UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): October 19, 2006 (October 18,
2006)
BERRY
PETROLEUM COMPANY
(Exact
Name of Registrant as Specified in its Charter)
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DELAWARE
(State
or Other Jurisdiction of
Incorporation
or Organization)
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1-9735
(Commission
File Number)
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77-0079387
(IRS
Employer
Identification
Number)
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5201
TRUXTUN AVE., STE. 300, BAKERSFIELD, CA
(Address
of Principal Executive Offices)
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93309
(Zip
Code)
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Registrant’s
telephone number, including area code: (661)
616-3900
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
October 18, 2006, Berry Petroleum Company, J.P. Morgan Securities Inc.,
Citigroup Global Markets Inc., Wells Fargo Brokerage Services, LLC, Goldman,
Sachs & Co., SG Americas Securities, LLC, BNP Paribas Securities Corp.,
Wedbush Morgan Securities Inc., Comerica Securities, Inc., Piper Jaffray
&
Co., and First Albany Capital Inc. (collectively, the “Underwriters”) entered
into an underwriting agreement. Pursuant to such agreement, we agreed to
sell,
and the underwriters agreed to buy, $200 million aggregate principal amount
of
8¼% Notes due 2016. The transaction is scheduled to close on Tuesday, October
24, 2006. We estimate that the net proceeds to our company, after deducting
the
underwriting discount and estimated offering expenses, will be approximately
$195,000,000. We expect to use the net proceeds primarily to repay current
borrowings under our senior unsecured revolving credit facility and to
finance
the November 1, 2006 installment under our joint venture agreement to develop
properties in the Piceance basin.
The
underwriting agreement contains terms and conditions that are customary
for
transactions of this nature. The underwriting agreement, which appears
as
Exhibit 1.1 to this report, is incorporated by reference in response to
this
Item 1.01. This description of the terms of the underwriting agreements
is
qualified in its entirety by reference to such exhibit.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibits
1.1
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Underwriting Agreement dated October 18, 2006 by and between Berry Petroleum
Company and the several Underwriters listed in Schedule 1 thereto.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.
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BERRY
PETROLEUM COMPANY
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By:
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/s/
Kenneth A. Olson
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Kenneth
A. Olson
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Corporate
Secretary
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Date: October
19, 2006
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EXHIBIT
1.1
EXECUTION
COPY
$200,000,000
BERRY
PETROLEUM COMPANY
8.25%
Senior Subordinated Notes due 2016
Underwriting
Agreement
October
18, 2006
J.P.
Morgan Securities Inc.
As
Representative of the
several
Underwriters listed
in
Schedule 1 hereto
c/o
J.P.
Morgan Securities Inc.
270
Park
Avenue
New
York,
New York 10017
Ladies
and Gentlemen:
Berry
Petroleum Company, a Delaware corporation (the “Company”), proposes to issue and
sell to the several Underwriters listed in Schedule 1 hereto (the
“Underwriters”), for whom you are acting as representative (the
“Representative”), $200,000,000 principal amount of its 8.25% Senior
Subordinated Notes due 2016 (the “Securities”). The Securities will be issued
pursuant to an Indenture to be dated as of October 24, 2006 (the “Indenture”)
between the Company and Wells Fargo Bank National Association, as trustee (the
“Trustee”).
The
Company hereby confirms its agreement with the several Underwriters concerning
the purchase and sale of the Securities, as follows:
1. Registration
Statement.
The
Company has prepared and filed with the Securities and Exchange Commission
(the
“Commission”) under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the “Securities Act”), a
registration statement on Form S-3 (File No. 333-135055), including a
prospectus, relating to the Securities. Such registration statement, as amended
at the time it became effective, including the information, if any, deemed
pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of
the
registration statement at the time of its effectiveness (“Rule 430
Information”), is referred to herein as the “Registration Statement.” The base
prospectus included in the Registration Statement (the “Base Prospectus”), as
supplemented by the preliminary prospectus supplement dated October 6, 2006
relating to the Securities and used prior to the filing of the Prospectus (as
defined below) (the “Preliminary Prospectus Supplement”),
is hereinafter referred to as the “Preliminary Prospectus.” The Base Prospectus,
as supplemented by the prospectus supplement dated October 18, 2006 relating
to
the Securities in the form first used (or made available upon request of
purchasers pursuant to Rule 173 under the Securities Act) in connection with
confirmation of sales of the Securities (the “Prospectus Supplement”) is
hereinafter referred to as the “Prospectus”. Any reference in this Agreement to
the Registration Statement, any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the
effective date of the Registration Statement or the date of such Preliminary
Prospectus or the Prospectus, as the case may be and any reference to “amend”,
“amendment” or “supplement” with respect to the Registration Statement, any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after such date under the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the “Exchange Act”) that are deemed to be incorporated by
reference therein. Capitalized terms used but not defined herein shall have
the
meanings given to such terms in the Registration Statement and the
Prospectus.
At
or
prior to the time when sales of the Securities were first made (the “Time of
Sale”), the Company had prepared the following information (collectively, the
“Time of Sale Information”): a Preliminary Prospectus dated October 6, 2006, and
each “free-writing prospectus” (as defined pursuant to Rule 405 under the
Securities Act) listed on Annex B hereto as constituting part of the Time of
Sale Information.
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2. Purchase
of the Securities by the Underwriters.
(a)
The
Company agrees to issue and sell the Securities to the several Underwriters
as
provided in this Agreement, and each Underwriter, on the basis of the
representations, warranties and agreements set forth herein and subject to
the
conditions set forth herein, agrees, severally and not jointly, to purchase
from
the Company the respective principal amount of Securities set forth opposite
such Underwriter’s name in Schedule 1 hereto at a price equal to 98% of the
principal amount thereof plus accrued interest, if any, from October 24, 2006
to
the Closing Date (as defined below). The yield of the Securities is no lower
than the yield recommended by Goldman, Sachs & Co. (“GS”), acting as a
“qualified independent underwriter” within the meaning of Rule 2720 of the Rules
of Conduct of the National Association of Securities Dealers, Inc. The Company
will not be obligated to deliver any of the Securities except upon payment
for
all the Securities to be purchased as provided herein.
The
Company hereby confirms its engagement of GS as, and GS hereby confirms its
agreement with the Company to render services as, a “qualified independent
underwriter” within the meaning of Rule 2720(b) of the National Association of
Securities Dealers, Inc. with respect to the offering and sale of the
Securities.
(b) The
Company understands that the Underwriters intend to make a public offering
of
the Securities as soon after the effectiveness of this Agreement as in the
judgment of the Representative is advisable, and initially to offer the
Securities on the terms set forth in the Prospectus. The Company acknowledges
and agrees that the Underwriters may offer and sell Securities to or through
any
affiliate of an Underwriter and that any such affiliate may offer and sell
Securities purchased by it to or through any Underwriter.
(c) Payment
for and delivery of the Securities will be made at the offices of Simpson
Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York, at 10:00
A.M., New York City time, on October 24, 2006, or at such other time or place
on
the same or such other date, not later than the fifth business day thereafter,
as the Representative and the Company may agree upon in writing. The time and
date of such payment and delivery is referred to herein as the “Closing
Date”.
(d) Payment
for the Securities shall be made by wire transfer in immediately available
funds
to the account(s) specified by the Company to the Representative against
delivery to the nominee of The Depository Trust Company, for the account of
the
Underwriters, of one or more global notes representing the Securities
(collectively, the “Global Note”), with any transfer taxes payable in connection
with the sale of the Securities duly paid by the Company. The Global Note will
be made available for inspection by the Representative not later than 1:00
P.M.,
New York City time, on the business day prior to the Closing Date.
(e) The
Company acknowledges and agrees that the Underwriters are acting solely in
the
capacity of an arm’s length contractual counterparty to the Company with respect
to the offering of Securities contemplated hereby (including in connection
with
determining the terms of the offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company or any other person. Additionally,
neither the Representative nor any other Underwriter is advising the Company
or
any other person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company shall consult with its own advisors
concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the
Underwriters shall have no responsibility or liability to the Company with
respect thereto. Any review by the Underwriters of the Company, the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Underwriters and shall not be on behalf
of the Company.
