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EXHIBIT 2
Eagle Geophysical, Inc.
5,880,000 Shares(1)
Common Stock
UNDERWRITING AGREEMENT
August 5, 1997
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX & COMPANY INTERNATIONAL
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Each of Eagle Geophysical, Inc., a Delaware Corporation (the
"Company"), the selling securityholders set forth on Schedule 1 attached hereto
(the "Selling Securityholders") and Seitel, Inc., a Delaware corporation
("Seitel"), Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"), Xxxxxx Xxxxxx ("Xxxxxx"), Xxxx A.
M. Xxxxxxxx ("Xxxxxxxx") and Xxxxx Xxxxx ("Xxxxx") hereby confirms its agreement
with the several underwriters named in Schedule 2 hereto (the "Underwriters"),
for whom you have been duly authorized to act as representatives (in such
capacities, the "Representatives"), as set forth below. If you are the only
Underwriters, all references herein to the Representatives shall be deemed to be
to the Underwriters.
It is understood that prior to or concurrent with the Firm Closing
Date (as hereinafter defined), the Company will acquire 81% of the outstanding
shares of Energy Research International ("ERI"), a Cayman Islands corporation
and the ultimate parent corporation and owner of 100% of the issued and
outstanding capital stock of Exploration Holdings Limited ("EHL"), a United
Kingdom corporation and the owner of 100% of the issued and outstanding capital
stock of each of Eagle Geophysical Offshore, Inc. (formerly known as Horizon
Seismic, Inc.), a Texas corporation, and Horizon Exploration Ltd., a United
Kingdom corporation (the "Horizon Companies"), pursuant to an acquisition
agreement dated as of May , 1997 (the "ERI Acquisition Agreement"), whereby
ERI, EHL and the Horizon Companies will become wholly-owned
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(1) Plus options to purchase up to 882,000 additional shares to cover over-
allotments.
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subsidiaries of the Company (the "ERI Acquisition"). The Company currently owns
19% of the outstanding shares of ERI.
1. Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell, and EHI Holdings, Inc., a
Delaware corporation ("EHI") and an indirect, wholly-owned subsidiary of
Seitel, proposes to sell, to the several Underwriters an aggregate of 4,000,000
shares and 1,880,000 shares, respectively (the "Firm Securities"), of the
Company's Common Stock, par value $0.01 per share ("Common Stock"). The Company
also proposes to issue and sell and EHI, Xxxxxxxx Limited, a corporation
organized under the laws of the Isle of Man all of the outstanding capital
stock of which is owned by Xxxxxxxx ("Xxxxxxxx"), Dormera Limited, a
corporation organized under the laws of the Isle of Man all of the outstanding
capital stock of which is owned by Xxxxxx ("Dormera"), Balmedie Limited, a
corporation organized under the laws of the Isle of Man all of the outstanding
capital stock of which is owned by Xxxxxxxx ("Balmedie") and Larlane Limited, a
corporation organized under the laws of the Isle of Man all of the outstanding
capital stock of which is owned by Xxxxx ("Larlane"), also propose to sell to
the several Underwriters not more than 602,000, 100,000, 56,400, 56,400, 56,400
and 10,800 additional shares of Common Stock, respectively, if requested by the
Representatives as provided in Section 4 of this Agreement. Any and all shares
of Common Stock to be purchased by the Underwriters pursuant to such options
are referred to herein as the "Option Securities"; and the Firm Securities and
any Option Securities are collectively referred to herein as the "Securities".
2. Representations and Warranties with respect to the Company.
The Company, EHI, Seitel, Harrison, Purdie, Xxxxxxxx and Dormera, jointly and
severally, represent and warrant to, and agree with, each of the several
Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-28303) with
respect to the Securities, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and one
or more amendments to such registration statement may have been so filed. After
the execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has
been declared by the Commission to be effective under the Act, either (A) if
the Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter
defined) relating to the Securities, that shall identify the Preliminary
Prospectus (as hereinafter defined) that it supplements containing such
information as is required or permitted by Rules 434, 430A and 424(b) under the
Act or (B) if the Company does not rely on Rule 434 under the Act, a prospectus
in the form most recently included in an amendment to such registration
statement (or, if no such amendment shall have been filed, in such registration
statement), with such changes or insertions as are required by Rule 430A under
the Act or permitted by Rule 424(b) under the Act, and in the case of either
clause (i)(A) or (i)(B) of this sentence as have been provided to and approved
by the Representatives prior to the execution of this Agreement, or (ii) if
such registration statement, as it may have been amended, has not been declared
by the Commission to be effective under the Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been furnished to and approved by the Representatives prior to
the execution of this Agreement. The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b) under the
Act for the purpose of registering certain additional Securities, which
registration shall be effective upon filing with the Commission. As used in
this Agreement, the term "Original Registration Statement" means the
registration statement initially filed relating to the Securities, as amended
at the time when it was or is declared effective, including all financial
schedules and exhibits thereto and including any information omitted therefrom
pursuant to Rule 430A under the
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Act and included in the Prospectus (as hereinafter defined); the term "Rule
462(b) Registration Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including the Registration
Statement and any Preliminary Prospectus or Prospectus incorporated therein at
the time such Registration Statement becomes effective); the term "Registration
Statement" includes both the Original Registration Statement and any Rule
462(b) Registration Statement; the term "Preliminary Prospectus" means each
prospectus subject to completion filed with such registration statement or any
amendment thereto (including the prospectus subject to completion, if any,
included in the Registration Statement or any amendment thereto at the time it
was or is declared effective); the term "Prospectus" means:
(A) if the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Securities that is first filed pursuant to Rule
424(b)(7) under the Act, together with the Preliminary Prospectus
identified therein that such Term Sheet supplements;
(B) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b)
under the Act; or
(C) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the
Act, the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet. All
references to the Registration Statement, any Preliminary Prospectus, any
Prospectus or any amendments or supplement to any of the foregoing, shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX").
(b) The Commission has not issued any order preventing or suspending
use of any Preliminary Prospectus. When any Preliminary Prospectus was filed
with the Commission it (i) contained all statements required to be stated
therein in accordance with, and complied in all material respects with the
requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective, it (i) contained or will contain all statements required to
be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not or will not include
any untrue statement
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of a material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any Term Sheet that
is a part thereof or any amendment or supplement to the Prospectus is filed
with the Commission pursuant to Rule 424(b) (or, if the Prospectus or part
thereof or such amendment or supplement is not required to be so filed, when
the Registration Statement or the amendment thereto containing such amendment
or supplement to the Prospectus was or is declared effective) and on the Firm
Closing Date and any Option Closing Date (as hereinafter defined), the
Prospectus, as amended or supplemented at any such time, (i) contained or will
contain all statements required to be stated therein in accordance with, and
complied or will comply in all material respects with the requirements of, the
Act and the rules and regulations of the Commission thereunder and (ii) did not
or will not include any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
foregoing provisions of this paragraph (b) do not apply to statements or
omissions made in any Preliminary Prospectus, the Registration Statement or any
amendment thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives specifically for use
therein.
(c) If the Company has elected to rely on Rule 462(b) and the Rule
462(b) Registration Statement has not been declared effective, (i) the Company
has filed a Rule 462(b) Registration Statement in compliance with and that is
effective upon filing pursuant to Rule 462(b) and has received confirmation of
its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act, or the Commission has received payment of such filing fee.
(d) The Company and each of its subsidiaries (as set forth on Schedule
3 hereto) have been duly organized and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of incorporation
and are duly qualified to transact business as foreign corporations and are in
good standing under the laws of all other jurisdictions where the ownership or
leasing of their respective properties or the conduct of their respective
businesses requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to the Company
and its subsidiaries, taken as a whole.
(e) The Company and each of its subsidiaries have full power
(corporate and other) to own or lease their respective properties and conduct
their respective businesses as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus; and the Company has full power (corporate and other) to
enter into this Agreement and to carry out all the terms and provisions hereof
to be carried out by it.
(f) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and, except for directors' qualifying shares (if any) and as
otherwise set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus, are owned beneficially by
the Company free and clear of any security interests, liens, encumbrances,
equities or claims.
(g) The Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus. All of the issued shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable. The Firm Securities and the Option Securities
have been duly authorized and at the Firm Closing Date or the related Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable. No holders of
outstanding shares of capital stock of the Company are entitled as such to any
preemptive or other rights to subscribe for any of the Securities, and no
holder of securities of the Company has any right which has not been fully
exercised or waived to require the Company to register the offer or sale of any
securities owned by such holder under the Act in the public offering
contemplated by this agreement.
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(h) The capital stock of the Company conforms to the description
thereof contained in the Prospectus or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus.
(i) Except as disclosed in the Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus), there are no
outstanding (A) securities or obligations of the Company or any of its
subsidiaries convertible into or exchangeable for any capital stock of the
Company or any such subsidiary, (B) warrants, rights or options to subscribe
for or purchase from the Company or any such subsidiary any such capital stock
or any such convertible or exchangeable securities or obligations, or (C)
obligations of the Company or any such subsidiary to issue any shares of
capital stock, any such convertible or exchangeable securities or obligations,
or any such warrants, rights or options.
(j) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included in the Registration Statement and
the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present the financial position of the Company
and its consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved (except as otherwise noted therein). The selected financial
data set forth under the caption "Selected Financial Information" in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) fairly present, on the basis stated in the Prospectus
(or such Preliminary Prospectus), the information included therein.
(k) The pro forma financial statements and the related notes thereto
included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) fairly
present the information shown therein, have been prepared in accordance with
the Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(l) Xxxxxx Xxxxxxxx LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered their
report with respect to the audited consolidated financial statements and
schedules included in the Registration Statement and the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus), are
independent public accountants as required by the Act and the applicable rules
and regulations thereunder.
(m) KPMG, who have certified certain financial statements relating to
ERI, and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Registration Statement and
the Prospectus with respect thereto (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), are independent public accountants as
required by the Act and the applicable rules and regulations thereunder.
(n) The execution and delivery of this Agreement have been duly
authorized by the Company and this Agreement has been duly executed and
delivered by the Company, and is the valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency and similar laws affecting creditors'
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rights generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity
or at law);
(o) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that are required to be described
in the Registration Statement or the Prospectus and are not described therein
(or, if the Prospectus is not in existence, the most recent Preliminary
Prospectus), and no such proceedings have been threatened against the Company
or any of its subsidiaries or with respect to any of their respective
properties; and no contract or other document is required to be described in
the Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that is not described therein (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) or filed as
required.
