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EXHIBIT 10.2
PURCHASE COMMITMENT AGREEMENT
This Purchase Commitment Agreement (this "Agreement") dated as of
February 27, 1998, is by and between Xxxxxx Offshore, Inc. ("Offshore"), a
Delaware corporation, and Xxxxxx Brothers, LLC ("Xxxxxx Brothers"), a Delaware
limited liability company. Offshore and Xxxxxx Brothers may be referred to
herein collectively as the "Parties" or individually as a "Party."
RECITALS
WHEREAS, DeepTech International Inc. ("DeepTech"), El Paso Natural Gas
Company ("El Paso") and El Paso Acquisition Company ("EPAC") have entered into
an Agreement and Plan of Merger (the "Merger Agreement"), dated as of even date
herewith, pursuant to which it is contemplated that DeepTech shall be merged
with either El Paso or EPAC;
WHEREAS, in connection with the transactions contemplated by the
Merger Agreement, Offshore, DeepTech, DeepFlex Production Services, Inc.
("DeepFlex") and El Paso have entered into a Contribution and Distribution
Agreement (the "Contribution Agreement"), dated as of even date herewith,
pursuant to which DeepTech will distribute to the holders of DeepTech common
stock one right (a "Right," collectively, the "Rights") for each share of
DeepTech common stock held by such holder to acquire a proportionate share of
the Offshore Shares (as defined in the Contribution Agreement) held by DeepTech
(the "Rights Offering");
WHEREAS, pursuant to a Standby Agreement (the "Standby Agreement"),
dated as of even date herewith, by and between Xxxxxx X. Xxxxxx, DeepTech,
Xxxxxx Brothers, Offshore and El Paso, dated as of even date herewith, Xxxxxx
Brothers has committed to purchase from DeepTech that number of Remaining
Shares (as defined in the Standby Agreement), if any, which is necessary to
provide DeepTech with net proceeds from the Rights Offering at least equal to
$75 million; and
WHEREAS, Offshore desires to induce Xxxxxx Brothers to enter into the
Standby Agreement by entering into this Agreement to provide consideration to
Xxxxxx Brothers for Xxxxxx Brothers' commitment to purchase such Remaining
Shares.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein and other good and valuable
consideration (the receipt and sufficiency of which are hereby confirmed and
acknowledged), the Parties hereto hereby stipulate and agree as follows:
1. Purchase Commitment Fee. Contemporaneous with the closing of the
Rights Offering, Offshore agrees to make a payment (the "Consideration") in an
amount equal to the product of (i) 23,076,923 and (ii) the Rights Price (herein
defined). For purposes of this Agreement, the "Rights Price" shall be, with
respect to the date of the closing of the Rights
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Offering, (a) if prior to July 1, 1998, $.25, (b) if on or after July 1, 1998
through July 31, 1998, $.275, (c) if on or after August 1, 1998 through August
31, 1998, $.30 or (d) if on or after September 1, 1998, $.325 (the "Fee
Amount"). Offshore, in its sole discretion, may elect to pay the Consideration
in cash (in immediately available federal funds) (the "Cash Consideration"),
common stock of Offshore (the "Stock") or any combination thereof. The number
of shares of Stock comprising the Consideration shall be equal to the quotient
of (1) the difference between the Fee Amount less the Cash Consideration,
divided by (2) the Stock Price (herein defined). The "Stock Price" shall be the
lower of (i) the closing price per share of the Stock on the trading day
immediately preceding the date of the closing of the Rights Offering or (ii)
the average closing price per share of Stock for the 10 trading day period
immediately preceding, and including, the trading day immediately preceding the
date of the closing of the Rights Offering.