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3. Representations
and Warranties of the Company.
The
Company represents and warrants to each Underwriter that:
(a) Preliminary
Prospectus.
No
order preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission, and each Preliminary Prospectus, at the time of filing
thereof, complied in all material respects with the Securities Act and did
not
contain any untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided
that the
Company makes no representation and warranty with respect to any statements
or
omissions made in reliance upon and in conformity with information relating
to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representative expressly for use in any Preliminary Prospectus.
(b) Time
of Sale Information.
The
Time of Sale Information, at the Time of Sale did not, and at the Closing Date
will not, contain any untrue statement of a material fact or omit to state
a
material fact necessary in order to make the statements therein, in the light
of
the circumstances under which they were made, not misleading; provided
that the
Company makes no representation and warranty with respect to any statements
or
omissions made in reliance upon and in conformity with information relating
to
any Underwriter furnished to the Company in writing by such Underwriter through
the Representative expressly for use in such Time of Sale Information. No
statement of material fact included in the Prospectus has been omitted from
the
Time of Sale Information and no statement of material fact included in the
Time
of Sale Information that is required to be included in the Prospectus has been
omitted therefrom.
(c) Issuer
Free Writing Prospectus.
The
Company (including its agents and representatives, other than the Underwriters
in their capacity as such) has not prepared, made, used, authorized, approved
or
referred to and will not prepare, make, use, authorize, approve or refer to
any
“written communication” (as defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Company or its agents and representatives (other
than a communication referred to in clauses (i) (ii) (iii) below) an “Issuer
Free Writing Prospectus”) other than (i) any document not constituting a
prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134
under the Securities Act, (ii) the Preliminary Prospectus, (iii) the Prospectus,
(iv) documents listed on Annex B hereto as constituting the Time of Sale
Information and (v) any electronic road show or other written communications,
in
each case approved in writing in advance by the Representative. Each such Issuer
Free Writing Prospectus complied in all material respects with the Securities
Act, and does not or will not conflict with information contained in the
Registration Statement, any Preliminary Prospectus or the Prospectus, has been
or will be (within the time period specified in Rule 433) filed in accordance
with the Securities Act (to the extent required thereby) and, when taken
together with the Time of Sale Information filed prior to first use of such
Issuer Free Writing Prospectus, did not, and at the Closing Date will not,
contain any untrue statement of a material fact or omit to state a material
fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided
that the
Company makes no representation and warranty with respect to any statements
or
omissions made in each such Issuer Free Writing Prospectus in reliance upon
and
in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representative expressly
for
use in any Issuer Free Writing Prospectus.
(d) Registration
Statement and Prospectus.
The
Registration Statement is an “automatic shelf registration statement” as defined
under Rule 405 of the Securities Act that has been filed with the Commission
not
earlier than three years prior to the date hereof; and no notice of objection
of
the Commission to the use of such registration statement or any post-effective
amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been
received by the Company. No order suspending the effectiveness of the
Registration Statement has been issued by the Commission and no proceeding
for
that purpose or pursuant to Section 8A of the Securities Act against the Company
or related to the offering has been initiated or threatened by the Commission;
as of the applicable effective date of the Registration Statement and any
amendment thereto, the Registration Statement complied and will comply in all
material respects with the Securities Act and the Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the “Trust Indenture Act”), and did not and will not contain any
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary in order to make the statements therein not
misleading; and as of the date of the Prospectus and any amendment or supplement
thereto and as of the Closing Date, the Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided
that the
Company makes no representation and warranty with respect to (i) that part
of
the Registration Statement that constitutes the Statement of Eligibility and
Qualification (Form T-1) of the Trustee under the Trust Indenture Act or (ii)
any statements or omissions made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by
such Underwriter through the Representative expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement
thereto.
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(e) Incorporated
Documents.
The
documents incorporated by reference in the Registration Statement, the
Prospectus and the Time of Sale Information, when they became effective or
were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Exchange Act, and none of such documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by reference in the
Registration Statement, the Prospectus or the Time of Sale Information, when
such documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and will not contain any
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein, in the light
of
the circumstances under which they were made, not misleading.
(f) Financial
Statements.
The
financial statements and the related notes thereto included or incorporated
by
reference in the Registration Statement, the Time of Sale Information and the
Prospectus comply in all material respects with the applicable requirements
of
the Securities Act and the Exchange Act, as applicable, and present fairly
the
financial position of the Company as of the dates indicated and the results
of
its operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered thereby, and the supporting schedules included or incorporated
by reference in the Registration Statement present fairly the information
required to be stated therein; and the other financial information included
or
incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus has been derived from the accounting records
of
the Company and presents fairly the information shown thereby.
(g) No
Material Adverse Change.
Since
the date of the most recent financial statements of the Company included or
incorporated by reference in the Registration Statement, the Time of Sale
Information and the Prospectus, (i) there has not been any change in the capital
stock (other than grants or exercises pursuant to employee or director benefit
or compensation plans and pursuant to the Company’s stock repurchase program,
which plans and program are as described in the Registration Statement, the
Time
of Sale Information and the Prospectus) or long-term debt of the Company, or
any
dividend or distribution of any kind declared, set aside for payment, paid
or
made by the Company on any class of capital stock (other than amounts paid
or
allocated pursuant to employee or director benefit or compensation plans, which
plans are as described in the Registration Statement, the Time of Sale
Information and the Prospectus), or any material adverse change, or any
development involving a prospective material adverse change, in or affecting
the
business, properties, management, financial position, results of operations
or
prospects of the Company; (ii) the Company has not entered into any transaction
or agreement that is material to the Company or incurred any liability or
obligation, direct or contingent, that is material to the Company; and (iii)
the
Company has not sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in the case of each of clauses (i), (ii) or (iii) as otherwise disclosed
in the Registration Statement, the Time of Sale Information and the
Prospectus.
(h) Organization
and Good Standing.
The
Company has been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization, is duly qualified to do
business and is in good standing in each jurisdiction in which its ownership
or
lease of property or the conduct of its businesses requires such qualification,
and has all power and authority necessary to own or hold its properties and
to
conduct the businesses in which it is engaged, except where the failure to
be so
qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, results of operations
or
prospects of the Company or on the performance by the Company of its obligations
under the Securities (a “Material Adverse Effect”). The Company does not own or
control, directly or indirectly, any corporation, limited liability company,
partnership or other entity other than a 20.3% interest in Bakersfield Fuel
and
Oil Company, a California corporation, a 37.5% interest in Lake Canyon
Transportation & Gathering LLC, a Utah limited liability company and its
role as trustee under that certain Declaration of Trust executed November 3,
1986 known as the B Group Victory Trust.
(i) Capitalization.
The
Company has an authorized capitalization as set forth in the Registration
Statement, the Time of Sale Information and the Prospectus under the heading
“Capitalization”.
(j) Due
Authorization.
The
Company has full right, power and authority to execute and deliver this
Agreement, the Securities and the Indenture (collectively, the “Transaction
Documents”) and to perform its obligations hereunder and thereunder; and all
action required to be taken for the due and proper authorization, execution
and
delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken.
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(k) The
Indenture.
The
Indenture has been duly authorized by the Company and upon effectiveness of
the
Registration Statement was or will have been duly qualified under the Trust
Indenture Act and, when duly executed and delivered in accordance with its
terms
by each of the parties thereto, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with
its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability (collectively,
the “Enforceability Exceptions”).
(l) The
Securities.
The
Securities have been duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for
as
provided herein, will be duly and validly issued and outstanding and will
constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.
(m) Underwriting
Agreement.
This
Agreement has been duly authorized, executed and delivered by the
Company.
(n) Descriptions
of the Transaction Documents.
Each
Transaction Document conforms in all material respects to the description
thereof contained in the Registration Statement, the Time of Sale Information
and the Prospectus.
(o) No
Violation or Default.