(p) The issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance by the
Company with the other provisions of this Agreement and the consummation of the
other transactions herein contemplated do not (i) require the consent,
approval, authorization, registration or qualification of or with any
governmental authority, except such as have been obtained, such as may be
required under state securities or blue sky laws and, if the registration
statement filed with respect to the Securities (as amended) is not effective
under the Act as of the time of execution hereof, such as may be required (and
shall be obtained as provided in this Agreement) under the Act, or (ii)
conflict with or result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, lease or other agreement or instrument 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 are bound, which conflict, breach,
violation or default could reasonably be expected to have a material adverse
effect on the Company and its subsidiaries taken as a whole (other than
conflicts, breaches, violations or defaults that have been waived by the other
party thereto or conflicts, breaches, violations or defaults under agreements
governing or otherwise relating to indebtedness of the Company or its
subsidiaries that will be repaid on or promptly after the Firm Closing Date
from the proceeds of the sale of the Securities by the Company hereunder), or
the charter documents or by-laws of the Company or any of its subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any court or
other governmental authority or any arbitrator applicable to the Company or any
of its subsidiaries.
(q) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus, neither the Company
nor any of its subsidiaries has sustained any material loss or interference
with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any
labor dispute or any legal or governmental proceeding and there has not been
any material adverse change, or any development involving a prospective
material adverse change, in the condition (financial or otherwise), management,
business prospects, net worth, or results of the operations of the Company or
any of its subsidiaries, except in each case as described in or contemplated by
the Prospectus or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus.
(r) The Company has not, directly or indirectly, (i) taken any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or
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resale of the Securities or (ii) since the filing of the Registration Statement
(A) sold, bid for, purchased, or paid anyone any compensation for soliciting
purchases of, the Securities (except for the sale of the Securities by the
Company under this Agreement) or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company (except for the sale of Securities by the Selling Securityholders under
this Agreement).
(s) The Company has not distributed and, prior to the later of (i) the
Option Closing Date and (ii) the completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement or
any amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or other materials, if any, permitted by the
Act.
(t) The Company and each of its subsidiaries have (i) good and
marketable title in fee simple to all real property owned by them and (ii) good
and marketable title to all personal property owned by them, in each case free
and clear of any security interests, liens, encumbrances, equities, claims and
other defects, except such as do not materially and adversely interfere with
the use made or proposed to be made of such property by the Company or such
subsidiary, and any real property and buildings and any personal property held
under lease or charter by the Company or any such subsidiary are held under
valid, subsisting and enforceable leases or charters, as the case may be, with
such exceptions as are not material and do not materially and adversely
interfere with the use made and proposed to be made of such property and
buildings by the Company or such subsidiary, in each case except as described
in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(u) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus), (i) the Company
and its subsidiaries have not incurred any material liability or obligation,
direct or contingent, nor entered into any material transaction not in the
ordinary course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock; and (iii) there has not been any
material change in the capital stock, short-term debt or long-term debt of the
Company and its consolidated subsidiaries, except in each case as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus).
(v) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(w) The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks,
service marks, trade names, licenses, copyrights and proprietary or other
confidential information currently employed by them in connection with their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
result in a material adverse change in the condition (financial or
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otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(x) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as the Company believes are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied for; and
neither the Company nor any such subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(y) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except (i) for restrictions imposed by general
corporate law of the jurisdiction in which any such subsidiary may be organized
or (ii) as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus) or
(iii) for restrictions imposed in agreements governing or otherwise relating to
indebtedness of the Company or its subsidiaries that will be repaid on or
promptly after the Firm Closing Date from the proceeds of the sale of the
Securities by the Company hereunder, which agreements will be terminated after
repayment or (iv) restrictions which would not, singly or in the aggregate,
result in a material adverse change in the condition (financial or otherwise),
net worth, business prospects or results of operations of the Company and its
subsidiaries, taken as a whole.
(z) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their respective businesses, except
where a failure to possess any such items would not result in a material
adverse change in the condition (financial or otherwise), net worth, business
prospects or results of operations of the Company and its subsidiaries taken as
a whole, and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(aa) The Company and each of its subsidiaries has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to
file would not have a material adverse effect on the Company and its
subsidiaries) and each has paid all taxes required to be paid by it and any
other assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except
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for any such assessment, fine or penalty that is currently being contested in
good faith, or as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(ab) Neither the Company nor any of its subsidiaries is in violation
of any foreign, federal or state law or regulation relating to occupational
safety and health or to the storage, handling or transportation of hazardous or
toxic materials; the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable foreign, federal
and state occupational safety and health and environmental laws and regulations
to conduct their respective businesses; and the Company and each such
subsidiary is in compliance with all terms and conditions of any such permit,
license or approval, except in each case any such violation, failure to receive
required permits, licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals which would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or results of
operations of the Company and its subsidiaries taken as a whole, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(ac) Each certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter
as to the matters covered thereby.
(ad) Except (i) for the shares of capital stock of each of the
subsidiaries owned by the Company and such subsidiaries, (ii) as described in
or contemplated by the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) and (iii) for investments that are not
material to the Company and its subsidiaries taken as a whole, neither the
Company nor any such subsidiary owns any shares of stock or any other equity
securities of any corporation or has any equity interest in any firm,
partnership, association or other entity.
(ae) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment
Company Act of 1940, as amended, and this transaction will not cause the
Company to become an investment company subject to registration under such Act.
(af) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principals and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(ag) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance and
observance of any term, covenant or condition of any indenture, mortgage, deed
of trust, lease or other agreement or instrument 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 is bound or may be affected, except for
any such default or event that has been waived or disclosed in the Prospectus
(or, if the Prospectus is not
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in existence, the most recent Preliminary Prospectus) or that will arise under
agreements governing or otherwise relating to indebtedness of the Company or
its subsidiaries that will be repaid on or promptly after the Firm Closing Date
from the proceeds of the sale of the Securities by the Company hereunder, which
agreements will be terminated after repayment, or that will not, individually
or in the aggregate, result in a material adverse change in the condition
(financial or otherwise), net worth, business prospects or results of
operations of the Company and its subsidiaries taken as a whole.
(ah) Upon consummation of the ERI Acquisition, the Warrant Certificate
to purchase 16,665 ordinary shares of ERI issued to Seitel dated July 3, 1996;
the Warrant Certificate to purchase 5,555 ordinary shares of ERI issued to
Xxxxxxxx, dated July 3, 1996; the Warrant Certificate to purchase 5,555
ordinary shares of ERI issued to Xxxxxx, dated July 3, 1996; the Warrant
Certificate to purchase 5,555 ordinary shares of ERI issued to Xxxxxxxx dated
July 3, 1996; and the Shareholders Agreement among ERI, Seitel, Oliveira,
Harrison, Dormera, Xxxxxx, Balmedie, Xxxxxxxx, Xxxxxxx, and Xxxxx, dated July
3, 1996; (collectively, the "Terminated Agreements") will be terminated, will
no longer be in force and effect, and the parties to the Terminated Agreements
will have executed waivers relinquishing and forfeiting any and all rights
granted under the Terminated Agreements.
(ai) Prior to or concurrent with the Firm Closing Date, the ERI
Acquisition Agreement will have been duly authorized, executed and delivered by
and will be a valid and binding agreement of the parties thereto.
(aj) Upon consummation of the ERI Acquisition, ERI, EHL and the
Horizon Companies will become wholly-owned subsidiaries of the Company.
3. Representations and Warranties with respect to the Selling
Securityholders. Each of the Selling Securityholders, and Seitel, Harrison,
Purdie, Xxxxxxxx and Xxxxx (solely with respect to EHI, Xxxxxxxx, Dormera,
Balmedie and Larlane, respectively), represents and warrants to, and agrees
with, each of the several Underwriters that:
(a) Such Selling Securityholder has full power (corporate and other)
to enter into this Agreement and to sell, assign, transfer and deliver to the
Underwriters the Securities to be sold by such Selling Securityholder hereunder
in accordance with the terms of this Agreement; the execution and delivery of
this Agreement have been duly authorized by all necessary corporate action of
such Selling Securityholder; and this Agreement has been duly executed and
delivered by such Selling Securityholder.
(b) Such Selling Securityholder has duly executed and delivered an
irrevocable power of attorney and custody agreement (with respect to such
Selling Securityholder, the "Power-of-Attorney" and the "Custody Agreement",
respectively), each in the form heretofore delivered to the Representatives,
appointing Xxx X. Xxxxxxxxx and Xxxxxx X. Xxxxxxxx as such Selling
Securityholder's attorney-in-fact (the "Attorney-in-Fact") with authority to
execute, deliver and perform this Agreement on behalf of such Selling
Securityholder and appointing the Company, as custodian thereunder (the
"Custodian"). Prior to or concurrent with the Firm Closing Date, certificates in
negotiable form, endorsed in blank or accompanied by blank stock powers duly
executed, with signatures appropriately guaranteed, representing the Securities
to be sold by such Selling Securityholder hereunder will be deposited with the
Custodian pursuant to the Custody Agreement for the purpose of delivery pursuant
to this Agreement. Such Selling Securityholder
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has full power (corporate and other) to enter into the Custody Agreement and
the Power-of-Attorney and to perform its obligations under the Custody
Agreement. The execution and delivery of the Custody Agreement and the
Power-of-Attorney have been duly authorized by all necessary corporate action
of such Selling Securityholder; the Custody Agreement and the Power-of-Attorney
have been duly executed and delivered by such Selling Securityholder and,
assuming due authorization, execution and delivery by the Custodian, are the
legal, valid, binding and enforceable instruments of such Selling
Securityholder. Such Selling Securityholder agrees that each of the Securities
represented by the certificates to be deposited with the Custodian is subject
to the interests of the Underwriters hereunder, that the arrangements made for
such custody, the appointment of the Attorney-in-Fact and the right, power and
authority of the Attorney-in-Fact to execute and deliver this Agreement, to
agree on the price at which the Securities (including such Selling
Securityholder's Securities) are to be sold to the Underwriters, and to carry
out the terms of this Agreement, are to that extent irrevocable and that the
obligations of such Selling Securityholder hereunder shall not be terminated,
except as provided in this Agreement or the Custody Agreement, by any act of
such Selling Securityholder, by operation of law or otherwise, whether in the
case of any individual Selling Securityholder by the death or incapacity of
such Selling Securityholder, in the case of a trust or estate by the death of
the trustee or trustees or the executor or executors or the termination of such
trust or estate, or in the case of a corporate or partnership Selling
Securityholder by its liquidation or dissolution or by the occurrence of any
other event. If any individual Selling Securityholder, trustee or executor
should die or become incapacitated or any such trust should be terminated, or
if any corporate or partnership Selling Securityholder shall liquidate or
dissolve, or if any other event should occur, before the delivery of such
Securities hereunder, the certificates for such Securities deposited with the
Custodian shall be delivered by the Custodian in accordance with the respective
terms and conditions of this Agreement as if such death, incapacity,
termination, liquidation or dissolution or other event had not occurred,
regardless of whether or not the Custodian or the Attorney-in-Fact shall have
received notice thereof.
(c) Prior to or concurrent with the Firm Closing Date, such Selling
Securityholder will be the lawful owner of and will have good and marketable
title to the Securities to be sold by such Selling Securityholder hereunder and
upon sale and delivery of, and payment for, such Securities, as provided
herein, such Selling Securityholder will convey good and marketable title to
such Securities, free and clear of any security interests, liens, encumbrances,
equities, claims or other defects.
