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POOL ENERGY SERVICES CO.
$150,000,000 8-5/8% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
March 26, 1998
SBC WARBURG DILLON READ INC.
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX RICE & COMPANY L.L.C.
as Initial Purchasers
c/o SBC Warburg Dillon Read Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Pool Energy Services Co. (the "Issuer"), proposes to issue and sell to
SBC Warburg Dillon Read Inc., Xxxxxx Xxxxxxx & Co. Incorporated and Xxxxxxx Rice
& Company L.L.C. (the "Initial Purchasers") $150,000,000 aggregate principal
amount of its 8-5/8% Senior Subordinated Notes due 2008 (the "Notes"). The Notes
will be issued pursuant to an indenture (the "Indenture"), to be dated the
Closing Date (as defined below), by and among the Issuer and the guarantors
listed on the signature pages hereto (collectively, the "Subsidiary Guarantors")
and Marine Midland Bank as trustee (the "Trustee"). The Issuer's obligations
under the Notes and the New Notes (as defined below) will be unconditionally
guaranteed on a senior subordinated basis by each of the Subsidiary Guarantors
pursuant to each of their guarantees (the "Subsidiary Guarantees"). All
references herein to the Notes or the New Notes include the related Subsidiary
Guarantees, unless the context otherwise requires. Capitalized terms used but
not otherwise defined herein shall have the meanings given to such terms in the
Indenture or the Offering Memorandum (as defined below).
The Notes will be offered and sold to the Initial Purchasers pursuant
to an exemption from the registration requirements under the Securities Act of
1933, as amended, and the rules and regulations thereunder (collectively, the
"Act"), including the documents incorporated by reference therein. The Issuer
has prepared a preliminary offering memorandum, dated March , 1998, including
the documents incorporated by reference therein (the "Preliminary Offering
Memorandum"), and a final offering memorandum, dated and available for
distribution on the date hereof, including the documents incorporated by
reference therein (the "Offering Memorandum"), relating to the Issuer, the
Subsidiary Guarantors and the Notes.
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The Initial Purchasers have advised the Issuer that the Initial
Purchasers intend, as soon as they deem it advisable after this Purchase
Agreement (the "Agreement") has been executed and delivered, to resell (the
"Exempt Resales") the Notes purchased by the Initial Purchasers under this
Purchase Agreement (this "Agreement") in private sales exempt from registration
under the Act on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers," as defined in Rule 144A under
the Act ("QIBs"), in compliance with Rule 144A and (ii) other eligible
purchasers pursuant to offers and sales that occur outside the U.S. within the
meaning of Regulation S under the Act. The persons specified in clauses (i) and
(ii) of the preceding sentence are sometimes collectively referred to herein as
the "Eligible Purchasers", and the offering and sale of the Notes to the Initial
Purchasers and Eligible Purchasers are sometimes referred to herein as the
"Offering".
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the registration rights agreement, to be dated
the Closing Date (the "Registration Rights Agreement"), among the Issuer, the
Subsidiary Guarantors and the Initial Purchasers, for so long as such Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuer and
the Subsidiary Guarantors will agree to (a) file with the Securities and
Exchange Commission (the "Commission"), under the circumstances set forth in the
Registration Rights Agreement, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the Issuer's 8-5/8% Senior
Subordinated Notes due 2008 to be offered in exchange (the "New Notes") for the
Notes (the "Exchange Offer") and/or (ii) a shelf registration statement pursuant
to Rule 415 under the Act (the "Shelf Registration Statement" and, together with
the Exchange Offer Registration Statement, the "Registration Statements")
relating to the resale by certain holders of the Notes, and (b) use their best
efforts to cause such Registration Statements to be declared effective as soon
as practicable on or prior to 120 days after the Closing Date. This Agreement,
the Notes, the New Notes, the Indenture and the Registration Rights Agreement
are hereinafter sometimes referred to collectively as the "Operative Documents."
Upon original issuance of the Notes and until such time as the same is
no longer required under the applicable requirements of the Act, the Notes shall
bear a legend substantially in the form provided in the Offering Memorandum.
The net proceeds of the sale of the Notes will be used in the manner
described in the Offering Memorandum.
The Issuer, each of the Subsidiary Guarantors, and the Initial
Purchasers agree as follows:
1. SALE AND PURCHASE. Upon the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the other
terms and conditions herein set forth, the Issuer agrees to issue and sell to
the Initial Purchasers, and the Initial Purchasers agree to purchase from the
Issuer, the aggregate principal amount of the Notes. The purchase price for the
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Notes shall be 97.25% of their principal amount. The Issuer shall cause each
Subsidiary Guarantor to unconditionally guarantee on a senior subordinated basis
the Issuer's obligations under the Notes and the New Notes.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the
Notes shall be made to the Issuer by wire transfer of immediately available
funds, to an account of the Issuer designated by the Issuer at least two
business days prior to the payment date, against delivery of the certificates
for the Notes for the account of the Initial Purchasers. Delivery of, and
payment of the purchase price for, the Notes shall be made at 10:00 a.m., New
York City time, on the third business day following the date of this Agreement
(the "Closing Date") at the offices of Xxxxxx & Xxxxxx L.L.P., 2300 First City
Tower, 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000. The Closing Date, and the location of
delivery of, and the form of payment for, the Notes may be varied by mutual
agreement between the Initial Purchaser and the Issuer.
One or more of the Notes in global form or certificated form, as the
case may be, registered in such names as the Initial Purchasers may request upon
at least one business day's notice prior to the Closing Date, having an
aggregate principal amount corresponding to the aggregate principal amount of
the Notes sold pursuant to Exempt Resales to QIBs, in the case of the Notes in
global form, and to other Eligible Purchasers, in the case of Notes in
certificated form sold pursuant to Regulation S, shall be delivered by the
Issuer to the Initial Purchasers (or as the Initial Purchasers direct), against
payment by the Initial Purchasers of the purchase price therefor by means of
transfer of immediately available funds (including book transfer) reasonably
acceptable to the Initial Purchasers and the Issuer to the order of the Issuer.
The Notes shall be made available to the Initial Purchasers for inspection not
later than 9:30 a.m., New York City time, on the business day immediately
preceding the Closing Date.
3. CERTAIN AGREEMENTS OF THE ISSUER AND SUBSIDIARY GUARANTORS.
The Issuer and the Subsidiary Guarantors, jointly and severally, covenant and
agree with the Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons identified
by the Initial Purchasers, without charge, with as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for
purposes contemplated by the Act. The Issuer and Subsidiary Guarantors consent
to the use of the Preliminary Offering Memorandum and the Offering Memorandum,
and any amendments and supplements thereto required pursuant to this Agreement,
by the Initial Purchasers in connection with Exempt Resales that are in
compliance with Section 4(B) of this Agreement.
(b) Not to amend or supplement the Offering Memorandum prior to
the Closing Date unless the Initial Purchasers shall previously have been
advised of, and shall not have objected to in writing (any such objection not to
be unreasonable), such amendment or supplement within a reasonable time, but in
any event not longer than five days after being furnished with a copy of such
amendment or supplement. The Issuer shall promptly prepare, upon the Initial
Purchasers'
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reasonable request, any amendment or supplement to the Offering Memorandum that
may be necessary or advisable in connection with Exempt Resales.
(c) If, during the time that an Offering Memorandum is required to
be delivered in connection with any Exempt Resales or market-making transactions
after the date of this Agreement and prior to the consummation of the Exchange
Offer, any event shall occur that, in the judgment of the Issuer or any of the
Subsidiary Guarantors or in the judgment of counsel to the Initial Purchasers,
makes any statement of a material fact in the Offering Memorandum untrue or that
requires the making of any additions to or changes in the Offering Memorandum in
order to make such statements in the Offering Memorandum, in the light of the
circumstances under which they are made, not misleading, or if it is necessary
to amend or supplement the Offering Memorandum to comply with all applicable
laws, the Issuer and the Subsidiary Guarantors shall promptly notify the Initial
Purchasers of such event and prepare an appropriate amendment or supplement to
the Offering Memorandum so that (i) such statements in the Offering Memorandum
as amended or supplemented will, in the light of the circumstances at the time
that the Offering Memorandum is delivered to prospective Eligible Purchasers,
not be misleading and (ii) the Offering Memorandum will comply with applicable
law.
(d) To furnish such information as may be required and otherwise
to cooperate with the Initial Purchasers and counsel to the Initial Purchasers
in qualifying the Notes and New Notes for offering and sale under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may request and
to maintain such qualification in effect so long as required for the Exempt
Resales; provided that neither the Issuer nor any Subsidiary Guarantor shall be
required to qualify as a foreign partnership, limited liability company or
corporation in any jurisdiction in which it is not so qualified or to file a
general consent to service of process in any such jurisdiction or subject itself
to taxation in excess of a nominal dollar amount in any such jurisdiction where
it is not then so subject (except service of process with respect to the
offering and sale of the Notes and New Notes).
