exv10w1






Exhibit 10.1




April 29, 2008




Stone Energy Corporation

625 E. Kaliste Saloom Road

Lafayette, Louisiana 70508




Attention: Mr. Kenneth Beer, Senior Vice President and Chief Financial Officer




Commitment Letter — $700,000,000 Senior Secured Credit Facility




Ladies and Gentlemen:




You have advised Bank of America, N.A. (“Bank of America”) and Banc of America Securities LLC
(“BAS”) that Stone Energy Corporation (“Stone”) intends to acquire all of the stock of Bois d’Arc
Energy, Inc., a Nevada corporation (the “Target”), for not more than $1.8 billion in cash and
common equity in Stone and merge Target into Stone Energy Offshore, L.L.C., a Delaware limited
liability company (“Merger Sub”) and a wholly-owned subsidiary of Stone (such transaction, the
"Merger”), pursuant to the Agreement and Plan of Merger, dated as of April 29, 2008 (the “Merger
Agreement”) among Stone, Merger Sub, and Target. After giving effect to the Merger, Merger Sub
will be the surviving entity and Stone will own all of the outstanding equity interests of Merger
Sub. Stone, all of its subsidiaries (including the Merger Sub), the Target, and all subsidiaries
of the Target are hereinafter referred to collectively as the “Relevant Entities.” The
stockholders of the Target prior to the consummation of the Merger are hereinafter referred to
collectively as the “Target Stockholders.”



You have also advised Bank of America and BAS that you intend to finance the Merger, costs and
expenses related to the Transaction (as hereinafter defined) and the ongoing working capital and
other general corporate purposes of Stone, Merger Sub, and their subsidiaries (including to finance
the acquisition of oil and gas reserves, leases, and properties) after consummation of the Merger
from the following sources (and that no financing other than the financing described herein will be
required in connection with the Transaction): (a) approximately $750,000,000 of common equity in
Stone will be issued by Stone to the Target Stockholders (the “Equity Consideration”), (b)
approximately $500,000,000 of existing cash of Stone will be paid by Stone to the Target
Stockholders (the “Stone Cash Consideration”), and (c) a senior secured revolving credit facility
with an initial borrowing base of $700,000,000 (based on the reserve reports of Stone and the
Target dated as of December 31, 2007, and subject to redetermination as set forth below if the
Closing Date (as defined below) has not occurred prior to November 1, 2008) of Stone and Merger Sub
as co-borrowers (the “Facility”) will be used for the balance of the cash portion of the purchase
price for the Merger and for the other purposes described above. “Closing Date” means the date on
which the definitive documentation for the Facility has been executed by the parties thereto and
the conditions to effectiveness of the Facility have been satisfied. The Facility will consist of
a second amendment and restatement of the Amended and Restated Credit Agreement, dated as of
November 1, 2007, among Stone, the financial institutions named therein, Bank of America, as
administrative agent, BNP Paribas, JPMorgan Chase Bank, N.A., U.S. Bank National Association and
Whitney National Bank, as co-syndication agents, Natixis and The Royal Bank of Scotland plc, as
co-documentation agents,



Commitment Letter




 









 