(d) Such Selling Securityholder has not, directly or indirectly, (i)
taken any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (ii) since the filing of the Registration
Statement (A) sold, bid for, purchased, or paid anyone any compensation for
soliciting purchases of, the Securities or (B) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by such Selling
Securityholders under this Agreement).
(e) Such Selling Securityholder has reviewed the Prospectus (or, if
the Prospectus is not in existence, the most recent Preliminary Prospectus) and
the Registration Statement, and the information regarding such Selling
Securityholder set forth therein under the caption "Principal and Selling
Stockholders" is complete and accurate; and nothing has come to the attention
of such Selling Securityholder to make it believe that the Prospectus (or, if
the Prospectus is not in
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existence, the most recent Preliminary Prospectus) and the Registration
Statement contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(f) The sale by such Selling Securityholder of Securities pursuant
hereto is not prompted by any adverse information concerning the Company that
is not set forth in the Registration Statement or the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).
(g) The sale of the Securities to the Underwriters by such Selling
Securityholder pursuant to this Agreement, the compliance by such Selling
Securityholder with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein contemplated do
not (i) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as have been
obtained, such as may be required under state securities or blue sky laws and,
if the registration statement filed with respect to the Securities (as amended)
is not effective under the Act as of the time of execution hereof, such as may
be required (and shall be obtained as provided in this Agreement) under the Act
and the Exchange Act, or (ii) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under any
indenture, mortgage, deed of trust, lease or other agreement or instrument to
which such Selling Securityholder or any of its subsidiaries is a party or by
which such Selling Securityholder or any of its subsidiaries or any of their
respective properties are bound, which conflict, breach, violation or default
could reasonably be expected to have a material adverse effect on the Selling
Stockholder and its subsidiaries (if any) taken as a whole (other than
conflicts, breaches, violations or defaults that have been waived by the other
party thereto or conflicts, breaches, violations or defaults under agreements
governing or otherwise relating to indebtedness of the Company or its
subsidiaries that the Company has represented will be repaid on or promptly
after the Firm Closing Date from the proceeds of the sale of the Securities by
the Company), or the charter documents or by-laws of such Selling
Securityholder or any of its subsidiaries or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental authority
or any arbitrator applicable to such Selling Securityholder or any of its
subsidiaries.
(h) Such Selling Securityholder has not distributed and, prior to the
later of (i) the Option Closing Date and (ii) the completion of the
distribution of the Securities, will not distribute any offering material in
connection with the offering and sale of the Securities other than the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or other materials, if
any, permitted by the Act.
4. Purchase, Sale and Delivery of the Securities. (a) On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell, and EHI agrees to sell, to each of the Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase from
the Company and EHI, severally and not jointly, at a purchase price of $15.81
per share, the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule 2 hereto. One or more certificates in definitive form
for the Firm Securities that the several Underwriters have agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Representatives request upon notice to the Company at least 48
hours prior to the Firm Closing Date, shall be delivered by or on behalf of the
Company and EHI to the Representatives for the respective accounts of the
Underwriters,
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against payment by or on behalf of the Underwriters of the purchase price
therefor by wire transfer in same-day funds (the "Wired Funds") to the accounts
designated by the Company and EHI. Such delivery of and payment for the Firm
Securities shall be made at the offices of Xxxxx & Xxxx LLP, Xxx Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:30 A.M., New York time, on August 11,
1997, or at such other place, time or date as the Representatives and the
Company may agree upon or as the Representatives may determine pursuant to
Section 11 hereof, such time and date of delivery against payment being herein
referred to as the "Firm Closing Date". The Company and EHI will make such
certificate or certificates for the Firm Securities available for checking and
packaging by the Representatives at the offices in New York, New York of the
Company's transfer agent or registrar or of Prudential Securities Incorporated
at least 24 hours prior to the Firm Closing Date.
(b) For the purpose of covering any over-allotments in connection with
the distribution and sale of the Firm Securities as contemplated by the
Prospectus, each of the Company, EHI, Xxxxxxxx, Dormera, Balmedie and Larlane
hereby grants to the several Underwriters an option to purchase, severally and
not jointly, the Option Securities in the amounts set forth on Schedule 1. If
such options are exercised, such Option Securities shall be purchased first
from Xxxxxxxx, Dormera, Balmedie and Larlane (up to a total of 180,000 shares
of Common Stock as set forth on Schedule 1 attached hereto) on a pro rata
basis, then from the Company (up to a total of 602,000 shares of Common Stock)
and then from EHI (up to a total of 100,000 shares of Common Stock.) The
purchase price to be paid for any Option Securities shall be the same price per
share as the price per share for the Firm Securities set forth above in
paragraph (a) of this Section 4, plus if the purchase and sale of any Option
Securities takes place after the Firm Closing Date and after the Firm
Securities are trading "ex-dividend", an amount equal to the dividends payable
on such Option Securities. The options granted hereby may be exercised as to
all or any part of the Option Securities from time to time within thirty (30)
days after the date of the Prospectus (or, if such 30th day shall be a Saturday
or Sunday or a holiday, on the next business day thereafter when the New York
Stock Exchange is open for trading). The Underwriters shall not be under any
obligation to purchase any of the Option Securities prior to the exercise of
such options. The Representatives may from time to time exercise the options
granted hereby by giving notice in writing or by telephone (confirmed in
writing) to the Company setting forth the aggregate number of Option Securities
as to which the several Underwriters are then exercising the options and the
date and time for delivery of and payment for such Option Securities. Any such
date of delivery shall be determined by the Representatives but shall not be
earlier than two business days or later than five business days after such
exercise of the options and, in any event, shall not be earlier than the Firm
Closing Date. The time and date set forth in such notice, or such other time on
such other date as the Representatives and Company may agree upon or as the
Representatives may determine pursuant to Section 11 hereof, is herein called
the "Option Closing Date" with respect to such Option Securities. Upon exercise
of the options as provided herein, the Company and/or the Selling
Securityholders, as the case may be, shall become obligated, as set forth
above, to sell to each of the several Underwriters, and, subject to the terms
and conditions herein set forth, each of the Underwriters (severally and not
jointly) shall become obligated to purchase from the Company and/or the Selling
Securityholders, as the case may be, the same percentage of the total number of
the Option Securities as to which the several Underwriters are then exercising
the options as such Underwriter is obligated to purchase of the aggregate
number of Firm Securities, as adjusted by the Representatives in such manner as
they deem advisable to avoid fractional shares. If the options are exercised as
to all or any portion of the Option Securities, one or more certificates in
definitive form for such Option Securities, and payment therefor, shall be
delivered on the related Option Closing Date in the manner, and upon the terms
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and conditions, set forth in paragraph (a) of this Section 4, except that
reference therein to the Firm Securities and the Firm Closing Date shall be
deemed, for purposes of this paragraph (b), to refer to such Option Securities
and Option Closing Date, respectively.
(c) The Company and the Selling Securityholders hereby acknowledge
that the wire transfer by or on behalf of the Underwriters of the purchase
price for any Securities does not constitute closing of a purchase and sale of
the Securities. Only execution and delivery of a receipt for Securities by the
Underwriters indicates completion of the closing of a purchase of the
Securities from the Company and the Selling Securityholders. Furthermore, in
the event that the Underwriters wire funds to the Company and the Selling
Securityholders prior to the completion of the closing of a purchase of
Securities, the Company and the Selling Securityholders hereby acknowledge that
until the Underwriters execute and deliver a receipt for the Securities, by
facsimile or otherwise, the Company and the Selling Securityholders will not be
entitled to the wired funds and shall return the wired funds to the
Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. In the event that the closing of a purchase of Securities is not
completed and the wired funds are not returned by the Company and the Selling
Securityholders to the Underwriters on the same day the wired funds were
received by the Company and the Selling Securityholders, the Company and the
Selling Securityholders agree to pay to the Underwriters in respect of each day
the wired funds are not returned by it, in same-day funds, interest on the
amount of such wired funds in an amount representing the Underwriters' cost of
financing as reasonably determined by Prudential Securities Incorporated.
(d) It is understood that any of you, individually and not as one of
the Representatives, may (but shall not be obligated to) make payment on behalf
of any Underwriter or Underwriters for any of the Securities to be purchased by
such Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations hereunder.
5. Offering by the Underwriters. Upon your authorization of the
release of the Firm Securities, the several Underwriters propose to offer the
Firm Securities for sale to the public upon the terms set forth in the
Prospectus.
6. Covenants of the Company. The Company covenants and agrees
with each of the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the time of execution of this Agreement, and any
amendments thereto to become effective as promptly as possible. If required,
the Company will file the Prospectus or any Term Sheet that constitutes a part
thereof and any amendment or supplement thereto with the Commission in the
manner and within the time period required by Rules 434 and 424(b) under the
Act. During any time when a prospectus relating to the Securities is required
to be delivered under the Act, the Company (i) will comply with all
requirements imposed upon it by the Act and the rules and regulations of the
Commission thereunder to the extent necessary to permit the continuance of
sales of or dealings in the Securities in accordance with the provisions hereof
and of the Prospectus, as then amended or supplemented, and (ii) will not file
with the Commission the Prospectus, Term Sheet or the amendment referred to in
the second sentence of Section 2(a) hereof, any amendment or supplement to such
Prospectus, Term Sheet or any amendment to the Registration Statement or any
Rule 462(b) Registration Statement of which the Representatives previously have
been advised and furnished with a copy for a reasonable period of time prior to
the proposed filing and as to which filing the Representatives shall not have
given their consent.
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The Company will prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon request by the
Representatives or counsel for the Underwriters, any amendments to the
Registration Statement or amendments or supplements to the Prospectus that may
be necessary or advisable in connection with the distribution of the Securities
by the several Underwriters, and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective by the
Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when the
Registration Statement or any amendment thereto has been filed or declared
effective or the Prospectus or any amendment or supplement thereto has been
filed and will provide evidence satisfactory to the Representatives of each
such filing or effectiveness.
(b) The Company will advise the Representatives, promptly after
receiving notice or obtaining knowledge thereof, of (i) the issuance by the
Commission of any stop order suspending the effectiveness of the Original
Registration Statement or any Rule 462(b) Registration Statement or any
amendment thereto or any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, (ii) the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, (iii) the institution, threatening or
contemplation of any proceeding for any such purpose or (iv) any request made
by the Commission for amending the Original Registration Statement or any Rule
462(b) Registration Statement, for amending or supplementing the Prospectus or
for additional information. The Company will use its best efforts to prevent
the issuance of any such stop order and, if any such stop order is issued, to
obtain the withdrawal thereof as promptly as possible.
(c) The Company will arrange for the qualification of the Securities
for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such
qualifications in effect for as long as may be necessary to complete the
distribution of the Securities, provided, however, that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.
