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EXHIBIT 10.2
EXCHANGE AGREEMENT
This EXCHANGE AGREEMENT (this "Exchange Agreement") is entered into as
of this __ day of October, 1997 (the "Effective Date") between STONE ENERGY
CORPORATION (the "Company") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a
national banking association (the "Exchange Agent").
RECITALS
A. This Exchange Agreement is entered into in connection with the
offer by the Company (the "Exchange Offer") to exchange $1,000 principal amount
of its 8 3/4% Senior Subordinated Notes due 2007 that have been registered under
the Securities Act of 1933 (the "Exchange Notes") for each $1,000 principal
amount of its 8 3/4% Senior Subordinated Notes due 2007 (the "Old Notes")
tendered pursuant to the terms of the Prospectus (the "Prospectus") and the
related Letter of Transmittal described in Section 2(b), below.
B. The Prospectus and the associated Letter of Transmittal
provide the terms and conditions under which Holders (as hereinafter defined)
may tender some or all of their Old Notes in exchange for Exchange Notes (the
"Exchange"), which Notes are issued pursuant to that certain Indenture dated as
of September 19, 1997, by and between the Company and Texas Commerce Bank
National Association, as Trustee.
AGREEMENTS
1. Appointment of Exchange Agent. The Exchange Agent is hereby
appointed by the Company: (a) to effect the Exchange in accordance with the
Prospectus, each executed Letter of Transmittal and the instructions that
follow; and (b) to act as agent for the holders (individually, a "Holder" and
collectively, the "Holders") of the Old Notes identified in the register for
the Old Notes. The Exchange Agent agrees to act in accordance with the terms
of this Exchange Agreement for a period commencing on the date of this Exchange
Agreement and ending on ______ unless requested by the Company on terms
acceptable to the Exchange Agent to act in connection with the Exchange Offer
as Exchange Agent until some later date or unless sooner terminated as provided
in Section 14 hereof.
2. Delivery of Documents. The Company shall deliver the following
documents (collectively, the "Exchange Documents") to the Exchange Agent on or
before the date of this Exchange Agreement:
(a) the final Prospectus;
(b) the form of the Letter of Transmittal to be used by the
Holders in transmitting Old Notes for surrender in connection with the
Exchange; and
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(c) the form of the Notice of Guaranteed Delivery (as such
term is defined in the Prospectus).
3. Holders. The listing of the Holders of the Old Notes as of the
close of business on _____________(the "Record Date") shall be conclusive
evidence of the identities of the Holders of such Old Notes.
4. Mailing to Holders. At the request of the Company, the Exchange
Agent shall initially mail to each Holder of record and to participants in The
Depository Trust Company's hook-entry system (pursuant to information provided
by The Depository Trust Company) on the Effective Date one or more copies of
each of the relevant Exchange Documents. Thereafter, at the request of the
Company, a Holder or an entity acting on behalf of a Holder or such
participant, the Exchange Agent may mail additional copies of any one or more
of the Exchange Documents to such Holder or entity. The Exchange Agent shall
provide notice of such mailing, including names and addresses, to the Company.
5. Exchange Procedure.
(a) The Exchange Agent shall verify receipt of the Old Notes and
examine the executed Letters of Transmittal received by the Exchange Agent in
connection therewith and the other documents delivered or mailed to the
Exchange Agent to ascertain whether they appear to be properly completed and
executed in accordance with the instructions set forth in the Letter of
Transmittal.
Old Notes shall be considered properly presented to the Exchange Agent
only if: (i) the Old Notes, accompanied by properly completed and duly executed
Letters of Transmittal, are received by the Exchange Agent (together with any
other required documents) in accordance with the instructions set forth in the
Letter of Transmittal prior to the Expiration Date (as such term is defined in
the Prospectus); (ii) the adequacy of the items and documents relating to the
Letter of Transmittal therefor has been favorably passed upon by the Company as
provided below; and (iii) such tenders of Old Notes are not withdrawn in
accordance with the terms of the Exchange Offer; provided that the Old Notes
may be received within five New York Stock Exchange trading days after the
Expiration Date if tender of such Old Notes is made pursuant to the Guaranteed
Delivery Procedures contained in the Prospectus.
