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EXHIBIT 10.1
EAGLE GEOPHYSICAL, INC.
(a Delaware corporation)
$100,000,000
10 3/4% Senior Notes due 2008
PURCHASE AGREEMENT
July 15, 1998
PRUDENTIAL SECURITIES INCORPORATED
BANC ONE CAPITAL MARKETS, INC.
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Eagle Geophysical, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions set forth herein, to
issue and sell to Prudential Securities Incorporated and Banc One Capital
Markets, Inc. (each an "Initial Purchaser" and together the "Initial
Purchasers") $100,000,000 aggregate principal amount of its 10 3/4% Senior Notes
due 2008 (the "Securities"). The Securities are to be issued pursuant to an
indenture to be dated as of July 20, 1998 (the "Indenture") between the Company
and Chase Bank of Texas, National Association, as trustee (the "Trustee"). The
Securities and the Indenture are more fully described in the Offering Memorandum
(as hereinafter defined). Capitalized terms used herein and not otherwise
defined herein have the respective meanings specified in the Offering
Memorandum.
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "1933 Act"), in reliance on an exemption from the registration requirements
of the 1933 Act. The Company has prepared a preliminary offering memorandum,
dated June 26, 1998 (such preliminary offering memorandum being hereinafter
referred to as the "Preliminary Offering Memorandum"), and has prepared a final
offering memorandum, dated July 15, 1998 (such final offering memorandum, in the
form first furnished to the Initial Purchasers for use in connection with the
offering of the Securities, being hereinafter referred to as the "Offering
Memorandum"), each setting forth information regarding the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Securities by the Initial Purchasers in
accordance with the terms hereof.
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The Company understands that the Initial Purchasers propose to
make an offering of the Securities on the terms set forth in the Offering
Memorandum, as soon as they deem advisable after this Agreement has been
executed and delivered, (i) to persons in the United States whom the Initial
Purchasers reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the 1933 Act, as such rule
may be amended from time to time ("Rule 144A"), in transactions under Rule 144A,
(ii) to a limited number of other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under Regulation D ("Regulation D")
of the 1933 Act ("Accredited Investors")) in private sales exempt from
registration under the 1933 Act and (iii) pursuant to offers and sales that
occur outside the United States within the meaning of Regulation S ("Regulation
S") under the 1933 Act.
The Initial Purchasers and other holders of Securities
(including subsequent transferees) will be entitled to the benefits of a
Registration Rights Agreement, which will be entered into as of the Closing Time
(as hereinafter defined), in substantially the form attached hereto as Exhibit A
with such changes as shall be agreed to by the parties hereto (the "Registration
Rights Agreement"). Pursuant to the Registration Rights Agreement, the Company
will agree that it shall file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, either (i) a
registration statement under the 1933 Act registering the Exchange Securities
(as defined in the Registration Rights Agreement) to be offered in exchange for
the Securities (the "Registration Statement) and to use its best efforts to
cause such Registration Statement to be declared effective or (ii) under certain
circumstances set forth therein, file with the Commission a shelf registration
statement pursuant to Rule 415 under the 1933 Act relating to the resale of the
Securities (the "Shelf Registration Statement"), and use its best efforts to
cause such Shelf Registration Statement to be declared effective.
Section 1. Representations and Warranties of the Company. (a)
The Company represents and warrants to, and agrees with, each of the Initial
Purchasers that:
(i) As of their respective dates and, except with respect to the
Preliminary Offering Memorandum, as of the Closing Time, (x) none of the
Preliminary Offering Memorandum, the Offering Memorandum or any amendment or
supplement thereto includes or will include an untrue statement of a material
fact or omits or will 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, (y) all reasonable inquiries have been made to ascertain
such facts and to verify the accuracy of all such information and statements and
(z) any opinions and intentions expressed in the Preliminary Offering
Memorandum, the Offering Memorandum or any amendment or supplement thereto with
respect to the Company are honestly held and are based on reasonable
assumptions; provided, however, that the Company makes no representation or
warranty as to statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by the Initial Purchasers
expressly for use in the Preliminary Offering Memorandum, the Offering
Memorandum or any amendment or supplement thereto.
(ii) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with corporate power
and authority under such laws to own, lease and operate its properties and
conduct its business as described in the Offering
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Memorandum; and the Company is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it owns
or leases property of a nature, or transacts business of a type, that would make
such qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or on the assets, earnings, results of
operations, business affairs or business prospects of the Company and its
Subsidiaries (as defined below) taken as a whole (a "Material Adverse Effect").
(iii) The Company's only subsidiaries (either direct or indirect) as of
the date hereof are those entities listed as such on Schedule I hereto (the
"Subsidiaries"). Each of the Subsidiaries is duly incorporated and validly
existing in the manner and jurisdiction set forth on Schedule I, in each case,
with all requisite corporate or other power and authority under such laws, and
all necessary authorizations, approvals, orders, licenses, certificates and
permits of and from regulatory or governmental officials, bodies and tribunals,
to own, lease and operate their respective properties and to conduct their
respective businesses as now conducted and as described in the Offering
Memorandum; and are, to the extent applicable, duly qualified to do business as
foreign corporations in good standing in all other jurisdictions where the
ownership or leasing of their respective properties or the conduct of their
respective businesses requires such qualification, except where the failure to
be so qualified could not reasonably be expected to have a Material Adverse
Effect.
(iv) The Company had, at the date indicated in the Offering Memorandum,
a duly authorized, issued and outstanding capitalization as set forth in the
Offering Memorandum under "As of March 31, 1998" under the caption
"Capitalization." All of the outstanding capital stock of the Company has been
duly authorized and validly issued, is fully paid and nonassessable and was not
issued in violation of any preemptive or similar rights (whether provided
contractually or pursuant to its charter, by-laws or other organizational
documents). All of the outstanding capital stock or other equity interest of
each of the Subsidiaries has been duly authorized and validly issued, is fully
paid and nonassessable and was not issued in violation of any preemptive or
similar rights (whether provided contractually or pursuant to any of their
respective charters, by-laws or other organizational documents) and the
outstanding shares of the capital stock or other equity interests of the
Subsidiaries owned by the Company are owned beneficially and of record by the
Company in the percentages of each such Subsidiary's total capital stock or
other equity interests set forth on Schedule I and, in each case, are free and
clear of all liens, encumbrances, equities and claims or restrictions on
transferability or voting of, or the payment to the Company of dividends or
distributions on, such capital stock, except as set forth in the Offering
Memorandum.
(v) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and constitutes the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
(vi) The execution and delivery of the Registration Rights Agreement
have been duly authorized by the Company and the Subsidiary Guarantors thereto
and, on and as of the Closing Time, the Registration Rights Agreement will have
been duly executed and delivered by
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the Company and the Subsidiary Guarantors thereto and when duly executed and
delivered by the Company, the Subsidiary Guarantors thereto and the Initial
Purchasers, will constitute a valid and binding obligation of each of the
Company and the Subsidiary Guarantors thereto, enforceable against the Company
and the Subsidiary Guarantors thereto in accordance with its terms.
(vii) The execution and delivery of the Indenture have been duly
authorized by the Company and the Subsidiary Guarantors thereto and, on and as
of the Closing Time, the Indenture will have been duly executed and delivered by
the Company and the Subsidiary Guarantors thereto and when duly executed and
delivered by the Company, the Subsidiary Guarantors thereto and the Trustee,
will constitute a valid and binding obligation of each of the Company and the
Subsidiary Guarantors thereto, enforceable against the Company and the
Subsidiary Guarantors thereto in accordance with its terms.
(viii) The issuance, execution and delivery of the Securities and the
Exchange Securities have been duly authorized by the Company. When executed,
authenticated, issued and delivered in the manner provided for in the Indenture
and sold and paid for as provided in this Agreement, the Securities will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms. The Exchange Securities, when executed, authenticated, issued and
delivered in exchange for the Securities, will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with the terms thereof. The
Securities conform to the description thereof in the Offering Memorandum.
(ix) The financial statements included in the Offering Memorandum,
together with the related schedules and notes, present fairly (1) the financial
position of the Company and its Subsidiaries on a consolidated basis as of the
dates indicated and (2) the results of operations and cash flows of the Company
and its Subsidiaries on a consolidated basis for the periods specified, subject,
in the case of unaudited financial statements of the Company, to normal year-end
adjustments which shall not be materially adverse to the condition (financial or
otherwise), earnings, business affairs or business prospects of the Company and
its Subsidiaries, considered as one enterprise. Such financial statements have
been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved. The financial
statement schedules, if any, included in the Offering Memorandum present fairly
the information required to be stated therein. The selected financial data
included in the Offering Memorandum present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited
consolidated financial statements included in the Offering Memorandum.
(x) Xxxxxx Xxxxxxxx LLP, which is reporting upon the audited financial
statements and related schedules and notes included in the Offering Memorandum,
is an independent public accountant with respect to the Company and its
Subsidiaries within the meaning of the 1933 Act, the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder.
(xi) The documents incorporated by reference in the Offering
Memorandum, when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the 1933
Act or the Exchange Act, as applicable, and the
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rules and regulations of the Commission thereunder, and none of such documents
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; and any further documents so filed and incorporated by reference
in the Offering Memorandum, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material respects
to the requirements of the 1933 Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will 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.
(xii) Except as disclosed in the Offering Memorandum, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the knowledge
of the Company, threatened against or affecting the Company or any Subsidiary or
any of their respective officers or directors, in their capacity as such, that
could reasonably be expected to result in a Material Adverse Effect, or that
could adversely affect the consummation of the transactions contemplated in this
Agreement or the Offering Memorandum; the aggregate of all pending legal or
governmental proceedings that are not described in the Offering Memorandum to
which the Company, any Subsidiary or any of their respective officers or
directors, in their capacity as such, are a party or which affect any of the
Company's or its Subsidiaries' respective properties, including ordinary routine
litigation incidental to the business of the Company or any Subsidiary, are
reasonably expected not to have a Material Adverse Effect.
(xiii) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign (other
than under the 1933 Act and the rules and regulations thereunder with respect to
the Registration Rights Agreement and the transactions contemplated thereunder
and the securities or "blue sky" laws of the various states) is required for the
valid authorization, issuance, sale and delivery of the Securities, for the
execution, delivery or performance by the Company of this Agreement, the
Registration Rights Agreement or the Indenture or for the consummation by the
Company of the transactions contemplated in this Agreement and the Offering
Memorandum, except such of the foregoing as will be obtained prior to the
Closing Time.
(xiv) Neither the Company nor any Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which it is a party or by which it may be bound
or to which any of its properties may be subject, except for such defaults as
have been waived in writing by the other party thereto or that would not have a
Material Adverse Effect. The execution and delivery by the Company of this
Agreement, the Registration Rights Agreement and the Indenture, the issuance,
sale and delivery of the Securities by the Company, the consummation by the
Company of the transactions contemplated in this Agreement and the Offering
Memorandum and the compliance by the Company with the terms of this Agreement,
the Registration Rights Agreement and the Indenture have been duly authorized by
all necessary corporate action on the part of the Company and do not and will
not result in any violation of the charter or by-laws of the Company or any
Subsidiary, and do not and will not conflict with, or result in a breach of any
of the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
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any property or assets of the Company or any Subsidiary under, (A) any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or by which they
may be bound or to which any of their respective properties may be subject or
(B) any existing applicable law, rule, regulation, judgment, order or decree of
any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any Subsidiary or any of their
respective properties.
(xv) The Company and each of its Subsidiaries owns, possesses or has
obtained all material governmental licenses, permits, certificates, franchises,
consents, orders, approvals and other authorizations necessary to own or lease,
as the case may be, and to operate its properties and to carry on its business
as presently conducted, and neither the Company nor any Subsidiary has any
reason to believe that any governmental agency or body is considering limiting,
suspending or revoking any such license, permit, certificate, franchise,
consent, order, approval or authorization.
(xvi) The Company and each of its Subsidiaries has good and marketable
title to all properties and assets described in the Offering Memorandum as owned
by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as (A) are described in the Offering Memorandum or (B) are neither
material in amount nor materially significant in relation to the business of the
Company and its Subsidiaries, considered as one enterprise; all of the leases
and subleases material to the business of the Company and its Subsidiaries,
considered as one enterprise, and under which the Company or any Subsidiary
holds properties or assets described in the Offering Memorandum, are in full
force and effect, and neither the Company nor any Subsidiary has received any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of the
Company or its Subsidiaries (as the case may be) to the continued possession of
the leased or subleased premises or assets under any such lease or sublease.