(d) If, at any time prior to the later of (i) the final date when a
prospectus relating to the Securities is required to be delivered under the Act
or (ii) the Option Closing Date, any event occurs as a result of which the
Prospectus, as then amended or supplemented, would include any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act or the rules or
regulations of the Commission thereunder, the Company will promptly notify the
Representatives thereof and, subject to Section 6(a) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.
(e) The Company will, without charge, provide (i) to the
Representatives and to counsel for the Underwriters a signed copy of the
registration statement originally filed with respect to the Securities and each
amendment thereto (in each case including exhibits thereto) or any Rule 462(b)
Registration Statement, (ii) to each other Underwriter, a conformed copy of
such registration statement or any Rule 462(b) Registration Statement and each
amendment thereto (in each case without exhibits thereto) and (iii) so long as
a prospectus relating to the Securities is required to be delivered under the
Act, as many copies of each Preliminary Prospectus or the
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Prospectus or any amendment or supplement thereto as the Representatives may
reasonably request; without limiting the application of clause (iii) of this
sentence, the Company, not later than (A) 6:00 PM, New York City time, on the
date of determination of the public offering price, if such determination
occurred at or prior to 10:00 A.M., New York City time, on such date or (B)
2:00 PM, New York City time, on the business day following the date of
determination of the public offering price, if such determination occurred
after 10:00 A.M., New York City time, on such date, will deliver to the
Underwriters, without charge, as many copies of the Prospectus and any
amendment or supplement thereto as the Representatives may reasonably request
for purposes of confirming orders that are expected to settle on the Firm
Closing Date. The Company will provide or cause to be provided to each of the
Representatives, and to each Underwriter that so requests in writing, a copy of
each report on Form SR filed by the Company as required by Rule 463 under the
Act.
(f) The Company, as soon as practicable, will make generally available
to its securityholders and to the Representatives a consolidated earnings
statement of the Company and its subsidiaries that satisfies the provisions of
Section 11(a) of the Act and Rule 158 thereunder.
(g) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Prospectus.
(h) The Company will not, directly or indirectly, without the prior
written consent of Prudential Securities Incorporated, on behalf of the
Underwriters, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 180 days after the date hereof, except (i) pursuant to this
Agreement, (ii) for issuances pursuant to the exercise of employee or director
stock options and warrants outstanding on the date hereof and (iii) for the
grants of options pursuant to option plans existing on the date hereof.
(i) The Company will not, directly or indirectly, (i) take any action
designed to cause or to result in, or that has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or (ii) (A) sell, bid for, purchase, or pay anyone any compensation
for soliciting purchases of, the Securities or (B) pay or agree to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company (except for the sale of Securities by the Selling
Securityholders under this Agreement).
(j) The Company will obtain the agreements described in Section 9(m)
hereof prior to the date hereof.
(k) If at any time during the 25-day period after the Registration
Statement becomes effective or the period prior to the Option Closing Date, any
rumor, publication or event relating to or affecting the Company shall occur as
a result of which in your opinion the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such rumor,
publication or event necessitates a supplement to or amendment of the
Prospectus), the Company will, after notice from you advising the Company to
the effect set forth above, forthwith prepare, consult with you concerning the
substance of, and disseminate a press release or other public statement,
reasonably satisfactory to you, responding to or commenting on such rumor,
publication or event.
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(l) If the Company elects to rely on Rule 462(b), the Company shall
both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 promulgated under the Act by the earlier of (i) 10:00 P.M. New York time on
the date of this Agreement and (ii) the time confirmations are sent or given,
as specified by Rule 462(b)(2).
(m) The Company will cause the Securities to be duly included for
quotation on the Nasdaq Stock Market's National Market (the "Nasdaq National
Market") prior to the Firm Closing Date. The Company will ensure that the
Securities remain included for quotation on the Nasdaq National Market
following the Firm Closing Date.
7. Covenants of Selling Securityholders.
Each of the Selling Securityholders, and Seitel, Harrison, Purdie,
Xxxxxxxx and Xxxxx (solely with respect to EHI, Xxxxxxxx, Dormera, Balmedie and
Larlane, respectively), covenants and agrees with each of the Underwriters
that:
(a) Such Selling Securityholder will not, directly or indirectly,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, offer, sell, offer to sell, contract to sell,
pledge, grant any option to purchase or otherwise sell or dispose (or announce
any offer, sale, pledge, offer of sale, contract of sale, grant of any option
to purchase or other sale or disposition) of any shares of Common Stock legally
or beneficially owned by such Selling Securityholder or any securities
convertible into, or exchangeable or exercisable for, shares of Common Stock
for a period of 180 days after the date hereof, except pursuant to this
Agreement.
(b) Such Selling Securityholder will not, directly or indirectly, (i)
take any action designed to cause or result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Securities or (ii)(A) sell, bid for, purchase, or pay anyone
any compensation for soliciting purchases of, the Securities or (B) pay or
agree to pay to any person any compensation for soliciting another to purchase
any other securities of the Company (except for the sale of Securities by the
Selling Securityholders under this Agreement).
8. Expenses. The Company will pay all costs and expenses
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 13 hereof, including all costs and expenses
incident to (i) the printing or other production of documents with respect to
the transactions, including any costs of printing the registration statement
originally filed with respect to the Securities and any amendment thereto, any
Rule 462(b) Registration Statement, any Preliminary Prospectus and the
Prospectus and any amendment or supplement thereto, this Agreement and any blue
sky memoranda, (ii) all arrangements relating to the delivery to the
Underwriters of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the
Underwriters of any certificates evidencing the Securities, including transfer
agent's and registrar's fees, (v) the qualification of the Securities under
state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters relating thereto, (vi) the filing
fees of the Commission and the National Association
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of Securities Dealers, Inc. relating to the Securities, (vii) any quotation of
the Securities on the Nasdaq National Market, (viii) any meetings with
prospective investors in the Securities (other than as shall have been
specifically approved by the Representatives to be paid for by the Underwriters)
and (ix) advertising relating to the offering of the Securities (other than as
shall have been specifically approved by the Representatives to be paid for by
the Underwriters). If the sale of the Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 9 hereof is not satisfied, because this Agreement is terminated
pursuant to Section 13 hereof or because of any failure, refusal or inability on
the part of the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including counsel fees and
disbursements) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities. The Company shall not in any event
be liable to any of the Underwriters for the loss of anticipated profits from
the transactions covered by this Agreement.
9. Conditions of the Underwriters' Obligations. The obligations
of the several Underwriters to purchase and pay for the Firm Securities shall be
subject, in the Representatives' sole discretion, to the accuracy of the
representations and warranties of the parties hereto contained herein as of the
date hereof and as of the Firm Closing Date, as if made on and as of the Firm
Closing Date, to the accuracy of the statements of the Company and the Selling
Securityholders made pursuant to the provisions hereof, to the performance by
the parties hereto of their respective covenants and agreements hereunder and to
the following additional conditions:
(a) If the Original Registration Statement or any amendment thereto
filed prior to the Firm Closing Date has not been declared effective as of the
time of execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have been declared effective not later than the
earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to
the registration statement originally filed with respect to the Securities or
to the Registration Statement, as the case may be, containing information
regarding the initial public offering price of the Securities has been filed
with the Commission and (ii) the time confirmations are sent or given as
specified by Rule 462(b)(2), or with respect to the Original Registration
Statement, or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that constitutes
a part thereof and any amendment or supplement thereto shall have been filed
with the Commission in the manner and within the time period required by Rules
434 and 424(b) under the Act; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto shall have been issued, and no
proceedings for that purpose shall have been instituted or threatened or, to
the knowledge of the Company or the Representatives, shall be contemplated by
the Commission; and the Company shall have complied with any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectus or otherwise).
(b) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P., counsel for the Company,
Seitel and EHI, to the effect that:
(i) the Company and each of Eagle Geophysical Onshore,
Inc., a Delaware corporation, and Eagle Geophysical Offshore, Inc.
