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STONE ENERGY CORPORATION
(A DELAWARE CORPORATION)
2,750,000 SHARES OF COMMON STOCK
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PURCHASE AGREEMENT
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Dated: July 28, 1999
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TABLE OF CONTENTS
PAGE
SECTION 1. Representations and Warranties....................................3
(a) Representations and Warranties by the Company.....................3
(i) Compliance with Registration Requirements................3
(ii) Incorporated Documents...................................3
(iii) Independent Accountants..................................4
(iv) Financial Statements.....................................4
(v) No Material Adverse Change in Business...................4
(vi) Good Standing of the Company.............................4
(vii) No Subsidiaries..........................................5
(viii) Capitalization...........................................5
(ix) Authorization of this Agreement..........................5
(x) Authorization and Description of the Securities..........5
(xi) Absence of Defaults and Conflicts........................5
(xii) Absence of Labor Dispute.................................6
(xiii) Absence of Proceedings...................................6
(xiv) Accuracy of Exhibits.....................................6
(xv) Absence of Further Requirements.........................6
(xvi) Possession of Licenses and Permits.......................6
(xvii) Title to Property........................................7
(xviii) Oil and Gas Properties...................................7
(xix) Petroleum Engineers......................................7
(xx) Environmental Laws.......................................8
(xxi) Public Utility Holding Company Act.......................8
(xxii) Investment Company Act...................................8
(xxiii) Registration Rights......................................8
(xxiv) Internal Accounting Controls.............................8
(xxv) Insurance................................................9
(xxvi) No Stabilization.........................................9
(xxvii) Unlawful Contributions...................................9
(xxviii) Tax Returns..............................................9
(b) Officer's Certificates............................................9
SECTION 2. Sale and Delivery to Underwriters; Closing........................9
(a) Initial Securities................................................9
(b) Option Securities................................................10
(c) Payment..........................................................10
(d) Denominations; Registration......................................11
SECTION 3. Covenants of the Company.........................................11
(a) Compliance with Securities Regulations and Commission Requests...11
(b) Filing of Amendments.............................................11
(c) Delivery of Registration Statements..............................11
(d) Delivery of Prospectuses.........................................12
(e) Continued Compliance with Securities Laws........................12
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(f) Blue Sky Qualifications..........................................12
(g) Rule 158.........................................................13
(h) Use of Proceeds..................................................13
(i) Restriction on Sale of Securities................................13
(j) Reporting Requirements...........................................13
SECTION 4. Payment of Expenses..............................................14
(a) Expenses.........................................................14
(b) Termination of Agreement.........................................14
SECTION 5. Conditions of Underwriters' Obligations..........................14
(a) Effectiveness of Registration Statement..........................14
(b) Opinion of Counsel for Company...................................15
(c) Opinion of Counsel for Underwriters..............................15
(d) Officers' Certificate............................................15
(e) Accountant's Comfort Letter......................................15
(f) Bring-Down Comfort Letter........................................15
(g) Approval of Listing..............................................16
(h) Lock-up Agreements...............................................16
(i) Reserve Letters..................................................16
(j) Conditions to Purchase of Option Securities......................16
(i) Officers' Certificate...................................16
(ii) Opinion of Counsel for Company..........................16
(iii) Opinion of Counsel for Underwriters.....................16
(iv) Bring-Down Comfort Letter...............................16
(k) Additional Documents.............................................17
(l) Termination of this Agreement....................................17
SECTION 6. Indemnification..................................................17
(a) Indemnification of Underwriters..................................17
(b) Indemnification of Company, Directors and Officers...............18
(c) Actions against Parties; Notification............................18
(d) Settlement without Consent if Failure to Reimburse...............19
(e) Other Agreements with Respect to Indemnification.................19
SECTION 7. Contribution.....................................................19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery...20
SECTION 9. Termination of Agreement.........................................21
(a) Termination; General.............................................21
(b) Liabilities......................................................21
SECTION 10. Default by One or More of the Underwriters.......................21
SECTION 11. Default by the Company...........................................22
SECTION 12. Notices..........................................................22
SECTION 13. Parties..........................................................22
SECTION 14. GOVERNING LAW....................................................22
SECTION 15. Effect of Headings...............................................22
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STONE ENERGY CORPORATION
(a Delaware corporation)
2,750,000 Shares of Common Stock
(Par Value $.01 per Share)
PURCHASE AGREEMENT
July 28, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
HOWARD, WEIL, LABOUISSE, ▇▇▇▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ RICE & COMPANY L.L.C.