(xvii) The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as the Company reasonably
believes is adequate for the conduct of their respective businesses and the
value of their respective properties or assets and is customary for companies
engaged in similar businesses in similar industries.
(xviii) The Company and each of its Subsidiaries owns or possesses
adequate patents, patent licenses, trademarks, service marks and trade names
necessary to carry on their respective businesses as presently conducted, and
neither the Company nor any Subsidiary has received any notice of infringement
of or conflict with asserted rights of others with respect to any patents,
patent licenses, trademarks, service marks or trade names that in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could materially
adversely affect the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its subsidiaries, considered as
one enterprise.
(xix) No material event of default exists under any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument to which the Company or any Subsidiary is a party or to which the
Company or any Subsidiary is subject except as may have been waived in writing
by the other party thereto.
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(xx) There are no contracts or documents of a character that would be
required to be described in the Offering Memorandum, if it were a prospectus
filed as part of a registration statement on Form S-1 under the 1933 Act, that
are not described as would be so required. All such contracts to which the
Company or any Subsidiary is party have been duly authorized, executed and
delivered by the Company or such Subsidiary, constitute valid and binding
agreements of the Company or such Subsidiary and are enforceable against the
Company or such Subsidiary in accordance with the terms thereof.
(xxi) To the best knowledge of the Company, no labor problem exists
with its employees or with the employees of any Subsidiary or is imminent that
could adversely affect the Company and its Subsidiaries, considered as one
enterprise, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any Subsidiary's principal
suppliers, contractors or customers that could be expected to have a Material
Adverse Effect.
(xxii) All United States federal income tax returns of the Company and
the Subsidiaries required by law to be filed have been filed and all United
States federal income taxes which are due and payable have been paid, except
assessments against which appeals have been or will be promptly taken and as to
which adequate reserves have been provided. The Company and its Subsidiaries
each has filed all other tax returns that are required to have been filed by it
pursuant to applicable foreign, state, local or other law except insofar as the
failure to file such returns would not have a Material Adverse Effect, and has
paid all taxes due pursuant to such returns or pursuant to any assessment
received by the Company or its Subsidiaries, except for such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Company in
respect of any income and corporation tax liability for any years not finally
determined are adequate to meet any assessments or re-assessments for additional
income tax for any years not finally determined, except to the extent of any
inadequacy that would not have a Material Adverse Effect.
(xxiii) The Company and its Subsidiaries each maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(A) transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxiv) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (A) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (B) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the
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"Code"); and each "pension plan" for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(xxv) When the Securities are issued and delivered pursuant to this
Agreement, such securities will not be of the same class (within the meaning of
Rule 144A) as securities of the Company which are listed on a national
securities exchange registered under Section 6 of the Exchange Act or quoted on
a U.S. automated interdealer quotation system.
(xxvi) The Company has been advised that the Securities have been
designated PORTAL securities in accordance with the rules and regulations of the
National Association of Securities Dealers, Inc. ("NASD").
(xxvii) None of the Company or any affiliate (as defined in Rule 501(b)
under the 0000 Xxx) of the Company has directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the 1933 Act) by or for the Company that are of the
same or similar class as the Securities (other than with respect to the Exchange
Securities) in a manner that would require the registration of the Securities
under the 1933 Act.
(xxviii) None of the Company or any affiliate of the Company or any
person acting on their behalf has (A) engaged, in connection with the offering
of the Securities, in any form of general solicitation or general advertising
(as those terms are used within the meaning of Regulation D) or (B) solicited
offers for, or offered or sold, such Securities by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the 0000 Xxx) or in any manner involving a public offering within the
meaning of Section 4(2) of the 1933 Act.
(xxix) With respect to those Securities sold in reliance on Regulation
S, (A) none of the Company, its affiliates (as defined in rule 501(b) under the
0000 Xxx) or any person acting on its or their behalf (other than the Initial
Purchasers, as to whom the Company makes no representation) has engaged or will
engage in any directed selling efforts within the meaning of Regulation S and
(B) each of the Company and its affiliates and any person acting on its or their
behalf (other than the Initial Purchasers, as to whom the Company makes no
representation) has complied and will comply with the offering restrictions
requirement of Regulation S.
(xxx) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sold (except pursuant to this Agreement), bid for,
purchased, or paid anyone any compensation for soliciting purchases of, the
Securities or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(xxxi) Assuming (A) the accuracy of the representations and warranties
of the Initial Purchasers in Section 2 hereof and (B) the due performance by the
Initial Purchasers of the
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covenants and agreements set forth in Section 2 hereof, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Initial
Purchasers under, or in connection with the initial resale of such Securities by
the Initial Purchasers in accordance with, this Agreement to register the
Securities under the 1933 Act or to qualify the Indenture in respect of the
Securities under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(xxxii) No relationship, direct or indirect, exists between or among
the Company or any of its Subsidiaries, on the one hand, and the directors,
officers, securityholders, customers or suppliers of the Company or any
Subsidiary, on the other hand, that is of a character that would be required to
be described in the Offering Memorandum if it were a prospectus filed as part of
a registration statement on Form S-1 under the 1933 Act, that is not described
as would be so required.
(xxxiii) The Company is not an "investment company" or a company
controlled by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxxiv) Neither the Company nor any of its Subsidiaries, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its Subsidiaries, has used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
(xxxv) All offers and sales by the Company of the Company's securities
that have taken place within the past three years were at all relevant times
exempt from the registration requirements of the 1933 Act or duly registered
under the 1933 Act, and were duly registered or the subject of an available
exemption from the requirements of applicable state securities laws.
(xxxvi) Since the respective dates as of which information is given in
the Offering Memorandum, except as otherwise stated therein or contemplated
thereby, there has not been (A) any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects of
the Company and its Subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, (B) any transaction entered into by
the Company or any Subsidiary, other than in the ordinary course of business,
that is material to the Company and its Subsidiaries, considered as one
enterprise, or (C) any dividend or distribution of any kind declared, paid or
made by the Company on its capital stock.
(xxxvii) Except as disclosed in the Offering Memorandum and except as
would not individually or in the aggregate have a Material Adverse Effect, (A)
the Company and its Subsidiaries are each in compliance with all applicable
Environmental Laws, (B) the Company and its Subsidiaries have all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or,
to the knowledge of the Company, threatened Environmental Claims against the
Company or any of its Subsidiaries, and (D) there are no circumstances with
respect to any
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property or operations of the Company or any Subsidiary that could reasonably be
anticipated to form the basis of an Environmental Claim against the Company or
any Subsidiary.
For purposes of this Agreement, the following terms shall have the
following meanings: "Environmental Law" means any United States (or other
applicable jurisdiction's) federal, state, local, maritime or municipal statute,
law, rule, regulation, ordinance, code, policy or rule of common law and any
judicial or administrative interpretation thereof including any judicial or
administrative order, consent decree or judgment, relating to the environment,
water, land, health, safety or any chemical, material or substance, exposure to
which is prohibited, limited or regulated by any governmental authority.
"Environmental Claims" means any and all administrative, regulatory, maritime or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way to
any Environmental Law.
(b) Any certificate signed by any officer of the Company or
any Subsidiary and delivered to the Initial Purchasers or to counsel for the
Initial Purchasers shall be deemed a representation and warranty by the Company
to the Initial Purchasers as to the matters covered thereby.
Section 2. Purchase, Sale and Resale of the Securities;
Closing; Representations, Warranties and Agreements of the Initial Purchasers.
(a) On the basis of the representations and warranties herein contained, and
subject to the terms and conditions herein set forth, the Company agrees to sell
to each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, at a purchase price of 97% of the principal amount thereof, the
principal amount of the Securities set forth opposite its name on Schedule II
hereto.
(b) Payment of the purchase price for, and delivery of, the
Securities shall be made at the offices of Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.,
000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 or at such other place as shall
be agreed upon by the Company and the Initial Purchasers, at 10:00 A.M., local
time, on July 20, 1998, or at such other time not more than two business days
thereafter as the Initial Purchasers and the Company shall agree (such date and
time of payment and delivery being herein called the "Closing Time"). It is
contemplated that the Securities will be issued to Cede & Co., as nominee of the
Depository Trust Company ("DTC"). The Securities shall be in such denominations
and registered in such names as you may request in writing at least two business
days before the Closing Time. The Securities, which may be in temporary form,
will be made available in New York City for examination and packaging not later
than 10:00 A.M., local time, on the last business day prior to the Closing Time.
(c) At the Closing Time, payment shall be made to the Company
in the aggregate amount of $97,000,000 in immediately available funds payable to
the order of the Company against delivery of the Securities to you and the
Company shall promptly reimburse you for your costs in obtaining immediately
available funds.
(d) The Initial Purchasers have advised the Company that they
propose to offer the Securities for sale, upon the terms and conditions set
forth in this Agreement and in the
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Offering Memorandum. Each Initial Purchaser hereby represents and warrants to
the Company that it is a Qualified Institutional Buyer as defined in Rule 144A
and an "Accredited Investor" as defined in Rule 501 of Regulation D. Each
Initial Purchaser agrees with the Company that it (i) will not solicit offers
for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising or in any manner involving a public offering
within the meaning of Section 4(2) of the 1933 Act, (ii) will solicit offers for
the Securities only from, and will offer, sell or deliver the Securities, as
part of its initial offering, only to (A) persons whom it reasonably believes to
be Qualified Institutional Buyers or, if any such person is buying for one or
more institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to it that each such account is a
Qualified Institutional Buyer to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A, and, in each case, in a
transaction under Rule 144A, (B) other institutional investors that it
reasonably believes to be Accredited Investors or, if any such person is buying
for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to the relevant
Initial Purchaser that each such account is an Accredited Investor; provided
that, with respect to clause (B), each such transfer of Securities is effected
by the delivery to such purchaser of Securities in definitive form and
registered in its name (or its nominee's name) on the books maintained by the
Trustee or (C) non-U.S. persons outside the United States, as defined in
Regulation S under the 1933 Act, to whom the offeror or seller reasonably
believes offers and sales of the Securities may be made in reliance upon
Regulation S under the 1933 Act and (iii) if offers and sales of Securities will
be made by the Initial Purchasers to non-U.S. persons outside the United States,
as defined in Regulation S, such offers and sales will be made in compliance
with Regulation S.
Section 3. Certain Covenants of the Company. The Company
covenants and agrees with each of the Initial Purchasers as follows:
(a) The Company will not at any time make any amendment or
supplement to the Offering Memorandum of which the Initial Purchasers shall not
have previously been advised and furnished a copy or to which the Initial
Purchasers or their counsel shall reasonably object.
(b) The Company will promptly deliver to the Initial
Purchasers, without charge, during the period from the date hereof to the date
of the completion of the distribution of the Securities by the Initial
Purchasers, such number of copies of the Offering Memorandum, as it may then be
amended or supplemented, or the Preliminary Offering Memorandum, as it may then
be amended or supplemented, as the Initial Purchasers and their counsel may
reasonably request.
(c) If, at any time prior to completion of the distribution of
the Securities by the Initial Purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of their counsel or
counsel for the Company, to amend or supplement the Offering Memorandum in order
that the Offering Memorandum 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 existing at the time it is delivered
to a purchaser, not misleading or if, in the opinion of counsel to the Initial
Purchasers or counsel for the Company, it is necessary to amend or supplement
the Offering Memorandum to comply with applicable law, the
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Company, at its own expense, will promptly prepare such amendment or supplement
as may be necessary so that the statements in the Offering Memorandum as so
amended or supplemented will not, in the light of the circumstances existing at
the time it is delivered to a purchaser, be misleading or so that such Offering
Memorandum as so amended or supplemented will comply with applicable law, as the
case may be, and furnish the Initial Purchasers such number of copies as they
may reasonably request.