(formerly known as Horizon Seismic,
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Inc.), a Texas corporation (the "Subsidiaries"), have been duly
organized and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation and
are duly qualified to transact business as foreign corporations and
are in good standing under the laws of all other jurisdictions where,
to the knowledge of such counsel, the ownership or leasing of their
respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so
qualified does not amount to a material liability or disability to
the Company and its subsidiaries, taken as a whole;
(ii) the Company and each of the Subsidiaries have corporate
power to own or lease their respective properties and conduct their
respective businesses as described in the Registration Statement and
the Prospectus, and the Company has corporate power to enter into
this Agreement and to carry out all the terms and provisions hereof
to be carried out by it;
(iii) the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares
(if any) and as otherwise set forth in the Prospectus, are owned
beneficially by the Company free and clear of any perfected security
interests or, to the best knowledge of such counsel, any other
security interests, liens, encumbrances, equities or claims;
(iv) the Company has an authorized, issued and outstanding
capitalization as set forth in the Prospectus; all of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, have been issued
in compliance with all applicable federal and state securities laws
and were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities; the
Firm Securities have been duly authorized by all necessary corporate
action of the Company and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be validly
issued, fully paid and nonassessable; the Securities have been duly
included for trading on the Nasdaq National Market; no holders of
outstanding shares of capital stock of the Company are entitled as
such to any preemptive or other rights to subscribe for any of the
Securities; and no holders of securities of the Company, other than
the Selling Securityholders, are entitled to have such securities
registered under the Registration Statement;
(v) the statements set forth under the heading "Description
of Capital Stock" in the Prospectus, insofar as such statements
purport to summarize certain provisions of the capital stock of the
Company, provide a fair summary of such provisions; and the
statements set forth under the headings "Risk Factors - Potential
Conflicts of Interest," "Risk Factors - Environmental and Other
Regulations" and "Business - Environmental Matters/Governmental
Regulation" in the Prospectus, insofar as such statements constitute
a summary of the legal matters, documents or proceedings referred to
therein, provide a fair summary of such legal matters, documents and
proceedings;
(vi) the execution and delivery of this Agreement have been
duly authorized by all necessary corporate action of the Company and
Seitel and this Agreement has been duly executed and delivered by the
Company and Xxxxxx;
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(xxx) (X) no legal or governmental proceedings are pending to
which the Company or any of the Subsidiaries is a party or to which
the property of the Company or any of the Subsidiaries is subject
that are required to be described in the Registration Statement or
the Prospectus and are not described therein, and, to the best
knowledge of such counsel, no such proceedings have been threatened
against the Company or any of the Subsidiaries or with respect to any
of their respective properties and (B) to the knowledge of such
counsel, no contract or other document is required to be described in
the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement that is not described therein
or filed as required;
(viii) the issuance, offering and sale of the Securities to
the Underwriters by the Company pursuant to this Agreement, the
compliance by the Company with the other provisions of this Agreement
and the consummation of the other transactions herein contemplated do
not (A) require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws (provided that such counsel shall not be required to
express any opinion as to the requirements of state securities or
blue sky laws), or (B) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which the Company
or any of the Subsidiaries is a party or by which the Company or any
of the Subsidiaries or any of their respective properties are bound,
which conflict, breach, violation or default could reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole (other than conflicts, breaches,
violations or defaults that have been waived by the other party
thereto or conflicts, breaches, violations or defaults under
agreements governing or otherwise relating to indebtedness of the
Company or its subsidiaries that the Company has represented will be
repaid on or promptly after the Firm Closing Date from the proceeds
of the sale of the Securities by the Company), or the charter
documents or by-laws of the Company or any of the Subsidiaries, or
any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator known to such
counsel and applicable to the Company or Subsidiaries;
(ix) the Registration Statement is effective under the Act;
any required filing of the Prospectus, or any Term Sheet that
constitutes a part thereof, pursuant to Rules 434 and 424(b) has been
made in the manner and within the time period required by Rules 434
and 424(b); and, to such counsel's knowledge after due inquiry with
the Commission no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened
or, are contemplated by the Commission;
(x) the Registration Statement originally filed with respect
to the Securities and each amendment thereto, any Rule 462(b)
Registration Statement and the Prospectus (in each case, other than
the financial statements and other financial information contained
therein, as to which such counsel need express no opinion) appeared
on its face to comply as to form in all material respects with the
applicable requirements of the Act and the rules and regulations of
the Commission thereunder;
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(xi) The ERI Acquisition Agreement has been duly authorized
by all necessary corporate action of the Company and has been duly
executed and delivered by the Company; and, assuming due
authorization, execution and delivery by Harrison, Purdie, Campbell,
Burns, Xxxxxxxx, Dormera, Balmedie and Larlane, the ERI Acquisition
Agreement is the legal, valid, binding and enforceable instrument of
the Company, subject to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law);
(xii) EHI has full corporate power to enter into this
Agreement, EHI has full corporate power to enter into the Custody
Agreement and the Power-of-Attorney and to sell, transfer and deliver
the Securities being sold by EHI hereunder in the manner provided in
this Agreement and to perform its obligations under the Custody
Agreement; the execution and delivery by EHI of this Agreement and
the Custody Agreement and the Power-of-Attorney by EHI have been duly
authorized by all necessary corporate action of EHI; this Agreement
has been duly executed and delivered by EHI and; assuming due
authorization, execution and delivery by the Custodian, the Custody
Agreement and the Power-of-Attorney is the legal, valid, binding and
enforceable instrument of EHI, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law);
(xiii) the delivery by EHI to the several Underwriters of
certificates for the Securities being sold hereunder by EHI against
payment therefor as provided herein, will convey good and marketable
title to such Securities to the several Underwriters, free and clear
of all security interests, liens, encumbrances, equities, claims or
other defects; and
(xiv) the sale of the Securities to the Underwriters by EHI
pursuant to this Agreement, the compliance by EHI with the other
provisions of this Agreement, the Custody Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws (provided that such counsel shall not be required to
express any opinion as to the requirements of state securities or
blue sky laws), or (ii) conflict with or result in a breach or
violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which EHI or any
of its subsidiaries is a party or by which EHI or any of its
subsidiaries or any of their respective properties are bound, which
conflict, breach, violation or default could reasonably be expected
to have a material adverse effect on EHI and its subsidiaries taken
as a whole (other than conflicts, breaches, violations or defaults
that have been waived by the other party thereto or conflicts,
breaches, violations or defaults under agreements governing or
otherwise relating to indebtedness of the Company or its subsidiaries
that the Company has represented will be repaid on or promptly after
the Firm Closing Date from the proceeds of the sale of the Securities
by the Company), or the charter documents or by-laws of EHI or any of
its subsidiaries or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any
arbitrator applicable to EHI or any of its subsidiaries.
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Such counsel shall also state that they have no reason to believe that
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of its date or the date of such opinion, included or
includes any untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company, Seitel and EHI and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (b) shall include any amendment or supplement thereto at the date of
such opinion.
(c) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxx & Xxxxxxxx, P.C., U.S. counsel for Harrison, Purdie,
Campbell, Burns, Xxxxxxxx, Dormera, Balmedie and Larlane to the effect that:
(i) The ERI Acquisition Agreement has been duly authorized by
all necessary action (corporate or otherwise) of Harrison, Purdie,
Xxxxxxxx and Xxxxx, and has been duly executed and delivered by
Harrison, Purdie, Campbell, Burns, Xxxxxxxx, Dormera, Balmedie and
Larlane; and, assuming due authorization, execution and delivery by
the Company, the ERI Acquisition Agreement is the legal, valid,
binding and enforceable instrument of Harrison, Purdie, Campbell,
Burns, Xxxxxxxx, Dormera, Balmedie and Larlane, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and subject, as to enforceability, to public policy
considerations or federal or state securities laws limiting rights to
indemnity and to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(ii) Each of Harrison, Purdie, Xxxxxxxx and Xxxxx has full
power to enter into this Agreement, the Custody Agreement and the
Power-of-Attorney and to perform their obligations under each; this
Agreement has been duly executed and delivered by each of Harrison,
Purdie, Campbell, Burns, Xxxxxxxx, Dormera, Balmedie and Larlane;
assuming due authorization, execution and delivery by the Custodian,
the Custody Agreement and the Power-of-Attorney are the legal, valid,
binding and enforceable instruments of each of Harrison, Purdie,
Campbell, Burns, Xxxxxxxx, Dormera, Balmedie and Larlane, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
public policy considerations or federal or state securities laws
limiting rights to indemnity and to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law); and
(iii) the compliance by each of Harrison, Purdie, Xxxxxxxx
and Xxxxx with the other provisions of this Agreement, the Custody
Agreement and the consummation of the other transactions herein
contemplated do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under
state securities or blue sky laws (provided that such counsel shall
not be required to express any opinion as to the requirements of
state securities or blue sky laws), or (ii) conflict with or result
in a breach
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or violation of any of the terms and provisions of, or constitute a
default under any indenture, mortgage, deed of trust, lease or other
agreement or instrument, known to such counsel, to which any of
Harrison, Purdie, Xxxxxxxx or Xxxxx is a party or by which or any of
their respective properties are bound, which conflict, breach,
violation or default could reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole
(other than conflicts, breaches, violations or defaults that have
been waived by the other party thereto or conflicts, breaches,
violations or defaults under agreements governing or otherwise
relating to indebtedness of the Company or its subsidiaries that the
Company has represented will be repaid on or promptly after the Firm
Closing Date from the proceeds of the sale of the Securities by the
Company), or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to any of Harrison,
Purdie, Xxxxxxxx and Xxxxx.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of Harrison,
Purdie, Campbell, Burns, Xxxxxxxx, Dormera, Balmedie and Larlane and public
officials.
References to the Registration Statement and the Prospectus in this
paragraph (c) shall include any amendment or supplement thereto at the date of
such opinion.
(d) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Cains Advocates and Notaries, counsel for Xxxxxxxx, Dormera,
Balmedie and Larlane to the effect that:
(i) the ERI Acquisition Agreement has been duly authorized
by all necessary action (corporate or otherwise) of Xxxxxxxx, Dormera,
Balmedie and Larlane;
(ii) each of Xxxxxxxx, Dormera, Balmedie and Larlane has full
power to enter into this Agreement, the Custody Agreement and the
Power-of-Attorney and to sell, transfer and deliver the Securities
being sold by them hereunder in the manner provided in this Agreement
and to perform their obligations under the Custody Agreement; the
execution and delivery of this Agreement, the Custody Agreement and
the Power-of-Attorney have been duly authorized by all necessary
action (corporate or otherwise) of each of Xxxxxxxx, Dormera, Balmedie
and Larlane;
(iii) the delivery by each of Xxxxxxxx, Dormera, Balmedie and
Larlane to the several Underwriters of certificates for the Securities
being sold hereunder by each of Xxxxxxxx, Dormera, Balmedie and
Larlane against payment therefor as provided herein, will convey good
and marketable title to such Securities to the several Underwriters,
free and clear of all security interests, liens, encumbrances,
equities, claims or other defects; and
(iv) the sale of the Securities to the Underwriters by each
of Xxxxxxxx, Dormera, Balmedie and Larlane pursuant to this Agreement,
the compliance by each of Xxxxxxxx, Dormera, Balmedie and Larlane with
the other provisions of this Agreement, the Custody Agreement and the
consummation of the other transactions herein contemplated do not (i)
require the consent, approval, authorization, registration or
qualification of or with any governmental authority, except such as
have been obtained and such as may be required under state securities
or blue sky laws, or (ii) conflict with or result in a breach or
violation
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of any of the terms and provisions of, or constitute a default under
any indenture, mortgage, deed of trust, lease or other agreement or
instrument known to such counsel and to which any of Xxxxxxxx,
Dormera, Balmedie and Larlane is a party or by which or any of their
respective properties are bound, which conflict, breach, violation or
default could reasonably be expected to have a material adverse
effect on the Company and its subsidiaries taken as a whole (other
than conflicts, breaches, violations or defaults that have been
waived by the other party thereto or conflicts, breaches, violations
or defaults under agreements governing or otherwise relating to
indebtedness of the Company or its subsidiaries that the Company has
represented will be repaid on or promptly after the Firm Closing Date
from the proceeds of the sale of the Securities by the Company), or
any statute or any judgment, decree, order, rule or regulation of any
court or other governmental authority or any arbitrator known to such
counsel and applicable to any of Xxxxxxxx, Dormera, Balmedie and
Larlane; and
(v) the delivery by each of Xxxxxxxx, Dormera, Balmedie and
Larlane to the Company of certificates representing 81% of the issued
and outstanding capital stock of ERI pursuant to the ERI Acquisition
Agreement against payment therefor as provided therein, will convey
good and marketable title of such capital stock to the Company, free
and clear of all security interests, liens, encumbrances, equities,
claims or other defects.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of Harrison,
Purdie, Campbell, Burns, Xxxxxxxx, Dormera, Balmedie and Larlane and public
officials.
References to the Registration Statement and the Prospectus in this
paragraph (d) shall include any amendment or supplement thereto at the date of
such opinion.
