Attached files
| file | filename |
|---|---|
| 8-K - Energy XXI Ltd | v168687_8k.htm |
| EX-1.2 - Energy XXI Ltd | v168687_ex1-2.htm |
| EX-3.1 - Energy XXI Ltd | v168687_ex3-1.htm |
| EX-5.2 - Energy XXI Ltd | v168687_ex5-2.htm |
| EX-5.1 - Energy XXI Ltd | v168687_ex5-1.htm |
| EX-99.1 - Energy XXI Ltd | v168687_ex99-1.htm |
Execution
Version
Energy
XXI (Bermuda) Limited
90,000,000
Shares
Common
Stock
($.001
par value per Share)
Underwriting
Agreement
December
8, 2009
Underwriting
Agreement
December
8, 2009
UBS
Securities LLC
Credit
Suisse Securities (USA) LLC
Capital
One Southcoast, Inc.
Dahlman
Rose & Company, LLC
Morgan
Keegan & Company, Inc.
Scotia
Capital (USA) Inc.
SMH
Capital Inc.
TD
Securities (USA) LLC
Canaccord
Adams Ltd.
CRT
Capital Group LLC
Johnson
Rice & Company L.L.C.
Natixis
Bleichroeder LLC
Pritchard
Capital Partners, LLC
Rodman
& Renshaw, LLC
Macquarie
Capital (USA) Inc.
Sunrise
Securities Corporation
as Managing
Underwriters
c/o UBS
Securities LLC
299 Park
Avenue
New York,
New York 10171-0026
Ladies
and Gentlemen:
Energy XXI (Bermuda) Limited, a
corporation organized under the laws of Bermuda (the “Company”), proposes
to issue and sell to the underwriters named in Schedule A annexed
hereto (the “Underwriters”), for
whom you are acting as representatives, an aggregate of 90,000,000 shares (the
“Firm Shares”)
of common stock, $.001 par value per share (the “Common Stock”), of
the Company. In addition, solely for the purpose of covering
over-allotments, the Company proposes to the Underwriters the option to purchase
from the Company up to an additional 13,500,000 shares of Common Stock (the
“Additional
Shares”). The Firm Shares and the Additional Shares are
hereinafter collectively sometimes referred to as the “Shares.” In
addition to the issuance and sale of the Shares to the Underwriters, the Company
intends to simultaneously issue and sell 1,000,000 shares of Convertible
Perpetual Preferred Stock, $.001 par value per share (the “Preferred
Stock”). The Shares are described in the Prospectus, which is
referred to below.
The Company has prepared and filed, in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations thereunder (collectively, the “Act”), with the
Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (File No. 333-148713) under the Act (the
“registration
statement”), including a prospectus, which registration statement
incorporates by reference documents which the Company has filed, or will file,
in accordance with the provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”). Amendments
to such registration statement, if necessary or appropriate, have been similarly
prepared and filed with the Commission in accordance with the
Act. Such registration statement, as so amended, has become effective
under the Act.
Except where the context otherwise
requires, “Registration
Statement,” as used herein, means the registration statement, as amended
at the time of such registration statement’s effectiveness for purposes of
Section 11 of the Act, as such section applies to the respective Underwriters
(the “Effective
Time”), including (i) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein, (ii) any
information contained or incorporated by reference in a prospectus filed with
the Commission pursuant to Rule 424(b) under the Act, to the extent such
information is deemed, pursuant to Rule 430B or Rule 430C under the Act, to be
part of the registration statement at the Effective Time, and (iii) any
registration statement filed to register the offer and sale of Shares pursuant
to Rule 462(b) under the Act.
The Company has furnished to you, for
use by the Underwriters and by dealers in connection with the offering of the
Shares, copies of one or more preliminary prospectus supplements, and the
documents incorporated by reference therein, relating to the
Shares. Except where the context otherwise requires, “Pre-Pricing
Prospectus,” as used herein, means each such preliminary prospectus
supplement, in the form so furnished, including any basic prospectus (whether or
not in preliminary form) furnished to you by the Company and attached to or used
with such preliminary prospectus supplement. Except where the context
otherwise requires, “Basic Prospectus,” as
used herein, means any such basic prospectus and any basic prospectus furnished
to you by the Company and attached to or used with the Prospectus Supplement (as
defined below).
Except where the context otherwise
requires, “Prospectus
Supplement,” as used herein, means the final prospectus supplement,
relating to the Shares, filed by the Company with the Commission pursuant to
Rule 424(b) under the Act on or before the second business day after the date
hereof (or such earlier time as may be required under the Act), in the form
furnished by the Company to you for use by the Underwriters and by dealers in
connection with the offering of the Shares.
Except where the context otherwise
requires, “Prospectus,” as used
herein, means the Prospectus Supplement together with the Basic Prospectus
attached to or used with the Prospectus Supplement.
“Applicable Time” as
used herein, means the date and time that this Agreement is executed and
delivered by the parties hereto.
“Covered Free Writing
Prospectuses,” as used herein, means (i) each “issuer free writing
prospectus” (as defined in Rule 433(h)(1) under the Act), if any, relating to
the Shares, which is not a Permitted Free Writing Prospectus and (ii) each
Permitted Free Writing Prospectus.
“Disclosure Package,”
as used herein, means any Pre-Pricing Prospectus or Basic
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Prospectus,
in either case together with any combination of one or more of the Permitted
Free Writing Prospectuses, if any.
“Permitted Free Writing
Prospectuses,” as used herein, means the documents listed on Schedule B attached
hereto and each “road show” (as defined in Rule 433 under the Act), if any,
related to the offering of the Shares contemplated hereby that is a “written
communication” (as defined in Rule 405 under the Act). The
Underwriters have not offered or sold and will not offer or sell, without the
Company’s consent, any Shares by means of any “free writing prospectus” (as
defined in Rule 405 under the Act) that is required to be filed by the
Underwriters with the Commission pursuant to Rule 433 under the Act, other than
a Permitted Free Writing Prospectus.
Any reference herein to the
registration statement, the Registration Statement, any Basic Prospectus, any
Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus or any
Permitted Free Writing Prospectus shall be deemed to refer to and include the
documents, if any, incorporated by reference, or deemed to be incorporated by
reference, therein (the “Incorporated
Documents”), including, unless the context otherwise requires, the
documents, if any, filed as exhibits to such Incorporated
Documents. Any reference herein to the terms “amend,” “amendment” or “supplement” with
respect to the Registration Statement, any Basic Prospectus, any Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or any Permitted Free
Writing Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act on or after the initial effective date of the
Registration Statement, or the date of such Basic Prospectus, such Pre-Pricing
Prospectus, the Prospectus Supplement, the Prospectus or such Permitted Free
Writing Prospectus, as the case may be, and deemed to be incorporated therein by
reference.
As used in this Agreement, “business day” shall
mean a day on which the New York Stock Exchange (the “NYSE”) is open for
trading. The terms “herein,” “hereof,” “hereto,” “hereinafter” and
similar terms, as used in this Agreement, shall in each case refer to this
Agreement as a whole and not to any particular section, paragraph, sentence or
other subdivision of this Agreement. The term “or,” as used herein,
is not exclusive.
The Company and the Underwriters agree
as follows:
1. Sale and
Purchase. Upon the basis of the representations and warranties
and subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the respective Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A attached
hereto, subject to adjustment in accordance with Section 8 hereof, in each case
at a purchase price of $1.80 per Share. The Company is advised by you
that the Underwriters intend (i) to make a public offering of their respective
portions of the Firm Shares as soon after the effectiveness of this Agreement as
in your judgment is advisable and (ii) initially to offer the Firm Shares upon
the terms set forth in the Prospectus. You may from time to time
increase or decrease the public offering price after the initial public offering
to such extent as you may determine.
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In addition, the Company hereby grants
to the several Underwriters the option (the “Over-Allotment
Option”) to purchase, and upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them, all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. The Over-Allotment Option may be
exercised by UBS Securities LLC (“UBS”) and Credit
Suisse Securities (USA) LLC (“Credit Suisse”) on
behalf of the several Underwriters at any time and from time to time on or
before the thirtieth day following the date of the Prospectus Supplement, by
written notice to the Company. Such notice shall set forth the
aggregate number of Additional Shares as to which the Over-Allotment Option is
being exercised and the date and time when the Additional Shares are to be
delivered (any such date and time being herein referred to as an “additional time of
purchase”); provided, however, that no
additional time of purchase shall be earlier than the “time of purchase” (as
defined below) nor earlier than the second business day after the date on which
the Over-Allotment Option shall have been exercised nor later than the tenth
business day after the date on which the Over-Allotment Option shall have been
exercised. The number of Additional Shares to be sold to each
Underwriter shall be the number which bears the same proportion to the aggregate
number of Additional Shares being purchased as the number of Firm Shares set
forth opposite the name of such Underwriter on Schedule A hereto
bears to the total number of Firm Shares (subject, in each case, to such
adjustment as UBS and Credit Suisse may determine to eliminate fractional
Shares), subject to adjustment in accordance with Section 8
hereof.
2. Payment and
Delivery. Payment of the purchase price for the Firm Shares
shall be made to the Company by Federal Funds wire transfer against delivery of
the certificates for the Firm Shares to you through the facilities of The
Depository Trust Company (“DTC”) for the
respective accounts of the Underwriters. Such payment and delivery
shall be made at 10:00 A.M., New York City time, on December 14, 2009 (unless
another time shall be agreed to by you and the Company or unless postponed in
accordance with the provisions of Section 8 hereof). The time at
which such payment and delivery are to be made is hereinafter sometimes called
the “time of
purchase.” Electronic transfer of the Firm Shares shall be
made to you at the time of purchase in such names and in such denominations as
you shall specify.
Payment of the purchase price for the
Additional Shares shall be made at the additional time of purchase in the same
manner and at the same office and time of day as the payment for the Firm
Shares. Electronic transfer of the Additional Shares shall be made to
you at the additional time of purchase in such names and in such denominations
as you shall specify.
Deliveries of the documents described
in Section 6 hereof with respect to the purchase of the Shares shall be
made at the offices of Baker Botts L.L.P. at 910 Louisiana, Houston, Texas
77002, at 10:00 A.M., New York City time, on the date of the closing of the
purchase of the Firm Shares or the Additional Shares, as the case may
be.
3. Representations and
Warranties of the Company. The Company represents and warrants
to and agrees with each of the Underwriters that:
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(a) Registration. The
Registration Statement has heretofore become effective under the Act or, with
respect to any registration statement to be filed to register the offer and sale
of Shares pursuant to Rule 462(b) under the Act, will be filed with the
Commission and become effective under the Act no later than 10:00 P.M., New York
City time, on the date of determination of the public offering price for the
Shares; no stop order of the Commission preventing or suspending the use of any
Basic Prospectus, any Pre-Pricing Prospectus, the Prospectus Supplement, the
Prospectus or any Permitted Free Writing Prospectus, or the effectiveness of the
Registration Statement, has been issued, and no proceedings for such purpose
have been instituted or, to the Company’s knowledge, are contemplated by the
Commission.
(b) Form of Documents; No Material
Misstatements or Omissions. The Registration Statement
complied when it became effective, complies as of the date hereof and, as
amended or supplemented, at the time of purchase, each additional time of
purchase, if any, and at all times during which a prospectus is required by the
Act to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares, will
comply, in all material respects, with the requirements of the Act; the
conditions to the use of Form S-3 in connection with the offering and sale of
the Shares as contemplated hereby have been satisfied; the Registration
Statement meets, and the offering and sale of the Shares as contemplated hereby
complies with, the requirements of Rule 415 under the Act (including, without
limitation, Rule 415(a)(5) under the Act); the Registration Statement did not,
as of the Effective Time, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; each Pre-Pricing Prospectus complied, at the
time it was filed with the Commission, and complies as of the date hereof, in
all material respects with the requirements of the Act; at the Applicable Time,
at the time of purchase and each additional time of purchase, if any, the
Disclosure Package (together with the public offering price per Share, number of
Firm Shares and number of Additional Shares) does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; each Basic Prospectus complied or will comply,
as of its date, the date it was or will be filed with the Commission, as of the
date hereof (if filed with the Commission on or prior to the date hereof), at
the time of purchase, each additional time of purchase, if any, and at all times
during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar
rule) in connection with any sale of Shares, in all material respects, with the
requirements of the Act; each of the Prospectus Supplement and the Prospectus
will comply, as of the date that it is filed with the Commission, the date of
the Prospectus Supplement, the time of purchase, each additional time of
purchase, if any, and at all times during which a prospectus is required by the
Act to be delivered (whether physically or through compliance with Rule 172
under the Act or any similar rule) in connection with any sale of Shares, in all
material respects, with the requirements of the Act (in the case of the
Prospectus, including, without limitation, Section 10(a) of the Act); on the
date of the Prospectus Supplement and the date the Prospectus Supplement
is
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filed
with the Commission and at the time of purchase, each additional purchase, if
any, and the end of the period during which a prospectus is required by the Act
to be delivered (whether physically or through compliance with Rule 172 under
the Act or any similar rule) in connection with any sale of Shares the
Prospectus, as then amended or supplemented, will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; each Permitted Free Writing Prospectus, when
considered together with the Disclosure Package (together with the public
offering price per share, the number of Firm Shares and the number of Additional
Shares) as of the Applicable Time, does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the
Company makes no representation or warranty in this Section 3(b) with
respect to any statement contained in the Registration Statement, any
Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing Prospectus
in reliance upon and in conformity with information concerning an Underwriter
and furnished in writing by or on behalf of such Underwriter through you to the
Company expressly for use in the Registration Statement, such Pre-Pricing
Prospectus, the Prospectus or such Permitted Free Writing Prospectus; each
Incorporated Document, at the time such document was filed, or will be filed,
with the Commission or at the time such document became or becomes effective, as
applicable, complied or will comply, in all material respects, with the
requirements of the Exchange Act and did not or will not, as applicable, include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(c) Offering
Material. Prior to the execution of this Agreement, the
Company has not, directly or indirectly, offered or sold any Shares by means of
any “prospectus” (within the meaning of the Act) or used any “prospectus”
(within the meaning of the Act) in connection with the offer or sale of the
Shares, in each case other than the Pre-Pricing Prospectuses and the Permitted
Free Writing Prospectuses, if any; the Company has not, directly or indirectly,
prepared, used or referred to any Permitted Free Writing Prospectus except in
compliance with Rules 164 and 433 under the Act; assuming that such Permitted
Free Writing Prospectus is so sent or given after the Registration Statement was
filed with the Commission (and after such Permitted Free Writing Prospectus was,
if required pursuant to Rule 433(d) under the Act, filed with the Commission),
the sending or giving, by any Underwriter, of any Permitted Free Writing
Prospectus will satisfy the provisions of Rule 164 and Rule 433 (without
reliance on subsections (b), (c) and (d) of Rule 164); the conditions set forth
in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1)
under the Act are satisfied, and the registration statement relating to the
offering of the Shares contemplated hereby, as initially filed with the
Commission, includes a prospectus that, other than by reason of Rule 433 or Rule
431 under the Act, satisfies the requirements of Section 10 of the Act; neither
the Company nor the Underwriters are disqualified, by reason of subsection (f)
or (g) of Rule 164 under the Act, from using, in connection with the offer and
sale of the Shares, “free writing prospectuses” (as defined in Rule 405 under
the Act) pursuant to Rules 164 and 433
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under the
Act; the Company is not an “ineligible issuer” (as defined in Rule 405 under the
Act) as of the eligibility determination date for purposes of Rules 164 and 433
under the Act with respect to the offering of the Shares contemplated by the
Registration Statement, without taking into account any determination by the
Commission pursuant to Rule 405 under the Act that it is not necessary under the
circumstances that the Company be considered an “ineligible issuer”; the parties
hereto agree and understand that the content of any and all “road shows” (as
defined in Rule 433 under the Act) related to the offering of the Shares
contemplated hereby is solely the property of the Company.