and BAS, as sole lead arranger and bookrunner (the “Existing
Facility”). The Facility will be in substantially the form of the Existing Facility except that
(i) Merger Sub will be a co-borrower under the Facility, (ii) the initial borrowing base shall be
set at $700,000,000 (based on the reserve reports of Stone and the Target dated as of December 31,
2007, and subject to redetermination as set forth below if the Closing Date has not occurred prior
to November 1, 2008), (iii) 100% lender approval will be required to increase the borrowing base,
(iv) the commitment fees and applicable margins will be as set forth on Exhibit A hereto,
(v) the Facility will be guaranteed by all direct and indirect subsidiaries of Stone and Merger
Sub, (vi) the condition precedent requiring the delivery of financial statements of Stone shall be
expanded to require delivery of financial statements of the Target, (vii) it shall be an additional
condition precedent that no Material Adverse Effect (as defined in the Merger Agreement) with
respect to the Target shall have occurred, (viii) the condition precedent with respect to absence
of certain litigation shall be expanded to include litigation preventing or purporting to prevent
the Merger, (ix) all governmental, shareholder and third party consents and approvals necessary to
consummate the Merger shall have been received, (x) all debt of the Target and its subsidiaries
shall have been terminated and repaid in full, except for the Facility and debt would be permitted
under the Existing Facility, and (xi) all liens against the assets and equity interests of the
Target and its subsidiaries shall have been released, except as would be permitted under the
Existing Facility. The Merger, the issuance of the Equity Consideration, the payment of the Stone
Cash Consideration, the entering into and funding of the Facility, and all related transactions are
hereinafter collectively referred to as the “Transaction.”



If the Closing Date has not occurred prior to September 30, 2008, you shall deliver to Bank of
America and BAS by such date updated, internally prepared reserve reports dated as of June 30, 2008
with respect to the oil and gas reserves of Stone and its subsidiaries and the Target and its
subsidiaries, in each case that would be in compliance with Section 5.6(c)(ii) of the Existing
Facility (the “Updated Reserve Reports”). If the Closing Date has not occurred prior to November
1, 2008, the initial borrowing base for the Facility shall be redetermined, effective on such date
and based on the Updated Reserve Reports, in accordance with Section 2.2 of the Existing Facility,
except that such redetermined initial borrowing base must be approved by all proposed Lenders under
the Facility that have delivered written commitments for the Facility.



In connection with the foregoing, Bank of America is pleased to advise you of its commitment to
provide the full principal amount of the Facility and to act as the sole administrative agent (in
such capacity, the “Administrative Agent”) for the Facility, all upon and subject to the terms and
conditions set forth in this letter (this “Commitment Letter”). BAS is pleased to advise you of
its willingness, as the sole lead arranger and sole book manager (in such capacities, the “Lead
Arranger”) for the Facility, to form a syndicate of financial institutions (including Bank of
America) (collectively, the “Lenders”) in consultation with you for the Facility. You hereby agree
that, effective upon your acceptance of this Commitment Letter and continuing through September 30,
2008, you shall not solicit any other bank, investment bank, financial institution, person or
entity to provide, structure, arrange or syndicate any component of the Facility or any other
senior financing similar to or as a replacement of any component of the Facility.



Bank of America will act as sole Administrative Agent for the Facility, and BAS will act as sole
Lead Arranger for the Facility. No additional agents, co-agents or arrangers will be appointed and
no other titles will be awarded without our prior approval.



The commitment of Bank of America hereunder and the undertaking of BAS to provide the services
described herein are subject to the satisfaction of each of the following conditions precedent in a
manner acceptable to Bank of America and BAS: (a) the accuracy and completeness in all material
respects of all representations that you and your affiliates make to Bank of America and BAS in
this Commitment 