2. Registration Rights. In addition to the Cash Consideration, Xxxxxx
Brothers shall receive from Offshore certain registration rights associated
with the Acquired Stock (the "Registration Rights") as follows:
(a) Demand Registration Rights
(i) Request for Registration. For five (5) years after the date
on which TIME acquires the Acquired Stock, any holder or group of
holders (each a "Holder" and collectively with Xxxxxx Brothers, the
"Holders") of Registrable Securities (herein defined) owning at
least a majority of the shares of Registrable Securities (herein
defined) may make a written request to Offshore for registration
(the "Demand Registration") under the Securities Act of 1933, as
amended from time to time (the "Securities Act") of each such share
of Registrable Securities until the earlier to occur of (i) the
date on which such share of Registrable Securities ceases to be a
Restricted Security (as defined herein) or (ii) the date on which a
Demand Registration is effected pursuant to this Section (the
"Registrable Securities") at any time. The Holders shall be
entitled to three (3) Demand Registrations, which include the right
to require Offshore maintain continuous or shelf registration
statements, with respect to the Registrable Securities, regardless
of the number of shares covered by such Registration; provided
that, if any of the shares that the Holders request to be included
in a Demand Registration is excluded from such Demand Registration
because of Section 2.(a)(iii) of this Agreement, such Holder shall
continue to have the right to a Demand Registration with respect to
such excluded shares. Any request for a Demand Registration must
specify (i) the number of shares of the issue of the Registrable
Securities proposed to be sold and (ii) the intended method of
disposition thereof. Restricted Security means each share evidenced
by any Acquired Stock until the earlier to occur of the date on
which (i) a registration statement covering such share has been
declared effective and it has been disposed of pursuant to such
effective registration statement, (ii) it is sold pursuant to Rule
144 (or any similar provisions then in force) under the Securities
Act, or (iii) it has been otherwise transferred by Xxxxxx Brothers
and Offshore has delivered new certificates or other evidences of
ownership for them not subject to any legal or other restriction
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on transfer under the Securities Act or under state securities laws
and not bearing a restrictive legend.
(ii) Effective Registration and Expenses. At the request of the
Holders of at least a majority of the Registrable Securities,
Offshore shall use all reasonable efforts to keep any Demand
Registration Statement continuously effective in order to permit
the prospectus forming part thereof to be usable by the Holders for
a period ending one year from the effective time of such
Registration Statement, or for such shorter period that will
terminate when all shares covered by the Registration Statement
have been sold pursuant to such Demand Registration Statement or
otherwise or cease to be outstanding. The offer and sale under any
such Demand Registration Statement or the obligation of Offshore to
file the Demand Registration Statement and to maintain its
effectiveness may be suspended for one or more periods of time not
exceeding 45 calendar days in the aggregate with respect to such
Demand Registration Statement if the Board of Directors of Offshore
shall have determined that the offering and sales under the Demand
Registration Statement, the filing of such Demand Registration
Statement or the maintenance of its effectiveness would require
disclosure of or would interfere in any material respect with any
material financing, acquisition, merger or other transaction
involving Offshore or any of its subsidiaries or would otherwise
require disclosure of nonpublic information that would materially
and adversely affect Offshore. A registration will not count as a
Demand Registration until it has become effective and, with respect
to a shelf registration, unless such registration remains effective
for the period requested not to exceed one year; provided, however,
that if a registration does not become effective solely because of
any act or omission on the part of any other Holder, such
registration shall nevertheless count as a Demand Registration. In
any registration initiated as a Demand Registration, Offshore will
pay all the Registration Expenses (as defined in Section 2(d)) in
connection therewith.
(iii) Priority on Demand Registrations. If the Holders of at
least a majority of shares of an issue of Registrable Securities to
be registered so elect, the offering of such issue of Registrable
Securities shall be in the form of an underwritten offering. In
such event, if the managing underwriter or underwriters of such
offering advise Offshore and the Holders in writing that, in their
opinion, the aggregate amount of Registrable Securities requested
to be included in such offering will materially and adversely
affect the success or offering price of such offering, Offshore
will include in such registration the aggregate amount of such
Registrable Securities which, in the opinion of such managing
underwriter or underwriters, can be sold without any such material
adverse effect. Such securities would then be allocated pro rata
among the Holders on the basis of the number of Registrable
Securities requested to be included in such registration.
(iv) Selection of Underwriters. If any Demand Registration is in
the form of an underwritten offering, Offshore will select and
obtain the investment banker or investment
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bankers and manager or managers that will administer the offering;
provided that such investment bankers and managers must be
reasonably satisfactory to Xxxxxx Brothers or, if Xxxxxx Brothers
is no longer a Holder, a majority-in-interest of the Holders.