(d) Capitalization. As
of the date of this Agreement, the Company has an authorized and outstanding
capitalization as set forth in the sections of the Registration Statement, the
Pre-Pricing Prospectuses and the Prospectus entitled “Capitalization” and
“Description of Capital Stock” (and any similar sections or information, if any,
contained in any Permitted Free Writing Prospectus), and, as of the time of
purchase and any additional time of purchase, as the case may be, the Company
shall have an authorized and outstanding capitalization as set forth in the
sections of the Registration Statement, the Pre-Pricing Prospectuses and the
Prospectus entitled “Capitalization” and “Description of Capital Stock” (and any
similar sections or information, if any, contained in any Permitted Free Writing
Prospectus) (subject, in each case, to the passing of the proposed amendment to
increase the Company’s authorized capital to 1,000,000,000 shares of Common
Stock to be voted upon at the Company’s 2009 Annual General Meeting of
Shareholders on December 11, 2009 (the “Authorized Capital
Amendment”) and to the issuance of shares of Common Stock upon
exercise of stock options disclosed as outstanding in the Registration Statement
(excluding the exhibits thereto), each Pre-Pricing Prospectus and the Prospectus
and the grant of options under existing stock option plans described in the
Registration Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus); all of the issued and outstanding shares of
capital stock, including the Common Stock, of the Company have been duly
authorized and validly issued and are fully paid and non-assessable, have been
issued in compliance with all applicable securities laws and were not issued in
violation of any preemptive right, resale right, right of first refusal or
similar right; the Shares are duly listed, and admitted and authorized for
trading, subject to official notice of issuance, on The NASDAQ Capital Market
(the “NASDAQ”).
(e) Formation. The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of Bermuda, with full corporate power and authority
to own, lease and operate its properties and conduct its business as described
in the Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and
the Permitted Free Writing Prospectuses, if any, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as contemplated
herein. Each of Energy XXI (US Holdings) Limited, Energy XXI, Inc.,
Energy XXI USA, Inc. Energy XXI Gulf Coast, Inc., Energy XXI Services, LLC,
Energy XXI GOM, LLC (“EXXI GOM”), Energy
XXI Texas Onshore, LLC (formerly Energy XXI Texas GP, LLC) and Energy XXI
Onshore, LLC, (formerly Energy XXI Texas, LP) (collectively the “Subsidiaries”) has
been duly incorporated or formed and is currently existing as a corporation or
limited liability company, as applicable, and is in good standing under the laws
of the jurisdiction
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of its
incorporation or organization, with full corporate or limited liability company
power and authority to own, lease and operate its properties and to conduct its
business as currently conducted or as it is to be conducted as described in the
Registration Statement, the Pre-Pricing Prospectuses, the Prospectus and the
Permitted Free Writing Prospectuses, if any.
(f) Foreign
Qualification. The Company and each of the Subsidiaries is
duly qualified to do business as a foreign corporation or limited liability
company and is in good standing in each jurisdiction where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good standing
would not, individually or in the aggregate, either (i) have a material adverse
effect on the business, properties, financial condition, results of operations
or prospects of the Company and the Subsidiaries taken as a whole, (ii) prevent
or materially interfere with consummation of the transactions contemplated
hereby or (iii) result in the delisting of shares of Common Stock from the
NASDAQ (the occurrence of any such effect or any such prevention or interference
or any such result described in the foregoing clauses (i), (ii) and (iii) being
herein referred to as a “Material Adverse
Effect”).
(g) Subsidiaries. The
Company has no subsidiaries (as defined under the Act) other than the
Subsidiaries; the Company, directly or indirectly, owns all of the issued and
outstanding capital stock or membership interests of each of the Subsidiaries;
other than the capital stock or membership interests of the
Subsidiaries, the Company does not own, directly or indirectly, any shares of
stock or any other equity interests or long-term debt securities of any
corporation, firm, partnership, joint venture, association or other entity;
complete and correct copies of the Memorandum of Association, or Bye-Laws or
Certificate of Incorporation or any of the organizational documents
(collectively “Organizational
Documents”) of the Company and each of the Subsidiaries and all
amendments thereto have been delivered to you, and, other than amendments to the
Company’s Memorandum of Association and Bye-Laws entered into in connection with
the Authorized Capital Amendment, no changes therein will be made on or after
the date hereof through and including the time of purchase or, if later, any
additional time of purchase except as disclosed in the Disclosure Package or for
any certificate of designation or other changes to the Company’s Organizational
Documents to be made in connection with the issuance of the Preferred Stock; all
of the outstanding shares of capital stock or membership interests of
each of the Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable, have been issued in compliance with all applicable
securities laws, were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right and, except for liens pursuant to
the Amended and Restated First Lien Credit Agreement, dated June 8, 2007, among
the Energy XXI GOM, various financial institutions, as lenders, The Royal Bank
of Scotland plc, as Administrative Agent, RBS Securities Corporation and BNP
Paribas, as Joint Lead Arrangers and Joint Bookrunners, BNP Paribas, as
Syndication Agent, and Guaranty Bank, FSB and BMO Capital Markets Financing,
Inc., as Co-Documentation Agents, as amended (the “First Lien
Facility”), and the Indenture, dated November 12, 2009, among Energy XXI
Gulf Coast, Inc., the Guarantors named therein and
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Wilmington
Trust FSB, as trustee, governing Energy XXI Gulf Coast, Inc.’s 16% Second Lien
Junior Secured Notes due 2014 (the “Second Lien Notes
Indenture”), are owned by the Company subject to no security interest,
other encumbrance or adverse claims; and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(h) Valid Shares. The Shares have
been duly and validly authorized and, when issued and delivered against payment
therefor as provided herein, will be duly and validly issued, fully paid and
non-assessable and free of statutory and contractual preemptive rights, resale
rights, rights of first refusal and similar rights; the Shares, when issued and
delivered against payment therefor as provided herein, will be free of any
restriction upon the voting or transfer thereof pursuant to Bermuda’s The
Companies Act of 1981 or the Organizational Documents of the Company or any of
the Subsidiaries or any agreement or other instrument to which the Company is a
party or to which it is bound.
(i) Conforming
Stock. The capital stock of the Company, including the Shares,
conforms in all material respects to each description thereof, if any, contained
or incorporated by reference in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any.
(j) Authorization of this
Agreement. This Agreement has been duly authorized, executed
and delivered by the Company.
(k) No Existing
Default. Neither the Company nor any of the Subsidiaries is in
breach or violation of or in default under (nor has any event occurred which,
with notice, lapse of time or both, would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness (or a person
acting on such holder’s behalf) the right to require the repurchase, redemption
or repayment of all or a part of such indebtedness under) (A) its Organizational
Documents, or (B) any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound or affected, or (C) any federal, state, local or
foreign law, regulation or rule, or (D) any rule or regulation of any
self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the NASDAQ), or (E)
any decree, judgment or order applicable to it or any of its properties, except
for such breaches, violations or defaults pursuant to subsection (B), (C), (D)
or (E) as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(l) No Conflicts. The
execution, delivery and performance of this Agreement, the issuance and sale of
the Shares and the consummation of the transactions contemplated hereby will not
conflict with, result in any breach or violation of or constitute a default
under (nor constitute any event which, with notice, lapse of time or both, would
result in any breach or violation of, constitute a default under or give the
holder of any indebtedness (or a person acting on such holder’s behalf) the
right to
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require
the repurchase, redemption or repayment of all or a part of such indebtedness
under) (or result in the creation or imposition of a lien, charge or encumbrance
on any property or assets of the Company or any Subsidiary pursuant to) (A) the
Organizational Documents of the Company or any of the Subsidiaries, or (B) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound or
affected, or (C) any federal, state, local or foreign law, regulation or rule,
or (D) any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the rules
and regulations of the NASDAQ), or (E) any decree, judgment or order applicable
to the Company or any of the Subsidiaries or any of their respective properties,
except for such breaches, violations or defaults pursuant to subsection (B),
(C), (D) or (E) as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(m) No Consents. No
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, or of or with any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the
NASDAQ), or approval of the stockholders of the Company, is required in
connection with the issuance and sale of the Shares or the consummation by the
Company of the transactions contemplated hereby, other than (i) registration of
the Shares under the Act, which has been effected (or, with respect to any
registration statement to be filed hereunder pursuant to Rule 462(b) under the
Act, will be effected in accordance herewith), (ii) any necessary qualification
under the securities or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters or (iii) under the Conduct Rules of
the Financial Industry Regulatory Authority, Inc. (“FINRA”).
(n) No Preemptive Rights, Registration
Rights or Options. Except as described in the Registration
Statement (excluding the exhibits thereto), each Pre-Pricing Prospectus and the
Prospectus, (i) no person has the right, contractual or otherwise, to cause the
Company to issue or sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other rights to
purchase any shares of Common Stock or shares of any other capital stock of or
other equity interests in the Company and (iii) no person has the right to act
as an underwriter or as a financial advisor to the Company in connection with
the offer and sale of the Shares; no person has the right, contractual or
otherwise, to cause the Company to register under the Act any shares of Common
Stock or shares of any other capital stock of or other equity interests in the
Company, or to include any such shares or interests in the Registration
Statement or the offering contemplated thereby.
(o) Authority to Conduct
Business. Each of the Company and the Subsidiaries has all
necessary licenses, authorizations, consents and approvals and has made all
necessary filings required under any applicable law, regulation or rule, and has
obtained
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all
necessary licenses, authorizations, consents and approvals from other persons,
in order to conduct their respective businesses; neither the Company nor any of
the Subsidiaries is in violation of, or in default under, or has received notice
of any proceedings relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment applicable to the Company or
any of the Subsidiaries, except where such violation, default, revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.
(p) No Legal
Action. There are no actions, suits, claims, investigations or
proceedings pending or, to the Company’s knowledge, threatened to which the
Company or any of the Subsidiaries or any of their respective properties is or
would be subject at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or agency,
or before or by any self-regulatory organization or other non-governmental
regulatory authority (including, without limitation, the NASDAQ), except any
such action, suit, claim, investigation or proceeding which, if resolved
adversely to the Company or any Subsidiary, would not, individually or in the
aggregate, have a Material Adverse Effect.
(q) Auditor. UHY LLP,
whose reports on (i) the consolidated financial statements of the Company and
the Subsidiaries and (ii) the Statement of Revenues and Direct Operating
Expenses related to the oil and gas properties (the “Acquired Properties”)
to be acquired from MitEnergy Upstream, LLC (“MitEnergy”) pursuant
to the Purchase and Sale Agreement dated November 20, 2009 between Energy XXI,
Inc. and MitEnergy (the “PSA”) are included or
incorporated by reference in the Registration Statement, the Pre-Pricing
Prospectuses and the Prospectus, are independent registered public accountants
as required by the Act and by the rules of the Public Company Accounting
Oversight Board.
(r) PSA. The PSA has
been duly authorized, executed and delivered, and constitutes a valid, binding
and enforceable agreement in accordance with its terms except as limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws affecting the enforcement of creditors’ rights
generally.
(s) Financial
Statements. The financial statements included or incorporated
by reference in the Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, together with
the related notes and schedules, present fairly the consolidated financial
position of the Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations, cash flows and changes in stockholders’
equity of the Company and the Subsidiaries for the periods specified and the
revenues and direct operating expenses of the Acquired Properties for the
periods specified and have been prepared in compliance with the requirements of
the Act and Exchange Act and in conformity with U.S. generally accepted
accounting principles applied on a consistent basis during the periods involved;
all pro forma financial statements or data included or incorporated by reference
in the
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Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, comply in all material respects with the
requirements of the Act and the Exchange Act, and the assumptions used in the
preparation of such pro forma financial statements and data are reasonable, the
pro forma adjustments used therein are appropriate to give effect to the
transactions or circumstances described therein and the pro forma adjustments
have been properly applied to the historical amounts in the compilation of those
statements and data; the other financial and statistical data contained or
incorporated by reference in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, are accurately and fairly presented and prepared on a basis consistent with
the financial statements and books and records of the Company; there are no
financial statements (historical or pro forma) that are required to be included
or incorporated by reference in the Registration Statement, any Pre-Pricing
Prospectus or the Prospectus that are not included or incorporated by reference
as required; the Company and the Subsidiaries do not have any material
liabilities or obligations, direct or contingent (including any off-balance
sheet obligations), not described in the Registration Statement (excluding the
exhibits thereto), each Pre-Pricing Prospectus and the Prospectus; and all
disclosures contained or incorporated by reference in the Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, regarding “non-GAAP financial measures” (as such
term is defined by the rules and regulations of the Commission) comply with
Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act, to
the extent applicable.
