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EXHIBIT 4.1
GREY WOLF, INC.
AND THE
GUARANTORS
$75,000,000
8-7/8% Senior Notes due 2007, Series B
Purchase Agreement
May 5, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
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$75,000,000
8-7/8% Senior Notes due 2007, Series B
GREY WOLF, INC.
AND THE GUARANTORS
PURCHASE AGREEMENT
May 5, 1998
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
c/x Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
New York, New York 10172
Dear Sirs:
Grey Wolf, Inc., a Texas corporation (the "COMPANY"),
proposes to issue and sell to Donaldson,
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Lufkin & Xxxxxxxx Securities Corporation ("DLJ"), Xxxxxx Brothers Inc. and
Prudential Securities Incorporated (each, an "INITIAL PURCHASER" and,
collectively, the "INITIAL PURCHASERS") an aggregate of $75,000,000 in principal
amount of its 8-7/8% Senior Notes due 2007, Series B (the "NOTES"), subject to
the terms and conditions set forth herein. The Notes are to be issued pursuant
to the provisions of an indenture (the "INDENTURE"), to be dated as of the
Closing Date (as defined below), among the Company, the Guarantors (as defined
below) and Chase Bank of Texas, N.A., as trustee (the "TRUSTEE"). The Notes and
the Exchange Notes (as defined below) issuable in exchange therefor are
collectively referred to herein as the "NOTES." The Notes will initially be
guaranteed (the "SUBSIDIARY GUARANTEES") by each of the subsidiaries of the
Company listed on Schedule A hereto (each, a "GUARANTOR" and collectively the
"GUARANTORS"). Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture.
1. OFFERING MEMORANDUM. The Notes will be initially offered
and sold to the Initial Purchasers pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Company and the Guarantors have prepared an offering memorandum,
dated May 5, 1998, relating to the Notes and the Subsidiary Guarantees (such
offering memorandum together with the information incorporated by reference
therein, being herein referred to as the "OFFERING MEMORANDUM").
Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture, the Notes (and all
securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE
HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR
(B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR, (2) AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR
ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF
REGULATION S UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION
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REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, the principal amounts
of Notes set forth opposite the name of such Initial Purchaser on Schedule B
hereto at a purchase price equal to 98% of the principal amount thereof (the
"PURCHASE PRICE").
3. TERMS OF OFFERING. The Initial Purchasers have advised the
Company that the Initial Purchasers will make offers (the "EXEMPT RESALES") of
the Notes purchased hereunder on the terms set forth in the Offering Memorandum,
as amended or supplemented, solely to (i) persons whom the Initial Purchasers
reasonably believe to be "qualified institutional buyers" as defined in Rule
144A under the Act ("QIBS") and (ii) to persons permitted to purchase the Notes
in offshore transactions in reliance upon Regulation S under the Act (each, a
"REGULATION S PURCHASER") (such persons specified in clauses (i) and (ii) being
referred to herein as the "ELIGIBLE PURCHASERS"). The Initial Purchasers will
offer the Notes to Eligible Purchasers initially at a price equal to 100.0% of
the principal amount thereof. Such price may be changed at any time without
notice.
Holders (including subsequent transferees) of the Notes will
have the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in substantially
the form of Exhibit A hereto, for so long as such Notes constitute "TRANSFER
RESTRICTED SECURITIES" (as defined in the Registration Rights Agreement).
Pursuant to the Registration Rights Agreement, the Company and the Guarantors
will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein, (i) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to the Company's 8-7/8% Senior Notes due 2007, Series B (the "EXCHANGE NOTES"),
to be offered in exchange for the Notes (such offer to exchange being referred
to as the "EXCHANGE OFFER") and the Subsidiary Guarantees thereof and (ii) a
shelf registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Notes and to use its reasonable best efforts to cause such
Registration Statements to be
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declared and remain effective and usable for the periods specified in the
Registration Rights Agreement and to consummate the Exchange Offer. This
Agreement, the Indenture, the Notes, the Subsidiary Guarantees, the Supplemental
Series A Indenture (as defined herein) and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price
for, the Notes shall be made at the offices of Xxxxxx & Xxxxxx, L.L.P. or such
other location as may be mutually acceptable. Such delivery and payment shall be
made at 9:00 a.m. Houston, Texas time, on May 8, 1998 or at such other time on
the same date or such other date as shall be agreed upon by the Initial
Purchasers and the Company in writing. The time and date of such delivery and
the payment for the Notes are herein called the "CLOSING DATE."