In the event any Letter of Transmittal or other document has been
improperly completed or executed or is not in proper form for presentation (as
required by the instructions stated in the Letter of Transmittal), or if some
other irregularity in connection with the presentation of any of the Old Notes
exists, the Exchange Agent shall consult with an Authorized Representative (as
defined in Section 7 hereof) as to proper action to take to correct such
irregularity, except that no such consultation shall be necessary with respect
to any such irregularity that is of a routine nature and that is cured by the
appropriate party delivering to the Exchange Agent the items necessary for cure
pursuant to the Exchange Agent's instructions.
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The Exchange Agent is authorized, and hereby agrees, to waive any
irregularity in connection with the presentation of any of the Old Notes by any
Holder with the written approval of an Authorized Representative. Determination
of all questions as to any irregularity or the proper documents shall be made
in writing by an Authorized Representative, and such determination shall be
final and binding.
Notwithstanding anything to the contrary herein, no Old Note may be
accepted for exchange until the Company shall have given the Exchange Agent
written notice of its acceptance for exchange of such Old Note.
(b) Upon receipt by the Exchange Agent of (i) one or more Old
Notes and (ii) a Letter of Transmittal covering such Old Notes completed in
accordance with the instructions therein, the Exchange Agent shall request the
Company to accept such Old Notes for exchange and to issue the Exchange Notes
to which such Holder is entitled. Such request shall be substantially in the
form of Exhibit A.
(c) The Company, upon receipt of the request described in the
immediately preceding clause (b) from the Exchange Agent, shall (i) provide
written notice to the Exchange Agent of the Company's acceptance of such Old
Notes for exchange and (ii) issue the Exchange Notes to which such Holder is
entitled and deliver the same to the Trustee (as such term is defined in the
Prospectus) for authentication. Texas Commerce Bank National Association,
acting in its capacity as Trustee under the Indenture, shall promptly
authenticate such Exchange Notes and deliver such authenticated Notes to the
Exchange Agent. The Exchange Agent shall deliver such Exchange Notes to the
party indicated in the Letter of Transmittal at the Company's cost and risk.
(d) All Exchange Notes distributed pursuant hereto shall be
either personally delivered or forwarded by first-class mail, postage prepaid,
unless otherwise directed, and the Company shall bear all cost and risk of such
delivery.
(e) The Exchange Agent may (but shall have no obligation to)
take any and all other actions it deems necessary or appropriate as the
Exchange Agent in connection with the Exchange Offer and under the customs and
practices normally applied to such transactions and arrangements; provided
however, that it is understood and agreed that the Exchange Agent shall have no
duty or obligation hereunder, under the Exchange Offer or under the Indenture
in its capacity as Exchange Agent except for those specifically set forth
herein.
(f) Notwithstanding anything to the contrary aforesaid, with
respect to Old Notes and Exchange Notes in global form registered in the name
of a nominee of The Depository Trust Company, the Company and the Exchange
Agent shall be deemed to have satisfied the foregoing exchange procedures by
complying with the terms and provisions of the Automated Tender Offer Program,
together with any related procedures, of The Depository Trust Company.
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6. Cancellation of Old Notes. The Exchange Agent is directed to
cancel and shall maintain in its custody all Old Notes, together with all
Letters of Transmittal and related documents that (in each case) have been
accepted by the Company for exchange.
Upon the termination of this Exchange Agreement, the Exchange Agent
shall forward to the Company all documents received by the Exchange Agent in
connection with accepted tenders of the Old Notes (including the presented Old
Notes and all Letters of Transmittal, telegrams or facsimile transmissions)
with respect to which an Exchange has been effectuated and shall return to the
relevant Holder any Old Notes that were not properly tendered or were otherwise
not accepted for tender by the Company. Such deliveries shall be effectuated
by courier or other means acceptable to the Company and shall be at the sole
cost and risk of the Company.
7. Future Instructions. Exchange Agent may rely and act on any
instructions from any Authorized Representative with respect to all matters
pertaining to this Exchange Agreement and the transactions contemplated hereby.
"Authorized Representative" is hereby defined as the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer or the Treasurer of
the Company or legal counsel acting on behalf of any of the foregoing.
