ENERGY XXI GULF COAST, INC. 10% Senior Notes due 2013 REGULATION S PURCHASE AGREEMENT
ENERGY
XXI GULF COAST, INC.
10%
Senior Notes due 2013
REGULATION
S PURCHASE AGREEMENT
June
5,
2007
▇▇▇▇▇▇▇▇▇
& COMPANY, INC.
GREENWICH
CAPITAL MARKETS, INC.
BNP
PARIBAS SECURITIES CORP.
BMO
CAPITAL MARKETS CORP.
CAPITAL
ONE SOUTHCOAST, INC.
NATEXIS
BLEICHROEDER INC.
c/▇
▇▇▇▇▇▇▇▇▇
& COMPANY, INC.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ladies
and Gentlemen:
Energy
XXI Gulf Coast, Inc., a Delaware corporation (the “Company”),
Energy XXI (Bermuda Limited), a Bermuda company and the Company’s ultimate
parent (“Parent”),
and
the other Guarantors (as defined below) (the Company and the Guarantors,
collectively the “Company
Parties”)
hereby
agree with you effective as of May 24, 2007, as follows:
Introductory.
The
Company proposes to issue and sell $750,000,000 in aggregate principal amount
of
its 10% Senior Notes due 2013 (the “Notes”).
The
Notes will be offered and sold (i) in the United States (the
“Regulation
D Notes”)
directly
to certain purchasers of the Notes (the “Regulation
D Purchasers”) in
a
private placement (the “Regulation
D Placement”)
without being registered under the Securities Act of 1933, as amended, and
the
rules and regulations of the Securities and Exchange Commission (the
“Commission”)
thereunder (collectively, the “Securities
Act”)
in
reliance upon Section 4(2) thereof and/or Regulation D thereunder (“Regulation
D”)
and
(ii) outside the United States (the “Regulation
S Notes”
and,
together with the Regulation D Notes, the “Notes”)
to the
initial purchasers named herein (the “Initial
Purchasers”)
in a
transaction exempt from the registration requirements of the Securities Act
(the
“Regulation
S Offering”)
in
reliance upon Regulation S of the Securities Act (“Regulation
S”).
Each
of
the Initial Purchasers has agreed to act as placement agents in connection
with
the Regulation D Placement (in such capacity, each, a “Placement
Agent”
and,
collectively, the “Placement
Agents”)
subject to the terms and conditions and other provisions of a placement agency
agreement (the “Placement
Agency Agreement”)
to
be
entered into among the Placement Agents and the Company Parties. The
Company Parties will enter into a note purchase agreement with the Regulation
D
Purchasers of the Regulation D Notes (the “Regulation
D Purchase Agreement”).
Prior
to
or concurrently with the closing of the Regulation S Offering and the Regulation
D Placement, the Company Parties will enter into an Amended and Restated First
Lien Credit Agreement with the Lenders party thereto and The Royal Bank of
Scotland plc, as Administrative Agent of the Lenders (such agreement and all
related loan documents, collectively, the “Credit
Agreement”).
Proceeds from the sale of the Notes, and borrowing under the Credit Agreement
will be used to finance the acquisition (the “Pogo
Acquisition”)
of
certain of the offshore Gulf of Mexico oil and natural gas properties (the
“Pogo
Assets”)
of
Pogo Producing Company (“Pogo”)
pursuant to the Purchase and Sale Agreement (the “Purchase
and Sale Agreement”)
dated
as of April 24, 2007 between Pogo and Energy XXI GOM, LLC, a wholly-owned
subsidiary of the Company (“Buyer”),
and
to repay certain debt and to pay fees and expenses of these transactions as
summarized in the Preliminary CIM (as defined below). The closing of the Pogo
Acquisition under the Purchase and Sale Agreement will occur concurrently with
the closing of the Regulation S Offering, the Regulation D Placement and the
borrowing under the Credit Agreement (the “Closing
Date”).
The
Notes
will be issued pursuant to an indenture (the “Indenture”),
to be
entered between the Company, Parent, and the other guarantors named therein
(the
“Subsidiary
Guarantors,”
and
together with Parent, the “Guarantors”)
and
▇▇▇▇▇ Fargo Bank, National Association, as trustee (the “Trustee”).
Pursuant to the Indenture, the Guarantors shall fully and unconditionally
guarantee, on a senior basis, to each holder of the Notes and the Trustee,
the
payment and performance of the Company’s obligations under the Indenture and the
Notes (each such guarantee being referred to herein as a “Guarantee.”
Holders
of the Notes will be entitled to the benefits of a registration rights agreement
(the “Registration
Rights Agreement”)
to be
entered into among the Company Parties, the Initial Purchasers and the
Regulation D Purchasers pursuant to which the Company Parties will agree,
among other things to (i) file a registration statement (the “Registration
Statement")
with
the Commission for a registered offer (the “Exchange
Offer”)
to
exchange any and all of the Notes for a like aggregate principal amount of
notes
that are identical in all material respects to the Notes (the “Exchange
Notes”),
except for that the Exchange Notes will not contain terms with respect to
transfer restrictions or liquidated damages, (ii) use their reasonable efforts
to cause the Registration Statement to be declared effective under the
Securities Act and (iii) use their reasonable best efforts to consummate the
Exchange Offer, in each case, within the timeframe, and subject to the
provisions contained therein.
The
Company, ▇▇▇▇▇▇▇▇▇ & Company, Inc., as closing agent (the “Closing
Agent”),
and
▇▇▇▇▇ Fargo Bank, National Association, as escrow agent, will enter into an
escrow agreement (the “Escrow
Agreement”)
to
provide for the escrow of the proceeds for the purchase of the Notes and the
payment of such proceeds on the Closing Date pursuant to the terms of the Escrow
Agreement and as set forth in this Agreement and the Regulation D Purchase
Agreement.
This
Agreement, the Credit Agreement, the Purchase and Sale Agreement, the Indenture,
the Registration Rights Agreement, the Escrow Agreement and the Engagement
Letter dated as of March 15, 2007 (the “Engagement
Letter”)
between Parent and ▇▇▇▇▇▇▇▇▇ & Company, Inc., are referred to herein
collectively as the “Transaction
Documents,”
and
the transactions contemplated hereby and thereby are referred to herein
collectively as the “Transactions.”
This
Agreement, the Registration Rights Agreement and the Indenture are referred
herein collectively as the “Regulation
S Purchase Documents.”
Nothing
in this Agreement should be read to limit or otherwise modify the terms and
other provisions of the Engagement Letter, provided
that, in
the event any terms of the Engagement Letter are inconsistent with or contradict
any terms of this Agreement, this Agreement shall govern.
2
The
Company has prepared a preliminary confidential information memorandum, dated
May 12, 2007 (the “Preliminary
CIM”),
relating to the Regulation D Placement and the Regulation S Offering, (ii)
a
pricing term sheet attached hereto as Schedule I, which includes pricing terms
and other information with respect to the Notes (the “Pricing
Supplement”
and,
together with the Preliminary CIM, the “Time
of Sale Document”)
and
(iii) a final confidential information memorandum dated the date hereof relating
to the Regulation D Placement and the Regulation S Offering, as the same may
be
amended or supplemented (the “CIM”).
“CIM”
means, as of any date or time referred to in this Agreement, the most recent
information memorandum (whether the Time of Sale Document or the CIM, and any
amendment or supplement to either such document), including exhibits and
schedules thereto.
1. Terms
of Offering.
Subject
to the terms and conditions herein contained, the Company proposes to issue
and
sell to ▇▇▇▇▇▇▇▇▇ & Company, Inc. (the “Lead
Initial Purchaser”)
and
Greenwich Capital Markets, Inc., BNP Paribas Securities Corp., BMO Capital
Markets Corp., Capital One Southcoast, Inc. and Natexis Bleichroeder Inc. (each,
an “Initial
Purchaser”
and,
collectively, the “Initial
Purchasers”)
$320,915,000 aggregate
principal amount of Regulation S Notes. Upon original issuance thereof, and
until such time as the same is no longer required under the applicable
requirements of the Securities Act, the Regulation S Notes shall bear the
legends set forth in the CIM. The Initial Purchasers have advised the Company,
and the Company understands, that the Initial Purchasers will make offers to
sell (the “Exempt
Resales”)
some
or all of the Regulation S Notes purchased by the Initial Purchasers hereunder
on the terms set forth or to be set forth in the CIM to persons (the
“Subsequent
Purchasers”)
whom
the Initial Purchasers reasonably believe to be non-“U.S. persons” or non-“U.S.
purchasers” (as defined in Regulation S) in reliance upon Regulation S.
2. Purchase
and Sale of Regulation S Notes.
