1
EXHIBIT 10.1
EXECUTION COPY
--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
TRITON ENERGY LIMITED
AND
HM4 TRITON, L.P.
8% CONVERTIBLE PREFERENCE SHARES
(PAR VALUE $.01 PER SHARE)
AUGUST 31, 1998
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 References and Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II
PURCHASE OF 8% PREFERENCE SHARES
Section 2.1 Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.2 Representations and Warranties of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV
COVENANTS
Section 4.1 Furnishing of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.2 Rights Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.3 Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.4 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.5 Affirmative Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 4.6 Negative Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 4.7 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.8 Shareholders Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.9 Preferred Stock Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.10 HSR Act Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.11 Indemnification of Directors and Officers; Insurance . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.13 Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.14 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.15 Financial Advisory Agreement; Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
i
3
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.1 Conditions Precedent to Each Party's Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.2 Conditions Precedent to Obligation of Purchaser at the First Closing . . . . . . . . . . . . . . . . 41
Section 5.3 Conditions Precedent to Obligations of Company at the First Closing . . . . . . . . . . . . . . . . 43
Section 5.4 Conditions Precedent to Obligation of Purchaser at the Second Closing . . . . . . . . . . . . . . . 43
Section 5.5 Conditions Precedent to Obligations of Company at the Second Closing . . . . . . . . . . . . . . . . 45
ARTICLE VI
CLOSINGS
Section 6.1 Closings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.2 Actions to Occur at the First Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.3 Actions to Occur at the Second Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE VII
TERMINATION
Section 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Indemnification of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.2 Indemnification of Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.3 Defense of Third-Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 8.4 Direct Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.6 Tax Related Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IX
MISCELLANEOUS
Section 9.1 Survival of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.2 No Waiver; Modification in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 9.3 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ii
4
Section 9.5 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 9.6 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.11 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.12 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.13 Director and Officer Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 9.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
EXHIBITS
Exhibit A Form of Financial Advisory Agreement
Exhibit B Form of Monitoring and Oversight Agreement
Exhibit C Form of Preferred Stock Authorization
Exhibit D Form of Shareholders Agreement
Exhibit E Form of Indemnification Agreement
Exhibit F-1 Form of Legal Opinion of Xxxxxx Xxxxxxx, General Counsel to
the Company
Exhibit F-2 Form of Legal Opinion of X. X. Xxxxxx & Co.
Exhibit F-3 Form of Legal Opinion of Hunter & Hunter
iii
5
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of August 31, 1998, by and between
Triton Energy Limited, a Cayman Islands company (the "Company"), and HM4
Triton, L.P., a Cayman Islands exempted limited partnership (together with its
permitted assigns, "Purchaser").
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, and unless
the context requires a different meaning, the following terms have the meanings
indicated:
"5% Preference Shares" has the meaning set forth in Section 3.1(c)(i).
"5% Preference Shares Authorization" has the meaning set forth in
Section 3.1(c)(iii).
"8% Preference Shares" means the Company's 8% Convertible Preference
Shares, par value $.01 per share.
"Additional D&O Policies" has the meaning set forth in Section
4.11(b).
"Affiliate" means, with respect to any Person, any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person. For purposes of this
definition and this Agreement, the term "control" (and correlative terms) means
the power, whether by contract, equity ownership or otherwise, to direct the
policies or management of a Person.
"Agreement" means this Stock Purchase Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the
terms hereof.
"Approval" means any approval, authorization, grant of authority,
consent, order, qualification, permit, license, variance, exemption, franchise,
concession, certificate, filing or registration or any waiver of the foregoing,
or any notice, statement or other communication required to be filed with,
delivered to or obtained from any Governmental Entity or any other Person.
"Articles of Association" means the Company's Articles of Association,
as amended from time to time.
1
6
"Asset Value" shall mean the consideration to be paid for such asset
by the acquiring Person in a bona fide arms-length transaction with a
non-Affiliate third party, including all debt assumed as part of such
transaction or to which the assets subject to such transaction remain subject
and which remains outstanding immediately following such transaction; provided,
however, that if the consideration is payable in whole or in part in property
(which term shall include the securities of any issuer other than the Company)
other than cash, the fair market value of such property shall be determined as
follows: (i) if such property consists of securities, such value shall be the
Current Market Price of such securities and (ii) such value of property other
than securities shall be determined by the Company and HMCo in good faith or,
if the Company and HMCo do not agree on the fair market value of such property
within five (5) Business Days after HMCo's receipt of a copy of the written
offer to purchase such assets describing and quantifying the non-cash
consideration to be paid for such assets, then the Company and HMCo shall
select one nationally recognized independent appraiser (with each of the
Company and HMCo bearing one-half of the expense of such appraiser) to
determine the fair market value of that property and the appraised fair market
value of that property as determined by such appraiser shall be deemed the fair
market value of that property.
"Authorized Preferred Stock" has the meaning set forth in Section
3.1(c)(i).
"Benefit Plan" has the meaning set forth in Section 3.1(o).
"Board" means the Board of Directors of the Company.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in New York,
New York or Dallas, Texas generally are authorized or required by law or other
government actions to close.
"Capital Stock" means (i) with respect to any Person that is a
corporation or company, any and all shares, interests, participations or other
equivalents (however designated) of capital or capital stock of such Person and
(ii) with respect to any Person that is not a corporation or company, any and
all partnership or other equity interests of such Person.
"Closings" has the meaning provided therefor in Section 6.1.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder as in effect on the date hereof.
"Common Stock" means the Company's ordinary shares, par value $.01 per
share, and any Capital Stock for or into which such Common Stock hereafter is
exchanged, converted, reclassified or recapitalized by the Company or pursuant
to an agreement to which the Company is a party.
"Company" has the meaning set forth in the introductory paragraph
hereof.
"Company Disclosure Schedule" has the meaning set forth in Section
3.1.
2
7
"Company Indemnified Costs" means (i) any and all damages, losses,
claims, liabilities, demands, charges, suits, penalties, costs and expenses
(including court costs and reasonable legal fees and expenses incurred in
investigating and preparing for any litigation or proceeding) that any of the
Company Indemnified Parties incurs and that arise out of or result from any
breach or default by Purchaser of any of the representations or warranties
under this Agreement or any other Transaction Documents and (ii) any and all
damages, losses, claims, liabilities, demands, charges, suits, penalties, costs
and expenses (including court costs and reasonable legal fees and expenses
incurred in investigating and preparing for any litigation or proceeding) that
any of the Company Indemnified Parties incurs and that arise out of or result
from any breach by Purchaser of any of the covenants or agreements under this
Agreement or any other Transaction Documents.
"Company Interests" means:
(a) all rights, titles, interests, tenements,
hereditaments, appurtenances, benefits and privileges of the Company
or any of its Subsidiaries in, to and under the Concession Area, the
Material Oil and Gas Contracts, the other Contract Interests and all
material personal property, improvements, lease and well equipment,
easements, permits, servitudes, rights of way and surface rights
associated therewith, if any; and
(b) all material files, records and data owned
by, or in the actual or constructive possession of, the Company or any
of its Subsidiaries relating to the Company, any of its Subsidiaries,
the Concession Area, the Material Oil and Gas Contracts, the Contract
Interests or any other Company Interest, including all material title
records, geological, geophysical and seismic records, data and
information, production records, electric logs, core data, pressure
data and other related matters of a non-interpretive nature associated
therewith.
"Company Options" has the meaning set forth in Section 3.1(c)(iv).
"Company SEC Documents" has the meaning set forth in Section
3.1(e)(i).
"Concession Area" means the geographic areas or regions covered by or
subject to the Material Oil and Gas Contracts.
"Contract Interests" means the Material Oil and Gas Contracts and any
and all existing oil and gas processing contracts, casinghead gas contracts,
joint venture agreements, seismic exploration agreements, area of mutual
interest agreements, saltwater disposal agreements, commingling agreements,
sales agreements, transportation agreements, pipeline agreements, and other
contracts, agreements and instruments (including the penalty provisions thereof
and future interests, reversionary rights and deferred interests) and orders
relating thereto, to which the Company or any Subsidiary is a party or
otherwise bound which relate to the Concession Area or to the exploration for
or development, production or transportation of oil, gas or petroleum from or
attributable to the Concession Area.
3
8
"Contracts" means all agreements, contracts, or other binding
commitments, arrangements or plans, written or oral (including any amendments
and other modifications thereto), to which the Company or any of its
Subsidiaries is a party or is otherwise bound.
"Credit Agreements" means, collectively, (i) that certain Credit
Agreement between the Company and Societe Generale, Southwest Agency, dated
October 8, 1997, as amended, (ii) that certain Credit Agreement between the
Company and Barclays Bank PLC, dated November 26, 1997, as amended, (iii) that
certain Credit Agreement between the Company and Toronto Dominion (Texas),
Inc., dated November 26, 1997, as amended, (iv) that certain Credit Agreement
between the Company and Union Bank of California, N.A., dated December 31,
1997, as amended, (v) that certain Credit Agreement between the Company and
Credit Suisse First Boston, dated February 9, 1998, as amended, and (vi) that
certain Demand Promissory Note with Banque Paribas dated September 15, 1997.
"Cure Period" has the meaning set forth in Section 7.1(b)(i).
"Current Market Price" of Common Stock or any other class of stock or
other security of the Company or any other issuer for any day shall mean the
last reported sales price, regular way on such day, or, if no sale takes place
on such day, the average of the reported closing bid and asked prices on such
day, regular way, in either case as reported on the New York Stock Exchange
("NYSE") or, if such security is not listed or admitted for trading on the
NYSE, on the principal national securities exchange on which such security is
listed or admitted for trading or, if not listed or admitted for trading on any
national securities exchange, on The Nasdaq Stock Market or, if such security
is not quoted on The Nasdaq Stock Market, the average of the closing bid and
asked prices on such day in the over-the-counter market as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or, if bid and asked prices for such security on such day shall not
have been reported through NASDAQ, the average of the bid and asked prices on
such day as furnished by any NYSE member firm regularly making a market in such
security selected for such purpose by the Board of Directors or, if no such
market is regularly made, as determined by a majority of the Board of Directors
based on advice of an independent appraiser selected by a majority of the Board
of Directors.
"Debt", without duplication, means (a) all indebtedness (including the
principal amount thereof or, if applicable, the accreted amount thereof and the
amount of accrued and unpaid interest thereon) of the Company or its
Subsidiaries, whether or not represented by bonds, debentures, notes or other
securities, for the repayment of money borrowed, (b) all deferred indebtedness
of the Company or its Subsidiaries for the payment of the purchase price of
property or assets purchased, (c) all obligations of the Company or its
Subsidiaries to pay rent or other payment amounts under a lease of real or
personal property which is required to be classified as a capital lease or a
liability on the face of a balance sheet prepared in accordance with GAAP, (d)
any outstanding reimbursement obligation of the Company or its Subsidiaries
with respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of the Company or its Subsidiaries, (e) any payment
obligation of the Company or its Subsidiaries under any interest rate swap
agreement, forward rate agreement, interest rate cap or collar agreement or
other financial agreement
4
9
or arrangement entered into for the purpose of limiting or managing interest
rate risks, (f) all indebtedness for borrowed money secured by any Lien
existing on property owned by the Company or its Subsidiaries, whether or not
indebtedness secured thereby shall have been assumed, (g) all guaranties,
endorsements, assumptions and other contingent obligations of the Company or
its Subsidiaries in respect of, or to purchase or to otherwise acquire,
indebtedness for borrowed money of others, (h) all other short-term and
long-term liabilities of the Company or its Subsidiaries of any nature and (i)
all premiums, penalties and change of control payments required to be paid or
offered in respect of any of the foregoing as a result of the consummation of
the transactions contemplated by the Transaction Documents regardless if any of
such are actually paid.
"Environmental Laws" has the meaning set forth in Section 3.1(r)(A).
"ERISA" has the meaning set forth in Section 3.1(o).
"Excess Shares" has the meaning set forth in Section 4.2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Financial Advisory Agreement" means that certain Financial Advisory
Agreement between the Company and HMCo in the form of Exhibit A hereto.
"First Closing" has the meaning set forth in Section 6.1.
"First Closing Date" has the meaning set forth in Section 6.1.
"GAAP" has the meaning set forth in Section 3.1(e)(ii).
"Governmental Entity" means any agency, bureau, commission, court,
authority, department, official, political subdivision, tribunal or other
instrumentality of any government, whether (i) regulatory, administrative or
otherwise, (ii) federal, state or local, or (iii) domestic or foreign.
"Hazardous Materials" has the meaning set forth in Section 3.1(r)(B).
"HMCo" has the meaning set forth in Section 4.16.
"HSR Act" has the meaning set forth in Section 3.1(d)(iii) of this
Agreement.
"Indemnification Agreement" has the meaning set forth in Section
4.11(a).
"Indemnified Parties" means the Purchaser Indemnified Parties or the
Company Indemnified Parties, as the case may be.
5
10
"Indemnifying Party" means any person who is obligated to provide
indemnification hereunder.
"Indenture" means that certain Amended and Restated Senior Indenture
between the Company and The Chase Manhattan Bank, as Trustee, dated as of July
25, 1997, together with the Amended and Restated First Supplemental Indenture,
dated as of July 25, 1997, with respect to $200,000,000 aggregate principal
amount of 8 3/4% Senior Notes due 2002, and the Amended and Restated Second
Supplemental Indenture, dated as of July 25, 1997, with respect to $200,000,000
aggregate principal amount of 9 1/4% Senior Notes due 2005.
"Initial Shares" means the 1,822,500 Shares to be purchased and sold
at the First Closing.
"Intangible Property" has the meaning set forth in Section 3.1(q).
"knowledge" has the meaning set forth in Section 3.1(j)(v).
"Law" means any constitutional provision, statute or other law,
ordinance, rule, regulation or interpretation of any thereof and any Order of
any Governmental Entity (including environmental laws).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or the
revenues or income thereon or therefrom.
"Litigation" has the meaning set forth in Section 3.1(k).
"Material Adverse Effect" or "Material Adverse Change" means any
effect, change, event or occurrence that is materially adverse to the business,
operations, properties, condition (financial or otherwise), results of
operations, assets, liabilities or prospects of the Company and its
Subsidiaries taken as a whole , but excluding any such effect, change, event or
occurrence resulting from or relating to (i) changes in general economic
conditions or (ii) effects, changes, events or occurrences in the Company's
industry generally (including without limitation any regulatory changes or
changes in prices for oil or gas), in each case which do not have a materially
disproportionate effect on the business, operations or properties of the
Company or its Subsidiaries as compared to general economic conditions or the
Company's industry as a whole, respectively.
"Material Contracts" has the meaning given it in Section 3.1(l)(ii).
"Material Oil and Gas Contracts" means the following agreements as in
effect on the date hereof and as the same may hereafter be modified, amended,
supplemented or restated: (A) Contract for Exploration and Exploitation for
Xxxxxxxx de Atalayas I with an effective date of July 1, 1982, between Triton
Columbia, Inc. ("TCI") and Empressa Colombiana De Petroleos; (B) Contract for
Exploration and Exploitation for Tauramena with an effective date of July 4,
1988, between TCI and Empressa Colombiana De Petroleos; (C) Rio Chitamena
Association Contract between Empressa Colombiana De Petroleos and Total
Exploration En Produktie Maatschappij B.V., dated
6
11
December 3, 1990; (D) Contract between Malaysia-Thailand Joint Authority and
Petronas Carigali (JDA) SDN. BHD. and Triton Oil Company of Thailand dated as
of April 21, 1994, relating to Exploration and Exploitation of Petroleum for
Xxxxxxxx-Xxxxxxxx Xxxxx Xxxxxxxxxxx Xxxx Xxxxx X-00; and (E) the joint
operating agreements relating to the foregoing (A) through (D).
"Memorandum of Association" means the Company's Memorandum of
Association, as amended from time to time.
"Monitoring Agreement" means that certain Monitoring and Oversight
Agreement to be entered into between the Company and HMCo in the form of
Exhibit B hereto.
"NYSE" means the New York Stock Exchange.
"NYSE Approval" has the meaning set forth in Section 4.3.
"Oil and Gas Properties" means leasehold and other interests in oil,
gas and other mineral properties owned or otherwise held in the name of the
Company or any of its Subsidiaries.
"Order" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"Permitted Liens" has the meaning set forth in Section 3.1(n).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Preferred Stock Authorization" means the unanimous written consent of
the Board creating, authorizing and providing for the issuance of the 8%
Preference Shares, in the form of Exhibit C.
"Purchase Price" has the meaning set forth in Section 2.1(b).
"Purchaser" has the meaning set forth in the introductory paragraph
hereto.
"Purchaser Designees" has the meaning set forth in Section 4.11(a).
"Purchaser Indemnified Costs" means any and all damages, losses,
claims, liabilities, demands, charges, suits, penalties, costs and expenses
(including court costs and reasonable legal fees and expenses incurred in
investigating and preparing for any litigation or proceeding) that any of the
Purchaser Indemnified Parties incurs and that arise out of or result from (i)
any breach or default by the Company of any of the representations or
warranties under this Agreement or any other Transaction Documents, (ii) any
breach by the Company of any of the covenants or agreements (other than
breaches of covenants to be performed by the Company after the Closing) of the
Company under this Agreement or any other Transaction Documents or (iii) any
litigation or proceedings brought by any shareholder of the Company (whether
such action is brought in such
7
12
shareholder's name or derivatively on behalf of the Company) in respect of the
transactions contemplated by this Agreement or any other Transaction Documents.