Any instructions given to the Exchange Agent orally by any Authorized
Representative shall be confirmed in writing (including by facsimile
transmission) by such Authorized Representative as soon as practicable. The
foregoing notwithstanding, the Exchange Agent shall not be liable or
responsible and shall be fully authorized and protected from acting, or failing
to act, in accordance with any oral instructions that do not conform with the
written confirmation received in accordance with this section.
8. Payment for Services Rendered and Expenses. For services
rendered as the Exchange Agent hereunder, the Exchange Agent shall be entitled
to compensation as set forth in Exhibit B to this Exchange Agreement. The
Exchange Agent will present the Company with an invoice for payment promptly
after termination of this Exchange Agreement. Payment shall be made by the
Company promptly after receipt of the invoice.
9. Exculpation. The Exchange Agent shall:
(a) have no obligation to expend its own funds with respect to
the Exchange Offer or any of its duties hereunder or to otherwise make
payment with respect to any tendered Old Note or any Exchange Note
distributed hereunder;
(b) have no duties or obligations other than those specifically
set forth herein, or as may subsequently be agreed to in writing by the
Exchange Agent and the Company;
(c) not be required to make and shall make no representations
as to and shall have no responsibilities regarding the determination of
the validity, sufficiency, value or genuineness of any Old Note or the
aggregate principal amount represented thereby
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presented in accordance with the terms of any Letter of Transmittal
(other than verification of the principal amounts reflected on the Old
Notes tendered to the Exchange Agent in connection with the Exchange
Offer) and will not be required to make and shall not make any
representations as to the validity, value or genuineness of the
transactions contemplated by the Exchange Offer or in the Exchange
Documents or as to the accuracy or otherwise as to any of the terms of
the Exchange Documents;
(d) not be obligated to take any legal action hereunder that
might in the Exchange Agent's reasonable judgment involve any expenses
or liability, unless the Exchange Agent has been furnished with
reasonable indemnity therefor from the Company and the Guarantors;
(e) conclusively rely on, and shall be fully protected by the
Company in acting upon, any instrument, opinion, notice, certificate,
letter, facsimile transmission, telegram or other document delivered to
the Exchange Agent and in good faith believed by it to be genuine and
to have been signed by the proper party or parties;
(f) conclusively rely on and shall be fully protected by the
Company in acting upon the written or oral instructions of any
Authorized Representative with respect to any matter relating to the
Exchange Agent's actions specifically covered by this Exchange
Agreement; and
(g) be permitted to consult with counsel satisfactory to the
Exchange Agent and the advice or opinion of such counsel shall be frill
and complete authorization and protection in respect of any action
taken, suffered or omitted by the Exchange Agent hereunder and under
any of the Exchange Documents in good faith and in accordance with such
advice or opinion of such counsel.
10. Liability of Exchange Agent: Indemnification. The Exchange Agent
and its officers, directors, employees, agents, contractors, subsidiaries and
affiliates shall not be liable for any action taken or suffered by the Exchange