(e) To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, to confirm such advice in writing, of the issuance by
any securities commission of any stop order or notification suspending the
qualification or exemption from qualification of any of the Notes for offering
or sale in any jurisdiction, or the initiation of any proceeding for such
purpose by any state securities commission or other regulatory authority. The
Issuer shall use its reasonable best efforts (unless otherwise agreed by the
Initial Purchasers) to prevent the issuance of any stop order or order
suspending the qualification or exemption of any of the Notes under any state
securities or Blue Sky laws, and if at any time any state securities commission
or other regulatory authority shall issue an order suspending the qualification
or exemption of any of the Notes under any state securities or Blue Sky laws,
the Issuer shall use its reasonable best efforts (unless otherwise agreed by the
Initial Purchasers) to obtain the withdrawal or lifting of such order at the
earliest possible time.
(f) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees, disbursements (including fees, expenses and disbursements
of counsel) and stamp, documentary or similar taxes
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incident to and in connection with: (i) the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements) and all amendments and
supplements thereto, (ii) the preparation and delivery of the Operative
Documents and all other agreements, memoranda, correspondence and documents
prepared and delivered in connection with this Agreement and with the Exempt
Resales, (iii) the issuance, transfer and delivery by the Issuer and the
Subsidiary Guarantors of the Notes and the Subsidiary Guarantees, respectively,
to the Initial Purchasers, (iv) the qualification or registration of the Notes
for offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the cost of printing and mailing a preliminary
and final Blue Sky memorandum and the fees and disbursements of counsel to the
Initial Purchasers relating thereto), (v) the furnishing of such copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and all amendments
and supplements thereto, as may be reasonably requested for use in connection
with Exempt Resales, (vi) the preparation of certificates for the Notes and New
Notes (including, without limitation, printing and engraving thereof), (vii) the
application for eligibility of the Notes for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") market of the National
Association of Securities Dealers, Inc. ("NASD"), including, but not limited to,
all application fees and expenses, (viii) the approval of the Notes and New
Notes by The Depository Trust Company ("DTC") for "book-entry" transfer, (ix)
the rating of the Notes and New Notes by rating agencies, (x) the fees and
expenses of the Trustee and its counsel and (xi) the performance by the Issuer
and the Subsidiary Guarantors of their other obligations under the Operative
Documents, including, but not limited to, the fees, disbursements and expenses
of the Issuer's counsel and accountants. It is understood, however, that, except
as provided in clause (iv) above in this Section, and Sections 5, 7 and 10(d)
hereof, the Initial Purchasers will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Notes or New Notes by them, and any advertising expenses connected with any
offers they may make.
(g) To use the net proceeds from the sale of the Notes in the
manner described in the Offering Memorandum under the caption "Use of Proceeds."
(h) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to satisfy all
conditions precedent on its part to the delivery of the Notes.
(i) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Notes in a manner that would require
the registration under the Act of the sale of the Notes to the Initial
Purchasers or any Eligible Purchasers.
(j) During the period of two years after the Closing Date or, if
earlier, until such time as the Notes are no longer restricted securities (as
defined in Rule 144 under the Act), not to, and not to permit any of its
affiliates (as defined in Rule 144 under the Act) to, resell any of the Notes
that have been reacquired by any of them.
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(k) Not to engage, or allow any of its affiliates, or any person
acting on its behalf (other than in any case any Initial Purchasers, as to whom
the Issuer and the Subsidiary Guarantors make no covenant) to engage, in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Act) in connection with any offer or sale of the Notes.
(l) Not to engage, or allow any of its affiliates, or any person
acting on its behalf (other than in any case any Initial Purchasers, as to whom
the Issuer and the Subsidiary Guarantors make no covenant), to engage in any
directed selling effort with respect to the Notes, and agree to comply with the
offering restrictions requirement of Regulation S under the Act. Terms used in
this paragraph have the meanings given to them by Regulation S.
(m) In connection with the Offering, until the Initial Purchasers
shall have notified the Issuer of the completion of the resale of the Notes, not
to, and not to permit any of its affiliates to, either alone or with one or more
other persons, bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest in any Notes; and neither it nor any of its
affiliates will make bids or purchases for the purpose of creating actual, or
apparent, active trading in, or of raising the price of, the Notes.
(n) During the period of two years after the Closing Date or, if
earlier, until such time as the Notes are no longer restricted securities (as
defined in Rule 144 under the Act), not to be or become an investment company
required to be registered, but not registered, under the Investment Company Act
of 1940, as amended (the "Investment Company Act").
(o) From and after the Closing Date, for so long as any of the
Notes remain outstanding and are "restricted securities" within the meaning of
Rule 144(a)(3) under the Act and during any period in which the Issuer is not
subject to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), to make available the information required by Rule
144A(d)(4) under the Act to (i) any holder or beneficial owner of Notes in
connection with any sale of such Notes and (ii) any prospective purchaser of
such Notes from any such holder or beneficial owner designated by the holder or
beneficial owner.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representations letter of the Issuer to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(q) To use its best efforts to effect the eligibility of the Notes
for trading in the PORTAL market and to obtain approval of the Notes by DTC for
"book-entry" transfer.
(r) From and after the Closing Date, for so long as any of the
Notes remain outstanding, to deliver without charge to the Initial Purchasers,
promptly upon their becoming available, copies of (i) all reports and other
communications (financial or otherwise) that the Issuer shall mail or otherwise
make available to its security holders, (ii) all reports or financial statements
furnished to or filed by the Issuer and each of the Subsidiary Guarantors with
the Commission or any national
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securities exchange and (iii) such other information as the Initial Purchasers
may reasonably request regarding the Issuer and its subsidiaries.
(s) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared by the Issuer and the Subsidiary
Guarantors, a copy of any regularly prepared internal financial statements of
the Issuer and each of the Subsidiary Guarantors for any period subsequent to
the period covered by the financial statements appearing in the Offering
Memorandum and prior to the Closing Date.
(t) Not to distribute prior to the Closing Date any offering
material in connection with the offer and sale of the Notes other than the
Preliminary Offering Memorandum and the Offering Memorandum.
4. REPRESENTATIONS AND WARRANTIES.
(A) The Issuer and each of the Subsidiary Guarantors, jointly and
severally, represent and warrant to the Initial Purchasers that:
(1) Each of the Preliminary Offering Memorandum and the Offering
Memorandum has been prepared in connection with the Exempt Resales. Neither the
Preliminary Offering Memorandum nor the Offering Memorandum, or any supplement
or amendment thereto, contains any untrue statement of a material fact or omits
to state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that the Issuer and the Subsidiary Guarantors make no
representation or warranty with respect to information contained in or omitted
from the Preliminary Offering Memorandum or the Offering Memorandum, as
supplemented or amended, in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Issuer by or on behalf of
the Initial Purchasers expressly for use in the Preliminary Offering Memorandum
or the Offering Memorandum or any supplement or amendment thereto. No order
prohibiting the use of either the Preliminary Offering Memorandum or the
Offering Memorandum or asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act has been
issued or threatened. Except as disclosed in the Offering Memorandum, on the
date of this Agreement, the Issuer's Annual Report on Form 10-K most recently
filed with the Securities and Exchange Commission (the "Commission") and all
subsequent reports (collectively, the "Exchange Act Reports") which have been
filed by the Issuer with the Commission or sent to stockholders pursuant to the
Securities Exchange Act of 1934 (the "Exchange Act") do not include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Such documents, when they were filed with the
Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder.
(2) As of the date of this Agreement, the Issuer has the
authorized, issued and outstanding capitalization as set forth under the heading
entitled "Actual" in the section of the Offering
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Memorandum entitled "Capitalization" and, as of the Closing Date, the Issuer
shall have an authorized capitalization as set forth under the heading entitled
"Pro Forma As Adjusted" in the section of the Offering Memorandum entitled
"Capitalization."
(3) The Issuer, either directly or indirectly through a Subsidiary
Guarantor, owns, all of the outstanding capital stock, partnership interests,
membership interests and other securities evidencing equity ownership of each of
the Subsidiary Guarantors, free and clear of any pledge, fiduciary transfer,
security interest, claim, lien, limitation on voting rights or encumbrance, and
all such securities will have been duly authorized and validly issued, fully
paid and nonassessable and have not been issued in violation of, or subject to,
any preemptive, first refusal or similar rights. There are not any outstanding
rights, warrants or options to acquire, or instruments convertible into or
exchangeable for, any shares of capital stock, partnership interests, membership
interests or other equity interest of any Subsidiary Guarantor.
(4) The Issuer and each of its subsidiaries have been duly
organized, are validly existing as corporations in good standing under the laws
of their respective jurisdictions of organization and have all requisite power
and authority under their constituent documents and applicable laws to (a) carry
on its business as it is currently being conducted and as proposed to be
conducted, in each case as described in the Offering Memorandum and (b) own,
lease and operate its respective properties in accordance with its business as
currently and as proposed to be conducted. The Issuer and each of its
subsidiaries is duly qualified and in good standing as a foreign entity
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not, either individually or in
the aggregate, result in a Material Adverse Effect. A "Material Adverse Effect"
means any material adverse effect on the business, condition (financial or
other), properties, assets, liabilities, results of operations or prospects of
the Issuer and its subsidiaries taken as a whole.
