therein, in the light of the circumstances
when the U.S. Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the
Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the U.S. Prospectus to
comply with applicable law, forthwith to prepare, file with the Commission and furnish, at
its own expense, to the Underwriters and to the dealers (whose names and addresses you will
furnish to the Company) to which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments or supplements to the
U.S. Prospectus so that the statements in the U.S. Prospectus as so amended or supplemented
will not, in the light of the circumstances when the U.S. Prospectus (or in lieu thereof the
notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, be
misleading or so that the U.S. Prospectus, as amended or supplemented, will comply with
applicable law.
18
(h) To endeavor to qualify the Securities for offer and sale under the securities
or Blue Sky laws of such jurisdictions as you shall reasonably request.
(i) To make generally available to the Company’s security holders and to you as
soon as practicable an earning statement covering a period of at least twelve months
beginning with the first fiscal quarter of the Company occurring after the date of this
Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder.
(j) The Underlying Shares issuable upon conversion of the Securities shall have
been accepted for listing on the New York Stock Exchange, subject to issuance.
(k) To timely file with the NYSE all documents and notices required by the NYSE of
companies that have or will issue securities that are traded on the NYSE.
(l) Whether or not the transactions contemplated in this Agreement are consummated
or this Agreement is terminated, to pay or cause to be paid all expenses incident to the
performance of its obligations under this Agreement, including: (i) the fees, disbursements
and expenses of the Company’s counsel and the Company’s accountants in connection with the
registration and delivery of the Securities under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, the Prospectuses, any free writing
prospectus prepared by or on behalf of, used by, or referred to by the Company and
amendments and supplements to any of the foregoing, including all printing costs associated
therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer
and delivery of the Securities to the Underwriters, including any transfer or other taxes
payable thereon, (iii) the cost of printing or producing any Blue Sky or Legal Investment
memorandum in connection with the offer and sale of the Securities under state securities
laws and all expenses in connection with the qualification of the Securities for offer and
sale under the applicable securities laws as provided in Section 6(g) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky or Legal Investment
memorandum, (iv) all filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of the offering of the
Securities by the Financial Industry Regulatory Authority, Inc., (v) any fees charged by the
rating agencies for the rating of the Securities, (vi) the cost of preparation, issuance and
delivery of the Securities, (vii) the costs and charges of any trustee, transfer agent,
registrar or depositary and their respective counsels, (viii) the costs and expenses of the
Company relating to investor presentations on any “road show” undertaken in connection with
the marketing of the offering of the Securities, including, without limitation, expenses
associated with the preparation or dissemination of any electronic road show, expenses
associated with the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the prior approval
of the Company, travel and lodging expenses of the representatives and officers
19
of the Company and any such consultants, and the cost of any aircraft chartered in connection with
the road show, (ix) the document production charges and expenses associated with printing
this Agreement and (x) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this Section, Section 8
entitled “Indemnity and Contribution” and the last paragraph of Section 10 below, the
Underwriters will pay all of their costs and expenses, including fees and disbursements of
their counsel, stock transfer taxes payable on resale of any of the Securities by them and
any advertising expenses connected with any offers they may make.
(m) The Company also covenants with each Underwriter that, without the prior
written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will
not, during the period ending 90 days after the date of the Prospectus, (A) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares, or (B) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Shares, whether any such transaction
described in clause 1 or 2 above is to be settled by delivery of Common Shares or such other
securities, in cash or otherwise or (C) file any registration statement with the Commission
relating to the offering of any Common Shares or any securities convertible into or
exercisable or exchangeable for Common Shares, other than a Form S-8. The foregoing
sentence shall not apply to (a) the Securities to be sold hereunder, (b) the sale of
2,434,785 Common Shares in a public offering pursuant to an underwriting agreement, dated on
or about the date hereof, between the Company and the Representative (or the exercise of the
Underwriter’s over-allotment option in connection with such sale), (c) the issuance by the
Company of Common Shares upon the exercise of an option or warrant or the conversion of a
security in each case outstanding on the date hereof of which the Underwriters have been
advised in writing, (d) the establishment of a trading plan pursuant to Rule 10b5-1 under
the Exchange Act, for the transfer of Common Shares, provided that such plan does not
provide for the transfer of Common Shares during the 90-day restricted period and no public
announcement or filing under the Exchange Act regarding the establishment of such plan shall
be required of or voluntarily made by or on behalf of the undersigned or the Company, (e)
the grant and exercise of options under, or the issuance and sale of shares pursuant to,
employee share incentive plans in effect on the date hereof, (f) the issuance by the Company
of Common Shares to repurchase any outstanding interests under the indirect participation
interest agreement dated February 25, 2005, and (g) the issuance of a number of Common
Shares equal to 20% of the then-outstanding number of Common Shares, on a fully diluted
basis, in connection with a strategic transaction.