On
the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers
agree to purchase from the Company, the Regulation S Notes at a purchase price
of 98% of the aggregate principal amount thereof. Delivery to the Initial
Purchasers of and payment for the Regulation S Notes shall be made at a Closing
(the “Closing”)
to be
held at 10:00 a.m., New York City time, on the Closing Date (as defined in
the
Regulation D Purchase Agreement) at the Houston offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇
LLP, First City Tower, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
The
Company shall deliver to the Initial Purchasers one or more certificates
representing the Regulation S Notes in definitive form, registered in such
names
and denominations as the Initial Purchasers may request, against payment by
the
Initial Purchasers of the purchase price therefor by immediately available
Federal funds bank wire transfer to such bank account or accounts as the Company
shall designate to the Initial Purchasers at least two business days prior
to
the Closing. The certificates representing the Regulation S Notes in definitive
form shall be made available to the Initial Purchasers for inspection at the
Houston offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, First City Tower, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (or such other place as shall
be
reasonably acceptable to the Initial Purchasers) not later than 10:00 a.m.
one
business day immediately preceding the Closing Date. Regulation S Notes to
be
represented by one or more definitive global securities in book-entry form
will
be deposited on the Closing Date, by or on behalf of the Company, with The
Depository Trust Company (“DTC”)
or its
designated custodian, and registered in the name of Cede & Co.
3
3. Representations
and Warranties of the Company Parties.
In
addition to the other representations, warranties and agreements contained
in
the Agreement, each of the Company Parties hereby jointly represents, warrants
and agrees with, the Initial Purchasers as follows:
(a) No
Material Misstatement or Omission.
(i)
Neither the Time of Sale Document, nor any amendment or supplement thereto,
as
of the date thereof and at all times subsequent thereto up to the Closing Date,
did not and does not contain any untrue statement if a material fact, or omitted
or omits to state a material fact necessary to make the statements therein,
in
the light of the circumstances under which they were made, not misleading and
(ii) the CIM, and at the time of each sale of the Regulation S Notes and at
the
Closing Date, as then amended or supplemented, if applicable, did not and will
not, contain any untrue statement of a material fact, or omitted or omits to
state a material fact necessary to make the statements therein, in the light
of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this Section 3(a) do not apply
to statements or omissions made in reliance upon and in conformity with
information relating to the Initial Purchasers and furnished to the Company
in
writing by the Initial Purchasers expressly for use in the Time of Sale Document
or the CIM or any amendment or supplement thereto. No
injunction or order has been issued that either (i) asserts that any of the
transactions contemplated by the Regulation S Purchase Documents is subject
to the registration requirements of the Securities Act or (ii) would prevent
or
suspend the issuance or sale of any of the Regulation S Notes or the use of
the
Time of Sale Document, the CIM or any amendment or supplement thereto, in any
jurisdiction. No statement of material fact included or to be included in the
CIM has omitted from the Time of Sale Document and no statement of material
fact
included in the Time of Sale Document that is required to be included in the
CIM
has been omitted or will be omitted therefrom.
(b) The
Transaction Documents.
Each of
the Company Parties has all necessary power and authority to execute and deliver
the Transaction Documents to which they are a party and to perform its
respective obligations thereunder; each of the Transaction Documents has been
duly authorized by the Company Parties, as the case may be, and, when executed
and delivered by the Company Parties, as the case may be, will constitute a
valid and binding agreement of the Company Parties, as the case may be,
enforceable against the Company Parties in accordance with its terms; and the
Indenture, when executed and delivered by the Company Parties, will meet the
requirements for qualification under the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Trust
Indenture Act”).
4
(c) Acquisition
of Pogo Assets.
After
giving effect to the Transactions contemplated or to be contemplated by the
CIM,
the Company will have acquired the Pogo Assets as contemplated or to be
contemplated by the CIM.
(d) The
Regulation S Notes.
The
Company has all necessary power and authority to execute, issue and deliver
the
Regulation S Notes; the Regulation S Notes have been duly authorized for
issuance and sale by the Company, will be in the form contemplated by the
Indenture and, when executed, authenticated and issued in accordance with the
terms of the Indenture and delivered to and paid for by the Initial Purchasers
pursuant to this Agreement, will constitute valid and binding obligations of
the
Company, entitled to the benefits of the Indenture, enforceable against the
Company in accordance with their terms. The Regulation S Notes and the
Guarantees will conform, in all material respects to the description thereof
contained or to be contained in the CIM.
(e) The
Guarantees.
Each of
the Guarantors has all necessary power and authority to execute, issue and
deliver its respective Guarantee; the Guarantees have been duly authorized
for
issuance and sale by each of the Guarantors, will be in the form contemplated
by
the Indenture and, when executed and the Guarantees issued in accordance with
the terms of the Indenture, will constitute valid and binding obligations of
each of the Guarantors, entitled to the benefits of the Indenture, enforceable
against each of the Guarantors in accordance with their terms.
(f) The
Exchange Notes and Related Guarantees.
Each of
the Company Parties has all necessary power and authority to execute, issue
and
deliver the Exchange Notes and the related Guarantees; the Exchange Notes and
the related Guarantees to which they are a party have been duly authorized
for
issuance and sale by the Company Parties, as the case may be, will be in the
form contemplated by the Indenture and, when executed, authenticated and issued
in accordance with the terms of the Indenture and delivered to and exchanged
for
the Notes and the related Guarantees, as the case may be, will constitute valid
and binding obligations of the Company Parties, as the case may be, entitled
to
the benefits of the Indenture, enforceable against the Company Parties, as
the
case may be, in accordance with their terms.
(g) No
Material Adverse Change.
Except
as otherwise disclosed or to be disclosed in the CIM, and for the period from
and after the date hereof and prior to the Closing Date, except as otherwise
disclosed or to be disclosed in the CIM: (i) there has been no material adverse
change, or any development that could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations, whether or not arising from transactions
in
the ordinary course of business, of the Company and its subsidiaries, considered
as one entity, Parent or the Pogo Assets (any such change is called a
“Material
Adverse Change”);
(ii)
Parent, or the Company and its subsidiaries, considered as one entity, have
not
incurred any material liability or obligation (including any off-balance sheet
obligation), indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not in the
ordinary course of business; (iii) there has been no dividend or distribution
of
any kind declared, paid or made by the Company or Parent, except for dividends
paid to the Company or other subsidiaries, any of the Company’s subsidiaries on
any class of capital stock or repurchase or redemption by the Company or Parent
or any of its subsidiaries of any class of capital stock; and (iv) there has
not
occurred any downgrading from the Caa2 rating by ▇▇▇▇▇’▇ Investors Service, Inc
and the CCC rating by Standard & Poor’s Rating Services accorded to any
securities of the Parent of the Company, nor has any notice been given of any
intended or potential downgrading or of any review for a possible change that
does not indicate the direction of the possible change, in the rating accorded
any securities of the Parent or the Company or any of its subsidiaries by any
“nationally recognized statistical rating organization” (as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act).
5
(h) Going
Concern of Company.
On the
Closing Date, after giving effect to the offering and sale of the Notes and
the
application of the proceeds thereof as described or to be described in the
CIM,
(i) the fair value and present fair saleable value of the assets of the Company
and its subsidiaries on a going concern basis will exceed the sum of its stated
liabilities and identified contingent liabilities; and (ii) each of the Company
and its subsidiaries will not be (a) left with unreasonably small capital with
which to carry on its business as it is proposed to be conducted, (b) unable
to
pay its debts (contingent or otherwise) as they mature or (c) otherwise
insolvent. In computing the amount of such contingent liabilities at any time,
such liabilities will be computed at the amount that, in the light of all the
facts and circumstances existing at such time, represent the amount that can
reasonably be expected to become an actual or matured liability.
(i) Independent
Accountants.
(i)
UHY, LLP, who have expressed their opinion with respect to the financial
statements of the Company and, the carve-out financial statements for Castex
Energy, Inc. (which, in each case, includes the related notes thereto) included
or to be included in the CIM and (ii) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, who have expressed
their opinion with respect to the financial statements of ▇▇▇▇▇▇ Energy Offshore
L.L.C., ▇▇▇▇▇▇ Texas GP, L.L.C. and ▇▇▇▇▇▇ Texas L.L.C. (which term includes
the
related notes thereto) included or to be included in the CIM, are each (i)
independent public or certified public accountants as required by the Securities
Exchange Act of 1934 as amended (the “Exchange
Act”),
(ii)
in compliance with the applicable requirements relating to the qualification
of
accountants under Rule 2-01 of Regulation S-X and (iii) a registered public
accounting firm as defined by the Public Company Accounting Oversight Board
whose registration has not been suspended or revoked and who has not requested
such registration to be withdrawn.
(j) Preparation
of the Financial Statements.
As of
the date hereof, the financial statements contained in the Time of Sale Document
and contained or to be contained in the CIM, present fairly in all material
respects the consolidated financial position of (i) the Company and its
subsidiaries, (ii) ▇▇▇▇▇▇ Energy Offshore L.L.C., ▇▇▇▇▇▇ Texas GP L.L.C., and
▇▇▇▇▇▇ Texas L.L.C., (iii) the assets acquired from Castex Energy, Inc., and
(iv) the Pogo Assets, in each case, as of and at the dates indicated and the
results of each of their respective operations and cash flows for the periods
specified. All such financial statements have been prepared in conformity in
all
material respects with generally accepted accounting principles applied on
a
consistent basis throughout the periods involved, except as contemplated or
to
be contemplated by the CIM. As of the date hereof, the financial data set forth
or to be set forth in the CIM, and the financial data set forth or to be set
forth in the CIM will as of its date, fairly present the information set forth
therein on a basis consistent with that of the audited and unaudited financial
statements contained or to be contained in the CIM.