(5) The Issuer and each of the Subsidiary Guarantors has all
requisite power and authority to execute, deliver and perform all of its
obligations under the Operative Documents and to consummate the transactions
contemplated by the Operative Documents and, without limitation, the Issuer has
all requisite power and authority to issue, sell and deliver the Notes and New
Notes and each of the Subsidiary Guarantors has all requisite power and
authority to execute, deliver and perform all of its obligations under the
Subsidiary Guarantees.
(6) This Agreement has been duly and validly authorized, executed
and delivered by the Issuer and each of the Subsidiary Guarantors.
(7) The Indenture has been duly and validly authorized by the
Issuer and each of the Subsidiary Guarantors and, when duly executed and
delivered by the Issuer and each of the Subsidiary Guarantors, will be a legal,
valid and binding agreement of each of the Issuer and the Subsidiary Guarantors,
enforceable against each of them in accordance with its terms, except that
enforceability of the Indenture may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general
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principles of equity. The Indenture, when executed and delivered, will conform
in all material respects to the description thereof in the Offering Memorandum.
(8) The Notes have been duly and validly authorized for issuance
and sale to the Initial Purchasers by the Issuer and, when issued, authenticated
and delivered by the Issuer against payment by the Initial Purchasers in
accordance with the terms of this Agreement and the Indenture, the Notes will be
legal, valid and binding obligations of the Issuer, entitled to the benefits of
the Indenture and enforceable against the Issuer in accordance with their terms,
except that enforceability of the Notes may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity. The Notes,
when executed, authenticated and delivered, will conform in all material
respects to the description thereof in the Offering Memorandum.
(9) The New Notes have been duly and validly authorized for
issuance by the Issuer and, when issued, authenticated and delivered by the
Issuer in accordance with the terms of the Exchange Offer and the Indenture, the
New Notes will be legal, valid and binding joint and several obligations of each
of the Issuer, entitled to the benefits of the Indenture and enforceable against
the Issuer in accordance with their terms, except that enforceability of the New
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity. The New Notes, when executed, authenticated and
delivered, will conform in all material respects to the description thereof in
the Offering Memorandum.
(10) The Subsidiary Guarantees have been duly and validly
authorized by the Subsidiary Guarantors and, when the Notes are executed and
delivered in accordance with the terms of the Indenture and, in the case of the
Subsidiary Guarantees on the New Notes, when the New Notes are executed and
delivered in accordance with the Registration Rights Agreement, will be legal,
valid and binding joint and several obligations of the Subsidiary Guarantors,
enforceable against each of them in accordance with their terms, except that
enforceability of the Subsidiary Guarantees may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity. The Subsidiary Guarantees, when executed and delivered,
will conform in all material respects to the description thereof in the Offering
Memorandum.
(11) The Registration Rights Agreement has been duly and validly
authorized by the Issuer and each of the Subsidiary Guarantors and, when duly
executed and delivered by the Issuer and each of the Subsidiary Guarantors, will
be a legal, valid and binding agreement of the Issuer and each of the Subsidiary
Guarantors, enforceable against each of them in accordance with its terms,
except that (a) enforceability of the Registration Rights Agreement may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity and (b) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws and
public policy
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considerations. The Registration Rights Agreement, when executed and delivered,
will conform in all material respects to the description thereof in the Offering
Memorandum.
(12) None of the Issuer or its subsidiaries is (a) in violation of
its articles of incorporation, charter, bylaws or other organizational document
or (b) in default (or, with notice or lapse of time or both, would be in
default) in the performance or observance of any obligation, agreement, covenant
or condition contained in any bond, debenture, note, indenture, mortgage, deed
of trust, loan agreement, lease, license, storage or service agreement,
authorization, permit, certificate or other agreement or instrument to which any
of them is a party or by which any of them is bound or to which any of their
assets or properties is subject (collectively, "Agreements and Instruments"), or
(c) in violation of any law, statute, rule, regulation, judgment, order or
decree of any domestic or foreign court with jurisdiction over any of them or
any of their assets or properties or other governmental or regulatory authority,
agency or other body, that, in the case of clauses (b) and (c) above, would,
either individually or in the aggregate, result in a Material Adverse Effect.
There exists no condition that, with notice or lapse of time or both, would
constitute a default by the Issuer or any of its subsidiaries under any such
Agreements and Instruments or the items referred to in clause (c) of the
preceding paragraph or result in the imposition of any penalty or the
acceleration of any indebtedness, other than penalties, defaults or conditions
that would not, either individually or in the aggregate, result in a Material
Adverse Effect.
(13) The execution, delivery or performance by the Issuer and the
Subsidiary Guarantors of this Agreement and each of the other Operative
Documents to which they are a party, and the use of the proceeds of the sale of
the Notes in the manner contemplated by the Offering Memorandum, does not or
will not violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the lapse of
time, or both, would constitute a default), or require consent not already
obtained under (as of the Closing Date), or result in the creation or
imposition of a lien, charge or encumbrance on any property or assets of the
Issuer or any of the Subsidiary Guarantors pursuant to (a) the articles of
incorporation, charter, bylaws or other organizational documents of the Issuer
or any of the Subsidiary Guarantors, (b) any bond, debenture, note, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Issuer or any of the Subsidiary Guarantors is a party or by which the
Issuer or any of the Subsidiary Guarantors is bound or to which any of the
property or assets of the Issuer or any of the Subsidiary Guarantors is
subject, (c) any law, statute, rule or regulation applicable to the Issuer or
any of the Subsidiary Guarantors or their assets or properties or (d) any
judgment, order or decree of any domestic or foreign court or governmental
agency or authority having jurisdiction over the Issuer or any of the
Subsidiary Guarantors or their assets or properties, except as would not,
either individually or in the aggregate, affect the validity of, or any of the
rights under, the Notes or result in a Material Adverse Effect. Assuming the
accuracy of the representations and warranties of the Initial Purchasers in
Section 4(B) of this Agreement, no consent, approval, authorization or order
of, or filing, registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency, domestic or
foreign, is required to be obtained or made for the execution, delivery and
performance of this Agreement or any of the other Operative Documents, or any
of the transactions contemplated thereby or the planned expansion of the
Issuer's facilities as
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described in the Offering Memorandum, except (a) such that have been obtained or
made and are in full force and effect, (b) registration of the offer and sale of
the New Notes under the Act pursuant to the Registration Rights Agreement and
(c) such as may be required by the NASD or pursuant to the Blue Sky law of any
state. No consents or waivers from any other person or entity are required for
the execution, delivery and performance of this Agreement or any of the other
Operative Documents, or any of the transactions contemplated thereby, except
such as have been obtained or made and are in full force and effect.
(14) There is (a) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or foreign,
now pending or, to the knowledge of the Issuer or its subsidiaries, threatened
or contemplated, to which the Issuer or any of its subsidiaries is or may be a
party or to which the business, assets or property of such person is or may be
subject, (b) except as set forth in the Offering Memorandum, no statute, rule,
regulation or order that has been enacted, adopted or issued or, to the
knowledge of the Issuer or its subsidiaries, that has been proposed by any
governmental body or agency, domestic or foreign, (c) no injunction, restraining
order or order of any nature by a federal or state court or foreign court of
competent jurisdiction to which the Issuer or any of its subsidiaries is or may
be subject that would be reasonably likely to in the case of the preceding
clauses, either individually or in the aggregate, (1) result in a Material
Adverse Effect, or (2) interfere with or adversely affect the issuance of the
Notes or the New Notes or the Subsidiary Guarantees in any jurisdiction or
adversely affect the consummation of the transactions contemplated by any of the
Operative Documents or the planned acquisition of Sea Mar, Inc. ("Sea Mar") as
described in the Offering Memorandum. Every request of any securities authority
or agency of any jurisdiction for additional information with respect to Notes
or the New Notes that has been received by the Issuer, the Subsidiary Guarantors
or their counsel prior to the date hereof has been, or will prior to the Closing
Date be, complied with.
(15) No labor disturbance by the employees of the Issuer or any of
its subsidiaries exists or, to the knowledge of the Issuer or the Subsidiary
Guarantors, is imminent that might reasonably be expected to result in a
Material Adverse Effect; the Issuer and its subsidiaries are in compliance in
all respects with, as applicable and except where a failure to so comply would
not, individually or in the aggregate, have a Material Adverse Effect, all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA").