(t) No Material
Changes. Subsequent to the respective dates as of which
information is given in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, in each case excluding any amendments or supplements to the foregoing made
after the execution of this Agreement, there has not been, other than the
issuance of Preferred Stock as of the time of purchase or as disclosed in the
Disclosure Package (i) any material adverse change, or any development involving
a prospective material adverse change, in the business, properties, management,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole, (ii) any transaction which is material to the Company and the
Subsidiaries taken as a whole, (iii) any obligation or liability, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company or any Subsidiary, which is material to the Company and the Subsidiaries
taken as a whole, (iv) any change in the capital stock, other than such changes
to the capital stock of the Company made in connection with the Authorized
Capital Amendment, or outstanding indebtedness of the Company or any
Subsidiaries or (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company or any Subsidiary.
(u) Lock-Up
Agreements. The Company has obtained for the benefit of the
Underwriters the agreement (a “Lock-Up Agreement”),
in the form set forth as Exhibit A hereto, of
each of its directors and “officers” (within the meaning of Rule 16a-1(f) under
the Exchange Act) and each beneficial owner of more than 5% of the Common Stock
named in Exhibit
A-1 hereto.
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(v) Investment
Company. Neither the Company nor any Subsidiary is, and at no
time during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar
rule) in connection with any sale of Shares will either of them be, and, after
giving effect to the offering and sale of the Shares and the application of the
proceeds thereof, neither of them will be, an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended (the “Investment Company
Act”) or a “passive foreign investment company” or a “controlled foreign
corporation,” as such terms are defined in the Internal Revenue Code of 1986, as
amended (the “Internal
Revenue Code”).
(w) Title to
Assets. The Company and each of the Subsidiaries have
generally satisfactory title to their respective oil and gas properties, title
investigations having been carried out by the Company or the Subsidiaries in
accordance with practice in the oil and gas industry in the areas in which the
Company and the Subsidiaries operate, and good and marketable title to the other
real and personal property reflected in the Registration Statement, the
Pre-Pricing Prospectus, the Prospectus and the Permitted Free Writing
Prospectuses, if any, as being owned by any of them, free and clear of all
liens, claims, security interests or other encumbrances, except as described in
the Registration Statement, the Pre-Pricing Prospectus, the Prospectus, the
Permitted Free Writing Prospectuses, if any and the First Lien Facility and the
Second Lien Notes Indenture, or as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; all the
property described in the Registration Statement, the Pre-Pricing Prospectuses,
the Prospectus and the Permitted Free Writing Prospectuses, if any, as being
held under lease by the Company or a Subsidiary is held thereby under valid,
subsisting and enforceable leases, except (i) as described, and subject to
limitations contained, in the Registration Statement, the Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing Prospectus or (ii) such
as do not materially interfere with the use of such properties taken as a whole
as they have been used in the past and are proposed to be used in the future as
described in the Registration Statement, the Pre-Pricing Prospectus, the
Prospectus or any Permitted Free Writing Prospectus; the working interests
derived from oil, gas and mineral leases or mineral interests which constitute a
portion of the real property held or leased by the Company and its Subsidiaries
reflect in all material respects the right of the Company and its Subsidiaries
to explore, develop or produce hydrocarbons from such real property, and the
care taken by the Company and its Subsidiaries with respect to acquiring or
otherwise procuring such leases or other property interests was generally
consistent with standard industry practices in the areas in which the Company
operates for acquiring or procuring leases and interests therein to explore,
develop or produce hydrocarbons.
(x) Labor. Neither the
Company nor any of the Subsidiaries is engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate, have a
Material Adverse Effect, (i) there is (A) no unfair labor practice complaint
pending or, to the Company’s knowledge, threatened against the Company or any of
the Subsidiaries before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
is pending
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or, to
the Company’s knowledge, threatened, (B) no strike, labor dispute, slowdown or
stoppage pending or, to the Company’s knowledge, threatened against the Company
or any of the Subsidiaries and (C) no union representation dispute currently
existing concerning the employees of the Company or any of the Subsidiaries,
(ii) to the Company’s knowledge, no union organizing activities are currently
taking place concerning the employees of the Company or any of the Subsidiaries
and (iii) there has been no violation of any federal, state, local or foreign
law relating to discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations promulgated
thereunder concerning the employees of the Company or any of the
Subsidiaries.
(y) Environmental
Matters. Except as would not, individually or in the
aggregate, result in a Material Adverse Effect: (i) the Company and
the Subsidiaries and their respective properties, assets and operations are in
compliance with, and the Company and each of the Subsidiaries hold all permits,
authorizations and approvals required under, Environmental Laws (as defined
below); (ii) there are no events, conditions or circumstances known to the
Company that would reasonably be expected to give rise to any costs or
liabilities to the Company or any Subsidiary under Environmental Laws; and (iii)
neither the Company nor any of the Subsidiaries has received any written notice
of an action, suit, claim, investigation, notice of violation, judgment, order
or proceeding, in each case relating to any liability under any Environmental
Law or any release or, to the Company’s knowledge, threatened release of any
Hazardous Materials (as defined below) by the Company or any of its Subsidiaries
(as used herein, “Environmental Law”
means any federal, state or local, law, statute, ordinance, rule (including,
without limitation, rules of common law), regulation, order, decree, judgment,
injunction, permit, license, authorization or other legally enforceable binding
requirement relating to health or safety (to the extent such health or safety
relates to exposure to Hazardous Materials) or the protection of the environment
or natural resources, including those relating to the distribution, generation,
treatment, storage, disposal, transportation or release of Hazardous Materials,
and “Hazardous
Materials” means any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is regulated by or
that gives rise to liability under any Environmental Law).
(z) Tax Returns. All
tax returns required to be filed by the Company or any of the Subsidiaries have
been timely filed, and all taxes and other assessments of a similar nature
(whether imposed directly or through withholding) including any interest,
additions to tax or penalties applicable thereto due or claimed to be due from
such entities have been timely paid, other than those being contested in good
faith and for which adequate reserves have been provided.
(aa) Insurance
Coverage. The Company and each of the Subsidiaries maintain
insurance covering their respective properties, operations, personnel and
businesses as the Company reasonably deems adequate; such insurance insures
against such losses and risks to an extent which the Company believes is
adequate in accordance with customary
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industry
practice to protect the Company and the Subsidiaries and their respective
businesses; all such insurance is fully in force on the date hereof and will be
fully in force at the time of purchase and each additional time of purchase, if
any, except as described in the Registration Statement, the Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing Prospectus; neither the
Company nor any Subsidiary has reason to believe that it will not be able to
renew any such insurance as and when such insurance expires.
(bb) No Contract
Termination. Neither the Company nor any Subsidiary has sent
or received any communication regarding termination of, or intent not to renew,
any of the contracts or agreements referred to or described in any Pre-Pricing
Prospectus, the Prospectus or any Permitted Free Writing Prospectus, or referred
to or described in, or filed as an exhibit to, the Registration Statement or any
Incorporated Document, and no such termination or non-renewal has been
threatened by the Company or any Subsidiary or, to the Company’s knowledge, any
other party to any such contract or agreement.
(cc) Maintenance of Internal
Controls. The Company and each of the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(dd) Disclosure and Control
Procedures. The Company has established and maintains and
evaluates “disclosure controls and procedures” (as such term is defined in Rule
13a-15 and 15d-15 under the Exchange Act) and “internal control over financial
reporting” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange
Act); such disclosure controls and procedures are designed to ensure that
material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and its
Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for which they
were established; the Company’s independent registered public accountants and
the Audit Committee of the Board of Directors of the Company have been advised
of: (i) all significant deficiencies, if any, in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize and report financial data; and (ii) all fraud, if any,
whether or not material, that involves management or other employees who have a
role in the Company’s internal controls; all “significant deficiencies” and
“material weaknesses” (as such terms are defined in Rule 1-02(a)(4) of
Regulation S-X under the Act) of the Company, if any, have been identified to
the Company’s independent registered public accountants and are disclosed in the
Registration Statement (excluding the exhibits thereto), each Pre-Pricing
Prospectus and the Prospectus; since the date of the most recent evaluation of
such disclosure controls and procedures and internal controls, there have been
no significant changes in internal controls or in other factors that could
significantly affect internal
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controls,
including any corrective actions with regard to significant deficiencies and
material weaknesses; the principal executive officers (or their equivalents) and
principal financial officers (or their equivalents) of the Company have made all
certifications required by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”)
and any related rules and regulations promulgated by the Commission, and the
statements contained in each such certification are complete and correct; the
Company, the Subsidiaries and the Company’s directors and officers are each in
compliance in all material respects with all applicable effective provisions of
the Sarbanes-Oxley Act and the rules and regulations of the Commission and the
NASDAQ promulgated thereunder.
(ee) Forward Looking
Statements. Each “forward-looking statement” (within the
meaning of Section 27A of the Act or Section 21E of the Exchange Act) contained
or incorporated by reference in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, has been made or reaffirmed with a reasonable basis and in good
faith.
(ff) Statistical or Market-Related
Data. All statistical or market-related data included or
incorporated by reference in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any, are based on or derived from sources that the Company reasonably believes
to be reliable and accurate.
(gg) Illegal
Payments. Neither the Company nor any of the Subsidiaries nor,
to the Company’s knowledge, any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation
(including, without limitation, the Foreign Corrupt Practices Act of 1977),
which payment, receipt or retention of funds is of a character required to be
disclosed in the Registration Statement, any Pre-Pricing Prospectus, the
Prospectus or a Permitted Free Writing Prospectuses, if any.
(hh) Money Laundering
Laws. The operations of the Company and the Subsidiaries 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 or non-governmental
authority involving the Company or any of the Subsidiaries with respect to the
Money Laundering Laws is pending or, to the Company’s knowledge,
threatened.
(ii) OFAC
Sanctions. Neither the Company nor any of the Subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any of the Subsidiaries is currently subject to any
U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the
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offering
of the Shares contemplated hereby, or lend, contribute or otherwise make
available such proceeds to any Subsidiary, joint venture partner or other person
or entity for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(jj)
Independent Petroleum
Engineers. Netherland, Sewell & Associates, Inc. (“NSAI”), whose reports
regarding the oil and gas reserves of the Company and its Subsidiaries (the
“Reserve
Reports”) are referenced in the Pre-Pricing Prospectus and the
Prospectus, and who has delivered the letter referenced to in Section 6(e)
hereof, was, as of the date of such reports, and is, as of the date hereof, an
independent engineering firm with respect to the Company.
(kk) Information Underlying Reserve
Report. The factual information underlying the estimates of
proved oil and gas reserves of the Company and the Subsidiaries, which was
supplied by the Company and the Subsidiaries to NSAI for the purposes of
preparing the Reserve Reports, including, without limitation, production
volumes, costs of operation and development, current prices for production,
agreements relating to current and future operations and sales of production,
was true and correct in all material respects on the dates such estimates were
made and such information was supplied and was prepared in accordance with
customary industry practices; other than normal production of the reserves and
intervening market commodity price fluctuations, the Company and the
Subsidiaries are not aware of any facts or circumstances that would result in a
material adverse change in the reserves, or the present value of future net cash
flows therefrom, as described in the Registration Statement, Pre-Pricing
Prospectus, the Prospectus and any Permitted Free Writing Prospectus and as
reflected in the Reserve Report; estimates of such reserves and present values
as described in the Registration Statement, Pre-Pricing Prospectus, the
Prospectus and any Permitted Free Writing Prospectus and reflected in the
Reserve Report comply in all material respects with the applicable requirements
of Regulation S-X and Industry Guide 2 under the Act.
(ll) Gas Imbalances; Prepayments.
On a net basis there are no gas imbalances, take-or-pay or other prepayments
that would require the Company or any of its subsidiaries to deliver
Hydrocarbons produced from the Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor exceeding one-half
bcf of gas (on an mcf equivalent basis) in the aggregate, other than as would
not result in a Material Adverse Effect.
(mm) Subsidiary
Distributions. No Subsidiary is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such Subsidiary’s capital stock, from repaying the Company any
loans or advances to such Subsidiary from the Company or from transferring any
of such Subsidiary’s property or assets to the Company or any other Subsidiary
of the Company, except as described in the Disclosure Package.
(nn) Delisting
Notice. The Company has not received any notice from the
NASDAQ regarding the delisting of the Common Stock from the
NASDAQ.
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(oo) Finder’s or Broker’s or Agent’s
Commissions. Except pursuant to this Agreement, neither the
Company nor any of the Subsidiaries has incurred any liability for any finder’s
or broker’s fee or agent’s commission in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby or by the Registration Statement.
(pp) Price Stabilization or
Manipulation. Neither the Company nor any of the Subsidiaries
nor any of their respective directors, officers, affiliates or controlling
persons has taken, directly or indirectly, any action designed, or which has
constituted or might reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(qq) FINRA
Associations. To the Company’s knowledge, there are no
affiliations or associations between (i) any member of FINRA and (ii) the
Company or any of the Company’s officers, directors (with the exception of Hill
A. Feinberg’s association or affiliation with First Southwest Company) or 5% or
greater security holders or any beneficial owner of the Company’s unregistered
equity securities that were acquired at any time on or after the 180th day
immediately preceding the date the Registration Statement was initially filed
with the Commission, except as disclosed in the Registration Statement
(excluding the exhibits thereto), the Pre-Pricing Prospectuses and the
Prospectus.
In addition, any certificate signed by
any officer of the Company or any of the Subsidiaries and delivered to any
Underwriter or counsel for the Underwriters in connection with the offering of
the Shares shall be deemed to be a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
4.