6
(k) Pro
Forma Financial Information.
The pro
forma financial information of the Company and its subsidiaries and the related
notes thereto included or to be included under the captions Summary - Energy
XXI
Summary Historical and Pro Forma Financial Data,” “Summary - Summary Unaudited
Consolidated Pro Forma Financial Statements” and “Capitalization” under the
column “As Adjusted” and elsewhere in the CIM, as of its date, presented fairly
the information contained therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give
effect to the Transactions and circumstances referred to therein.
(l) Engineer
Reports.
The
Company has heretofore delivered to the Initial Purchasers true, correct and
complete copies of the engineering reports of (i) Netherland, ▇▇▇▇▇▇ &
Associates, (ii) ▇▇▇▇▇▇ & ▇▇▇▇▇, Ltd., and (iii) ▇▇▇▇▇ ▇▇▇▇▇
Company LP (collectively, the “Engineer
Reports”).
There
have been no material adverse developments concerning the matters reported
in
such Engineering Reports since their respective dates.
(m) Incorporation
and Good Standing of the Company Parties.
Each of
the Company Parties has been duly incorporated or organized and is validly
existing as a corporation, partnership or limited liability company, as
applicable, in good standing under the laws of the jurisdiction of its
incorporation or organization and has the power and authority (corporate or
other) to own, lease and operate its properties and to conduct its business
as
described or to be described in the CIM as of its date, and to enter into and
perform its obligations under each of the Transaction Documents to which it
is a
party. Each of the Company Parties is duly qualified as a foreign corporation,
partnership or limited liability company, as applicable, 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 to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
financial position, stockholders’ equity, results of operations or business of
the Company, Parent or the Pogo Assets (a “Material
Adverse Effect”).
All
of the issued and outstanding capital stock or other equity or ownership
interest of each of the Subsidiary Guarantors has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, charge, encumbrance or adverse claim, except as
disclosed or to be disclosed in the CIM. Parent does not, directly or
indirectly, own any securities of any entity other than the Energy XXI, (US
Holdings) Limited, Energy XXI USA, Inc., the Company and its subsidiaries.
As of
the date hereof, the Company does not own or control, and as of the Closing
Date, the Company will not own or control, directly or indirectly, any
corporation, association or other entity other than (i) the subsidiaries listed
on Exhibit
A
hereto
and (ii) such other entities omitted from Exhibit
A
hereto,
which, when such omitted entities are considered in the aggregate as a single
subsidiary, would not constitute a “significant subsidiary” within the meaning
of Rule 1-02(w) of Regulation S-X.
(n) Capitalization
and Other Capital Stock Matters.
As of
the date hereof, the capitalization of the Company and its subsidiaries
presented on a consolidated basis in the CIM under the caption “Capitalization”
under the column “Actual” is a fair summary of such capitalization in all
material respects.
7
(o) Non-Contravention
of Existing Instruments; No Further Authorizations or Approvals
Required.
None of
the Company Parties (i) is in violation of its charter or by laws, (ii) is
in
default (or, with the giving of notice or lapse of time, would be in default
or
constitute a default) (“Default”)
under
any indenture, mortgage, loan or credit agreement, note, contract, franchise,
lease or other instrument to which any of the Company Parties 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 Parties is subject (each, an “Existing
Instrument”),
or
(iii) is in violation of any law, administrative regulation or administrative
or
court decree applicable to any of the Company Parties’ except with respect to
clauses (ii) and (iii) of this sentence, for such Defaults or violations as
would not, individually or in the aggregate, result in a Material Adverse
Effect. Each of the Company Parties’ execution, delivery and performance of the
Transaction Documents to which it is a party and the consummation of the
Transactions, including the issuance and sale of the Notes, (i) will not result
in any violation of the provisions of the charter or bylaws of any of the
Company Parties, (ii) will not conflict with or constitute a breach of, or
Default or a Debt Repayment Triggering Event (as defined below) under, or result
in the creation or imposition of any security interest, mortgage, pledge, lien,
charge, encumbrance or adverse claim upon any property or assets of any of
the
Company Parties pursuant to, or require the consent of any other party to any
Existing Instrument or other third party and (iii) will not result in any
violation of any law, administrative regulation or administrative or court
decree applicable to any of the Company Parties except with respect to clauses
(ii) and (iii) of this sentence, for such conflicts, breaches, Defaults, Debt
Repayment Triggering Events or violations as would not, individually or in
the
aggregate, result in a Material Adverse Effect. As used herein, a “Debt
Repayment Triggering Event”
means
any event or condition that gives, or with the giving of notice or lapse of
time
would give, 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
any of the Company Parties.
(p) Regulatory
Approval.
No
consent, approval, authorization or other order of, or registration or filing
with, any court or other governmental or regulatory authority or agency, is
required for each of the Company Parties’ execution, delivery and performance of
the Transaction Documents to which it is a party and consummation of the
Transactions, except (i) with respect to the transactions contemplated by the
Registration Rights Agreement or the filing of a Current Report on Form 8-K
with
the Commission as may be required under the Securities Act and the Exchange
Act,
as the case may be, (ii) as required by the state securities or “blue sky” laws,
and (iii) for such consents, approvals, authorizations, orders, filings or
registrations that have been obtained or made and are in full force and effect
except would not have a Market Adverse Effect.
(q) No
Material Actions or Proceedings.
Except
as otherwise disclosed in the CIM, there are no legal or governmental actions,
suits or proceedings pending or, to the best of the Company’s knowledge, (i)
threatened against or affecting any of the Company Parties, (ii) which has
as
the subject thereof any officer or director of, or property owned or leased
by,
any of the Company Parties or (iii) relating to environmental or discrimination
matters, where in any such case (A) any such action, suit or proceeding, if
so
determined adversely, would reasonably be expected to result in a Material
Adverse Effect or adversely affect the consummation of the Transactions or
(B)
any such action, suit or proceeding is or would be material in the context
of
the offer and sale of Notes. No material labor dispute with the employees of
any
of the Company Parties, or with the employees of any principal supplier of
the
Company Parties, exists or, to the best of the Company’s knowledge, is
threatened or imminent.
8
(r) Intellectual
Property Rights.
Except
as otherwise disclosed or to be disclosed in the CIM, the Company Parties own
or
possess, and as of the closing of the Transaction will own and possess,
sufficient trademarks, service marks, trade names, patents, patent rights,
copyrights, domain names, licenses, approvals, trade secrets, inventions,
know-how (including unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), licenses and other similar rights
(collectively, “Intellectual
Property Rights”)
reasonably necessary to conduct their businesses as now conducted and as to
be
conducted as described or to be described in the CIM, except where the failure
to own or possess such Intellectual Property Rights would not have a Material
Adverse Effect.
(s) All
Necessary Permits, etc.
Except
as otherwise disclosed in the CIM, each of the Company Parties possess such
valid and current certificates, authorizations or permits issued by the
appropriate state, federal or other applicable regulatory agencies or bodies
and
such valid licenses or other rights to use all databases, geological data,
geophysical data, engineering data, seismic data, maps and other technical
information, in each case, necessary to conduct their respective businesses,
and
neither the Company Parties nor any Guarantor has received, or has any reason
to
believe that it has received or will receive, any notice of proceedings relating
to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if
the
subject of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(t) Title
to Properties.
Each of
the Company Parties has (i) generally satisfactory title to its oil and gas
properties, title investigations having been carried out by the Company Parties
in accordance with the practice in the oil and gas industry in the areas in
which the Company Parties operate except as, in each case, would not result
in a
Material Adverse Effect, (ii) good and marketable title to all other real
property owned by it to the extent necessary to carry on its business and (iii)
good and marketable title to all personal property owned by it, in each case
free and clear of all liens, encumbrances and defects except such as are
described or to be described in the CIM or such as do not materially affect
the
value of the properties of the Company Parties, considered as one enterprise,
and do not interfere with the use made and proposed to be made of such
properties, by the Company Parties, considered as one enterprise; and all of
the
leases and subleases material to the business of the Company Parties, considered
as one enterprise, and under which any of the Company Parties holds properties
described or to be described in the CIM, are in full force and effect, and
none
of the Company Parties has any notice of any material claim of any sort that
has
been asserted by anyone adverse to the rights of any of the Company Parties
under any of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company Parties to the continued possession of
the
leased or subleased premises under any such lease or sublease.
(u) Gas
Imbalances; Prepayments.
On a
net basis there are no gas imbalances, take-or-pay or other prepayments that
would require the Company or any of its subsidiaries to deliver Hydrocarbons
produced from the Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor exceeding one-half bcf of gas (on
an
mcf equivalent basis) in the aggregate, other than as disclosed or to be
disclosed in the CIM or as would not result in a Material Adverse
Effect.
9
(v) Tax
Law Compliance.