(16) The Issuer and each of its subsidiaries (a) is in compliance
with, and not subject to costs or liabilities under, any and all local, state,
provincial, federal and foreign laws, regulations, rules of common law, orders
and decrees, as in effect as of the date hereof, and any presently effective
judgments, decrees, orders and injunctions issued or promulgated thereunder,
including those relating to pollution or protection of public and employee
health and safety and the environment applicable to it or its business or
operations or ownership or use of its property ("Environmental Laws"), other
than such noncompliance or costs or liabilities that would not, either
individually or in the aggregate, result in a Material Adverse Effect, and (b)
possesses all permits, certificates of public convenience and necessity,
licenses, authorizations, or other approvals required
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under applicable Environmental Laws, other than such permits, certificates,
licenses, authorizations or approvals the lack of which would not, either
individually or in the aggregate, result in a Material Adverse Effect. All
currently pending and, to its knowledge, threatened proceedings, notices of
violation, demands, notices of potential responsibility or liability, suits and
existing environmental or other conditions with respect to which the Issuer or
its subsidiaries could reasonably be expected to have any liability are fully
and accurately described in all material respects in the Offering Memorandum
except as would not, either individually or in the aggregate, result in a
Material Adverse Effect. The Issuer maintains a system of internal management
controls sufficient to provide reasonable assurance that all material sampling,
analytical, recordkeeping and reporting requirements under applicable
Environmental Laws are implemented, executed and maintained in accordance with
the requirements of such Environmental Laws.
(17) The Issuer and each of its subsidiaries has (a) good and
marketable title to all of the properties and assets described in the Offering
Memorandum as owned by it and good and marketable title to the leasehold estates
in the real and personal property described in the Offering Memorandum as leased
by it, free and clear of all Liens (as defined in the Indenture), except for
Liens described in the Offering Memorandum, Liens permitted under the Indenture
and such Liens as would not, either individually or in the aggregate, result in
a Material Adverse Effect, (b) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made all
declarations and filings with, all federal, state, local and foreign
authorities, all self-regulatory authorities and all courts and other tribunals
(each, an "Authorization") to (i) carry on its business as it is currently being
conducted and as described in the Offering Memorandum, (ii) own, lease, license
and operate its respective properties in accordance with its business as
currently conducted, and (iii) proceed with the acquisition of Sea Mar, and (c)
no reason to believe that any governmental body or agency, domestic or foreign,
is considering limiting, suspending or revoking any such Authorization, except
where such limiting, suspending or revoking would not, either individually or in
the aggregate, result in a Material Adverse Effect. All such Authorizations are
valid and in full force and effect and the Issuer and each of its subsidiaries
is in compliance with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities having jurisdiction
with respect to such Authorizations except where the failure to be in compliance
would not, either individually or in the aggregate, result in a Material Adverse
Effect. Except as would not, either individually or in the aggregate, result in
a Material Adverse Effect, all leases and storage contracts to which the Issuer
or any of its subsidiaries is a party are valid, binding and enforceable, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity and no default has occurred and is
continuing thereunder.
(18) The Issuer and each of its subsidiaries owns, possesses or has
the right to employ all patents, patent rights, licenses, inventions,
copyrights, technology, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks and trade names (collectively, the
"Intellectual Property"), if any, necessary to conduct the businesses operated
by the Issuer or any of its subsidiaries as
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described in the Offering Memorandum. None of the Issuer or the Subsidiary
Guarantors has received any notice of infringement of or conflict with (and
neither knows of any such infringement or a conflict with) asserted rights of
others with respect to any of the foregoing that, if such assertion of
infringement or conflict were sustained, would result in a Material Adverse
Effect. To the knowledge of the Issuer and each of the Subsidiary Guarantors,
the use of the Intellectual Property in connection with the business and
operations of the Issuer and its subsidiaries does not infringe on the rights of
any person.
(19) The Issuer and each of its subsidiaries has timely and
properly prepared and filed all tax returns and necessary federal, state, local
and foreign tax returns which are required to be filed by the Issuer and each of
its subsidiaries, and all taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from such
entities or that are due and payable have been paid, other than those being
contested in good faith and for which reserves have been provided in accordance
with generally accepted accounting principles or those currently payable without
penalty or interest. To the knowledge of the Issuer and each of the Subsidiary
Guarantors, there are no material tax deficiencies or proposed additional tax
assessments which have been or might be asserted against any of them or their
subsidiaries or their assets or property.
(20) None of the Issuer or its subsidiaries is an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), or analogous foreign laws and regulations.
(21) Except with respect to the Notes or the New Notes as
contemplated by the Registration Rights Agreement and with respect to securities
issuable pursuant to the acquisition of Sea Mar, there are no holders of
securities of the Issuer or any of its subsidiaries who have the right to
request or demand that the Issuer or any of its subsidiaries register under the
Act or analogous foreign laws and regulations any of such securities held by any
such holders.
(22) The Issuer and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that:
(a) transactions are executed in accordance with management's general or
specific authorizations; (b) transactions are recorded as necessary to permit
preparation of its financial statements in conformity with United States
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 its
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(23) The Issuer and each of its subsidiaries maintain insurance
covering their properties, assets, operations, personnel and businesses, and
such insurance is of such type and in such amounts in accordance with customary
industry practice to protect the Issuer and its subsidiaries and their
businesses. None of the Issuer or the Subsidiary Guarantors has received notice
from any insurer or agent of such insurer that any material capital improvements
or other material expenditures will
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have to be made in order to continue any insurance maintained by any of them
other than capital improvements and other expenditures that have been budgeted
by the Issuer or its subsidiaries, as the case may be.
(24) None of the Issuer, the Subsidiary Guarantors or their
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has (a)
taken, directly or indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or manipulation of the price of
any security of the Issuer or any of the Subsidiary Guarantors to facilitate the
sale or resale of the Notes or (b) since the date of the Preliminary Offering
Memorandum (i) sold, bid for, purchased or paid any person any compensation for
soliciting purchases of the Notes in a manner that would require registration of
the Notes under the Act or (ii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Issuer or any of the Subsidiary Guarantors in a manner that would require
registration of the Notes under the Act.
(25) No registration under the Act of the Notes is required for the
sale of the Notes to the Initial Purchasers as contemplated by this Agreement or
for the Exempt Resales, assuming in each case (a) the purchasers who buy the
Notes in the Exempt Resales are Eligible Purchasers and (b) the accuracy of and
compliance with the Initial Purchasers' representations, warranties and
covenants contained in Section 4(B) of this Agreement. No form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Act) was used by the Issuer, any of the Subsidiary Guarantors or any
of their representatives in connection with the offer and sale of any of the
Notes or in connection with Exempt Resales, including, but not limited to,
articles, notices or other communications published in any newspaper, magazine
or similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising. Neither the Issuer nor the Subsidiary Guarantors nor any of their
affiliates has entered into, and none of the Issuer or the Subsidiary Guarantors
or their affiliates will enter into, any contractual arrangement with respect to
the distribution of the Notes except for this Agreement.
(26) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Notes, the New Notes, and Subsidiary
Guarantees to be purchased by the Eligible Purchasers will not involve any
prohibited transaction within the meaning of Section 406(a) of ERISA or Section
4975(c)(1)(A)-(D) of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder ("Code"). The
representation made by the Issuer and each of the Subsidiary Guarantors in the
preceding sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made by the
Eligible Purchasers as set forth in the Offering Memorandum under the caption
"Transfer Restrictions."
(27) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of its
date, contains the information specified in, and meets the requirements of, Rule
144A(d)(4) under the Act.
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(28) As of December 31, 1997, none of the Issuer, or any of the
Issuer's subsidiaries had any material liabilities or obligations, direct or
contingent, that were not set forth in the financial statements (including the
pro forma financial statements) and the notes thereto set forth in the Offering
Memorandum. Since December 31, 1997, neither the Issuer nor any of its
subsidiaries had any material liabilities or obligations, direct or contingent,
that were not set forth in the Issuer's consolidated balance sheet as of
December 31, 1997, or in the notes thereto. Since the date as of which
information is given in the Offering Memorandum and up to the Closing Date,
except as otherwise expressly set forth in the Offering Memorandum, (a) none of
the Issuer or its subsidiaries has (i) incurred any liabilities or obligations,
direct or contingent, that are not in the ordinary course of business that
would, either individually or in the aggregate, result in a Material Adverse
Effect or (ii) entered into any material transaction not in the ordinary course
of business, (b) there has not been any event or development in respect of the
business, development or financial condition of the Issuer or any of its
subsidiaries that would, either individually or in the aggregate, result in a
Material Adverse Effect, (c) there has been no dividend or distribution of any
kind declared, paid, or made by either the Issuer or any of the Issuer's
subsidiaries on any class of its equity securities, and (d) there has not been
any change in the long-term debt of the Issuer and its subsidiaries.
(29) Neither the Issuer nor any of the Subsidiary Guarantors (nor
any agent acting on behalf of the Issuer or any of the Subsidiary Guarantors)
has taken, and none of them will take, any action that might cause this
Agreement or the issuance or sale of the Notes or New Notes to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220), Regulation
U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System or analogous foreign laws and
regulations, in each case as in effect, or as the same may hereafter be in
effect, on the Closing Date.