(d) The Company will endeavor, in cooperation with the Initial
Purchasers, to qualify the Securities for offering and sale under the applicable
securities laws of such states and other jurisdictions as the Initial Purchasers
may designate and to maintain such qualifications in effect for a period of not
less than a year from the date of the Offering Memorandum; provided, however,
that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign corporation or as a dealer in securities
in any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is not
otherwise so subject. The Company will file such statements and reports as may
be required by the laws of each jurisdiction in which the Securities have been
qualified as above provided. The Company will also supply the Initial Purchasers
with such information as is necessary for the determination of the legality of
the Securities for investment under the laws of such jurisdictions as the
Initial Purchasers may request.
(e) Except following the effectiveness of the Registration
Statement or the Shelf Registration Statement, neither the Company nor any of
its affiliates (as such term is defined in Rule 501(b) of Regulation D) will
solicit any offer to buy or offer to sell the Securities by means of any form of
general solicitation or general advertising (within the meaning of Rule 502(C)
of Regulation D) or in any manner involving a public offering within the meaning
of Section 4(2) of the 1933 Act.
(f) Neither the Company nor any of its affiliates (as such
term is defined in Rule 501(b) of the 0000 Xxx) will offer, sell or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
the 0000 Xxx) the offering of which security could be integrated with the sale
of the Securities in a manner that would require the registration of any of the
Securities under the 1933 Act
(g) The Company will not be or become an open-end investment
company, unit investment trust or face-amount certificate company that is or is
required to be registered under the 1940 Act, and will not be or become a
closed-end investment company required to be registered thereunder.
(h) During the period from the Closing Time to the earlier of
(i) two years after the Closing Time or (ii) the date of effectiveness of the
Registration Statement or the Shelf Registration Statement, the Company will
not, and will not permit any of its affiliates (as such term is defined in Rule
144 under the 0000 Xxx) to, resell any of the Securities that have been
reacquired thereby, except for Securities purchased by the Company or any of its
affiliates and resold in a transaction registered under the 1933 Act.
(i) The Company will, so long as the Securities are
outstanding and are "restricted securities" within the meaning of Rule 144(a)(3)
under the 1933 Act, either (i) file
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reports and other information with the Commission under Section 13 or Section
15(d) of the Exchange Act, or (ii) in the event the Company is not subject to
Section 13 or Section 15(d) of the Exchange Act, furnish to holders of the
Securities and prospective purchasers of the Securities designated by such
holders, upon request of such holders or such prospective purchasers, the
information required to be delivered pursuant to Rule 144A(d)(4) under the 1933
Act to permit compliance with Rule 144A in connection with resale of the
Securities. For a period of five years after the Closing Time, the Company will
make available to the Initial Purchasers upon request copies of all such reports
and information, together with such other documents, reports and information as
shall be furnished by the Company to the holders of the Securities issued by it.
(j) If requested by the Initial Purchasers, the Company will
use its best efforts in cooperation with the Initial Purchasers to permit the
Securities sold in transactions described in Section 2(d)(ii)(A) hereof to be
eligible for clearance and settlement through The Depository Trust Company.
(k) Each Security will bear the following legend until such
legend shall no longer be necessary or advisable because such Security is no
longer subject to the restrictions on transfer described therein:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933,AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED,
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT,
FOR INVESTMENT PURPOSES AND NOT WITH A
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VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (E) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT; PROVIDED THAT THE COMPANY SHALL HAVE
THE RIGHT PRIOR TO ANY SUCH OFFER, SALE, PLEDGE OR TRANSFER
(i) PURSUANT TO CLAUSE (E) OR (F) ABOVE TO REQUIRE THE
DELIVERY OF AN OPINION (IN FORM AND SUBSTANCE SATISFACTORY TO
THE COMPANY) OF COUNSEL SATISFACTORY TO THE COMPANY, AND
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY, AND (ii) IN THE CASE OF CLAUSE (D) ABOVE, THE
TRANSFEROR SHALL DELIVER A LETTER FROM THE TRANSFEREE,
SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
MEMORANDUM TO THE COMPANY AND THE TRUSTEE, WHICH SHALL
PROVIDE, AMONG OTHER THINGS, THAT SUCH TRANSFEREE IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" AND THAT IT IS ACQUIRING
SUCH SECURITIES FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION
UNDER THE SECURITIES ACT AND IN EACH OF THE FOREGOING CASES,
TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE COMPANY.
(l) The Company will apply the net proceeds from the sale of
the Securities as set forth in the Offering Memorandum under the heading "Use of
Proceeds".
(m) After the date hereof and prior to the Closing Time, the
Company will not issue any press release or other communications directly or
indirectly or hold any press conference with respect to the Company, the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company, without the prior written consent of Prudential
Securities Incorporated, unless in the judgment of the Company and its counsel,
and after notification to the Initial Purchasers, such press release or
communication is required by law.
(n) For a period of 180 days from the date of the Offering
Memorandum, the Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, directly or indirectly,
offer, guarantee, sell, grant any option to purchase or otherwise dispose of any
debt securities of the Company, other than the Securities, the Exchange
Securities referred to in the Registration Rights Agreement, bank indebtedness
and debt securities convertible into equity securities.
(o) The Company will take all reasonable action necessary to
enable Standard & Poor's, a division of The McGraw Hill Companies, Inc., and
Xxxxx'x Investors Service, Inc.,
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or such other rating agencies approved by Prudential Securities Incorporated, to
provide their respective credit ratings of the Securities.
(p) The Company will comply with all of the terms and
conditions of the Registration Rights Agreement.
(q) The Company will, prior to any registration of the
Securities or the Exchange Securities pursuant to the Registration Rights
Agreement, or at such earlier time as may be so required, qualify the Indenture
under the Trust Indenture Act and enter into any necessary supplemental
indentures in connection therewith.
(r) The Company will cooperate with the Initial Purchasers and
use its best efforts to permit the Securities to be eligible for clearance and
settlement through DTC.
Section 4. Payment of Expenses. (a) The Company will pay all
costs and expenses incident to the performance of its obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 9 hereof, including, but not
limited to, all costs and expenses incident to (a) the preparation and printing
or other production of documents with respect to the transactions, including any
costs of printing the Preliminary Offering Memorandum, the Offering Memorandum
and any amendments or supplements thereto, the Indenture, this Agreement, the
Registration Rights Agreement and any blue sky memoranda, (b) all arrangements
relating to the delivery to the Initial Purchasers of copies of the foregoing
documents, (c) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (d) preparation, issuance
and delivery to the Initial Purchasers of any certificates evidencing the
Securities, including transfer agent's and registrar's fees, (e) the
qualification of the Securities under state securities and blue sky laws in
accordance with Section 3(d), and any filing for review of the offering or the
Exchange Offer with NASD, in each case including filing fees and reasonable fees
and disbursements of counsel for the Initial Purchasers relating thereto and in
connection with the preparation of any "blue sky" or legal investment memoranda,
(f) the fees and disbursements of the Trustee, including the fees and
disbursements of counsel for the Trustee, in connection with the Indenture and
the Securities, (g) any meetings with prospective investors in the Securities
(other than as shall have been specifically approved by the Initial Purchasers
to be paid for by the Initial Purchasers), (h) any fees charged by investment
rating agencies for the rating of Securities and (i) the fees associated with
any listing of the Securities on any securities exchange, including the cost of
obtaining approval for the trading of the Securities through PORTAL.
(b) In addition to its obligations under Section 6(a) hereof,
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any loss, claim, damage or liability described in Section 6(a) hereof, it will
reimburse the Initial Purchasers, and each of them, on a monthly basis against
submission of invoices and such additional information as the Company reasonably
may request for all reasonable legal or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the obligations of the Company to
reimburse the Initial Purchasers for such expenses and the
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possibility that such payments might later be held to have been improper by a
court of jurisdiction. To the extent that any portion, or all, of any such
interim reimbursement payments are so held to have been improper, the Initial
Purchasers receiving the same shall promptly return such amounts to the party or
parties who have paid such amounts together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by
Citibank, N.A. (the "Prime Rate"). Any such interim reimbursement payments that
are not made to the Initial Purchasers within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request until the date paid.
(c) In addition to their obligations under Section 6(b)
hereof, the Initial Purchasers agree that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any loss, claim, damage or liability described in
Section 6(b)(i) or 6(b)(ii) hereof, (in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by the Initial Purchasers specifically for
use therein), they will reimburse the Company on a monthly basis, against
submission of invoices and such additional information as the Initial Purchasers
reasonably may request, for all reasonable legal or other expenses incurred by
the Company in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Initial Purchasers' obligation to reimburse the Company for such expenses and
the possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any portion, or all, of
any such interim reimbursement payments are so held to have been improper, the
Company shall promptly return such amounts to the Initial Purchasers together
with interest, compounded daily, determined on the basis of the Prime Rate. Any
such interim reimbursement payments that are not made to the Company within 30
days of a request for reimbursement shall bear interest at the Prime Rate from
the date of such request until the date paid.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections 4 (b)
and 4 (c) above, including the amounts of any requested reimbursement payments,
the method of determining such amounts and the basis on which such amounts shall
be apportioned among the indemnifying parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the NASD. Any such
arbitration must be commenced by service of a written demand for arbitration or
a written notice of intention to arbitrate, therein electing the arbitration
tribunal. If the party demanding arbitration does not make designation of an
arbitration tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Any such arbitration will be limited to
the interpretation of obligations of the parties under the interim reimbursement
provisions contained in Sections 4(b) and 4(c) hereof and will not resolve the
ultimate propriety or enforceability of the obligation to indemnify for expenses
that is created by the provisions of Section 6 hereof.
Section 5. Conditions of Initial Purchasers' Obligations. The
obligation of each Initial Purchaser to purchase and pay for the Securities that
it has severally agreed to purchase hereunder is subject to the accuracy of the
representations and warranties of the Company
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contained herein and in certificates of any officer of the Company and any
Subsidiary delivered pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder, and to the following further
conditions:
(a) At the Closing Time, each of the Initial Purchasers shall
have received a signed opinion of Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P., counsel
for the Company, dated as of the Closing Time, in substantially the form
attached hereto as Exhibit B-1.
(b) At the Closing Time, each of the Initial Purchasers shall
have received the signed opinion of Xxxxx & Wood LLP, counsel for the Initial
Purchasers, dated as of the Closing Time, to the effect that the opinion
delivered pursuant to Section 5(a) appears on its face to be appropriately
responsive to the requirements of this Agreement and with respect to the
incorporation and legal existence of the Company, the Securities, this
Agreement, the Indenture, the Registration Rights Agreement, the Offering
Memorandum and such other related matters as the Initial Purchasers may require.
The Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(c) At the time that this Agreement is executed by the Company
and at the Closing Time, each of the Initial Purchasers shall have received from
Xxxxxx Xxxxxxxx LLP, independent auditors for the Company, a letter, dated
respectively as of the date of this Agreement and as of the Closing Time, in
form and substance satisfactory to the Initial Purchasers, confirming that they
are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the applicable published rules and regulations
thereunder, and setting forth certain matters customarily included in
accountants "comfort letters," in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers.
(d) At the time that this Agreement is executed by the Company
and at the Closing Time, each of the Initial Purchasers shall have received from
KPMG Peat Marwick LLP, independent auditors for Energy Resources International,
a letter, dated respectively as of the date of this Agreement and as of the
Closing Time, in form and substance satisfactory to the Initial Purchasers,
confirming that they were independent public accountants with respect to Energy
Resources International within the meaning of the 1933 Act and the applicable
published rules and regulations thereunder, and setting forth certain matters
customarily included in accountants "comfort letters," in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial Purchasers.
(e) The Company shall have furnished to the Initial Purchasers
a certificate, signed by the Chief Executive Officer and the principal financial
or accounting officer of the Company, dated as of the Closing Time, to the
effect that the signers of such certificate have examined the Offering
Memorandum, any amendment or supplement to the Offering Memorandum, and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Time with the same effect as
if made at the Closing Time; and the Offering
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Memorandum, as it may then be amended or supplemented, 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; and
the Company has complied with all the agreements and satisfied
all the conditions under this Agreement on its part to be
performed or satisfied at or prior to the Closing Time; and
(ii) since the respective dates as of which
information is given in the Offering Memorandum (exclusive of
any amendment or supplement thereto), neither the Company nor
any of its Subsidiaries have sustained any material loss or
interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute
or any legal or governmental proceeding, and there has not
been any material adverse change, or any development involving
a prospective material adverse change, in the condition
(financial or otherwise), management, business prospects, net
worth or results of operations of the Company or any of its
Subsidiaries, except in each case as described in or
contemplated by the Offering Memorandum (exclusive of any
amendment or supplement thereto).