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Stone Energy Corporation, a Delaware corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated,
Howard, Weil, Labouisse, ▇▇▇▇▇▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇ Rice & Company L.L.C.
and each of the other underwriters named in Schedule A hereto (collectively,
the "Underwriters", which term shall also include any underwriter substituted
as hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇, Bear,
▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a
division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated, Howard, Weil, Labouisse, ▇▇▇▇▇▇▇▇▇▇
Incorporated and ▇▇▇▇▇▇▇ Rice & Company L.L.C. are acting as representatives
(in such capacity, the "Representatives"), with respect to (i) the sale by the
Company, and the purchase by the Underwriters, acting severally and not
jointly, of the number of shares of Common Stock, par value $.01 per share, of
the Company ("Common Stock") set forth in Schedule A hereto and (ii) the grant
by the Company to the Underwriters, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 412,500
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 2,750,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 412,500 shares of
Common Stock subject to the option described in Section 2(b) hereof (the
"Option Securities") are hereinafter called, collectively, the "Securities."
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The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-79733) for the
registration of the Securities under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"). Such registration statement has been declared
effective by the Commission, the Company has filed such post-effective
amendments thereto as may be required, and each such post-effective amendment
has been declared effective by the Commission. Such registration statement (as
so amended, if applicable), including the information, if any, deemed to be a
part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule
430A Information") are referred to herein as the "Registration Statement"; and
the final prospectus and the final prospectus supplement relating to the
offering of the Securities, in the forms first furnished to the Underwriters by
the Company for use in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus"; provided, however, that
all references to the "Registration Statement" and the "Prospectus" shall also
be deemed to include all documents incorporated therein by reference pursuant
to the Securities Exchange Act of 1934, as amended (the "1934 Act"). A
"preliminary prospectus" shall be deemed to refer to (i) any prospectus used
before the Registration Statement became effective and (ii) any prospectus that
omitted, as applicable, the Rule 430A Information or other information to be
included upon pricing in a form of prospectus filed with the Commission
pursuant to Rule 424(b) of the 1933 Act Regulations and was used after such
effectiveness and prior to the initial delivery of the Prospectus to the
Underwriters by the Company. For purposes of this Agreement, all references to
the Registration Statement, Prospectus or preliminary prospectus or to any
amendment or supplement to any of the foregoing shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which are "contained," "included" or "stated" (or other
references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information which are incorporated by
reference in the Registration Statement, Prospectus or preliminary prospectus,
as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, Prospectus or preliminary prospectus
shall be deemed to include the filing of any document under the 1934 Act which
is incorporated by reference in the Registration Statement, prospectus or
preliminary prospectus, as the case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter, as of the date hereof and as of
the Closing Time referred to in Section 2(c) hereof, and as of the Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
Underwriter as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. The
Registration Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the
part of the Commission for additional information has been complied
with.
At the respective times the Registration Statement and any
post-effective amendments thereto became effective and at the Closing
Time (as hereinafter defined) (and, if any Option Securities are
purchased, at the Date of Delivery (as hereinafter defined)), the
Registration Statement and any amendments thereto complied and will
comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and 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 statements
therein not misleading. At the date of the Prospectus and at the
Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), neither the Prospectus nor any amendments and
supplements thereto included or will include an untrue statement of a
material fact or omitted or will 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.
Notwithstanding the foregoing, the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement or the Prospectus.
Each preliminary prospectus and prospectus filed as part of
the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations, and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with the offering
of Securities will, at the time of such delivery, be substantially
identical to any electronically transmitted copies thereof filed with
the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, when they became effective or at the time they
were or hereafter are filed with the Commission, complied with and
will comply in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder (the
"1934 Act Regulations")
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and, when read together with the other information in the Prospectus,
at the date of the Prospectus and at the Closing Time, did not and
will not contain 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 under which they were made,
not misleading.