Except
as disclosed or to be disclosed in the CIM, the Company Parties have filed
all
necessary federal and state income and franchise tax returns and have paid
all
taxes required to be paid by any of them and, if due and payable, any related
or
similar assessment, fine or penalty levied against any of them except as may
be
being contested in good faith and by appropriate proceedings, except as would
not result in a Material Adverse Effect. The Company has made adequate charges,
accruals and reserves in the applicable financial statements referred to in
Sections
3(j)
above in
respect of all federal and state and income and franchise taxes for all periods
as to which the tax liability of the Company or any of its subsidiaries has
not
been finally determined, other than as disclosed or to be disclosed in the
CIM
or as would not result in a Material Adverse Effect.
(w) Company’s
Accounting System.
The
Company makes and keeps accurate books and records and maintains a system of
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences in each case, other than as
disclosed or to be disclosed in the CIM or as would not result in a Material
Adverse Effect.
(x) Insurance.
Each of
the Company Parties is insured by recognized, financially sound and reputable
institutions with policies in such amounts and with such deductibles and
covering such risks as are generally deemed adequate and customary for their
businesses including, but not limited to, policies covering real and personal
property owned or leased by the Company Parties against theft, damage,
destruction, acts of vandalism, earthquakes and hurricanes, other than as
disclosed or to be disclosed in the CIM or as would not result in a Material
Adverse Effect. The Company has no reason to believe that it or any Guarantor
will not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted
and
at a cost that would not result in a Material Adverse Change. Except as
described or to be described in the CIM and except as would not result in a
Material Adverse Effect, none of the Company Parties has been denied any
insurance coverage which it has sought or for which it has applied.
(y) No
Unlawful Contributions or Other Payments.
Neither
the Company Parties nor, to the best of the Company’s knowledge, any employee or
agent of any of the Company Parties, has made any contribution or other payment
to any official of, or candidate for, any federal, state or foreign office
in
violation of any law.
10
(z) Disclosure
Controls and Procedures; Deficiencies in or Changes to Internal Control Over
Financial Reporting.
Parent
has established and maintains disclosure controls and procedures (as defined
in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended), which (i) are designed to ensure that material information relating
to
the Parent, including its consolidated subsidiaries, is made known to the
Parent’s principal executive officer and its principal financial officer by
others within those entities and are effective in all material respects to
perform the functions for which they were established. Based on the most recent
evaluation of its disclosure controls and procedures, Parent is not aware of
(i)
any significant deficiencies or material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to
adversely affect its ability to record, process, summarize and report financial
information or (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in Parent’s internal control over
financial reporting. Parent is not aware of any change in its internal control
over financial reporting that has occurred during its most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect
its
internal control over financial reporting.
(aa) Compliance
with Environmental Laws.
Except
as described or to be described in the CIM or as would not, singly or in the
aggregate, result in a Material Adverse Effect, (i) neither the Company nor
any of its subsidiaries is in violation of any federal, state or local 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”),
(ii) the Company Parties have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with
their requirements, (iii) there are no pending or 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 any of the Company Parties and (iv) 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 any of the
Company Parties relating to Hazardous Materials or any Environmental
Laws.
(bb) Compliance
with Laws.
The
Company has not been advised, and has no reason to believe, that it and each
of
the Guarantors are not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, except where failure to be so in compliance would not result in a
Material Adverse Effect.
(cc) Company
Parties Not an “Investment Company.”
Neither the Company nor any Guarantor is, and after receipt of payment for
the
Notes, will be, an “investment company” within the meaning of Investment Company
Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
11
(dd) Brokers.
Except
for the Initial Purchasers there is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder’s fee or other fee
or commission as a result of the Regulation S Offering or the transactions
contemplated thereby.
(ee) No
Registration Required Under the Securities Act.
Assuming the accuracy of the representations and warranties of the Initial
Purchasers contained in this Agreement and the compliance of such parties with
the agreements set forth herein and therein, it is not necessary, in connection
with the issuance and sale of the Regulation S Notes, in the manner contemplated
by the Transaction Documents and the CIM, to register the Regulation S Notes
under the Securities Act or to qualify the Indenture under the Trust Indenture
Act.
(ff) No
U.S. Persons.
The
Company will not offer or sell any of the Regulation S Notes to any person
whom
it reasonably believes is not (i) a non-“U.S. person” or non-“U.S.
Purchaser” (as defined in Regulation S of the Securities Act.
(gg) No
Directed Selling Efforts.
To the
knowledge of the Company, none of the Company Parties or any of their respective
Affiliates have engaged, or will engage, directly or indirectly in any form
of
“directed selling efforts” in connection with the offering of the Regulation S
Notes (as those terms are used in Regulation S under the Securities Act) or
in
any manner involving a public offering within the meaning of Section 4(2) of
the
Securities Act. To the knowledge of the Company, none of the Company Parties
has
entered, and will enter, into any arrangement or agreement with respect to
the
distribution of the Regulation S Notes, except for this Agreement, the
Indenture, the Escrow Agreement, the Engagement Letter and the Registration
Rights Agreement, and the Company agrees not to enter into any such arrangement
or agreement.
The
Company acknowledges that the Initial Purchasers and, for purposes of the
opinion to be delivered pursuant to Section 7 hereof, counsel to the Company,
will rely upon the accuracy and truthfulness of the foregoing representations
and hereby consents to such reliance.
4. Covenants
of the Company Parties.
Each of
the Company Parties jointly and severally agrees:
(a) To
(i)
advise the Initial Purchasers promptly after obtaining knowledge (and, if
requested by the Initial Purchasers, confirm such advice in writing) of (A)
the
issuance by any U.S. or non-U.S. federal or state securities commission of
any
stop order suspending the qualification or exemption from qualification of
any
of the Regulation S Notes for offer or sale in any jurisdiction, or the
initiation of any proceeding for such purpose by any state securities commission
or other regulatory authority, or (B) the happening of any event that makes
any
statement of a material fact made in the Time of Sale Document or the CIM untrue
or that requires the making of any additions to or changes in the CIM in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, (ii) use its reasonable best efforts to prevent
the issuance of any stop order or order suspending the qualification or
exemption from qualification of any of the Regulation S Notes under any U.S.
state securities or Blue Sky laws (or their equivalent in non-U.S.
jurisdictions), and (iii) if, at any time, any U.S. or non-U.S. federal or
state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of any of the
Regulation S Notes under any such laws, use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible
time.
12
(b) To
(i)
furnish the Initial Purchasers, without charge, as many copies of the Time
of
Sale Document and the CIM, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request, and (ii) promptly prepare, upon
the
Initial Purchasers’ reasonable request, any amendment or supplement to the Time
of Sale Document and the CIM that the Initial Purchasers, upon advice of legal
counsel, determines may be necessary in connection with Exempt Resales (and
the
Company hereby consents to the use of the Time of Sale Document and the CIM,
and
any amendments and supplements thereto, by the Initial Purchasers in connection
with Exempt Resales).
(c) Not
to
amend or supplement the Time of Sale Document or the CIM prior to the Closing
Date, or at any time prior to the completion of the resale by the Initial
Purchasers of all the Regulation S Notes purchased by the Initial Purchasers,
unless the Initial Purchasers shall previously have been advised thereof and
shall have provided its written consent thereto.
(d) So
long
as the Initial Purchasers shall hold any of the Regulation S Notes, (i) if
any
event shall occur as a result of which, in the reasonable judgment of the
Company or the Lead Initial Purchaser, it becomes necessary or advisable to
amend or supplement the Time of Sale Document or the CIM in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to amend or supplement the Time
of
Sale Document or the CIM to comply with any Federal, state, local or foreign
statute, law (including, without limitation, common law) or ordinance, or any
judgment, decree, rule, regulation or order (collectively, “Applicable
Law”)
of any
federal, state, local and other governmental authority, governmental or
regulatory agency or body, court, arbitrator or self-regulatory organization,
domestic or foreign (each, a “Governmental
Authority”),
to
prepare, at the expense of the Company, an appropriate amendment or supplement
to the Time of Sale Document and the CIM (in form and substance reasonably
satisfactory to the Initial Purchasers) so that (A) as so amended or
supplemented, the Time of Sale Document and the CIM will not include an untrue
statement of 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, and (B) the Time of Sale Document and the CIM
will comply with Applicable Law and (ii) if, following the filing by the Company
or Parent of the information required by the SEC on Current Report on Form
8-K
under 1.02, 2.01 and 9.01 regarding the closing of the Pogo Acquisition, in
the
reasonable judgment of the Company, it becomes necessary or advisable to amend
or supplement the Time of Sale Document or the CIM so that the Time of Sale
Document and the CIM will contain all of the information specified in, and
meet
the requirements of, Rule 144A(d)(4) of the Securities Act, to prepare an
appropriate amendment or supplement to the Time of Sale Document or the CIM
(in
form and substance reasonably satisfactory to the Initial Purchasers) so that
the Time of Sale Document or the CIM, as so amended or supplemented, will
contain the information specified in, and meet the requirements of, such
Rule.
13
(e) To
cooperate with the Initial Purchasers and the Initial Purchasers’ counsel in
connection with the qualification of the Regulation S Notes under the U.S.
and
non-U.S. securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may request and continue such qualification in effect so long as
reasonably required for Exempt Resales.