The
Company is not (i) in violation of its charter or by-laws; (ii) in default,
and
no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan
agreement or other agreement or instrument to which the Company is a party
or by
which the Company is bound or to which any of the property or assets of the
Company is subject; or (iii) in violation of any law or statute or any judgment,
order, rule or regulation of any court or arbitrator or governmental or
regulatory authority, except, in the case of clauses (ii) and (iii) above,
for
any such default or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.
(p) No
Conflicts.
The
execution, delivery and performance by the Company of each of the Transaction
Documents, the issuance and sale of the Securities and compliance by the Company
with the terms thereof and the consummation of the transactions contemplated
by
the Transaction Documents will not (i) conflict with or result in a breach
or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance
upon
any property or assets of the Company pursuant to, any indenture, mortgage,
deed
of trust, loan agreement or other agreement or instrument to which the Company
is a party or by which the Company is bound or to which any of the property
or
assets of the Company is subject, (ii) result in any violation of the provisions
of the charter or by-laws of the Company or (iii) result in the violation of
any
law or statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach, violation or default
that would not, individually or in the aggregate, have a Material Adverse Effect
and, in the case of clause (i) above, for conflicts, breaches, violations or
defaults under the Credit Agreement dated as of April 28, 2006 among the
Company, Wells Fargo Bank, National Association, as administrative agent, and
the lenders parties thereto from time to time for which a consent has been
obtained and under the uncommitted money market line of credit facility dated
as
of November 3, 2005 between the Company and Societe Generale for which a consent
has been obtained.
(q) No
Consents Required.
No
consent, approval, authorization, order, registration or qualification of or
with any court or arbitrator or governmental or regulatory authority (including
without limitation the Federal Energy Regulatory Commission or the California
Public Utilities Commission) is required for the execution, delivery and
performance by the Company of each of the Transaction Documents, the issuance
and sale of the Securities and compliance by the Company with the terms thereof
and the consummation of the transactions contemplated by the Transaction
Documents, except for the registration of the Securities under the Securities
Act, the qualification of the Indenture under the Trust Indenture Act and such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required under applicable state securities laws in connection with
the
purchase and distribution of the Securities by the Underwriters.
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(r) Legal
Proceedings.
Except
as described in the Registration Statement, the Time of Sale Information and
the
Prospectus, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company is or may be a party
or to which any property of the Company is or may be the subject that,
individually or in the aggregate, if determined adversely to the Company, could
reasonably be expected to have a Material Adverse Effect; to the knowledge
of
the Company, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings threatened or contemplated by any governmental
or
regulatory authority or threatened by others that, individually or in the
aggregate, if determined adversely to the Company, could reasonably be expected
to have a Material Adverse Effect; and (i) there are no current or pending
legal, governmental or regulatory actions, suits or proceedings that are
required under the Securities Act to be described in the Registration Statement
or the Prospectus that are not so described in the Registration Statement,
the
Time of Sale Information and the Prospectus and (ii) there are no statutes,
regulations or contracts or other documents that are required under the
Securities Act to be filed as exhibits to the Registration Statement or
described in the Registration Statement and the Prospectus that are not so
filed
as exhibits to the Registration Statement or described in the Registration
Statement, the Time of Sale Information and the Prospectus.
(s) Independent
Accountants.
PricewaterhouseCoopers LLP, who has certified certain financial statements
of
the Company, is an independent registered public accounting firm with respect
to
the Company within the applicable rules and regulations adopted by the
Commission and the Public Company Accounting Oversight Board (United States)
and
as required by the Securities Act.
(t) Title
to Real and Personal Property.
Except
as discussed in the Registration Statement, the Time of Sale Information and
the
Prospectus, the Company has good and marketable title to, or has valid rights
to
lease or otherwise use, all items of real and personal property that are
material to the businesses of the Company, in each case free and clear of all
liens, encumbrances, claims and defects and imperfections of title except those
that (i) do not materially interfere with the use made and proposed to be made
of such property by the Company or (ii) could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.
(u) Title
to Intellectual Property.
(i) The
Company owns or possesses adequate rights to use all patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the conduct of its businesses;
(ii) the conduct of its businesses will not conflict in any respect with any
such rights of others; and (iii) the Company has not received any notice of
any
claim of infringement or conflict with any such rights of others; except in
the
case of each of clauses (i) and (ii) as would not have, individually or in
the
aggregate, a Material Adverse Effect.
(v) No
Undisclosed Relationships.
No
relationship, direct or indirect, exists between or among the Company, on the
one hand, and the directors, officers, shareholders, customers or suppliers
of
the Company, on the other, that is required by the Securities Act to be
described in the Registration Statement and the Prospectus and that is not
so
described in such documents and in the Time of Sale Information.
(w) Investment
Company Act.
The
Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in the
Registration Statement, the Time of Sale Information and the Prospectus, will
not be an “investment company” or an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder (collectively,
“Investment Company Act”).
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(x) Taxes.
(i) The
Company has paid all federal, state, local and foreign taxes and filed all
tax
returns required to be paid or filed through the date hereof, and (ii) except
as
otherwise disclosed in the Registration Statement, the Time of Sale Information
and the Prospectus, there is no tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company or any of its
properties or assets, except, in the case of each of clauses (i) and (ii) above,
for any such failure to so pay or file or deficiency that would not,
individually or in the aggregate, have a Material Adverse Effect.
(y) Licenses
and Permits.
The
Company possesses all licenses, certificates, permits and other authorizations
issued by, and have made all declarations and filings with, the appropriate
federal, state, local or foreign governmental or regulatory authorities that
are
necessary for the ownership or lease of its properties or the conduct of its
businesses as described in the Registration Statement, the Time of Sale
Information and the Prospectus, except where the failure to possess or make
the
same would not, individually or in the aggregate, have a Material Adverse
Effect; and except as described in the Registration Statement, the Time of
Sale
Information and the Prospectus, the Company has not received notice of any
revocation or modification of any such license, certificate, permit or
authorization and has no reason to believe that any such license, certificate,
permit or authorization will not be renewed in the ordinary course except where
such renovation, modification, or non-renewal would not, individually or in
the
aggregate, have a Material Adverse Effect.
(z) No
Labor Disputes.
No
labor disturbance by or dispute with employees of the Company exists or, to
the
knowledge of the Company, is contemplated or threatened and the Company is
not
aware of any existing or imminent labor disturbance by, or dispute with, the
employees of any of its principal suppliers, contractors or customers, except
as
could not reasonably be expected to have a Material Adverse Effect.
(aa) Compliance
With Environmental Laws.
(i) The
Company (x) is in compliance with any and all applicable federal, state, local
and foreign laws, rules, regulations, requirements, decisions and orders
relating to the protection of human health or safety, the environment, natural
resources, hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”); (y) has received and is in compliance with
all permits, licenses, certificates or other authorizations or approvals
required of it under applicable Environmental Laws to conduct its businesses;
and (z) has not received notice of any actual or potential liability under
or
relating to any Environmental Laws, including for the investigation or
remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, and has no knowledge of any event or
condition that would reasonably be expected to result in any such notice, and
(ii) there are no costs or liabilities associated with Environmental Laws of
or
relating to the Company, except in the case of each of (i) and (ii) above,
for
any such failure to comply, or failure to receive required permits, licenses
or
approvals, or cost or liability, as would not, individually or in the aggregate,
have a Material Adverse Effect; and (iii) except as described in each of the
Time of Sale Information and the Prospectus, (x) there are no proceedings that
are pending, or that are known to the Company to be contemplated, against the
Company under any Environmental Laws in which a governmental entity is also
a
party, other than such proceedings regarding which it is reasonably believed
no
monetary sanctions of $100,000 or more will be imposed, (y) the Company is
not
aware of any issues regarding compliance with Environmental Laws, or Liabilities
or other obligations under Environmental Laws or concerning hazardous or toxic
substances or wastes, pollutants or contaminants, that could reasonably be
expected to have a material effect on the capital expenditures, earnings or
competitive position of the Company, and (z) the Company does not anticipate
material capital expenditures relating to any Environmental Laws.
(bb) Compliance
With ERISA.