(b) Piggyback Registration. For five years after the date on which
Xxxxxx Brothers acquires the Registrable Stock, if Offshore, at any
time proposes to file on its behalf and/or on behalf of any of its
security holders (the "Registered Security Holders") a registration
statement under the Securities Act on any form (other than a
registration statement on Form S-4 or S-8 or any similar or successor
form or any other registration statement relating to an exchange offer
or offering of securities solely to Offshore's existing security
holders or employees), it will give written notice to each Holder at
least twenty (20) days before the anticipated date of initial filing
with the Commission of such registration statement, which notice shall
set forth Offshore's intention to effect such a registration, the
class or series and number of equity securities proposed to be
registered and the intended method of disposition of the securities
proposed to be registered by Offshore. The notice shall offer to
include in such filing the aggregate number of shares of Registrable
Securities as such Holder may request. Nothing in this Section 2(b)
shall preclude Offshore from discontinuing the registration of its
securities being effected on its behalf under this Section 2(b) at any
time prior to the effective date of the registration relating thereto.
(c) Registration Procedures
(i) For Demand Registration. Offshore will use commercially
reasonable efforts to effect a Demand Registration requested by the
Holders pursuant to Section 2(a)(i) in accordance with the intended
method of disposition thereof as quickly as practicable. Such
efforts by Offshore shall include:
(A) preparing and filing with the Securities and Exchange
Commission (the "Commission"), not later than 60 days after receipt
of a request to file a Demand Registration, a registration
statement on any form that is available for the sale of such issue
of Registrable Securities by Offshore in accordance with the
intended method of distribution thereof and using commercially
reasonable efforts to cause such registration statement to become
effective reasonably promptly thereafter;
(B) preparing and filing with the Commission any amendments and
supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than one
year or such shorter period which will terminate when all
Registrable Securities covered by such registration statement have
been sold (but not before the expiration of the 90-day period
referred to in Section 4(3) of the Securities Act and Rule 174
thereunder, if applicable), and comply with the provisions of the
Securities Act with respect to the disposition of all securities
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covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(C) as soon as reasonably practicable, furnishing to the Holders
a copy of such registration statement as filed and each amendment
and supplement thereto (in each case including all exhibits
thereto), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as
the Holders may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holders;
(D) using commercially reasonable efforts to register or qualify
such Registrable Securities under such other securities or blue sky
laws of such appropriate jurisdictions and do any and all other
acts and things which may be reasonably necessary to enable the
Holders to consummate the disposition of the Registrable Securities
owned by such Holders in such jurisdictions; provided that Offshore
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify
but for this paragraph (D), (ii) subject itself to taxation in any
such jurisdiction or (iii) consent to general service of process in
any such jurisdiction;
(E) using commercially reasonable efforts to cause the
Registrable Securities covered by such registration statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and
operations of Offshore to enable the Holders to consummate the
disposition of such Registrable Securities;
(F) making available for inspection by any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other agent retained by
any such underwriter (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and
properties of Offshore (collectively, the "Records"), and cause
Offshore's officers, directors and employees to supply all
information reasonably requested by any such Inspector, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, in connection with such registration statement.
Records or other information which Offshore has determined, in good
faith, to be confidential and which they notify the Inspectors are
confidential shall not be disclosed by the Inspectors unless (i)
the disclosure of such Records or other information is required to
be disclosed pursuant to the Securities Act or is necessary to
avoid or correct a misstatement or omission in the registration
statement or (ii) the release of such Records or other information
is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction. Upon learning that disclosure of such
Records or other information is sought in a court of competent
jurisdiction, the Holder (including its transferees) agrees that it
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will give notice to Offshore and allow Offshore to undertake
appropriate action to prevent disclosure of the Records or other
information deemed confidential; and
(G) if required by applicable listing requirements, causing all
such Registrable Securities to be listed on each securities
exchange on which similar securities issued by Offshore are then
listed, provided that the applicable listing requirements are
satisfied.
Offshore may require each seller of Registrable Securities under
a Demand Registration to furnish to Offshore information regarding
the distribution of such securities as Offshore may from time to
time request.