(f) Whether
or not any of the Transactions contemplated under the Regulation S Purchase
Documents are consummated or this Agreement is terminated, to pay (i) all costs,
expenses, fees and taxes incident to and in connection with: (A) the
preparation, printing and distribution of the Time of Sale Document and the
CIM
and all amendments and supplements thereto (including, without limitation,
financial statements and exhibits), and all other agreements, memoranda,
correspondence and other documents prepared and delivered in connection
herewith, (B) the negotiation, printing, processing and distribution (including,
without limitation, word processing and duplication costs) and delivery of,
each
of the Regulation S Purchase Documents, (C) the preparation, issuance and
delivery of the Regulation S Notes, (D) the qualification of the Regulation
S
Notes for offer and sale under any applicable Non-U.S. securities laws
(including, without limitation, the fees and disbursements of the Initial
Purchasers’ counsel relating to such registration or qualification, if any), (E)
furnishing such copies of the Time of Sale Document and the CIM, and all
amendments and supplements thereto, as may reasonably be requested for use
by
the Initial Purchasers and (F) the performance of the obligations of the Company
Parties under the Regulation S Purchase Agreements, including the Registration
Rights Agreement), (ii) all fees and expenses of the counsel, accountants and
any other experts or advisors retained by the Company, (iii) all expenses and
listing fees in connection with the application for quotation of the Regulation
S Notes on the Private Offerings, Resales and Trading Automated Linkages market
(“PORTAL”)
and
with the listing of the Regulation S Notes on the Luxembourg Stock Exchange
and
any other non-U.S. securities exchange, (iv) all fees and expenses (including
fees and expenses of counsel) of the Company in connection with approval of
the
Regulation S Notes by DTC for “book-entry” transfer and (v) all fees charged by
rating agencies in connection with the rating of the Regulation S Notes. In
addition, and in addition to any fees that may be paid to the Initial Purchasers
hereunder, whether or not any Regulation S Offering occurs (unless the Initial
Purchasers are unwilling to proceed with the Regulation S Offering with full
cooperation by the Company and willingness by the Company to proceed with the
Regulation S Offering and in the absence of fraud or material violation of
law
by the Company), the Company will reimburse the Initial Purchasers, promptly
upon receipt of an invoice therefor, for all out-of-pocket expenses (including
reasonable fees and expenses of its counsel, including, for the avoidance of
doubt, the reasonable fees and expenses of any other independent experts
retained by the Initial Purchasers and the expenses of BNP Paribas Securities
Corp. in connection with the roadshow and investor meetings in Europe) incurred
by the Initial Purchasers in connection with the engagement contemplated
hereunder. This clause (f) shall not prejudice the payment of commissions,
fees
and expenses due to the Placement Agents under the terms of the Placement Agency
Agreement; provided,
however
the
Company shall not be obligated to pay the same commissions, fees and expenses
twice.
(g) To
apply
the net proceeds from the sale of the Notes will be used by the Company in
the
manner described in the Preliminary CIM and described or to be described in
the
CIM under the caption titled “Use of Proceeds.”.
14
(h) To
not
invest, or otherwise use the proceeds received by the Company from its sale
of
the Notes in such a manner as would require the Company or any of the Guarantors
to register as an investment company under the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission
thereunder.
(i) Not
to
will take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of
the
price of the Notes or any other reference security, whether to facilitate the
sale or resale of the Notes or otherwise.
(j) To
use
its reasonable best efforts to timely do and perform all things required to
be
done and performed under the Transaction Documents prior to and after the
Closing Date.
(k) Not
to,
and to ensure that no affiliate (as defined in Rule 501(b) of the Securities
Act) of the Company will, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any “security” (as defined in the Securities
Act) that would be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the sale to the Initial
Purchasers or to the Subsequent Purchasers of the Notes.
(l) Following
the filing by the Company or Parent of the information required by the SEC
on
Current Report on Form 8-K under 1.02, 2.01 and 9.01 regarding the closing
of
the Pogo Acquisition and for so long as any of the Regulation S Notes remain
outstanding, during any period in which the Company is not subject to Section
13
or 15(d) of the Exchange Act, to make available, upon request, to any owner
of
the Regulation S Notes in connection with any sale thereof and any prospective
Subsequent Purchasers of such Regulation S Notes from such owner, the
information required by Rule 144A(d)(4) under the Securities Act.
(m) To
comply
with the representation letter of the Company to DTC relating to the approval
of
the Regulation S Notes by DTC for “book entry” transfer; and to use its
reasonable efforts to effect the inclusion of the Regulation S Notes in PORTAL
and to list the Regulation S Notes on the Luxembourg Stock Exchange or another
European stock exchange.
(n) For
so
long as any of the Regulation S Notes remain outstanding, the Company will
furnish to the Initial Purchasers copies of all reports and other communications
(financial or otherwise) furnished by Parent or the Company to the Trustee
or to
the holders of the Regulation S Notes and, as soon as available, copies of
any
reports or financial statements furnished to or filed by Parent or the Company
with the SEC or any U.S. or non-U.S. securities exchange on which any class
of
securities of Parent or the Company may be listed; provided
that
this covenant shall not apply with respect to any reports or other
communications that are publicly available on the ▇▇▇▇▇ system of the SEC or
are
posted on Parent’s or the Company’s website.
(o) Except
in
connection with the Exchange Offer or the filing of the Shelf Registration
Statement, not to, and not to authorize or permit any person acting on its
behalf to, (i) distribute any offering material in connection with the offer
and
sale of the Regulation S Notes other than the Time of Sale Document and the
CIM
and any amendments and supplements to the CIM prepared in compliance with this
Agreement and the Regulation D Purchase Agreement, without the prior written
approval of the Initial Purchasers, or (ii) solicit any offer to buy or offer
to
sell the Regulation S Notes by means of any form of directed selling efforts
(including, without limitation, as such terms are used in Regulation S under
the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act.
15
(p) During
the two year period after the Closing Date (or such shorter period as may be
provided for in Rule 144(k) under the Securities Act, as the same may be in
effect from time to time), to not, and to not permit any current or future
Subsidiaries of either the Company or any other affiliates (as defined in Rule
144A under the Securities Act) controlled by the Company to, resell any of
the
Regulation S Notes which constitute “restricted securities” under Rule 144 that
have been reacquired by the Company, any current or future Subsidiaries or
any
other “affiliates” (as defined in Rule 144A under the Securities Act) controlled
by the Company, except pursuant to an effective registration statement under
the
Securities Act.
(q) The
Company shall pay all stamp, documentary and transfer taxes and other duties,
if
any, which may be imposed by any U.S. or non-U.S. federal, state or local taxing
authority thereof or therein with respect to the issuance of the Regulation
S
Notes or the sale thereof to the Initial Purchasers.
5. Representations
and Warranties of the Initial Purchasers.
Each
Initial Purchaser severally represents and warrants that:
(a) It
is a
QIB as defined in Rule 144A under the Securities Act and it will offer the
Regulation S Notes for resale only upon the terms and conditions set forth
in
this Agreement and in the Time of Sale Document and the CIM.
(b) It
is not
acquiring the Regulation S Notes with a view to any distribution thereof that
would violate the Securities Act or the securities laws of any state of the
United States or any other applicable jurisdiction. In connection with the
Exempt Resales, it will solicit offers to buy the Regulation S Notes only from,
and will offer and sell the Regulation S Notes only to non-U.S. persons
reasonably believed by the Initial Purchasers to be a purchaser referred to
in
Regulation S under the Securities Act; provided,
however,
that in
purchasing such Regulation S Notes, such persons are deemed to have represented
and agreed as provided under the caption “Notice to Investors” contained in the
Time of Sale Document and the CIM.
(c) No
directed selling efforts has or will be made by the Initial Purchasers or any
of
its representatives in connection with the offer and sale of any of the
Regulation S Notes within the meaning of Regulation S.
6. Conditions.
The
obligations of the Initial Purchasers to purchase the Regulation S Notes under
this Agreement are subject to the performance by each of the Company Parties
of
their respective covenants and obligations hereunder and the satisfaction of
each of the following conditions:
(a) All
the
representations and warranties of the Company Parties contained in this
Agreement and in each of the Regulation S Purchase Documents shall be true
and
correct as of the date hereof and at the Closing Date. On or prior to the
Closing Date, the Company and each other party to the Regulation S Purchase
Documents (other than the Initial Purchasers) shall have performed or complied
with all of the agreements and satisfied all conditions on their respective
parts to be performed, complied with or satisfied pursuant to the
Regulation S Purchase Documents (other than conditions to be satisfied by
such other parties, which the failure to so satisfy would not, individually
or
in the aggregate, have a Material Adverse Effect).
16
(b) No
action
shall have been taken and no statute, rule, regulation or order shall have
been
enacted, adopted or issued by any federal, state or foreign governmental or
regulatory authority of competent jurisdiction that would, as of the Closing
Date, render impossible the issuance or sale of the Regulation S Notes; and
no
injunction or order of any federal, state or foreign court shall have been
issued that would, as of the Closing Date, prevent the issuance or sale of
the
Regulation S Notes.