(i)
Each employee benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), for which the
Company or any member of its “controlled group” (defined as any organization
which is a member of a controlled group of corporations within the meaning
of
Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would
have any liability (each, a “Plan”) has been maintained in all material respects
in compliance with its terms and the requirements of any applicable statutes,
orders, rules and regulations, including but not limited to ERISA and the Code;
(ii) to the knowledge of the Company, no prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with
respect to any Plan excluding transactions effected pursuant to a statutory
or
administrative exemption; and (iii) no Plan is subject to Title IV of
ERISA.
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(cc) Disclosure
Controls.
The
Company maintains an effective system of “disclosure controls and procedures”
(as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure
that information required to be disclosed by the Company in reports that it
files or submits under the Exchange Act is recorded, processed, summarized
and
reported within the time periods specified in the Commission’s rules and forms,
including controls and procedures designed to ensure that such information
is
accumulated and communicated to the Company’s management as appropriate to allow
timely decisions regarding required disclosure. The Company has carried out
evaluations of the effectiveness of their disclosure controls and procedures
as
required by Rule 13a-15 of the Exchange Act.
(dd) Accounting
Controls.
The
Company maintains systems of “internal control over financial reporting” (as
defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements
of the Exchange Act and have been designed by, or under the supervision of,
its
principal executive and principal financial officers, or persons performing
similar functions, to provide reasonable assurance regarding the reliability
of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including,
but not limited to internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accounts for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken
with respect to any differences. Except as disclosed in the Registration
Statement, the Time of Sale Information and the Prospectus, there are no
material weaknesses in the Company’s internal controls.
(ee) Insurance.
The
Company has insurance covering its properties, operations, personnel and
businesses, which insurance is in amounts and insures against such losses and
risks as are commercially reasonable; and the Company has not (i) received
notice from any insurer or agent of such insurer that capital improvements
or
other expenditures are required or necessary to be made in order to continue
such insurance or (ii) any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary
to
continue its business.
(ff) No
Unlawful Payments.
Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company,
has
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official
or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(gg) Compliance
with Money Laundering Laws.
The
operations of the Company are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the knowledge of
the
Company, threatened.
(hh) Compliance
with OFAC.
Neither
the Company nor, to the knowledge of the Company, any director, officer, agent,
employee or Affiliate of the Company, is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Department
of
the Treasury (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering of the Securities hereunder, or lend, contribute or
otherwise make available such proceeds to any joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
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(ii) Solvency.
On and
immediately after the Closing Date, the Company (after giving effect to the
issuance of the Securities and the other transactions related thereto as
described in the Registration Statement, the Time of Sale Information and the
Prospectus) will be Solvent. As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (i) the present
fair
market value (or present fair saleable value) of the assets of the Company
is
not less than the total amount required to pay the liabilities of the Company
on
its total existing debts and liabilities (including contingent liabilities)
as
they become absolute and matured; (ii) the Company is able to realize upon
its
assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business;
(iii) assuming consummation of the issuance of the Securities as contemplated
by
this Agreement, the Registration Statement, the Time of Sale Information and
the
Prospectus, the Company is not incurring debts or liabilities beyond its ability
to pay as such debts and liabilities mature; (iv) the Company is not engaged
in
any business or transaction, and does not propose to engage in any business
or
transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in
which the Company is engaged; and (v) the Company is not a defendant in any
civil action that would result in a judgment that the Company is or would become
unable to satisfy.
(jj) No
Broker’s Fees.
The
Company is not a party to any contract, agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim against
the Company or any Underwriter for a brokerage commission, finder’s fee or like
payment in connection with the offering and sale of the Securities.
(kk) No
Registration Rights.
No
person has the right to require the Company to register any securities for
sale
under the Securities Act by reason of the filing of the Registration Statement
with the Commission or the issuance and sale of the Securities.
(ll) No
Stabilization.
The
Company has not taken, directly or indirectly, any action designed to or that
could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Securities.
(mm) Margin
Rules.
Neither
the issuance, sale and delivery of the Securities nor the application of the
proceeds thereof by the Company as described in the Registration Statement,
the
Time of Sale Information and the Prospectus will violate Regulation T, U or
X of
the Board of Governors of the Federal Reserve System or any other regulation
of
such Board of Governors.
(nn) Forward-Looking
Statements.
No
forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in the Registration
Statement, the Time of Sale Information and the Prospectus has been made or
reaffirmed without a reasonable basis or has been disclosed other than in good
faith.
(oo) Statistical
and Market Data.
Nothing
has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the Registration
Statement, the Time of Sale Information and the Prospectus is not based on
or
derived from sources that are reliable and accurate in all material
respects.
(pp) Sarbanes-Oxley
Act.
There
is and has been no material failure on the part of the Company or any of the
Company’s directors or officers, in their capacities as such, to comply with any
provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including
Section 402 related to loans and Sections 302 and 906 related to
certifications.
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(qq) Status
under the Securities Act.
The
Company is not an ineligible issuer and is a well-known seasoned issuer, in
each
case as defined under the Securities Act, in each case at the times specified
in
the Securities Act in connection with the offering of the Securities.
(rr) Reserve
Report Data.
The oil
and gas reserve estimates of the Company for the fiscal years ended December
31,
2005, 2004 and 2003 contained in the Registration Statement, the Time of Sale
Information and the Prospectus are derived from reports that have been prepared
by the petroleum consulting firm as set forth therein, such reserve estimates
fairly reflect, in all material respects, the oil and gas reserves of the
Company at the dates indicated therein and are in accordance with the Commission
guidelines applicable thereto applied on a consistent basis throughout the
periods involved.
(ss) Independent
Reserve Engineering Firm.
DeGolyer and MacNaughton, who has certified the oil and gas reserve estimates
of
the Company has represented to the Company that it is, and the Company believes
it to be, an independent reserve engineering firm with respect to the Company
for the periods set forth in the Registration Statement, the Time of Sale
Information and the Prospectus.
(tt) Qualifying
Facilities.
Each of
the electric generation facilities that the Company owns, leases and/or operates
is a “qualifying facility” (“QF”) as defined under the Public Utility Regulatory
Polices Act of 1978, as amended, and the regulations promulgated thereunder
(“PURPA”) that sells its electric output solely at wholesale. The Company has
filed all notices of certification, recertification and otherwise complied
with
all requirements of PURPA necessary to maintain the QF status under PURPA of
each of the electric generation facilities that the Company owns, leases and/or
operates. The QF status of the electric generation facilities that the Company
owns, leases and/or operates is not subject to any pending challenge,
investigation or request for revocation, or appeal thereof.
(uu) Federal
Power Act.
Except
for regulation applicable solely to QFs under PURPA, the Company is not subject
to regulation as a “public utility company”, “public service company”, “holding
company” (or similar designation) by any governmental or regulatory authority,
including under the Federal Power Act, as amended (“FPA”) or any applicable
state utility laws.
(vv) Utility
Filings.
The
Company has filed or caused to be filed with, or obtained from, the applicable
state or local utility commissions or regulatory bodies (including the
California Independent System Operator), all forms, statements, reports,
registrations and documents (including all exhibits, amendments and supplements
thereto) required to be filed by it or obtained under California state utility
laws and the respective rules and regulations thereunder, except as could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, all of which complied in all material respects with all
applicable requirements of the appropriate act and the rules and regulations
thereunder in effect on the date each such report was filed.
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4. Further
Agreements of the Company.
The
Company covenants and agrees with each Underwriter that:
(a) Required
Filings.
The
Company will file the final Prospectus with the Commission within the time
periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the
Securities Act, will file any Issuer Free Writing Prospectus (including the
Term
Sheet in the form of Annex C hereto) to the extent required by Rule 433 under
the Securities Act; and will file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of
a
prospectus is required in connection with the offering or sale of the
Securities; and the Company will furnish copies of the Prospectus and each
Issuer Free Writing Prospectus (to the extent not previously delivered) to
the
Underwriters in New York City prior to 10:00 A.M., New York City time, on the
business day next succeeding the date of this Agreement in such quantities
as
the Representative may reasonably request. The Company will pay the registration
fees for this offering within the time period required by Rule 456(b)(1)(i)
under the Securities Act (without giving effect to the proviso therein) and
in
any event prior to the Closing Date.