Certain Covenants of
the Company. The Company hereby agrees:
(a) to
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such states or other jurisdictions as you may designate and to maintain
such qualifications in effect so long as you may request for the distribution of
the Shares; provided, however, that the
Company shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such jurisdiction (except
service of process with respect to the offering and sale of the Shares); and to
promptly advise you of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Shares for offer or sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(b) to
make available to the Underwriters in New York City, as soon as practicable
after this Agreement becomes effective, and thereafter from time to time to
furnish to the Underwriters, as many copies of the Prospectus (or of the
Prospectus as amended or supplemented if the Company shall have made any
amendments or supplements thereto after the effective date of the Registration
Statement) as the
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Underwriters
may request for the purposes contemplated by the Act; in case any Underwriter is
required to deliver (whether physically or through compliance with Rule 172
under the Act or any similar rule), in connection with the sale of the Shares, a
prospectus after the nine-month period referred to in Section 10(a)(3) of the
Act, or after the time a post-effective amendment to the Registration Statement
is required pursuant to Item 512(a) of Regulation S-K under the Act, the Company
will prepare, at its expense, promptly upon request such amendment or amendments
to the Registration Statement and the Prospectus as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act or Item 512(a)
of Regulation S-K under the Act, as the case may be;
(c) if,
at the time this Agreement is executed and delivered, it is necessary or
appropriate for a post-effective amendment to the Registration Statement, or a
Registration Statement under Rule 462(b) under the Act, to be filed with the
Commission and become effective before the Shares may be sold, the Company will
use its best efforts to cause such post-effective amendment or such Registration
Statement to be filed and become effective, and will pay any applicable fees in
accordance with the Act, as soon as possible; and the Company will advise you
promptly and, if requested by you, will confirm such advice in writing, (i) when
such post-effective amendment or such Registration Statement has become
effective, and (ii) if Rule 430A under the Act is used, when the Prospectus is
filed with the Commission pursuant to Rule 424(b) under the Act (which the
Company agrees to file in a timely manner in accordance with such
Rules);
(d) if,
at any time during the period when a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Shares, the Registration
Statement shall cease to comply with the requirements of the Act with respect to
eligibility for the use of the form on which the Registration Statement was
filed with the Commission (i) promptly notify you, (ii) promptly file with the
Commission a new registration statement under the Act, relating to the Shares,
or a post-effective amendment to the Registration Statement, which new
registration statement or post-effective amendment shall comply with the
requirements of the Act and shall be in a form satisfactory to you, (iii) use
its best efforts to cause such new registration statement or post-effective
amendment to become effective under the Act as soon as practicable, (iv)
promptly notify you of such effectiveness and (v) take all other action
necessary or appropriate to permit the public offering and sale of the Shares to
continue as contemplated in the Prospectus; all references herein to the
Registration Statement shall be deemed to include each such new registration
statement or post-effective amendment, if any;
(e) if
the third anniversary of the initial effective date of the Registration
Statement (within the meaning of Rule 415(a)(5) under the Act) shall occur at
any time during the period when a prospectus is required by the Act to be
delivered (whether physically or through compliance with Rule 172 under the Act
or any similar rule) in connection with any sale of Shares, to file with the
Commission, prior to such third anniversary, a new registration statement under
the Act relating to the Shares, which new registration statement shall comply
with the requirements of the Act (including, without
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limitation,
Rule 415(a)(6) under the Act) and shall be in a form reasonably satisfactory to
you; and (ii) use its reasonable efforts to cause such new registration
statement to become effective under the Act as soon as practicable, but in any
event within 180 days after such third anniversary and promptly notify you of
such effectiveness; the Company shall take all other action necessary or
appropriate to permit the public offering and sale of the Shares to continue as
contemplated in the Prospectus; all references herein to the Registration
Statement shall be deemed to include each such new registration statement, if
any;
(f)
to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement, any Pre-Pricing Prospectus, the Prospectus or any Permitted Free
Writing Prospectus or for additional information with respect thereto, or of
notice of institution of proceedings for, or the entry of a stop order,
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to use its best efforts to obtain the lifting or removal
of such order as soon as possible; to advise you promptly of any proposal to
amend or supplement the Registration Statement, any Pre-Pricing Prospectus or
the Prospectus, and to provide you and Underwriters’ counsel copies of any such
documents for review and comment a reasonable amount of time prior to any
proposed filing and to file no such amendment or supplement to which you shall
object in writing;
(g) subject
to Section 4(f) hereof, to file promptly all reports and documents and any
preliminary or definitive proxy or information statement required to be filed by
the Company with the Commission in order to comply with the Exchange Act for so
long as a prospectus is required by the Act to be delivered (whether physically
or through compliance with Rule 172 under the Act or any similar rule) in
connection with any sale of Shares; and to provide you, for your review and
comment, with a copy of such reports and statements and other documents to be
filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange Act
during such period a reasonable amount of time prior to any proposed filing, and
to file no such report, statement or document to which you shall have objected
in writing; and to promptly notify you of such filing;
(h) to
advise the Underwriters promptly of the happening of any event within the period
during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar
rule) in connection with any sale of Shares, which event could require the
making of any change in the Prospectus then being used so that the Prospectus
would not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and to advise the
Underwriters promptly if, during such period, it shall become necessary to amend
or supplement the Prospectus to cause the Prospectus to comply with the
requirements of the Act, and, in each case, during such time, subject to Section
4(f) hereof, to prepare and furnish, at the Company’s expense, to the
Underwriters promptly such amendments or supplements to such Prospectus as may
be necessary to reflect any such change or to effect such
compliance;
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(i)
to make generally
available to its security holders, and to deliver to you, an earnings statement
of the Company which will satisfy, on a timely basis, the provisions of Section
11(a) of the Act and Rule 158 under the Act;
(j)
to furnish to you copies of the
Registration Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto and documents incorporated by
reference therein) and sufficient copies of the foregoing (other than exhibits)
for distribution of a copy to each of the other Underwriters;
(k) to
furnish to you as early as practicable prior to the time of purchase and any
additional time of purchase, as the case may be, but not later than two business
days prior thereto, a copy of the latest available unaudited interim and monthly
consolidated financial statements, if any, of the Company and the Subsidiaries
which have been read by the Company’s independent registered public accountants,
as stated in their letter to be furnished pursuant to Section 6(d)
hereof;
(l)
to apply the net proceeds from the sale of the
Shares in the manner set forth under the caption “Use of proceeds” in the
Prospectus Supplement;
(m) to
pay all costs, expenses, fees and taxes in connection with (i) the preparation
and filing of the Registration Statement, each Basic Prospectus, each
Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus, each
Permitted Free Writing Prospectus and any amendments or supplements thereto, and
the printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the registration, issue,
sale and delivery of the Shares including any stock or transfer taxes and stamp
or similar duties payable upon the sale, issuance or delivery of the Shares to
the Underwriters, (iii) the producing, word processing and/or printing of this
Agreement, any Agreement Among Underwriters, any dealer agreements, any Powers
of Attorney and any closing documents (including compilations thereof) and the
reproduction and/or printing and furnishing of copies of each thereof to the
Underwriters and (except closing documents) to dealers (including costs of
mailing and shipment), (iv) the qualification of the Shares for offering and
sale under state or foreign laws and the determination of their eligibility for
investment under state or foreign law (including the legal fees and filing fees
and other disbursements of counsel for the Underwriters) and the printing and
furnishing of copies of any blue sky surveys or legal investment surveys to the
Underwriters and to dealers, (v) any listing of the Shares on any securities
exchange or qualification of the Shares for quotation on the NASDAQ and any
registration thereof under the Exchange Act, (vi) any filing for review of the
public offering of the Shares by FINRA, including the legal fees and filing fees
and other disbursements of counsel to the Underwriters relating to FINRA
matters, (vii) the fees and disbursements of any transfer agent or registrar for
the Shares, (viii) the costs and expenses of the Company relating to
presentations or meetings undertaken in connection with the marketing of the
offering and sale of the Shares to prospective investors and the Underwriters’
sales forces, including, without limitation, out of pocket expenses associated
with the production of road show slides and graphics, fees and
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expenses
of any consultants engaged in connection with the road show presentations,
travel, lodging and other expenses incurred by the officers of the Company and
any such consultants, and the cost of any aircraft chartered in connection with
the road show and (ix) the performance of the Company’s other obligations
hereunder;
(n) to
comply with Rule 433(d) under the Act (without reliance on Rule 164(b) under the
Act) and with Rule 433(g) under the Act;
(o) beginning
on the date hereof and ending on, and including, the date that is 90 days after
the date of the Prospectus Supplement (the “Lock-Up Period”),
without the prior written consent of UBS and Credit Suisse, not to (i) issue,
sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any
option to purchase or otherwise dispose of or agree to dispose of, directly or
indirectly, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, with respect to, any Common Stock or any other securities of the
Company that are substantially similar to Common Stock, or any securities
convertible into or exchangeable or exercisable for, or any warrants or other
rights to purchase, the foregoing, (ii) file or cause to become effective a
registration statement under the Act relating to the offer and sale of any
Common Stock or any other securities of the Company that are substantially
similar to Common Stock, or any securities convertible into or exchangeable or
exercisable for, or any warrants or other rights to purchase, the foregoing
(iii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of Common Stock
or any other securities of the Company that are substantially similar to Common
Stock, or any securities convertible into or exchangeable or exercisable for, or
any warrants or other rights to purchase, the foregoing, whether any such
transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise or (iv) publicly announce an intention to
effect any transaction specified in clause (i), (ii) or (iii), except, in each
case, for (A) the registration of the offer and sale of the Shares, as
contemplated by this Agreement, and the Preferred Stock (B) issuances of Common
Stock upon the conversion of the Preferred Stock or the exercise of options or
warrants disclosed as outstanding in the Registration Statement (excluding the
exhibits thereto), each Pre-Pricing Prospectus and the Prospectus, (C) the
issuance of employee stock options not exercisable during the Lock-Up Period
pursuant to stock option plans described in the Registration Statement
(excluding the exhibits thereto), each Pre-Pricing Prospectus and the
Prospectus, (D) the issuance of Common Stock to the Company’s independent
directors pursuant to the 2006 Long-Term Incentive Plan of Energy XXI Services,
LLC, and (E) the issuance of up to 500,000 shares of Common Stock to employees,
directors and other service providers of the Company and its subsidiaries
pursuant to the Employee Stock Purchase Plan of Energy XXI Services, LLC; provided, however, that if (a)
during the period that begins on the date that is fifteen (15) calendar days
plus three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (b) prior
to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the sixteen (16) day
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period
beginning on the last day of the Lock-Up Period, then the restrictions imposed
by this Section 4(o) shall continue to apply until the expiration of the date
that is fifteen (15) calendar days plus three (3) business days after the date
on which the issuance of the earnings release or the material news or material
event occurs;
(p) not,
at any time at or after the execution of this Agreement, to, directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the
meaning of the Act), or use any “prospectus” (within the meaning of the Act) in
connection with the offer or sale of the Shares, in each case other than the
Prospectus;
(q) not
to, and to cause the Subsidiaries not to, take, directly or indirectly, any
action designed, or which will constitute, or has constituted, or might
reasonably be expected to cause or result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares;
(r) to
use its best efforts to cause the Shares to be listed for quotation on the
NASDAQ and to maintain the listing of the Common Stock, including the Shares,
for quotation on the NASDAQ; and
(s) to
maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
5. Reimbursement of the
Underwriters’ Expenses. If, after the execution and delivery
of this Agreement, the Shares are not delivered for any reason other than the
termination of this Agreement pursuant (a) to the fifth paragraph of Section 8
hereof, (b) Clause (A), (C), (D) or (E) of Clause (2) of the second paragraph of
Section 7 hereof or (c) the default by one or more of the Underwriters in its or
their respective obligations hereunder, the Company shall, in addition to paying
the amounts described in Section 4(m) hereof, reimburse the Underwriters for all
of their out-of-pocket expenses, including the fees and disbursements of their
counsel.
6. Conditions of the
Underwriters’ Obligations. The several obligations of the
Underwriters hereunder are subject to the accuracy of the representations and
warranties on the part of the Company on the date hereof, at the time of
purchase and, if applicable, at the additional time of purchase, the performance
by the Company of its obligation hereunder and to the following additional
conditions precedent:
(a) The
Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Vinson & Elkins L.L.P., counsel
for the Company, addressed to the Underwriters, and dated the time of purchase
or the additional time of purchase, as the case may be, with executed copies for
each Underwriter, and in form and substance satisfactory to UBS and Credit
Suisse, in the form set forth in Exhibit B
hereto.
(b) The
Company shall furnish to you at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Bo Boyd, the Company’s Vice President
of Law, addressed to the Underwriters, and dated the time of purchase
or
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the
additional time of purchase, as the case may be, with executed copies for each
Underwriter, and in form and substance satisfactory to UBS and Credit Suisse, in
the form set forth in Exhibit C
hereto.
(c) You
shall have received at the time of purchase and, if applicable, at the
additional time of purchase, an opinion of Appleby Hunter Bailhache, counsel for
the Company, addressed to the Underwriters, and dated the time of purchase or
the additional time of purchase, as the case may be, in form and substance
reasonably satisfactory to UBS and Credit Suisse, in the form set forth in Exhibit
D.
(d) You
shall have received from UHY LLP letters dated, respectively, the date of this
Agreement, the date of the Prospectus Supplement, the time of purchase and, if
applicable, the additional time of purchase, and addressed to the Underwriters
(with executed copies for each Underwriter) in the forms satisfactory to UBS and
Credit Suisse, which letters shall cover, without limitation, the various
financial disclosures contained in the Registration Statement, the Pre-Pricing
Prospectuses, the Prospectus and the Permitted Free Writing Prospectuses, if
any.
(e) You
shall have received from NSAI letters, dated, respectively, the date of this
Agreement, the time of purchase and, if applicable, the additional time of
purchase, and addressed to the Underwriters (i) confirming that as of the date
of the Reserve Reports, it was an independent reserve engineer with respect to
the Company and its Subsidiaries and no information has come to its attention
that could reasonably be expected to cause it to withdraw its Reserve Reports
and (ii) otherwise in form and substance acceptable to UBS and Credit
Suisse.
(f) You
shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Baker Botts L.L.P.,
counsel for the Underwriters, dated the time of purchase or the additional time
of purchase, as the case may be, in form and substance reasonably satisfactory
to UBS and Credit Suisse.