(c) No
Proceeding shall be pending or, to the knowledge of the Company after due
inquiry, threatened other than Proceedings that (A) if adversely determined
would not, individually or in the aggregate, adversely affect the issuance
or
marketability of the Regulation S Notes that are the subject of this Agreement,
and (B) would not, individually or in the aggregate, have a Material Adverse
Effect.
(d) Subsequent
to the respective dates as of which data and information is given in the Time
of
Sale Document and the CIM, there shall not have been any Material Adverse
Change.
(e) On
or
after the date hereof, (i) there shall not have occurred any downgrading,
suspension or withdrawal of, nor shall any notice have been given of any
potential or intended downgrading, suspension or withdrawal of, or of any review
(or of any potential or intended review) for a possible change that does not
indicate the direction of the possible change in, any rating of the Company
or
any securities of the Company (including, without limitation, the placing of
any
of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any “nationally
recognized statistical rating organization” as such term is defined for purposes
of Rule 436(g)(2) under the Securities Act, (ii) there shall not have occurred
any change, nor shall any notice have been given of any potential or intended
change, in the outlook for any rating of the Company or any securities of the
Company by any such rating organization and (iii) no such rating organization
shall have given notice that it has assigned (or is considering assigning)
a
lower rating to the Regulation S Notes than that on which the Regulation S
Notes
were marketed.
(f) The
Initial Purchasers shall have received on the Closing Date:
(i) certificates
dated the Closing Date, signed by (1) the Chief Executive Officer and (2) the
principal financial or accounting officer of the Company, on behalf of the
Company, to the effect that (a) the representations and warranties set forth
in
Section 3 hereof, in each of the Regulation S Purchase Documents are true
and correct with the same force and effect as though expressly made at and
as of
the Closing Date, (b) the Company Parties have performed and complied with
all
agreements and satisfied all conditions in all material respects on their part
to be performed or satisfied at or prior to the Closing Date, (c) at the Closing
Date, since the date hereof or since the date of the most recent financial
statements in the Time of Sale Document and the CIM (exclusive of any amendment
or supplement thereto after the date hereof), no event or events have occurred,
no information has become known nor does any condition exist that, individually
or in the aggregate, would have a Material Adverse Effect, (d) since the date
of
the most recent financial statements in the Time of Sale Document and the CIM
(exclusive of any amendment or supplement thereto after the date hereof), other
than as described in the Time of Sale Document and the CIM or contemplated
hereby, neither the Company nor any Subsidiary of the Company has incurred
any
liabilities or obligations, direct or contingent, not in the ordinary course
of
business, that are material to the Company and the Subsidiaries, taken as a
whole, or entered into any transactions not in the ordinary course of business
that are material to the business, condition (financial or otherwise) or results
of operations or prospects of the Company and the Subsidiaries, taken as a
whole, and there has not been any change in the capital stock or long-term
indebtedness of the Company or any Subsidiary of the Company that is material
to
the business, condition (financial or otherwise) or results of operations of
the
Company and the Subsidiaries, taken as a whole, and (e) the sale of the
Regulation S Notes has not been enjoined (temporarily or
permanently).
17
(ii) a
certificate, dated the Closing Date, executed by the Secretary of the Company
and each Guarantor, certifying such matters as the Initial Purchasers may
reasonably request.
(iii) The
Company Parties shall have each delivered to the Purchasers or the Closing
Agent
(on behalf of the Purchasers) a certificate evidencing qualification by such
entity as a foreign corporation and good standing issued by the Secretaries
of
State (or comparable office) of each of the jurisdictions in which the Company
Parties operate as of a date within 30 days prior to the Closing
Date.
(iv) the
opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, U.S. counsel to the Company and Subsidiary
Guarantors, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bailhache, Bermuda counsel for Parent, in each
case dated as of the Closing Date, substantially to the effect set forth on
Exhibit B;
and
(v) an
opinion, dated the Closing Date, of ▇▇▇▇▇ Day, counsel to the Initial
Purchasers, in form satisfactory to the Initial Purchasers covering such matters
as are customarily covered in such opinions.
(g) The
terms
of each Transaction Document shall conform in all material respects to the
description thereof in the Time of Sale Document and the CIM. Each of the
Company Parties shall have executed and delivered, or caused to be delivered,
to
the Purchasers or the Closing Agent (i) each of the Transaction Documents
to which it is a party and (ii) the Regulation S Notes being purchased by the
Initial Purchasers at the Closing pursuant to this Agreement, in each case
in
form and substance reasonably satisfactory to the Initial
Purchasers.
(h) All
conditions to closing of each of the Transaction Documents shall be satisfied
or, where applicable, waived; and the Transactions shall have been consummated
in accordance with their terms and in accordance with the applicable Transaction
Documents and as described in the Preliminary CIM and as described or to be
described in the CIM.
18
(i) At
least
$750.00 million in aggregate principal amount of Notes shall have been sold
by
the Company to the Regulation D Purchasers and Initial Purchasers and an amount
shall have been borrowed by the Company under the Credit Agreement sufficient
to
repay all outstanding borrowings under the Amended and Restated Second Lien
Credit Agreement, dated as of July 28, 2006 among the Company, various lenders
named therein, BNP Paribas, and RBS Securities Corporation (the “Second
Lien Facility”).
(j) The
Regulation S Notes shall have been designated for trading on PORTAL, to the
extent so eligible, and shall be eligible for clearance and settlement through
DTC.
7. Indemnification
and Contribution.
(a) Each
of
the Company Parties jointly and severally agree to indemnify and hold harmless
the Initial Purchasers, each of their directors, officers and employees, and
each person, if any, who controls the Initial Purchasers within the meaning
of
the Securities Act or the Exchange Act, against any losses, claims, damages
or
liabilities of any kind to which the Initial Purchasers, director, officer,
employee or such controlling person may become subject under the Securities
Act,
the Exchange Act or other federal or state statutory law or regulation, or
at
common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Company (not to be
unreasonably withheld, delayed or conditioned), insofar as any such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or
are based upon:
(i) any
untrue statement or alleged untrue statement of a material fact contained in
the
Time of Sale Document or the CIM, or any amendment or supplement
thereto;
(ii) the
omission or alleged omission to state, in the Time of Sale Document or the
CIM
or any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(iii) any
breach by any of the Company Parties of their respective representations,
warranties and agreements set forth herein or breach of applicable
law;
and,
subject to the provisions hereof, will reimburse, as incurred, the Initial
Purchasers, director, officer, employee and each such controlling person for
any
legal or other expenses incurred by the Initial Purchasers or such controlling
person in connection with investigating, defending against or appearing as
a
third-party witness in connection with any such loss, claim, damage, liability
or action in respect thereof; provided,
however,
the
Company Parties will not be liable in any such case to the extent (but only
to
the extent) that a court of competent jurisdiction shall have determined by
a
final, unappealable judgment that such loss, claim, damage or liability resulted
solely from any untrue statement or alleged untrue statement or omission or
alleged omission made in the Time of Sale Document or the CIM or any amendment
or supplement thereto in reliance upon and in conformity with written
information concerning the Initial Purchasers furnished to the Company by the
Initial Purchasers specifically for use therein,
it being
understood and agreed that the only such information furnished by the Initial
Purchasers to the Company consists of the information described in subsection
(b) below.
The
indemnity agreement set forth in this Section 7 shall be in addition to any
liability that the Company and the Guarantors may otherwise have to the
indemnified parties.
19
(b) The
Initial Purchasers agree to indemnify and hold harmless each of the Company
Parties and their respective directors, officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any such director, officer or controlling
person may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as a court of competent jurisdiction shall have determined
by
a final, unappealable judgment that such losses, claims, damages or liabilities
(or actions in respect thereof) have resulted solely from (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Time
of Sale Document or the CIM or any amendment or supplement thereto or (ii)
the
omission or the alleged omission to state therein a material fact required
to be
stated in the Time of Sale Document or the CIM or any amendment or supplement
thereto or necessary to make the statements therein not misleading, in each
case
to the extent (but only to the extent) that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and
in conformity with written information concerning such Initial Purchasers,
furnished to the Company or its agents by the Initial Purchasers specifically
for use therein as set forth in Section 11; and, subject to the limitation
set
forth immediately preceding this clause, will reimburse, as incurred, any legal
or other expenses incurred by the Company Parties or any such director, officer
or controlling person in connection with any such loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition
to
any liability that the Initial Purchasers may otherwise have to the indemnified
parties.
(c) As
promptly as reasonably practicable after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 7, such
indemnified party will, if a claim in respect thereof is to be made against
the
indemnifying party under this Section 7, notify the indemnifying party of the
commencement thereof in writing; but the omission to so notify the indemnifying
party (i) will not relieve such indemnifying party from any liability under
paragraph (a) or (b) above unless and only to the extent it is materially
prejudiced as a result thereof and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the
indemnification obligation provided in paragraphs (a) and (b) above. In case
any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be
entitled to participate therein and, to the extent that it may elect,
jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided,
however,
that 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 defendants in any such action include both the indemnified party and the
indemnifying party, and the indemnified party shall
have concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that
there may be one or more legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party, or (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after receipt by the indemnifying
party of notice of the institution of such action, then, in each such case,
the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action
on
behalf of such indemnified party or parties at the expense of the indemnifying
party. After notice from the indemnifying party to such indemnified party of
its
election so to assume the defense thereof and approval by such indemnified
party
of counsel appointed to defend such action, the indemnifying party will not
be
liable to such indemnified party under this Section 7 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred
by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in
the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 7 or the Company in the case of paragraph (b) of this Section 7,
representing the indemnified parties under such paragraph (a) or paragraph
(b),
as the case may be, who are parties to such action or actions), (ii) the
indemnifying party has authorized in writing the employment of counsel for
the
indemnified party at the expense of the indemnifying party or (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 commencement of the action, in each of which cases the fees
and
expenses of counsel shall be at the expense of the indemnifying party and shall
be paid as they are incurred.