(b) Delivery
of Copies.
The
Company will deliver, without charge, (i) to the Representative, two signed
copies of the Registration Statement as originally filed and each amendment
thereto, in each case including all exhibits and consents filed therewith and
documents incorporated by reference therein; and (ii) to each Underwriter (A)
a
conformed copy of the Registration Statement as originally filed and each
amendment thereto, in each case including all exhibits and consents filed
therewith and (B) during the Prospectus Delivery Period (as defined below),
as
many copies of the Prospectus (including all amendments and supplements thereto
and documents incorporated by reference therein) and each Issuer Free Writing
Prospectus as the Representative may reasonably request. As used herein, the
term “Prospectus Delivery Period” means such period of time after the first date
of the public offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law to
be
delivered (or required to be delivered but for Rule 172 under the Securities
Act) in connection with sales of the Securities by any Underwriter or
dealer.
(c) Amendments
or Supplements; Issuer Free Writing Prospectuses.
Before
making, preparing, using, authorizing, approving, referring to or filing any
Issuer Free Writing Prospectus, and before filing any amendment or supplement
to
the Registration Statement or the Prospectus, the Company will furnish to the
Representative and counsel for the Underwriters a copy of the proposed Issuer
Free Writing Prospectus, amendment or supplement for review and will not make,
prepare, use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the
Representative reasonably objects.
(d) Notice
to the Representative.
The
Company will advise the Representative promptly, and confirm such advice in
writing, (i) when any amendment to the Registration Statement has been filed
or
becomes effective; (ii) when any supplement to the Prospectus or any amendment
to the Prospectus or any Issuer Free Writing Prospectus has been filed; (iii)
of
any request by the Commission for any amendment to the Registration Statement
or
any amendment or supplement to the Prospectus or the receipt of any comments
from the Commission relating to the Registration Statement or any other request
by the Commission for any additional information; (iv) of the issuance by the
Commission of any order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus
or
the Prospectus or the initiation or threatening of any proceeding for that
purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence
of any event within the Prospectus Delivery Period as a result of which the
Prospectus, the Time of Sale Information or any Issuer Free Writing Prospectus
as then amended or supplemented would include any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
existing when the Prospectus, the Time of Sale Information or any such Issuer
Free Writing Prospectus is delivered to a purchaser, not misleading; (vi) of
the
receipt by the Company of any notice of objection of the Commission to the
use
of the Registration Statement or any post-effective amendment thereto pursuant
to Rule 401(g)(2) under the Securities Act; and (vii) of the receipt by the
Company of any notice with respect to any suspension of the qualification of
the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order suspending
the
effectiveness of the Registration Statement, preventing or suspending the use
of
any Preliminary Prospectus or the Prospectus or suspending any such
qualification of the Securities and, if any such order is issued, will obtain
as
soon as possible the withdrawal thereof.
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(e) Time
of Sale Information.
If at
any time prior to the Closing Date (i) any event shall occur or condition shall
exist as a result of which the Time of Sale Information as then amended or
supplemented would include any untrue statement of a material fact or omit
to
state any material fact necessary in order to make the statements therein,
in
the light of the circumstances, not misleading or (ii) it is necessary to amend
or supplement the Time of Sale information to comply with law, the Company
will
immediately notify the Underwriters thereof and forthwith prepare and, subject
to paragraph (c) above, file with the Commission (to the extent required) and
furnish to the Underwriters and to such dealers as the Representative may
designate, such amendments or supplements to the Time of Sale Information as
may
be necessary so that the statements in the Time of Sale Information as so
amended or supplemented will not, in the light of the circumstances, be
misleading or so that the Time of Sale Information will comply with
law.
(f) Ongoing
Compliance.
If
during the Prospectus Delivery Period (i) any event shall occur or condition
shall exist as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary
to amend or supplement the Prospectus to comply with law, the Company will
immediately notify the Underwriters thereof and forthwith prepare and, subject
to paragraph (c) above, file with the Commission and furnish to the Underwriters
and to such dealers as the Representative may designate, such amendments or
supplements to the Prospectus as may be necessary so that the statements in
the
Prospectus as so amended or supplemented will not, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus will comply with law.
(g) Blue
Sky Compliance.
The
Company will qualify the Securities for offer and sale under the securities
or
Blue Sky laws of such jurisdictions as the Representative shall reasonably
request and will continue such qualifications in effect so long as required
for
distribution of the Securities; provided
that the
Company shall not be required to (i) qualify as a foreign corporation or other
entity or as a dealer in securities in any such jurisdiction where it would
not
otherwise be required to so qualify, (ii) file any general consent to service
of
process in any such jurisdiction or (iii) subject itself to taxation in any
such
jurisdiction if it is not otherwise so subject.
(h) Earning
Statement.
The
Company will make generally available to its security holders and the
Representative as soon as practicable an earning statement that satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering a period of at least twelve months beginning
with the first fiscal quarter of the Company occurring after the “effective
date” (as defined in Rule 158) of the Registration Statement.
(i) Clear
Market.
During
the period from the date hereof through and including the date that is 90 days
after the date hereof, the Company will not, without the prior written consent
of the Representative, offer, sell, contract to sell or otherwise dispose of
any
debt securities issued or guaranteed by the Company and having a tenor of more
than one year.
(j) Use
of Proceeds.
The
Company will apply the net proceeds from the sale of the Securities as described
in the Registration Statement, the Time of Sale Information and the Prospectus
under the heading “Use of proceeds”.
(k) No
Stabilization.
The
Company will not take, directly or indirectly, any action designed to or that
could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Securities.
(l) Record
Retention.
The
Company will, pursuant to reasonable procedures developed in good faith, retain
copies of each Issuer Free Writing Prospectus that is not filed with the
Commission in accordance with Rule 433 under the Securities Act.
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5. Certain
Agreements of the Underwriters.
Each
Underwriter hereby represents and agrees that
(a) It
has
not and will not use, authorize use of, refer to, or participate in the planning
for use of, any “free writing prospectus”, as defined in Rule 405 under the
Securities Act (which term includes use of any written information furnished
to
the Commission by the Company and not incorporated by reference into the
Registration Statement and any press release issued by the Company) other than
(i) a free writing prospectus that, solely as a result of use by such
underwriter, would not trigger an obligation to file such free writing
prospectus with the Commission pursuant to Rule 433, (ii) any Issuer Free
Writing Prospectus listed on Annex B or prepared pursuant to Section 3(c) or
Section 4(c) above (including any electronic roadshow), or (iii) any free
writing prospectus prepared by such underwriter and approved by the Company
in
advance in writing (each such free writing prospectus referred to in clauses
(i)
or (iii), an “Underwriter Free Writing Prospectus”). Notwithstanding the
foregoing, the Underwriters may use a term sheet substantially in the form
of
Annex C hereto without the consent of the Company.
(b) It
is not
subject to any pending proceeding under Section 8A of the Securities Act with
respect to the offering (and will promptly notify the Company if any such
proceeding against it is initiated during the Prospectus Delivery
Period).
6. Conditions
of Underwriters’ Obligations.
The
obligation of each Underwriter to purchase Securities on the Closing Date as
provided herein is subject to the performance by the Company of its covenants
and other obligations hereunder and to the following additional
conditions:
(a) Registration
Compliance; No Stop Order.
No
order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceeding for such purpose, pursuant to Rule 401(g)(2) or
pursuant to Section 8A under the Securities Act shall be pending before or
threatened by the Commission; the Prospectus and each Issuer Free Writing
Prospectus shall have been timely filed with the Commission under the Securities
Act (in the case of a Issuer Free Writing Prospectus, to the extent required
by
Rule 433 under the Securities Act) and in accordance with Section 4(a) hereof;
and all requests by the Commission for additional information shall have been
complied with to the reasonable satisfaction of the Representative.
(b) Representations
and Warranties.
The
representations and warranties of the Company contained herein shall be true
and
correct on the date hereof and on and as of the Closing Date; and the statements
of the Company and its officers made in any certificates delivered pursuant
to
this Agreement shall be true and correct on and as of the Closing
Date.