(g) You
shall have received at the time of purchase and, if applicable, at the
additional time of purchase, the favorable opinion of Conyers Dill &
Pearman, counsel for the Underwriters, dated the time of purchase or the
additional time of purchase, as the case may be, in form and substance
reasonably satisfactory to UBS and Credit Suisse.
(h) No
Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which you shall have objected in
writing.
(i) The
Registration Statement and any registration statement required to be filed,
prior to the sale of the Shares, under the Act pursuant to Rule 462(b) shall
have been filed and shall have become effective under the Act. The
Prospectus Supplement shall have been filed with the Commission pursuant to Rule
424(b) under the Act at or before 5:30 P.M., New York City time, on the second
full business day after the date of this Agreement (or such earlier time as may
be required under the Act).
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(j)
Prior to and at the time of purchase, and, if applicable, the
additional time of purchase, (i) no stop order with respect to the effectiveness
of the Registration Statement shall have been issued under the Act or
proceedings initiated under Section 8(d) or 8(e) of the Act; (ii) the
Registration Statement and all amendments thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; (iii)
none of the Pre-Pricing Prospectuses or the Prospectus, and no amendment or
supplement thereto, shall include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading; (iv)
no Disclosure Package, and no amendment or supplement thereto, shall include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading; and (v) none of the Permitted Free Writing
Prospectuses, if any, shall include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they are made, not
misleading.
(k) The
Company will, at the time of purchase and, if applicable, at the additional time
of purchase, deliver to you a certificate of its Chief Executive Officer and its
Chief Financial Officer, dated the time of purchase or the additional time of
purchase, as the case may be, in the form attached as Exhibit E
hereto.
(l) You
shall have received each of the signed Lock-Up Agreements referred to in Section
3(u) hereof, and each such Lock-Up Agreement shall be in full force and effect
at the time of purchase and the additional time of purchase, as the case may
be.
(m) The
Company shall have furnished to you such other documents and certificates as to
the accuracy and completeness of any statement in the Registration Statement,
any Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing
Prospectus as of the time of purchase and, if applicable, the additional time of
purchase, as you may reasonably request.
(n) The
Shares shall have been approved for quotation on the NASDAQ, subject only to
notice of issuance at or prior to the time of purchase or the additional time of
purchase, as the case may be.
(o) FINRA
shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions,
contemplated hereby.
7. Effective Date of Agreement;
Termination. This Agreement shall become effective when the
parties hereto have executed and delivered this Agreement.
The obligations of the several
Underwriters hereunder shall be subject to termination in the absolute
discretion of UBS and Credit Suisse, if (1) since the time of execution of this
Agreement or the earlier respective dates as of which information is given in
the
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Registration
Statement, the Pre-Pricing Prospectuses, the Prospectus and the Permitted Free
Writing Prospectuses, if any, there has been any change or any development
involving a prospective change in the business, properties, management,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole, the effect of which change or development is, in the judgment
of UBS and Credit Suisse, so material and adverse as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the Shares on
the terms and in the manner contemplated in the Registration Statement, the
Pre-Pricing Prospectuses, the Prospectus and the Permitted Free Writing
Prospectuses, if any, or (2) since the time of execution of this Agreement,
there shall have occurred: (A) a suspension or material limitation in trading in
securities generally on the NYSE, the NYSE Amex Equities or the NASDAQ; (B) a
suspension or material limitation in trading in the Company’s securities on the
NASDAQ; (C) a general moratorium on commercial banking activities declared by
either federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States; (D) an outbreak or escalation of hostilities or acts of terrorism
involving the United States or a declaration by the United States of a national
emergency or war; or (E) any other calamity or crisis or any change in
financial, political or economic conditions in the United States or elsewhere,
if the effect of any such event specified in clause (D) or (E), in the judgment
of UBS and Credit Suisse, makes it impractical or inadvisable to proceed with
the public offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement, the Pre-Pricing Prospectuses, the
Prospectus and the Permitted Free Writing Prospectuses, if any, or (3) since the
time of execution of this Agreement, there shall have occurred any downgrading,
or any notice or announcement shall have been given or made of: (A) any intended
or potential downgrading or (B) any watch, review or possible change that does
not indicate an affirmation or improvement in the rating accorded any securities
of or guaranteed by the Company or any Subsidiary by any “nationally recognized
statistical rating organization,” as that term is defined in Rule 436(g)(2)
under the Act.
If UBS and Credit Suisse elect to
terminate this Agreement as provided in this Section 7, the Company and each
other Underwriter shall be notified promptly in writing.
If the sale to the Underwriters of the
Shares, as contemplated by this Agreement, is not carried out by the
Underwriters for any reason permitted under this Agreement, or if such sale is
not carried out because the Company shall be unable to comply with any of the
terms of this Agreement, the Company shall not be under any obligation or
liability under this Agreement (except to the extent provided in Sections 4(m),
5 and 9 hereof), and the Underwriters shall be under no obligation or liability
to the Company under this Agreement (except to the extent provided in Section 9
hereof) or to one another hereunder.
8.
Increase in Underwriters’
Commitments. Subject to Sections 6 and 7 hereof, if any
Underwriter shall default in its obligation to take up and pay for the Firm
Shares to be purchased by it hereunder (otherwise than for a failure of a
condition set forth in Section 6 hereof or a reason sufficient to justify the
termination of this Agreement under the provisions of Section 7 hereof) and if
the number of Firm Shares which all Underwriters so defaulting shall have agreed
but failed to take up and pay for does not exceed 10% of the total number of
Firm Shares, the non-defaulting Underwriters (including the Underwriters, if
any, substituted in the manner set
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forth
below) shall take up and pay for (in addition to the aggregate number of Firm
Shares they are obligated to purchase pursuant to Section 1 hereof) the number
of Firm Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be taken up and paid for by
such non-defaulting Underwriters in such amount or amounts as you may designate
with the consent of each Underwriter so designated or, in the event no such
designation is made, such Shares shall be taken up and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set forth opposite the names of such non-defaulting Underwriters in
Schedule
A.
Without relieving any defaulting
Underwriter from its obligations hereunder, the Company agrees with the
non-defaulting Underwriters that it will not sell any Firm Shares hereunder
unless all of the Firm Shares are purchased by the Underwriters (or by
substituted Underwriters selected by you with the approval of the Company or
selected by the Company with your approval).
If a new Underwriter or Underwriters
are substituted by the Underwriters or by the Company for a defaulting
Underwriter or Underwriters in accordance with the foregoing provision, the
Company or you shall have the right to postpone the time of purchase for a
period not exceeding five business days in order that any necessary changes in
the Registration Statement and the Prospectus and other documents may be
effected.
The term “Underwriter” as used in this
Agreement shall refer to and include any Underwriter substituted under this
Section 8 with like effect as if such substituted Underwriter had originally
been named in Schedule
A hereto.
If the aggregate number of Firm Shares
which the defaulting Underwriter or Underwriters agreed to purchase exceeds 10%
of the total number of Firm Shares which all Underwriters agreed to purchase
hereunder, and if neither the non-defaulting Underwriters nor the Company shall
make arrangements within the five business day period stated above for the
purchase of all the Firm Shares which the defaulting Underwriter or Underwriters
agreed to purchase hereunder, this Agreement shall terminate without further act
or deed and without any liability on the part of the Company to any Underwriter
and without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph, and no action taken hereunder,
shall relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
9. Indemnity and
Contribution.
(a) The
Company agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors, officers and members, any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and any “affiliate” (within the meaning of Rule 405 under the Act)
of such Underwriter, and the successors and assigns of all of the foregoing
persons, from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
any such Underwriter or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such
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loss,
damage, expense, liability or claim arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement (or in the Registration Statement as amended by any
post-effective amendment thereof by the Company) or arises out of or is based
upon any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in, and in conformity with information concerning such
Underwriter furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use in, the Registration Statement or arises out of
or is based upon any omission or alleged omission to state a material fact in
the Registration Statement in connection with such information, which material
fact was not contained in such information and which material fact was required
to be stated in such Registration Statement or was necessary to make such
information not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact included in any Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include any Basic Prospectus, any
Pre-Pricing Prospectus, the Prospectus Supplement, the Prospectus and any
amendments or supplements to the foregoing), in any Covered Free Writing
Prospectus, in any “issuer information” (as defined in Rule 433 under the Act)
of the Company, which “issuer information” is required to be, or is, filed with
the Commission, or in any Prospectus together with any combination of one or
more of the Covered Free Writing Prospectuses, if any, or arises out of or is
based upon any omission or alleged omission 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, except, with respect to such Prospectus or
any Permitted Free Writing Prospectus, insofar as any such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in, and in conformity
with information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in, such
Prospectus or Permitted Free Writing Prospectus or arises out of or is based
upon any omission or alleged omission to state a material fact in such
Prospectus or Permitted Free Writing Prospectus in connection with such
information, which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such information,
in the light of the circumstances under which they were made, not misleading.
(b) Each
Underwriter severally agrees to indemnify, defend and hold harmless the Company,
its directors and officers, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons, from and against any
loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter through you to
the
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Company
expressly for use in, the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company), or
arises out of or is based upon any omission or alleged omission to state a
material fact in such Registration Statement in connection with such
information, which material fact was not contained in such information and which
material fact was required to be stated in such Registration Statement or was
necessary to make such information not misleading or (ii) any untrue statement
or alleged untrue statement of a material fact contained in, and in conformity
with information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter through you to the Company expressly for use in, a
Prospectus or a Permitted Free Writing Prospectus, or arises out of or is based
upon any omission or alleged omission to state a material fact in such
Prospectus or Permitted Free Writing Prospectus in connection with such
information, which material fact was not contained in such information and which
material fact was necessary in order to make the statements in such information,
in the light of the circumstances under which they were made, not
misleading.
(c) If
any action, suit or proceeding (each, a “Proceeding”) is
brought against a person (an “indemnified party”)
in respect of which indemnity may be sought against the Company or an
Underwriter (as applicable, the “indemnifying party”)
pursuant to subsection (a) or (b), respectively, of this Section 9, such
indemnified party shall promptly notify such indemnifying party in writing of
the institution of such Proceeding and such indemnifying party shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the
omission to so notify such indemnifying party shall not relieve such
indemnifying party from any liability which such indemnifying party may have to
any indemnified party or otherwise. The indemnified party or parties
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the indemnifying party in connection with the
defense of such Proceeding or the indemnifying party shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
defend such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to such
indemnifying party (in which case such indemnifying party shall not have the
right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by such indemnifying party and paid as incurred (it being understood, however,
that such indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The
indemnifying party shall not be liable for any settlement of any Proceeding
effected without its written consent but, if settled with its written consent,
such indemnifying party agrees to indemnify and hold harmless the indemnified
party or parties from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have
- 29
-
requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this Section 9(c), then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 120 business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall not have
fully reimbursed the indemnified party in accordance with such request prior to
the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days’ prior notice of its intention to
settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault or culpability or a
failure to act by or on behalf of such indemnified party.
(d) If
the indemnification provided for in this Section 9 is unavailable to an
indemnified party under subsections (a) and (b) of this Section 9 or
insufficient to hold an indemnified party harmless in respect of any losses,
damages, expenses, liabilities or claims referred to therein, then each
applicable indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same respective proportions as the
total proceeds from the offering (net of underwriting discounts and commissions
but before deducting expenses) received by the Company, and the total
underwriting discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the Shares. The relative fault of
the Company on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Underwriters and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, damages, expenses, liabilities and
claims referred to in this subsection shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(e) The
Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata
allocation
- 30
-
(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 subsection (d) above. Notwithstanding the provisions
of this Section 9, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by such Underwriter and distributed to the public were offered to the public
exceeds the amount of any damage which such Underwriter has otherwise been
required to pay by reason of such untrue statement or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 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 9 are several in proportion to their respective
underwriting commitments and not joint.
(f) The
indemnity and contribution agreements contained in this Section 9 and the
covenants, warranties and representations of the Company contained in this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, or any of their respective partners,
directors, officers or members or any person (including each partner, officer,
director or member of such person) who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, directors or officers or any person who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or the
issuance and delivery of the Shares. The Company and each Underwriter
agree promptly to notify each other of the commencement of any Proceeding
against it and, in the case of the Company, against any of the Company’s
officers or directors in connection with the issuance and sale of the Shares, or
in connection with the Registration Statement, any Basic Prospectus, any
Pre-Pricing Prospectus, the Prospectus or any Permitted Free Writing
Prospectus.
10. Information Furnished by the
Underwriters. The statements set forth on the cover page of
the Prospectus Supplement and the statements set forth in the Underwriting
section of the Prospectus Supplement, under the headings
Over-Allotment Option, Commissions and Discounts and Price Stabilization, Short
Positions, only insofar as such statements relate to the amount of selling
concession and reallowance or to over-allotment and stabilization activities
that may be undertaken by the Underwriters, constitute the only information
furnished by or on behalf of the Underwriters, as such information is referred
to in Sections 3 and 9 hereof.
11. Notices. Except
as otherwise herein provided, all statements, requests, notices and agreements
shall be in writing or by telegram or facsimile and, if to the Underwriters,
shall be sufficient in all respects if delivered or sent to UBS Securities LLC,
299 Park Avenue, New York, NY 10171-0026, Attention: Syndicate Department, and
to Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, NY
10010; if to the Company, shall be sufficient in all respects if delivered or
sent to the Company at the offices of the Company at c/o Energy XXI U.S.A.,
Inc., Suite 2626, 1021 Main, Houston, Texas 77002 (facsimile: 713-351-3300),
Attention: Bo Boyd, Vice President of Legal.
- 31
-
12. Governing Law;
Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating
to this Agreement (“Claim”), directly or
indirectly, shall be governed by, and construed in accordance with, the laws of
the State of New York. The section headings in this Agreement have
been inserted as a matter of convenience of reference and are not a part of this
Agreement.