(iii) Independent Accountants. The accountants who certified
the financial statements and any supporting schedules thereto included
in the Registration Statement and the Prospectus are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The historical consolidated
financial statements of the Company included in the Registration
Statement and the Prospectus, together with the related schedules and
notes, present fairly in all material respects the financial position
of the Company at the dates indicated and the statements of
operations, stockholders' equity and cash flows of the Company for the
periods specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP")
applied on a consistent basis throughout the periods involved. The
schedules supporting the historical financial statements of the
Company, if any, included in the Registration Statement and the
Prospectus present fairly and in all material respects in accordance
with GAAP the information required to be stated therein. The selected
financial data and the summary financial information relating to the
historical financial statements of the Company included in the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business
prospects of the Company, whether or not arising in the ordinary
course of business (a "Material Adverse Effect"), (B) there have been
no transactions entered into by the Company, other than those in the
ordinary course of business, which are material with respect to the
Company considered as one enterprise, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under, or as contemplated 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, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or be in good standing would not result in a
Material Adverse Effect.
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(vii) No Subsidiaries. The Company does not have any
subsidiaries, whether operating or not, existing under any
jurisdiction in the United States.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant
to reservations, agreements or employee benefit plans referred to in
the Prospectus or pursuant to the exercise of convertible securities
or options referred to in the Prospectus). The shares of issued and
outstanding capital stock have been duly authorized and validly issued
and are fully paid and non-assessable; none of the outstanding shares
of capital stock was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(ix) Authorization of this Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(x) Authorization and Description of the Securities. The
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid
and non-assessable; the Common Stock conforms to all statements
relating thereto contained in the Prospectus and such description
conforms to the rights set forth in the instruments defining the same;
no holder of the Securities will be subject to personal liability by
reason of being such a holder; and the issuance of the Securities is
not subject to the preemptive or other similar rights of any
securityholder of the Company.
(xi) Absence of Defaults and Conflicts. The Company is not in
violation of its charter or by-laws or 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 the Company is a party or by which it may be bound, or to which
any of the property or assets of the Company is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from
the sale of the Securities as described in the Prospectus under the
caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary
corporate action and 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 property or assets of the Company
pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action
result in any violation of the provisions of the charter
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or by-laws of the Company 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 of its assets, properties or
operations. 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.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company 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 principal suppliers,
manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation 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, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of
its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company is a party or of which
any of their respective property or assets is the subject which are
not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) 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, domestic or foreign, is necessary or required for the due
authorization, execution and delivery by the Company of this Agreement
or for the performance by the Company of the transactions contemplated
under the Prospectus or this Agreement, except such as have been
already made, obtained or rendered, as applicable or as may be
required under the 1933 Act, or the 1933 Act Regulations and foreign
or state securities or blue sky laws.
(xvi) Possession of Licenses and Permits. The Company
possesses such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to
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so possess would not, singly or in the aggregate, have a Material
Adverse Effect; the Company is in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, have a Material
Adverse Effect; all of the Governmental Licenses are valid and in full
force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full
force and effect would not have a Material Adverse Effect; and the
Company has not 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 Effect.
(xvii) Title to Property. The Company has good and marketable
title to all real property (other than oil and gas properties) owned
by it and good title to all other properties (other than oil and gas
properties) owned by it, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially
affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company; and all
of the leases and subleases material to the business of the Company,
considered as one enterprise, and under which the Company holds
properties described in the Prospectus, are in full force and effect,
and the Company has not any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company to the continued possession of
the leased or subleased premises under any such lease or sublease.
(xviii) Oil and Gas Properties. The Company has good and
defensible title to its oil and gas properties, free and clear of all
liens, encumbrances, security interests, and claims, except (i) as
specified in the Registration Statement and the Prospectus; (ii) liens
for taxes not yet due; (iii) liens, claims and encumbrances under gas
sales contracts, operating agreements, unitization and pooling
agreements and such other agreements as are customarily found in
connection with comparable drilling and producing operations; and (iv)
other liens, claims, encumbrances and title defects that are, singly
and in the aggregate, not material in amount and do not materially
interfere with the Company's use or enjoyment of their respective oil
and gas properties.