Agent or such agent of the Exchange Agent in good faith in accordance with the
Exchange Offer, this Exchange Agreement, the Exchange Documents or the
instructions of any Authorized Representative, the Company or the Company's
counsel, other than any liability arising out of the gross negligence, willful
misconduct or bad faith of the Exchange Agent. THE COMPANY HEREBY IRREVOCABLY
AND UNCONDITIONALLY, JOINTLY AND SEVERALLY, COVENANTS AND AGREES TO INDEMNITY
AND HOLD THE EXCHANGE AGENT AND ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
CONTRACTORS, SUBSIDIARIES AND AFFILIATES HARMLESS FROM AND AGAINST ANY FEES,
COSTS, EXPENSES (INCLUDING REASONABLE EXPENSES OF LEGAL COUNSEL), LOSSES,
LIABILITIES, CLAIMS OR DAMAGES (COLLECTIVELY THE "INDEMNIFIED LIABILITIES"),
WHICH WITHOUT GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH ON ITS PART,
MAY BE PAID, INCURRED OR SUFFERED BY IT, OR TO WHICH IT MAY BECOME SUBJECT BY
REASON OF OR AS A RESULT OF THE PREPARATION OF THIS EXCHANGE AGREEMENT, THE
REVIEW AND ADMINISTRATION OF ANY OTHER EXCHANGE DOCUMENTS OR THE ADMINISTRATION
OR PERFORMANCE OF THE EXCHANGE AGENT'S DUTIES HEREUNDER OR UNDER ANY EXCHANGE
DOCUMENT, OR BY REASON OF OR AS A RESULT OF THE EXCHANGE AGENT'S COMPLIANCE
WITH THE INSTRUCTIONS SET FORTH HEREIN OR WITH ANY WRITTEN OR ORAL INSTRUCTION
DELIVERED TO IT PURSUANT HERETO, OR AS A RESULT OF DEFENDING ITSELF AGAINST ANY
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CLAIM OR LIABILITY RESULTING FROM ITS ACTIONS AS EXCHANGE AGENT HEREUNDER OR
UNDER ANY OF THE EXCHANGE DOCUMENTS, INCLUDING ANY CLAIM AGAINST THE EXCHANGE
AGENT BY ANY HOLDER OR ANY BENEFICIAL OWNER OF A NOTE OR ANY OTHER PERSON OR
ENTITY; THE FOREGOING INDEMNITY IS SPECIFICALLY INTENDED TO INCLUDE ANY
NEGLIGENT ACTION ON THE EXCHANGE AGENT'S PART TAKEN WITHOUT GROSS NEGLIGENCE,
WILLFUL MISCONDUCT OR BAD FAITH. TO THE EXTENT ANY INDEMNITY CONTAINED HEREIN
IS CONTRARY TO OR UNENFORCEABLE UNDER APPLICABLE LAW, THE COMPANY EACH HEREBY
AGREES TO CONTRIBUTE TO THE EXCHANGE AGENT THE MAXIMUM AMOUNT OF THE
INDEMNIFIED LIABILITIES PERMITTED UNDER APPLICABLE LAW. THE EXCHANGE AGENT
SHALL BE ENTITLED TO PARTICIPATE AT ITS OWN EXPENSE IN THE DEFENSE OF ANY SUCH
ACTION, PROCEEDING, SUIT OR CLAIM. ALL AMOUNTS DUE TO THE EXCHANGE AGENT
HEREUNDER SHALL CONSTITUTE EXPENSES OF ADMINISTRATION UNDER ANY BANKRUPTCY LAW
(AS DEFINED IN THE INDENTURE).
11. Representations. The Company represents and warrants that (i) it
is duly incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization, (ii) the making and
consummation of the Exchange Offer and the execution, delivery and performance
of all transactions contemplated thereby (including without limitation this
Exchange Agreement) have been duly authorized by all necessary corporate action
and will not result in a breach of or constitute a default under the articles
of incorporation or bylaws of the Company or any indenture, agreement or
instrument to which it is a party or is bound (including, without limitation,
the Indenture), (iii) this Exchange Agreement has been duly executed and
delivered by the Company and constitutes a legal, valid, binding and
enforceable obligation, (iv) the Exchange Offer and the Exchange Documents will
comply in all material respects with all applicable requirements of law and (v)
there is no litigation pending or, to the best of its knowledge, threatened as
of the date hereof in connection with the Exchange Offer.
12. Governing Law. This Exchange Agreement shall be construed and
enforced in accordance with the laws of the State of Texas and shall inure to
the benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of the parties hereto.