13. Submission to
Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have exclusive jurisdiction over the adjudication of such matters, and the
Company consents to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
any Underwriter or any indemnified party. Each Underwriter and the
Company (on its behalf and, to the extent permitted by applicable law, on behalf
of its stockholders and affiliates) waive all right to trial by jury in any
action, proceeding or counterclaim (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this
Agreement. The Company agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Company and may be enforced in any other courts to the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
14. Parties at
Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters and the Company and to the extent
provided in Section 9 hereof the controlling persons, partners, directors,
officers, members and affiliates referred to in such Section, and their
respective successors, assigns, heirs, personal representatives and executors
and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from any of the
Underwriters) shall acquire or have any right under or by virtue of this
Agreement.
15. No Fiduciary
Relationship. The Company hereby acknowledges that the
Underwriters are acting solely as underwriters in connection with the purchase
and sale of the Company’s securities. The Company further
acknowledges that the Underwriters are acting pursuant to a contractual
relationship created solely by this Agreement entered into on an arm’s length
basis, and in no event do the parties intend that the Underwriters act or be
responsible as a fiduciary to the Company, its management, stockholders or
creditors or any other person in connection with any activity that the
Underwriters may undertake or have undertaken in furtherance of the purchase and
sale of the Company’s securities, either before or after the date
hereof. The Underwriters hereby expressly disclaim any fiduciary or
similar obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions,
and the Company hereby confirms its understanding and agreement to that
effect. The Company and the Underwriters agree that they are each
responsible for making their own independent judgments with respect to any such
transactions and that any opinions or views expressed by the Underwriters to the
Company regarding such transactions, including, but not limited to, any opinions
or views with respect to the price or market for the Company’s securities, do
not constitute advice or recommendations to the
- 32
-
Company. The
Company and the Underwriters agree that the Underwriters are acting as principal
and not the agent or fiduciary of the Company, and no Underwriter has assumed,
and none of them will assume, any advisory responsibility in favor of the
Company with respect to the transactions contemplated hereby or the process
leading thereto (irrespective of whether any Underwriter has advised or is
currently advising the Company on other matters). The Company hereby
waives and releases, to the fullest extent permitted by law, any claims that the
Company may have against the Underwriters with respect to any breach or alleged
breach of any fiduciary, advisory or similar duty to the Company in connection
with the transactions contemplated by this Agreement or any matters leading up
to such transactions.
16. Counterparts. This
Agreement may be signed by the parties in one or more counterparts which
together shall constitute one and the same agreement among the
parties.
17. Successors and
Assigns. This Agreement shall be binding upon the Underwriters
and the Company and their successors and assigns and any successor or assign of
any substantial portion of the Company’s and any of the Underwriters’ respective
businesses and/or assets.
18. Miscellaneous. UBS,
an indirect, wholly owned subsidiary of UBS AG, is not a bank and is separate
from any affiliated bank, including any U.S. branch or agency of UBS
AG. Because UBS is a separately incorporated entity, it is solely
responsible for its own contractual obligations and commitments, including
obligations with respect to sales and purchases of
securities. Securities sold, offered or recommended by UBS are not
deposits, are not insured by the Federal Deposit Insurance Corporation, are not
guaranteed by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.
[The Remainder of
This Page Intentionally Left Blank; Signature Page
Follows]
- 33
-
If the foregoing correctly sets forth
the understanding between the Company and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this Agreement
and your acceptance shall constitute a binding agreement between the Company and
the Underwriters, severally.
|
Very
truly yours,
|
|
|
ENERGY
XXI (BERMUDA) LIMITED
|
|
|
By:
|
/s/ John D. Schiller,
Jr.
|
|
Name: John
D. Schiller, Jr.
|
|
|
Title: Chairman
and Chief Executive Officer
|
|
Signature
Page to the Common Stock Underwriting Agreement
Accepted
and agreed to as of the date first above written, on behalf of themselves and as
representatives of the several Underwriters named in Schedule A
|
By:
UBS Securities
LLC
|
|
|
By:
|
/s/ Zach Jordan
|
|
Name:
|
Zach
Jordan
|
|
Title:
|
Executive
Director
|
|
By:
|
/s/ Joel Foote
|
|
Name:
|
Joel
Foote
|
|
Title:
|
Managing
Director
|
|
By: Credit
Suisse Securities (USA) LLC
|
|
|
By:
|
/s/ Timothy E. Perry
|
|
Name:
|
Timothy
E. Perry
|
|
Title:
|
Managing
Director
|
Signature
Page to the Common Stock Underwriting Agreement
SCHEDULE
A
|
Underwriter
|
Number of
Firm Shares
|
|||
|
UBS
SECURITIES LLC
|
31,950,000 | |||
|
CREDIT
SUISSE SECURITIES (USA) LLC
|
21,300,000 | |||
|
CAPITAL
ONE SOUTHCOAST, INC.
|
4,100,000 | |||
|
DAHLMAN
ROSE & COMPANY, LLC
|
4,100,000 | |||
|
MORGAN
KEEGAN & COMPANY, INC
|
4,100,000 | |||
|
SCOTIA
CAPITAL (USA) INC.
|
4,100,000 | |||
|
SMH
CAPITAL INC.
|
4,100,000 | |||
|
TD
SECURITIES (USA) LLC
|
4,100,000 | |||
|
CANACCORD
ADAMS LTD.
|
1,518,750 | |||
|
CRT
CAPITAL GROUP LLC
|
1,518,750 | |||
|
JOHNSON
RICE & COMPANY L.L.C.
|
1,518,750 | |||
|
NATIXIS
BLEICHROEDER LLC
|
1,518,750 | |||
|
PRITCHARD
CAPITAL PARTNERS, LLC
|
1,518,750 | |||
|
RODMAN
& RENSHAW, LLC
|
1,518,750 | |||
|
MACQUARIE
CAPITAL (USA) INC.
|
1,518,750 | |||
|
SUNRISE
SECURITIES CORP.
|
1,518,750 | |||
|
Total
|
90,000,000 | |||
SCHEDULE
B
 |
Issuer
Free Writing Prospectus dated December 8, 2009
Relating
to Preliminary Prospectus Supplements
dated
December 1, 2009
Filed
pursuant to Rule 433
Registration
Statement No. 333-148731
|
|
90,000,000
shares of Common Stock
and
$100
million 7.25% Convertible Perpetual Preferred
Stock
|
|
This term
sheet relates to the concurrent offerings of common stock (the “Common Stock
Offering”) and convertible perpetual preferred stock (the “Convertible Preferred
Stock Offering”) described below and should be read together with the
preliminary prospectus supplement dated December 1, 2009 relating to the Common
Stock Offering or (ii) the preliminary prospectus supplement dated December 1,
2009 relating to the Convertible Preferred Stock Offering, respectively,
together in each case with the documents incorporated by reference therein and
the accompanying prospectus dated March 18, 2008, before making a decision in
connection with an investment in the securities. The information in
this term sheet supersedes the information contained in the preliminary
prospectus supplements to the extent that it is inconsistent
therewith. Terms used but not defined herein have the meaning
ascribed to them in the preliminary prospectus supplements.
General
|
Issuer:
|
Energy
EXXI (Bermuda) Limited
|
|
|
Ticker/Exchange:
|
EXXI/NASDAQ
|
Convertible Preferred Stock
Offering
|
The
Security:
|
Convertible
Perpetual Preferred Stock
|
|
|
Offering
Size:
|
$100,000,000
(1,000,000 shares)
|
|
|
Over-allotment
Option:
|
$10,000,000
(10% or 100,000 shares)
|
|
|
Joint-Bookrunners:
|
UBS
Investment Bank, Credit Suisse
|
|
|
Maturity:
|
Perpetual
|
|
|
Denomination:
|
$100
and integral multiples thereof
|
|
|
Issue
Price / Liquidation Preference:
|
$100
per share, plus accumulated and unpaid dividends
|
|
|
Underwriting
Discount:
|
$3.00
per share (3.00%)
|
|
|
Net
Proceeds:
|
EXXI
estimates that the net proceeds from the Convertible Preferred Stock
Offering, after deducting underwriting discounts and commission and
estimated offering expenses, will be approximately $97.0 million (or
approximately $106.7 million if the underwriters exercise their option to
purchase additional shares in full)
|
|
|
Use
of Proceeds:
|
Energy
XXI intends to use the proceeds from the Convertible Preferred Stock
Offering, together with the proceeds from the Common Stock Offering
and cash on hand, to finance the MitEnergy acquisition
|
|
|
Cumulative
Dividends:
|
7.25%
per annum ($7.25 per annum per share), payable quarterly in arrears on
each March 15, June 15, September 15 and December 15 of each year,
commencing March 15, 2010
|
|
|
Method
of Payment of Dividends:
|
Dividends
on the Convertible Preferred Stock may be paid in cash or, where freely
transferable by any non-affiliate recipient thereof, shares of EXXI common
stock, or a combination thereof. If EXXI elects to make any payment, or
any portion thereof, in shares of EXXI common stock, such shares
shall be valued for such purpose at 95% of the Market Value of EXXI common
stock as determined on the second trading day immediately prior to the
record date for such dividend. EXXI will give the holders of the
notes notice of any such election 15 business days prior to the record
date for such dividend
|
|
|
Conversion
Premium:
|
Approximately
20% above the Price to Public in the concurrent Common Stock
Offering
|
|
|
Initial
Conversion Rate:
|
43.8596
shares of EXXI common stock per share of Convertible Preferred Stock
(subject to
adjustment)
|
|
Initial
Conversion Price:
|
Approximately
$2.28 per share of EXXI common stock (subject to
adjustment)
|
|
|
Conversion
Rate Adjustment:
|
Standard
adjustments to Conversion Rate and Conversion Price for dilutive
events.
|
|
|
Redemption
Rights:
|
Convertible
Preferred Stock will not be redeemable by EXXI
|
|
|
Mandatory
Conversion:
|
On
or after December 15, 2014, EXXI may cause the Convertible Preferred Stock
to be automatically converted into a number of shares of EXXI common
stock for each share of Convertible Preferred Stock equal to the then
prevailing conversion rate if, for at least 20 trading days in a period of
30 consecutive trading days, the Daily VWAP of EXXI common stock equals or
exceeds 150% of the then-prevailing conversion price
|
|
|
Ranking:
|
Preferred
|
|
|
Listing:
|
The
Convertible Preferred Stock will not be listed on a public
exchange
|
|
|
Form:
|
Registered
|
|
Settlement:
|
DTC
|
|
|
Governing
Law:
|
Bermuda
|
|
|
Special
Rights upon a Fundamental Change:
|
If
a holder converts its Convertible Preferred Stock at any time beginning at
the opening of business on the trading day immediately following the
effective date of a fundamental change (as described under ‘‘Description
of preferred stock — Special rights upon a fundamental change’’) and
ending at the close of business on the 30th trading day immediately
following such effective date, the holder will automatically receive a
number of shares of EXXI common stock equal to the greater
of:
§
(i) a number of shares of EXXI common stock, as described under
‘‘Description of preferred stock — Conversion rights’’ and subject to
adjustment as described under ‘‘Description of preferred stock —
Conversion Rate Adjustment’’ (with such adjustment or cash payment for
fractional shares as EXXI may elect, as described under “Description of
preferred stock — No Fractional Shares”) plus (ii) the make-whole premium,
if any, described below under ‘‘— Determination of the make-whole
premium’’; and
§
a number of shares of EXXI common stock
equal to the lesser of (i) the liquidation preference divided by the
Market Value of EXXI common stock on the effective date of a fundamental
change and (ii) 105.2632 (subject to adjustment)
|
|
|
Determination
of the Make-Whole Premium:
|
If
a holder elects to convert its shares of Convertible Preferred Stock upon
the occurrence of a fundamental change, in certain circumstances, EXXI
will increase the conversion rate (the “make-whole premium”) by reference
to the table below:
|
|
Number of
Additional Shares
(per $100
liquidation preference)
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Stock
Price ($)1
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
Effective
Date
|
$ | 1.90 | $ | 2.25 | $ | 2.50 | $ | 2.75 | $ | 3.00 | $ | 3.25 | $ | 3.50 | $ | 3.75 | $ | 4.00 | $ | 4.50 | $ | 5.00 | $ | 6.00 | $ | 7.00 | $ | 8.00 | $ | 9.00 | $ | 10.00 | ||||||||||||||||||
|
December
14, 2009
|
8.7720 | 7.6995 | 6.4220 | 5.4109 | 4.5952 | 3.9269 | 3.3722 | 2.9067 | 2.5125 | 1.8870 | 1.4206 | 0.7952 | 0.4232 | 0.2022 | 0.0765 | 0.0145 | ||||||||||||||||||||||||||||||||||
|
December
15, 2010
|
8.7720 | 7.0027 | 5.8084 | 4.8698 | 4.1175 | 3.5045 | 2.9982 | 2.5752 | 2.2183 | 1.6547 | 1.2368 | 0.6801 | 0.3521 | 0.1600 | 0.0536 | 0.0032 | ||||||||||||||||||||||||||||||||||
|
December
15, 2011
|
8.7720 | 6.2838 | 5.1618 | 4.2909 | 3.6008 | 3.0446 | 2.5896 | 2.2125 | 1.8967 | 1.4021 | 1.0387 | 0.5592 | 0.2801 | 0.1195 | 0.0339 | 0.0023 | ||||||||||||||||||||||||||||||||||
|
December
15, 2012
|
8.7720 | 5.5230 | 4.4467 | 3.6297 | 2.9973 | 2.4992 | 2.1004 | 1.7765 | 1.5098 | 1.1008 | 0.8065 | 0.4248 | 0.2058 | 0.0820 | 0.0189 | 0.0009 | ||||||||||||||||||||||||||||||||||
|
December
15, 2013
|
8.7720 | 4.6819 | 3.5806 | 2.7736 | 2.1781 | 1.7348 | 1.4010 | 1.1462 | 0.9484 | 0.6666 | 0.4783 | 0.2457 | 0.1138 | 0.0395 | 0.0043 | 0.0023 | ||||||||||||||||||||||||||||||||||
|
December
15, 2014 and thereafter
|
8.7720 | 4.1474 | 2.8287 | 1.7739 | 0.9365 | 0.3015 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | 0.0000 | ||||||||||||||||||||||||||||||||||
|
(1)
The stock prices set forth in the table will be adjusted as of any date on
which the Conversion Rate of the Convertible Preferred Stock is adjusted
by multiplying the applicable price in effect immediately before the
adjustment by a fraction:
§
whose numerator is the Conversion Rate immediately before the
adjustment; and
§
whose denominator is the adjusted Conversion
Rate
In
addition, EXXI will adjust the number of additional shares in the table at
the same time, in the same manner in which, and for the same events for
which, EXXI must adjust the Conversion Rate as described under
‘‘Description of preferred stock — Conversion Rate
Adjustment.’