(c) No
Downgrade.
Subsequent to the earlier of (A) the Time of Sale and (B) the execution and
delivery of this Agreement, (i) no downgrading shall have occurred in the rating
accorded the Securities or any other debt securities or preferred stock of
or
guaranteed by the Company by any “nationally recognized statistical rating
organization”, as such term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act and (ii) no such organization shall have
publicly announced that it has under surveillance or review, or has changed
its
outlook with respect to, its rating of the Securities or of any other debt
securities or preferred stock of or guaranteed by the Company (other than an
announcement with positive implications of a possible upgrading).
(d) No
Material Adverse Change.
No
event or condition of a type described in Section 3(g) hereof shall have
occurred or shall exist, which event or condition is not described in the Time
of Sale Information (excluding any amendment or supplement thereto) and the
Prospectus (excluding any amendment or supplement thereto) and the effect of
which in the judgment of the Representative makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities
on
the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Prospectus.
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(e) Officers’
Certificate.
The
Representative shall have received on and as of the Closing Date a certificate
of the President and Chief Executive Officer and the Executive Vice President
and Chief Financial Officer of the Company (i) confirming that such officers
have carefully reviewed the Registration Statement, the Time of Sale Information
and the Prospectus and, to the best knowledge of such officers, the
representations set forth in Sections 3(b) or 3(d) hereof are true and correct,
(ii) confirming that the other representations and warranties of the Company
in
this Agreement are true and correct and that the Company has complied with
all
agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date and (iii) to the effect set forth
in
paragraphs (a), (c) and (d) above.
(f) Comfort
Letters.
On the
date of this Agreement and on the Closing Date, PricewaterhouseCoopers LLP
shall
have furnished to the Representative, at the request of the Company, letters,
dated the respective dates of delivery thereof and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representative, containing statements and information of the type customarily
included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information contained or incorporated
by reference in the Registration Statement, the Time of Sale Information and
the
Prospectus; provided
that the
letter delivered on the Closing Date shall use a “cut-off” date no more than
three business days prior to the Closing Date.
(g) Opinion
and 10b-5 Statement of Counsel for the Company.
Each of
(i) Akin, Gump, Strauss, Hauer & Feld, L.L.P., special counsel of the
Company; and (ii) Musick, Peeler & Garrett LLP, general counsel for the
Company, shall have furnished to the Representative, at the request of the
Company, their written opinion and/or 10b-5 Statement, dated the Closing Date
and addressed to the Underwriters, in form and substance reasonably satisfactory
to the Representative, to the effect set forth in (i) Annex A-1 hereto; and
(ii)
Annex A-2 hereto, respectively.
(h) Opinion
and 10b-5 Statement of Counsel for the Underwriters.
The
Representative shall have received on and as of the Closing Date an opinion
and
10b-5 Statement of Simpson Thacher & Bartlett LLP, counsel for the
Underwriters, with respect to such matters as the Representative may reasonably
request, and such counsel shall have received such documents and information
as
they may reasonably request to enable them to pass upon such
matters.
(i) No
Legal Impediment to Issuance.
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 that would, as of the Closing Date, prevent
the issuance or sale of the Securities; 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 Securities.
(j) Good
Standing.
The
Representative shall have received on and as of the Closing Date satisfactory
evidence of the good standing of the Company in its jurisdiction of organization
and its good standing in such other jurisdictions as the Representative may
reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such
jurisdictions.
-
14
-
(k) Reserve
Report Confirmation Letters.
On the
date of this Agreement and on the Closing Date, DeGolyer and MacNaughton shall
have furnished to the Representative, at the request of the Company, letters,
dated the respective dates of delivery thereof and addressed to the
Underwriters, in form and substance reasonably satisfactory to the
Representative, containing statements and information with respect to the
estimated oil and gas reserves of the Company as reported in letters to the
Company.
(l) Consents.
On or
prior to the Closing Date, the Company shall have furnished to the
Representative a copy of the consent to the issuance, offer and sale of the
Securities executed by the administrative agent and lenders under the Credit
Agreement dated as of April 28, 2006 among the Company, Wells Fargo Bank,
National Association, as administrative agent, and the lenders parties thereto
from time to time and a copy of the consent to the issuance, offer and sale
of
the Securities executed by Societe Generale under the uncommitted money market
line of credit facility dated as of November 3, 2005 between the Company and
Societe Generale.
(m) Officers’
Certificate.
The
Representative shall have received on and as of the Closing Date a certificate
of the Executive Vice President and Chief Financial Officer and the Controller
of the Company confirming that such officers have carefully reviewed the
Registration Statement, the Time of Sale Information and the Prospectus and
containing statements relating to certain information contained
therein.
(n) Additional
Documents.
On or
prior to the Closing Date, the Company shall have furnished to the
Representative such further certificates and documents as the Representative
may
reasonably request.
All
opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Underwriters.
7. Indemnification
and Contribution.
(a) Indemnification
of the Underwriters.
The
Company agrees to indemnify and hold harmless each Underwriter, its affiliates,
directors and officers and each person, if any, who controls such Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, that arise
out of, or are based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, not
misleading, (ii) or any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Prospectus (or any
amendment or supplement thereto), any Issuer Free Writing Prospectus or any
Time
of Sale Information, or caused by any omission or alleged omission to state
therein a material fact necessary in order to make the statements therein,
in
light of the circumstances under which they were made, not misleading, in each
case except insofar as such losses, claims, damages or liabilities arise out
of,
or are based upon, any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with any information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representative expressly for use therein.
The
Company also agrees to indemnify and hold harmless GS, its affiliates, directors
and officers and each person, if any, who controls GS within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities incurred as a result
of GS’s acts or omissions to act in connection with its participation as a
“qualified independent underwriter” within the meaning of the Rules of Conduct
of the National Association of Securities Dealers, Inc. in connection with
the
offering of the Securities.
-
15
-
(b) Indemnification
of the Company.
Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, its directors, its officers who signed the Registration Statement
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 to the same extent
as
the indemnity set forth in paragraph (a) above, but only with respect to any
losses, claims, damages or liabilities that arise out of, or are based upon,
any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such
Underwriter furnished to the Company in writing by such Underwriter through
the
Representative expressly for use in the Registration Statement, any Preliminary
Prospectus, the Prospectus (or any amendment or supplement thereto), any Issuer
Free Writing Prospectus or any Time of Sale Information, it being understood
and
agreed that the only such information consists of the following information
in
the Issuer Free Writing Prospectus dated October 18, 2006: the final sentence
of
the ultimate paragraph of such Issuer Free Writing Prospectus which sentence
relates to the Underwriters’ phone number; and the following information in the
Preliminary Prospectus and the Prospectus: (i) the third paragraph under the
caption “Underwriting”, which paragraph relates to selling arrangements; (ii)
third and fourth sentences of the fifth paragraph under the caption
“Underwriting,” which sentences relate to market-making; and (iii) the ninth
paragraph under the caption “Underwriting,” which paragraph relates to
stabilizing transactions.
(c) Notice
and Procedures.