(xix) Petroleum Engineers. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & Associates,
Inc. ("▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇") and ▇▇▇▇▇▇▇ Consultants, Ltd. ("Atwater"),
petroleum engineers from whose reserve reports information is set
forth or incorporated by reference in the Registration Statement and
the Prospectus, were, as of the date of each respective report, and
are, as of the date hereof, independent petroleum engineers with
respect to the Company. The information underlying the estimates of
the reserves of the Company supplied by the Company to ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ and Atwater for purposes of preparing such reserve reports
(including, without limitation, production, costs of operation and
development, current prices for production, agreements relating to
current and future operations and sales of production)
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was true and correct in all material respects on the dates such
information was supplied and such reserve reports were prepared.
(xx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) the Company is not
in violation of any federal, state, local or foreign statute, law,
rule, regulation, ordinance, code, policy or rule of common law or any
judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife,
including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company has all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or, to
the knowledge of the Company, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company and (D) there
are no events or circumstances that might reasonably be expected to
form the basis of an order for clean-up or remediation, or an action,
suit or proceeding by any private party or governmental body or
agency, against or affecting the Company relating to Hazardous
Materials or any Environmental Laws.
(xxi) Public Utility Holding Company Act. The Company is not
subject to, or is exempt from, regulation as a "holding company", a
"subsidiary company" of a "holding company", an "affiliate" of a
"holding company" or an "affiliate" of a "subsidiary company" of a
"holding company", in each case as such terms are defined in the
Public Utility Holding Company Act, as amended.
(xxii) Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxiii) Registration Rights. Except as disclosed in the
Prospectus, there are no persons with registration rights or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under
the 1933 Act.
(xxiv) Internal Accounting Controls. The Company maintains a
system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization, (B) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with
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generally accepted accounting principles and to maintain
accountability for assets, (C) access to assets is permitted only in
accordance with management's general or specific authorization and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxv) Insurance. The Company maintains reasonably adequate
insurance for the business conducted by the Company.
(xxvi) No Stabilization. Neither the Company nor, any of its
officers, directors or controlling persons has taken, directly or
indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(xxvii) Unlawful Contributions. Neither the Company, nor any
director, officer, agent, employee or other person, acting on behalf
of the Company, has used any corporate funds during the last five
years for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any unlawful
payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or made any illegal bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.
(xxviii) Tax Returns. The Company has filed all foreign,
federal, state and local tax returns that are required to be filed or
has requested extensions thereof and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is (A) currently being
contested in good faith or as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
preliminary prospectus) or (B) would not, singly or in the aggregate,
result in a Material Adverse Effect
(b) Officer's Certificates. Any certificate signed by any officer of
the Company delivered to the Representatives or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company to each
Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company, agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule B, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, bears to the total number of Initial Securities, subject, in
each case, to such adjustments among the Underwriters as the Representatives in
their sole discretion shall make to eliminate any sales or purchases of
fractional securities.
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(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional
412,500 shares of Common Stock, at the price per share set forth in Schedule B,
less an amount per share equal to any dividends or distributions declared by
the Company and payable on the Initial Securities but not payable on the Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the Initial Securities upon written notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a "Date of Delivery") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional
shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. or at such other place as shall be agreed upon by the
Representatives and the Company, at 8:30 a.m. (Central time) on the third
(fourth, if the pricing occurs after 4:30 p.m. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company
(such time and date of payment and delivery being herein called "Closing
Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the
notice from the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to bank accounts designated by the Company against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
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(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations
and registered in such names as the Representatives may request in writing at
least two full business days before the Closing Time or the relevant Date of
Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and
packaging by the Representatives in The City of New York not later than 10:00
a.m. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter participating in the offering of Securities, as follows:
(a) Compliance with Securities Regulations and Commission Requests.