(30) The accountants who have certified the financial statements
included as part of the Offering Memorandum are independent accountants within
the meaning of the Act. The historical financial statements of the Issuer and
Sea Mar comply as to form in all material respects with the requirements
applicable to registration statements on Form S-1 under the Act and present
fairly in all material respects the consolidated financial position and results
of operations of the Issuer and Sea Mar at the respective dates and for the
respective periods indicated. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis throughout the periods presented and comply as to form
with the rules and regulations promulgated under the Act. The pro forma
financial statements included in the Offering Memorandum (a) have been prepared
on a basis consistent with such historical statements, except for the pro forma
adjustments specified therein, (b) include all material adjustments to the
historical financial statements required by Rule 11-02 of Regulation S-X under
the Exchange Act to reflect the transactions described in the Offering
Memorandum and (c) give effect to assumptions made on a reasonable basis and
present fairly in all material respects the historical and proposed transactions
contemplated by the Offering Memorandum, this Agreement, the Operative Documents
and the acquisition of Sea Mar. All other financial and statistical information
and data included in the Offering Memorandum (including, but not limited to,
financial and statistical information contained in the Offering Memorandum under
the headings "Summary -- Selected Historical and
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Pro Forma Condensed Consolidated Financial Data," "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations"), historical and pro forma, are accurately presented in all material
respects and prepared on a basis consistent with the financial statements and
the books and records of the Issuer and its subsidiaries.
(31) None of the Issuer or the Subsidiary Guarantors is or, upon
consummation of the transactions contemplated by the Operative Documents, will
be (a) "insolvent" as that term is defined in Section 101(32) of the United
States Bankruptcy Code (the "Bankruptcy Code") (11 U.S.C. Section 101(32)),
Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or Section 2 of the
Uniform Fraudulent Conveyance Act ("UFCA"), (b) an entity with "unreasonably
small capital" as that term is used in Section 548(a)(2)(ii) of the Bankruptcy
Code or Section 5 of the UFCA, (c) engaged or about to engage in a business or
transaction for which its remaining property is "unreasonably small" in relation
to the business or transaction as that term is used in Section 4 of the UFTA or
(d) unable to pay its debts as they mature or become due, within the meaning of
Section 548(a)(2)(B)(iii) of the Bankruptcy Code, Section 4 of the UFTA and
Section 6 of the UFCA. The Issuer and each of the Subsidiary Guarantors now owns
and upon consummation of the Transactions will own assets having a value both at
"fair valuation" and at "present fair saleable value" greater than the amount
required to pay its "debts" as such terms are used in Section 2 of the UFTA and
Section 2 of the UFCA.
(32) There are no contracts, agreements or understandings between
the Issuer or any of the Subsidiary Guarantors and any other person other than
the Initial Purchasers that would give rise to a valid claim against the Issuer,
the Subsidiary Guarantors or the Initial Purchasers for a brokerage commission,
finder's fee or like payment in connection with the issuance, purchase and sale
of the Notes or New Notes.
(33) The statistical and market-related data included in the
Offering Memorandum are based on or derived from sources that the Issuer and the
Subsidiary Guarantors believe to be reliable and accurate and represent the
Issuer's and the Subsidiary Guarantors' good faith estimates that are made on
the basis of data derived from such sources.
(34) No forward-looking statement (within the meaning of Section
27A of the Act and Section 21E of the Exchange Act) contained in the Offering
Memorandum has been made without a reasonable basis or has been disclosed other
than in good faith.
(35) Sea Mar and any of its subsidiaries that owns the marine
vessels described in the Offering Memorandum, which operate in United States
coastwise trade (the "Vessels"), are and at all times have been citizens of the
United States within the meaning of Section 2 of the Shipping Act of 1916, as
amended, 46 U.S.C. Section 802 (the "Shipping Act"), and qualified to engage in
coastwise trade. At no time during Sea Mar's or any subsidiary's ownership of
the Vessels have any of the Vessels been sold, chartered or otherwise
transferred to any person or entity in violation of any applicable laws, rules
or regulations. Each Vessel so required has a certificate of inspection from the
United States Coast Guard and an American Bureau of Shipping load line
certificate where
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applicable, in each case free of reported or reportable exceptions or notations
of record, except where failure to be so certified would not, either
individually or in the aggregate, result in a Material Adverse Effect.
(36) Each certificate signed by any officer of the Issuer or any of
the Subsidiary Guarantors and delivered to the Initial Purchasers or counsel for
the Initial Purchasers pursuant to, or in connection with, this Agreement shall
be deemed to be a representation and warranty by the Issuer or such Subsidiary
Guarantor to the Initial Purchasers as to the matters covered by such
certificate.
(37) The Issuer and each of the lenders have executed the amendment
to the Credit Agreement that increases the aggregate limit under the Credit
Agreement to $180 million as further described in the Offering Memorandum (the
"Amended Credit Agreement").
The Issuer and each of the Subsidiary Guarantors acknowledge that the
Initial Purchasers and, for purposes of the opinions to be delivered to the
Initial Purchasers pursuant to Section 7 of this Agreement, the various law
firms acting as counsel to the Issuer and each of the Subsidiary Guarantors and
counsel to the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and the Issuer and each Subsidiary Guarantor hereby
consent to such reliance.
(B) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Issuer that it is a QIB with such
knowledge and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the securities. Each
of the Initial Purchasers, severally and not jointly, represents, warrants and
agrees with the Issuer that (i) it has not and will not solicit offers for, or
offer or sell, the Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the Act
and (ii) it has and will solicit offers for the Notes only from, and will offer
the Notes only to, (x) persons whom such Initial Purchaser reasonably believes
to be QIBs 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 such Initial Purchaser that each such account is a QIB
to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and, in each case, in transactions under Rule 144A, or
(y) persons other than U.S. persons outside the U.S. in reliance on Regulation
S.
Each of the Initial Purchasers, severally and not jointly, represents
and warrants that the source of funds being used by it to acquire the Notes does
not include the assets of any "employee benefit plan" (within the meaning of
Section 3 of ERISA) or any "plan" (within the meaning of Section 4975 of the
Code).
The Initial Purchasers understand that the Issuer and, for purposes of
the opinion to be delivered to them pursuant to Section 7(f) hereof, counsel to
the Issuer will rely upon the accuracy and truth of the foregoing
representations, and the Initial Purchasers hereby consent to such reliance.
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5. INDEMNIFICATION. (a) Each of the Issuer and the Subsidiary
Guarantors, on a joint and several basis, agrees to indemnify and hold harmless
each of the Initial Purchasers, each person, if any, who controls the Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, the agents, employees, officers and directors of the Initial
Purchasers and the agents, employees, officers and directors of any such
controlling person from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all reasonable expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all reasonable amounts paid in
settlement of any claim or litigation) to which they or any of them may become
subject under the Act, the Securities Exchange Act of 1934, as amended or
otherwise insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum, or in any supplement thereto or
amendment thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Issuer
and the Subsidiary Guarantors will not be liable in any such case to the extent,
but only to the extent, that any such loss, liability, claim, damage or expense
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the Initial Purchasers furnished
to the Issuer by or on behalf of the Initial Purchasers expressly for use
therein. This indemnity agreement will be in addition to any liability that each
of the Issuer and the Subsidiary Guarantors may otherwise have, including, but
not limited to, liability under this Agreement.
If any action is brought against any of the Initial Purchasers or any
such person with respect to which indemnity may be sought against the Issuer and
the Subsidiary Guarantors pursuant to the foregoing paragraph, the Initial
Purchasers or such person shall promptly notify the indemnifying party in
writing of the institution of such action and the indemnifying party shall
assume the defense of such action, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses, provided, however, that the omission to so notify the indemnifying
party shall not relieve the indemnifying party from any liability which they may
have to the Initial Purchasers or any such person or otherwise. The Initial
Purchasers shall have the right to employ their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the Initial
Purchasers unless the employment of such counsel shall have been authorized in
writing by the indemnifying party in connection with the defense of such action
or the indemnifying party shall not have employed counsel to have charge of the
defense of such action or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from or additional to those available to the indemnifying party
(in which case the indemnifying party shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in any of
which events such fees and expenses shall be borne by the indemnifying party and
paid as incurred (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel (together
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with appropriate local counsel) in any one action or series of related actions
in the same jurisdiction representing the indemnified parties who are parties to
such action). The indemnifying party shall not be liable for any settlement of
any such claim or action effected without its written consent but if settled
with the written consent of the indemnifying party, the indemnifying party
agrees to indemnify and hold harmless the Initial Purchasers and any such person
from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request prior
to the date of such settlement and (iii) such indemnified party shall have given
the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(b) The Initial Purchasers, severally and not jointly, agree to
indemnify and hold harmless the Issuer and the Subsidiary Guarantors, each
person, if any, who controls the Issuer within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, and each of its agents, employees,
officers and directors and the agents, employees, officers and directors of such
controlling person from and against any losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to reasonable attorneys' fees and
any and all reasonable expenses whatsoever incurred in investigating, preparing
or defending against any litigation, commenced or threatened, or any claim
whatsoever and any and all reasonable amounts paid in settlement of any claim or
litigation) to which they or either of them may become subject under the Act,
the Exchange Act or otherwise insofar as such losses, liabilities, claims,
damages or expenses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum or the Offering Memorandum, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that any such loss, liability, claim, damage
or expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information relating to the Initial Purchasers furnished
to the Issuer by or on behalf of the Initial Purchasers in writing expressly for
use therein. The Issuer, the Subsidiary Guarantors and the Initial Purchasers
acknowledge that the information set forth in Section 8 is the only information
furnished in writing by the Initial Purchasers to the Issuer expressly for use
in the Offering Memorandum.