If any
suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnification may be sought pursuant to either paragraph
(a) or (b) above, such person (the “Indemnified Person”) shall promptly notify
the person against whom such indemnification may be sought (the “Indemnifying
Person”) in writing; provided
that the
failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under paragraph (a) or (b) of this Section 7 except
to the extent that it has been materially prejudiced (through the forfeiture
of
substantive rights or defenses) by such failure; and provided,
further,
that
the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under this
Section 7. If any such proceeding shall be brought or asserted against an
Indemnified Person and it shall have notified the Indemnifying Person thereof,
the Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to Section 7 that the Indemnifying Party may
designate in such proceeding and shall pay the costs and expenses of such
proceeding and shall pay the fees and expenses of counsel related to such
proceeding, as incurred. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to
the
contrary; (ii) the Indemnifying Person has failed within a reasonable time
to
retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the
same
counsel would be inappropriate due to actual or potential differing interest
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate
firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred; provided,
however
that if
indemnity may be sought pursuant to the second paragraph of 7(a) above in
respect of such proceeding, then in addition to such separate firm of the
Underwriters, their affiliates and such control persons of the Underwriters
the
indemnifying party shall be liable for the fees and expenses of not more than
one separate firm (in addition to any local counsel) for GS in its capacity
as a
“qualified independent underwriter”, its affiliates and all persons, if any, who
control GS within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act. Any such separate firm for any Underwriter,
its
affiliates, directors and officers and any control persons of such Underwriter
shall be designated in writing by J.P. Morgan Securities Inc. and any such
separate firm for the Company, its directors, its officers who signed the
Registration Statement and any control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement
or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested that an Indemnifying Person reimburse the
Indemnified Person for fees and expenses of counsel as contemplated by this
paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by the Indemnifying Person of
such
request and (ii) the Indemnifying Person shall not have (A) reimbursed the
Indemnified Person in accordance with such request prior to the date of such
settlement or (B) notified the Indemnified Person in writing that it is
disputing in good faith all or any non-reimbursed portion of the fees and
expenses included in such request stating in reasonable detail the basis for
such dispute. No Indemnifying Person shall, without the written consent of
the
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been
a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter
of
such proceeding and (y) does not include any statement as to or any admission
of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
-
16
-
(d) Contribution.
If the
indemnification provided for in paragraphs (a) and (b) above is unavailable
to
an Indemnified Person or insufficient in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one
hand and the Underwriters or GS in its capacity as a “qualified independent
underwriter,” as the case may be, on the other from the offering of the
Securities or (ii) if the allocation provided by clause (i) is not permitted
by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of
the
Company on the one hand and the Underwriters or GS in its capacity as a
“qualified independent underwriter,” as the case may be, on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters or GS in its capacity as a “qualified independent
underwriter,” as the case may be, on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Securities and the total underwriting
discounts and commissions received by the Underwriters in connection therewith,
in each case as set forth in the table on the cover of the Prospectus, or the
fee to be received by GS in its capacity as a “qualified independent
underwriter”, as the case may be, bear to the aggregate offering price of the
Securities. The relative fault of the Company on the one hand and the
Underwriters or GS in its capacity as a “qualified independent underwriter,” as
the case may be, on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters or GS in its capacity as a
“qualified independent underwriter,” as the case may be, and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission.
(e) Limitation
on Liability.
The
Company and the Underwriters agree that it would not be just and equitable
if
contribution pursuant to this Section 7 were determined by pro
rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of
the
equitable considerations referred to in paragraph (d) above. The amount paid
or
payable by an Indemnified Person as a result of the losses, claims, damages
and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such Indemnified Person in connection with any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total underwriting discounts and commissions received by such
Underwriter with respect to the offering of the Securities exceeds the amount
of
any damages that such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission.
No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters’
obligations to contribute pursuant to this Section 7 are several in proportion
to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive
Remedies.
The
remedies provided for in this Section 7 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any Indemnified
Person at law or in equity.
8. Effectiveness
of Agreement.
This
Agreement shall become effective upon the execution and delivery hereof by
the
parties hereto.
9. Termination.
This
Agreement may be terminated in the absolute discretion of the Representative,
by
notice to the Company, if after the execution and delivery of this Agreement
and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on the New York Stock Exchange or the over-the-counter
market; (ii) trading of any securities issued or guaranteed by the Company
shall
have been suspended on any exchange or in any over-the-counter market; (iii)
a
general moratorium on commercial banking activities shall have been declared
by
federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or
any
calamity or crisis, either within or outside the United States, that, in the
judgment of the Representative, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery
of
the Securities on the terms and in the manner contemplated by this Agreement,
the Time of Sale Information and the Prospectus.
-
17
-
10. Defaulting
Underwriter.
(a)
If, on
the Closing Date, any Underwriter defaults on its obligation to purchase the
Securities that it has agreed to purchase hereunder, the non-defaulting
Underwriters may in their discretion arrange for the purchase of such Securities
by other persons satisfactory to the Company on the terms contained in this
Agreement. If, within 36 hours after any such default by any Underwriter, the
non-defaulting Underwriters do not arrange for the purchase of such Securities,
then the Company shall be entitled to a further period of 36 hours within which
to procure other persons satisfactory to the non-defaulting Underwriters to
purchase such Securities on such terms. If other persons become obligated or
agree to purchase the Securities of a defaulting Underwriter, either the non
defaulting Underwriters or the Company may postpone the Closing Date for up
to
five full business days in order to effect any changes that in the opinion
of
counsel for the Company or counsel for the Underwriters may be necessary in
the
Registration Statement and the Prospectus or in any other document or
arrangement, and the Company agrees to promptly prepare any amendment or
supplement to the Registration Statement and the Prospectus that effects any
such changes. As used in this Agreement, the term “Underwriter” includes, for
all purposes of this Agreement unless the context otherwise requires, any person
not listed in Schedule 1 hereto that, pursuant to this Section 10, purchases
Securities that a defaulting Underwriter agreed but failed to
purchase.
(b) If,
after
giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and
the Company as provided in paragraph (a) above, the aggregate principal amount
of such Securities that remains unpurchased does not exceed one-eleventh of
the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Securities that such Underwriter agreed to purchase hereunder plus
such Underwriter’s pro
rata
share
(based on the principal amount of Securities that such Underwriter agreed to
purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made.
(c) If,
after
giving effect to any arrangements for the purchase of the Securities of a
defaulting Underwriter or Underwriters by the non-defaulting Underwriters and
the Company as provided in paragraph (a) above, the aggregate principal amount
of such Securities that remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Securities, or if the Company shall not
exercise the right described in paragraph (b) above, then this Agreement shall
terminate without liability on the part of the non-defaulting Underwriters.
Any
termination of this Agreement pursuant to this Section 10 shall be without
liability on the part of the Company, except that the Company will continue
to
be liable for the payment of expenses as set forth in Section 11 hereof and
except that the provisions of Section 7 hereof shall not terminate and shall
remain in effect.
(d) Nothing
contained herein shall relieve a defaulting Underwriter of any liability it
may
have to the Company or any non-defaulting Underwriter for damages caused by
its
default.
11. Payment
of Expenses.
(a)
Whether
or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company will pay or cause to be paid all costs
and
expenses incident to the performance of its obligations hereunder, including
without limitation, (i) the costs incident to the authorization, issuance,
sale,
preparation and delivery of the Securities and any taxes payable in that
connection; (ii) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement, the Preliminary
Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information
and
the Prospectus (including all exhibits, amendments and supplements thereto)
and
the distribution thereof; (iii) the costs of reproducing and distributing each
of the Transaction Documents; (iv) the fees and expenses of the Company’s
counsel and independent accountants; (v) the fees and expenses incurred in
connection with the registration or qualification and determination of
eligibility for investment of the Securities under the laws of such
jurisdictions as the Representative may designate and the preparation, printing
and distribution of a Blue Sky Memorandum (including the related fees and
expenses of counsel for the Underwriters); (vi) any fees charged by rating
agencies for rating the Securities; (vii) the fees and expenses of the Trustee
and any paying agent (including related fees and expenses of any counsel to
such
parties); (viii) all expenses and application fees incurred in connection with
any filing with, and clearance of the offering by, the National Association
of
Securities Dealers, Inc. (including the fees (of $10,000) and expenses of GS
acting as “qualified independent underwriter” within the meaning of the
aforementioned Rule 2720 of The Rules of Conduct); and (ix) all expenses
incurred by the Company in connection with any “road show” presentation to
potential investors (subject to the reimbursement by the Underwriters of
one-half of the costs of using an airplane with respect to any such “road show”
presentation).
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18
-
(b) If
(i)
this Agreement is terminated pursuant to Section 9, (ii) the Company for any
reason fails to tender the Securities for delivery to the Underwriters or (iii)
the Underwriters decline to purchase the Securities for any reason permitted
under this Agreement, the Company agrees to reimburse the Underwriters for
all
out-of-pocket costs and expenses (including the fees and expenses of their
counsel) reasonably incurred by the Underwriters in connection with this
Agreement and the offering contemplated hereby.
12. Persons
Entitled to Benefit of Agreement.