The Company, subject to Section 3(b), will comply with the requirements of Rule
430A of the 1933 Act Regulations and will notify the Representatives
immediately, and confirm the notice in writing, of (i) the effectiveness of any
post-effective amendment to the Registration Statement or the filing of any
supplement or amendment to the Prospectus, (ii) the receipt of any comments
from the Commission, (iii) any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Company will promptly effect the filings necessary pursuant
to Rule 424 of the 1933 Act Regulations and will take such steps as it deems
necessary to ascertain promptly whether the Prospectus transmitted for filing
under Rule 424 was received for filing by the Commission and, in the event that
it was not, it will promptly file the Prospectus. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The
Registration Statement and each amendment thereto furnished to the
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Underwriters will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter may reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus as such Underwriter may reasonably request.
The Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to any electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934
Act Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Registration Statement
and the Prospectus. If at any time when the Prospectus is required by the 1933
Act or the 1934 Act to be delivered in connection with sales of the Securities,
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or for the Company,
to amend the Registration Statement in order that the Registration Statement
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 statements
therein not misleading or to amend or supplement the Prospectus in order that
the Prospectus 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 not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or supplement as
may be necessary to correct such statement or omission or to make the
Registration Statement or the Prospectus comply with such requirements, and the
Company will furnish to the Underwriters, without charge, such number of copies
of such amendment or supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
maintain such qualifications in effect for a period of not less than one year
from the date of this Agreement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to qualify as
a foreign corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the date of this Agreement.
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(g) Rule 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds."
(i) Restriction on Sale of Securities. During a period of 90 days from
the date of the Prospectus, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ on behalf of the Underwriters, (i) directly or
indirectly, offer, pledge, sell, sell short, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the 1933
Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Common
Stock, whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the Securities
to be sold hereunder, (B) any shares of Common Stock issued by the Company upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (C) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to employee benefit plans of the Company or (D) any shares of Common
Stock issued pursuant to any non-employee director stock plan or dividend
reinvestment plan.
(j) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of
this Agreement, any Agreement among Underwriters, and such other documents as
may be required in connection with the offering, purchase, sale, issuance or
delivery of the Securities, (iii) the preparation, issuance and delivery of the
Securities, any certificates for the Securities to the Underwriters, including
any transfer taxes and any stamp or other duties payable upon the sale,
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issuance or delivery of the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors or
agents (including transfer agents and registrars), (v) the qualification of the
Securities under state securities laws in accordance with the provisions of
Section 3(f) hereof, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of any Blue Sky Survey, and any amendment
thereto, (vi) the printing and delivery to the Underwriters of copies of each
preliminary prospectus, and the Prospectus and any amendments or supplements
thereto, and (vii) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange ("NYSE").
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 11 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements
of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Company contained in Section 1 hereof or in certificates of any officer of
the Company delivered pursuant to the provisions hereof, to the performance by
the Company of its covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or be pending or
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
information relating to the description of the Securities, the specific method
of distribution and similar matters shall have been filed with the Commission
in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A),
or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A hereto and to such further effect as counsel to
the Underwriters may reasonably request.
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(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (i), (ii), (v), (vi) (solely
as to preemptive or other similar rights arising by operation of law or under
the charter or by-laws of the Company), (ix), (x), and (xiv) (solely as to the
information in the Prospectus under "Description of Capital Stock--Common
Stock") and the penultimate paragraph of Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York, Texas and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper upon
certificates of officers of the Company and certificates of public officials,
reserve engineers and accountants.
(d) Officers' Certificate. At Closing Time, there shall not have been,
since the date of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, whether or not arising in the ordinary
course of business, and the Representatives shall have received a certificate
of the Chief Executive Officer, President or a Vice President of the Company
and of the chief financial officer or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section
1(a) are true and correct in all material respects with the same force and
effect as though expressly made at and as of the Closing Time, (iii) the
Company has complied in all material respects with all agreements and satisfied
all conditions on its part required under this Agreement to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to the best
of such officer's knowledge, are threatened by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a
letter dated such date, in form and substance reasonably satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters, 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 and the Prospectus.
(f) Bring-Down Comfort Letter. At Closing Time, the Representatives
shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (f) of this Section 5,
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except that the specified date referred to shall be a date not more than three
business days prior to the Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the NYSE, subject only to official notice of
listing.
(h) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form of
Exhibit B hereto signed by the persons listed on Schedule C hereto.