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Letter and your compliance in all material respects with the terms of this
Commitment Letter and the Fee Letter
(as hereinafter defined); (b) prior to the earlier to occur of (i) the achievement of a Successful
Syndication (as defined in the Fee Letter) and (ii) 90 days after the Closing Date, there shall be
no competing offering, placement or arrangement of any debt securities or bank financing by or on
behalf of Stone, the Target, or any of their respective subsidiaries; (c) the negotiation,
execution and delivery of definitive documentation for the Facility consistent with this Commitment
Letter; (d) no Material Adverse Effect (as defined in the Merger Agreement) with respect to the
Target shall have occurred or become known to Bank of America or BAS, (e) the terms of the Merger
Agreement shall not have been materially altered, amended, or otherwise changed or supplemented, or
any material condition or requirement therein waived, in each case without the prior written
consent of the Lenders, (f) the Merger shall be consummated substantially simultaneously with the
funding of the Facility and substantially in accordance with the terms of the Merger Agreement and
in compliance with applicable law and regulatory approvals, (g) if the Closing Date has not
occurred by September 30, 2008, you shall have delivered to Bank of America and BAS the Updated
Reserve Reports, and (h) you shall have delivered to Bank of America and BAS title reports (or, if
available, title opinions) regarding that portion of the Borrowing Base Assets (as defined below)
which results in evidence of title satisfactory to Bank of America and BAS and their counsel
covering Borrowing Base Assets representing not less than 50% of the value of the aggregate oil and
gas reserves of the Target and its subsidiaries, and such title reports or opinions shall reflect
that the Target and its subsidiaries have good and marketable title to all such Borrowing Base
Assets, free and clear of all liens, except for Permitted Borrowing Base Liens (as defined in the
Existing Facility). “Borrowing Base Assets” means the properties given value in the most recent
reserve reports delivered to Bank of America and BAS with respect to Stone and the Target and used
to determine such initial borrowing base.



No later than 45 days after the Closing Date, you shall deliver to Bank of America and BAS title
reports (or, if available, title opinions) regarding that portion of the Borrowing Base Assets
which results in evidence of title satisfactory to Bank of America and BAS and their counsel
covering Borrowing Base Assets representing not less than 80% of the value of the aggregate oil and
gas reserves of Stone and its subsidiaries (including those acquired in the Merger), and such title
reports or opinions shall reflect that Stone and its subsidiaries have good and marketable title to
all such Borrowing Base Assets, free and clear of all liens, except for Permitted Borrowing Base
Liens (as defined in the Existing Facility).



BAS intends to commence syndication of the Facility promptly upon your acceptance of this
Commitment Letter and the Fee Letter, and the commitment of Bank of America hereunder shall be
reduced dollar-for-dollar as and when corresponding written commitments are received from the
Lenders. You agree to actively assist, and to use your commercially reasonable efforts to cause
the Target to actively assist, BAS in achieving a syndication of the Facility that is reasonably
satisfactory to BAS and you. Such assistance shall include your (a) providing and causing your
advisors to provide Bank of America and BAS and the other Lenders upon request with all information
reasonably deemed necessary by Bank of America and BAS to complete syndication, including, but not
limited to, information and evaluations prepared by you, the Target, and your and its advisors, or
on your or its behalf, relating to the Transaction (including the Projections (as hereinafter
defined), the “Information”), (b) assisting in the preparation of an Information Memorandum and
other materials to be used in connection with the syndication of the Facility (collectively, the
"Information Materials”), (c) using your commercially reasonable efforts to ensure that the
syndication efforts of BAS benefit materially from the existing banking relationships of Stone and
the Target, and (d) otherwise assisting Bank of America and BAS in their syndication efforts,
including by making your officers and advisors and the officers and advisors of the Target and its
subsidiaries available from time to time to attend and make presentations regarding the business
and prospects of Stone, the Target, and their respective subsidiaries, as appropriate, at one or
more meetings of prospective Lenders.



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It is understood and agreed that BAS will manage and control all aspects of the syndication in
consultation with you, including decisions as to the selection of prospective Lenders and any
titles offered to proposed Lenders, when commitments will be accepted and the final allocations of
the commitments among the Lenders. It is understood that no Lender or Sub-Underwriter (as defined
in the Fee Letter) participating in the Facility will receive compensation from you in order to
obtain its commitment, except on the terms contained herein and in the Fee Letter. It is also
understood and agreed that the amount and distribution of the fees among the Lenders will be at the
sole and absolute discretion of Bank of America and BAS, in consultation with Stone.