After
such notice from the indemnifying party to such indemnified party, the
indemnifying party will not be liable for the costs and expenses of any
settlement of such action effected by such indemnified party without the prior
written consent of the indemnifying party (which consent shall not be
unreasonably withheld), unless such indemnified party waived in writing its
rights under this Section 7, in which case the indemnified party may effect
such
a settlement without such consent.
20
(d) No
indemnifying party shall be liable under this Section 7 for any settlement
of
any claim or action (or threatened claim or action) effected without its written
consent, which shall not be unreasonably withheld, but if a claim or action
settled with its written consent, or if there be a final judgment for the
plaintiff with respect to any such claim or action, each indemnifying party
jointly and severally agrees, subject to the exceptions and limitations set
forth above, to indemnify and hold harmless each indemnified party from and
against any and all losses, claims, damages or liabilities (and legal and other
expenses as set forth above) incurred by reason of such settlement or judgment.
No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect
any
settlement or compromise of any pending or threatened proceeding in respect
of
which the indemnified party is or could have been a party, or indemnity could
have been sought hereunder by the indemnified party, unless such settlement
(A)
includes an unconditional written release of the indemnified party, in form
and
substance satisfactory to the indemnified party, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or
on
behalf of the indemnified party.
21
(e) In
circumstances in which the indemnity agreement provided for in the preceding
paragraphs of this Section 7 is unavailable to, or insufficient to hold
harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contributions, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as
is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties, on the one hand, and the indemnified party, on the other,
from
the Offering or (ii) if the allocation provided by the foregoing clause (i)
is
not permitted by applicable law, not only such relative benefits but also the
relative fault of the indemnifying party or parties, on the one hand, and the
indemnified party, on the other, in connection with the statements or omissions
or alleged statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof). The relative benefits received
by the Company, on the one hand, and the Initial Purchasers, on the other,
shall
be deemed to be in the same proportion as the total proceeds from the Offering
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by the Initial Purchasers. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Initial Purchasers, on the other, the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission or alleged statement or omissions, and any
other equitable considerations appropriate in the circumstances.
(f) The
Company Parties and the Initial Purchasers agree that it would not be equitable
if the amount of such contribution determined pursuant to the immediately
preceding paragraph (e) were determined by pro rata or per capita allocation
or
by any other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of the immediately preceding
paragraph (e). Notwithstanding any other provision of this Section 7, the
Initial Purchasers shall not be obligated to make contributions hereunder that
in the aggregate exceed the total discounts, commissions and other compensation
(exclusive of the reimbursement of any out-of-pocket expenses) received by
such
Initial Purchasers under this Agreement, less the aggregate amount of any
damages that such Initial Purchasers have otherwise been required to pay by
reason of the untrue or alleged untrue statements or the omissions or alleged
omissions to state a material fact. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of the immediately preceding
paragraph (e), each person, if any, who controls the Initial Purchasers within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Initial Purchasers, and
each director of the Company Parties, each officer of the Company Parties and
each person, if any, who controls any of the Company Parties within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, shall
have the same rights to contribution as the Company Parties.
22
8. Termination.
The
Initial Purchasers may terminate this Agreement at any time prior to the Closing
Date by written notice to the Company if any of the following has
occurred:
(a) since
the
date hereof, any Material Adverse Effect or development involving or expected
to
result in a prospective Material Adverse Effect that could, in the Initial
Purchasers’ reasonable judgment, be expected to (i) make it impracticable or
inadvisable to proceed with the offering or delivery of the Regulation S Notes
on the terms and in the manner contemplated in the Time of Sale Document and
the
CIM, or (ii) materially impair the investment quality of any of the Regulation
S
Notes;
(b) the
failure of the Company Parties to satisfy the conditions contained in Section
6(a) hereof on or prior to the Closing Date;
(c) any
outbreak or escalation of hostilities or other national or international
calamity or crisis, including acts of terrorism, or material adverse change
or
disruption in economic conditions in, or in the financial markets of, the United
States (it being understood that any such change or disruption shall be relative
to such conditions and markets as in effect on the date hereof), if the effect
of such outbreak, escalation, calamity, crisis, act or material adverse change
in the economic conditions in, or in the financial markets of, the United States
could be reasonably expected to make it, in the Initial Purchasers’ judgment,
impracticable or inadvisable to market or proceed with the offering or delivery
of the Notes on the terms and in the manner contemplated in the Time of Sale
Document and the CIM or to enforce contracts for the sale of any of the
Regulation S Notes;
(d) the
suspension or limitation of trading generally in securities on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market or
any
setting of limitations on prices for securities on any such
exchange;
(e) the
enactment, publication, decree or other promulgation after the date hereof
of
any Applicable Law that in the Initial Purchasers’ counsel’s reasonable opinion
materially and adversely affects, or could be reasonably expected to materially
and adversely affect, the properties, business, operations, earnings, assets,
liabilities or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole;
(f) any
securities of the Company shall have been downgraded or placed on any “watch
list” for possible downgrading by any “nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; or
(g) the
representation and warranty contained in Section 3(a) of this Agreement is
incorrect in any way; or
(h) the
declaration of a banking moratorium by any Governmental Authority; or the taking
of any action by any Governmental Authority after the date hereof in respect
of
its monetary or fiscal affairs that in the Initial Purchasers’ opinion could
reasonably be expected to have a material adverse effect on the financial
markets in the United States or elsewhere.
For
the
avoidance of doubt, this Section 8 shall not alter ▇▇▇▇▇▇▇▇▇
& Company, Inc.’s
right to
a Tail Fee (as defined in the Engagement Letter) pursuant to the Engagement
Letter.
23
9. Survival
of Representations and Indemnities.
The
representations and warranties, covenants, indemnities and contribution and
expense reimbursement provisions and other agreements, representations and
warranties of the Company Parties set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Initial Purchasers, (ii) acceptance of the
Regulation S Notes, and payment for them hereunder, and (iii) any termination
of
this Agreement.
10. Default
by the Initial Purchasers.
If any
Initial Purchaser shall breach its obligations to purchase the Regulation S
Notes that it has agreed to purchase hereunder on the Closing Date and
arrangements satisfactory to the Company for the purchase of such Regulation
S
Notes are not made within 36 hours after such default, this Agreement shall
terminate with respect to such Initial Purchaser without liability on the part
of the Company or other such Initial Purchasers. Nothing herein shall relieve
such defaulting Initial Purchaser from liability for its default.
11. Information
Supplied by the Initial Purchasers.
The
statements set forth on the cover page with respect to price and in the first
sentence of the seventh paragraph and in the tenth paragraph under the heading
“Private Placement” in the Time of Sale Document and the CIM (to the extent such
statements relate to the Initial Purchasers) constitute the only information
furnished by the Initial Purchasers to the Company or the Subsidiaries for
the
purposes of Sections
4(a)
and
8
hereof.
12. No
Fiduciary Relationship.
The
Company Parties hereby acknowledge that, in connection with the Transactions,
(i) the Regulation S Offering, including the determination of the offering
price
of the Regulation S Notes and any related discounts, commissions and fees,
shall
be an arm’s-length commercial transaction between the Company and the Initial
Purchasers, (ii) the Initial Purchasers will be acting as an independent
contractors and will not be the agent or fiduciary of the Company or its
stockholders, creditors, employees, Subsequent Purchasers or any other party,
(iii) the Initial Purchasers shall not assume any advisory or fiduciary
responsibility in favor of the Company (irrespective of whether the Initial
Purchasers have advised or are currently advising the Company on other matters)
and the Initial Purchasers shall have no obligation to the Company Parties
with
respect to the Transactions except as may be set forth expressly herein or
in
the Transactions Documents, (iv) the Initial Purchasers and their respective
affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Company Parties and (v) the Initial
Purchasers shall not provide any legal, accounting, regulatory or tax advice
with respect to the Transactions and the Company Parties shall consult their
own
legal, accounting, regulatory and tax advisors to the extent they deem
appropriate. The Company hereby waives and releases, to the fullest permitted
by
law, any claims that either of the Company may have against the Initial
Purchasers with respect to any breach or alleged breach of any fiduciary or
similar duty to the Company in connection with the transactions contemplated
by
this Agreement or any matters leading up to such transactions.
13. Miscellaneous.
(a) Notices.
Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with an overnight courier service,
in
each case properly addressed to the party to receive the same. The addresses
and
facsimile numbers for such communications shall be:
24
If
to the
Initial Purchasers:
▇▇▇▇▇▇▇▇▇
& Company, Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
General Counsel
BNP
Paribas Securities Corp.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
Debt Capital Markets
BMO
Capital Markets Corp.
▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Director
Greenwich
Capital Markets, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Greenwich,
Connecticut 06830
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
Debt Capital Market Syndicate
Capital
One Southcoast, Inc.
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇. Suite 1000
New
Orleans, Louisiana 70112
Facsimile:
(▇▇▇)
▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Natexis
Bleichroeder Inc.
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ Floor
New
York,
NY 10105
Facsimile:
(▇▇▇) ▇▇▇ ▇▇▇▇
Attention:
Capital Markets
25
with
a
copy to:
▇▇▇▇▇
Day
▇▇▇
▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
New
York,
New York 10017
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
If
to
Company:
Energy
XXI Gulf Coast, Inc.
Suite
2626
1021
Main
Houston,
Texas 77002
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, Director
with
a
copy to:
▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP
First
City Tower
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Suite
2500
Houston,
Texas 77002-6760
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Attention:
▇. ▇▇▇▇ ▇▇▇▇▇, Esq.
Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender’s facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by an
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause
(A),
(B)
or
(C)
above,
respectively. Any party hereto may change the address for receipt of
communications by giving written notice to the others.
(b) Governing
Law; Jurisdiction; Jury Trial.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York. Any legal suit, action or proceeding arising out of
or
based upon this Agreement or the transactions contemplated hereby may be
instituted in the federal courts of the United States of America located in
the
Borough of Manhattan in the City of New York or the courts of the State of
New
York in each case located in the Borough of Manhattan in the City of New York.
Each party hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereby irrevocably waives any right it may have, and agrees not
to
request, a jury trial for the adjudication of any dispute hereunder or in
connection with or arising out of this Agreement or any transaction contemplated
hereby.
26
(c) Successors.
This
Agreement has been and is made solely for the benefit of and shall be binding
upon the Company Parties, the Initial Purchasers and, to the extent provided
in
Section 8 hereof, the controlling persons, officers, directors, partners,
employees, representatives and agents referred to in Section 8, and their
respective heirs, executors, administrators, successors and assigns, all as
and
to the extent provided in this Agreement, and no other person shall acquire
or
have any right under or by virtue of this Agreement. The term “successors and
assigns” shall not include a purchaser of any of the Regulation S Notes from the
Initial Purchasers merely because of such purchase. Notwithstanding the
foregoing, it is expressly understood and agreed that each purchaser who
purchases the Regulation S Notes from the Initial Purchasers is intended to
be a
beneficiary of the covenants of the Company Parties contained in the
Registration Rights Agreement to the same extent as if the Regulation S Notes
were sold and those covenants were made directly to such purchaser by the
Company Parties, and each such purchaser shall have the right to take action
against the Company Parties to enforce, and obtain damages for any breach of,
those covenants.
(d) Partial
Unenforceability.
The
invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section,
paragraph or provision hereof. If any Section, paragraph or provision of this
Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes)
as
are necessary to make it valid and enforceable.
(e) Entire
Agreement.
This
Agreement, together with the Engagement Letter, constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
(f) Counterparts.
This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided,
that a
facsimile signature shall be considered due execution and shall be binding
upon
the signatory thereto with the same force and effect as if the signature were
an
original, not a facsimile signature.
(g) Amendment.
This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. The failure
by
any party to exercise any right or remedy under this Agreement or otherwise,
or
delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.
(h) Headings.
The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
27
Please
confirm that the foregoing correctly sets forth the agreement between the
Company, the Guarantors and the Initial Purchasers.
| Very truly yours, | ||
|
ENERGY
XXI GULF COAST, INC.
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: Chief Executive Officer | ||
|
ENERGY
XXI (BERMUDA) LIMITED
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
ENERGY
XXI TEXAS, LP
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
ENERGY
XXI TEXAS GP, LLC
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
|
ENERGY
XXI GOM, LLC
|
||
| |
|
|
| By: | ||
|
Name: |
||
| Title: | ||
28
Accepted
and Agreed to:
|
▇▇▇▇▇▇▇▇▇
& COMPANY, INC.
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
|
GREENWICH
CAPITAL MARKETS, INC.
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
|
BNP
PARIBAS SECURITIES CORP.
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
|
BMO
CAPITAL MARKETS CORP.
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
|
CAPITAL
ONE SOUTHCOAST, INC.
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
|
NATEXIS
BLEICHROEDER INC.
|
||||
| By: | ||||
|
Name: |
||||
|
Title:
|
||||
29
Schedule
I
Pricing
Supplement
[attached]
30
Exhibit
A
List
of Subsidiaries
Energy
XXI Texas, LP
Energy
XXI Texas GP, LLC
Energy
XXI GOM, LLC
31
Exhibit
B
Opinion
of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, as U.S. counsel for Parent and the Company, and ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Bailhache, as Bermuda counsel for Parent, to be delivered pursuant to
Section 6(f) of this Agreement.
[To
be
allocated among counsel]
References
to the Preliminary CIM in this Exhibit include any supplements thereto at the
Closing Date.
1. Each
of
the Company and the Guarantors is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of formation,
with limited liability power and corporate power, as the case may be, and
authority to own, lease and operate its properties and to conduct its business
as described in the CIM and to enter into and perform its respective obligations
under the Regulation S Purchase Agreement, the Placement Agency Agreement,
the
Indenture and the Registration Rights Agreement (the “Regulation
S Purchase Documents”),
as the
case may be.
2. Each
of
the Company and the Guarantors has all necessary corporate power and authority
to execute and deliver the Note Purchase Documents, to perform its obligations
thereunder to issue the Regulation S Notes.
3. The
Regulation S Purchase Agreement has been duly authorized, executed and delivered
by each of the Guarantors and the Company.
4. Each
of
the Indenture, Escrow Agreement, and the Registration Rights Agreement has
been
duly authorized, executed and delivered by the Company and each of the
Guarantors, as the case may be, and constitutes a valid and binding agreement
of
the Company and each of the Guarantors, as the case may be, enforceable against
each of the Company and each of the Guarantors, as the case may be, in
accordance with its terms. The Indenture is in sufficient form for qualification
under the Trust Indenture Act.
5. The
Regulation S Notes, when executed, authenticated and issued in accordance with
the terms of the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to the Regulation S Purchase Agreement, will constitute
valid and binding obligations of the Company, entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their
terms.
6. The
Guarantees, when the Regulation S Notes have been executed, authenticated and
issued in accordance with the terms of the Indenture and delivered to and paid
for by the Initial Purchasers pursuant to the Purchase Agreement, will
constitute valid and binding obligations of the Guarantors, entitled to the
benefits of the Indenture, enforceable against the Guarantors in accordance
with
their terms.
7. The
Exchange Notes and the related Guarantees have been duly authorized by the
Company and the Guarantors, as the case may be.
32
8. The
execution and delivery of the Note Purchase Documents by Parent, the Company
and
the subsidiaries of the Company, the performance by such companies of their
respective obligations thereunder, including the issuance and sale of the Notes
and the Guarantees, (i) will not result in any violation of the provisions
of
the charter, by-laws or equivalent constituent documents of Parent, the Company
or any Guarantor; (ii) will not constitute a breach of, or default or a Debt
Repayment Triggering Event under, or result in the creation or imposition of
any
security interest, mortgage, pledge, lien, charge, encumbrance or adverse claim
upon any property or assets of Parent, the Company or any Guarantor, pursuant
to
any material Existing Instrument listed on identified on the annexed schedule
furnished to us by the Company, and which the Company has represented lists
all
material agreements and instruments to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject; (iii) will not result in any violation of any federal,
Delaware or New York law or, to the best knowledge of such counsel any
administrative regulation or administrative or court decree, applicable to
Parent, the Company or any of the subsidiaries of the Company (provided no
opinion is given with respect to federal or state securities laws); or (v)
will
not require any consent, approval, authorization or other order of, or
registration (provided no opinion is given with respect to federal or state
securities laws), or filing with, any court or other governmental or regulatory
authority or agency, except (i) with respect to the transaction contemplated
by
the Registration Rights Agreement and may be required under the Securities
Act
and the Exchange Act, (ii) as required by federal or state securities or “blue
sky” laws and (iii) for such consents, approvals, authorizations, orders,
filings or registrations which have been obtained or made.
9. Assuming
the accuracy of the representations and warranties of Parent, the Company and
the Initial Purchasers contained in the Regulation S Purchase Agreement and
the compliance of such parties with the agreements set forth herein and therein,
it is not necessary, in connection with the issuance and sale of the Regulation
S Notes to the Initial Purchasers, in the manner contemplated by
Regulation S Purchase Documents and the CIM, to register the initial sale
of the Regulation S Notes under the Securities Act or to qualify the Indenture
under the Trust Indenture Act it being understood no opinion is given with
respect to subsequent resales of the Regulation S Notes.
10. Neither
the Parent nor the Company is, and after receipt of payment for the Notes,
will
be, an “investment company” within the meaning of, and subject to registration
under, Investment Company Act.
33