(i) Reserve Letters. At the time of the execution of this Agreement
and at the Closing Time, Atwater and ▇▇▇▇▇▇, independent petroleum engineers,
shall have furnished to the Representatives a letter with respect to reserve
information of the Company contained in the Registration Statement and the
Prospectus in form and substance satisfactory to the Representatives.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates
furnished by the Company hereunder shall be true and correct in all material
respects as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Chief Executive Officer, President or a Vice
President of the Company and of the chief financial or chief
accounting officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(e) hereof remains
true and correct in all material respects as of such Date of Delivery.
(ii) Opinions of Counsel for Company. The favorable opinion
of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable
opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iv) Bring-Down Comfort Letter. A letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, in form and substance satisfactory to the Representatives and
dated such Date of Delivery, substantially in the same form and
substance as the letter furnished to the Representatives pursuant to
Section 5(g) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
five days prior to such Date of Delivery.
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(k) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives and counsel for the
Underwriters.
(l) Termination of this Agreement. If any condition specified in this
Section 5 shall not have been fulfilled when and as required to be fulfilled,
this Agreement or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company
at any time at or prior to the Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 6,
7 and 8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. (1) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information deemed to be a part thereof, if applicable, 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 arising out of any untrue statement or alleged untrue
statement of a material fact included in any 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;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) subject to Section 6(c), against any and all expense
whatsoever, as incurred (including the reasonable fees and
disbursements of counsel chosen by the Company), reasonably incurred
in investigating, preparing or defending against any litigation, or
any
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investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that such expense is not paid under (i) or
(ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, each
of its directors, each of its officers who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for
use in the Registration Statement (or any amendment thereto) or such
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give written notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability (i) unless
and to the extent the indemnifying party did not otherwise learn of such action
and such indemnifying party was materially prejudiced as a result thereof and
(ii) in any event, shall not relieve it from any liability which it may have
otherwise than on account of this indemnity agreement. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
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legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party,
(iii) 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 the institution of such action, or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(1)(ii) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) Other Agreements with Respect to Indemnification. The provisions
of this Section shall not affect any agreement among the Company with respect
to indemnification.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, labilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (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) 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 of the Underwriters, on the other hand, in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages 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 such
Securities (before deducting expenses) received by the Company and the total
underwriting
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discount received by the Underwriters, in each case as set forth on the cover
of the Prospectus, bear to the aggregate initial public offering price of such
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 or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, 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 which such
Underwriter has otherwise been required to pay by reason of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter,
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
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company, as the case may be.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the number of Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or controlling person, or
by or on behalf of the Company, and shall survive delivery of the Securities to
the Underwriters.
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SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time, if (i) there has been, since the time of execution of this Agreement or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company whether or not
arising in the ordinary course of business, or (ii) there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iii) trading in any securities of the Company has been
suspended or materially limited by the Commission or by the NYSE, or if trading
generally on the NYSE has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by the NYSE or by order of the Commission, the NASD or any other
governmental authority, or (iv) a banking moratorium has been declared by
either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section , such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6, 7 and 8 shall survive such termination and remain in full force
and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Securities in such amounts as may be agreed
upon and upon the terms herein set forth; if, however, the Representatives
shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the aggregate principal amount of Securities to be purchased on
such date, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of Securities to be purchased on such date
this Agreement or, with respect to any Date of Delivery which occurs
after the Closing Time, the obligation of the Underwriters to purchase
and of the Company to sell the Option Securities to be purchased and
sold on such Date of Delivery, shall terminate without liability on
the part of any non-defaulting Underwriter.
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No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the
obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either (i) the Representatives or (ii)
the Company shall have the right to postpone the Closing Time for a period not
exceeding seven days in order to effect any required changes in the
Registration Statement or the Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Default by the Company.
If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any
nondefaulting party; provided, however, that the provisions of Sections 1, 4,
6, 7 and 8 shall remain in full force and effect. No action taken pursuant to
this Section shall relieve the Company from liability, if any, in respect of
such default.