(f) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Time, there shall not have been any downgrading, nor
any notice given of any intended or potential downgrading or of a possible
change that does not indicate the direction of the possible change, in the
rating accorded any of the Company's securities, including the Securities, by
any "nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 436(g)(2) under the 0000 Xxx.
(g) Subsequent to the date hereof or, if earlier, the dates as
of which information is given in the Offering Memorandum (exclusive of any
amendment or supplement thereto), there shall not have been any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company the effect of which is, in the sole judgment of the
Initial Purchasers, so material and adverse as to make it impractical or
inadvisable to proceed with the purchase and the delivery of the Securities as
contemplated by the Offering Memorandum (exclusive of any amendment or
supplement thereto).
(h) Prior to or concurrent with the Closing Time, counsel for
the Initial Purchasers shall have been furnished with all such documents,
certificates and opinions as they may have reasonably requested from the
Company.
(i) At the Closing Time, the Indenture shall have been fully
executed and delivered by the parties thereto and be in full force and effect.
(j) At the Closing Time, the Registration Rights Agreement
shall have been fully executed and delivered by the parties thereto and be in
full force and effect.
If any of the conditions specified in this Section 5 shall not
have been fulfilled when and as required by this Agreement, this Agreement may
be terminated by the Initial Purchasers on notice to the Company at any time at
or prior to the Closing Time, and such
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termination shall be without liability of any party to any other party, except
as provided in Section 4. Notwithstanding any such termination, the provisions
of Sections 4, 6, 7 and 14 shall remain in effect.
Section 6. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each Initial Purchaser and each person, if
any, who controls any Initial Purchaser within the meaning of Section 15 of the
1933 Act or Section 20 of the Exchange Act against any losses, claims, damages
or liabilities, joint or several, to which such Initial Purchaser or such
controlling person may become subject under the 1933 Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement
made by the Company in Section 1 of this Agreement,
(ii) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Preliminary Offering
Memorandum or the Offering Memorandum or any amendment or supplement
thereto or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any
jurisdiction in order to qualify the Securities under the securities or
blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"),
(iii) the omission or alleged omission to state in
the Preliminary Offering Memorandum or the Offering Memorandum or any
amendment or supplement thereto, or any Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or
(iv) any untrue statement or alleged untrue statement
of any material fact contained in any audio or visual materials used by
the Company in connection with the marketing of the Securities,
including without limitation, slides, videos, films and tape
recordings,
and will reimburse, as incurred and pursuant to Section 4(b) hereof, each
Initial Purchaser and each such controlling person for any legal or other
expenses reasonably incurred by such Initial Purchaser or such controlling
person in connection with investigating, defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Offering Memorandum, the Offering
Memorandum or any amendment or supplement thereto or any Application in reliance
upon and in conformity with written information furnished to the Company by such
Initial Purchaser specifically for use therein. This indemnity agreement will be
in addition to any liability which the Company may otherwise have. The Company
will not, without the prior written consent of the Initial Purchaser or Initial
Purchasers purchasing, in the aggregate, more than fifty percent (50%) of the
Securities, settle or compromise or consent to the
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entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Initial Purchaser or any person who controls any such Initial
Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of all of
the Initial Purchasers and such controlling persons from all liability arising
out of such claim, action, suit or proceeding.
(b) Each Initial Purchaser, severally and not jointly, will
indemnify and hold harmless the Company, each of its directors, each of its
executive officers and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act against
any losses, claims, damages or liabilities to which the Company, any such
director, officer or controlling person may become subject under the 1933 Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Preliminary Offering Memorandum, the Offering Memorandum or any amendment
or supplement thereto or any Application or (ii) the omission or alleged
omission to state therein a material fact required to be stated in the
Preliminary Offering Memorandum, the Offering Memorandum or any amendment or
supplement thereto, or any Application or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Initial Purchaser specifically for use therein;
and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred and pursuant to Section 4(c) hereof, any legal or other
expenses reasonably incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Initial Purchaser may
otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 6. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof and approval by such
indemnified party of counsel appointed to
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defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 6 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Initial Purchasers in the case of paragraph (a) of this
Section 6, representing the indemnified parties under such paragraph (a) who are
parties to such action or actions) or (ii) the indemnifying party does not
promptly retain counsel satisfactory to the indemnified party or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action effected by
such indemnified party without the consent of the indemnifying party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 6 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions
received by the Initial Purchasers. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Initial
Purchasers, the parties' relative intents, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and the
Initial Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (d). Notwithstanding any
other provision of this paragraph (d), no Initial Purchaser shall be obligated
to make contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that
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such Initial Purchaser has otherwise been required to pay in respect of the
same or any substantially similar claim, and no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute hereunder
are several in proportion to their respective underwriting obligations and not
joint, and contributions among Initial Purchasers shall be governed by the
provisions of the Prudential Securities Incorporated Master Agreement Among
Underwriters, as applicable. For purposes of this paragraph (d), each person, if
any, who controls an Initial Purchaser within the meaning of Section 15 of the
1933 Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such Initial Purchaser, and each director of the Company, each
officer of the Company and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of Sections 4(b), 4(c) and 4(d) hereof and this
Section 6, and are fully informed regarding said provisions. They further
acknowledge that the provisions of Sections 4(b), 4(c) and 4(d) hereof and this
Section 6 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Offering Memorandum as required by the 0000 Xxx. The
parties are advised that federal or state policy, as interpreted by the courts
in certain jurisdictions, may be contrary to certain provisions of Sections
4(b), 4(c) and 4(d) hereof and this Section 6, and the parties hereto hereby
expressly waive and relinquish any right or ability to assert such public policy
as a defense to a claim under Sections 4(b), 4(c) and 4(d) hereof or this
Section 6 and further agree not to attempt to assert any such defense.
Section 7. Survival. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, its officers, and the several Initial Purchasers set forth in or made
pursuant to this Agreement, respectively, shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Company, any of its officers or directors, any Initial Purchaser or any person
who controls the Company or the Initial Purchasers within the meaning of Section
15 of the 1933 Act or Section 20(a) of the Exchange Act and (ii) delivery of and
payment for the Securities. The respective agreements, covenants, indemnities
and other statements set forth in Sections 3, 4, 6, 7 and 14 hereof shall remain
in full force and effect, regardless of any termination or cancellation of this
Agreement.
Section 8. Default of Initial Purchasers. If one of the
Initial Purchasers defaults in its obligations to purchase Securities hereunder
and the aggregate principal amount of such Securities that such defaulting
Initial Purchaser agreed but failed to purchase is ten percent or less of the
aggregate principal amount of Securities to be purchased by all of the Initial
Purchasers at such time hereunder, the other Initial Purchaser may make
arrangements satisfactory to the Initial Purchaser for the purchase of such
Securities by other persons, but if no such arrangements are made by the Closing
Time, the other Initial Purchaser shall be obligated to purchase the Securities
that such defaulting Initial Purchaser agreed but failed to purchase. If
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one of the Initial Purchasers so defaults with respect to an aggregate principal
amount of Securities that is more than ten percent of the aggregate principal
amount of Securities to be purchased by all of the Initial Purchasers at such
time hereunder, and if arrangements satisfactory to the Initial Purchaser are
not made within 36 hours after such default for the purchase by other persons,
of the Securities with respect to which such default occurs, this Agreement will
terminate without liability on the part of any non-defaulting Initial Purchaser
or the Company other than as provided in Section 4 hereof. In the event of any
default by one of the Initial Purchasers as described in this Section 8, the
Initial Purchasers shall have the right to postpone the Closing Time established
as provided in Section 2 hereof for not more than seven business days in order
that any necessary changes may be made in the arrangements or documents for the
purchase and delivery of the Securities. As used in this Agreement, the term
"Initial Purchaser" includes any person substituted for a Initial Purchaser
under this Section 8. Nothing herein shall relieve any defaulting Initial
Purchaser from liability for its default.
Section 9. Termination of Agreement. (a) This agreement may be
terminated with respect to the Securities in the sole discretion of the Initial
Purchasers by notice to the Company given prior to the Closing Time in the event
that the Company shall have failed, refused or been unable to perform all
obligations and satisfy all conditions on its part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Closing Time,
(i) the Company or any of its Subsidiaries shall
have, in the sole judgment of the Initial Purchasers, sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material
adverse change (including without limitation a change in management or
control of the Company), in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries, except in each case as described in or
contemplated by the Offering Memorandum (exclusive of any amendment or
supplement thereto);
(ii) trading in the Company's Common Stock shall have
been suspended by the Commission or The Nasdaq Stock Market, Inc. or
trading in securities generally on the New York Stock Exchange, Inc. or
The Nasdaq Stock Market, Inc. shall have been suspended or minimum or
maximum prices shall have been established on either such exchange or
market system;
(iii) a banking moratorium shall have been declared
by New York or United States authorities; or
(iv) there shall have been (A) an outbreak or
escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or (C) any other calamity or
crisis or material adverse change in general economic, political or
financial conditions having an effect on the financial markets or the
market for the Securities that, in the sole judgment of the Initial
Purchasers, makes it impractical or inadvisable to proceed with the
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offer, sale or the delivery of the Securities as contemplated by the
Offering Memorandum.
(b) If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party,
except to the extent provided in Section 4. Notwithstanding any such
termination, the provisions of Sections 6 and 7 shall remain in effect.
Section 10. Information Supplied by the Initial Purchasers.
The statements set forth in the last paragraph on the cover page, the fourth
full paragraph on page (ii), the statements regarding market making under the
heading "Risk Factors - Absence of Market for the Notes; Restrictions on
Resales", the amounts of Securities purchased by the Initial Purchasers in the
first paragraph, the fourth paragraph, the first sentence of the sixth paragraph
and the eighth paragraph under the heading "Plan of Distribution" in the
Preliminary Offering Memorandum and the Offering Memorandum (to the extent such
statements relate to the Initial Purchasers) constitute the only information
furnished by the Initial Purchasers to the Company for the purposes of Sections
1(a)(i) and 6 hereof. The Initial Purchasers confirm that such statements (to
such extent) are correct.
Section 11. Notices. All notices and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered, mailed or transmitted by any standard form of
telecommunication to the applicable party at the addresses indicated below:
If to the Initial Purchasers:
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx-00xx Xxxxx
Xxx Xxxx, XX 00000-0000,
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
with copies to:
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
If to the Company:
00 Xxxxx Xxxxxx Xxxx,
0xx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx, President
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with copies to:
Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: X.X. Xxxxxxx, III
Section 12. Consent to Jurisdiction and Service of Process.
All judicial proceedings arising out of or relating to this Agreement may be
brought in any state or federal court of competent jurisdiction in the State of
New York, and by execution and delivery of this Agreement, the Company accepts
for itself and in connection with its properties, generally and unconditionally,
the nonexclusive jurisdiction of the aforesaid courts and waive any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement.
To the extent that the Company has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
Section 13. Parties. This Agreement is made solely for the
benefit of the Initial Purchasers, the Company and, to the extent expressed, any
person who controls the Company or any Initial Purchaser within the meaning of
Section 15 of the 1933 Act or Section 20 of the Exchange Act, and the directors
of the Company, its officers and their respective executors, administrators,
successors and assigns and no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser, as a purchaser, from the Initial Purchasers of the
Securities. No purchaser of Securities from any Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.
Section 14. Governing Law and Time. This Agreement shall be
governed by the laws of the State of New York, without regard to conflict of
laws provisions.
Section 15. Counterparts. This Agreement may be executed in
one or more counterparts and when a counterpart has been executed by each party,
all such counterparts taken together shall constitute one and the same
agreement.
-------------------------
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If the foregoing correctly sets forth our understanding,
please sign and return to us a counterpart hereof, whereupon this instrument
will become a binding agreement between the Company and the Initial Purchasers
in accordance with its terms.
Very truly yours,
EAGLE GEOPHYSICAL, INC.