"Purchaser Indemnified Parties" means Purchaser and each officer,
director, employee, stockholder, partner, member and Affiliate of Purchaser.
"Purchaser's Expenses" means all reasonable out-of-pocket fees, costs
and expenses incurred by Purchaser in connection with its due diligence efforts
or the transactions contemplated by this Agreement and the other Transaction
Documents, including (i) fees, costs and expenses of its accountants, counsel,
financial advisors and other similar advisors and (ii) fees paid to any
Governmental Entity but excluding any commitment, underwriting fee or similar
fees paid by Purchaser to any third party lender or underwriter in connection
with any debt financing obtained by Purchaser with respect to the transactions
contemplated by this Agreement.
"Registration Statement" has the meaning set forth in Section 4.4.
"Release" has the meaning set forth in Section 3.1(r)(C).
"Remaining Shares" means the Shares purchased and sold at the Second
Closing, including 8% Preference Shares purchased by Purchaser pursuant to
Rights held by Purchaser.
"Remedial Action" has the meaning set forth in Section 3.1(r)(D).
"Reserve Report" means the Appraisal Report as of December 31, 1997 on
Certain Properties owned by Triton Colombia Incorporated in Colombia prepared
by XxXxxxxx and XxxXxxxxxxx with respect to the Cusiana and Cupiagua Fields in
Colombia and the End-1997 Reserves Report of Carigali-Triton Operating Company
with respect to Block A-18 in the Malaysia-Thailand Joint Development Area
estimating the proved reserves attributable to the Cakirawala, Suriya, Bulan,
Bumi East, Senja, Samudra and Wira fields as of December 31, 1997 and described
in the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997.
"Rights" has the meaning set forth in Section 4.2(a).
"Rights Agreement" has the meaning set forth in Section 3.1(u).
"Rights Offering" has the meaning set forth in Section 4.2(a).
"Rights Offering Documents" has the meaning set forth in Section
4.2(b).
"Rule 144" means Rule 144 under the Securities Act of 1933, as
amended, and any successor rule thereto.
"Sale Transaction" means (a) the acquisition (by direct issuance from
the Company, from existing securityholders or otherwise) by any Person or group
of Persons deemed a "person" under
8
13
Section 13(a)(3) of the Exchange Act of beneficial ownership of securities
representing a majority of the combined voting power of the outstanding
securities of the Company entitled to vote , generally or as a separate class
or series or together with one or more class or series of shares or stock, in
the election of directors of the Company, the result of which would result in
such Person or Persons (or group) having the ability to elect a majority of the
Board of Directors, (b) a reorganization, recapitalization, merger,
consolidation or similar business combination or transaction involving the
Company (unless the holders of the outstanding securities of the Company
entitled to vote in the election of directors prior to such transaction
continue to own securities of the entity resulting from or surviving such
transaction (a "Surviving Entity") entitled to vote in the election of
directors sufficient to allow holders to elect a majority of the board of
directors of the Surviving Entity upon the completion of such transaction) or
(c) a sale or other disposition (in a single transaction or a series of related
transactions) of assets with an Asset Value in excess of 50% of the market
value of the assets of the Company and its Subsidiaries as a whole; provided,
however, such term shall not include the transactions contemplated by this
Agreement or any other Transaction Documents.
"SEC" means the Securities and Exchange Commission.
"Second Closing" has the meaning set forth in Section 6.1.
"Second Closing Date" has the meaning set forth in Section 6.1.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Senior Notes" means, collectively, (i) $200,000,000 in aggregate
principal amount of 8 3/4% Senior Notes due 2002, and (ii) $200,000,000 in
aggregate principal amount of 9 1/4% Senior Notes due 2005.
"Shareholder Litigation" means each of the pending class action
proceedings styled as Birdie Capital Corporation and Xxxxxxxx Xxxxxxxx v.
Triton Energy, Limited., et al., Xxx Xxxxxxx v. Triton Energy, Limited., et
al., X. X. Xxx, Xx. v. Triton Energy, Limited, et al., North River Trading Co.
L.L.C. v. Triton Energy, Limited, et al., Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxx v.
Triton Energy, Limited., et al., Xxxxxxx X. Xxxx v. Triton Energy, Limited., et
al., and any and all additional claims, actions, suits or proceedings relating
to the same set of facts or circumstances, or otherwise containing
substantially the same allegations, as such proceedings.
"Shareholders Agreement" means the Shareholders Agreement between the
Company and Purchaser, substantially in the form attached hereto as Exhibit D.
"Shares" means the shares of 8% Preference Shares purchased by
Purchaser pursuant to this Agreement.
9
14
"Stock Plans" means the Company's (i) 1981 Employee Non-Qualified
Stock Option Plan, as amended, (ii) 1985 Stock Option Plan, as amended, (iii)
1988 Stock Appreciation Rights Plan, (iv) 1989 Stock Option Plan, as amended,
(v) Second Amended and Restated 1992 Stock Option Plan, (vi) Amended and
Restated 1985 Restricted Stock Plan, as amended, (vii) 1997 Share Compensation
Plan and (viii) Triton Resources (UK) Limited Share Option Scheme.
"Subsidiary" means, (i) a corporation, a majority of whose stock with
voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by the Company, by a Subsidiary of the Company or
by the Company and another Subsidiary, or (ii) any other Person (other than a
corporation) in which the Company, a Subsidiary or the Company and a
Subsidiary, directly or indirectly, at the date of determination thereof has at
least a majority ownership interest. For purposes of this Agreement, Triton
International Oil Corporation shall be deemed a Subsidiary of the Company.
"Tax" or "Taxes" has the meaning set forth in Section 3.1(n).
"Tax Return" has the meaning set forth in Section 3.1(n) hereof.
"Termination Fee" has the meaning set forth in Section 9.5(c).
"Transaction Documents" means this Agreement, the Preferred Stock
Authorization, the Shareholders Agreement and any other documents executed in
connection herewith or therewith.
"Transfer" has the meaning set forth in Section 3.2(e).
"Underlying Shares" means the shares of Common Stock issuable upon
conversion or exchange of the Shares.
"Unsubscribed Shares" shall mean the number of shares of 8% Preference
Shares for which the holders of Rights shall not have subscribed, either
pursuant to their basic or oversubscription privileges, during the period of
time in which holders of Rights may exercise Rights to purchase 8% Preference
Shares in the Rights Offering.
Section 1.2 References and Titles. All references in this
Agreement to Exhibits, Schedules, Articles, Sections, subsections, and other
subdivisions refer to the corresponding Exhibits, Schedules, Articles,
Sections, subsections, and other subdivisions of this Agreement unless
expressly provided otherwise. Titles appearing at the beginning of any
Articles, Sections, subsections, or other subdivisions of this Agreement are
for convenience only, do not constitute any part of such Articles, Sections,
subsections or other subdivisions, and shall be disregarded in construing the
language contained therein. The words "this Agreement," "herein," "hereby,"
"hereunder," and "hereof," and words of similar import, refer to this Agreement
as a whole and not to any particular subdivision unless expressly so limited.
The words "this Section," "this subsection," and words of similar import, refer
only to the Sections or subsections hereof in which such words occur. The word
"including" (in its various forms) means "including without limitation."
10
15
Pronouns in masculine, feminine, or neuter genders shall be construed to state
and include any other gender and words, terms, and titles (including terms
defined herein) in the singular form shall be construed to include the plural
and vice versa, unless the context otherwise expressly requires. Unless the
context otherwise requires, all defined terms contained herein shall include
the singular and plural and the conjunctive and disjunctive forms of such
defined terms.
ARTICLE II
PURCHASE OF 8% PREFERENCE SHARES
Section 2.1 Purchase of Shares.
(a) Subject to the terms and conditions herein set forth,
the Company will sell to Purchaser, and Purchaser will purchase from the
Company, at the times indicated below, a number of shares of 8% Preference
Shares equal to the sum of the following:
(i) at the First Closing, 1,822,500 Shares; and
(ii) at the Second Closing, a number of 8%
Preference Shares equal to the sum of (A) Purchaser's pro rata
portion of 8% Preference Shares offered in the Rights Offering
and (B) all Unsubscribed Shares; provided that Purchaser shall
not be required to purchase more than 3,177,500 8% Preference
Shares at the Second Closing.
(b) The aggregate purchase price payable for the 8%
Preference Shares at each Closing shall be equal to $70.00 multiplied by the
total number of 8% Preference Shares purchased by the Purchaser at such Closing
(the "Purchase Price").
(c) Delivery of the Shares shall be made at each Closing
by delivery to Purchaser, against payment of the Purchase Price therefor as
provided herein, of a share certificate representing the total number of Shares
to be purchased at such Closing by Purchaser hereunder.
(d) Payment of the Purchase Price for the Shares to be
purchased hereunder shall be made by or on behalf of Purchaser by wire transfer
of immediately available funds to an account of the Company (the number for
which account shall have been furnished to Purchaser at least two Business Days
prior to the applicable Closing Date).
11
16
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company. The
Company represents and warrants to Purchaser as follows (in each case as
qualified by matters reflected on the disclosure schedule dated as of the date
of this Agreement and delivered by the Company to Purchaser on or prior to the
date of this Agreement (the "Company Disclosure Schedule") and made a part
hereof by reference):
(a) Organization, Standing and Power. Each of the
Company and each of its Subsidiaries is a corporation or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized and has the requisite
corporate or other such entity power and authority to carry on its business as
now being conducted. Each of the Company and each of its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed or to be in
good standing, individually or in the aggregate, has not had and could not
reasonably be expected to have a Material Adverse Effect. The Company has
delivered (or, in the case of the Company's Subsidiaries, made available) to
Purchaser prior to the execution of this Agreement complete and correct copies
of its Memorandum of Association and Articles of Association, as in effect on
the date of this Agreement.
(b) Subsidiaries. Schedule 3.1(b)(i) of the Company
Disclosure Schedule sets forth a true and complete list, as of the date hereof,
of each Subsidiary of the Company, together with the jurisdiction of
incorporation or organization and the percentage of each Subsidiary's
outstanding share capital (or other voting or equity securities or interests,
as applicable) owned by the Company or another Subsidiary of the Company.
Except as set forth in Schedule 3.1(b)(ii) of the Company Disclosure Schedule,
all the outstanding shares of share capital (or other voting or equity
securities or interests, as applicable) of each Subsidiary of the Company have
been validly issued and (with respect to corporate Subsidiaries) are fully paid
and nonassessable and are owned directly or indirectly by the Company, free and
clear of all Liens except for Permitted liens. Except for the shares or
capital stock of its Subsidiaries and the partnership interests listed in
Schedule 3.1(b)(iii) of the Company Disclosure Schedule, as of the date hereof,
the Company does not own, directly or indirectly, any share or capital stock
(or other voting or equity securities or interests, as applicable) of any
corporation, limited liability company, partnership, joint venture or other
entity which is material to the business of the Company and its Subsidiaries
taken as a whole.
(c) Capital Structure.
(i) The authorized shares of Company consists of
200,000,000 shares of Common Stock and 20,000,000 shares of other
classes to be determined upon the creation thereof by the Board (the
"Authorized Preferred Stock"), of which, as of the date of this
Agreement, (A) 36,636,452 shares of Common Stock are issued and
outstanding,
12
17
(B) 420,000 shares of Authorized Preferred Stock are designated as 5%
Convertible Preference Shares, par value $.01 per share (the "5%
Preference Shares"), each of which is convertible into one share of
Common Stock, 209,639 shares of which are issued and outstanding, (C)
200,000 shares of the Authorized Preferred Stock are designated as
Series A Junior Participating Preference Shares, no shares of which
are issued and outstanding, (D) 91 shares of Common Stock are held by
the Company in its treasury and (E) no shares of Common Stock are held
by any of the Company's Subsidiaries. Except as described above in
this Section 3.1(c)(i), the Company has no authorized, issued or
outstanding shares or Capital Stock.
(ii) As of the date hereof, there are no bonds,
debentures, notes or other indebtedness issued or outstanding having
the right to vote on any matters on which holders of Common Stock or
Authorized Preferred Stock may vote, including without limitation the
transactions contemplated by this Agreement and the other Transaction
Documents.
(iii) Giving effect to the applicable provisions of
the Articles of Association, the Preferred Stock Authorization, the
unanimous written consent of the Board authorizing the 5% Preference
Shares (the "5% Preference Shares Authorization") and all other
instruments affecting the rights of holders of shares or capital stock
of the Company to which the Company is a party or is bound (which, if
any, other than the Articles of Association, the Preferred Stock
Authorization. the 5% Preference Shares Authorization and the other
Transaction Documents, are set forth in Schedule 3.1(c)(iii) or
Schedule 3.1(c)(vi) of the Company Disclosure Schedule), upon issuance
each outstanding Share will be convertible into four shares of Common
Stock; there are no restrictions or limitations, contractual or
otherwise, binding upon the Company or to which the Company is subject
that prohibit or limit the enforceability of the terms and provisions
of the Preferred Stock Authorization or, except as set forth in the
Preferred Stock Authorization, will prohibit or limit the right of a
holder of Shares to convert Shares into shares of Common Stock; and
the conversion of any Shares into shares of Common Stock will not
violate or result in or constitute a default under any loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding to which the Company is a party or by which it or any of
its properties or assets are bound;
(iv) There are no outstanding warrants, share or
stock options, share or stock appreciation rights or other rights to
receive any shares or capital stock of the Company or any of its
Subsidiaries granted under the Stock Plans or otherwise, except as set
forth in Schedule 3.1(c)(iv) of the Company Disclosure Schedule (such
warrants, share or stock options, shares or stock appreciation rights
or other rights disclosed thereon, collectively, the "Company
Options"). Except for the Company Options and 5% Preference Shares
(as to which no more than 209,639 shares of Common Stock and no shares
or stock of any other class or series of the Company are issuable upon
exercise or conversion thereof) and, except as set forth above or in
Schedule 3.1(c)(iv) of the Company Disclosure Schedule, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements,
13
18
arrangements or undertakings of any kind to which the Company or any
of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares or
stock (or other voting or equity securities or interests, as
applicable) of the Company or of any of its Subsidiaries or obligating
the Company or any of its Subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. Except as set
forth in the 5% Preference Shares Authorization and in Schedule
3.1(c)(iv) of the Company Disclosure Schedule, there are no
outstanding contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares or
stock (or other voting or equity securities or interests, as
applicable) of the Company or any of its Subsidiaries.
(v) All outstanding shares (or other voting or
equity securities or interests, as applicable) of the Company and its
Subsidiaries are, and all shares which may be issued upon conversion
of the 8% Preference Shares will be, when issued, duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive or similar rights.
(vi) Except as contemplated hereby or in the other
Transaction Documents or as set forth in Schedule 3.1(c)(vi) of the
Company Disclosure Schedule, there are not as of the date hereof and
there will not be at the time of either Closing any shareholder
agreements, voting agreements or trusts, proxies or other agreements
or contractual obligations to which the Company or any Subsidiary is a
party or bound with respect to the voting or disposition of any shares
or stock (or other voting or equity securities or interests, as
applicable) of the Company or any of its Subsidiaries and, to the
Company's knowledge, as of the date hereof, there are no other
shareholder agreements, voting agreements or trusts, proxies or other
agreements or contractual obligations among the shareholders of the
Company with respect to the voting or disposition of any shares or
stock (or other voting or equity securities or interests, as
applicable) of the Company or any of its Subsidiaries.
(d) Authority; No Violations; Approvals.
(i) The Board of Directors has approved this
Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, and declared this Agreement, the
other Transaction Documents and the transactions contemplated hereby
and thereby to be in the best interests of the Company. The Company
has all requisite corporate power and authority to enter into this
Agreement and each of the other Transaction Documents and to
consummate each of the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and each of the other
Transaction Documents and the consummation of each of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement
and each of the other Transaction Documents has been duly executed and
delivered by the Company and the Preferred Stock Authorization has
been duly adopted by the Board of Directors in accordance with
applicable law. Each of the Preferred Stock Authorization and,
assuming this Agreement and each of the other Transaction Documents
14
19
to which Purchaser is a party constitute the valid and binding
obligations of Purchaser, this Agreement and each of the other
Transaction Documents constitutes a valid and binding obligation of
Company enforceable in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
(ii) Except as set forth in Schedule 3.1(d)(ii) of
the Company Disclosure Schedule, the execution and delivery of this
Agreement and each of the other Transaction Documents does not, and
the consummation of the transactions contemplated hereby and thereby
and compliance with the provisions hereof and thereof will not,
conflict with, require the consent of any other party to or result in
any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation
or acceleration of any material obligation or to the loss of a
material benefit under, or give rise to a right of purchase under,
result in the creation of any Lien upon any of the properties or
assets of the Company or any of its Subsidiaries under, or otherwise
result in a material detriment to the Company or any of its
Subsidiaries under, any provision of (A) the Memorandum of Association
and Articles of Association or any provision of the comparable charter
or organizational documents of any of its Subsidiaries, (B) any loan
or credit agreement, note, bond, mortgage, indenture, lease, or other
agreement (including the Material Oil and Gas Contracts) to which the
Company or any of its Subsidiaries is a party or otherwise is bound or
by which any of them or their respective properties are bound or any
Approval applicable to the Company or any of its Subsidiaries, (C) any
joint venture or other ownership arrangement to which the Company or
any of its Subsidiaries is a party or otherwise is bound or by which
any of them or their respective properties are bound or (D) assuming
the Approvals referred to in Section 3.1(d)(iii) are duly and timely
obtained or made, any Law or Order applicable to the Company or any of
its Subsidiaries or any of their respective properties or assets,
other than, in the case of clause (B) (other than with respect to any
material loan or credit agreement, note, bond, mortgage or indenture
or any Material Oil and Gas Contract), (C) or (D), any such conflicts,
violations, defaults, rights, Liens, detriments, Laws or Orders that,
individually or in the aggregate, (x) have not had and could not
reasonably be expected to have a Material Adverse Effect, (y) have not
impaired and could not reasonably be expected to impair the ability of
the Company to perform its obligations under any of the Transaction
Documents in any material respect, or (z) could not reasonably be
expected to delay in any material respect or prevent the consummation
of any of the transactions contemplated by any of the Transaction
Documents.