(ii) For Piggyback Registration. If a Holder desires to have the
Registrable Securities registered under Section 2 of this
Agreement, such Holder shall advise Offshore in writing within
fifteen (15) days after the date of receipt of such offer from
Offshore, setting forth the amount of the Registrable Securities
for which registration is requested. Offshore shall thereupon
include in such filing the number of shares of Registrable
Securities for which registration is so requested, subject to the
next sentence, and shall use its best efforts to effect
registration of such shares of Registrable Securities under the
Securities Act. If the managing underwriter of a proposed public
offering shall advise Offshore in writing that, in its opinion, the
distribution of the Registrable Securities requested to be included
in the registration concurrently with the securities being
registered by Offshore or any Registered Security Holder would
materially and adversely affect the distribution of such securities
by Offshore or such Registered Security Holders, then the Holders
and the Registered Security Holders shall reduce the number of
securities intended to be distributed through such offering on a
pro rata basis.
(d) Registration Expenses. All expenses incident to Offshore's
performance of or compliance with this Agreement, including without
limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including fees and
disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities), rating agency fees, printing expenses,
messenger and delivery expenses, internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the fees and expenses incurred
in connection with the listing of the securities to be registered on
each securities exchange on which similar securities issued by
Offshore are then listed, and fees and disbursements of counsel for
Offshore and its independent certified public accountants, securities
acts liability insurance (if Offshore elects to obtain such
insurance), and the fees and expenses of any special experts retained
by Offshore in connection with such registration, fees and expenses of
other persons retained by Offshore (but not including any underwriting
discounts or commissions or transfer taxes attributable to the sale of
Registrable Securities) will be borne by Offshore (all such expenses
referred to herein as the "Registration Expenses").
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(e) Indemnification; Contribution
(i) Indemnification by Offshore. Offshore agrees to indemnify,
to the fullest extent permitted by law, each Holder, the
underwriters and each of their respective officers, directors and
agents and each person who controls each Holder (within the meaning
of the Securities Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue
statement of material fact contained in any registration statement,
prospectus or preliminary prospectus or any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in case of a
prospectus or preliminary prospectus, in the light of the
circumstances under which they were made) not misleading, except
insofar as the same are caused by or contained in any information
with respect to such Holder furnished in writing to Offshore by
such Holder expressly for use therein.
(ii) Indemnification by Holder of Registrable Securities. In
connection with any Demand Registration in which a Holder is
participating, each such Holder will furnish to Offshore in writing
such information with respect to such Holder as Offshore reasonably
requests for use in connection with any such registration statement
or prospectus and agrees to indemnify, to the extent permitted by
law, Offshore, the underwriters and each of their respective
directors and officers and each person who controls Offshore
(within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of a material fact or any omission or
alleged omission of a material fact required to be stated in the
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or necessary to make the
statements therein (in the case of a prospectus or preliminary
prospectus, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that
such untrue statement or omission is contained in any information
with respect to such Holder so furnished in writing by such Holder;
provided that no event shall any Holder be liable for any amount in
excess of the net proceeds received from such Holder's sale of its
shares of.
(iii) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder agrees to give prompt written
notice to the indemnifying party after the receipt by such person
of any written notice of the commencement of any action, suit,
proceeding or investigation or threat thereof made in writing for
which such person will claim indemnification or contribution
pursuant to this Agreement and, unless in the reasonable judgment
of such indemnified party a conflict of interest may exist between
such indemnified party and the indemnifying party with respect to
such claim, permit the indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to
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such indemnified party. Whether or not such defense is assumed by
the indemnifying party, the indemnifying party will not be subject
to any liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). No indemnifying
party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or
litigation. If the indemnifying party is not entitled to, or elects
not to, assume the defense of a claim, it will not be obligated to
pay the fees and expenses of more than one counsel with respect to
such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to
such claim, in which event the indemnifying party shall be
obligated to pay the fees and expenses of such additional counsel
or counsels.
(f) Participation in Underwritten Registrations. No Holder may
participate in any underwritten registration hereunder unless such
Holder (a) agrees to sell such Holder's securities on the basis
provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under
the terms of such underwriting arrangements.
(g) Rule 144. Offshore covenants that (i) it will file the reports
required to be filed by it under the Securities Act and the Securities
Exchange Act of 1934, as amended from time to time, and the rules and
regulations adopted by the Commission thereunder and (ii) take such
further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the Commission.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
XXXXXX BROTHERS, LLC
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Xxxxxx X. Xxxxxx
President
XXXXXX OFFSHORE, INC.
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Xxxxxx X. Xxxxxxx
Senior Vice President