(e) The Representatives shall have received an opinion, dated the Firm
Closing Date, of X.X. Xxxxxx & Company, counsel for ERI, to the effect that:
(i) ERI has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of all other
jurisdictions where, to the knowledge of such counsel, the ownership
or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified does
not amount to a material liability or disability to the Company and
its subsidiaries, taken as a whole;
(ii) ERI has corporate power to own or lease its properties
and conduct its business as described in the Registration Statement
and the Prospectus;
(iii) the issued shares of capital stock of ERI have been
duly authorized and validly issued, are fully paid and nonassessable
and, except for directors' qualifying shares (if any) and as otherwise
set forth in the Prospectus, are owned of record by the Company free
and clear of any perfected security interests or, to the best
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims;
(iv) no legal or governmental proceedings are pending to
which ERI is a party or to which the property of ERI is subject that
are required to be described in the
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25
Registration Statement or the Prospectus and are not described
therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against ERI or with respect to any
of its properties;
(v) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument, known
to such counsel, to which ERI is a party or by which ERI or any of its
properties are bound, which conflict, breach, violation or default
could reasonably be expected to have a material adverse effect on the
Company and its subsidiaries taken as a whole (other than conflicts,
breaches, violations or defaults that have been waived by the other
party thereto or conflicts, breaches, violations or defaults under
agreements governing or otherwise relating to indebtedness of the
Company or its subsidiaries that the Company has represented will be
repaid on or promptly after the Firm Closing Date from the proceeds of
the sale of the Securities by the Company), or the charter documents
or by-laws of ERI, or any statute or any judgment, decree, order, rule
or regulation of any court or other governmental authority or any
arbitrator known to such counsel and applicable to ERI; and
(vi) the delivery by each of Xxxxxxxx, Dormera, Balmedie and
Larlane to the Company of certificates representing 81% of the issued
and outstanding capital stock of ERI pursuant to the ERI Acquisition
Agreement against payment therefor as provided therein, will convey
good and marketable title of such capital stock to the Company, free
and clear of all security interests, liens, encumbrances, equities,
claims or other defects.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of ERI and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (e) shall include any amendment or supplement thereto at the date of
such opinion.
(f) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxxx & Xxxxxxx, counsel for Exploration Holdings Ltd. and
Horizon Exploration Ltd. (the "U.K. Subsidiaries") to the effect that:
(i) the U.K. Subsidiaries have been duly organized and are
validly existing as corporations in good standing under the laws of
their respective jurisdictions of incorporation and are duly qualified
to transact business as foreign corporations and are in good standing
under the laws of all other jurisdictions where, to the knowledge of
such counsel, the ownership or leasing of their respective properties
or the conduct of their respective businesses requires such
qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and its
subsidiaries, taken as a whole;
(ii) each of the U.K Subsidiaries has corporate power to own
or lease their respective properties and conduct their respective
businesses as described in the Registration Statement and the
Prospectus;
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(iii) the issued shares of capital stock of each of the U.K.
Subsidiaries has been duly authorized and validly issued, are fully
paid and nonassessable and, except for directors' qualifying shares
(if any) and as otherwise set forth in the Prospectus, are owned
beneficially by ERI, in the case of Exploration Holdings Ltd., and by
Exploration Holdings Ltd., in the case of Horizon Exploration Ltd.,
free and clear of any perfected security interests or, to the best
knowledge of such counsel, any other security interests, liens,
encumbrances, equities or claims;
(iv) no legal or governmental proceedings are pending to
which the U.K. Subsidiaries is a party or to which the property of the
U.K. Subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not described
therein, and, to the best knowledge of such counsel, no such
proceedings have been threatened against the U.K. Subsidiaries or with
respect to any of their respective properties;
(v) the issuance, offering and sale of the Securities to the
Underwriters by the Company pursuant to this Agreement, the compliance
by the Company with the other provisions of this Agreement and the
consummation of the other transactions herein contemplated do not (A)
conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, lease or other agreement or instrument, known
to such counsel, to which the U.K. Subsidiaries are a party or by
which the U.K. Subsidiaries or any of their respective properties are
bound, which conflict, breach, violation or default could reasonably
be expected to have a material adverse effect on the Company and its
subsidiaries taken as a whole (other than conflicts, breaches,
violations or defaults that have been waived by the other party
thereto or conflicts, breaches, violations or defaults under
agreements governing or otherwise relating to indebtedness of the
Company or its subsidiaries that the Company has represented will be
repaid on or promptly after the Firm Closing Date from the proceeds of
the sale of the Securities by the Company), or the charter documents
or by-laws of the U.K. Subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to
the U.K. Subsidiaries;
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the U.K. Subsidiaries and public officials.
References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such opinion.
(g) The Representatives shall have received an opinion, dated the Firm
Closing Date, of Xxxxx & Wood LLP, counsel for the Underwriters, with respect
to the issuance and sale of the Firm Securities, the Registration Statement and
the Prospectus, and such other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass upon such matters. In rendering such opinion, such counsel may rely as to
all matters of Texas law upon the opinion of Gardere Xxxxx Xxxxxx & Xxxxx,
L.L.P referred to in paragraph (b) above.
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(h) Prior to or concurrent with the Firm Closing Date, each condition
to the closing contemplated by the ERI Acquisition Agreement shall have been
satisfied or waived. There shall exist at and as of the Firm Closing Date no
conditions that would constitute a default (or an event that with notice or
lapse of time, or both, would constitute a default) under the ERI Acquisition
Agreement. Prior to or concurrent with the Firm Closing Date, (i) the Company
shall have consummated the ERI Acquisition pursuant to the ERI Acquisition
Agreement and on terms that conform to the description thereof in the
Registration Statement and the Prospectus and (ii) ERI, EHL and the Horizon
Companies shall be wholly-owned subsidiaries of the Company; and the Company
shall have delivered to the Representatives evidence, in form and substance
satisfactory to the Representatives, that the conditions specified in this
paragraph shall have been satisfied.
(i) Upon consummation of the ERI Acquisition, the Warrant Certificate
to purchase 16,665 ordinary shares of ERI issued to Seitel dated July 3, 1996;
the Warrant Certificate to purchase 5,555 ordinary shares of ERI issued to
Xxxxxxxx, dated July 3, 1996; the Warrant Certificate to purchase 5,555
ordinary shares of ERI issued to Xxxxxx, dated July 3, 1996; the Warrant
Certificate to purchase 5,555 ordinary shares of ERI issued to Xxxxxxxx dated
July 3, 1996; and the Shareholders Agreement among ERI, Seitel, Oliveira,
Harrison, Dormera, Xxxxxx, Balmedie, Xxxxxxxx, Xxxxxxx, and Xxxxx, dated July
3, 1996; (collectively, the "Terminated Agreements") will be terminated, will
no longer be in force and effect, and the parties to the Terminated Agreements
will have executed waivers relinquishing and forfeiting any and all rights
granted under the Terminated Agreements.
(j) The Representatives shall have received from Xxxxxx Xxxxxxxx LLP a
letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect
that:
(i) they are independent accountants with respect to the
Company and its consolidated subsidiaries within the meaning of the
Act and the applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules and pro forma financial statements examined
by them and included in the Registration Statement and the Prospectus
comply in form in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations;
(iii) on the basis of a reading of the latest available
interim unaudited consolidated condensed financial statements of the
Company and its consolidated subsidiaries, carrying out certain
specified procedures (which do not constitute an examination made in
accordance with generally accepted auditing standards) that would not
necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (iii), a reading of the minute
books of the stockholders, the board of directors and any committees
thereof of the Company and each of its consolidated subsidiaries, and
inquiries of certain officials of the Company and its consolidated
subsidiaries who have responsibility for financial and accounting
matters, nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated condensed financial statements
of the Company and its consolidated subsidiaries included in the
Registration Statement and the Prospectus do not comply in form in all
material respects with the applicable accounting requirements of
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28
the Act and the related published rules and regulations thereunder or
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
consolidated financial statements included in the Registration
Statement and the Prospectus; and
(B) at a specific date not more than five business days prior
to the date of such letter, there were any changes in the capital
stock or long-term debt of the Company and its consolidated
subsidiaries or any decreases in net current assets or stockholders'
equity of the Company and its consolidated subsidiaries, in each case
compared with amounts shown on the [insert date of the most recent
consolidated (condensed) balance sheet] [unaudited] consolidated
[condensed] balance sheet included in the Registration Statement and
the Prospectus, or for the period from [insert date one day after the
date inserted above] to such specified date there were any decreases,
as compared with the corresponding period in the preceding year, in
sales, net revenues, net income before income taxes or total or per
share amounts of net income of the Company and its consolidated
subsidiaries, except in all instances for changes, decreases or
increases set forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records of
the Company and its consolidated subsidiaries and are included in the
Registration Statement and the Prospectus, and have compared such amounts,
percentages and financial information with such records of the Company and its
consolidated subsidiaries and with information derived from such records and
have found them to be in agreement, excluding any questions of legal
interpretation;
(v) on the basis of a reading of the unaudited pro forma
consolidated condensed financial statements included in the Registration
Statement and the Prospectus, carrying out certain specified procedures that
would not necessarily reveal matters of significance with respect to the
comments set forth in this paragraph (v), inquiries of certain officials of the
Company and its consolidated subsidiaries who have responsibility for financial
and accounting matters and proving the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the unaudited pro
forma consolidated condensed financial statements, nothing came to their
attention that caused them to believe that the unaudited pro forma consolidated
condensed financial statements do not comply in form in all material respects
with the applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the historical
amounts in the compilation of such statements.
In the event that the letter referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letter shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (j) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
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(k) The Representatives shall have received from KPMG, a letter or
letters dated, respectively, the date hereof and the Firm Closing Date, in form
and substance satisfactory to the Representatives, to the effect that:
(i) they are independent accountants with respect to ERI and
its consolidated subsidiaries within the meaning of the Act and the
applicable rules and regulations thereunder;
(ii) in their opinion, the audited consolidated financial
statements and schedules examined by them and included in the
Registration Statement and the Prospectus with respect to ERI and its
consolidated subsidiaries comply in form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations;
(iii) on the basis of a reading of the latest available
interim unaudited consolidated condensed financial statements of ERI
and its consolidated subsidiaries, carrying out certain specified
procedures (which do not constitute an examination made in accordance
with generally accepted auditing standards) that would not necessarily
reveal matters of significance with respect to the comments set forth
in this paragraph (iii), a reading of the minute books of the
stockholders, the board of directors and any committees thereof of ERI
and each of its consolidated subsidiaries, and inquiries of certain
officials of ERI and its consolidated subsidiaries who have
responsibility for financial and accounting matters, nothing came to
their attention that caused them to believe that:
(A) the unaudited consolidated condensed financial statements
of ERI and its consolidated subsidiaries included in the Registration
Statement and the Prospectus do not comply in form in all material
respects with the applicable accounting requirements of the Act and
the related published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement and the
Prospectus; and
(B) at a specific date not more than five business days prior
to the date of such letter, there were any changes in the capital
stock or long-term debt of ERI and its consolidated subsidiaries or
any decreases in net current assets or stockholders' equity of ERI and
its consolidated subsidiaries, in each case compared with amounts
shown on the [insert date of the most recent consolidated (condensed)
balance sheet] [unaudited] consolidated [condensed] balance sheet
included in the Registration Statement and the Prospectus, or for the
period from [insert date one day after the date inserted above] to
such specified date there were any decreases, as compared with the
corresponding period in the preceding year, in sales, net revenues,
net income before income taxes or total or per share amounts of net
income of ERI and its consolidated subsidiaries, except in all
instances for changes, decreases or increases set forth in such
letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting
records of ERI and its consolidated subsidiaries and are included in
the Registration Statement and the Prospectus, and have compared such
amounts, percentages and financial information with such records of ERI
and its consolidated subsidiaries and with
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information derived from such records and have found them to be in agreement,
excluding any questions of legal interpretation.