This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers and directors and any
controlling persons referred to herein, and the affiliates of each Underwriter
referred to in Section 7 hereof. Nothing in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy
or
claim under or in respect of this Agreement or any provision contained herein.
No purchaser of Securities from any Underwriter shall be deemed to be a
successor merely by reason of such purchase.
13. Survival.
The
respective indemnities, rights of contribution, representations, warranties
and
agreements of the Company and the Underwriters contained in this Agreement
or
made by or on behalf of the Company or the Underwriters pursuant to this
Agreement or any certificate delivered pursuant hereto shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect, regardless of any termination of this Agreement or any investigation
made by or on behalf of the Company or the Underwriters.
14. Certain
Defined Terms.
For
purposes of this Agreement, (a) except where otherwise expressly provided,
the
term “affiliate” has the meaning set forth in Rule 405 under the Securities Act;
(b) the term “business day” means any day other than a day on which banks are
permitted or required to be closed in New York City; (c) the term “subsidiary”
has the meaning set forth in Rule 405 under the Securities Act ; and (d) the
term “significant subsidiary” has the meaning set forth in Rule 1-02 of
Regulation S-X under the Exchange Act.
15. Miscellaneous.
(a) Authority
of the Representative.
Any
action by the Underwriters hereunder may be taken by J.P. Morgan Securities
Inc.
on behalf of the Underwriters, and any such action taken by J.P. Morgan
Securities Inc. shall be binding upon the Underwriters.
(b) Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any
standard form of telecommunication. Notices to the Underwriters shall be given
to the Representative c/o J.P. Morgan Securities Inc., 270 Park Avenue, New
York, New York 10017 (fax: 212-270-1063); Attention: Lawrence Landry. Notices
to
the Company shall be given to it at 5201 Truxtun Avenue, Suite 300, Bakersfield,
California 93309 (fax: 661-616-3881); Attention: Kenneth A. Olson, Corporate
Secretary.
(c) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
(d) Counterparts.
This
Agreement may be signed in counterparts (which may include counterparts
delivered by any standard form of telecommunication), each of which shall be
an
original and all of which together shall constitute one and the same
instrument.
(e) Amendments
or Waivers.
No
amendment or waiver of any provision of this Agreement, nor any consent or
approval to any departure therefrom, shall in any event be effective unless
the
same shall be in writing and signed by the parties hereto.
(f) Headings.
The
headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
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19
-
If
the
foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided
below.
Very
truly yours,
BERRY
PETROLEUM COMPANY
By_/s/
Ralph J. Goehring___
Name: Ralph
J.
Goehring
Title: Executive
Vice President and Chief
Financial
Officer
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20
-
Accepted:
October 18, 2006
J.P.
MORGAN SECURITIES INC.
For
itself and on behalf of the
several
Underwriters listed
in
Schedule 1 hereto.
By_/s/
Adam Bernard______
Authorized
Signatory
Schedule
1
|
Underwriter
|
Principal
Amount
|
|||
|
J.P.
Morgan Securities Inc.
|
$
|
90,000,000
|
||
|
Citigroup
Global Markets Inc.
|
$
|
28,000,000
|
||
|
Wells
Fargo Securities, LLC
|
$
|
28,000,000
|
||
|
Goldman,
Sachs & Co.
|
$
|
16,000,000
|
||
|
SG
Americas Securities, LLC
|
$
|
12,000,000
|
||
|
BNP
Paribas Securities Corp.
|
$
|
12,000,000
|
||
|
Wedbush
Morgan Securities Inc.
|
$
|
3,500,000
|
||
|
Comerica
Securities, Inc.
|
$
|
3,500,000
|
||
|
Piper
Jaffray & Co.
|
$
|
3,500,000
|
||
|
First
Albany Capital Inc.
|
$
|
3,500,000
|
||
|
Total
|
$
|
200,000,000
|
||
Annex
A-1
[Form
of
Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.]
[Omitted.]
Annex
A-2
[Omitted.]
Annex
B
a.
Time of Sale Information
Final
pricing term sheet substantially in the form of Annex C attached hereto.
Annex
C
BERRY
PETROLEUM COMPANY
8.25%
Senior Subordinated Notes due 2016
Pricing
Term Sheet
October
18, 2006
The
following information supplements the preliminary prospectus supplement dated
October 6, 2006 to the prospectus dated June 15, 2006.
|
Issuer:
|
Berry
Petroleum Company
|
||
|
Security
Description:
|
Senior
Subordinated Notes
|
||
|
Distribution:
|
SEC
Registered
|
||
|
Face:
|
$200,000,000
|
||
|
Gross
Proceeds:
|
$200,000,000
|
||
|
Net
Proceeds to Issuer (before expenses)
|
$196,000,000
|
||
|
Coupon:
|
8.25%
|
||
|
Maturity:
|
November
1, 2016
|
||
|
Offering
Price:
|
100.000%
|
||
|
Yield
to Maturity:
|
8.25%
|
||
|
Spread
to Treasury:
|
+349bps
|
||
|
Benchmark:
|
T
4.875% due 8/15/2016
|
||
|
Ratings:
|
B3/B
|
||
|
Interest
Pay Dates:
|
November
1 and May 1
|
||
|
Beginning:
|
May
1, 2007
|
||
|
Clawback:
|
Up
to 35% at 108.25%
|
||
|
Until:
|
November
1, 2009
|
||
|
Optional
redemption:
|
Makewhole
call @ T+50bps prior to November 1, 2011, then:
|
||
|
On
or after:
|
Price:
|
||
|
November
1, 2011
|
104.125%
|
||
|
November
1, 2012
|
102.750%
|
||
|
November
1, 2013
|
101.375%
|
||
|
November
1, 2014 and thereafter
|
100.000%
|
||
|
Change
of control:
|
Put
@ 101% of principal plus accrued interest
|
||
|
Trade
Date:
|
October
18, 2006
|
||
|
Settlement
Date:
|
(T+4)
|
October
24, 2006
|
|
|
CUSIP:
|
Bond
proceeds will be funded into escrow. If the acquisition fails to
close by
November 19th, bondholders will receive 101% plus interest from
closing
085789AC9 |
||
|
ISIN:
|
US085789AC95
|
||
|
Denominations:
|
2,000x1,000
|
||
|
Bookrunners:
|
JPMorgan
|
||
|
Citigroup
|
|||
|
Wells
Fargo Securities
|
|||
|
Goldman,
Sachs & Co.
|
|||
|
Co-Managers:
|
|
SOCIETE
GENERALE
|
|
|
BNP
PARIBAS
|
|||
|
Wedbush
Morgan Securities Inc.
|
|||
|
Comerica
Securities
|
|||
|
Piper
Jaffray
|
|||
|
First
Albany Capital
|
|||
-
26
-
As
a
result of the final determination of the coupon for the 8.25% Senior
Subordinated Notes due 2016, set forth below is a revised version of the table
under the caption “Ratio of earnings to fixed charges” in the preliminary
prospectus supplement dated October 6, 2006 to the prospectus dated June 15,
2006, which has been revised to reflect the pro forma ratio of earnings to fixed
charges based on the coupon set forth above:
|
Pro
Forma Ratio of Earnings to Fixed Charges
|
||
|
($
in thousands)
|
Pro
forma
year
ended December 31,
|
Pro
forma
six
months ended June 30,
|
|
2005
|
2006
|
|
|
Total
earnings
|
$
169,115
|
$
99,440
|
|
Fixed
charges, as above
|
6,256
|
6,923
|
|
Adjustments:
|
||
|
Estimated
net increase in interest expense from refinancing
|
5,313
|
1,188
|
|
Total
pro forma fixed charges
|
11,569
|
8,111
|
|
Pro
forma ratio of earnings to fixed charges
|
14.62x
|
12.26x
|
The
issuer has filed a registration statement (including a prospectus) with the
SEC
for the offering to which this communication relates. Before you invest, you
should read the prospectus in that registration statement, the prospectus
supplement and other documents the issuer has filed with the SEC for more
complete information about the issuer and this offering. You may get these
documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus if you request it by calling
toll-free 1-800-245-8812.
-
27
-