(n) If the third anniversary of the initial effective date of the Registration
Statement occurs before all the Securities have been sold by the Underwriters, prior to the
third anniversary to file a new shelf registration statement and to take any other action
20
necessary to permit the public offering of the Securities to continue without interruption;
references herein to the Registration Statement shall include the new registration statement
declared effective by the Commission.
(o) To prepare a final term sheet relating to the offering of the Securities,
containing only information that describes the final terms of the Securities or the offering
in a form consented to by the Representative, and to file such final term sheet within the
period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final
terms have been established for the offering of the Securities.
7. Covenants of the Underwriters. Each Underwriter severally 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 such Underwriter that
otherwise would not be required to be filed by the Company thereunder, but for the action of the
Underwriter.
8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of any
Underwriter within the meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any U.S. preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act,
any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act, or the Prospectuses or any amendment or supplement thereto, or caused by
any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration Statement and
each person, if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to such Underwriter, but only with reference to information
relating to such Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use in the Registration Statement, any U.S. preliminary prospectus, the
Time of Sale Prospectus, any issuer free writing prospectus or the Prospectuses or any
amendment or supplement thereto.
(c) In case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought pursuant to
Section 8(a) or (b), such person (the “indemnified party”) shall promptly notify the
21
person against whom such indemnity may be sought (the “indemnifying party”) in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests between them.
It is understood that the indemnifying party shall not, in respect of the legal expenses of
any indemnified party in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in
addition to any local counsel) for all such indemnified parties and that all such fees and
expenses shall be reimbursed promptly following receipt of an invoice for such fees or
expenses. Such firm shall be designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in
the case of parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party 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 from and against any loss or liability by reason
of such settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in Section 8(a) or (b) is
unavailable to an indemnified party or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the other hand from
the offering of the Securities or (ii) if the allocation provided by clause 8(d)(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 8(d)(i) above but also the relative fault of the
Company on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities shall be deemed to be in the same respective proportions as the
net proceeds from the offering of the Securities (before
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deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the Underwriters
bear to the aggregate initial public offering price of the Securities as set forth in the
Prospectuses. 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 the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters’ respective obligations to contribute
pursuant to this Section 8 are several in proportion to the respective principal amounts of
Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or equitable
if contribution pursuant to this Section 8 were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred to in Section
8(d). The amount paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in Section 8(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the
Securities underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 8 and the
representations, warranties and other statements of the Company contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person
controlling any Underwriter or any affiliate of any Underwriter or by or on behalf of the
Company, its officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Securities.
9. Termination. The Underwriters may terminate this Agreement by notice given by you to
the Company, if after the execution and delivery of this Agreement and prior to the Closing Date
(i) trading generally shall have been suspended or materially limited on, or by, as the case may
be, any of the Commission, the Canadian Qualifying Authorities, the NYSE, the NYSE Amex, the NASDAQ
Global Market, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have been suspended on
any exchange or in any over-the-counter market, (iii) a
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material disruption in securities
settlement, payment or clearance services in the United States shall have occurred, (iv) any
moratorium on commercial banking activities shall have been declared by Federal or New York State
authorities or the Canadian Qualifying Authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, or any change in financial markets or any calamity or crisis that, in
your judgment, is material and adverse and which, singly or together with any other event specified
in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the
offer, sale or delivery of the Securities on the terms and in the manner contemplated in the Time
of Sale Prospectus or the Prospectuses.
10. Effectiveness; Defaulting Underwriters. This Agreement shall become effective upon
the execution and delivery hereof by the parties hereto.