You represent, warrant and covenant that (a) all financial projections, estimates, evaluations,
forward-looking statements and forecasts concerning Stone, Merger Sub, or the Target and their
respective subsidiaries that have been or are hereafter made available to Bank of America, BAS or
the Lenders by you or any of your representatives (or on your or their behalf) (the “Projections”)
have been or will be prepared in good faith based upon assumptions you believe to be reasonable at
the time made (it being understood and agreed by Bank of America and BAS that Projections are not
to be viewed as facts and that actual results during the period or periods covered by Projections
may differ from the projected results and such differences may be material) and (b) all written
Information, taken as a whole, other than Projections, which has been or is hereafter made
available to Bank of America, BAS or the Lenders by you or any of your representatives (or on your
or their behalf) in connection with the Facility, as and when furnished, is and will be complete
and correct in all material respects and does not and will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements
contained therein not materially misleading in light of the circumstances under which such
statements are made; provided that your responsibility for such written Information is limited to
your actual knowledge of the Target based on review of materials provided to you by the Target
Stockholders, the Target, and its subsidiaries. You agree to furnish us with further and
supplemental information from time to time until the earlier to occur of (i) the achievement of a
Successful Syndication and (ii) 90 days after the Closing Date, so that the representation,
warranty and covenant in the immediately preceding sentence are correct on such date, as if the
Information were being furnished, and such representation, warranty and covenant were being made,
on such date. In issuing this commitment and in arranging and syndicating the Facility, Bank of
America and BAS are and will be using and relying on the Information without independent
verification thereof.



You acknowledge that BAS and/or Bank of America on your behalf will make available Information
Materials to the proposed syndicate of Lenders by posting the Information Materials on IntraLinks
or another similar electronic system. In connection with the syndication of the Facility, unless
the parties hereto otherwise agree in writing, you shall be under no obligation to provide
Information Materials suitable for distribution to any prospective Lender (each, a “Public Lender”)
that has personnel who do not wish to receive material non-public information (within the meaning
of the United States federal securities laws, “MNPI”) with respect to the Relevant Entities, their
respective affiliates or any other entity, or the respective securities of any of the foregoing.
You agree, however, that the definitive credit documentation will contain provisions concerning
Information Materials to be provided to Public Lenders and the absence of MNPI therefrom. Prior to
distribution of Information Materials to prospective Lenders, you shall provide us with a customary
letter authorizing the dissemination thereof.



By executing this Commitment Letter, you agree to reimburse Bank of America and BAS from time to
time on demand for all reasonable out-of-pocket fees and expenses (including, but not limited to,
the reasonable fees, disbursements and other charges of Bracewell & Giuliani LLP, as counsel to the
Lead Arranger and the Administrative Agent, and of special and local counsel to the Lenders
retained by the Lead Arranger or the Administrative Agent) incurred in connection with the
Facility, the syndication thereof, and the preparation of the definitive documentation therefor.



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You agree to indemnify and hold harmless Bank of America, BAS, each Lender and each of their
affiliates and their respective officers, directors, employees, agents, advisors and other
representatives (each an “Indemnified Party”) from and against (and will reimburse each Indemnified
Party as the same are incurred for) any and all claims, damages, losses, liabilities and expenses
(including, without limitation, the reasonable fees, disbursements and other charges of counsel)
that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in connection therewith) (a)
any matters contemplated by this Commitment Letter or (b) the Facility, or any use made or proposed
to be made with the proceeds thereof (IN ALL CASES, WHETHER OR NOT CAUSED OR ARISING, IN WHOLE OR
IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNIFIED PARTY), except
to the extent such claim, damage, loss, liability or expense is found in a final, nonappealable
judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct. In the case of an investigation, litigation or proceeding to
which the indemnity in this paragraph applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by you, your equityholders or creditors or
an Indemnified Party, whether or not an Indemnified Party is otherwise a party thereto and whether
or not any aspect of the Transaction is consummated. You also agree that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or otherwise) to you or
your subsidiaries or affiliates or to your or their respective equity holders or creditors arising
out of, related to or in connection with any aspect of the Transaction, except to the extent of
direct, as opposed to special, indirect, consequential or punitive, damages determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence or willful misconduct. Notwithstanding any other provision of this
Commitment Letter, no Indemnified Party shall be liable for any damages arising from the use by
others of information or other materials obtained through electronic telecommunications or other
information transmission systems, other than for direct or actual damages resulting from the gross
negligence or willful misconduct of such Indemnified Party as determined by a final and
nonappealable judgment of a court of competent jurisdiction.