By: /s/ Xxx X. Xxxxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxxxx
Title: Chief Executive Officer
and President
Confirmed and accepted as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
BANC ONE CAPITAL MARKETS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Managing Director
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SCHEDULE I
Subsidiaries of the Company
Subsidiary: Formed In:
----------- ----------
Eagle Geophysical Onshore, Inc. (100% owned by the Company) Delaware
Eagle Geophysical Offshore, Inc. (100% owned by the Company) Delaware
Eagle Geophysical Leasing, Inc. (100% owned by the Company) Delaware
Eagle Geophysical de Mexico, Inc. (100% owned by the Company) Delaware
Eagle Front End Services, Inc. (100% owned by the Company) Delaware
Austral Horizon, Inc. (100% owned by the Company) Delaware
Atlantic Horizon, Inc. (100% owned by the Company) Delaware
Eagle Geophysical de Colombia, Inc. (100% owned by the Company) Delaware
Eagle Geophysical Management, Inc. (100% owned by the Company) Delaware
Eagle Front End Services, Ltd. (Eagle Geophysical Management, Inc. - 1% GP, Texas
Eagle Front End Services, Inc. - 99% LP)
Eagle Geophysical GOM, Inc. (f/k/a (100% owned by Exploration Holdings Ltd.) Texas
Eagle Geophysical Offshore, Inc.)
Energy Research International (100% owned by the Company) Cayman Islands
Exploration Holdings Limited (100% owned by Energy Research International) England
Horizon Exploration Limited (100% owned by Exploration Holdings Ltd.) England
Sch-1
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SCHEDULE II
Principal Amount
Of Securities
Initial Purchasers to be Purchased
------------------ ----------------
Prudential Securities Incorporated...................... $ 90,000,000
Banc One Capital Markets, Inc........................... $ 10,000,000
Total........................................... ------------
$100,000,000
Sch-2
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EXHIBIT A
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of July 20, 1998, among Eagle Geophysical, Inc., a Delaware
corporation (the "Company"), and the subsidiaries of the Company (the
"Subsidiaries") set forth in Schedule I hereto on the one hand, and Prudential
Securities Incorporated and Banc One Capital Markets, Inc. (collectively, the
"Initial Purchasers"), on the other hand.
This Agreement is made pursuant to the Purchase Agreement
dated July 15, 1998 among the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for the sale by the Company to the Initial
Purchasers of $100,000,000 aggregate principal amount of the Company's 10 3/4%
Senior Notes due 2008 (the "Notes"). In order to induce the Initial Purchasers
to enter into the Purchase Agreement, the Company has agreed to provide to the
Initial Purchasers and their direct and indirect transferees and assigns the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the SEC promulgated
thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Company" shall have the meaning set forth in the preamble of this
Agreement and also includes the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that any such
depositary must have an address in the Borough of Manhattan, in the
City of New York.
"Exchange Notes" shall mean 10 3/4% Series B Senior Notes due 2008
issued by the Company under the Indenture containing terms identical to
the Notes (except that (i) interest thereon shall accrue from the last
date on which interest was paid on the Notes or, if no such interest
has been paid, from July 20, 1998, (ii) the transfer restrictions
thereon shall be eliminated and (iii) certain provisions relating to an
increase in the stated rate of interest thereon shall be eliminated) to
be
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offered to Holders of Notes in exchange for Notes pursuant to the
Exchange Offer.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Notes for Registrable Notes pursuant to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such
registration statement, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Holders" shall mean the Initial Purchasers, for so long as they own
any Registrable Notes, and each of their successors, assigns and direct
and indirect transferees who become registered owners of Registrable
Notes under the Indenture.
"Indenture" shall mean the Indenture relating to the Notes dated as of
July 20, 1998 among the Company, the subsidiaries of the Company
signatory thereto and Chase Bank of Texas, National Association, a
national banking association, as trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the preamble
of this Agreement.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Notes; provided
that whenever the consent or approval of Holders of a specified
percentage of Registrable Notes is required hereunder, Registrable
Notes held by the Company or any of its affiliates (as such term is
defined in Rule 405 under the 0000 Xxx) (other than the Initial
Purchasers or subsequent holders of Registrable Notes if such
subsequent holders are deemed to be such affiliates solely by reason of
their holding of such Registrable Notes) shall be disregarded in
determining whether such consent or approval was given by the Holders
of such required percentage or amount.
"Person" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Notes covered by a Shelf
Registration Statement, and by all other amendments and
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supplements to a prospectus, including post-effective amendments, and
in each case including all material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the preamble
of this Agreement.
"Registrable Notes" shall mean the Notes; provided, however, that the
Notes shall cease to be Registrable Notes when (i) a Registration
Statement with respect to such Notes shall have been declared effective
under the 1933 Act and such Notes shall have been disposed of pursuant
to such Registration Statement, (ii) such Notes shall have been sold to
the public pursuant to Rule 144 (or any similar provision then in
force, but not Rule 144A) under the 1933 Act, (iii) such Notes shall
have ceased to be outstanding or (iv) such Notes have been exchanged
for Exchange Notes upon consummation of the Exchange Offer.
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC, stock exchange or National
Association of Securities Dealers, Inc. ("NASD") registration and
filing fees, (ii) all fees and expenses incurred in connection with
compliance with state or other securities or blue sky laws and
compliance with the rules of the NASD (including reasonable fees and
disbursements of counsel for any underwriters or Holders in connection
with state or other securities or blue sky qualification of any of the
Exchange Notes or Registrable Notes), (iii) all expenses of any Persons
in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments
or supplements thereto, certificates representing the Exchange Notes
and other documents relating to the performance of and compliance with
this Agreement, (iv) all rating agency fees, (v) all fees and expenses
incurred in connection with the listing, if any, of any of the
Registrable Notes on any securities exchange or exchanges, (vi) all
fees and disbursements relating to the qualification of the Indenture
under applicable securities laws, (vii) the reasonable fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements (including the expenses of preparing and distributing any
underwriting or securities sales agreement) of one counsel (in addition
to appropriate local counsel) for the Holders (which counsel shall be
selected in writing by the Majority Holders), (viii) the fees and
expenses of the independent public accountants of the Company,
including the expenses of any special audits or "cold comfort" letters
required by or incident to such performance and compliance, (ix) the
fees and expenses of a "qualified independent underwriter" as defined
by Conduct Rule 2720 of the NASD (if required by the NASD rules) in
connection with the offering of the Registrable Securities, (x) the
fees and expenses of the trustee, including its counsel, and any escrow
agent or custodian, and (xi) any fees and disbursements of the
underwriters customarily required to be paid by issuers or sellers of
securities and the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement,
but excluding underwriting
A-3
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discounts and commissions and transfer taxes, if any, relating to the
sale or disposition of Registrable Notes by a Holder.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Exchange Notes or Registrable Notes
pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) of
this Agreement which covers all of the then Registrable Notes on an
appropriate form under Rule 415 under the 1933 Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to
such registration statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Notes and the
Exchange Notes under the Indenture.
2. Registration Under the 1933 Act. (a) Exchange Offer
Registration. To the extent not prohibited by any applicable law or applicable
interpretation of the Staff of the SEC, the Company shall (A) file on or prior
to the 60th calendar day following the Closing Time an Exchange Offer
Registration Statement covering the offer by the Company to the Holders of
Exchange Notes in exchange for all of the Registrable Notes, (B) use its best
efforts to cause such Exchange Offer Registration Statement to be declared
effective by the SEC on or prior to the 180th calendar day following the Closing
Time, (C) use its best efforts to cause such Exchange Offer Registration
Statement to remain effective until the closing of the Exchange Offer and (D)
use its best efforts to consummate the Exchange Offer on or prior to the 210th
calendar day following the Closing Date. Upon the effectiveness of the Exchange
Offer Registration Statement, the Company shall promptly commence the Exchange
Offer, it being the objective of such Exchange Offer to enable each Holder
(other than Participating Broker-Dealers (as defined in Section 3(f)) eligible
and electing to exchange Registrable Notes for Exchange Notes (assuming that
such Holder is not an affiliate of the Company within the meaning of Rule 405
under the 1933 Act, acquires the Exchange Notes in the ordinary course of such
Holder's business and has no arrangements or understandings with any person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Notes) to trade such Exchange Notes from and after their receipt without any
limitations or restrictions under the 1933 Act and without material restrictions
under the securities laws of a substantial proportion of the several states of
the United States. The Exchange Notes will be issued under the Indenture.
A-4
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In connection with the Exchange Offer, the Company shall:
(i) mail to each Holder a copy of the Prospectus forming part
of the Exchange Offer Registration Statement, together with an
appropriate letter of transmittal and related documents;
(ii) keep the Exchange Offer open for not less than 30 days
after the date notice thereof is mailed to the Holders (or longer if
required by applicable law);
(iii) use the services of the Depositary for the Exchange
Offer with respect to Notes evidenced by global certificates;
(iv) permit Holders to withdraw tendered Registrable Notes at
any time prior to the close of business, New York City time, on the
last business day on which the Exchange Offer shall remain open, by
sending to the institution specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder,
the principal amount of Registrable Notes delivered for exchange, and a
statement that such Holder is withdrawing his election to have such
Notes exchanged; and
(v) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer,
the Company shall:
(i) accept for exchange Registrable Notes duly tendered and
not validly withdrawn pursuant to the Exchange Offer in accordance with
the terms of the Exchange Offer Registration Statement and the letter
of transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Notes so accepted for exchange by the
Company; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Notes to each Holder of Registrable Notes equal in amount to
the Registrable Notes of such Holder so accepted for exchange.
Interest on each Exchange Note will accrue from the last date
on which interest was paid on the Registrable Notes surrendered in exchange
therefor or, if no interest has been paid on the Registrable Notes, from July
20, 1998. The Exchange Offer shall not be subject to any conditions, other than
that the Exchange Offer, or the making of any exchange by a Holder, does not
violate applicable law or any applicable interpretation of the Staff of the SEC.
Each Holder of Registrable Notes (other than Participating Broker-Dealers) who
wishes to exchange such Registrable Notes for Exchange Notes in the Exchange
Offer shall have represented that (i) any Exchange Notes to be received by it
were acquired in the ordinary course of business, (ii) at the time of the
commencement of the Exchange Offer it has no arrangement with any person to
participate in the distribution (within the meaning of the 0000 Xxx) of the
Exchange Notes, (iii) it is not an affiliate (as defined in Rule 405 under the
0000 Xxx) of the Company, or if it is an affiliate it will comply with the
registration and prospectus delivery requirements of the 1933 Act to the extent
applicable and (iv) it is not acting on behalf of any person who could not make
the
A-5
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representations in clauses (i) through (iii). The Company shall inform the
Initial Purchasers of the names and addresses of the Holders to whom the
Exchange Offer is made, and the Initial Purchasers shall have the right to
contact such Holders and otherwise facilitate the tender of Registrable Notes in
the Exchange Offer.
(b) Shelf Registration. (i) If, because of any change in law
or applicable interpretations thereof by the Staff of the SEC, the Company is
not permitted to effect the Exchange Offer as contemplated by Section 2(a)
hereof, or (ii) if for any other reason the Exchange Offer cannot be consummated
within 210 calendar days following the Closing Time, or (iii) if any Holder
(other than an Initial Purchaser) is not eligible to participate in the Exchange
Offer or (iv) upon the request of any Initial Purchaser (with respect to any
Registrable Notes which it acquired directly from the Company) following the
consummation of the Exchange Offer if any such Initial Purchaser shall hold
Registrable Notes which it acquired directly from the Company and if such
Initial Purchaser is not permitted, in the opinion of counsel to such Initial
Purchaser, pursuant to applicable law or applicable interpretation of the Staff
of the SEC to participate in the Exchange Offer, the Company shall, at its cost:
(A) as promptly as practicable, and in any event within 60
days after the date on which such filing obligation arises, file with
the SEC a Shelf Registration Statement relating to the offer and sale
of the then outstanding Registrable Notes by the Holders from time to
time in accordance with the methods of distribution elected by the
Majority Holders of such Registrable Notes and set forth in such Shelf
Registration Statement, and use its best efforts to cause such Shelf
Registration Statement to be declared effective by the SEC on or prior
to 45 days after the date on which such filing occurs.