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If any action is brought against the Issuer or the Subsidiary
Guarantors or any such person with respect to which indemnity may be sought
against the Initial Purchasers pursuant to the foregoing paragraph, the Issuer,
the Subsidiary Guarantors or such person shall promptly notify the Initial
Purchasers in writing of the institution of such action and the Initial
Purchasers shall assume the defense of such action, including the employment of
counsel reasonably satisfactory to such indemnified party and payment of all
fees and expenses, provided, however, that the omission to so notify the Initial
Purchasers shall not relieve the Initial Purchasers from any liability which
they may have to the Issuer, the Subsidiary Guarantors or any such person or
otherwise. The Issuer, the Subsidiary Guarantors or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the Issuer or such person unless the
employment of such counsel shall have been authorized in writing by the Initial
Purchasers in connection with the defense of such action or the Initial
Purchasers shall not have employed counsel to have charge of the defense of such
action or such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to the Initial Purchasers (in which case the
Initial Purchasers shall not have the right to direct the defense of such action
on behalf of the indemnified party or parties, but the Initial Purchasers may
employ counsel and participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of the Initial Purchasers), in any of
which events such fees and expenses shall be borne by the Initial Purchasers and
paid as incurred (it being understood, however, that the Initial Purchasers
shall not be liable for the expenses of more than one separate counsel in any
one action or series of related actions in the same jurisdiction representing
the indemnified parties who are parties to such action). Anything in this
paragraph to the contrary notwithstanding, the Initial Purchasers shall not be
liable for any settlement of any such claim or action effected without the
written consent of the Initial Purchasers but if settled with the written
consent of the Initial Purchasers, the Initial Purchasers agrees to indemnify
and hold harmless the Issuer, the Subsidiary Guarantors and any such person from
and against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (a) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (b) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (c) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
6. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 5 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified
-20-
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under Section 5 of this Agreement, the Issuer, the Subsidiary Guarantors and the
Initial Purchasers shall contribute to the amount paid or payable by such
indemnified party as a result of such aggregate losses, claims, damages,
liabilities and expenses of the nature contemplated by such indemnification
provision (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action or any claims
asserted) to which the Issuer and/or the Subsidiary Guarantors and the Initial
Purchasers may be subject (a) in such proportion as is appropriate to reflect
the relative benefits received by the Issuer and the Subsidiary Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, from the Offering
or, (b) if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (a) above but also the relative fault of the Issuer and the
Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Issuer and the
Subsidiary Guarantors, on the one hand, and the Initial Purchasers, on the other
hand, shall be deemed to be in the same proportion as (i) the total proceeds
from the Offering (net of discounts and commissions but before deducting
expenses) received by the Issuer and the Subsidiary Guarantors and (ii) the
total discounts and commissions received by the Initial Purchasers as set forth
in the table on the cover page of the Offering Memorandum. The relative fault of
the Issuer and the Subsidiary Guarantors, on the one hand, and the Initial
Purchasers, on the other hand, 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 Issuer (and the Subsidiary Guarantors) or the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission.
The Issuer, the Subsidiary Guarantors and the Initial Purchasers agree
that it would not be just and equitable if contribution pursuant to this Section
6 were determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 6, (a) in no case shall the
Initial Purchasers be required to contribute any amount in excess of the amount
by which the total discount and commissions applicable to the Notes pursuant to
this Agreement exceeds the amount of any damages that the Initial Purchasers
have otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (b) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial Purchasers, and each person, if any, who controls the Issuer or the
Subsidiary Guarantors within the meaning of Section 15 of the Act or Section 20
of the Exchange Act shall have the same rights to contribution as the Issuer or
the Subsidiary Guarantors, respectively, where applicable, subject in each case
to clauses (a) and (b) of this paragraph. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action against
such party in respect of which a claim for contribution may be made against
another party or parties under this Section 6, notify such party
-21-
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or parties from whom contribution may be sought, but the omission to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 6 or otherwise; provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section 5 for purposes of indemnification. No party shall be liable for
contribution with respect to any action or claim settled without its written
consent, provided, however, that such written consent was not unreasonably
withheld.
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations
of the Initial Purchasers to purchase and pay for the Notes, as provided for in
this Agreement, shall be subject to satisfaction of the following conditions
prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuer and
the Subsidiary Guarantors contained in this Agreement shall be true and correct
on the date of this Agreement and on the Closing Date. The Issuer and the
Subsidiary Guarantors shall have performed or complied with all of the
agreements contained in this Agreement and required to be performed or complied
with by them at or prior to the Closing Date.
(b) No stop order suspending the qualification or exemption from
qualification of the Notes in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency that would, as of the Closing Date, prevent the issuance of
the Notes or the Exchange Offer; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the best knowledge of the
Issuer and the Subsidiary Guarantors, threatened against the Issuer and/or the
Subsidiary Guarantors before any court or arbitrator or any governmental body,
agency or official that, if adversely determined, would result in a Material
Adverse Effect.
(d) Since the date as of which information is given in the
Offering Memorandum, except as expressly set forth therein, neither the Issuer
nor any of its subsidiaries had any material liabilities or obligations, direct
or contingent, that were not set forth in the Issuer's consolidated balance
sheet as of December 31, 1997 or in the notes thereto. Since the date as of
which information is given in the Offering Memorandum and up to the Closing
Date, except as otherwise expressly set forth in the Offering Memorandum, (i)
none of the Issuer or its subsidiaries has (A) incurred any liabilities or
obligations, direct or contingent, that would, either individually or in the
aggregate, result in a Material Adverse Effect or (B) entered into any material
transaction not in the ordinary course of business, and (ii) there has not been
any event or development in respect of the business, development or financial
condition of the Issuer or any of its subsidiaries that would, either
individually or in the aggregate, result in a Material Adverse Effect.
-22-
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(e) The Initial Purchasers shall have received certificates, dated
the Closing Date, signed by (i) the Chief Executive Officer and (ii) the chief
financial or accounting officer of the Issuer confirming, as of the Closing
Date, the matters set forth in paragraphs (a), (b), (c) and (d) of this Section
7.
(f) The Initial Purchasers shall have received on the Closing Date
opinions dated the Closing Date, addressed to the Initial Purchasers, of
Xxxxxxxxx & Xxxxxxx, of Xxxxxx, Xxxx & Xxxxxxx (with respect to foreign
subsidiaries), of Xxxxxx & Co. (with respect to foreign subsidiaries) and of the
General Counsel to the Company (with respect to subparagraph 12 of Exhibit A),
in each case counsel to the Issuer, collectively in substance substantially
similar to Exhibit A hereto.
(g) The Initial Purchasers shall have received on the Closing Date
an opinion dated the Closing Date of Xxxxxx & Xxxxxx L.L.P., special counsel to
the Initial Purchasers, covering substantially such matters as are customarily
covered in such opinions.
(h) The Initial Purchasers shall have received a "comfort letter"
from each of Deloitte & Touche L.L.P. and Xxxxxx Xxxxxxxx LLP, independent
public accountants for the Issuer and the Subsidiary Guarantors and Sea Mar,
respectively, dated as of the date of this Agreement, addressed to the Initial
Purchasers and in form and substance satisfactory to the Initial Purchasers and
counsel to the Initial Purchasers. In addition, as of the Closing Date, the
Initial Purchasers shall have received "bring-down comfort letters" from
Deloitte & Touche L.L.P. and Xxxxxx Xxxxxxxx LLP in form and substance
satisfactory to the Initial Purchasers and counsel to the Initial Purchasers
covering the same items and matters as covered in the "comfort letters" but as
of a date that is not more than three days prior to the date thereof and any
changes and additions to the Preliminary Offering Memorandum that were made
producing the Offering Memorandum.
(i) The Issuer, the Subsidiary Guarantors and the Trustee shall
have entered into the Indenture, in a form satisfactory to the Initial
Purchasers, and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(j) The Issuer and the Subsidiary Guarantors shall have entered
into the Registration Rights Agreement, in a form satisfactory to the Initial
Purchasers, and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(k) The Notes shall have been approved as eligible for trading in
the PORTAL market.