In the event that the letter referred to above set forth any such
changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that (A) such letter shall be accompanied by a
written explanation of ERI as to the significance thereof, unless the
Representatives deem such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives,
make it impractical or inadvisable to proceed with the purchase and delivery of
the Securities as contemplated by the Registration Statement, as amended as of
the date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (k) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(l) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of the Company to the effect that:
(i) the representations and warranties of the Company in this
Agreement are true and correct as if made on and as of the Firm
Closing Date; the Registration Statement, as amended as of the Firm
Closing Date, does not include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented
as of the Firm Closing Date, does not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company has
performed all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Firm Closing
Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any amendment thereto has been issued, and
no proceedings for that purpose have been instituted or threatened or,
to the best of the Company's knowledge, are contemplated by the
Commission; and
(iii) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with their respective businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any
legal or governmental proceeding, and there has not been any material
adverse change, or any development involving a prospective material
adverse change, in the condition (financial or otherwise), management,
business prospects, net worth or results of operations of the Company
or any of its subsidiaries, except in each case as described in or
contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).
(m) The Representatives shall have received a certificate, dated the
Firm Closing Date, of the principal executive officer and the principal
financial or accounting officer of each Selling Securityholder to the effect
that:
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(i) the representations and warranties of such Selling
Securityholder in this Agreement are true and correct as if made on
and as of the Closing Date;
(ii) to the extent that any statements or omissions are made
in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by
such Selling Securityholder specifically for use therein, the
Registration Statement, as amended as of the Closing Date, does not
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading,
and the Prospectus, as amended or supplements as of the Closing Date,
does not include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and
(iii) such Selling Securityholder has performed all covenants
and agreements on its part to be performed or satisfied at or prior to
the Firm Closing Date.
(n) The Representatives shall have received from each person who is a
director, officer or stockholder of the Company an agreement to the effect that
such person will not, directly or indirectly, without the prior written consent
of Prudential Securities Incorporated, on behalf of the Underwriters, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of an option to purchase or other sale or disposition)
of any shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, shares of Common Stock for a period of 180
days after the date of this Agreement.
(o) On or before the Firm Closing Date, the Representatives and
counsel for the Underwriters shall have received such further certificates,
documents or other information as they may have reasonably requested from the
Company.
(p) Prior to the commencement of the offering of the Securities, the
Securities shall have been included for trading on the Nasdaq National Market.
All opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory in all material respects to the Representatives and
counsel for the Underwriters. The Company shall furnish to the Representatives
such conformed copies of such opinions, certificates, letters and documents in
such quantities as the Representatives and counsel for the Underwriters shall
reasonably request.
The respective obligations of the several Underwriters to purchase and
pay for any Option Securities shall be subject, in their discretion, to each of
the foregoing conditions to purchase the Firm Securities, except that all
references to the Firm Securities and the Firm Closing Date shall be deemed to
refer to such Option Securities and the related Option Closing Date,
respectively.
10. Indemnification and Contribution. (a) The Company, EHI,
Seitel and, subject to Section 10(f) below, Xxxxxxxx, Dormera, Xxxxxxxx and
Xxxxxx, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act,
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against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter or such controlling person may become subject under the Act,
the Exchange Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company, EHI, Seitel, Oliveira, Dormera, Xxxxxxxx and Xxxxxx in
Section 2 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto or (B) any application or other
document, or any amendment or supplement thereto, executed by the
Company or based upon written information furnished by or on behalf of
the Company filed in any jurisdiction in order to qualify the
Securities under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange
(each an "Application"),
(iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto,
or any Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
(iv) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials used in
connection with the marketing of the Securities, including without
limitation, slides, videos, films and tape recordings,
and will reimburse, as incurred, each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such Underwriter
or such controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and EHI,
Seitel, Oliveira, Dormera, Xxxxxxxx and Xxxxxx will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any untrue statement or alleged untrue statement or omission
or alleged omission made in such Registration Statement or any amendment
thereto, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or any Application in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through the
Representatives specifically for use therein; and provided, further that the
Company, EHI, Seitel, Oliveira, Dormera, Xxxxxxxx and Xxxxxx will not be liable
to any Underwriter or any person controlling such Underwriter with respect to
any such untrue statement or omission made in any Preliminary Prospectus that
is corrected in the Prospectus (or any amendment or supplement thereto) if the
person asserting any such loss, claim, damage or liability purchased Securities
from such Underwriter but was not sent or given a copy of the Prospectus (as
amended or supplemented) at or prior to the written confirmation of the sale of
such Securities to such person in any case where such delivery of the
Prospectus (as amended or supplemented) is required by the Act, unless such
failure to deliver the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Sections 6(d) and (e) of this Agreement. This
indemnity agreement will be in addition to any liability which the Company and
EHI, Seitel, Oliveira, Dormera, Xxxxxxxx and Xxxxxx may otherwise have. Neither
the Company nor EHI, Seitel, Oliveira, Dormera, Xxxxxxxx and Xxxxxx will,
without the prior written consent of the Underwriter
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or Underwriters purchasing, in the aggregate, more than fifty percent (50%) of
the Securities, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not any such Underwriter or
any person who controls any such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release of all of the Underwriters and such controlling persons
from all liability arising out of such claim, action, suit or proceeding.
(b) Subject to Section 10(f) below, each of the Selling
Securityholders, Seitel, Harrison, Purdie, Xxxxxxxx and Xxxxx, severally and
not jointly, agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Registration Statement or any
amendment thereto, each Underwriter and each person who controls the Company or
any Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which the Company, any such director, officer, such Underwriter or
any such controlling person may become subject under the Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement made by the Selling Securityholders,
Seitel, Harrison, Purdie, Xxxxxxxx or Xxxxx in Section 3 of this Agreement,
(ii) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto, or (iii) the omission or the alleged omission to state therein a
material fact required to be stated in the Registration Statement or any
amendment thereto, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with the written information
furnished to the Company by the Selling Securityholders, Seitel, Harrison,
Purdie, Xxxxxxxx or Xxxxx. Subject to the limitations set forth in the
immediately preceding sentence, the Selling Securityholders, Seitel, Harrison,
Purdie, Xxxxxxxx or Xxxxx, severally and not jointly, will reimburse, as
incurred, any legal or other expenses reasonably incurred by the Company, any
such director, officer, such Underwriter or any such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or any action in respect thereof. This indemnity agreement will be in
addition to any liability which the Selling Securityholders, Seitel, Harrison,
Purdie, Xxxxxxxx or Xxxxx may otherwise have. The Selling Securityholders,
Seitel, Harrison, Purdie, Xxxxxxxx or Xxxxx will not, without the prior written
consent of the Underwriter or Underwriters purchasing, in the aggregate, more
than fifty percent (50%) of the Securities, settle or compromise or consent to
the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not any such Underwriter or any person who controls any such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
is a party to such claim, action, suit or proceeding), unless such settlement,
compromise or consent includes an unconditional release of all of the
Underwriters and such controlling persons from all liability arising out of
such claim, action, suit or proceeding.
(c) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, the Selling Securityholders and each person,
if any, who controls the Company or the Selling Securityholders within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act
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against any losses, claims, damages or liabilities to which the Company, any
such director or officer of the Company, the Selling Securityholders or any
such controlling person of the Company or the Selling Securityholders may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (i) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in the
Registration Statement or any amendment thereto, any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or any Application or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein: and,
subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company, any such director, officer or controlling person or the Selling
Securityholders in connection with investigating or defending any such loss,
claim, damage, liability or any action in respect thereof. This indemnity
agreement will be in addition to any liability which such Underwriter may
otherwise have.
(d) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 10, notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 10. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided, however, that if the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 10 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 10, representing the indemnified parties under
such paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel satisfactory to the
indemnified party or (iii) the indemnifying party has authorized the employment
of counsel for the
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indemnified party at the expense of the indemnifying party. After such notice
from the indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the indemnifying
party.
(e) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 10 is unavailable or insufficient, for
any reason, to hold harmless an indemnified party in respect of any losses,
claims, damages or liabilities (or actions in respect thereof), each
indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect (i) the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or alleged omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Securityholders on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the offering
(before deducting expenses) received by the Company and the Selling
Securityholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, the
Selling Securityholders or the Underwriters, the parties' relative intents,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances. The Company, the Selling Securityholders and the
Underwriters agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other
method of allocation that does not take into account the equitable
considerations referred to above in this paragraph (e). Notwithstanding any
other provision of this paragraph (e), no Underwriter shall be obligated to
make contributions hereunder that in the aggregate exceed the total public
offering price of the Securities purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages that such Underwriter has
otherwise been required to pay in respect of the same or any substantially
similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section II (f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute hereunder are several in proportion to
their respective underwriting obligations and not joint, and contributions
among Underwriters shall be governed by the provisions of the Prudential
Securities Incorporated Master Agreement Among Underwriters. For purposes of
this paragraph (e), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement and
each person, if any, who controls the Company and the Selling Securityholders
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company or the Selling
Securityholders.
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(f) The liability of each of Xxxxxxxx, Dormera, Balmedie and Larlane
under this Section 10 shall not exceed an amount equal to the initial public
offering price of the Securities sold by each of Xxxxxxxx, Dormera, Balmedie,
and Larlane to the Underwriters, and the liability of each of the controlling
stockholders of such entities (Harrison, Purdie, Xxxxxxxx and Xxxxx,
respectively) shall be limited as set forth immediately above in this Section
10(f).
11. Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Firm Securities or Option Securities hereunder
and the aggregate number of such Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all
of the Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representatives for the purchase of such
Securities by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case
may be, the other Underwriters shall be obligated severally in proportion to
their respective commitments hereunder to purchase the Firm Securities or Option
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of
Firm Securities or Option Securities, as the case may be, to be purchased by all
of the Underwriters at such time hereunder, and if arrangements satisfactory to
the Representatives are not made within 36 hours after such default for the
purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to
which such default occurs, this Agreement will terminate without liability on
the part of any non-defaulting Underwriter or the Company other than as provided
in Section 12 hereof. In the event of any default by one or more Underwriters as
described in this Section 11, the Representatives shall have the right to
postpone the Firm Closing Date or the Option Closing Date, as the case may be,
established as provided in Section 4 hereof for not more than seven business
days in order that any necessary changes may be made in the arrangements or
documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 11. Nothing herein shall relieve any defaulting Underwriter from
liability for its default.
12. Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, Seitel
and the Selling Securityholders, their officers and the several Underwriters set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, any of its officers or
directors, any Underwriter or any controlling person referred to in Section 10
hereof and (ii) delivery of and payment for the Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 8
and 10 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.