(B) use its best efforts to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years
after the Closing Time or such shorter period which will terminate when
all of the Registrable Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement
or all of the Registrable Notes become eligible for resale pursuant to
Rule 144 under the 1933 Act without volume restrictions; and
(C) notwithstanding any other provisions hereof, use its best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming a part thereof and any
supplement thereto complies in all material respects with the 1933 Act
and the rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes
effective, 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 and (iii) any Prospectus
forming part of any Shelf Registration Statement, and any supplement to
such Prospectus (as amended or supplemented from time to 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, in light of
the circumstances under which they were made, not misleading.
The Company further agrees, if necessary, to supplement or
amend the Shelf Registration Statement if reasonably requested by the Majority
Holders with respect to
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35
information relating to the Holders and otherwise as required by Section 3(b)
below, to use all reasonable efforts to cause any such amendment to become
effective and such Shelf Registration to become usable as soon as practicable
thereafter and to furnish to the Holders of Registrable Notes copies of any
such supplement or amendment promptly after its being used or filed with the
SEC.
(c) Expenses. The Company shall pay all Registration Expenses
in connection with the registration pursuant to Section 2(a) and 2(b). Each
Holder shall pay all expenses of its counsel other than as set forth in the
preceding sentence, underwriting discounts and commissions (prior to the
reduction thereof with respect to selling concessions, if any) and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Notes pursuant to the Shelf Registration Statement.
(d) Effective Registration Statement. (i) The Company will be
deemed not to have used its best efforts to cause a Registration Statement to
become, or to remain, effective during the requisite period if the Company
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or in the Holders of Registrable Notes
covered thereby not being able to exchange or offer and sell such Registrable
Notes during that period unless (A) such action is required by applicable law or
(B) such action is taken by the Company in good faith and for valid business
reasons (but not including avoidance of the Company's obligations hereunder),
including a material corporate transaction, so long as the Company promptly
complies with the requirements of Section 3(k) hereof, if applicable.
(ii) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof will not be deemed to have become effective unless
it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Notes
pursuant to a Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such
interference, until the offering of Registrable Notes pursuant to such
Registration Statement may legally resume.
(e) Increase in Interest Rate. In the event that either (i)
the Exchange Offer Registration Statement is not filed with the Commission on or
prior to the 60th calendar day following the Closing Time, or (ii) the Exchange
Offer Registration Statement is not declared effective on or prior to the 180th
calendar day following the Closing Time, or (iii) the Exchange Offer is not
consummated on or prior to the 210th calendar day following the Closing Time or
a Shelf Registration Statement with respect to the Registrable Notes is not
declared effective on or prior to the 210th calendar day following the Closing
Time, or (iv) either (A) the Exchange Offer Registration Statement ceases to be
effective at any time prior to the time that the Exchange Offer is consummated
or (B) if applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective at any
time prior to the second anniversary of the Closing Time, the interest rate
borne by the Notes shall be increased by 25 basis points per annum following
such 60-day period in the case of clause (i) above, following such 180-day
period in the case of clause (ii) above, following such 30-day period in the
case of clause (iii) above, or immediately in the case of clause (iv) above,
which rate will be
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increased by an additional 25 basis points per annum for each 30-day period that
any such additional interest continues to accrue in the case of clauses (i),
(ii) and (iii) above or for each 90-day period that any such additional interest
continues to accrue in the case of clause (iv) above, provided that the
aggregate per annum increase in such interest rate will in no event exceed 150
basis points. Upon (x) the filing of the Exchange Offer Registration Statement
after the 60-day period described in clause (i) above, (y) the consummation of
the Exchange Offer or the effectiveness of a Shelf Registration Statement, as
the case may be, after the 210-day period described in clause (iii) above, as
the case may be, or (z) the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement following an event described in
clause (iv) above, the interest rate borne by the Notes from the date of such
filing, effectiveness or consummation, as the case may be, will be reduced to
the original interest rate if the Company is otherwise in compliance with this
paragraph; provided, however, that, if after any such reduction in interest
rate, a different event specified in clauses (i), (ii), (iii) or (iv) above
occurs, the interest rate will again be increased and thereafter reduced
pursuant to the foregoing conditions. If the Company issues a notice that the
Shelf Registration Statement is unusable pending the announcement of a material
corporate transaction or otherwise pursuant to Section 3(k) hereof, or such a
notice is required under applicable securities laws to be issued by the Company,
and the aggregate number of days in any consecutive twelve-month period for
which all such notices are issued or required to be issued exceeds 30 days in
the aggregate, then the interest rate borne by the Notes will be increased by 25
basis points per annum following the date that such Shelf Registration Statement
ceases to be usable beyond the 30-day period permitted above, which rate shall
be increased by an additional 25 basis points per annum for each 90-day period
that such additional interest continues to accrue; provided that the aggregate
increase in such annual interest rate may in no event exceed 150 basis points.
Upon the Company declaring that the Shelf Registration Statement is usable after
the interest rate has been increased pursuant to the preceding sentence, the
interest rate borne by the Notes will be reduced to the original interest rate
if the Company is otherwise in compliance with this paragraph; provided,
however, that if after any such reduction in interest rate the Shelf
Registration Statement again ceases to be usable beyond the period permitted
above, the interest rate will again be increased and thereafter reduced pursuant
to the foregoing provisions.
(f) Specific Enforcement. Without limiting the remedies
available to the Initial Purchasers and the Holders, the Company acknowledges
that any failure by the Company to comply with its respective obligations under
Sections 2(a) and 2(b) hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Company's
obligations under Sections 2(a) and 2(b) hereof.
3. Registration Procedures. In connection with the obligations
of the Company with respect to the Registration Statements pursuant to Sections
2(a) and 2(b) hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement,
within the time period specified in Section 2, on the appropriate form
under the 1933 Act, which form (i) shall be selected by the Company,
(ii) shall, in the case of a Shelf Registration, be
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available for the sale of the Registrable Notes by the selling Holders
thereof and (iii) shall comply as to form in all material respects
with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC
to be filed therewith, and use its best efforts to cause such
Registration Statement to become effective and remain effective in
accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to (i) the Exchange Offer Registration
Statement as may be necessary under applicable law to keep such
Exchange Offer Registration Statement effective for the period required
to comply with Section 2(a) (except to the extent the Company is unable
to consummate the Exchange Offer and the Company complies with Section
2(b), subject in all respects to Section 3(f) hereof), and (ii) the
Shelf Registration Statement as may be necessary under applicable law
to keep such Shelf Registration Statement effective for the period
required pursuant to Section 2(b) hereof; cause each Prospectus to be
supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the 1933 Act; and
comply with the provisions of the 1933 Act with respect to the
disposition of all securities covered by each Registration Statement
during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Notes, at least ten days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Notes is
being filed and advising such Holders that the distribution of
Registrable Notes will be made in accordance with the method elected by
the Majority Holders; and (ii) furnish to each Holder of Registrable
Notes, to counsel for the Initial Purchasers, to counsel for the
Holders and to each underwriter of an underwritten offering of
Registrable Notes, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or
underwriter may reasonably request, including financial statements and
schedules and, if the Holder so requests, all exhibits (including those
incorporated by reference) in order to facilitate the public sale or
other disposition of the Registrable Notes; and (iii) subject to the
last paragraph of Section 3, hereby consent to the use of the
Prospectus, including each preliminary Prospectus, or any amendment or
supplement thereto by each of the selling Holders of Registrable Notes
in connection with the offering and sale of the Registrable Notes
covered by the Prospectus or any amendment or supplement thereto;
(d) use its best efforts to register or qualify the
Registrable Notes under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable Notes covered
by a Registration Statement and each underwriter of an underwritten
offering of Registrable Notes shall reasonably request by the time the
applicable Registration Statement is declared effective by the SEC, to
cooperate with the Holders in connection with any filings required to
be made with the NASD, keep each such registration or qualification
effective during the period such Registration Statement is required to
be effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in each such jurisdiction of such Registrable Notes
owned by such Holder; provided,
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however, that the Company shall not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this
Section 3(d) or (ii) take any action which would subject it to general
service of process or taxation in any such jurisdiction if it is not
then so subject;
(e) in the case of a Shelf Registration, notify each Holder of
Registrable Notes and counsel for such Holders promptly and, if
requested by such Holder or counsel, confirm such advice in writing
promptly (i) when a Registration Statement has become effective and
when any post-effective amendments and supplements thereto become
effective, (ii) of any request by the SEC or any state securities
authority for post-effective amendments and supplements to a
Registration Statement and Prospectus or for additional information
after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the closing of any sale
of Registrable Notes covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating
to such offering cease to be true and correct in all material respects,
(v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Notes for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, (vi) of the happening of any event or the discovery
of any facts during the period a Shelf Registration Statement is
effective which makes any statement made in such Shelf Registration
Statement or the related Prospectus untrue in any material respect or
which requires the making of any changes in such Shelf Registration
Statement or Prospectus in order to make the statements therein not
misleading and (vii) of any determination by the Company that a
post-effective amendment to a Registration Statement would be
appropriate;
(f) (A) in the case of the Exchange Offer, (i) include in the
Exchange Offer Registration Statement a "Plan of Distribution" section
covering the use of the Prospectus included in the Exchange Offer
Registration Statement by broker-dealers who have exchanged their
Registrable Notes for Exchange Notes for the resale of such Exchange
Notes, (ii) furnish to each broker-dealer who desires to participate in
the Exchange Offer, without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any
preliminary prospectus, and any amendment or supplement thereto, as
such broker-dealer may reasonably request, (iii) include in the
Exchange Offer Registration Statement a statement that any
broker-dealer who holds Registrable Notes acquired for its own account
as a result of market-making activities or other trading activities (a
"Participating Broker-Dealer"), and who receives Exchange Notes for
Registrable Notes pursuant to the Exchange Offer, may be a statutory
underwriter and must deliver a prospectus meeting the requirements of
the 1933 Act in connection with any resale of such Exchange Notes, (iv)
subject to the last paragraph of Section 3, hereby consent to the use
of the Prospectus forming part of the Exchange Offer Registration
Statement or any amendment or supplement thereto, by any broker-dealer
in connection with the sale or transfer of the Exchange Notes covered
by the Prospectus or any amendment or supplement thereto, and (v)
include in the transmittal letter or similar
A-10
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documentation to be executed by an exchange offeree in order to
participate in the Exchange Offer (x) the following provision:
"If the undersigned is not a broker-dealer, the undersigned
represents that it is not engaged in, and does not intend to
engage in, a distribution of Exchange Notes. If the
undersigned is a broker-dealer that will receive Exchange
Notes for its own account in exchange for Registrable Notes,
it represents that the Registrable Notes to be exchanged for
Exchange Notes were acquired by it as a result of
market-making activities or other trading activities and
acknowledges that it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of
such Exchange Notes pursuant to the Exchange Offer; however,
by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act"; and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in subclause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act; and
(B) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its best efforts to cause
to be delivered at the request of an entity representing the
Participating Broker-Dealers (which entity shall be one of the Initial
Purchasers, unless it elects not to act as such representative) only
one, if any, "cold comfort" letter with respect to the Prospectus in
the form existing on the last date for which exchanges are accepted
pursuant to the Exchange Offer and with respect to each subsequent
amendment or supplement, if any, effected during the period specified
in clause (C) below; and
(C) to the extent any Participating Broker-Dealer participates
in the Exchange Offer, the Company shall use its best efforts to
maintain the effectiveness of the Exchange Offer Registration Statement
for a period of 180 days following the closing of the Exchange Offer
and make available the Prospectus to any Participating Broker-Dealer;
and
(D) the Company shall not be required to amend or supplement
the Prospectus contained in the Exchange Offer Registration Statement
as would otherwise be contemplated by Section 3(b), or take any other
action as a result of this Section 3(f), for a period exceeding 180
days after the last date for which exchanges are accepted pursuant to
the Exchange Offer (as such period may be extended by the Company) and
Participating Broker-Dealers shall not be authorized by the Company to,
and shall not, deliver such Prospectus after such period in connection
with resales contemplated by this Section 3.