SECTION 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ at World Financial Center,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇ ▇. ▇▇▇▇▇, ▇▇.;
notices to the Company shall be directed to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇. ▇. ▇▇▇ ▇▇▇▇▇ (70505), ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Vice President and Chief Financial Officer
SECTION 13. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters,
the Company and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation. No purchaser of Securities from any Underwriter shall be deemed
to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
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* * * * *
23
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement among the Underwriters, the Company in accordance with its terms.
Very truly yours,
STONE ENERGY CORPORATION
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
D. ▇▇▇▇▇ ▇▇▇▇▇
President and Chief Operating Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, A DIVISION OF ▇▇▇▇ ▇▇▇▇▇▇▇▇
INCORPORATED
HOWARD, WEIL, LABOUISSE, ▇▇▇▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ RICE & COMPANY L.L.C.
By: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
--------------------------------------
Authorized Signatory
For themselves and as Representatives
of the several Underwriters named in Schedule A hereto.
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SCHEDULE A
NUMBER OF
NAME OF UNDERWRITER INITIAL SECURITIES
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated .............................................. 1,100,000
Bear, ▇▇▇▇▇▇▇ & Co. Inc. ........................................ 618,750
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ....................................... 618,750
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated.. 137,500
Howard, Weil, Labouisse, ▇▇▇▇▇▇▇▇▇▇ Incorporated ................ 137,500
▇▇▇▇▇▇▇ Rice & Company L.L.C .................................... 137,500
----------
Total ........................................................... 2,750,000
==========
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SCHEDULE B
STONE ENERGY CORPORATION
2,750,000 SHARES OF COMMON STOCK
(PAR VALUE $.01 PER SHARE)
1. The initial public offering price per share of the
Securities shall be $43.75.
2. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $41.45, being an amount equal to the
initial public offering price set forth above less $2.30 per share; provided,
however, that the Underwriters shall purchase 50,000 of the Initial Securities
(the "Stone Securities") at the public offering price and the Underwriters
shall sell the Stone Securities to ▇▇▇▇▇ ▇. ▇▇▇▇▇ at the public offering price;
provided further that the purchase price per share for any Option Securities
purchased upon the exercise of the over-allotment option described in Section
2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the Initial Securities but
not payable on the Option Securities.
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SCHEDULE C
LIST OF PERSONS
SUBJECT TO LOCK-UP AGREEMENTS
Name Position
---- --------
▇▇▇▇▇ ▇. ▇▇▇▇▇ Chairman of the Board and Chief Executive
Officer
D. ▇▇▇▇▇ ▇▇▇▇▇ President and Chief Operating Officer and
Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President, Chief Accounting
Officer and Controller
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Director
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Director
▇. ▇. ▇▇▇▇▇▇▇▇▇ Director
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Director
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Director
▇▇▇ ▇. ▇▇▇▇▇▇ Vice Chairman of the Board
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Vice President - Engineering
J. ▇▇▇▇ ▇▇▇▇▇▇▇ Vice President - Accounting and Controller
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III Vice President - Legal, Secretary and General
Counsel
▇.▇. ▇▇▇▇▇▇▇▇ Vice President - Land
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Vice President - Acquisitions
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EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(B)
(1) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(2) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(3) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(4) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual" under
the caption "Capitalization" (except for subsequent issuances, if any, pursuant
to the Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus); 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 were issued in violation of
the preemptive or other similar rights of any securityholder of the Company.
(5) The Securities to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale to the Underwriters
pursuant to the Purchase Agreement and, when issued and delivered by the
Company pursuant to the Purchase Agreement against payment of the consideration
set forth in the Purchase Agreement, will be validly issued and fully paid and
non-assessable and no holder of the Securities is or will be subject to
personal liability by reason of being such a holder.
(6) The issuance and sale of the Securities by the Company is not
subject to the preemptive or other similar rights of any securityholder of the
Company.
(7) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(8) The Registration Statement has been declared effective under the
1933 Act; any required filing of the Prospectus pursuant to Rule 424(b) has
been made in the manner and within the time period required by Rule 424(b);
and, to the best of our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(9) The Registration Statement, the Rule 430A Information, as
applicable, the Prospectus, and each amendment or supplement to the
Registration Statement and Prospectus, as of
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32
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which we
need express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(10) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory requirements,
with any applicable requirements of the charter and by-laws of the Company and
the requirements of the New York Stock Exchange.