(l) There shall not have occurred any downgrading, nor shall any
notice have been given of (i) any intended or potential downgrading of the Notes
or (ii) any review or possible change that does not indicate an improvement in
the rating accorded the Notes.
(m) The Initial Purchasers shall have been furnished with true and
correct copies of such other documents as they may reasonably request in
writing.
-23-
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(n) Each of the acquisition of Sea Mar and the Amended Credit
Agreement shall have been closed.
(o) Xxxxxx & Xxxxxx L.L.P., counsel to the Initial Purchasers,
shall have been furnished with such documents as they may reasonably request in
writing to enable them to review or pass upon the matters referred to in this
Section 7 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
contained in this Agreement.
If any of the conditions specified in this Section 7 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by the Initial Purchasers on notice to the Issuer at
any time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party except that the Issuer and the
Subsidiary Guarantors, jointly and severally, shall reimburse the Initial
Purchasers for all of the reasonable out-of-pocket expenses, including the
reasonable expense of Initial Purchasers' counsel, incurred by the Initial
Purchasers in connection with this Agreement. Notwithstanding any such
termination, the provisions of Sections 3(f), 5, 6, 9, 10(d), 13, 14 and 15
shall remain in effect.
The Issuer's obligation under this Agreement to sell the Notes to the
Initial Purchasers on the Closing Date is subject to the Initial Purchasers
purchasing and paying for all of the Notes.
8. INITIAL PURCHASERS' INFORMATION. The Issuer and the Initial
Purchasers severally acknowledge that the statements set forth in (a) the last
paragraph on the front cover page concerning the forms of the offering by the
Initial Purchasers; (b) the first paragraph on page 3 concerning stabilization
activities by the Initial Purchasers; and (c) the statements concerning the
Initial Purchasers contained in the fifth paragraph under the caption "Plan of
Distribution" in the Offering Memorandum constitute the only information
furnished in writing by or on behalf of the Initial Purchasers expressly for use
in the Offering Memorandum.
9. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations and warranties, covenants and agreements contained in this
Agreement, including the agreements contained in Sections 3(f) and 10(d), the
indemnity agreements contained in Section 5 and the contribution agreements
contained in Section 6 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Initial Purchasers
or any controlling person thereof or by or on behalf of the Issuer, any of the
Subsidiary Guarantors or any controlling person of any thereof, and shall
survive delivery of and payment for the Notes to and by the Initial Purchasers.
The representations contained in Section 4 and the agreements contained in
Sections 3(f), 5, 6, 9, 10(d), 13, 14 and 15 shall survive the termination of
this Agreement, including pursuant to Sections 7 and 10.
10. EFFECTIVE DATE OF AGREEMENT.
-24-
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(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Issuer from the
Initial Purchasers, without liability (other than with respect to Sections 5 and
6) on the Initial Purchasers if, on or prior to such date, (i) the Issuer or any
of the Subsidiary Guarantors shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed under
this Agreement, (ii) any other condition of the obligations of the Initial
Purchasers under this Agreement as provided in Section 7 is not fulfilled when
and as required in any material respect, (iii) trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or NASDAQ shall have
been suspended or materially limited, or minimum prices shall have been
established on such exchange by the Commission, or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a general
banking moratorium shall have been declared by U.S. federal, New York, or if a
moratorium in foreign exchange trading by major international banks or persons,
shall have been declared, or (v) there is an outbreak or escalation of military
action, hostilities or other national or international calamity or crisis on or
after the date of this Agreement, or if there has been a declaration by the
United States of a national emergency or war, the effect of which shall be, in
the Initial Purchasers' judgment, to make it inadvisable or impracticable to
proceed with the offering or delivery of the Notes on the terms and in the
manner contemplated in the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 10 shall be
given at the address specified in Section 11 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any clause
of Section 10(b), or if the sale of the Notes provided for in this Agreement is
not consummated because any condition to the obligations of the Initial
Purchasers set forth in this Agreement is not satisfied or because of any
refusal, inability or failure on the part of either of the Issuer or any
Subsidiary Guarantor to perform any agreement in this Agreement or comply with
any provision of this Agreement, the Issuer and the Subsidiary Guarantors,
jointly and severally, will, subject to demand by the Initial Purchasers,
reimburse the Initial Purchasers for all of their reasonable out-of-pocket
expenses (including the reasonable fees and expenses of the Initial Purchasers'
counsel) incurred in connection with this Agreement.
11. NOTICES. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchasers, shall be mailed,
delivered, or telexed, telegraphed or telecopied and confirmed in writing to SBC
Warburg Dillon Read Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(telephone: (000) 000-0000), Attention: Corporate Finance Department, telecopy
number: (000) 000-0000; and if sent to the Issuer or the Subsidiary Guarantors,
shall be mailed, delivered or telexed, telegraphed or telecopied and confirmed
in writing to Pool Energy Services Co., 10375
-25-
00
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 (telephone: (000) 000-0000, Attention:
Senior Vice President -- Finance, telecopy number: (000) 000-0000.
All such notices and communications shall be deemed to have been duly
given: (a) at the time delivered by hand, if personally delivered; (b) five
business days after being deposited in the mail, postage prepaid, if mailed; (c)
when answered back, if telexed; (d) when receipt acknowledged if telecopied; and
(e) on the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
12. PARTIES. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Issuer and the
Subsidiary Guarantors and the controlling persons and agents referred to in
Sections 5 and 6, and their respective successors and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provision
herein contained. The term "successors and assigns" shall not include a
purchaser, in its capacity as such, of Notes from the Initial Purchasers.
13. CONSTRUCTION. This Agreement shall be construed in accordance
with the internal laws of the State of New York (without giving effect to any
provisions thereof relating to conflicts of law that would result in the
application of the laws of another jurisdiction).
14. SUBMISSION TO JURISDICTION. The Issuer and each Subsidiary
Guarantor irrevocably submit to the nonexclusive jurisdiction of any State or
Federal court sitting in New York over any suit, action or proceeding arising
out of or relating to this Agreement. The Issuer and each Subsidiary Guarantor
irrevocably waive, to the fullest extent permitted by law, any objection they
may now or thereafter have to the laying of venue of any such court and any
claim that any such suit, action or proceeding brought in such a court has been
brought in an inconvenient forum. The Issuer, and each Subsidiary Guarantor
agree that a final judgment in any such suit, action or proceeding brought in
any such court shall be conclusive and binding upon the Issuer and each
Subsidiary Guarantor and may be enforced in any other court to the jurisdiction
of which the Issuer and such Subsidiary Guarantor are or may be subject, by suit
upon such judgment. The Issuer and each Subsidiary Guarantor hereby appoint,
without power of revocation, CT Corporation System as their agent to accept and
acknowledge on its behalf service of any and all process which may be served in
any suit, action or proceeding arising out of or relating to this letter.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of the Initial Purchasers to bring
proceedings against the Issuer and/or the Subsidiary Guarantor in the courts of
any other jurisdiction. The obligations of the Issuer and the Subsidiary
Guarantors under this Agreement are joint and several and, in any proceeding
against the Issuer or a Subsidiary Guarantors, it shall not be necessary to join
any other such person.
15. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
-26-
27
16. COUNTERPARTS. This Agreement may be executed in various
counterparts and by the parties to this Agreement in separate counterparty, 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.
17. MISCELLANEOUS. SBC Warburg Dillon Read Inc., an indirect,
wholly owned subsidiary of Swiss Bank Corporation, is not a bank and is separate
from any affiliated bank, including any U.S. branch or agency of Swiss Bank
Corporation. Because SBC Warburg Dillon Read Inc. is a separately incorporated
entity, it is solely responsible for its own contractual obligations and
commitments, including obligations with respect to sales purchases of
securities. Securities sold, offered or recommended by SBC Warburg Dillon Read
Inc. are not deposits, are not insured by the Federal Deposit Insurance
Corporation, are not guaranteed by a branch or agency, and are not otherwise an
obligation or responsibility of a branch or agency.
-27-
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If the foregoing correctly sets forth the understanding among the
Issuer, the Subsidiary Guarantors and the Initial Purchasers, please so indicate
in the space provided below for the purpose, whereupon this letter and your
acceptance shall constitute a binding agreement among the Issuer, each of the
Subsidiary Guarantors and the Initial Purchasers.
POOL ENERGY SERVICES CO.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
ASSOCIATED PETROLEUM SERVICES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
BIG 10 FISHING TOOL COMPANY, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
INTERNATIONAL AIR DRILLING COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
KUUKPIK - POOL ARCTIC ALASKA
By: Pool Alaska, Inc.
d/b/a Pool Artic Alaska
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-28-
29
PCNV, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL ALASKA, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL AMERICAS, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL-AUSTRALIA, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL CALIFORNIA ENERGY SERVICES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL COMPANY
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-29-
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POOL COMPANY HOUSTON LTD.
By: Pool Company,
General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
POOL COMPANY TEXAS, LTD.