This Commitment Letter and the fee letter among you, Bank of America and BAS of even date herewith
(the “Fee Letter”) and the contents hereof and thereof are confidential and, except for disclosure
hereof or thereof on a confidential basis to your accountants, attorneys and other professional
advisors retained by you in connection with the Transaction or as otherwise required by law, may
not be disclosed in whole or in part to any person or entity without our prior written consent;
provided, however, it is understood and agreed that you may disclose this Commitment Letter but not
the Fee Letter (a) on a confidential basis to the board of directors and advisors of the Target
Shareholders and the Target in connection with their consideration of the Transaction, and (b)
after your acceptance of this Commitment Letter and the Fee Letter, in filings with the Securities
and Exchange Commission and other applicable regulatory authorities and stock exchanges. Bank of
America and BAS hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title
III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), each of them is required to
obtain, verify and record information that identifies you, which information includes your name and
address and other information that will allow Bank of America or BAS, as applicable, to identify
you in accordance with the Act.



You acknowledge that Bank of America and BAS or their affiliates may be providing financing or
other services to parties whose interests may conflict with yours. Bank of America and BAS agree
that they will not furnish confidential information obtained from you to any of their other
customers and that they will treat confidential information relating to you, the Target, and your
and their respective affiliates with the same degree of care as they treat their own confidential
information. Bank of America and BAS further advise you that they will not make available to you
confidential information that they have obtained or may obtain from any other customer. In
connection with the services and



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transactions contemplated hereby,
you agree that Bank of America and BAS are permitted to access, use and share
with any of their bank or non-bank affiliates, agents, advisors (legal or otherwise) or
representatives any information concerning you, the Target, or any of your or its respective
affiliates that is or may come into the possession of Bank of America, BAS or any of such
affiliates.



In connection with all aspects the Transaction, you acknowledge and agree, and acknowledge your
affiliates’ understanding, that: (a) (i) the arranging and other services described herein
regarding the Facility are arm’s-length commercial transactions between you and your affiliates, on
the one hand, and Bank of America and BAS, on the other hand, (ii) you have consulted your own
legal, accounting, regulatory and tax advisors to the extent you have deemed appropriate, and (iii)
you are capable of evaluating, and understand and accept, the terms, risks and conditions of the
Transaction; (b) (i) Bank of America and BAS each has been, is, and will be acting solely as a
principal and, except as otherwise expressly agreed in writing by the relevant parties, has not
been, is not, and will not be acting as an advisor, agent or fiduciary for you, any of your
affiliates or any other person or entity and (ii) neither Bank of America nor BAS has any
obligation to you or your affiliates with respect to the Transaction except those obligations
expressly set forth herein; and (c) Bank of America and BAS and their respective affiliates may be
engaged in a broad range of transactions that involve interests that differ from yours and those of
your affiliates, and Bank of America and BAS have no obligation to disclose any of such interests
to you or your affiliates. To the fullest extent permitted by law, you hereby waive and release any
claims that you may have against Bank of America and BAS with respect to any breach or alleged
breach of agency or fiduciary duty in connection with any aspect of the Transaction.



The provisions of the immediately preceding five paragraphs shall remain in full force and effect
regardless of whether any definitive documentation for the Facility shall be executed and
delivered, and notwithstanding the termination of this Commitment Letter or any commitment or
undertaking of Bank of America or BAS hereunder.



This Commitment Letter and the Fee Letter may be executed in counterparts which, taken together,
shall constitute an original. Delivery of an executed counterpart of this Commitment Letter or the
Fee Letter by telecopier or facsimile shall be effective as delivery of a manually executed
counterpart thereof.