13. Termination. (a) This Agreement may be terminated with
respect to the Firm Securities or any Option Securities in the sole discretion
of the Representatives by notice to the Company and the Selling Securityholders
given prior to the Firm Closing Date or the related Option Closing Date,
respectively, in the event that the Company or the Selling Securityholders shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions on
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its part to be performed or satisfied hereunder at or prior thereto or, if at
or prior to the Firm Closing Date or such Option Closing Date, respectively,
(i) the Company or any of its subsidiaries shall have, in the
sole judgment of the Representatives, sustained any material loss or
interference with their respective businesses or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any labor dispute or any legal or governmental
proceeding or there shall have been any material adverse change, or
any development involving a prospective material adverse change
(including without limitation a change in management or control of the
Company), in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except in each case as described in or contemplated by
the Prospectus (exclusive of any amendment or supplement thereto);
(ii) trading in the Common Stock shall have been suspended by
the Commission or the Nasdaq National Market or trading in securities
generally on the New York Stock Exchange or Nasdaq National Market
shall have been suspended or minimum or maximum prices shall have been
established on either such exchange or market system;
(iii) a banking moratorium shall have been declared by New
York or United States authorities; or
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or (C) any other calamity or crisis or
material adverse change in general economic, political or financial
conditions having an effect on the U.S. financial markets that, in the
sole judgment of the Representatives, makes it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement, as amended
as of the date hereof.
(b) Termination of this Agreement pursuant to this Section 13 shall be
without liability of any party to any other party except as provided in Section
12 hereof.
14. Information Supplied by Underwriters. The statements set
forth in the last paragraph on the front cover page, in the stabilization legend
on the inside front cover page and in the table in the first full paragraph and
the third and seventh full paragraphs under the heading "Underwriting" in any
Preliminary Prospectus or the Prospectus (to the extent such statements relate
to the Underwriters) constitute the only information furnished by any
Underwriter through the Representatives to the Company for the purposes of
Sections 2(b) and 10 hereof. The Underwriters confirm that such statements (to
such extent) are correct.
15. Notices. All communications hereunder shall be in writing
and, if sent to any of the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission and confirmed in writing to Prudential
Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Equity Transactions Group (facsimile: (000) 000-0000); if sent to
the Company, shall be delivered or sent by mail, telex or facsimile
transmission and confirmed in writing to the Company at 00 Xxxxx Xxxxxx Xxxx,
0xx Xxxxx Xxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxx Xxxxxxxxx,
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President (facsimile: (000) 000-0000), if sent to EHI or Seitel, shall be
delivered or sent by mail, telex or facsimile transmission and confirmed in
writing to EHI or Seitel, as the case may be, at 00 Xxxxx Xxxxxx Xxxx, 0xx
Xxxxx Xxxx, Xxxxxxx, Xxxxx 00000, Attention: Xxxx X. Frame, President
(facsimile: (000) 000-0000) and if sent to any other Selling Securityholders,
shall be delivered or sent by mail, telex or facsimile transmission and
confirmed in writing to such Selling Securityholder at 0 Xxxxxxxx Xxxx,
Xxxxxxxxx, Xxxx XX00 0XX, England, Attention: Xx. Xxxxxx X. Xxxxxxxx
(facsimile: 011-44-1732-742746).
16. Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Company, Seitel, the Selling
Securityholders, Harrison, Purdie, Xxxxxxxx and Xxxxx and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities contained in Section 10(a) of this Agreement shall also be for
the benefit of any person or persons who control any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, (ii) the
indemnities of the Underwriters contained in Section 10(c) of this Agreement
shall also be for the benefit of the directors of the Company, the officers of
the Company who have signed the Registration Statement and any person or persons
who control the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and shall also be for the benefit of any person or
persons who control the Selling Securityholders within the meaning of Section 15
of the Act or Section 20 of the Exchange Act and (iii) the indemnities contained
in Section 10(b) of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement or any amendment thereto and any person or persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act. No purchaser of Securities from any Underwriter shall be
deemed a successor because of such purchase.
17. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
18. Consent to Jurisdiction and Service of Process. All judicial
proceedings arising out of or relating to this Agreement may be brought in any
state or federal court of competent jurisdiction in the State of New York, and
by execution and delivery of this Agreement, the Company, Seitel and the
Selling Securityholders accept for themselves and in connection with their
properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts and waive any defense of forum non conveniens and irrevocably
agree to be bound by any judgment rendered thereby in connection with this
Agreement. Each Selling Securityholder (except EHI, which designates and
appoints Seitel) designates and appoints Xx. Xxxxxx X. Xxxxxxxx, and such other
persons as may hereafter be selected by the Selling Securityholders irrevocably
agreeing in writing to so serve, as their agent to receive on their behalf
service of all process in any such proceedings in any such court, such service
being hereby acknowledged by
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the Selling Securityholders to be effective and binding service in every
respect. A copy of any such process so served shall be mailed by registered
mail to the Selling Securityholders at their address provided in Section 15
hereof; provided, however, that, unless otherwise provided by applicable law,
any failure to mail such copy shall not affect the validity of service of such
process. If any agent appointed by the Selling Securityholders refuses to
accept service, the Selling Securityholders hereby agree that service of
process sufficient for personal jurisdiction in any action against the Selling
Securityholders in the State of New York may be made by registered or certified
mail, return receipt requested, to the Selling Securityholders at their address
provided in Section 15 hereof, and the Selling Securityholders hereby
acknowledge that such service shall be effective and binding in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Underwriter to bring
proceedings against the Selling Securityholders in the courts of any other
jurisdiction.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute an agreement binding the Company and
each of the several Underwriters.
Very truly yours,
EAGLE GEOPHYSICAL, INC.
By /s/ XXX XXXXXXXXX
---------------------------------
Name: Xxx Xxxxxxxxx
Title: President
/s/ XXXXXX X. XXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ XXXXXX XXXXXX
------------------------------------
Xxxxxx Xxxxxx
/s/ XXXX A.M. XXXXXXXX
------------------------------------
Xxxx A.M. Xxxxxxxx
/s/ XXXXX XXXXX
------------------------------------
Xxxxx Xxxxx
SEITEL, INC.
By /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X Xxxxxx
Title: Sr. Vice President
SELLING SECURITYHOLDERS:
Xxxxxxxx Limited
Dormera Limited
Balmedie Limited
Larlane Limited
By: Attorneys-in-Fact
/s/ XXX X. XXXXXXXXX
------------------------------------
Xxx X. Xxxxxxxx
/s/ XXXXXX X. XXXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxxx
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The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
PRUDENTIAL SECURITIES INCORPORATED
XXXXXXX & COMPANY INTERNATIONAL
By PRUDENTIAL SECURITIES INCORPORATED
By /s/ XXXX XXXXXX XXXXXX
--------------------------------
Name: Xxxx-Xxxxxx Canfin
Title: Managing Director
For itself and on behalf of the Representatives and the several Underwriters.
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SCHEDULE 1
SELLING SECURITYHOLDERS
Firm Option
Selling Securities to be Securities to be
Securityholder Wholly-Owned By Offered and Sold Offered and Sold
------------------ ------------------- ---------------- ----------------
EHI Holdings, Inc. Seitel,Inc. 1,880,000 100,000
Xxxxxxxx Limited Xxxxxx X. Xxxxxxxx -- 56,400
Dormera Limited Xxxxxx Xxxxxx -- 56,400
Balmedie Limited Xxxx A.M. Xxxxxxxx -- 56,400
Larlane Limited Xxxxx Xxxxx -- 10,800
S-1
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SCHEDULE 2
UNDERWRITERS
Number of Firm
Securities to
Underwriter be Purchased
----------- --------------
Prudential Securities Incorporated.................... 1,713,750
Xxxxxxx & Company International....................... 1,713,750
Bear, Xxxxxxx & Co. Inc. ............................. 90,000
Alex. Xxxxx & Sons Incorporated....................... 90,000
Credit Suisse First Boston Corporation................ 90,000
Xxxxxx, Read & Co. Inc. .............................. 90,000
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation............................. 90,000
X. X. Xxxxxxx & Sons, Inc. ........................... 90,000
Xxxxxxx, Xxxxx & Co. ................................. 90,000
Howard, Weil, Labouisse,
Xxxxxxxxxx Incorporated............................ 90,000
Xxxxxxxxx & Company, Inc. ............................ 90,000
Xxxxxx Brothers Inc .................................. 90,000
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx incorporated................................. 90,000
X. X. Xxxxxx Securities Inc. ......................... 90,000
Xxxxxx Xxxxxxx & Co. Incorporated..................... 90,000
Xxxxxxxxxxx & Co., Inc. .............................. 90,000
PaineWebber Incorporated.............................. 90,000
Salomon Brothers Inc ................................. 90,000
Xxxxx Xxxxxx Inc. .................................... 90,000
X.X. Xxxxxxxx & Co. .................................. 45,000
Xxxxxxx, Xxxxxx & Co. ................................ 45,000
Xxxxxxxxxx & Co. Inc. ................................ 45,000
First Albany Corporation.............................. 45,000
Xxxxxx Xxxx LLC ...................................... 45,000
XxXxxxxx & Company Securities, Inc. .................. 45,000
Xxxxxx Xxxxxx & Company, Inc. ........................ 45,000
Xxxxxx Xxxxxxx & Co. ................................. 45,000
Principal Financial Securities, Inc. ................. 45,000
Xxxxxxxx Xxxxxx Refsnes, Inc. ........................ 45,000
Xxxxxxx Xxxxx & Associates, Inc. ..................... 45,000
The Xxxxxxxx-Xxxxxxxx Company, Inc. .................. 45,000
Sutro & Co. Incorporated ............................. 45,000
Xxxxxx Xxxxxxx Incorporated .......................... 45,000
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Number of Firm
Securities to
Underwriter be Purchased
----------- --------------
Xxxxxx X. Xxxx & Company ............................. 22,500
Xxxxxxx Securities Inc. .............................. 22,500
Xxxxxxx, Xxxxxx Inc. ................................. 22,500
Xxxxxx Xxxx & Xxxxxxxx Inc. .......................... 22,500
Xxxx Xxxxxxxxx Xxxxxxxx & Co. ........................ 22,500
Xxxxxx X. Xxxxx & Co., L.P. .......................... 22,500
Xxxxxxx & Company Inc. ............................... 22,500
Xxxxxx & Xxxxxxx, Inc. ............................... 22,500
The Xxxxxxx Companies Incorporated.................... 22,500
Southcoast Capital Corporation........................ 22,500
Southwest Securities, Inc. ........................... 22,500
Xxx Xxxxxx & Company.................................. 22,500
The Xxxxxxxx Capital Group, L.P. ..................... 22,500
---------
Total ................................. 5,880,000
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SCHEDULE 3
SUBSIDIARIES
Name Jurisdiction of Incorporation
---- -----------------------------
Eagle Geophysical Onshore, Inc. Delaware
Energy Research International Cayman Islands
Exploration Holdings Ltd. England
Eagle Geophysical Offshore, Inc.
(formerly known as Horizon Seismic, Inc.) Texas
Horizon Exploration Ltd. England
S-4