(g) (A) in the case of an Exchange Offer, furnish counsel for
the Initial Purchasers and (B) in the case of a Shelf Registration,
furnish counsel for the Holders of
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Registrable Notes copies of any request by the SEC or any state
securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement as
soon as practicable and provide immediate notice to each Holder of the
withdrawal of any such order;
(i) in the case of a Shelf Registration, furnish to each
Holder of Registrable Notes, without charge, at least one conformed
copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or
exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Notes to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold and not bearing any restrictive legends; and cause such
Registrable Notes to be in such denominations (consistent with the
provisions of the Indenture) and registered in such names as the
selling Holders or the underwriters, if any, may reasonably request at
least one business day prior to the closing of any sale of Registrable
Notes;
(k) in the case of a Shelf Registration, upon the occurrence
of any event or the discovery of any facts, each as contemplated by
Section 3(e)(vi) hereof, use its best efforts to prepare a supplement
or post-effective amendment to a Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Notes, such Prospectus will not contain
at the time of such delivery any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading. The Company agrees to notify each Holder to suspend use of
the Prospectus as promptly as practicable after the occurrence of such
an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus
to correct such misstatement or omission. At such time as such public
disclosure is otherwise made or the Company determines that such
disclosure is not necessary, in each case to correct any misstatement
of a material fact or to include any omitted material fact, the Company
agrees promptly to notify each Holder of such determination and to
furnish each Holder such numbers of copies of the Prospectus, as
amended or supplemented, as such Holder may reasonably request;
(l) obtain a CUSIP number for all Exchange Notes, or
Registrable Notes, as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Notes or the Registrable Notes, as the
case may be, in a form eligible for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Notes, or Registrable Notes, as the case
may be, (ii) cooperate with the Trustee and the Holders
A-12
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to effect such changes to the Indenture as may be required for the
Indenture to be so qualified in accordance with the terms of the TIA
and (iii) execute, and use its best efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner;
(n) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate actions (including those reasonably requested by the
Majority Holders) in order to expedite or facilitate the disposition of
such Registrable Notes and in such connection whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration:
(i) make such representations and warranties to
the Holders of such Registrable Notes and
the underwriters, if any, in form, substance
and scope as are customarily made by issuers
to underwriters in similar underwritten
offerings as may be reasonably requested by
them;
(ii) obtain opinions of counsel to the Company
and updates thereof (which counsel and
opinions (in form, scope and substance)
shall be reasonably satisfactory to the
managing underwriters, if any, and the
holders of a majority in principal amount of
the Registrable Notes being sold) addressed
to each selling Holder and the underwriters,
if any, covering the matters customarily
covered in opinions requested in sales of
securities or underwritten offerings;
(iii) obtain "cold comfort" letters and updates
thereof from the Company's independent
certified public accountants addressed to
the underwriters, if any, and use best
efforts to have such letters addressed to
the selling Holders of Registrable Notes,
such letters to be in customary form and
covering matters of the type customarily
covered in "cold comfort" letters to
underwriters in connection with similar
underwritten offerings;
(iv) enter into a securities sales agreement with
the Holders and an agent of the Holders
providing for, among other things, the
appointment of such agent for the selling
Holders for the purpose of soliciting
purchases of Registrable Notes, which
agreement shall be in form, substance and
scope customary for similar offerings; and
(v) deliver such documents and certificates as
may be reasonably requested and as are
customarily delivered in similar offerings.
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The above shall be done at (i) the effectiveness of such Shelf
Registration Statement (and, if appropriate, each post-effective
amendment thereto) and (ii) each closing under any underwriting or
similar agreement as and to the extent required thereunder. In the case
of any underwritten offering, the Company shall provide written notice
to the Holders of all Registrable Notes of such underwritten offering
at least 30 days (or such shorter, reasonable time period as is
practicable) prior to the filing of a prospectus supplement for such
underwritten offering. Such notice shall (x) if satisfactory to the
investment banker or manager of such underwritten offering, offer each
such Holder the right to participate in such underwritten offering, (y)
specify a date, which shall be no earlier than 10 days following the
date of such notice, by which such Holder must inform the Company of
its intent to participate in such underwritten offering and (z) include
the instructions such Holder must follow in order to participate in
such underwritten offering;
(o) in the case of a Shelf Registration, make available for
inspection by representatives of the Holders of the Registrable Notes
and any underwriters participating in any disposition pursuant to a
Shelf Registration Statement and any counsel or accountant retained by
such Holders or underwriters, at reasonable times and in a reasonable
manner, all financial and other records, pertinent corporate documents
and properties of the Company reasonably requested by any such persons,
and cause the respective officers, directors, employees, and any other
agents of the Company to supply all information reasonably requested by
any such representative, underwriter, special counsel or accountant in
connection with such Shelf Registration Statement, provided, however,
that such Persons shall first agree in writing with the Company that
any information that is reasonably and in good faith designated by the
Company in writing as confidential at the time of delivery of such
information shall be kept confidential by such Persons, unless (i)
disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law
(including any disclosure requirements pursuant to Federal securities
laws in connection with the filing of such Shelf Registration Statement
or the use of any Prospectus), (iii) such information becomes generally
available to the public other than as a result of a disclosure or
failure to safeguard such information by such Person or (iv) such
information becomes available to such Person from a source other than
the Company and its subsidiaries and such source is not bound by a
confidentiality agreement; provided, further, that the foregoing
investigation shall be coordinated on behalf of the Holders by one
representative designated by and on behalf of such Holders and any such
confidential information shall be available from such representative to
such Holders so long as any Holder agrees to be bound by such
confidentiality agreement;
(p) (i) a reasonable time prior to the filing of any Exchange
Offer Registration Statement, any Prospectus forming a part thereof,
any amendment to an Exchange Offer Registration Statement or amendment
or supplement to a Prospectus, provide copies of such document to the
Initial Purchasers, and make such changes in any such document prior to
the filing thereof as any of the Initial Purchasers or their counsel
may reasonably request; (ii) in the case of a Shelf Registration, a
reasonable time prior to filing any Shelf Registration Statement, any
Prospectus forming a part thereof, any amendment to such Shelf
Registration Statement or amendment or supplement to such
X-00
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Xxxxxxxxxx, provide copies of such document to the Holders of
Registrable Notes, to the Initial Purchasers, to counsel on behalf of
the Holders and to the underwriter or underwriters of an underwritten
offering of Registrable Notes, if any, and make such changes in any
such document prior to the filing thereof as the Holders of
Registrable Notes, the Initial Purchasers on behalf of such Holders,
their counsel and any underwriter may reasonably request; and (iii)
cause the representatives of the Company to be available for
discussion of such document as shall be reasonably requested by the
Holders of Registrable Notes, the Initial Purchasers on behalf of such
Holders or any underwriter and shall not at any time make any filing
of any such document of which such Holders, the Initial Purchasers on
behalf of such Holders, their counsel or any underwriter shall not
have previously been advised and furnished a copy or to which such
Holders, the Initial Purchasers on behalf of such Holders, their
counsel or any underwriter shall reasonably object, each of which
actions in this clause (iii) by the Holders shall be coordinated by
one representative for all the Holders at reasonable times and in a
reasonable manner;
(q) in the case of a Shelf Registration, use its best efforts
to cause all Registrable Securities to be listed on any securities
exchange on which similar debt securities issued by the Company are
then listed if requested by the Majority Holders or by the underwriter
or underwriters of an underwritten offering of Registrable Securities,
if any;
(r) in the case of a Shelf Registration, unless the rating in
effect for the Notes applies to the Exchange Notes and the Notes to be
sold pursuant to a Shelf Registration, use its best efforts to cause
the Registrable Notes to be rated with the appropriate rating agencies,
if so requested by the Majority Holders or by the underwriter or
underwriters of an underwritten offering of Registrable Notes, if any,
unless the Registrable Notes are already so rated;
(s) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
and
(t) cooperate and assist in any filings required to be made
with the NASD.
In the case of a Shelf Registration Statement, the Company may
(as a condition to such Holder's participation in the Shelf Registration)
require each Holder of Registrable Notes to furnish to the Company such
information regarding such Holder and the proposed distribution by such Holder
of such Registrable Notes and make such representations, in each case, as the
Company may from time to time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder
agrees that, upon receipt of any notice from the Company of the happening of any
event or the discovery of any facts, each of the kind described in Section
3(e)(ii)-(vi) hereof, such Holder will forthwith discontinue disposition of
Registrable Notes pursuant to a Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
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Section 3(k) hereof, and, if so directed by the Company, such Holder will
deliver to the Company (at the Company's expense) all copies in its possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Notes current at the time of receipt of
such notice. If the Company shall give any such notice to suspend the
disposition of Registrable Notes pursuant to a Shelf Registration Statement as a
result of the happening of any event or the discovery of any facts, each of the
kind described in Section 3(e)(vi) hereof, the Company shall be deemed to have
used its best efforts to keep the Shelf Registration Statement effective during
such period of suspension provided that the Company shall use its best efforts
to file and have declared effective (if an amendment) as soon as practicable an
amendment or supplement to the Shelf Registration Statement and shall extend the
period during which the Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from and
including the date of the giving of such notice to and including the date when
the Holders shall have received copies of the supplemented or amended Prospectus
necessary to resume such dispositions.
4. Underwritten Registrations. If any of the Registrable Notes
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Majority Holders of such Registrable
Notes included in such offering and shall be reasonably acceptable to the
Company.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
5. Indemnification and Contribution. (a) The Company and each
Subsidiary, jointly and severally, agree to indemnify and hold harmless each
Holder and each person, if any, who controls any Holder within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any losses,
claims, damages or liabilities, joint or several, to which such Holder or such
controlling person may become subject under the 1933 Act, the 1934 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 1 of the Purchase Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) any Registration Statement or Prospectus
or any amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Registrable Notes or Exchange Notes under the securities or blue sky
laws thereof or filed with the SEC or any securities association or
securities exchange (each an "Application"),
A-16
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(iii) the omission or alleged omission to state in any
Registration Statement or Prospectus or any amendment or supplement
thereto, or any Application a material fact required to be stated
therein or necessary to make the statements therein not misleading or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used by the
Company in connection with the marketing of the Registrable Notes or
Exchange Notes, including without limitation, slides, videos, films and
tape recordings,
and will reimburse, as incurred, each Holder and each such controlling person
for any legal or other expenses reasonably incurred by such Holder or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and each
Subsidiary, jointly and severally, will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in any Registration Statement or Prospectus or any amendment or
supplement thereto or any Application in reliance upon and in conformity with
written information relating to any Holder furnished to the Company by such
Holder specifically for use therein. This indemnity agreement will be in
addition to any liability which the Company and each Subsidiary, jointly and
severally, may otherwise have. The Company will not, without the prior written
consent of each Holder, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought hereunder (whether or not any
Holder or any person who controls any such Holder within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act is a party to such claim,
action, suit or proceeding), unless such settlement, compromise or consent
includes an unconditional release of all of such Holders and such controlling
persons from all liability arising out of such claim, action, suit or
proceeding.
(b) Each Holder, severally and not jointly, agrees, by
acquiring any Notes, to indemnify and hold harmless the Company, each of its
directors, each of its executive officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act against any losses, claims, damages or liabilities to which the
Company, any such director, officer or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement or Prospectus or any amendment or supplement
thereto or any Application or (ii) the omission or alleged omission to state
therein a material fact required to be stated in any Registration Statement or
Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information relating to any Holder furnished to the
Company by such Holder specifically for use therein; and, subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with investigating or
A-17
46
defending any such loss, claim, damage, liability or any action in respect
thereof. This indemnity agreement will be in addition to any liability which
such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 5. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by such Holder in the case of paragraph
(a) of this Section 5, representing the indemnified parties under such paragraph
(a) who are parties to such action or actions) or (ii) the indemnifying party
does not promptly retain counsel satisfactory to the indemnified party or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 5 is unavailable or
insufficient, for any reason, to hold harmless an indemnified party in respect
of any losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one
A-18
47
hand and the indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and each Subsidiary on the one hand and the Initial Purchasers on the
other shall be deemed to be in the same proportion as the total proceeds from
the offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by such Holder. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Holder, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in the
circumstances. The Company, each Subsidiary and each Holder agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocation or by any other method of allocation that does not take
into account the equitable considerations referred to above in this paragraph
(d). Notwithstanding any other provision of this paragraph (d), no Holder shall
be obligated to make contributions hereunder that in the aggregate exceed the
total public offering price of the Securities purchased by such Holder under
this Agreement, less the aggregate amount of any damages that such Holder has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls a Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as such Holder, and each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act, shall have the same rights to
contribution as the Company.