(11) The documents incorporated by reference in the Prospectus (other
than the financial statements and the supporting schedules included therein or
omitted therefrom as to which we need express no opinion) when they become
effective or were filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the 1933 Act or the 1934
Act, as applicable, and the rules and regulations of the Commission thereunder.
(12) To the best of our knowledge, except as disclosed in the
Prospectus, there is not pending or threatened any action, suit, proceeding,
inquiry or investigation, to which the Company is a party, or to which the
property of the Company is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably be
expected to materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in the Purchase Agreement or
the performance by the Company of its obligations thereunder.
(13) The information in the Prospectus under "Description of Capital
Stock" and in the Registration Statement under "Item 15" and in the Company's
Annual Report on 10-K/A for fiscal year ended December 31, 1998 under "Item 1.
Business--Regulation" and under "Item 3. Legal Proceedings" to the extent that
it constitutes matters of law, summaries of legal matters, the Company's
charter and bylaws or legal proceedings, or legal conclusions, has been
reviewed by us and is correct in all material respects.
(14) All descriptions in the Registration Statement of contracts and
other documents to which the Company is a party are accurate in all material
respects; to the best of our knowledge, there are no franchises, contracts,
indentures, mortgages, loan agreements, notes, leases or other instruments
required to be described or referred to in the Registration Statement or to be
filed as exhibits thereto other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.
(15) To the best of our knowledge, the Company is not in violation of
its charter or by-laws and no default by the Company exists in the due
performance or observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan agreement, note,
lease or other agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by reference
as an exhibit to the Registration Statement.
(16) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we express no
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33
opinion) is necessary or required in connection with the due authorization,
execution and delivery of the Purchase Agreement or for the offering, issuance,
sale or delivery of the Securities.
(17) The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated in the Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and
will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment Event
(as defined in Section 1(a)(xi) of the Purchase Agreement) under or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company is a party or by which it or any
of them may be bound, or to which any of the property or assets of the Company
is subject (except for such conflicts, breaches or defaults or liens, charges
or encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company, or any applicable law, statute, rule, regulation, judgment, order,
writ or decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any of its
properties, assets or operations.
(18) To the best of our knowledge, except as disclosed in the
Prospectus, there are no persons with registration rights or other similar
rights to have any securities registered pursuant to the Registration Statement
or otherwise registered by the Company under the 1933 Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information (if applicable), (except for financial statements and schedules and
other financial data included therein or omitted therefrom, as to which we need
make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements and schedules
and other financial data included therein or omitted therefrom, as to which we
need make no statement), at the time the Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or omits
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.
In rendering such opinion, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it
is otherwise subject to, any treatise, written policy or other document
relating to legal opinions, including, without limitation, the Legal Opinion
Accord of the ABA Section of Business Law (1991).
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EXHIBIT B
FORM OF LOCK-UP AGREEMENT
_________, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated
HOWARD, WEIL, LABOUISSE, ▇▇▇▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇ RICE & COMPANY L.L.C.
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by Stone Energy Corporation
Dear Sirs:
The undersigned, a stockholder, officer and/or director of Stone
Energy Corporation, a Delaware corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") and Bear, ▇▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, Weil, Labouisse, ▇▇▇▇▇▇▇▇▇▇ Incorporated, and
▇▇▇▇▇▇▇ ▇▇▇▇ & Company L.L.C. propose to enter into a Purchase Agreement (the
"Purchase Agreement") with the Company providing for the public offering of
shares (the "Securities") of the Company's common stock, par value $.01 per
share (the "Common Stock"). In recognition of the benefit that such an offering
will confer upon the undersigned as a stockholder, officer and/or director of
the Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 90
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer,
pledge, sell, sell short, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer any shares of the
Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing or
(ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction is to be settled by delivery of Common
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Stock or other securities, in cash or otherwise. The foregoing sentence shall
not apply to bona fide gifts or transfers effected by the undersigned, other
than on any securities exchange or in the over-the-counter market, to donees or
transferees that agree to be bound by this agreement.
Very truly yours,
Signature:
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Print Name:
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