(iii) No Approval from any Governmental Entity is
required by or with respect to the Company or any of its Subsidiaries
in connection with the execution and delivery of this Agreement or any
other Transaction Document by the Company or the consummation by the
Company of the transactions contemplated hereby or thereby, except
for: (A) if applicable, the filing of a notification report by
Company under the Xxxx- Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and the expiration or termination of
the applicable waiting period with respect thereto; (B) the filing
15
20
with the SEC of (x) the Registration Statement and the declaration of
the effectiveness of the Registration Statement by the SEC, (y) such
reports under Section 13(a) of the Exchange Act and such other
compliance with the Exchange Act and the rules and regulations
thereunder, as may be required in connection with this Agreement, the
other Transaction Documents and the transactions contemplated hereby
and thereby; (C) such Approvals as may be required by any applicable
state securities or "blue sky" laws; (D) such Approvals as may be
required by any foreign securities, corporate or other Laws; and (E)
any such Approval the failure of which to be made or obtained (1) has
not had and could not reasonably be expected to have a Material
Adverse Effect, (2) has not impaired and could not reasonably be
expected to impair the ability of the Company to perform its
obligations under any of the Transaction Documents in any material
respect and (3) could not reasonably be expected to delay in any
material respect or prevent the consummation of any of the
transactions contemplated by any of the Transaction Documents.
(e) SEC Documents.
(i) The Company has made available to Purchaser a
true and complete copy of each report, schedule, registration
statement and definitive proxy statement filed by the Company with the
SEC since December 31, 1996 and prior to or on the date of this
Agreement (the "Company SEC Documents"), which are all the documents
(other than preliminary materials) that the Company was required to
file with the SEC between December 31, 1996 and the date of this
Agreement. As of their respective dates, the Company SEC Documents
complied in all material respects with the requirements of the
Securities Act, or the Exchange Act, as the case may be, and the rules
and regulations of the SEC thereunder applicable to such Company SEC
Documents, and none of the Company SEC Documents contained when filed
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) The financial statements of the Company
included in the Company SEC Documents, including the notes and
schedules thereto, complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto,
were prepared in accordance with United States generally accepted
accounting principles ("GAAP") applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto
or, in the case of the unaudited statements, as permitted by Rule
10-01 of Regulation S-X of the SEC) and fairly present in accordance
with applicable requirements of GAAP (subject, in the case of the
unaudited statements, to normal, recurring adjustments, none of which
are material) the consolidated financial position of the Company and
its consolidated Subsidiaries as of their respective dates and the
consolidated results of operations and the consolidated cash flows of
the Company and its consolidated Subsidiaries for the periods
presented therein.
(iii) Except as disclosed in the Company SEC
Documents, there are no agreements, arrangements or understandings
between the Company and any party who is or
16
21
was at any time prior to the date hereof but after December 31, 1996
an Affiliate of the Company that are required to be disclosed in the
Company SEC Documents.
(f) Information Supplied. None of the information
included or incorporated by reference in the Registration Statement will, at
the date such Registration Statement is declared effective by the SEC or any
time from and after such date through and including the date of the Second
Closing, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading. Notwithstanding the foregoing, no representation is made by
the Company in this Section 3.1(f) with respect to statements made or
incorporated by reference in the Registration Statement in conformity with
information supplied by or on behalf of Purchaser specifically for use in the
Registration Statement.
(g) Absence of Certain Changes or Events.
(i) Except as disclosed in, or reflected in
Schedule 3.1(g) or the Company SEC Documents filed with the SEC after
December 31, 1997, and prior to the date of this Agreement, or except
as contemplated by this Agreement, since December 31, 1997, to the
date of this Agreement each of the Company and its Subsidiaries have
conducted their business only in the ordinary course consistent with
past practice, and there has not been: (i) any declaration, setting
aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to any shares or stock (or other
voting or equity securities or interests, as applicable) of the
Company or any of its Subsidiaries (other than the declaration and
payment of (A) regular cash dividends with respect to the Company's
first and third fiscal quarters at the required annual 5% rate per
share on the 5% Preferences Shares, with usual record and payment
dates and (B) any dividends or distributions by wholly owned
Subsidiaries); (ii) any split, combinations, reclassification or
amendment of any material term of any outstanding equity security of
the Company or any Subsidiary of the Company or (other than issuance
of Common Stock upon the exercise of any Company Options and/or
issuances of Common Stock upon conversion after the date hereof of 5%
Preference Shares outstanding on December 31, 1997) any issuance or
the authorization of the issuance of any other securities in respect
of, or in lieu of or in substitution for shares or stock (or other
voting or equity securities or interests, as applicable) of the
Company or any of its Subsidiaries, other than in connection with the
transactions contemplated hereby; (iii) any repurchase, redemption or
other acquisition by the Company or any Subsidiary of the Company of
any outstanding shares or stock (or other voting or equity securities
or interests, as applicable) of the Company or any Subsidiary of the
Company, except as contemplated by the Stock Plans; (iv) (A) any
granting by the Company or any of its Subsidiaries to any executive
officer of the Company or any of its Subsidiaries of any increase in
compensation, except for increases in the ordinary course of business
consistent with past practice or as required under employment or other
agreements or benefit arrangements in effect as of December 31, 1997,
or (B) any granting by the Company or any of its Subsidiaries to any
such executive officer of any increase in severance or termination
pay, except as was required under any employment, severance,
termination or other agreements or benefit
17
22
arrangements in effect as of December 31, 1997; (v) except as required
by a change in GAAP, any change in accounting methods, principles or
practices by the Company or any of its Subsidiaries materially
affecting its assets, liabilities or business; or (vi) any material
casualties affecting the Company and its Subsidiaries, taken as a
whole, or any material loss, damage or destruction to any of their
properties or assets, including the Company Interests (other than to
the extent covered by insurance, subject to applicable deductible
thresholds).
(ii) Except as disclosed in, or reflected in
Schedule 3.1(g) of the Company Disclosure Schedule or the Company's
consolidated financial statements included in the Company's Quarterly
Report on Form 10-Q for the six months ended June 30, 1998, and the
notes thereto, or except as contemplated by this Agreement, since
December 31, 1997, there has not been any event, circumstance or fact
that (x) has had or could reasonably be expected to have a Material
Adverse Effect, (y) has impaired or could reasonably be expected to
impair the ability of the Company to perform its obligations under any
of the Transaction Documents in any material respect, or (z) could
reasonably be expected to delay in any material respect or prevent the
consummation of any of the transactions contemplated by any of the
Transaction Documents.
(h) No Undisclosed Material Liabilities. Except as
disclosed in Schedule 3.1(h) of the Company Disclosure Schedule or the
Company's financial statements included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997, and the notes thereto, there are no
material liabilities or obligations of the Company or any of its Subsidiaries
of any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than: (i) liabilities adequately provided for
on the balance sheet of the Company dated as of June 30, 1998 (including the
notes thereto) contained in the Company's Quarterly Report on Form 10-Q for the
six months ended June 30, 1998; (ii) liabilities incurred in the ordinary
course of business consistent with past practice since December 31, 1997, which
liabilities, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect; (iii) liabilities arising under or in
connection with the Transaction Documents; (iv) liabilities reflected in the
pro forma financial statements included in the Company's Current Report on Form
8-K dated August 17, 1998, and (v) liabilities not required by GAAP to be
recognized or disclosed on a consolidated balance sheet of the Company and its
consolidated Subsidiaries or in the notes thereto, which liabilities,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(i) No Default. Neither the Company nor any of its
Subsidiaries is in default or violation (and no event has occurred which, with
notice or the lapse of time or both, would constitute a default or violation)
of any term, condition or provision of (i) the Memorandum of Association or
Articles of Association of the Company or the comparable charter or
organizational documents of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease, instrument, permit,
concession, franchise, license or any other contract, agreement, arrangement or
understanding to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective
properties or assets is bound, or (iii) any Order or Law applicable to the
Company or any of its Subsidiaries, except in the case of clause (ii) and
18
23
(iii), for violations or defaults that, individually or in the aggregate, (x)
have not had and could not reasonably be expected to have a Material Adverse
Effect, (y) have not impaired and could not reasonably be expected to impair
the ability of the Company to perform its obligations under any of the
Transaction Documents in any material respect, or (z) could not reasonably be
expected to delay in any material respect or prevent the consummation of any of
the transactions contemplated by any of the Transaction Documents. The Company
(i) is not in breach of or default under any financial covenant under the
Credit Agreements, the Indentures or the Senior Notes and (ii) except as
disclosed in Schedule 3.1(i) of the Company Disclosure Schedule, does not
believe that it is reasonably likely that it will be in breach of or default
under any financial covenant under the Credit Agreement or the Indentures as of
the next date on which the Company is required to be in compliance with any
such financial covenants.
(j) Compliance with Applicable Laws.
(i) The Company and each of its Subsidiaries has
in effect all Approvals of all Governmental Entities necessary for the
lawful conduct of their respective businesses, and there has occurred
no default or violation (and no event has occurred which, with notice
or the lapse of time or both, would constitute a default or violation)
under any such Approval, except for failures to obtain, or for
defaults or violations under, Approvals which failures, defaults or
violations, individually or in the aggregate, (i) have not had and
could not reasonably be expected to have a Material Adverse Effect,
(ii) have not impaired and could not reasonably be expected to impair
the ability of the Company to perform its obligations under any of the
Transaction Documents in any material respect, or (iii) could not
reasonably be expected to delay in any material respect or prevent the
consummation of any of the transactions contemplated by any of the
Transaction Documents.
(ii) Except as disclosed in the Company SEC
Documents, the businesses of the Company and its Subsidiaries are in
compliance with all applicable Laws and Orders, except for possible
noncompliance, which, individually or in the aggregate, (i) have not
had and could not reasonably be expected to have a Material Adverse
Effect, (ii) have not impaired and could not reasonably be expected to
impair the ability of the Company to perform its obligations under any
of the Transaction Documents in any material respect, or (iii) could
not reasonably be expected to delay in any material respect or prevent
the consummation of any of the transactions contemplated by any of the
Transaction Documents.
(iii) No investigation or review by any
Governmental Entity with respect to the Company, any of its
Subsidiaries, the transactions contemplated by this Agreement and the
other Transaction Documents, or the Contract Interest, to the
knowledge of the Company, is pending or threatened, nor has any
Governmental Entity notified the Company or any of its Subsidiaries in
writing or, to the Company's knowledge, otherwise of any intention to
conduct the same, other than those the outcome of which, individually
or in the aggregate, (i) have not had and could not reasonably be
expected to have a Material Adverse Effect, (ii) have not impaired and
could not reasonably be expected to impair the ability of the Company
to perform its obligations under any of the Transaction Documents in
any
19
24
material respect, or (iii) could not reasonably be expected to delay
in any material respect or prevent the consummation of any of the
transactions contemplated by any of the Transaction Documents.
(iv) Each operator under the Material Oil and Gas
Contracts which is the Company or a Subsidiary of the Company, and, to
the Company's knowledge, each other operator under the Material Oil
and Gas Contracts, has complied in all material respects with any
applicable Laws and Orders of Governmental Entities in respect to its
operation in the Concession Area and its performance under the
Material Oil and Gas Contracts.
(v) For purposes of this Agreement, the terms
"knowledge of the Company," "to the Company's knowledge" and other
references qualified by knowledge of the Company and/or its executive
officers means the actual knowledge of the executive officers and
directors of the Company and each of the individuals listed on
Schedule 3.1(j)(v) of the Company Disclosure Schedule after reasonable
inquiry.
(k) Litigation.
(i) Except as disclosed in the Company SEC
Documents or Schedule 3.1(k) of the Company Disclosure Schedule, there
is no suit, action, proceeding or indemnification claim, at law or in
equity, pending before any Governmental Entity, or, to the knowledge
of the Company, threatened, against or affecting the Company, any
Subsidiary of the Company, or the Contract Interests ("Litigation"),
and the Company is not a party to any Litigation, and the Company and
its Subsidiaries have no knowledge of any facts that could reasonably
be expected to give rise to any Litigation, that (in any case) (i) has
had or could reasonably be expected to have a Material Adverse Effect,
(ii) has impaired or reasonably could be expected to impair the
ability of the Company to perform its obligations under any of the
Transaction Documents in any material respect, or (iii) reasonably
could be expected to delay in any material respect or prevent the
consummation of any of the transactions contemplated by any of the
Transaction Documents, nor is there any Order of any Governmental
Entity or arbitrator outstanding against or, to the Company's
knowledge, binding upon the Company, any Subsidiary of the Company or
the Contract Interests which (i) has had or could reasonably be
expected to have a Material Adverse Effect, (ii) has impaired or
reasonably could be expected to impair the ability of the Company to
perform its obligations under any of the Transaction Documents in any
material respect, or (iii) reasonably could be expected to delay in
any material respect or prevent the consummation of any of the
transactions contemplated by any of the Transaction Documents.
(ii) Schedule 3.1(k) of the Company Disclosure
Schedule contains an accurate and complete list of all Orders
restricting or limiting in any material respect, the business or
operations of the Company or any of its Subsidiaries, in each case
that is not disclosed in the Company SEC Documents, to which the
Company or any of its Subsidiaries is a party or, to the Company's
knowledge, by which the Company or any of its Subsidiaries or any of
their respective assets or properties are bound.
20
25
(l) Certain Agreements; Contract Interests.
(i) Material Oil and Gas Contracts.
(a) With respect to the Material Oil and
Gas Contracts, (i) all such Material Oil and Gas Contracts are
in full force and effect and are the valid and legally binding
obligations of the Company and each of its Subsidiaries to the
extent a party thereto and, to the Company's knowledge, each
other party thereto and are enforceable in accordance with
their respective terms; (ii) neither the Company nor, to the
knowledge of the Company, any other party to any such Material
Oil and Gas Contract is in material breach or default with
respect to its obligations thereunder; and (iii) no party to
any such Material Oil and Gas Contract has given notice of any
action to terminate, cancel, rescind or procure a judicial or
arbitral reformation thereof.
(b) There are no material outstanding
calls for payments by the Company or any of its Subsidiaries
under the Material Oil and Gas Contracts that are due that
have not been made, and all royalties, rentals and other
payments due under any of the Contract Interests or otherwise
due and relating to any Material Oil and Gas Contract have
been paid to the proper person in the proper amount.
(c) Except for the Material Oil and Gas
Contracts, there are no Contract Interests to which the
Company or any Subsidiary is a party pursuant to which the
Company and its Subsidiaries received or were entitled to
receive revenues of $1,000,000 or more in any one of the three
years ending December 31, 1996, 1997 or 1998, or that
otherwise is material to the business, operations or financial
condition of the Company and its Subsidiaries as a whole.
(ii) Except for the Material Oil and Gas Contracts
and except as disclosed in the Company's Annual Report on Form 10-K
for the year ended December 31, 1997, the Company's Quarterly Report
on Form 10-Q for the six months ended June 30, 1998 and Schedule
3.1(l)(ii) of the Company Disclosure Schedule, there are no (A)
employment or consulting Contracts (unless such employment or
consulting Contracts are terminable without liability or penalty on 30
days or less notice) under or pursuant to which the Company is
obligated to make payments in excess of $200,000 per annum, (B) other
Contracts that are material to the Company and its Subsidiaries, taken
as a whole, or their respective business, (C) Contracts relating to
material leasehold interests or (D) Contracts with Affiliates under or
pursuant to which the Company is obligated to make payments in excess
of $60,000 per annum (excluding agreements solely by and among the
Company and one or more of its Subsidiaries), in any such case, to
which the Company or any Subsidiary is a party or to which the Company
or any Subsidiary or their respective assets is bound (such Contracts
disclosed or required to be disclosed, the "Material Contracts").
Each Material Contract is a valid and binding obligation of the
Company or one of its Subsidiaries
21
26
and, to the knowledge of the Company, of each party thereto other than
the Company or its respective Subsidiary and is in full force and
effect.
(iii) The Company or the relevant Subsidiary and,
to the knowledge of the Company, each other party to the Material
Contracts, has performed in all material respects the obligations
required to be performed by it under the Material Contracts and is not
(with or without lapse of time or the giving of notice, or both) in
breach or default thereunder.
(iv) A complete copy of each Material Oil and Gas
Contract and each written Material Contract and a written description
of each oral Material Contract has been made available to Purchaser
prior to the date of this Agreement.
(v) Except as disclosed in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, or in any
other Company SEC Document filed with the SEC after December 31, 1997,
and prior to the date of this Agreement or in Schedule 3.1(l)(v) of
the Company Disclosure Schedule, none of the Company or of its
Subsidiaries is a party to any oral or written agreement, plan or
arrangement with any employee (whether an employee, consultant or an
independent contractor) of the Company or its Subsidiary (A) the
benefits of which are contingent, or the terms of which are materially
altered, upon, or result from, the occurrence of a transaction
involving the Company or its Subsidiary of the nature of any of the
transactions contemplated by this Agreement or (B) any of the benefits
of which will be increased, or the vesting of benefits of which will
be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or any other Transaction Documents or
the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement.