If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the
Underwriters shall fail or refuse to purchase Securities that it has or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of Securities to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the principal amount of Firm
Securities set forth opposite their respective names in Schedule I bears to the aggregate principal
amount of Firm Securities set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as you may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in
no event shall principal amount of Securities that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-tenth of
such principal amount of Securities without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm Securities and
the aggregate principal amount of Firm Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Firm Securities to be purchased on such date,
and arrangements satisfactory to you and the Company for the purchase of such Firm Securities are
not made within 36 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company. In any such case either you or the
Company shall have the right to postpone the Closing Date, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement, in the Time of
Sale Prospectus, in the Prospectuses or in any other documents or arrangements may be effected.
If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Additional Securities and the aggregate principal amount of Additional Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal amount of Additional
Securities to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have
the option to (i) terminate their obligation hereunder to purchase the Additional Securities to be
sold on such Option Closing Date or (ii) purchase not less than the number of Additional Securities
that such non-defaulting Underwriters would have been obligated to purchase in the absence of such
default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
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If this Agreement shall be terminated by the Underwriters, or any of them, because of any
failure or refusal on the part of the Company to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket
expenses (including the fees and disbursements of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the offering contemplated hereunder.
11. Jurisdiction. The Company hereby submits to the exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding
arising out of or relating to this Agreement or the transactions contemplated herein. The Company
irrevocably and unconditionally waives any objection to the laying of venue of any suit or
proceeding arising out of or relating to this Agreement or the transactions contemplated herein
brought by any third party against the Underwriters or any indemnified party (as defined herein)
and irrevocably and unconditionally waives and agrees not to plead or claim in any such court that
any such suit or proceeding in any such court has been brought in an inconvenient forum, or that
any such court lacks personal jurisdiction, or that any such court may not enforce this Agreement
or the transactions contemplated herein.
12. Entire Agreement. This Agreement, together with any contemporaneous written
agreements and any prior written agreements (to the extent not superseded by this Agreement) that
relate to the offering of the Securities, represents the entire agreement between the Company and
the Underwriters with respect to the preparation of any U.S. preliminary prospectus, the Time of
Sale Prospectus, the Prospectuses, the conduct of the offering, and the purchase and sale of the
Securities.
The Company acknowledges that in connection with the offering of the Securities: (i) the
Underwriters have acted at arms length, are not agents of, and owe no fiduciary duties to, the
Company or any other person, (ii) the Underwriters owe the Company only those duties and
obligations set forth in this Agreement and prior written agreements (to the extent not superseded
by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of
the Company. The Company waives to the full extent permitted by applicable law any claims it may
have against the Underwriters arising from an alleged breach of fiduciary duty in connection with
the offering of the Securities.
The Company understands that the Underwriters or their affiliates will sell the Securities in
the Canadian Jurisdictions and in the United States. The Underwriters agree to offer the
Securities for sale only in accordance with, and in a manner permitted by, the laws of each
jurisdiction in which such Securities are permitted to be offered, as described under
“Underwriting” in the Canadian Prospectus Supplement.
13. Counterparts. This Agreement may be signed in two or more counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument.
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14. Applicable Law. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
15. Headings. The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
16. Notices. All communications hereunder shall be in writing and effective only upon
receipt and if to the Underwriters shall be delivered, mailed or sent to you in care of: Xxxxxx
Xxxxxxx & Co. Incorporated, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity Syndicate
Desk, with copies to the Legal Department and to Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxx X. Xxxxxxxxx; and if to the Company shall be
delivered, mailed or sent to: InterOil Corporation, 00000 X-00 Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, XX
00000, Attention: Xxxx Xxxxxx, with a copy to: Xxxxxx and Xxxxx LLP, 1 Houston Center, 0000
XxXxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention: Xxxx Xxxxxx.
[The remainder of this pages is intentionally left blank.]
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Very truly yours, INTEROIL CORPORATION |
||||
By: | /s/ Xxxx X. Xxxxxxx | |||
Name: | Xxxx X. Xxxxxxx | |||
Title: | Chief Executive Officer | |||
Accepted as of the date hereof
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Acting severally on behalf of themselves
and the several Underwriters named
in Schedule I hereto.
and the several Underwriters named
in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By: | /s/ Xxxxxx Xxxxxx | |||
Name: | Xxxxxx Xxxxxx | |||
Title: | Managing Director | |||
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