This Commitment Letter and the Fee Letter shall be governed by, and construed in accordance with,
the laws of the State of Texas. Each of you, Bank of America and BAS hereby irrevocably waives any
and all right to trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Commitment Letter, the Fee Letter,
the Transaction, or the actions of Bank of America and BAS in the negotiation, performance or
enforcement hereof.



This Commitment Letter and the Fee Letter embody the entire agreement and understanding among Bank
of America, BAS, you, and your affiliates with respect to the Facility and supersedes all prior
agreements and understandings relating to the specific matters hereof. The Facility will be in
substantially the form of the Existing Facility except as set forth in this Commitment Letter and
the Fee Letter. Those matters that are not covered or made clear herein or in the Fee Letter are
subject to mutual agreement of the parties. No party has been authorized by Bank of America or BAS
to make any oral or written statements that are inconsistent with this Commitment Letter.



This Commitment Letter is not assignable by any party hereto without the prior written consent of
each party hereto and is intended to be solely for the benefit of the parties hereto and the
Indemnified Parties.



This Commitment Letter and all commitments and undertakings of Bank of America and BAS hereunder
will expire at 5:00 p.m. (Houston, Texas time) on April 30, 2008 unless you execute this Commitment
Letter and the Fee Letter and return them to us prior to that time (which



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may be by facsimile transmission),
whereupon this Commitment Letter and the Fee Letter (each of which may be signed in
one or more counterparts) shall become binding agreements. Thereafter, all commitments and
undertakings hereunder will expire on the earliest of (a) December 31, 2008, unless the Closing
Date occurs on or prior thereto, (b) the closing of the Merger without the use of the Facility and
(c) the acceptance by the Target, the Target Shareholders, or any of their respective affiliates of
an offer for all or any substantial part of the capital stock or property and assets of the Target
and its subsidiaries other than as part of the Transaction.



THIS WRITTEN AGREEMENT AND THE FEE LETTER REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.



[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]




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We are pleased to have the opportunity to work with you in connection with this important
financing.



	 	 	 	 	 
	 	Very truly yours,





BANK OF AMERICA, N.A.

 	 
	 	By:  	/s/ Ronald E. McKaig	 
	 	 	Name:  	Ronald E. McKaig 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	BANC OF AMERICA SECURITIES LLC

 	 
	 	By:  	/s/ Gerard P. Rooney	 
	 	 	Name:  	Gerard P. Rooney 	 
	 	 	Title:  	Managing Director 	 
	 



ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE WRITTEN:




STONE ENERGY CORPORATION




	 	 	 	 	 
	By:

	 	/s/ Kenneth H. Beer 	 	 
	 

	 	 	 	 
	 

	 	Name: Kenneth H. Beer	 	 
	 

	 	Title: Senior Vice President and Chief Financial Officer	 	 






[Signature Page to Commitment Letter]




 









 





EXHIBIT A

PRICING GRID




	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	Applicable Margin for	 
	 	 	 	 	 	 	 	Applicable Margin	 	 	Alternate Base	 
	 	Borrowing Base Utilization*	 	 	Commitment Fee	 	 	For LIBOR Loans	 	 	Rate Loans	 
	 	Less than 30%
	 	 	0.375%	 	 	1.500%	 	 	0.00%	 
	 	Greater than or equal to
30% but less than 60%
	 	 	0.375%	 	 	1.750%	 	 	0.00%	 
	 	Greater than or equal to
60% but less than 90%
	 	 	0.500%	 	 	2.000%	 	 	0.00%	 
	 	Greater than or equal to 90%
	 	 	0.500%	 	 	2.250%	 	 	0.00%	 
	 






	*	 	"Borrowing Base Utilization” means (A) the sum of (i) loans plus (ii) letter of credit
liabilities divided by (B) the conforming borrowing base then in effect.