Schedule 3.1(l)(v) of the Company Disclosure Schedule lists each oral
and written agreement, plan or arrangement with any employee (whether
an employee, consultant or an independent contractor) of the Company
or any of its Subsidiaries which provides for aggregate benefits or
other amounts payable by the Company or any of its Subsidiaries in
excess of $200,000 which are contingent upon, or will be accelerated
by, or which otherwise will become payable upon the termination of any
such employee's employment by or any other service with the Company or
any of its Subsidiaries after, the occurrence of the transactions
contemplated by this Agreement or any of the other Transaction
Documents.
(vi) The Company has made available to Purchaser
(A) true and correct copies of all material loan or credit agreements
(including the Credit Agreements), notes, bonds, mortgages, indentures
and other agreements and instruments pursuant to which any Debt of the
Company or any of its Subsidiaries is outstanding or may be incurred
and (B) accurate information regarding the respective principal
amounts currently outstanding thereunder to the extent materially
different than as set forth in the financial statements included in
the Company's quarterly report on Form 10-Q for the six months ended
June 30, 1998.
22
27
(m) Status of Shares. The issuance and sale of the
Shares and the reservation and issuance of the Underlying Shares have been duly
authorized by all necessary corporate action on the part of the Company and
such Shares, when delivered to Purchaser at the Closing against payment
therefor as provided herein, will be validly issued, fully paid and
non-assessable and the issuance and sale of the Shares and the issuance of the
Underlying Shares is not and will not be subject to preemptive rights of any
other shareholder of the Company.
(n) Tax Returns and Tax Payments. The Company, each of
its Subsidiaries and any affiliated, consolidated, combined, unitary or similar
group of which the Company or any of its Subsidiaries is or was a member has
timely filed all material returns, reports or statements required to be filed
with any Governmental Entity with respect to Taxes ("Tax Returns") required to
be filed by it, and all such Tax Returns are true, correct and complete in all
material respects, and all Taxes shown thereon to be due have been paid, except
where the failure to so have timely filed, to be true, correct or complete or
to have paid such Taxes has not had and could not reasonably be expected to
have a Material Adverse Effect. The Company has established reserves, to the
extent required by GAAP, with respect to the payment of all material Taxes not
yet due and payable with respect to the result of operations of the Company and
its Subsidiaries through the date hereof. No claim for unpaid Taxes has been
asserted in writing by a tax authority or has become a Lien (except for
Permitted Liens) against the property of the Company or any of its
Subsidiaries, which claim or Lien has had or reasonably could be expected to
have a Material Adverse Effect. No audit of any Tax Return of the Company or
any of its Subsidiaries or any affiliated, consolidated, combined, unitary or
similar group in which the Company or any of its Subsidiaries is or has been a
member is being conducted by a tax authority, which audit reasonably could be
expected to have a Material Adverse Effect, and no extension of the statute of
limitations on the assessment of any material Taxes has been granted by the
Company or any of its Subsidiaries and currently is in effect. Neither the
Company nor any of its Subsidiaries is a party to, is bound by, or has any
obligation under any tax sharing or allocation agreement or similar agreement
or arrangement (other than among the Company and its Subsidiaries). For
purposes of this Agreement "Tax" means any federal, state, local or foreign
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, premium, withholding, alternative or added minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge of any kind whatsoever, together with
any interest or penalty, imposed by any Governmental Entity. For purposes of
this Agreement "Permitted Lien" means (a) liens, pledges, security interests,
claims or other encumbrances ("Encumbrances") securing Taxes, assessments,
governmental charges or levies, all of which are not yet due and payable or as
to which adequate reserves have been established in the Company's financial
statements and that may thereafter be paid without penalty, (b) mechanics',
carriers', workmen's, repairmen's, and other similar Encumbrances incurred in
the ordinary course of business consistent with past practice, or (c) such
other liens which, individually and in the aggregate, do not and will not
materially detract from the value of any of the property or assets of the
Company or its Subsidiaries or materially interfere with the use thereof.
(o) Employee Benefit Plans. All employee benefit plans
covering employees of the Company and its Subsidiaries (collectively, the
"Benefit Plans") are listed in the Company SEC Documents or the Company
Disclosure Schedule and complete copies of all material Benefit Plans,
23
28
including all amendments, have been made available to Purchaser. To the extent
applicable, the Benefit Plans comply, in all material respects, with the
requirements of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Code, and any Benefit Plan intended to be qualified under
Section 401(a) of the Code has been determined by the Internal Revenue Service
to be so qualified and has not, since such determination, been amended or, to
the knowledge of the Company, operated in a way which would adversely affect
such qualified status. Other than the Triton Exploration Services, Inc.
Retirement Income Plan, neither the Company nor any corporation, trade,
business or entity under common control with the Company within the meaning of
Section 414(b), (c) or (m) of the Code maintains, sponsors or contributes to or
has, within the six years prior to the First Closing Date, maintained,
sponsored or contributed to any employee benefit plan that is covered by Title
IV of ERISA or is subject to the funding requirements of Section 412 of the
Code or Section 302 of ERISA, or a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA. Neither a Benefit Plan nor the Company has incurred any
liability or penalty under Section 4975 of the Code or Section 502(i) of ERISA.
Each Benefit Plan has been maintained and administered in all material respects
in compliance with its terms and with ERISA and the Code to the extent
applicable thereto. There are no pending nor, to the knowledge of the
executive officers of the Company, any threatened material claims against or
otherwise involving any Benefit Plan and no suit, action or other litigation
(excluding claims for benefits incurred in the ordinary course of Benefit Plan
activities) has been brought against or with respect to any Benefit Plan. All
contributions required to be made as of the date hereof to the Benefit Plans
have been made. No employees of the Company or any of its Subsidiaries are
covered by any severance plan or similar arrangement, other than payments
pursuant to foreign law. Except as disclosed in Schedule 3.1(o) of the Company
Disclosure Schedule, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not (1) require the
Company to make a larger contribution to, or pay greater benefits under, any
Benefit Plan than it otherwise would, (2) create or give rise to additional
vested rights or service credits under any Benefit Plan, or (3) result in all
or any part of any payments made, or that may become payable as a result of the
transactions contemplated by the Agreement, by the Company not to be deductible
by the payor under sections 280G or 162(m) of the Code. Except as disclosed in
Schedule 3.1(o) of the Company Disclosure Schedule, no Benefit Plan provides
retiree medical or retiree life insurance benefits to any person and the
Company is not contractually obligated to provide any person with medical
benefits or life insurance upon retirement or termination of employment, except
as required by sections 601 through 608 of ERISA and section 4980B of the Code.
(p) Labor Matters. Except as set forth in Schedule
3.1(p) of the Company Disclosure Schedule or in the Company SEC Documents:
(i) there is no unfair labor practice charge or
grievance arising out of a collective bargaining agreement or other
grievance procedure against the Company or any of its Subsidiaries
pending, or, to the knowledge of the Company or any of its
Subsidiaries, threatened, that, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect;
24
29
(ii) there is no strike, dispute, slowdown, work
stoppage or lockout pending, or, to the knowledge of the Company or
any of its Subsidiaries, threatened, against or involving the Company
or any of its Subsidiaries that, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect;
or
(iii) To the knowledge of the Company, there is no
proceeding, claim, suit, action or governmental investigation pending
or threatened, in respect to which any current or former director,
officer, employee or agent of the Company or any of its Subsidiaries
is or may be entitled to claim indemnification from the Company or any
of its Subsidiaries pursuant to (a) the Memorandum of Association and
Articles of Association of the Company, (b) any provision of the
comparable charter or organizational documents of any of its
Subsidiaries, (c) any indemnification agreement to which the Company
or any Subsidiary of the Company is a party or (d) applicable Law.
(q) Intangible Property. The Company and its
Subsidiaries possess or have adequate rights to use all material trademarks,
trade names, patents, service marks, brand marks, brand names, computer
programs, databases, industrial designs and copyrights necessary for the
operation of the businesses of each of the Company and its Subsidiaries
(collectively, the "Intangible Property"), except where the failure to possess
or have adequate rights to use such properties, individually or in the
aggregate, has not had and could not reasonably be expected to have a Material
Adverse Effect. All of the Intangible Property is owned or licensed by the
Company or its Subsidiaries free and clear of any and all Liens, except those
that, individually or in the aggregate, have not had and could not reasonably
be expected to have a Material Adverse Effect, and neither the Company nor any
such Subsidiary has forfeited or otherwise relinquished any Intangible Property
which forfeiture, individually or in the aggregate, has had or could reasonably
be expected to have a Material Adverse Effect. To the knowledge of the
Company, the use of the Intangible Property by the Company or its Subsidiaries
does not, in any material respect, conflict with, infringe upon, violate or
interfere with or constitute an appropriation of any right, title, interest or
goodwill, including any intellectual property right, trademark, trade name,
patent, service xxxx, brand xxxx, brand name, computer program, database,
industrial design, copyright or any pending application therefor of any other
person and there have been no claims made and neither the Company nor any of
its Subsidiaries has received any notice of any claim or otherwise knows that
any of the Intangible Property is invalid or conflicts with the asserted rights
of any other person or has not been used or enforced or has failed to have been
used or enforced in a manner that would result in the abandonment, cancellation
or unenforceability of any of the Intangible Property, except for any such
conflict, infringement, violation, interference, claim, invalidity,
abandonment, cancellation or unenforceability that, individually or in the
aggregate, has not had and could not reasonably be expected to have a Material
Adverse Effect.
(r) Environmental Matters.
For purposes of this Agreement:
25
30
(A) "Environmental Laws" means all federal, state
and local laws, rules, regulations, ordinances, orders and decrees of
any Governmental Entity, whether now in existence or hereafter enacted
and in effect at the time of either Closing, relating to pollution or
the protection of human health, safety or the environment of any
jurisdiction in which the applicable party hereto owns or operates
assets or conducts business or owned or operated assets or conducted
business (whether or not through a predecessor entity) (including
ambient air, surface water, groundwater, land surface, subsurface
strata, natural resources or wildlife), including laws and regulations
relating to Releases or threatened Releases of Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of solid waste or
Hazardous Materials, and any similar laws, rules, regulations,
ordinances, orders and decrees of any foreign jurisdiction in which
the applicable party hereto owns or operates assets or conducts
business;
(B) "Hazardous Materials" means (x) any petroleum
or petroleum products, radioactive materials (including naturally
occurring radioactive materials), asbestos in any form that is or
could become friable, urea formaldehyde foam insulation,
polychlorinated biphenyls or transformers or other equipment that
contain dielectric fluid containing polychlorinated biphenyls, (y) any
chemicals, materials or substances which are now defined as or
included in the definition of "solid wastes," "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous
substances," "restricted hazardous wastes," "toxic substances" or
"toxic pollutants," or words of similar import, under any
Environmental Law and (z) any other chemical, material, substance or
waste, exposure to which is now prohibited, limited or regulated under
any Environmental Law in a jurisdiction in which the Company or any of
its Subsidiaries operates (for purposes of this Section 3.1(t)).
(C) "Release" means any spill, effluent,
emission, leaking, pumping, pouring, emptying, escaping, dumping,
injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, or into or out of
any property owned, operated or leased by the Company or its
Subsidiaries; and
(D) "Remedial Action" means all actions,
including any capital expenditures, required by a Governmental Entity
or required under any Environmental Law, or voluntarily undertaken to
(w) clean up, remove, treat, or in any other way ameliorate or address
any Hazardous Materials or other substance in the indoor or outdoor
environment; (x) prevent the Release or threat of Release, or minimize
the further Release of any Hazardous Material so it does not endanger
or threaten to endanger the public or employee health or welfare of
the indoor or outdoor environment; (y) perform pre-remedial studies
and investigations or post-remedial monitoring and care pertaining or
relating to a Release; or (z) bring the Company or its Subsidiaries
into compliance with any Environmental Law.
Except as disclosed in the Company SEC Documents or on
Schedule 3.1(r) of the Company Disclosure Schedule:
26
31
(i) The operations of the Company and its
Subsidiaries have been conducted are, and as of each Closing Date will
be, in compliance with all Environmental Laws, except where the
failure to so comply, individually or in the aggregate, has not had
and could not reasonably be expected to have a Material Adverse
Effect;
(ii) Neither the Company nor any of its
Subsidiaries has caused the generation, treatment, manufacture,
processing, distribution, use, storage, discharge, Release, transport
or handling of any Hazardous Materials at any of its properties or
facilities, except as has not had and could not reasonably be expected
to have a Material Adverse Effect;
(iii) Neither the Company nor any of its
Subsidiaries has received any written notice from any Governmental
Entity or other third party alleging any violation by the Company or
any of its Subsidiaries of, or responsibility or liability of the
Company or any of its Subsidiaries under, any Environmental Law or for
personal injuries, Remedial Action or property damages, which has had
or could reasonably be expected to have a Material Adverse Effect;
(iv) The Company and its Subsidiaries are not
subject to any outstanding written orders issued by, or contracts
with, any Governmental Entity or other person respecting (A)
Environmental Laws, (B) Remedial Action, (C) any Release or threatened
Release of a Hazardous Material or (D) an assumption of responsibility
for environmental liabilities of another person, except such orders or
contracts the compliance with which, individually or in the aggregate,
has not had and could not reasonably be expected to have a Material
Adverse Effect;
(v) Neither the Company nor any of its
Subsidiaries has any contingent liability in connection with the
Release of any Hazardous Material into the indoor or outdoor
environment (whether on-site or off-site) or employee or third party
exposure to Hazardous Materials that, individually or in the
aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.
(s) Insurance. Schedule 3.1(s) of the Company Disclosure
Schedule sets forth an insurance schedule of the Company's and each of its
Subsidiaries' directors' and officers' liability insurance. The Company
maintains insurance in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in businesses
similar to those of the Company and each of its Subsidiaries (taking into
account the cost and availability of such insurance).
(t) Vote. There are no approvals required of the holders
of any class or series of shares or stock of the Company necessary to approve
this Agreement or any other Transaction Documents and the transactions
contemplated hereby or thereby.
(u) Amendment to Rights Agreement. The Board has taken
all necessary action to amend the Rights Agreement, dated as of March 25, 1996,
as amended (the "Rights Agreement"),
27
32
between the Company and Chemical Bank, as Rights Agent, so that none of the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will cause (i) the rights issued pursuant to
the Rights Agreement to become exercisable under the Rights Agreement or (ii)
the distribution of Rights Certificates (as defined in the Rights Agreement).
(v) Prepayments. Neither the Company nor any Subsidiary
is obligated, by virtue of a prepayment arrangement, make-up right under a
production sales Contract containing a "take or pay" or similar provision,
production payment or any other arrangement, to deliver hydrocarbons, or
proceeds from the sale thereof, attributable to any of its properties at some
future time without then or thereafter being entitled to received payment of
the contract price therefor, except where any such arrangement could not
reasonably be expected to have a Material Adverse Effect.
(w) Gas Imbalances. Except as disclosed in the Company
SEC Documents, neither the Company nor any Subsidiary has (i) any obligation to
deliver gas from the Oil and Gas Properties (or cash in lieu thereof) to other
owners of interests in those properties as a result of past production by the
Company, any Subsidiary or any of their predecessors in excess of the share to
which they were entitled nor (ii) any right to receive deliveries of gas from
the Oil and Gas Properties (or cash in lieu thereof) from other owners of
interests in those properties as a result of past production by the company,
any Subsidiary or any of their predecessors of less than the share to which
they were entitled in either case where any such gas imbalance could reasonably
be expected to have a Material Adverse Effect.
(x) Reserve Report. A true, correct and complete copy of
the Reserve Report has been provided to Purchaser. The Company's and each
Subsidiary's ownership of the Oil and Gas Properties described in the Reserve
Report entitle the respective owner to receive a percentage of the oil, gas and
other hydrocarbons produced from each well or unit equal to not less than the
percentage set forth in the Reserve Report as the "Net Revenue Interest" for
such well or unit and cause the respective owner to be obligated to bear a
percentage of the cost of operation of such well or unit not greater than the
percentage set forth in the Reserve Report as the "Working Interest" for such
well or unit, and to the extent such percentages of production which the
respective owner is entitled to receive, and shares of expenses which the
respective owner is obligate to bear, may change after the date of such report,
such changes were properly reflected (based on reasonable assumptions) in
preparing such report. The underlying historical information used for
preparation of the Reserve Report was, at the time of delivery, true and
correct in all material respects.
(y) Nonconsent Operations. Except as set forth in
Schedule 3.1(y) of the Company Disclosure Schedule, there are no operations on
the Oil and Gas Properties in which the Company's or any Subsidiary's
commitment would have exceeded $5,000,000, being conducted as of January 1,
1998, or any time thereafter, in which the Company or any Subsidiary was
entitled to participate and did not participate.
(z) Information Provided. Neither this Agreement, the
Schedules and Exhibits hereto, the other Transaction Documents, nor any other
document provided by the Company to
28
33
Purchaser contain any untrue statement of a material fact or omit any material
fact necessary to make the statements herein or therein, as the case may be,
not misleading.
(aa) No Brokers or Finders. No agent, broker, finder or
investment or commercial banker, or other Person or firm engaged by or acting
on behalf of the Company or its Subsidiaries in connection with the
negotiation, execution or performance of this Agreement is or will be entitled
to any brokerage or finder's or similar fee or other commission as a result of
this Agreement, the other Transaction Documents or the transactions
contemplated hereby or thereby, other than any such fees or commissions that
have been disclosed to Purchaser and as to which the Company shall have full
responsibility.