(e) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions of this Agreement, including, without
limitation, the provisions of this Section 5, and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Section 5
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Offering Memorandum as required by the 0000 Xxx. The parties are advised
that federal or state policy, as interpreted by the courts in certain
jurisdictions, may be contrary to certain provisions of this Section 5, and the
parties hereto hereby expressly waive and relinquish any right or ability to
assert such public policy as a defense to a claim under this Section 5 and
further agree not to attempt to assert any such defense.
6. Miscellaneous. (a) Rule 144 and Rule 144A. For so long as
the Company is subject to the reporting requirements of Section 13 or 15 of the
1934 Act, the Company covenants that it will file the reports required to be
filed by it under Section 13(a) or 15(d) of the 1934 Act and the rules and
regulations adopted by the SEC thereunder. The Company further covenants that if
it ceases to be so required to file such reports, it will upon the request of
any Holder of Registrable Notes (i) make publicly available such information as
is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (ii)
deliver such information to a
A-19
48
prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the 1933 Act and it will take such further action as any Holder of
Registrable Notes may reasonably request, and (iii) take such further action
that is reasonable in the circumstances, in each case, to the extent required
from time to time to enable such Holder to sell its Registrable Notes without
registration under the 1933 Act within the limitation of the exemptions provided
by (x) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, (y) Rule 144A under the 1933 Act, as such Rule may be amended from time to
time, or (z) any similar rules or regulations hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Notes, the Company will deliver to such
Holder a written statement as to whether it has complied with such requirements.
(b) No Inconsistent Agreements. The Company has not entered
into nor will the Company on or after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Company's other issued and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Notes affected by such amendment, modification, supplement, waiver
or departure; provided, however, that no amendment, modification, supplement or
waiver or consent to any departure from the provisions of Section 5 hereof shall
be effective as against any Holder of Registrable Notes unless consented to in
writing by such Holder.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telecopier, or any courier guaranteeing overnight delivery (i)
if to a Holder (other than an Initial Purchaser), at the most current address
set forth on the records of the Registrar under the Indenture, (ii) if to an
Initial Purchaser, at the most current address given by such Initial Purchaser
to the Company by means of a notice given in accordance with the provisions of
this Section 6(d), which address initially is the address set forth in the
Purchase Agreement; and (iii) if to the Company, initially at the Company's
address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this
Section 6(d).
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next business day if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands, or other communications
shall be concurrently delivered by the Person giving the same to the Trustee, at
the address specified in the Indenture.
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49
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof or of the Purchase Agreement or the
Indenture. If any transferee of any Holder shall acquire Registrable Notes, in
any manner, whether by operation of law or otherwise, such Registrable Notes
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Notes, such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. Each of the Holders shall be
third party beneficiaries to the agreements made hereunder between the Company
on the one hand, and the Initial Purchasers, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
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50
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
EAGLE GEOPHYSICAL, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL ONSHORE, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL GOM, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL OFFSHORE, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL LEASING, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL DE MEXICO, INC.
By:
-----------------------------------
Name:
Title:
X-00
00
XXXXX XXXXX XXX SERVICES, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL MANAGEMENT, INC.
By:
-----------------------------------
Name:
Title:
EAGLE FRONT END SERVICES, LTD.
By: Eagle Geophysical Management, Inc.,
its General Partner
By:
-----------------------------------
Name:
Title:
AUSTRAL HORIZON, INC.
By:
-----------------------------------
Name:
Title:
ATLANTIC HORIZON, INC.
By:
-----------------------------------
Name:
Title:
EAGLE GEOPHYSICAL DE COLOMBIA, INC.
By:
-----------------------------------
Name:
Title:
A-23
52
Confirmed and accepted as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By:
----------------------------------
Authorized Signatory
BANC ONE CAPITAL MARKETS, INC.
By:
----------------------------------
Authorized Signatory
A-24
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SCHEDULE I
Certain Subsidiaries of the Company
Subsidiary: Formed In:
----------- ----------
Eagle Geophysical Onshore, Inc. Delaware
Eagle Geophysical GOM, Inc. Texas
Eagle Geophysical Offshore, Inc Delaware
Eagle Geophysical Leasing, Inc. Delaware
Eagle Geophysical de Mexico, Inc Delaware
Eagle Front End Services, Inc Delaware
Eagle Geophysical Management, Inc. Delaware
Eagle Front End Services, Ltd. Texas
Austral Horizon, Inc. Delaware
Atlantic Horizon, Inc. Delaware
Eagle Geophysical de Colombia, Inc. Delaware
Xxx-0
00
XXXXXXX X-0
FORM OF
OPINION OF GARDERE XXXXX XXXXXX & XXXXX, L.L.P.
1. Each of the Company and its U.S. Subsidiaries has been duly
organized and is validly existing and in good standing under the laws of its
respective jurisdiction of incorporation, organization or formation, with full
power (corporate or otherwise) and authority to own, lease and operate its
properties and assets and conduct its business as described in the Offering
Memorandum. The Company has full power (corporate or otherwise) and authority to
issue, sell and deliver the Securities, to execute and deliver the Purchase
Agreement, the Registration Rights Agreement and the Indenture, and to perform
its obligations thereunder.
2. Each of the Company and its U.S. Subsidiaries is qualified
to transact business as a foreign corporation or limited partnership and is in
good standing in each other jurisdiction in which, to our knowledge, the
ownership or leasing of its property or the conduct of its business would make
such qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or on the assets, earnings, results of
operations, business affairs or business prospects of the Company and the U.S.
Subsidiaries taken as a whole (a "Material Adverse Effect").
3. All of the outstanding capital stock or partnership
interests of each of the U.S. Subsidiaries listed on Schedule I to the Purchase
Agreement are owned of record as set forth on Schedule I. Such capital stock is
owned free and clear of any perfected security interests or, to the best of our
knowledge, any other security interests, liens, encumbrances, equities, claims,
restrictions on transferability or voting, except as set forth in the Offering
Memorandum. Such partnership interests are owned, to the best of our knowledge,
free and clear of any security interests, liens, encumbrances, equities, claims,
restrictions on transferability or voting, except as set forth in the Offering
Memorandum.
4. All of the outstanding capital stock of the Company has
been duly authorized and validly issued, is fully paid and nonassessable and was
not issued in violation of any statutory preemptive or similar rights, or, to
our knowledge, in violation of any other preemptive or similar rights.
5. The execution and delivery of the Purchase Agreement have
been duly authorized by all necessary corporate action of the Company and the
Purchase Agreement has been duly executed and delivered by the Company.
6. The execution and delivery of the Indenture have been duly
authorized by the Company and the Subsidiary Guarantors thereto. The Indenture
has been duly executed and delivered by the Company and the Subsidiary
Guarantors thereto and assuming due execution and delivery thereof by the
Trustee, constitutes a legal, valid and binding obligation of each of the
Company and the
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55
Subsidiary Guarantors thereto, enforceable against the Company and the
Subsidiary Guarantors thereto in accordance with its terms, except as such
enforceability may be subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting creditor's
rights generally and subject to the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
7. The issuance, execution and delivery of the Securities and
the Exchange Securities have been duly authorized by the Company. When executed,
authenticated, issued and delivered in the manner provided for in the Indenture
and sold and paid for as provided in the Purchase Agreement, the Securities will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms, except as such enforceability may be subject to the effect of any
applicable bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar law
affecting creditor's rights generally and subject to the effect of general
principles of equity (regardless of whether considered in a proceeding in equity
or at law). The Exchange Securities, when executed, authenticated, issued and
delivered in exchange for the Securities, will constitute valid and binding
obligations of the Company, entitled to the benefits of the Indenture,
enforceable against the Company in accordance with the terms thereof, except as
such enforceability may be subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar law affecting creditor's
rights generally and subject to the effect of general principles of equity
(regardless of whether considered in a proceeding in equity or at law). The
Securities conform in all material respects to the description thereof in the
Offering Memorandum.
8. The execution and delivery of the Registration Rights
Agreement have been duly authorized by the Company and the Subsidiary Guarantors
thereto. The Registration Rights Agreement has been duly executed and delivered
by the Company and the Subsidiary Guarantors thereto and constitutes a legal,
valid and binding obligation of each of the Company and the Subsidiary
Guarantors thereto, enforceable against the Company and the Subsidiary
Guarantors in accordance with its terms, except to the extent that Section 5
thereof may be held to be unenforceable due to the Securities and Exchange
Commission's policies and except as such enforceability may be subject to the
effect of any applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar law affecting creditor's rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
9. No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign (other
than under the 1933 Act and the 1934 Act, the Trust Indenture Act of 1939, and
the rules and regulations thereunder with respect to the Registration Rights
Agreement and the transactions contemplated thereunder and the securities or
"blue sky" laws of the various states, provided that we express no opinion as to
the requirements of such state securities or blue sky laws) is required for the
valid authorization, issuance, sale and delivery of the Securities, for the
execution, delivery or performance by the Company of the Purchase Agreement, the
Registration Rights Agreement, or the Indenture or for the consummation by the
Company of the transactions contemplated in the Purchase Agreement,
B-2
56
the Registration Rights Agreement and the Offering Memorandum, except such of
the foregoing as have been obtained.
10. The execution and delivery by the Company of the Purchase
Agreement, the Registration Rights Agreement and the Indenture, the issuance,
sale and delivery of the Securities by the Company, the consummation by the
Company of the transactions contemplated in the Purchase Agreement, the
Registration Rights Agreement and the Offering Memorandum and the compliance by
the Company with the terms of the Purchase Agreement, the Registration Rights
Agreement and the Indenture do not and will not result in any violation of the
charter or by-laws of the Company, and do not and will not conflict with, or
result in a breach of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any U.S. Subsidiary
under, (A) any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which the Company or any U.S. Subsidiary is a
party or by which they may be bound or to which any of their respective
properties may be subject and of which we have knowledge or (B) any existing
applicable law, rule or regulation (other than possible violations of state
securities or blue sky laws, as to which we express no opinion), or, to our
knowledge after having made inquiry of the Company, any judgment, order, writ,
injunction or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties, and which in the case of (A) or (B), could reasonably be expected to
have a Material Adverse Effect.
11. The Company is not an "investment company" or a company
controlled by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
12. Assuming (i) the accuracy of the representations and
warranties of the Initial Purchasers in Section 2 of the Purchase Agreement and
(ii) the due performance by the Initial Purchasers of the covenants and
agreements set forth in Section 2 of the Purchase Agreement, it is not necessary
in connection with the offer, sale and delivery of the Securities to the Initial
Purchasers under, or in connection with the initial resale of such Securities by
the Initial Purchasers in accordance with, the Purchase Agreement to register
the Securities under the Securities Act or to qualify the Indenture in respect
of the Securities under the Trust Indenture Act.
13. The statements made in the Offering Memorandum under the
caption "Certain Federal Income Tax Consequences," to the extent that they
constitute matters of law or legal conclusions, have been reviewed by us and
fairly present the information disclosed therein in all material respects.
14. The statements set forth in the Offering Memorandum under
the headings "Description of the Notes" and "Exchange Offer; Registration
Rights" insofar as such statements purport to summarize certain provisions of
the Securities, the Indenture and the Registration Rights Agreement, fairly and
accurately summarize such provisions in all material respects.
We have not independently verified the accuracy, completeness
or fairness of the statements made or the information contained in the Offering
Memorandum and, except with
B-3
57
respect to the descriptions referred to in paragraphs 13 and 14 above, we are
not passing upon and do not assume any responsibility therefor. In the course of
the preparation by the Company of the Offering Memorandum, we have participated
in discussions with your representatives and those of the Company and its
independent accountants, in which the business and affairs of the Company and
the contents of the Offering Memorandum were discussed. On the basis of
information that we have gained in the course of our representation of the
Company in connection with its preparation of the Offering Memorandum and our
participation in the discussions referred to above, we have no reason to believe
that the Offering Memorandum (as supplemented or amended) as of its date or the
date hereof contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. We express no opinion, however, as to the financial statements,
including the notes and schedules thereto, or any other financial or accounting
information set forth or referred to in the Offering Memorandum.
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