By: Pool Company,
General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
POOL ENERGY HOLDING, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL INTERNATIONAL, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
POOL PRODUCTION SERVICES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-30-
31
PTX, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Confirmed and accepted as of
the date first above written:
SBC WARBURG DILLON READ INC.,
XXXXXX XXXXXXX & CO. INCORPORATED, AND
XXXXXXX RICE & COMPANY L.L.C.
By: SBC Warburg Dillon Read Inc.
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
-31-
32
EXHIBIT A
OPINIONS OF COUNSEL
The opinions of counsel for the Issuer, to be delivered pursuant to
Section 7(f) of the Purchase Agreement shall be to the effect that:
1. The Issuer, each of the Subsidiary Guarantors and each of the
Issuer's significant foreign subsidiaries have been duly incorporated and are
validly existing corporations in good standing under the laws of their
respective jurisdictions of organization and have all requisite power and
authority under their constituent documents and applicable laws to (a) carry on
their business as currently conducted and as proposed to be conducted, in each
case as described in the Offering Memorandum and (b) own, lease and operate
their respective properties in accordance with their business as currently and
as proposed to be conducted.
2. The Issuer, each of the Subsidiary Guarantors and each of the
Issuer's significant foreign subsidiaries is duly qualified and in good standing
as a foreign entity authorized to do business in each jurisdiction listed in
Schedule A hereto.
3. The Issuer, either directly or indirectly through a Subsidiary
Guarantor, owns of record all of the outstanding capital stock, partnership
interests, membership interests and other securities evidencing equity ownership
of each of the Subsidiary Guarantors, free and clear of any adverse claim within
the meaning of the Uniform Commercial Code, and all such securities have been
duly authorized and validly issued, fully paid and nonassessable and have not
been issued in violation of, or subject to, any preemptive, first refusal or
similar rights.
4. The Issuer and each of the Subsidiary Guarantors have all
requisite power and authority to execute, deliver and perform all of their
obligations under the Operative Documents and to consummate the transactions
contemplated by the Operative Documents and, without limitation, the Issuer has
all requisite power and authority to issue, sell and deliver the Notes and New
Notes and each of the Subsidiary Guarantors has all requisite power and
authority to execute, deliver and perform all of its obligations under the
Subsidiary Guarantees.
5. The Agreement has been duly authorized, executed and delivered
by the Issuer and each Subsidiary Guarantor.
6. The Notes and the New Notes have been duly authorized by the
Issuer. The Notes have been duly executed and, when authenticated and delivered
to and paid for in accordance with the terms of the Agreement, and the New
Notes, when executed, authenticated and delivered in exchange for the Notes in
accordance with the Indenture, will be (a) valid and binding joint and several
obligations of the Issuer enforceable in accordance with their terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent
A-1
33
conveyance, moratorium or similar laws affecting the enforcement of creditors'
rights generally and general equitable principles (regardless of whether in a
proceeding in law or equity) and (b) entitled to the benefits of the Indenture.
7. Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by, and is a valid and binding
agreement of, each of the Issuer and each Subsidiary Guarantor, enforceable in
accordance with its terms except as the enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforceability of creditors' rights generally and
(ii)general equitable principles (regardless of whether in a proceeding in law
or equity) and except that such counsel does not express an opinion as to the
indemnification provisions contained in Section 8 of the Registration Rights
Agreement or Sections 5 and 6 of the Agreement.
8. The Subsidiary Guarantees have been duly authorized, executed
and delivered by each Subsidiary Guarantor, and the Subsidiary Guarantees are
valid and binding joint and several obligations of each Subsidiary Guarantor,
enforceable against each Subsidiary Guarantor in accordance with its terms,
except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
affecting the enforcement of creditors' rights generally and (ii) general
equitable principles (regardless of whether in a proceeding in law or equity).
9. The execution, delivery or performance by the Issuer and the
Subsidiary Guarantors (as applicable) of the Agreement and each of the other
Operative Documents to which they are a party, and the use of the proceeds of
the sale of the Notes in the manner contemplated by the Offering Memorandum,
does not or will not violate, conflict with or constitute a breach of any of the
terms or provisions of, or a default under (or an event that with notice or the
lapse of time, or both, would constitute a default), or require a consent or
waiver (other than registration of the Notes or the New Notes under Act pursuant
to the Registration Rights Agreement and any necessary qualifications under the
state securities or blue sky laws of the various jurisdictions in which the
Notes are being offered by the Initial Purchasers, as to which counsel expresses
no opinion) not previously obtained and in full force and in effect under, or
result in the creation or imposition of a lien, charge or encumbrance on any
property or assets of the Issuer or any of the Subsidiary Guarantors pursuant
to, (a) the articles of incorporation, charter, bylaws or other organizational
documents of the Issuer or any of the Subsidiary Guarantors or (b) any bond,
debenture, note, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Issuer or any of the
Subsidiary Guarantors is a party or by which the Issuer or any of the Subsidiary
Guarantors is bound or to which any of the property or assets of the Issuer or
any of its subsidiaries is subject and which is filed or incorporated by
reference by the Company with the commission as an Exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 or any
subsequent current report of the Company (except where such conflict, breach, or
default could not reasonably be expected to have a Material Adverse Effect).
X-0
00
00. Assuming the accuracy of the representations and warranties of
the Initial Purchasers in Section 4(B) of the Agreement and the accuracy and
performance of the representations and agreements of the Issuer and the
Subsidiary Guarantors in Sections 3(b), 3(l) and the second and third sentence
of Section 4(A)(25) of the Agreement, no consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of or with,
any court or governmental agency is required to be obtained or made for the
execution, delivery and performance by the Issuer and the Subsidiary Guarantors
of the Agreement or any of the other Operative Documents, or any of the
transactions contemplated thereby, except (a) registration of the offer and sale
of the New Notes under the Act pursuant to the Registration Rights Agreement,
(b) such as may be required by the NASD or pursuant to the blue sky law of any
state or such as may be required under any Energy Law, as to which counsel need
not express any opinion.
11. None of the Issuer or the Subsidiary Guarantors is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act.
12. After due inquiry, such counsel does not know of any legal or
governmental proceedings pending or threatened to which the Issuer or any
Subsidiary Guarantor is a party or to which any of the properties of the Issuer
or any Subsidiary Guarantors is subject other than proceedings which such
counsel believes are not likely to have a Material Adverse Effect or any effect
on the power or ability of the Issuer or any Subsidiary Guarantor to perform its
obligations under the Operative Documents or to consummate the transactions
contemplated thereby.
13. Each of the Operative Documents conform in all material
respects to the descriptions thereof contained in the Offering Memorandum; the
statements in the Offering Memorandum under the captions "Description of Notes,"
"Description of Other Indebtedness," "Certain U.S. Federal Income Tax
Considerations" and "Transfer Restrictions" in the Offering Memorandum, insofar
as such statements constitute a summary of the laws, regulations, legal matters,
documents or proceedings referred to therein, fairly summarize the matters
referred to therein.
14. Assuming the accuracy of the representations and warranties of
the Issuer and the Subsidiary Guarantors in Sections 3(k) and 3(l) and the
second and third sentences of Sections 4(A)(25) of the Agreement and of the
Initial Purchasers in Section 4(B) of the Agreement, the offer and sale of the
Notes to the Initial Purchasers in the manner contemplated by the Agreement or
in connection with the initial resale of such Notes by the Initial Purchasers
will be exempt from the registration requirements of the Act; and it is not
necessary to qualify an indenture in respect of the Notes or Subsidiary
Guarantees under the Trust Indenture Act in connection with such offer and sale
of the Notes.
15. The Offering Memorandum (except as to the financial statements
and other financial data contained therein) complies as to form in all material
respects with the requirements of the Act and the Trust Indenture Act as if it
were a prospectus filed under the Act, and to such counsel's
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knowledge, there are no contracts, licenses, agreements, leases or documents of
a character that would be required to be summarized or described in the Offering
Memorandum if it were a prospectus filed under the Act that are not described in
the Offering Memorandum.
In addition, such opinion shall include a statement that such counsel
has participated in conferences with officers and other representatives of the
Issuer and the Subsidiary Guarantors and representatives of the independent
public accountants of the Issuer and representatives of the Initial Purchasers
at which the contents of the Offering Memorandum were discussed, and although
such counsel has not independently verified and does not assume responsibility
for the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (except as and to the extent stated in subparagraph 13
above), on the basis of the foregoing (relying as to materiality to upon the
opinions of officers and other representatives of the Company), no facts have
come to the attention of such counsel that causes them to believe that the
Offering Memorandum, after giving effect to any amendment or supplement thereof
made prior to the Closing Date, as of its date or at the Closing Date contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that such
counsel need express no comment with respect to the financial statements and
schedules and statistical and market-related data included in the Offering
Memorandum).
Such opinion shall state that it is rendered to the Initial Purchasers
at the request of the Issuer.
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