Section 3.2 Representations and Warranties of Purchaser.
(a) Organization, Standing and Power. Purchaser is a
Cayman Islands exempted limited partnership duly organized, validly existing,
and in good standing under the laws of the Cayman Islands and has all requisite
partnership power and authority to own, lease, and operate its properties and
to carry on its business as now being conducted and to execute and deliver this
Agreement and the other Transaction Documents to which Purchaser is a party and
consummate the transactions contemplated hereby and thereby.
(b) Authority; Approvals.
(i) Purchaser represents and warrants to the
Company that (a) the execution and delivery of this Agreement and the
other Transaction Documents to which it is a party and the purchase of
the Shares to be purchased by it have been duly and properly
authorized, (b) this Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by it or on
its behalf and, assuming the accuracy of the representations and
warranties of the Company in Section 3.1(d) hereof, constitute the
valid and legally binding obligations of Purchaser, enforceable
against it in accordance with their respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights generally and to general principles of
equity; (c) the purchase of the Shares to be purchased by it does not
conflict with or violate (1) its partnership agreement or (2) any law
applicable to it in a manner that could materially hinder or impair
the completion of any of the transactions contemplated hereby; and (d)
the purchase of Shares to be purchased by it does not impose any
penalty or other onerous condition on Purchaser that could materially
hinder or impact the completion of any of the transactions
contemplated hereby.
(ii) No Approval from any Governmental Entity is
required by or with respect to Purchaser in connection with the
execution and delivery by Purchaser of this Agreement or any other
Transaction Document to which it is a party or the consummation by
Purchaser of the transactions contemplated hereby or thereby, except
for: (A) if applicable, the filing of a notification report by
Purchaser under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and the expiration or
29
34
termination of the applicable waiting period with respect thereto; (B)
such Approvals as may be required by any foreign securities, corporate
or other Laws; and (C) any such Approval the failure of which to be
made or obtained (1) has not impaired and could not reasonably be
expected to impair the ability of Purchaser to perform its obligations
under any of the Transaction Documents in any material respect or (2)
could not reasonably be expected to delay in any material respect or
prevent the consummation of any of the transactions contemplated by
any of the Transaction Documents.
(c) Litigation. As of the time of execution of this
Agreement, there is no claim, action, suit, inquiry, judicial or administrative
proceeding pending or, to the knowledge of Purchaser, threatened against it
relating to any of the transactions contemplated by this Agreement or any other
Transaction Document.
(d) Investment Intent. Purchaser represents and warrants
to the Company that the Shares to be acquired by it hereunder and any
Underlying Shares to be acquired upon the conversion or exchange of such Shares
are being acquired for its own account for investment and with no intention of
distributing or reselling such Shares or Underlying Shares or any part thereof
or interest therein in any transaction which would be in violation of the
securities Laws of the United States of America or any state or any foreign
country or jurisdiction.
(e) Transfer Restrictions. If Purchaser should decide to
dispose of any of the Shares to be purchased by it or any Underlying Shares to
be issued to it upon the conversion or exchange of such Shares, Purchaser
understands and agrees that it may do so only subject to the transfer
restrictions set forth in the Shareholders Agreement and pursuant to an
effective registration statement under the Securities Act or pursuant to an
exemption from registration under the Securities Act. In connection with any
offer, resale, pledge or other transfer (individually and collectively, a
"Transfer") of any Shares or Underlying Shares other than pursuant to an
effective registration statement, the Company may require that the transferor
of such Shares or Underlying Shares provide to the Company an opinion of
counsel which opinion shall be reasonably satisfactory in form and substance to
the Company, to the effect that such Transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and any State or foreign securities Laws.
Purchaser agrees to the imprinting, so long as appropriate, of substantially
the following legend on certificates representing the Shares and any Underlying
Shares:
THE [8% CONVERTIBLE PREFERENCE SHARES/ORDINARY
SHARES] (THE "SHARES") EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT
IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER (INDIVIDUALLY
AND COLLECTIVELY, A "TRANSFER") THE SHARES EVIDENCED HEREBY, EXCEPT
(A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT SUCH
30
35
AS THE EXEMPTION SET FORTH IN RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE). IF THE PROPOSED TRANSFER IS TO BE MADE OTHER THAN
PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES
LAW.
THE SHARES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A SHAREHOLDERS AGREEMENT DATED _______________, 1998,
WHICH CONTAINS CERTAIN RESTRICTIONS ON THE TRANSFER OF THE SHARES. A
COPY OF THE SHAREHOLDERS AGREEMENT IS AVAILABLE AT THE REGISTERED
OFFICE OF THE COMPANY.
The legends set forth above may be removed if and when the Shares or
Underlying Shares, as the case may be, represented by such certificate are no
longer subject to the transfer restrictions set forth in the Shareholders
Agreement and are disposed of pursuant to an effective registration statement
under the Securities Act or the opinion of counsel referred to above has been
provided to the Company. The share certificates shall also bear any additional
legends required by applicable federal, state or foreign securities Laws, which
legends may be removed when, in the opinion of counsel to the Company, the same
are no longer required under the Memorandum of Association, the Articles of
Association or the applicable requirements of such securities Laws. Purchaser
agrees that, in connection with any Transfer of Shares by it pursuant to an
effective registration statement under the Securities Act, Purchaser will
comply with all prospectus delivery requirements of the Securities Act. The
Company makes no representation, warranty or agreement as to the availability
of any exemption from registration under the Securities Act with respect to any
resale of Shares or Underlying Shares.
(f) Purchaser Status. Purchaser represents and warrants
to, and covenants and agrees with the Company that (i) at the time it was
offered the Shares, it was, (ii) at the date hereof, it is, and (iii) at each
Closing Date, it will be, an accredited investor as defined in Rule 501(a)
under the Securities Act, and has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the Company
and an investment in the Shares, and is able to bear the economic risk of such
investment.
(g) Information Supplied. None of the information, if
any, supplied by or on behalf of Purchaser specifically for inclusion in the
Registration Statement and which is included or incorporated by reference in
the Registration Statement will, at the date such Registration Statement is
declared effective by the SEC or any time from and after such date through and
including the date of the Second Closing, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. No representation
31
36
is made by Purchaser in connection with any of the foregoing except with
respect to statements made or incorporated by reference in the Registration
Statement in conformity with information supplied by or on behalf of Purchaser
specifically for use in the Registration Statement.
(h) No Brokers or Finders. No agent, broker, finder or
investment or commercial banker, or other Person or firm engaged by or acting
on behalf of Purchaser in connection with the negotiation, execution or
performance of this Agreement is or will be entitled to any brokerage or
finder's or similar fee or other commission as a result of this Agreement,
other than any such fees or commissions that have been disclosed to the Company
and as to which Purchaser shall have full responsibility.
(i) Ownership of Shares. Neither the Purchaser nor any
of its Affiliates is the beneficial owner of any shares of or stock of the
Company.
(j) Financing. Upon the terms and subject to the
conditions of this Agreement, the Purchaser has available to it and at the
Closings will have all funds necessary to satisfy its obligations to purchase
Shares hereunder.
ARTICLE IV
COVENANTS
Section 4.1 Furnishing of Information. As long as Purchaser owns
Shares or Underlying Shares representing at least 5% of the aggregate number of
shares of Common Stock then outstanding (determined after giving effect to the
full conversion of all outstanding Shares owned by Purchaser at the conversion
price then in effect), from and after the First Closing Date the Company will
promptly furnish to Purchaser all reports filed by it pursuant to Section 13(a)
or 15(d) of the Exchange Act (or if the Company is not at the time required to
file reports pursuant to said Section 13(a) or 15(d), annual and quarterly
reports comparable to those required by Sections 13(a) or 15(d) of the Exchange
Act).
Section 4.2 Rights Offering.
(a) Promptly following the First Closing, the Company
shall conduct a distribution to each record holder of Common Stock, 5%
Preference Shares and 8% Preference Shares, as of a record date after the First
Closing to be set by the Company, of the transferable right (the "Rights") to
purchase, at $70.00 per share, a pro-rata portion (with the pro rata portion
relating to outstanding 5% Preference Shares and 8% Preference Shares
determined based on the number of shares of Common Stock into which such shares
are convertible as of such record date) of 3,177,500 shares (subject to
rounding as set forth below) of 8% Preference Shares (the "Rights Offering").
Based on the current outstanding shares of the Company, in the Rights Offering
(i) the Company will distribute .072 transferrable Rights with respect to each
share of Common Stock and 5% Preference Shares and .288 transferable Rights
with respect to each 8% Preference Share outstanding as of the
32
37
record date for the Rights Offering, at no cost to the record holders; (ii) one
Right plus $70.00 in cash will entitle the holder to purchase one share of 8%
Preference Shares; (iii) the Rights will be evidenced by transferable
subscription certificates; (iv) no fractional Rights or cash in lieu thereof
will be issued or paid, and the number of Rights distributed to each holder of
Common Stock, 5% Preference Shares and 8% Preference Shares will be rounded up
to the nearest whole number of Rights; (v) brokers, dealers and other nominees
holding shares of Common Stock, 5% Preference Shares or 8% Preference Shares on
the record date for more than one beneficial owner will be entitled to obtain
separate subscription certificates for their beneficial owners so that they may
each receive the benefit of rounding; and (vi) each Right will also carry the
right to subscribe at the $70.00 subscription price for additional shares of 8%
Preference Shares for which the other holders of Rights did not subscribe
through the exercise of the basic subscription privileges (the "Excess
Shares"), provided that (A) only Rights holders who exercise their basic
subscription privilege in full will be entitled to exercise the
oversubscription privilege, (B) if the Excess Shares are not sufficient to
satisfy all oversubscriptions, the Excess Shares will be allocated pro rata
(subject to the elimination of fractional shares) among those Rights holders
exercising the oversubscription privilege and (C) Purchaser shall not purchase
any 8% Preference Shares pursuant to its oversubscription privilege under
Rights held by Purchaser.
(b) The Company shall promptly prepare and submit to
Purchaser for review, a form of subscription agreement, subscription
certificate and all other documents and instruments required in connection with
the Rights Offering, all of which shall be in form and substance reasonably
satisfactory to Purchaser (the "Rights Offering Documents"). The Rights
Offering Documents shall provide, among other things, that the Rights Offering
shall be generally conducted in the manner described in Section 4.2(a).
Section 4.3 Stock Exchange Listing. The Company shall submit a
listing application to the NYSE with respect to the 8% Preference Shares, the
Underlying Shares and the Rights within ten business days after the date hereof
and Purchaser shall be entitled to review and reasonably comment on such
listing application and the submission of any other materials to the NYSE in
connection with the listing of the 8% Preference Shares, the Underlying Shares
and the Rights. The Company shall use all commercially reasonable efforts to
cause, prior to the First Closing Date, the 8% Preference Shares, the
Underlying Shares and the Rights to be approved for listing on the NYSE,
subject to official notice of issuance, upon issuance in accordance with the
terms of this Agreement (including as provided in Section 2.1(a)) and the
Rights Offering Documents (and, in the case of the 8% Preference Shares,
generally, satisfactory distribution and, in the case of the Rights, the 8%
Preference Shares to be issued in the Rights Offering and the Underlying Shares
to be issued pursuant to such 8% Preference Shares, the effectiveness of the
Registration Statement) (collectively, the "NYSE Approval").
Section 4.4 Registration Statement. As promptly as practicable
after the date hereof, the Company shall prepare and file with the SEC a
registration statement on Form S-3, or shall file a post-effective amendment to
an existing shelf registration statement of the Company currently effective
under the Securities Act and in proper form to effect the Rights Offering
(including the issuance of the 8% Preference Shares to be issued pursuant
thereto and the Underlying Shares to be
33
38
issued upon conversion of such 8% Preference Shares), for the purpose of
registering under the Securities Act the offering, sale and delivery of the
securities issuable in the Rights Offering, including the Underlying Shares
with respect to the shares of 8% Preference Shares offered thereby. The term
"Registration Statement," as used herein, means such registration statement and
all amendments and supplements thereto, if any. The Company shall use all
commercially reasonable efforts to have the Registration Statement declared
effective under the Securities Act as promptly as practicable after the First
Closing. The Company shall notify Purchaser promptly of the receipt of any
comments on, or any requests for amendments or supplements to, the Registration
Statement by the SEC, and the Company shall supply Purchaser with copies of all
correspondence between it and its representatives, on the one hand, and the SEC
or members of its staff, on the other, with respect to the Registration
Statement. The Company, after consultation with Purchaser, shall use
commercially reasonable efforts to respond promptly to any comments made by the
SEC with respect to the Registration Statement. The Company and Purchaser each
agrees promptly to correct any information provided by it for use in the
Registration Statement if and to the extent that such information shall have
become false or misleading in any material respect, and the Company further
agrees to take all steps necessary to cause the Registration Statement (or the
prospectus contained therein) as so corrected to be filed with the SEC and to
be disseminated to the extent required by applicable Law. The Company shall
also take any action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified) reasonably required to be taken under any
applicable state securities Laws in connection with the issuance of securities
pursuant to the Registration Statement.
Section 4.5 Affirmative Covenants of the Company. The Company
hereby covenants and agrees that, until the earlier of the Second Closing or
the termination of this Agreement, unless otherwise expressly contemplated by
this Agreement or consented to in writing by Purchaser (such consent not to be
unreasonably withheld), the Company will and will cause each of its
Subsidiaries to:
(a) operate its business in the usual and ordinary course
consistent with past practices except as contemplated by this Agreement or as
provided in or contemplated by the Company Disclosure Schedule, consistent with
the Company's restructuring as announced or disclosed in the Company SEC
Documents filed prior to the date of this Agreement or disclosed in press
releases released prior to the date of this Agreement (the "Announced
Restructuring");
(b) use commercially reasonable efforts to maintain and
keep its properties and assets in as good a repair and condition as at present,
ordinary wear and tear excepted; and
(c) use all reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage to that
currently maintained, consistent with the Announced Restructuring.
34
39
Section 4.6 Negative Covenants of the Company.
(a) Except as expressly contemplated by this Agreement or
otherwise consented to in writing by Purchaser, from the date of this Agreement
until earlier of the First Closing or the termination of this Agreement, the
Company shall not do, and shall not permit any of its Subsidiaries to do, any
of the following:
(i) except as set forth in Schedule 4.6(a)(i) of
the Company Disclosure Schedule, acquire or agree to acquire (whether
pursuant to a definitive agreement, a non-binding letter of intent or
otherwise), by merging or consolidating with, by purchasing an equity
interest in or a portion of the assets of (including by a "farm-in" of
any properties or interests), or by any other manner, any business or
any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other Person (other than from a Subsidiary
of the Company or the purchase of assets from suppliers or vendors in
the ordinary course of business and other than assets which,
individually or in the aggregate, are not material to the business or
operations of the Company or any of its Subsidiaries);
(ii) except as set forth in Schedule 4.6(a)(ii) of
the Company Disclosure Schedule or as permitted under Section 4.12,
sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose
of, or agree to sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of (including by a "farm-out" of any properties or
interests), any of its assets or any assets of any of its
Subsidiaries, except for pledges or dispositions of assets in the
ordinary course of business or consistent with the Announced
Restructuring and except for assets which, individually or in the
aggregate, are not material to the business or operations of the
Company or any of its Subsidiaries;
(iii) except as set forth in Schedule 4.6(a)(iii)
of the Company Disclosure Schedule, adopt or propose to adopt any
amendments to the Company's Memorandum of Association or Articles of
Association or similar charter documents; other than transactions
between the Company and one or more of its Subsidiaries or among one
or more of its Subsidiaries, adopt resolutions authorizing a
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, or other reorganization of the Company or any
Subsidiary; or make any other material changes in the Company's
capital structure;
(iv) (i) except as set forth in Schedule
4.7(a)(iv) of the Company Disclosure Schedule change any of its
significant accounting methods, principles, practices or policies or
(ii) make or rescind any express or deemed election relating to Taxes,
settle or compromise any claim, action, suit, Litigation, audit or
controversy relating to Taxes, or change any of its methods of
reporting income or deductions for federal or other income Tax
purposes from those employed in the preparation of the federal or
other income Tax Returns or other Tax Returns for the taxable year
ending December 31, 1997, except, in the case of either clause (i) or
clause (ii), as may be required by Law or GAAP;
35
40
(v) other than borrowings in the ordinary course
under the Credit Facilities, incur any obligation for borrowed money
or purchase money indebtedness, whether or not evidenced by a note,
bond, debenture or similar instrument or under any financing lease,
whether pursuant to a sale-and-leaseback transaction or otherwise;
(vi) except as set forth in Schedule 4.6(a)(vi) of
the Company Disclosure Schedule, make any loans or advances to any
Person, other than (i) advances to employees in the ordinary and usual
course of business and (ii) transactions among or between the Company
and its Subsidiaries in the ordinary and usual course of the Company's
business;
(vii) declare or pay any dividend or make any other
distribution with respect to its shares or capital stock, other than
dividends paid by any Subsidiary to the Company or another Subsidiary
in the ordinary and usual course of the Company's business and regular
dividends on the 5% Preference Shares in accordance with the terms as
in effect on the date hereof;
(viii) except as set forth in Schedule 4.6(a)(viii)
of the Company Disclosure Schedule, enter into, adopt, or (except as
may be required by law) amend or terminate any Benefit Plan; approve
or implement any employment severance arrangements (other than
payments made under the Company's severance policy in accordance with
past practice) or discharge or, except to replace any officer or
executive management personnel who have departed on substantially the
same or lesser terms as the departed Person, hire any officers or
executive management personnel; authorize or enter into any
employment, severance, consulting services or other agreement with any
officers or executive management personnel; or except as set forth in
Section 4.6(a)(viii) of the Company Disclosure Schedule, change the
compensation or benefits provided to any director, officer, or
employee as of June 30, 1998; or
(ix) agree in writing or otherwise to do any of
the foregoing.
