SEC Contract Filing

Filing Date: 2016-08-12

Document Content:
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<TYPE>EX-10.5
<SEQUENCE>13
<FILENAME>a16-16325_11ex10d5.htm
<DESCRIPTION>EX-10.5
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 10.5</font></b></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman"><img width="146" height="42" src="g1632511ku01i001.jpg"></font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Bank of America, N.A.<br> c/o Merrill Lynch, Pierce, Fenner&nbsp;&amp; Smith Incorporated</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">One Bryant Park<br> New York, NY 10036<br> Attn: Gary Rosenblum, Managing Director, Associate General Counsel<br> Tel: 646-855-3684<br> Fax: 704-208-2869<br><br></font></p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">August&nbsp;10, 2016</font></p> </td> </tr> </table>
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<p style="font-size:10.0pt;margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To: SM Energy Company <br> 1775 Sherman Street, Suite&nbsp;1200<br> Denver, Colorado 80203<br> Attention:</font><font size="1" style="font-size:8.5pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>General Counsel<br> Telephone No.:<font size="1" style="font-size:8.5pt;">&#160;&#160;&#160; </font>303-863-4325</p>
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Re: Additional Call Option Transaction</font></p>
<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The purpose of this letter agreement (this &#147;<b>Confirmation</b>&#148;) is to confirm the terms and conditions of the call option transaction entered into between Bank of America, N.A. (&#147;<b>Dealer</b>&#148;) and SM Energy Company (&#147;<b>Counterparty</b>&#148;) as of the Trade Date specified below (the &#147;<b>Transaction</b>&#148;).&#160; This letter agreement constitutes a &#147;Confirmation&#148; as referred to in the ISDA Master Agreement specified below.&#160; Each party further agrees that this Confirmation together with the Agreement evidence a complete binding agreement between Counterparty and Dealer as to the subject matter and terms of the Transaction to which this Confirmation relates, and shall supersede all prior or contemporaneous written or oral communications with respect thereto.</font></p>
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<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the &#147;<b>Equity Definitions</b>&#148;), as published by the International Swaps and Derivatives Association,&nbsp;Inc. (&#147;<b>ISDA</b>&#148;) are incorporated into this Confirmation.&#160; In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern.&#160; Certain defined terms used herein are based on terms that are defined in the Prospectus dated August&nbsp;8, 2016, as supplemented by the Prospectus Supplement dated August&nbsp;8, 2016 (as so supplemented, the &#147;<b>Prospectus</b>&#148;) relating to the 1.50% Convertible Senior Notes due 2021 (as originally issued by Counterparty, the &#147;<b>Convertible Notes</b>&#148; and each USD 1,000 principal amount of Convertible Notes, a &#147;<b>Convertible Note</b>&#148;) issued by Counterparty in an aggregate initial principal amount of USD 150,000,000 (as increased by an aggregate principal amount of USD 22,500,000 pursuant to the exercise by the Underwriters (as defined herein) of their option to purchase additional Convertible Notes pursuant to the Underwriting Agreement (as defined herein)) pursuant to an Indenture dated May&nbsp;21, 2015 (the &#147;<b>Base Indenture</b>&#148;), as supplemented by a Supplemental Indenture thereto to be dated August&nbsp;12, 2016 (the &#147;<b>Supplemental Indenture</b>&#148;), between Counterparty and U.S. Bank National Association, as trustee (the Base Indenture as so supplemented, the &#147;<b>Indenture</b>&#148;).&#160; In the event of any inconsistency between the terms defined in the Prospectus, the Indenture and this Confirmation, this Confirmation shall govern.&#160; The parties acknowledge that this Confirmation is entered into on the date hereof with the understanding that (i)&nbsp;definitions set forth in the Indenture which are also defined herein by reference to the Indenture and (ii)&nbsp;sections of the Indenture that are referred to herein will conform to the descriptions the