The
exact stock price and effective date may not be set forth on the table, in
which case:
§
if the stock price is between two stock prices on the table or the
effective date is between two effective dates on the table, the make-whole
premium will be determined by straight-line interpolation between
make-whole premium amounts set forth for the higher and lower stock prices
and the two effective dates, as applicable, based on a 365-day
year;
§
if the stock price is in excess of $10.00 per share (subject to adjustment
in the same manner as the stock price) no make-whole premium will be paid,
and
§
if the stock price is less than or equal to $1.90 per share (subject to
adjustment in the same manner as the stock price), no make-whole premium
will be paid
|
||
|
CUSIP:
|
29274U
200
|
|
|
ISIN:
|
US29274U2006
|
Common Stock
Offering
|
The
Security:
|
Common
stock, par value $0.001 per share
|
|
|
Offering
Size:
|
90,000,000
shares
|
|
|
Over-allotment
Option:
|
13,500,000
shares
|
|
|
Price
to Public
|
$1.90
per share
|
|
|
Joint-Bookrunners:
|
UBS
Investment Bank, Credit Suisse
|
|
|
Co-Managers:
|
Capital
One Southcoast
Dahlman
Rose & Company
Morgan
Keegan & Company, Inc.
Scotia
Capital
SMH
Capital Inc.
TD
Securities
Canaccord
Adams Ltd.
CRT
Capital Group LLC
Johnson
Rice & Company L.L.C.
Natixis
Bleichroeder LLC
Pritchard
Capital Partners, LLC
Rodman
& Renshaw, LLC
Macquarie
Capital
Sunrise
Securities Corp.
|
|
Net
Proceeds:
|
EXXI
estimates that the net proceeds from the Common Stock Offering, after
deducting underwriting discounts and commission and estimated offering
expenses, will be approximately $160.0 million (or approximately $184.3
million if the underwriters exercise their option to purchase additional
shares in full)
|
|
|
Use
of Proceeds:
|
Energy
XXI intends to use the proceeds from the Common Stock Offering, together
with the proceeds from the Convertible Preferred Stock Offering and cash
on hand, to finance the MitEnergy acquisition
|
|
|
CUSIP
|
G10082108
|
|
|
ISIN
|
BMG100821088
|
Other Offering
Information
|
Pricing
Date:
|
December
8, 2009
|
|
|
Trade
Date:
|
December
9, 2009
|
|
|
Settlement
Date:
|
December
14, 2009 (T+3)
|
|
|
Capitalization
|
The
“Pro Forma” column of the Capitalization table in each of the preliminary
prospectus supplements is revised as follows: Cash and cash equivalents is
$114.7 million, Additional paid in capital is $880.4 million, Total
stockholders’ equity is $401.3 million and Total capitalization is
$1,256.9 million.
|
|
|
Ratio
of earnings to fixed charges and preferred stock dividends
|
The
“Pro Forma” columns of the table under “Ratio of earnings to fixed charges
and preferred stock dividends” in the preliminary prospectus supplement
relating to the Convertible Preferred Stock Offering is 1.27 for the
Quarter ended September 30, 2009. The coverage deficiency
necessary for the ratio of earnings to fixed charges and preferred stock
dividends to equal 1.00x (one-to-one coverage) was $546.8 million for the
pro forma year ended June 30,
2009.
|
Prior to
purchasing the common stock being offered pursuant to the preliminary prospectus
supplement, on December 8, 2009, one of the underwriters purchased, on behalf of
the syndicate, 200,300 shares of common stock at an average price of $1.9187 per
share.
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 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 UBS Securities LLC toll
free at 1-888-827-7275 or Credit Suisse Securities (USA) LLC toll free at
1-800-221-1037.
EXHIBIT
A
Lock-Up
Agreement
December
1, 2009
UBS
Securities LLC
Credit
Suisse Securities (USA) LLC
Together
with the other Underwriters
named in
Schedule A to the Underwriting Agreement
referred
to herein
c/o UBS
Securities LLC
299 Park
Avenue
New York,
New York 10171-0026
Ladies
and Gentlemen:
This Lock-Up Agreement is being
delivered to you in connection with the proposed Underwriting Agreement (the
“Underwriting
Agreement”) to be entered into by Energy XXI (Bermuda) Limited, a Bermuda
corporation (the “Company”), and you
and the other underwriters named in Schedule A to the Underwriting Agreement,
with respect to the public offering (the “Offering”) of common
stock, par value $.001 per share, of the Company (the “Common
Stock”).
In order to induce you to enter into
the Underwriting Agreement, the undersigned agrees that, for a period (the
“Lock-Up
Period”) beginning on the date hereof and ending on, and including, the
date that is 90 days after the date of the final prospectus supplement relating
to the Offering, the undersigned will not, without the prior written consent of
UBS Securities LLC and Credit Suisse Securities (USA) LLC, (i) sell, offer to
sell, contract or agree to sell, hypothecate, pledge, grant any option to
purchase or otherwise dispose of or agree to dispose of, directly or indirectly,
or file (or participate in the filing of) a registration statement with the
Securities and Exchange Commission (the “Commission”) in
respect of, or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission promulgated thereunder (the “Exchange Act”) with
respect to, any Common Stock or any other securities of the Company that are
substantially similar to Common Stock, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of Common Stock or any other securities of the Company that are
substantially similar to Common Stock, or any securities convertible into or
exchangeable or exercisable for, or any warrants or other rights to purchase,
the foregoing, whether any such transaction is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise or (iii) publicly
announce an intention to effect any transaction specified in clause (i) or
(ii). The foregoing sentence shall not apply to (a)
A-1
the
registration of the offer and sale of Common Stock as contemplated by the
Underwriting Agreement and the sale of the Common Stock to the Underwriters (as
defined in the Underwriting Agreement) in the Offering, (b) bona fide gifts,
provided the recipient thereof agrees in writing with the Underwriters to be
bound by the terms of this Lock-Up Agreement or (c) dispositions to any trust
for the direct or indirect benefit of the undersigned and/or the immediate
family of the undersigned, provided that such trust agrees in writing with the
Underwriters to be bound by the terms of this Lock-Up Agreement. For
purposes of this paragraph, “immediate family” shall mean the undersigned and
the spouse, any lineal descendent, father, mother, brother or sister of the
undersigned.
In addition, the undersigned hereby
waives any rights the undersigned may have to require registration of Common
Stock in connection with the filing of a registration statement relating to the
Offering. The undersigned further agrees that, for the Lock-Up
Period, the undersigned will not, without the prior written consent of UBS
Securities LLC and Credit Suisse Securities (USA) LLC, make any demand for, or
exercise any right with respect to, the registration of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, or
warrants or other rights to purchase Common Stock or any such
securities.
Notwithstanding the above, if (a)
during the period that begins on the date that is fifteen (15) calendar days
plus three (3) business days before the last day of the Lock-Up Period and ends
on the last day of the Lock-Up Period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (b) prior
to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the sixteen (16) day period beginning on the
last day of the Lock-Up Period, then the restrictions imposed by this Lock-Up
Agreement shall continue to apply until the expiration of the date that is
fifteen (15) calendar days plus three (3) business days after the date on which
the issuance of the earnings release or the material news or material event
occurs.
The undersigned hereby confirms that
the undersigned has not, directly or indirectly, taken, and hereby covenants
that the undersigned will not, directly or indirectly, take, any action
designed, or which has constituted or will constitute or might reasonably be
expected to cause or result in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of shares of Common
Stock.
The undersigned hereby authorizes the
Company and its transfer agent, during the Lock-Up Period, to decline the
transfer of or to note stop transfer restrictions on the stock register and
other records relating to shares of Common Stock or other securities subject to
this Lock-Up Agreement of which the undersigned is the record holder, and, with
respect to shares of Common Stock or other securities subject to this Lock-Up
Agreement of which the undersigned is the beneficial owner but not the record
holder, the undersigned hereby agrees to cause such record holder to authorize
the Company and its transfer agent, during the Lock-Up Period, to decline the
transfer of or to note stop transfer restrictions on the stock register and
other records relating to such shares or other securities.
* * *
A-2
If (i) the Company notifies you in
writing that it does not intend to proceed with the Offering, (ii) the
registration statement filed with the Commission with respect to the Offering is
withdrawn or (iii) for any reason the Underwriting Agreement shall be terminated
prior to the “time of purchase” (as defined in the Underwriting Agreement), this
Lock-Up Agreement shall be terminated and the undersigned shall be released from
its obligations hereunder.
|
Yours
very truly,
|
|
Name:
|
A-3
EXHIBIT
A-1
LIST OF
PARTIES TO EXECUTE LOCK-UP AGREEMENTS
|
Name
|
Position
|
|
|
1. John
D. Schiller, Jr.
|
Chairman
and Chief Executive Officer
|
|
|
2. Steve
Weyel
|
Director,
President and Chief Operating Officer
|
|
|
3.
David West Griffin
|
Director
and Chief Financial Officer
|
|
|
4.
Ben Marchive
|
Senior
Vice President, Operations
|
|
|
5.
Todd Reid
|
Senior
Vice President Marketing & Risk Management
|
|
|
6.
J. Granger Anderson III
|
Vice
President, Land
|
|
|
7.
Bo Boyd
|
Vice
President of Law
|
|
|
8.
Stewart Lawrence
|
Vice
President of Investor Relations and Communications
|
|
|
9.
Hugh Menown
|
Vice
President, Chief Accounting Officer and Chief Information
Officer
|
|
|
10.Steve
Nelson
|
Vice
President of Drilling and Production
|
|
|
11.Tom
O’Donnell
|
Vice
President of Corporate Development and Planning
|
|
|
12.Rick
Fox
|
Vice
President, Controller
|
|
|
13.Kerry
McDonough
|
Vice
President, Human Resources and Administration
|
|
|
14.William
Colvin
|
Director
|
|
|
15.Paul
Davison
|
Director
|
|
|
16.David
Morris Dunwoody
|
Director
|
|
|
17.Hill
A. Feinberg
|
Director
|
|
|
|
A-1-1
EXHIBIT
B
FORM OF
OPINION OF VINSON & ELKINS
|
1.
|
Organization and Good
Standing. Each of the Company’s subsidiaries listed on
Annex A
(the “Delaware
Subsidiaries”) hereto has been duly organized or incorporated and
is validly existing as a limited liability company or corporation in good
standing under the laws of the State of Delaware, with full corporate
power and authority to own, lease and operate its properties and to
conduct its business as currently conducted or as to be conducted, in each
case as described in the Disclosure Package and the
Prospectus.
|
|
|
|
2.
|
Valid Capital
Stock. All of the issued shares of capital stock of the
Delaware Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable and, except as otherwise disclosed in the
Disclosure Package and the Prospectus, are owned directly or indirectly by
the Company, in each case subject to no security interest, other
encumbrance or adverse claim (A) in respect of which a financing statement
under the Uniform Commercial Code of the States of Delaware, Louisiana or
Texas naming such subsidiary as a debtor is on file as of a recent date in
the office of the Secretary of State of the States of Delaware, Louisiana
or Texas or (B) otherwise known to us, without independent investigation,
in each case, other than liens in connection with the First Lien
Facility.
|
|
3.
|
No
Conflicts. The execution, delivery and performance of
the Underwriting Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated thereby will not conflict
with, require any approval, authorization or consent under, result in any
breach or violation of or constitute a default under (nor constitute any
event which, with notice, lapse of time or both, would result in any
breach or violation of, constitute a default under or give the holder of
any indebtedness (or a person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) (or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company or any
Subsidiary pursuant to) (i) the Organizational Documents of any of the
Delaware Subsidiaries, (ii) any agreement or other instrument filed
as an exhibit to the Registration Statement or any Incorporated Document,
(iii) the Delaware General Corporation Law, the Delaware Limited Liability
Company Act, the laws of the State of Texas or federal law other than the
registration of the Shares under the Act, which has been effected (except
that such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters
nor any opinion with respect to the Conduct Rules of
FINRA).
|
|
4.
|
Compliance. The
Registration Statement, the Pre-Pricing Prospectus and the Prospectus are,
on their face, appropriately responsive, in all material respects, to the
applicable requirements of the Act, except that in each case such counsel
need express no opinion with respect to the financial statements and
schedules, and other financial or reserve data, contained in the
Registration Statement, the Pre-Pricing Prospectus and the Prospectus;
|
B-1
|
the
conditions to the use of Form S-3 in connection with the offering and sale
of the Shares as contemplated by the Underwriting Agreement have been
satisfied; the Registration Statement meets, and the offering and sale of
the Shares as contemplated by the Underwriting Agreement complies with,
the requirements of Rule 415 under the Act; and each Incorporated
Document, at the time such document was filed with the Commission or at
the time such document became effective, as applicable, was, on its face,
appropriately responsive in all material respects with the requirements of
the Exchange Act (except as to the financial statements and schedules, and
other financial data derived therefrom, contained in such document, as to
which we express no opinion).
|
|
|
5.
|
Ineligible
Issuer. To our knowledge, the Company is not an
“ineligible issuer” (as defined in Rule 405 under the Act) as of the
eligibility determination date for purposes of Rules 164 and 433 under the
Act with respect to the offering of the Shares contemplated by the
Registration Statement.
|
|
6.
|
Effective Registration
Statement. The Registration Statement has become
effective under the Act and, to our knowledge, no stop order proceedings
with respect thereto are pending or threatened under the Act, and any
required filing of the Prospectus and any supplement thereto pursuant to
Rule 424 or Rule 430B under the Act has been made in the manner and within
the time period required by such Rule 424 and in compliance with Rule 430B
under the Act.
|
|
7.
|
Investment
Company. The Company is not an “investment company”
within the meaning of and subject to regulation under the Investment
Company Act of 1940, as amended.
|
|
8.
|
Summary
Statements. The statements in the Disclosure Package and
the Prospectus under the heading “Description of Capital Stock,” insofar
as such statements constitute summaries of documents or legal proceedings
or refer to matters of law or legal conclusions, constitute accurate
summaries of such documents, legal proceedings and laws in all material
respects.
|
|
9.
|
No Registration
Rights. No person or entity has the right, pursuant to
the terms of any contract, agreement or other instrument described in or
filed as an exhibit to the Registration Statement or any document
incorporated therein by reference or otherwise known to us, to cause the
Company to register under the Act any shares of Common Stock or shares of
any other capital stock or other equity interest in the Company or to
include any such shares or interest in the Registration Statement or the
offering contemplated thereby.
|
In rendering such opinion, such counsel
may (i) rely in respect of matters of fact upon certificates of officers and
employees of the Company and the Subsidiaries and upon information obtained from
public officials, (ii) assume that all documents submitted to such counsel as
originals are authentic, that all copies submitted to such counsel conform to
the originals thereof and that the signatures on all documents examined by such
counsel are genuine, (iii) state that its opinion is limited to matters governed
by federal law and the Delaware General Corporation Law and the Delaware Limited
Liability Company Act and the laws of the State of Texas, and (iv) state that
they
B-2
express
no opinion with respect to (A) any permits to own or operate any real or
personal property or (B) state or local taxes or tax statutes to which any
shareholders of the Company or any Subsidiary of the Company may be
subject.