(b) Except as expressly contemplated by this Agreement or
otherwise consented to in writing by Purchaser, from the date of this Agreement
until earlier of the Second Closing or the termination of this Agreement, the
Company shall not do, and shall not permit any of its Subsidiaries to do, any
of the following:
(i) materially amend, terminate or fail to use
all commercially reasonable efforts to maintain in full force and
effect and, if applicable, renew any Material Oil and Gas Contract or
any Material Contract (provided that the Company and its Subsidiaries
shall not be required to renew any Material Contract on terms that are
less favorable to the Company or its Subsidiaries), or fail to use all
commercially reasonable efforts to prevent a default in any material
respect (or take or omit to take any action that, with or without the
giving of notice or passage of time, would constitute a material
default) under any Material Oil and Gas Contract or any Material
Contract;
36
41
(ii) split, combine, reclassify or amend any term
of any of its shares or capital stock; or
(iii) Except as set forth in Schedule 4.6(b)(iii)
of the Company Disclosure Schedule, (A) issue, sell or deliver
(whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase, or otherwise) any of
its shares or capital stock or other securities other than (1) as
contemplated herein or (2) pursuant to awards issued and outstanding
as of the date hereof under the Stock Plans or as required under the
terms of any other security of the Company outstanding as in effect as
of the date of this Agreement, or (B) purchase or otherwise acquire
any of its shares or capital stock, employee or director stock
options, warrants or other equity securities or debt securities other
than pursuant to the terms thereof as in effect as of the date of this
Agreement.
Section 4.7 Approvals. The Company and Purchaser each agree to
cooperate and use all commercially reasonable efforts to obtain (and will
promptly prepare all registrations, filings and applications, requests and
notices preliminary to all) Approvals that may be necessary or which may be
reasonably requested by the Company or Purchaser to consummate the transactions
contemplated by this Agreement and the other Transaction Documents.
Section 4.8 Shareholders Agreement. On or before the First
Closing Date, the Company and Purchaser shall enter into the Shareholders
Agreement.
Section 4.9 Preferred Stock Authorization. On or before the
First Closing Date, the Company shall take, or cause to be taken, all action
necessary to authorize and approve the Preferred Stock Authorization in
accordance with the relevant provisions of the Companies Law of the Cayman
Islands.
Section 4.10 HSR Act Notification. To the extent the HSR Act will
be applicable to the acquisition of the Shares by Purchaser, each of the
parties hereto shall (a) file or cause to be filed, as promptly as practicable
after the execution and delivery of this Agreement and in no event later than
ten Business Days after the date of this Agreement, with the Federal Trade
Commission and the United States Department of Justice, all reports and other
documents required to be filed by such party under the HSR Act concerning the
transactions contemplated hereby and (b) promptly comply with or cause to be
complied with any requests by the Federal Trade Commission or the United States
Department of Justice for additional information concerning the Transaction, in
each case so that the waiting period applicable to this Agreement and the
Transaction contemplated hereby under the HSR Act shall expire as soon as
practicable after the execution and delivery of this Agreement. Each party
hereto agrees to request, and to cooperate with the other party or parties in
requesting, early termination of any applicable waiting period under the HSR
Act.
Section 4.11 Indemnification of Directors and Officers; Insurance.
(a) At the later of (i) the First Closing or (ii) such
date on which such individuals are elected to the Board of Directors, the
Company shall enter into indemnification agreements with
37
42
each of the directors designated by the Purchaser pursuant to the Shareholders
Agreement ("Purchaser Designees") substantially in the form of Exhibit E hereto
with such changes thereto as may be agreed upon by Purchaser and the Company
(each an "Indemnification Agreement").
(b) At or prior to the First Closing Date, the Company
shall obtain directors' and officers' liability insurance policies providing an
aggregate of $25,000,000 in additional coverage to the coverage provided by the
Company's current directors' and officers' insurance policy (the "Additional
D&O Policies"). The Company shall use all commercially reasonable efforts to
ensure that the Additional D&O Policies shall, in addition to customary
coverage, provide coverage for Purchaser and any of its Affiliates with respect
to any claims brought against Purchaser or any of its Affiliates arising out of
or relating to any act or omission of any director of the Company in his or her
capacity as a director of the Company; provided, however, that in the event the
Additional D&O Policies are not available to provide coverage as described in
this sentence, the Company shall use commercially reasonable efforts to obtain
a separate insurance policy (the "Alternative Policy") providing such coverage
in such amounts as can be obtained by the Company upon the payment of annual
premiums that, when aggregated with the annual premiums paid for the Additional
D&O Policies, do not exceed 200% of the annual premiums related to the
Company's existing director and officer liability policies aggregating
$30,000,000 in coverage. The Company shall maintain in effect the Additional
D&O Policies and the Alternative Policy for so long as Purchaser is entitled to
nominate members to the Board of Directors pursuant to the Shareholders
Agreement.
(c) The Company shall, from and after the date of this
Agreement and until the later of (i) four years from the First Closing Date or
(ii) the final resolution of all Shareholder Litigation, maintain in effect the
current directors' and officers' liability insurance policies maintained by the
Company (provided that the Company may substitute therefor policies no less
favorable in terms and amounts of coverage so long as substitution does not
result in gaps of lapses in coverage) with respect to matters occurring prior
to the Second Closing Date; provided, however, that in no event shall the
Company be required to expend pursuant to this Section more than an amount per
year equal to 150% of current annual premiums paid by the Company for such
insurance.
(d) The Company shall amend its existing insurance
coverage under the Company's current policies of directors' and officers'
liability insurance, or obtain comparable replacement policies on terms no less
favorable in terms of coverage and amounts than those in effect on the date
hereof, so that Purchaser's purchase of the Shares pursuant to this Agreement
shall not constitute a "change of control" of the Company or otherwise cause
any of the Purchaser Designees or any of persons who become officers, directors
or employees of the Company on or after the First Closing Date to be excluded
from the coverage provided by such insurance policies.
(e) In the event the Company or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any Person, then, and in each such case, proper provision shall be made so
that the successors and assigns of the Company shall assume the obligations set
forth in this Section 4.11. The provisions of this Section are intended to be
for the benefit of, and shall be enforceable by, the
38
43
parties hereto and each person entitled to indemnification or insurance
coverage pursuant to this Section, his heirs, and his representatives. The
rights provided such persons under this Section shall be in addition to, and
not in lieu of, any rights to indemnity that such persons may have under the
Articles of Association of the Company or any other provisions herein or in
other agreements.
Section 4.12 No Solicitation.
(a) From and after the date hereof until the earlier of
the Second Closing Date or the termination of this Agreement, neither the
Company nor any of its Subsidiaries, nor any of their respective officers,
directors, representatives, agents or Affiliates (including, without
limitation, any investment banker, attorney or accountant retained by the
Company or any of its Subsidiaries) (collectively, "Representatives") will, and
the Company will cause the employees and Representatives of the Company and its
Subsidiaries not to, directly or indirectly, (i) solicit, initiate or encourage
the submission of any proposal for a Sale Transaction, (ii) enter into any
agreement with respect to any Sale Transaction or give any approval with
respect to any Sale Transaction, (iii) participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any Sale
Transaction or any proposal for a Sale Transaction or (iv) release any third
party from its obligations under any existing standstill agreement or
arrangement relating to a proposed Sale Transaction or otherwise under any
confidentiality or other similar agreement relating to information material to
the Company or any of its Subsidiaries; provided, however, that if at any time
prior to the First Closing, the Board of Directors of the Company determines in
good faith, based on the advice of outside counsel, that it is necessary to do
so in order to comply with its fiduciary duties to the Company's shareholders
under applicable law, the Company (and its Representatives) may, in response to
a proposal for a Sale Transaction not solicited on or after the date hereof,
subject to compliance with Section 4.12(c), (x) furnish information with
respect to the Company pursuant to a customary confidentiality agreement to any
Person making such proposal and (y) participate in negotiations regarding such
proposal. The Company shall immediately cease and cause to be terminated any
existing solicitation, initiation, encouragement, activity, discussion or
negotiation with any parties conducted heretofore by the Company or any
Representatives with respect to any Sale Transaction existing on the date
hereof. Without limiting the foregoing, it is understood that any violation of
the restrictions set forth in the preceding sentence by any Representative of
the Company or any of its Subsidiaries, whether or not such Person is
purporting to act on behalf of the Company or any of its Subsidiaries or
otherwise, shall be deemed to be a breach of this Section 4.12(a) by the
Company.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (x) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Purchaser, the approval (including, without
limitation, the Board of Directors' resolution providing for such approval) of
this Agreement, the Preference Share Authorization or the transactions
contemplated hereby or thereby or (y) approve or recommend, or propose to
approve or recommend, any Sale Transaction, except in the case of clause (x) or
(y), if the Board of Directors of the Company determines in good faith, based
on the advice of outside counsel, that it is necessary to do so in order
39
44
to comply with its fiduciary duties under applicable law and then only at or
after the termination of this Agreement pursuant to Section 7.1(c).
(c) In addition to the obligations of the Company set
forth in paragraphs (a) and (b) of this Section 4.12, the Company promptly
shall advise Purchaser orally and in writing of any request for information or
of any proposed Sale Transaction or any inquiry with respect to or which could
reasonably be expected to lead to any proposed Sale Transaction, the identity
of the Person making any such request, proposed Sale Transaction or inquiry and
all the terms and conditions thereof. The Company will keep Purchaser fully
informed of the status and details (including amendments or proposed
amendments) of any such request, proposed Sale Transaction or inquiry, and
Purchaser shall keep confidential such information provided to it by the
Company pursuant to this Section 4.12(c), subject to any judicial or other
legal order, directions or obligation to disclose such information.
(d) Nothing contained in this Section 4.12 shall prohibit
the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act;
provided, however, neither the Company nor its Board of Directors nor any
committee thereof shall, except as permitted by Section 4.12(b), withdraw or
modify, or propose to withdraw or modify, its approval or recommendation with
respect to this Agreement, the Preference Share Authorization or the
transactions contemplated hereby or thereby (including, without limitation, the
Board of Directors' resolution providing for such approval) or approve or
recommend, or propose to approve or recommend, a Sale Transaction.
Section 4.13 Notification of Certain Matters. The Company shall
give prompt notice to Purchaser, and Purchaser shall give prompt notice to the
Company, of (a) the occurrence, or failure to occur, of any event that causes
any representation or warranty contained in any Transaction Document to be
untrue or inaccurate in any material respect at any time from the date of this
Agreement to either Closing Date and (b) any failure of the Company or
Purchaser to comply with or satisfy, in any material respect, any covenant,
condition or agreement to be complied with or satisfied by it under any
Transaction Document.
Section 4.14 Board of Directors. The Company shall take, or cause
to be taken, such action as may be necessary or advisable to ensure that
simultaneously with the First Closing the Board shall consist of ten
directorships, six of which shall be held by the individuals listed in Schedule
4.14 of the Company's Disclosure Schedule and four of which shall be vacant
pending designation by Purchaser of four individuals to serve as members of the
Board of Directors pursuant to the Shareholders Agreement and, as of the First
Closing Date, the Company will comply with its obligations under Section 4.1 of
the Shareholders Agreement. The Company shall take, or cause to be taken, such
action as may be necessary or advisable to ensure that simultaneously with the
First Closing each of the audit and compensation committees and the executive
committee, if any, of the Board of Directors shall include one of the directors
designated by Purchaser. The right of Purchaser to continue to designate
nominees for election to the Board of Directors shall be subject to the
conditions set forth in the Shareholders Agreement.
40
45
Section 4.15 Financial Advisory Agreement; Commitment Fee.
Simultaneously with the execution and delivery of this Agreement by the parties
hereto, the Company shall execute and deliver to Xxxxx, Muse & Co. Partners,
L.P. ("HMCo") counterparts of the Financial Advisory Agreement and Purchaser
shall cause HMCo to execute and deliver to the Company counterparts of the
Financial Advisory Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
Section 5.1 Conditions Precedent to Each Party's Obligation. The
respective obligations of Purchaser and the Company to effect the transactions
contemplated hereby are subject to the satisfaction on or prior to each Closing
Date of the following conditions:
(a) Approvals. All Approvals of, or expirations of
waiting periods imposed by, any Governmental Entity necessary for the
consummation of the transactions contemplated by this Agreement shall have been
filed, occurred, or been obtained, including the expiration or termination of
any applicable waiting period under the HSR Act.
(b) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction, or other order issued
by any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the transactions contemplated hereby shall be in
effect.
(c) No Action. No action shall have been taken nor any
statute, rule, or regulation shall have been enacted by any Governmental Entity
that makes the consummation of the transactions contemplated hereby illegal.
(d) NYSE Listing. The Company shall have obtained the
NYSE Approval.
Section 5.2 Conditions Precedent to Obligation of Purchaser at
the First Closing. The obligation of Purchaser to effect the transactions
contemplated by this Agreement to be consummated at the First Closing is
subject to the satisfaction of the following conditions unless waived, in whole
or in part, by Purchaser:
(a) Representations and Warranties. The representations
and warranties of the Company set forth in this Agreement shall be true and
correct in all respects (provided that, for purposes of this Section 5.2(a),
any representation or warranty of the Company contained herein that is
qualified by a materiality standard or a Material Adverse Effect qualification
shall be read without regard to any such qualifications as if such
qualifications were not contained therein) as of the date of this Agreement and
as of the First Closing Date as though made on and as of the First Closing Date
except for such failures which, individually or in the aggregate, have not had
and could not reasonably be expected to have a Material Adverse Effect, and
Purchaser shall have received a
41
46
certificate to the foregoing effect signed on behalf of the Company and its
Subsidiaries by the chief executive officer or by the chief financial officer
of the Company.
(b) Performance of Obligations. The Company shall have
performed in all respects (provided that, for purposes of this Section 5.2(b),
any covenant or agreement that is qualified by a materiality standard or
Material Adverse Effect qualification shall be read without regard to any such
qualification as if such qualification was not contained therein) all
obligations required to be performed by it or them under this Agreement prior
to the First Closing Date (it being understood that the Registration Statement
need not have become effective as of such date) except for such failures which,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect, and Purchaser shall have received a
certificate to such effect signed on behalf of the Company and its Subsidiaries
by the chief executive officer or by the chief financial officer of the
Company.
(c) Consents Under Agreements. Purchaser shall have been
furnished with evidence of (i) the consent or approval of each person that is a
party to a Material Oil and Gas Contract (including evidence of the payment or
any required payment) and whose consent or approval shall be required in order
to permit the consummation of each of the transactions contemplated by this
Agreement or to prevent a breach of such Contract or the creation of a right to
terminate such Contract, (ii) all consents or approvals required under the
Credit Agreements, the Indenture and the Senior Notes with respect to the
consummation of each of the transactions contemplated by this Agreement or
necessary to prevent a breach of any such Contracts or instruments and (iii)
all other consents or approvals required to be obtained by the Company or any
of its Subsidiaries with respect to the consummation of each of the
transactions contemplated by this Agreement the failure of which to obtain
reasonably could be expected to result in a Material Adverse Effect, and each
such consent or approval shall be unconditioned.
(d) Legal Opinions. Purchaser shall have received (i)
from Xxxxxx Xxxxxxx, general counsel of the Company and its Subsidiaries, an
opinion dated the First Closing Date, in substantially the form attached as
Exhibit F-1 hereto, (ii) from X. X. Xxxxxx & Co., Cayman counsel to the Company
and its Subsidiaries, or other counsel to the Company and its Subsidiaries
reasonably acceptable to Purchaser an opinion dated the First Closing Date, in
substantially the form attached as Exhibit F-2 hereto, (iii) from Xxxxxx &
Xxxxxx L.L.P., corporate counsel to the Purchaser, or other counsel to
Purchaser reasonably acceptable to Purchaser an opinion dated the First Closing
Date, as to the enforceability of this Agreement and the Shareholders
Agreement, in form and substance reasonably satisfactory to Purchaser and (iv)
from Hunter & Hunter, Cayman counsel to Purchaser, an opinion dated the First
Closing Date, in substantially the form attached as Exhibit F-3 hereto, each of
which opinions, if requested by Purchaser, shall expressly provide that they
may be relied upon by Purchaser's lenders, underwriters, or other sources of
financing with respect to the transactions contemplated hereby.
(e) Closing Deliveries. All documents, instruments,
certificates or other items required to be delivered by the Company pursuant to
Section 6.2(b) shall have been delivered.
42
47
(f) No Issuance of Securities. The Company shall have
complied in all respects with the covenants set forth in Section 4.6(b)(iii).
(g) Preferred Stock Authorization. The Board shall have
adopted and approved the Preferred Stock Authorization in accordance with the
Companies Laws of the Cayman Islands.