13. Notices. All reports, notices and other communications required
or permitted to be given hereunder shall be in writing and shall be delivered
by hand, by first-class mail, postage prepaid, or by facsimile as follows:
If to the Company:
Stone Energy Corporation
625 East Kaliste Saloom Road
Lafayette, Louisiana 70508
Telephone: (318) 237-0410
Telecopy: (318) 237-____
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If to the Exchange Agent:
Mailing Address:
Texas Commerce Bank National Association
Attention: Frank Ivins, Registered Bond Events, Personal & Confidential
P.O. Box 2320
Dallas, Texas 75221-2320
Address for hand deliveries and for deliveries by overnight courier:
Texas Commerce Bank National Association
Attention: Frank Ivins, Registered Bond Events, Personal & Confidential
1201 Main Street, 18th Floor
Dallas, Texas 75202
Telephone: (800) 275-2048
Telecopy: (214) 672-5746
14. Termination; Compensation: Resignation. This Exchange Agreement
will terminate on __________ , 1997 unless extended as provided in Section 1
hereof or sooner terminated as provided below. Notwithstanding Section 1
hereof, in the event the Exchange Offer is terminated, this Exchange Agreement
shall also be terminated and shall be of no further force and effect, without
any liability on the part of any of the parties hereto, provided that the
Company shall reimburse the Exchange Agent for all reasonable and necessary
fees, costs and expenses incurred by the Exchange Agent in connection with this
Exchange Agreement and/or the Exchange Documents including, but not limited to,
reimbursement of the fees set forth in Exhibit B hereto and payment pursuant to
the indemnification and contribution on provisions set forth in Section 10
hereof and such reimbursement, indemnification and contribution provisions
shall survive the termination of this Exchange Agreement; provided further,
that the Exchange Agent shall forward any Letters of Transmittal and Old Notes
received by the Exchange Agent after the date of termination and the
effectuation of the Exchange of such Old Notes to the Company as provided in
Section 6 above. This Exchange Agreement (a) may not be terminated by the
Company prior to __________ , 1997 unless all fees and all reasonable and
necessary expenses incurred by the Exchange Agent in accordance with Exhibit B
hereto shall have been paid to the Exchange Agent and the conditions set forth
in the immediately succeeding sentence shall have been satisfied and (b) may be
terminated by the Exchange Agent at any time. If this Exchange Agreement is
terminated prior to effectuation of the Exchange of all Old Notes, then the
Exchange Agent may (but shall not be obligated to) continue to perform its
duties hereunder until a new Exchange Agent shall have been appointed and the
Exchange Agent shall have received an opinion of counsel in form and substance
satisfactory to the Exchange Agent with respect to the legality and validity of
such appointment and as to such other matters as the Exchange Agent shall
require and such other documentation as the Exchange Agent shall reasonably
require, whereupon the Exchange Agent shall deliver to the new Exchange Agent
all Notes, Letters of Transmittal and other documents as the Exchange Agent may
then be holding pursuant to this Exchange Agreement.
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15. Amendment. This Exchange Agreement represents the entire
agreement between the parties with respect to its subject matter and may not be
amended except by an instrument in writing signed by each of the parties;
provided however, that this Exchange Agreement may be terminated or extended by
the written agreement of the Company and the Exchange Agent.
16. Counterparts. This Exchange Agreement may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Exchange Agreement.
STONE ENERGY CORPORATION
By:
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Name:
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Title:
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TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Exchange Agent
By:
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Name:
------------------------
Title:
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EXHIBIT A
Exchange Request
[Date]
Request Number: ____
Re: Stone Energy Corporation ("Company") Exchange of its 8 3/4 Senior
Subordinated Notes due 2007 (the "Old Notes") for 8 3/4% Senior
Subordinated Notes due 2007 that have been registered under the
Securities Act of 1933 (the "Exchange Notes") as contemplated in
the Prospectus dated October __, 1997.
Pursuant to the Exchange Agreement dated as of October __, 1997, we have
received a Letter of Transmittal, together with the Old Notes and other
necessary documents, representing $________ aggregate principal amount of the
Old Notes, and we hereby request the Company to accept such offer and to issue
Exchange Notes evidencing $_______ as follows:
Please notify us of acceptance and issue the Exchange Notes.
All documents related to the tender of such Notes are available for
inspection at 1201 Main Street, 18th Floor, Dallas, Texas 75202.
Upon completion of this exchange, the aggregate principal amount of Old
Notes outstanding will be $___________ .
Very truly yours,
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EXHIBIT B
Stone Energy Corporation Exchange Agreement
EXCHANGE AGENT FEE
$1,500 For duties involved with the Exchange Offer. This assumes that
their will be one Global Note and one bondholder with a minimum
number of calls. Additional time spent on duties not
anticipated above will be billed at $85 per hour.
ADDITIONAL EXPENSES
Out-of-pocket expenses are in addition to fees quoted above. This
includes, but is not limited to, legal fees and expenses, wire charges,
printing costs, postage, travel costs, forms, etc.