In addition, such counsel shall state
that they have participated in conferences with officers and other
representatives of the Company, the independent public accountants of the
Company and your representatives, at which the contents of the Registration
Statement, the Disclosure Package and the Prospectus and related matters were
discussed, and although such counsel has not independently verified, is not
passing upon, and is not assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in, the Registration
Statement, the Disclosure Package and the Prospectus (except to the extent
specified in the foregoing opinion), based on the foregoing, no facts have come
to such counsel’s attention that have caused such counsel to believe
that:
(A) the
Registration Statement, as of the Effective Time, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(B) the
Disclosure Package (together with the public offering price per Share, number of
Firm Shares and number of Additional Shares), as of the Applicable Time,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or
(C) the
Prospectus, as of its date and at the time of purchase contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
it being understood that such counsel
expresses no statement or belief with respect to (i) the financial statements
and related schedules, including the notes and schedules thereto and the
auditor’s report thereon, or any other financial and accounting and reserve
information, included in, or excluded from, the Registration Statement or the
Prospectus or the Disclosure Package, and (ii) representations and warranties
and other statements of fact included in the exhibits to the Registration
Statement.
Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the
Underwriting Agreement.
B-3
ANNEX
A TO EXHIBIT B
|
Name:
|
Jurisdiction:
|
|
|
Energy
XXI, Inc.
|
Delaware
|
|
|
Energy
XXI USA, Inc.
|
Delaware
|
|
|
Energy
XXI Gulf Coast, Inc.
|
Delaware
|
|
|
Energy
XXI Services, LLC
|
Delaware
|
|
|
Energy
XXI GOM, LLC
|
Delaware
|
|
|
Energy
XXI Texas Onshore, LLC (f/k/a Energy XXI Texas GP, LLC)
|
Delaware
|
|
|
Energy
XXI Onshore, LLC (f/k/a Energy XXI Texas, LP)
|
|
Delaware
|
B-Annex
A
EXHIBIT
C
FORM OF
OPINION OF INTERNAL COUNSEL
|
1.
|
Valid Capital
Stock. All of the Company’s options, warrants and other
rights to purchase or exchange any securities for shares of the Company’s
capital stock have been duly authorized and validly issued, conform to the
description thereof contained in each of the Disclosure Package and the
Prospectus.
|
|
2.
|
No Additional
Document. There are no contracts, licenses, agreements,
leases or documents of a character which are required to be described in
the Registration Statement, the Pre-Pricing Prospectus or the Prospectus
or to be filed as an exhibit to the Registration Statement or any
Incorporated Document which have not been so described or filed as
required.
|
|
3.
|
No Legal
Action. The Company is not a party to any legal or
governmental action or proceeding that challenges the validity or
enforceability, or seeks to enjoin the performance, of the Underwriting
Agreement and there are no actions, suits, claims, investigations or
proceedings pending, threatened or contemplated to which the Company or
any of the Subsidiaries or any of their respective directors or officers
is or would be a party or to which any of their respective properties is
or would be subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board, body,
authority or agency which are required to be described in the Registration
Statement, the Pre-Pricing Prospectus or the Prospectus but are not so
described as required.
|
|
4.
|
No
Conflicts. The execution, delivery and performance of
the Underwriting Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated thereby will not conflict
with, require any approval, authorization or consent under, result in any
breach or violation of or constitute a default under (nor constitute any
event which, with notice, lapse of time or both, would result in any
breach or violation of, constitute a default under or give the holder of
any indebtedness (or a person acting on such holder’s behalf) the right to
require the repurchase, redemption or repayment of all or a part of such
indebtedness under) (or result in the creation or imposition of a lien,
charge or encumbrance on any property or assets of the Company or any
Subsidiary pursuant to) (i) the Organizational Documents of the Company or
any of the Subsidiaries, (ii) any agreement or other instrument
filed as an exhibit to the Registration Statement or any Incorporated
Document, (iii) the Delaware General Corporation Law, the Delaware Limited
Liability Company Act, the laws of the State of Texas or federal law other
than the registration of the Shares under the Act, which has been effected
(except that such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters
nor any opinion with respect to the Conduct Rules of
FINRA).
|
|
5.
|
Effective Registration
Statement. The Registration Statement has become
effective under
|
C-1
|
the
Act and, to my knowledge, no stop order proceedings with respect thereto
are pending or threatened under the
Act, and any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424 or Rule 430B under the Act has been made in the
manner and within the time period required by such Rule 424 and in
compliance with Rule 430B under the Act.
|
|
|
6.
|
Good Standing and Foreign
Qualification. The Company and each of the Subsidiaries
are in good standing and are duly qualified to do business as a foreign
corporation, as the case may be, in each jurisdiction set forth opposite
its name on Annex A hereto.
|
|
7.
|
Summary
Statements. The statements in the Disclosure Package and
the Prospectus under the headings “Risk Factors,” “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” and
“Business,” insofar as such statements constitute summaries of documents
or legal proceedings or refer to matters of law or legal conclusions,
constitute accurate summaries of such documents, legal proceedings and
laws in all material respects.
|
In rendering such opinion, such counsel
may (i) rely in respect of matters of fact upon certificates of officers and
employees of the Company and the Subsidiaries and upon information obtained from
public officials, (ii) assume that all documents submitted to such counsel as
originals are authentic, that all copies submitted to such counsel conform to
the originals thereof and that the signatures on all documents examined by such
counsel are genuine, (iii) state that its opinion is limited to matters governed
by federal law and the Delaware General Corporation Law and the Delaware Limited
Liability Company Act and the laws of the State of Texas, and (iv) state that
they express no opinion with respect to (A) any permits to own or operate any
real or personal property or (B) state or local taxes or tax statutes to which
any shareholders of the Company or any Subsidiary of the Company may be
subject.
In addition, such counsel shall state
that they have participated in conferences with officers and other
representatives of the Company, the independent public accountants of the
Company and your representatives, at which the contents of the Registration
Statement, the Disclosure Package and the Prospectus and related matters were
discussed, and although such counsel has not independently verified, is not
passing upon, and is not assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in, the Registration
Statement, the Disclosure Package and the Prospectus (except to the extent
specified in the foregoing opinion), based on the foregoing, no facts have come
to such counsel’s attention that have caused such counsel to believe
that:
(A) the
Registration Statement, as of the Effective Time, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
(B) the
Disclosure Package (together with the public offering price per Share, number of
Firm Shares and number of Additional Shares), as of the Applicable Time,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or
C-2
(C) the
Prospectus, as of its date and at the time of purchase contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
it being understood that such counsel
expresses no statement or belief with respect to (i) the financial statements
and related schedules, including the notes and schedules thereto and the
auditor’s report thereon, or any other financial and accounting and reserve
information, included in, or excluded from, the Registration Statement or the
Prospectus or the Disclosure Package, and (ii) representations and warranties
and other statements of fact included in the exhibits to the Registration
Statement.
Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the
Underwriting Agreement.
C-3
ANNEX
A TO EXHIBIT C
Good
Standing and Foreign Qualification
|
Name:
|
Jurisdiction:
|
Foreign Qualification:
|
||
|
Energy
XXI (Bermuda) Limited
|
Bermuda
|
None
|
||
|
Energy
XXI (US Holdings) Limited
|
Bermuda
|
None
|
||
|
Energy
XXI, Inc.
|
Delaware
|
None
|
||
|
Energy
XXI USA, Inc.
|
Delaware
|
TX
|
||
|
Energy
XXI Gulf Coast, Inc.
|
Delaware
|
LA,
TX
|
||
|
Energy
XXI Services, LLC
|
Delaware
|
TX
|
||
|
Energy
XXI GOM, LLC
|
Delaware
|
LA,
TX
|
||
|
Energy
XXI Texas Onshore, LLC
|
Delaware
|
LA,
TX
|
||
|
(f/k/a
Energy XXI Texas GP, LLC)
|
||||
|
Energy
XXI Onshore, LLC
|
Delaware
|
LA,
TX
|
||
|
(f/k/a
Energy XXI Texas, LP)
|
|
|
C-Annex
A
EXHIBIT
D
FORM OF OPINION OF APPLEBY
HUNTER BAILHACHE
|
1.
|
Organization and Good
Standing. Each of the Company and Energy XXI (US
Holdings) Limited (the “Bermuda
Subsidiary”) has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the Bermuda, with full
corporate power and authority to own, lease and operate its properties and
conduct its business in each case as described in the Disclosure Package
and the Prospectus, and, in the case of the Company, to execute and
deliver the Underwriting Agreement and to perform its obligations
thereunder, including, without limitation, to issue, sell and deliver the
Shares as contemplated by the Underwriting
Agreement.
|
|
2.
|
Underwriting
Agreement. The Underwriting Agreement has been duly
authorized, executed and delivered by the
Company.
|
|
3.
|
Shareholder
Rights. To our knowledge, the Shares are free of
contractual preemptive rights, resale rights, rights of first refusal and
similar rights.
|
|
4.
|
Valid
Shares. The Shares have been duly authorized and validly
issued and are fully paid and
non-assessable.
|
|
5.
|
Capitalization. The
Company has an authorized and outstanding capitalization as set forth in
the Disclosure Package and the Prospectus; all of the issued and
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and such
issued and outstanding shares of capital stock and the Shares are free of
statutory preemptive rights and, to our knowledge, contractual preemptive
rights, resale rights, rights of first refusal and similar rights; the
certificates for the Shares are in due and proper
form.
|
|
6.
|
Conforming Capital
Stock. The capital stock of the Company, including the
Shares, conforms in all material respects to the description thereof
contained in the Disclosure Package and the
Prospectus.
|
|
7.
|
Summary
Statements. The statements in the Disclosure Package and
the Prospectus under the heading “Description of Capital Stock,” insofar
as such statements constitute summaries of documents or legal proceedings
or refer to matters of law or legal conclusions, constitute accurate
summaries of such documents, legal proceedings and laws in all material
respects.
|
|
8.
|
No
Conflicts. The execution, delivery and performance of
the Underwriting Agreement, the issuance and sale of the Shares and the
consummation of the transactions contemplated thereby will not conflict
with, require any approval, authorization or consent under, result in any
breach or violation of or constitute a default under (nor constitute any
event which, with notice, lapse of time or both, would result in any
breach or violation of, constitute a default under or give the holder of
any indebtedness (or a person acting on such holder’s behalf) the right to
require the repurchase, redemption or
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D-1
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repayment
of all or a part of such indebtedness under) (or result in the creation or
imposition of a lien, charge or encumbrance on any property or assets of
the Company or any Subsidiary pursuant to) (i) Organizational Documents of
the Company or the Bermuda Subsidiary or (ii) the laws of
Bermuda.
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D-2
EXHIBIT
E
OFFICERS’
CERTIFICATE
Each of the undersigned, John D.
Schiller, Jr., Chairman and Chief Executive Officer of Energy XXI (Bermuda)
Limited, a Bermuda corporation (the “Company”), and David
West Griffin, Chief Financial Officer of the Company, on behalf of the Company,
does hereby certify pursuant to Section 6(k) of that certain Underwriting
Agreement dated December 8, 2009 (the “Underwriting
Agreement”) among the Company and UBS Securities LLC, Credit Suisse
Securities (USA) LLC, Capital One Southcoast, Inc., Dahlman Rose & Company,
LLC, Morgan Keegan & Company, Inc., Scotia Capital (USA) Inc., SMH Capital
Inc., TD Securities (USA) LLC, Canaccord Adams Ltd., CRT Capital Group LLC,
Johnson Rice & Company L.L.C., Natixis Bleichroeder LLC, Pritchard Capital
Partners, LLC, Rodman & Renshaw, LLC, Macquarie Capital (USA) Inc. and
Sunrise Securities Corp., that as of December 14, 2009:
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1.
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He
has reviewed the Registration Statement, each Pre-Pricing Prospectus, the
Prospectus and each Permitted Free Writing
Prospectus.
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2.
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The
representations and warranties of the Company as set forth in the
Underwriting Agreement are true and correct as of the date hereof and as
if made on the date hereof.
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3.
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The
Company has performed all of its obligations under the Underwriting
Agreement as are to be performed at or before the date
hereof.
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4.
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The
conditions set forth in paragraph (j) of Section 6 of the Underwriting
Agreement have been met.
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Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the
Underwriting Agreement.
In
Witness
Whereof,
the undersigned have hereunto set their hands on this December 14,
2009.
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Name:
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John
D. Schiller, Jr.
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Title:
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Chairman
and Chief Executive
Officer
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Name:
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David
West Griffin
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Title:
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Chief
Financial Officer
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E-1