Section 5.3 Conditions Precedent to Obligations of Company at the
First Closing. The obligation of the Company to effect the transactions
contemplated by this Agreement to be consummated at the First Closing is
subject to the satisfaction of the following conditions unless waived, in whole
or in part, by the Company:
(a) Representations and Warranties. The representations
and warranties of Purchaser set forth in this Agreement shall be true and
correct in all respects (provided that, for purposes of this Section 5.3(a),
any representation or warranty of Purchaser contained herein that is qualified
by a materiality standard or a Material Adverse Effect qualification shall be
read without regard to any such qualifications as if such qualifications were
not contained therein) as of the date of this Agreement and as of the First
Closing Date as though made on and as of the First Closing Date except for such
failures which, individually or in the aggregate, have not had and could not
reasonably be expected to have a Material Adverse Effect, and the Company shall
have received a certificate to the foregoing effect signed on behalf of
Purchaser by the chief executive officer or by the chief financial officer of
Purchaser.
(b) Performance of Obligations of Purchaser. Purchaser
shall have performed in all respects (provided that, for purposes of this
Section 5.3(b), any covenant or agreement that is qualified by a materiality
standard shall be read without regard to any such qualification as if such
qualification was not contained therein) the obligations required to be
performed by it under this Agreement prior to the First Closing Date except for
such failures which, individually or in the aggregate, have not had and could
not reasonably be expected to have a Material Adverse Effect, and the Company
shall have received a certificate to such effect signed on behalf of Purchaser
by the chief executive officer or by the chief financial officer of Purchaser.
(c) Closing Deliveries. All documents, instruments,
certificates or other items required to be delivered by Purchaser pursuant to
Section 6.2(a) shall have been delivered.
Section 5.4 Conditions Precedent to Obligation of Purchaser at
the Second Closing. The obligation of Purchaser to effect the transaction
contemplated by this Agreement to be consummated at the Second Closing is
subject to the following conditions unless waived, in whole or in part, by
Purchaser:
(a) Consummation of First Closing. The First Closing
shall have occurred prior to the Second Closing Date.
43
48
(b) Completion of Rights Offering. The Rights Offering
shall have commenced and the time periods for basic and oversubscription rights
shall have expired and the number of Unsubscribed Shares shall have been
determined.
(c) Representations and Warranties. The representations
and warranties of the Company set forth in this Agreement shall be true and
correct in all respects (provided that, for purposes of this Section 5.4(c),
any representation or warranty of the Company contained herein that is
qualified by a materiality standard or a Material Adverse Effect qualification
shall be read without regard to any such qualifications as if such
qualifications were not contained therein) as of the date of this Agreement and
as of the Second Closing Date as though made on and as of the Second Closing
Date except for such failures which, individually or in the aggregate, have not
had and could not reasonably be expected to have a Material Adverse Effect, and
Purchaser shall have received a certificate to the foregoing effect signed on
behalf of the Company and its Subsidiaries by the chief executive officer or by
the chief financial officer of the Company.
(d) Performance of Obligations. The Company shall have
performed in all respects (provided that, for purposes of this Section 5.4(d),
any covenant or agreement that is qualified by a materiality standard or
Material Adverse Effect qualification shall be read without regard to any such
qualification as if such qualification was not contained therein) all
obligations required to be performed by it or them under this Agreement prior
to the Second Closing Date except for such failures which, individually or in
the aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect, and Purchaser shall have received a certificate to
such effect signed on behalf of the Company and its Subsidiaries by the chief
executive officer or by the chief financial officer of the Company.
(e) Legal Opinions. Purchaser shall have received (i)
from Xxxxxx Xxxxxxx, general counsel of the Company and its Subsidiaries, an
opinion dated the Second Closing Date, in substantially the form attached as
Exhibit F-1 hereto and (ii) from X. X. Xxxxxx & Co., Cayman counsel to the
Company and its Subsidiaries, or other counsel to the Company reasonably
acceptable to Purchaser, an opinion dated the Second Closing Date, in
substantially the form attached as Exhibit F-2 hereto, (iii) from Xxxxxx &
Xxxxxx L.L.P., corporate counsel to the Company, or other counsel to Purchaser
reasonably acceptable to Purchaser, an opinion dated the Second Closing Date,
as to the enforceability of this Agreement and the Shareholders Agreement, in
form and substance reasonably satisfactory to Purchaser and (iv) from Hunter &
Hunter, Cayman counsel to Purchaser, an opinion dated the Second Closing Date,
in substantially the form attached as Exhibit F-3 hereto, each of which
opinions, if requested by Purchaser, shall expressly provide that they may be
relied upon by Purchaser's lenders, underwriters, or other sources of financing
with respect to the transactions contemplated hereby.
(f) Closing Deliveries. All documents, instruments,
certificates or other items required to be delivered by the Company pursuant to
Section 6.3(b) shall have been delivered.
44
49
(g) Board Designees. Four individuals designated by
Purchaser pursuant to Section 4.1 of the Shareholders Agreement to serve as
members of the Board of Directors shall have been duly elected or appointed to
the Board of Directors and shall not have been removed other than at the
direction of Purchaser.
Section 5.5 Conditions Precedent to Obligations of Company at the
Second Closing. The obligation of the Company to effect the transactions
contemplated by this Agreement to be consummated at the Second Closing is
subject to the satisfaction of the following conditions unless waived, in whole
or in part, by the Company.
(a) Consummation of First Closing. The First Closing
shall have occurred prior to the Second Closing Date.
(b) Completion of Rights Offering. The Rights Offering
shall have commenced and expired and the number of Unsubscribed Shares shall
have been determined.
(c) Representations and Warranties. The representations
and warranties of Purchaser set forth in this Agreement shall be true and
correct in all material respects (provided that, for purposes of this Section
5.5(c), any representation or warranty of Purchaser contained herein that is
qualified by a materiality standard or a Material Adverse Effect qualification
shall be read without regard to any such qualification as if such
qualifications were not contained therein) as of the date of this Agreement and
as of the Second Closing Date as though made on and as of the Second Closing
Date except for such failures which, individually or in the aggregate, have not
had and could not reasonably be expected to have a Material Adverse Effect, and
the Company shall have received a certificate to the foregoing effect signed on
behalf of Purchaser by the chief executive officer or by the chief financial
officer of Purchaser.
(d) Performance of Obligations of Purchaser. Purchaser
shall have performed in all material respects (provided that, for purposes of
this Section 5.5(d), any covenant or agreement that is qualified by a
materiality standard shall be read without regard to any such qualifications as
if such qualification was not contained therein) the obligations required to be
performed by it under this Agreement prior to the Second Closing Date except
for such failures which, individually or in the aggregate, have not had and
could not reasonably be expected to have a Material Adverse Effect, and the
Company shall have received a certificate to such effect signed on behalf of
Purchaser by the chief executive officer or by the chief financial officer of
Purchaser.
(e) Closing Deliveries. All documents, instruments,
certificates or other items required to be delivered by Purchaser pursuant to
Section 6.3(a) shall have been delivered.
45
50
ARTICLE VI
CLOSINGS
Section 6.1 Closings. Subject to the satisfaction or waiver of
the conditions set forth in Article V, the purchase and sale of the Shares to
be purchased by Purchaser hereunder will take place at two closings (the
"Closings"). The closing of the purchase and sale of the Initial Shares
pursuant to Section 2.1(a)(i) (the "First Closing") and the closing of the
purchase and sale of the Remaining Shares pursuant to Section 2.1(a)(ii) and
the Rights Offering (the "Second Closing") shall occur (a) at the offices of
Xxxxxx & Xxxxxx L.L.P., 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, at
10:00 a.m., local time, on the third Business Day following the satisfaction or
waiver (subject to applicable Law) of each of the conditions to the obligations
of the parties to effect the transactions to occur at each such Closing as set
forth in Sections 5.1, 5.2, 5.3, 5.4 and 5.5, respectively; provided that
Purchaser may, at Purchaser's option, extend either of the Closing Dates up to
thirteen (13) Business Days after such date or (b) at such other location and
time as may be mutually agreed upon by the parties hereto. The date on which
the First Closing is required to take place is herein referred to as the "First
Closing Date" and the date on which the Second Closing is required to take
place is herein referred to as the "Second Closing Date." All closing
transactions at the First Closing shall be deemed to have occurred
simultaneously, and all closing transactions at the Second Closing shall be
deemed to have occurred simultaneously.
Section 6.2 Actions to Occur at the First Closing.
(a) At the First Closing, Purchaser shall deliver to the
Company the following:
(i) Purchase Price. An amount equal to the
Purchase Price for the Initial Shares in accordance with Article II
hereof;
(ii) Shareholders Agreement. Counterparts of the
Shareholders Agreement executed by Purchaser;
(iii) Monitoring Agreement. Counterparts of the
Monitoring Agreement executed by HMCo; and
(iv) Certificates. The certificates described in
Sections 5.3(a) and 5.3(b).
(b) At the First Closing, the Company shall pay to HMCo
the amount of $7,000,000 payable pursuant to the Financial Advisory Agreement
as referred to in Section 9.5(d) and shall deliver to Purchaser (or to its
designee as indicated otherwise) the following:
(i) Share Certificates. Certificates
representing the Initial Shares, duly endorsed in blank or accompanied
by stock powers duly endorsed in blank, and otherwise in proper form
for transfer;
46
51
(ii) Shareholders Agreement. Counterparts of the
Shareholders Agreement executed by the Company;
(iii) Monitoring Agreement. Counterparts of the
Monitoring Agreement executed by the Company;
(iv) Funding Fee. The amount of $2,551,500
payable pursuant to Section 9.5(d), paid to HMCo by wire transfer of
immediately available funds to an account of HMCo (the number for
which account shall have been furnished to the Company at least two
Business Days prior to the Closing Date);
(v) Purchaser's Expenses. An amount equal to
Purchaser's Expenses incurred through the First Closing Date in
connection with the transactions contemplated hereby as provided in
Section 9.5(a), by wire transfer of immediately available funds to an
account of Purchaser (the amount of such costs and expenses and the
number for which account shall have been furnished to the Company at
least two Business Days prior to the Closing Date);
(vi) Certificates. The certificates described in
Sections 5.2(a) and 5.2(b);
(vii) Consents Under Agreements. The original of
each consent or approval, if any, pursuant to Section 5.2(c); and
(viii) Legal Opinions. The opinions of counsel
referred to in Section 5.2(d).
Section 6.3 Actions to Occur at the Second Closing.
(a) At the Second Closing, Purchaser shall deliver to the
Company the following:
(i) Purchase Price. An amount equal to the
Purchase Price for the Remaining Shares in accordance with Article II
hereof; and
(ii) Certificates. The certificates described in
Sections 5.5(a) and 5.5(b).
(b) At the Second Closing, the Company shall deliver to
Purchaser (or to its designee as indicated otherwise) the following:
(i) Share Certificates. Certificates
representing the Remaining Shares, duly endorsed in blank or
accompanied by stock powers duly endorsed in blank, and otherwise in
proper form for transfer;
(ii) Funding Fee. The amount of 2% multiplied by
the product of (A) $70.00 and (B) the number of Remaining Shares, as
provided in Section 9.5(d), paid to HMCo by wire transfer of
immediately available funds to an account of HMCo (the number
47
52
for which account shall have been furnished to the Company at least
two Business Days prior to the Closing Date);
(iii) Purchaser's Expenses. An amount equal to
Purchaser's Expenses incurred between the First Closing Date and the
Second Closing Date as provided in Section 9.5(a), by wire transfer of
immediately available funds to an account of Purchaser (the amount of
such costs and expenses and the number for which account shall have
been furnished to the Company at least two Business Days prior to the
Closing Date);
(iv) Certificates. The certificates described in
Sections 5.4(c) and 5.4(d); and
(v) Legal Opinions. The opinions of counsel
referred to in Section 5.4(e).
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated prior
to either Closing:
(a) by mutual consent of Purchaser and the Company;
(b) by either Purchaser or the Company:
(i) in the event of a breach by the other party
of any representation, warranty, covenant or agreement contained in
this Agreement which (A) would give rise to the failure of a condition
set forth in Section 5.2(a) or 5.2(b), with respect to the First
Closing, or Section 5.3(a) or 5.3(b), with respect to the Second
Closing, as applicable, and (B) cannot be cured or, if curable, has
not been cured within 20 days (the "Cure Period") following receipt by
the breaching party of written notice of such breach (it being
acknowledged and agreed that there shall not be a Cure Period for
breaches of the covenants set forth in Section 4.12);
(ii) if a court of competent jurisdiction or other
Governmental Entity shall have issued an order, decree, or ruling or
taken any other action (which order, decree, or ruling Purchaser and
the Company shall use all commercially reasonable efforts to lift), in
each case permanently restraining, enjoining, or otherwise prohibiting
the transactions contemplated by this Agreement, and such order,
decree, ruling, or other action shall have become final and
nonappealable; provided, however, that the right to terminate this
Agreement under this clause (ii) shall not be available to any party
whose breach of this Agreement has been the cause of, or resulted in,
such order, decree, ruling or other action;
48
53
(iii) if the First Closing shall not have occurred
by the later of (A) October 31, 1998, as such date may be extended by
Purchaser pursuant to Section 6.1(a), and (B) the date to which the
First Closing Date is extended pursuant to Section 6.1(b); provided,
however, that the right to terminate this Agreement under this clause
(iii) shall not be available to any party whose breach of this
Agreement has been the cause of, or resulted in, the failure of the
First Closing to occur on or before such date; or
(iv) if the Second Closing shall not have occurred
by the later of (A) 50 Business Days after the date on which the
Registration Statement is declared effective under the Securities Act,
but in no event later than February 1, 1999, as such date may be
extended by Purchaser pursuant to Section 6.1(a), and (B) the date to
which the Second Closing Date is extended pursuant to Section 6.1;
provided, however, that the right to terminate this Agreement under
this clause (iv) shall not be available to any party whose breach of
this Agreement has been the cause of, or resulted in, the failure of
the Second Closing to occur on or before such date;
(c) by the Company if (i) the Board of Directors of the
Company shall have determined in good faith, based on the advice of outside
counsel, that it is necessary, in order to comply with its fiduciary duties to
the Company's shareholders under applicable law, to terminate this Agreement
and to enter into an agreement with respect to or to consummate a transaction
constituting a Sale Transaction, and (ii) the Company shall have given at least
five Business Days prior written notice to Purchaser advising Purchaser that
the Company has received a bona fide proposal for a Sale Transaction from a
third party, specifying the material terms and conditions of such proposal
(including the identity of the third party) and the material terms and
conditions of any agreements or arrangements to be entered into in connection
with a Sale Transaction and that the Company intends to terminate this
Agreement in accordance with this Section 7.1(c); provided that the Company may
not effect such termination pursuant to this Section 7.1(c) unless (i) the
Company shall not have breached Section 4.12 and (ii) the Company has
contemporaneously with such termination tendered payment to Purchaser, or its
designee, of the Termination Fee and the reimbursement of Purchaser's Expenses
(if and to the extent that Purchaser has provided to the Company documentation
reasonably acceptable to the Company in support of the amounts claimed) that is
due Purchaser or its designee pursuant to Section 9.5; or
(d) by Purchaser if:
(i) the Board shall have recommended to the
shareholders of the Company any Sale Transaction, other than a
proposal or offer by Purchaser or any of its Affiliates, or shall have
resolved to do so; or
(ii) a tender offer or exchange offer for 50% or
more of the outstanding shares of Common Stock or voting securities
representing 50% or more of the voting power of the outstanding
capital stock of the Company (giving effect to the conversion of
outstanding 8% Preference Shares to Common Stock at the rate which the
8% Preference Shares are then convertible into shares of Common Stock)
is commenced (other than by the
49
54
Company or its Affiliates) and the Board of Directors of the Company
fails to timely recommend against the stockholders of the Company
tendering their shares into such tender offer or exchange offer.
provided that Purchaser in exercising its termination rights hereunder may
condition the effectiveness of such termination upon receipt of the Termination
Fee and reimbursement of Purchaser's Expenses (if and to the extent that
Purchaser has provided to the Company documentation reasonably acceptable to
the Company in support of the amounts claimed) that are due Purchaser or its
designee pursuant to Section 9.5.
The right of any party hereto to terminate this Agreement pursuant to
this Section 7.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
employees, accountants, consultants, legal counsel, agents, or other
representatives whether prior to or after the execution of this Agreement.
Section 7.2 Effect of Termination. In the event of the
termination of this Agreement, written notice thereof shall forthwith be given
to the other party specifying the provision hereof pursuant to which such
termination is made, and this Agreement (except for the provisions of this
Section 7.2, Article VIII and Sections 9.4, 9.5, 9.6, 9.9, 9.10, 9.12 and 9.13,
which shall survive such termination) shall forthwith become null and void.
Subject to the provisions of Section 9.5, in the event of a termination of this
Agreement by either the Company or Purchaser as provided above, there shall be
no liability on the part of the Company or Purchaser, except for liability
arising out of a wilful breach of, or misrepresentation under, this Agreement
(but in no event shall any party hereto be entitled to recover punitive
damages).
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification of Purchaser. Subject to the provisions of
this Article VIII, from and after the First Closing Date the Company agrees to
indemnify and hold harmless the Purchaser Indemnified Parties from and against
any and all Purchaser Indemnified Costs.
8.2 Indemnification of Company. Subject to the provisions of this
Article VIII, from and after the First Closing Date Purchaser agrees to
indemnify and hold harmless the Company from and against any and all Company
Indemnified Costs.
8.3 Defense of Third-Party Claims. An Indemnified Party shall
give prompt written notice to any person who is obligated to provide
indemnification hereunder (an "Indemnifying Party") of the commencement or
assertion of any action, proceeding, demand, or claim by a third party
(collectively, a "third-party action") in respect of which such Indemnified
Party shall seek indemnification hereunder. Any failure so to notify an
Indemnifying Party shall not relieve such
50
55
Indemnifying Party from any liability that it, he, or she may have to such
Indemnified Party under this Section 8.3 unless the failure to give such notice
materially and adversely prejudices such Indemnifying Party. The Indemnifying
Party shall have the right to assume control of the defense of, settle, or
otherwise dispose of such third-party action on such terms as it deems
appropriate; provided, however, that:
(a) The Indemnified Party shall be entitled, at its own
expense, to participate in the defense of such third-party action (provided,
however, that the Indemnifying Party shall pay the attorneys' fees of one
counsel (provided that if any such third-party action is brought in a
jurisdiction other than Texas, the Indemnifying Party shall also pay the
attorney's fees of one local counsel) to the Indemnified Party if (i) the
employment of separate counsel shall have been authorized in writing by any
such Indemnifying Party in connection with the defense of such third-party
action, (ii) the Indemnifying Parties shall not have employed counsel
reasonably satisfactory to the Indemnified Party to have charge of such
third-party action, (iii) counsel to the Indemnified Party shall have advised
the Indemnified Party that there are defenses available to the Indemnified
Party that are different from or additional to those available to the
Indemnifying Party and that it is advisable to have those defenses asserted on
behalf of Indemnified Party by separate counsel, (iv) counsel to the
Indemnified Party and the Indemnifying Party shall have advised their
respective clients in writing, with a copy delivered to the other party, that
there is a conflict of interest that could make it inappropriate under
applicable standards of professional conduct to have common counsel), or (v)
the third-party action is a proceeding brought by a shareholder of the Company
(in such shareholder's name or derivatively on behalf of the Company) in
respect of the transactions contemplated by this Agreement;
(b) The Indemnifying Party shall obtain the prior written
approval of the Indemnified Party (not to be unreasonably withheld) before
entering into or making any settlement, compromise, admission, or
acknowledgment of the validity of such third-party action or any liability in
respect thereof if, pursuant to or as a result of such settlement, compromise,
admission, or acknowledgment, injunctive or other equitable relief would be
imposed against the Indemnified Party or if, in the reasonable opinion of the
Indemnified Party, such settlement, compromise, admission, or acknowledgment
could reasonably be expected to have a material adverse effect on its business;
(c) No Indemnifying Party shall, without the consent of
each Indemnified Party (which consent shall not be unreasonably withheld),
consent to the entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by each claimant or
plaintiff to each Indemnified Party of a release from all liability in respect
of such third-party action; and
(d) The Indemnifying Party shall not be entitled to
control (but shall be entitled to participate at its own expense in the defense
of), and the Indemnified Party shall be entitled to have sole control over, the
defense or settlement, compromise, admission, or acknowledgment of any
third-party action (i) as to which the Indemnifying Party fails to assume the
defense within a reasonable length of time; or (ii) to the extent the
third-party action seeks an order, injunction, or other equitable relief
against the Indemnified Party which could reasonably be expected to materially
51
56
adversely affect the business, operations, assets, or financial condition of
the Indemnified Party; provided, however, that the Indemnified Party shall make
no settlement, compromise, admission, or acknowledgment that would give rise to
liability on the part of any Indemnifying Party without the prior written
consent of such Indemnifying Party.
The parties hereto shall extend reasonable cooperation in connection with the
defense of any third-party action pursuant to this Article VIII and, in
connection therewith, shall furnish such records, information, and testimony
and attend such conferences, discovery proceedings, hearings, trials, and
appeals as may be reasonably requested.
8.4 Direct Claims. In any case in which an Indemnified Party
seeks indemnification hereunder which is not subject to Section 8.3 because no
third-party action is involved, the Indemnified Party shall notify the
Indemnifying Party in writing of any Indemnified Costs which such Indemnified
Party claims are subject to indemnification under the terms hereof. The
failure of the Indemnified Party to exercise promptness in such notification
shall not amount to a waiver of such claim unless the resulting delay
materially prejudices the position of the Indemnifying Party with respect to
such claim.
8.5 Special provisions Regarding Indemnity. Notwithstanding the
other terms of this Agreement:
(a) Purchaser shall not be entitled to recover any
Purchaser Indemnified Costs and the Company shall not be entitled to recover
any Company Indemnified Costs as a result of any breach of any representation
or warranty by the other party unless, in either such case, the aggregate
amount thereof exceeds $2,500,000, in which event the party entitled to
indemnification with respect thereto shall be entitled to recover only the
amount in excess of $2,500,000; and provided, however, that the limitations of
this Section 8.5(a) shall not apply to any Purchaser Indemnified Cost resulting
from or relating to (i) any misrepresentation or breach of the representations
and warranties contained in Section 3.1(c) or (ii) the Company's knowing or
willful misrepresentations or breaches of representations or warranties made as
a part of or contained in this Agreement.
(b) For purposes of determining if there has been any
inaccuracy or breach of a representation or warranty for purposes of
calculating Purchaser Indemnified Costs or Company Indemnified Costs, the
representations and warranties contained herein that are qualified by a
materiality standard or a Material Adverse Effect or Material Adverse Change
qualification shall be read without regard to any such qualifications as if
such qualifications were not contained therein.
(c) The Company's maximum liability for Purchaser
Indemnified Costs shall be the Purchase Price
8.6 Tax Related Adjustments. The Company and Purchaser agree that
any payment of Indemnified Costs made hereunder will be treated by the parties
on their Tax Returns as an adjustment to the Purchase Price. If,
notwithstanding such treatment by the parties, any payment of Indemnified Costs
is determined to be taxable income rather than adjustment to Purchase Price,
52
57
then the Indemnifying Party shall indemnify the Indemnified Party for any Taxes
payable by the Indemnified Party or any subsidiary by reason of the receipt of
such payment (including any payments under this Section 8.5), determined at an
assumed marginal tax rate equal to the highest marginal tax rate then in effect
for corporate taxpayers in the relevant jurisdiction.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Survival of Provisions.
(a) The representations and warranties of the Company and
Purchaser made herein or in any other Transaction Document and the covenants of
the Company and Purchaser to be complied with on or prior to either Closing
Date shall remain operative and in full force and effect pursuant to their
terms, regardless of (x) any investigation made by or on behalf of Purchaser or
the Company, as the case may be, or (y) acceptance of any of the Shares and
payment by Purchaser therefor, until the first anniversary of the Second
Closing Date.
(b) The covenants and agreements of the Company and
Purchaser contained in this Agreement to the extent that, by their terms, they
are to be performed or complied with after either of the Closing Dates,
including without limitation the Indemnification Agreement set forth in Article
VIII hereof, will survive until the later of (i) the first anniversary of the
Second Closing Date or (ii) the expiration of all applicable statute of
limitations (including all periods of extension, whether automatic or
permissive) affecting or applicable to any such covenant or agreement.
(c) Any claim for indemnification for a breach of a
representation, warranty or covenant hereunder shall be brought within the
applicable survival period specified in Section 9.1(a) or Section 9.1(b)
hereof. If a claim for indemnification is made in accordance with Article VIII
hereof before the expiration of the applicable survival period set forth in
Section 9.1(a) or Section 9.1(b), as applicable, then (not withstanding such
survival period) the representation, warranty, covenant or agreement applicable
to such claim will survive for purposes of such claim until the resolution of
such claim by final, nonappealable judgment or settlement, but only with
respect to such claim.
Section 9.2 No Waiver; Modification in Writing. No failure or
delay on the part of the Company or a Purchaser in exercising any right, power
or remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
Without limiting the rights that any party may have for fraud under common law,
the remedies provided for herein are cumulative and are the exclusive remedies
available to the Company or Purchaser at law or in equity. The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given without the written consent of the Company,
on the one hand, and Purchaser
53
58
or its permitted assigns, on the other hand, provided that notice of any such
waiver shall be given to each party hereto as set forth below. Any amendment,
supplement or modification of or to any provision of this Agreement, or any
waiver of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on any party hereto in any case shall entitle the other party to any other or
further notice or demand in similar or other circumstances.
Section 9.3 Specific Performance. The parties recognize that in
the event the Company should refuse to perform under the provisions of this
Agreement or any other Transaction Document, monetary damages alone will not be
adequate. Purchaser shall therefore be entitled, in addition to any other
remedies which may be available, including money damages, to obtain specific
performance of the terms of this Agreement. In the event of any action to
enforce this Agreement or any other Transaction Document specifically, the
Company hereby waive the defense that there is an adequate remedy at law.
Section 9.4 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of
applicable law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated herein are not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated herein are consummated as originally contemplated to
the fullest extent possible.
Section 9.5 Fees and Expenses.
(a) At each Closing pursuant to Sections 6.2(b)(v) and
6.3(b)(iii), the Company shall pay to Purchaser an amount equal to the
Purchaser's Expenses through the applicable Closing Date in connection with the
transactions contemplated by this Agreement.
(b) Concurrently with a termination of this Agreement by
the Company or Purchaser pursuant to Sections 7.1(b)(ii), 7.1(b)(iii) or
7.1(b)(iv) (and as a condition to any such termination by the Company), by the
Company pursuant to Section 7.1(c) (and as a condition to any such termination
by the Company) or by Purchaser pursuant to Section 7.1(b)(i) or 7.1(d), the
Company shall pay to Purchaser by wire transfer of immediately available funds
an amount equal to the Purchaser's Expenses. If the Company terminates this
Agreement pursuant to Section 7.1(b)(i), then Purchaser shall not be entitled
to reimbursement of the Purchaser's Expenses. The payment of Purchasers
Expenses pursuant to this Section 9.5(b) shall not in any way limit Purchasers
rights against the Company as permitted under Section 7.2 of this Agreement.
54
59
(c) Concurrently with a termination of this Agreement by
the Company pursuant to Section 7.1(c), the Company shall pay to Purchaser by
wire transfer of immediately available funds an amount equal to $30,000,000
(the "Termination Fee").
(d) If this Agreement is terminated by the Company or
Purchaser pursuant to Sections 7.1(b)(ii), 7.1(b)(iii) or 7.1(b)(iv) or by
Purchaser pursuant to Section 7.1(b)(i) as a result of non-willful breach of
this Agreement by the Company or pursuant to Section 7.1(d), and within one
year after such termination date (i) definitive documentation with respect to a
Sale Transaction has been entered into or (ii) 50% or more of the outstanding
Common Stock or voting securities representing 50% or more of the voting power
of the outstanding capital stock of the Company (giving effect to the
conversion of outstanding 8% Preference Shares to Common Stock at the rate at
which the 8% Preference Shares are then convertible into shares of Common
Stock) has been acquired pursuant to a tender or exchange offer in connection
with a proposed Sale Transaction or, if a tender or exchange offer in
connection with a proposed Sale Transaction has been commenced prior to but has
not expired as of such date that is one year after such termination of this
Agreement, 50% or more of the outstanding Common Stock or voting securities
representing 50% or more of the voting power of the outstanding capital stock
of the Company (giving effect to the conversion of outstanding 8% Preference
Shares to Common Stock at the rate at which the 8% Preference Shares are then
convertible into shares of Common Stock) is acquired pursuant to such tender or
exchange offer, then the Company shall pay or shall cause to be paid,
contemporaneously with the consummation of such Sale Transaction, to Purchaser,
or its designee, an amount equal to the Termination Fee by wire transfer of
immediately available funds. Notwithstanding the forgoing, Purchaser shall not
be entitled to the Termination Fee pursuant to this Section 9.5(d) if this
Agreement is terminated pursuant to Section 7.1(b)(iii) and the sole
unsatisfied condition to Purchaser's obligation to close shall have been the
failure of the condition in Section 5.1(a) to have been satisfied as a result
of the failure to obtain approval under the HSR Act or the failure of the
expiration or termination of any applicable waiting period under the HSR Act to
have expired.
(e) Pursuant to the terms of the Financial Advisory
Agreement, the Company will pay to HMCo a transaction fee equal to $7,000,000
by wire transfer of immediately available funds contemporaneously with the
earlier to occur of (i) the First Closing Date or (ii) the termination of this
Agreement for any reason. At the First Closing, the Company also shall pay to
HMCo a transaction fee in the amount of $2,551,500 by wire transfer of
immediately available funds. In addition, at the Second Closing, the Company
shall pay HMCo a transaction fee equal to two percent of the Purchase Price
paid by Purchaser at such Second Closing, including the Purchase Price paid by
Purchaser for any Shares purchased in the Rights Offering.
(f) The payment of Purchaser's Expenses and the
Termination Fee shall be paid by the Company without reservation of rights or
protests and the Company upon making such payment shall be deemed to have
released and waived any and all rights that it may have to recover such
amounts. Nothing contained in this Section 9.5 shall limit Purchasers rights
against the Company in the event of the termination of this Agreement by
Purchaser pursuant to Section 7.1(b)(i) as a result of a willful breach by the
Company of this Agreement.
55
60
Section 9.6 Parties in Interest. This Agreement shall be binding
upon and, except as provided below, inure solely to the benefit of each party
hereto and their successors and assigns, and nothing in this Agreement, except
as set forth in Section 4.11 (which is expressly intended for the benefit of
the parties specified therein and shall be enforceable by any of such parties
or any of their respective heirs and representatives) and Article VIII (which
is intended for the benefit of all Indemnified Parties), express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
Section 9.7 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Purchaser, to:
HM 4 Triton, L.P.
c/o Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(b) If to the Company, to:
Triton Energy Limited
c/o Triton Exploration Services, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
56
61
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Any of the above addresses may be changed at any time by notice given
as provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, on the date of receipt, if telecopied, three Business Days
after the date of mailing, if mailed by registered or certified mail, return
receipt requested, and one Business Day after the date of sending, if sent by
Federal Express or other recognized overnight courier.
Section 9.8 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that all parties need
not sign the same counterpart.
Section 9.9 Entire Agreement. This Agreement (which term shall
be deemed to include the Exhibits and Schedules hereto and the other
certificates, documents and instruments delivered hereunder) and the other
Transaction Documents constitute the entire agreement of the parties hereto and
supersede all prior agreements, letters of intent and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
There are no representations or warranties, agreements, or covenants other than
those expressly set forth in this Agreement and the other Transaction
Documents.
Section 9.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW PROVISIONS. Each of the parties hereby (a)
irrevocably submits to the exclusive jurisdiction of the United States Federal
District Court for the Northern District of Texas, sitting in Dallas County,
Texas, the United States of America, in the event such court has jurisdiction
or, if such court does not have jurisdiction, to any district court sitting in
Dallas County, Texas, the United States of America, for the purposes of any
suit, action or proceeding arising out of or relating to this Agreement,
including any claims for indemnity pursuant to Article VIII hereof, (b) waives,
and agrees not to assert in any such suit, acting or proceeding, any claim that
(i) it is not personally subject to the jurisdiction of such court or of any
other court to which proceedings in such court may be appealed, (ii) such suit,
action or proceeding is brought in an inconvenient forum or (iii) the venue of
such suit, action or proceeding is improper and (c) expressly waives any
requirement for the posting of a bond by the party bringing such suit, action
or proceeding. Each of the parties consents to process being served in any
such suit, action or proceeding by mailing, certified mail, return receipt
requested, a copy thereof to such party at the
57
62
address in effect for notices hereunder, and agrees that such services shall
constitute good and sufficient service of process and notice thereof. Nothing
in this Section 9.10 shall affect or limit any right to serve process in any
other manner permitted by law.
Section 9.11 Public Announcements. The Company, on the one hand,
and Purchaser, on the other, shall consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement or the transactions contemplated hereby, except for statements
required by Law or by any listing agreements with or rules of any national
securities exchange or the National Association of Securities Dealers, Inc., or
made in disclosures reasonably determined as required to be filed pursuant to
the Securities Act of 1933 or the Securities Exchange Act of 1934.
Section 9.12 Assignment. Neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned by any of the
parties hereto, whether by operation of Law or otherwise; provided, however,
that upon notice to the Company, (a) Purchaser may assign or delegate any or
all of its rights or obligations under this Agreement to any Affiliate thereof
and (b) nothing in this Agreement shall limit Purchaser's ability to make a
collateral assignment of its rights under this Agreement to any institutional
lender that provides funds to Purchaser without the consent of the Company.
The Company shall execute an acknowledgment of such collateral assignments in
such forms as Purchaser's lenders may from time to time reasonably request;
provided, however, that unless written notice is given to the Company that any
such collateral assignment has been foreclosed upon, the Company shall be
entitled to deal exclusively with Purchaser as to any matters arising under
this Agreement or any of the other agreements delivered pursuant hereto. In
the event of such an assignment, the provisions of this Agreement shall inure
to the benefit of and be binding on Purchaser's assigns. Any attempted
assignment in violation of this Section shall be null and void.
Section 9.13 Director and Officer Liability. The directors,
officers, partners, members and stockholders of Purchaser, the Company and
their respective Affiliates shall not have any personal liability or obligation
arising under this Agreement (including any claims that the Company or
Purchaser may assert) other than as an assignee of this Agreement.
Section 9.14 Headings. The headings of this Agreement are for
convenience of reference only and are not part of the substance of this
Agreement.
[The remainder of this page is intentionally left blank.]
58
63
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer as of the date first
written above.
TRITON ENERGY LIMITED
By: /s/ Xxxxxx X. Xxxxxxx, III
-------------------------------------
Xxxxxx X. Xxxxxxx, III
Interim Chief Executive Officer
and General Counsel
HM4 TRITON, L.P.
By: HM Triton G.P., LLC
its General Partner
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx
Senior Vice President
[Signature Page - Stock Purchase Agreement]