(b) One or more of the Notes in definitive global
form, registered in the name of Cede & Co., as nominee of the Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
aggregate principal amount of the Notes (collectively, the "GLOBAL NOTE"), shall
be delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct) in each case with any transfer taxes thereon duly paid by the
Company against payment by the Initial Purchasers of the Purchase Price thereof
by wire transfer in same day funds to the order of the Company. The Global Note
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
5. AGREEMENTS OF THE COMPANY AND THE GUARANTORS. Each of
the Company and the Guarantors hereby agrees with the Initial Purchasers as
follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Notes for offering or sale
in any jurisdiction designated by the Initial Purchasers pursuant to Section
5(e) hereof, or the initiation of any proceeding by any state securities
commission or any other federal or state regulatory authority for such purpose
and (ii) of the happening of any event during the period referred to in Section
5(c) below that makes any statement of a material fact made in the Offering
Memorandum untrue or that requires any additions to or changes in the Offering
Memorandum in order to make the statements therein not misleading. The Company
and the Guarantors shall use their reasonable best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any Notes under any state securities or Blue Sky laws and, if at any time any
state securities commission or other federal or state regulatory authority shall
issue an order suspending the qualification or exemption of any Notes under any
state securities or Blue Sky laws, the Company and the Guarantors shall use
their reasonable best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time.
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(b) To furnish the Initial Purchasers and those
persons identified by the Initial Purchasers to the Company as many copies of
the Offering Memorandum, and any amendments or supplements thereto, as the
Initial Purchasers may reasonably request for the time period specified in
Section 5(c). Subject to the Initial Purchasers' compliance with its
representations and warranties and agreements set forth in Section 7 hereof, the
Company consents to the use of the Offering Memorandum, and any amendments and
supplements thereto required pursuant hereto, by the Initial Purchasers in
connection with Exempt Resales.
(c) Prior to the sale of all Notes pursuant to Exempt
Resales as contemplated hereby, (i) not to make any amendment or supplement to
the Offering Memorandum of which the Initial Purchasers shall not previously
have been advised or to which the Initial Purchasers shall reasonably object
after being so advised and (ii) to prepare promptly upon the Initial Purchasers'
reasonable request, any amendment or supplement to the Offering Memorandum which
may be necessary or advisable in connection with such Exempt Resales.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur or condition shall exist as a result of which, in
the judgment of the Company and the Guarantors or in the opinion of counsel to
the Initial Purchasers, it becomes necessary to amend or supplement the Offering
Memorandum in order to make the statements therein, in the light of the
circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser, not misleading, or if, in the opinion of counsel to the Initial
Purchasers, it is necessary to amend or supplement the Offering Memorandum to
comply with any applicable law, forthwith to prepare an appropriate amendment or
supplement to such Offering Memorandum so that the statements therein, as so
amended or supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that such Offering Memorandum will comply
with applicable law, and to furnish to the Initial Purchasers and such other
persons as the Initial Purchasers may designate such number of copies thereof as
the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Notes pursuant to Exempt
Resales as contemplated hereby, to cooperate with the Initial Purchasers and
counsel to the Initial Purchasers in connection with the registration or
qualification of the Notes for offer and sale to the Initial Purchasers and
pursuant to Exempt Resales under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue such
registration or qualification in effect so long as required for Exempt Resales
and to file such consents to service of process or other documents as may be
necessary in order to effect such registration or qualification; provided,
however, that neither the Company nor any Guarantor shall be required in
connection therewith to qualify as a foreign corporation in any jurisdiction in
which it is not now so qualified or to take any action that would subject it to
general consent to service of process or taxation other than as to matters and
transactions relating to the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail
and make generally
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available as soon as practicable after the end of each fiscal year to the record
holders of the Notes a financial report of the Company and its subsidiaries on a
consolidated basis, all such financial reports to include a consolidated balance
sheet, a consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the end of and
for such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by the Company's independent public
accountants and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows as of the end
of and for such period, and for the period from the beginning of such year to
the close of such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(g) So long as the Notes are outstanding, to furnish
to the Initial Purchasers as soon as available copies of all reports or other
communications furnished by the Company or any of the Guarantors to its security
holders or furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company or any of the
Guarantors is listed and such other publicly available information concerning
the Company and/or its subsidiaries as the Initial Purchasers may reasonably
request.
(h) So long as any of the Notes remain outstanding
and during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), to make available to any holder of Notes in connection with any
sale thereof and any prospective purchaser of such Notes from such holder, the
information ("RULE 144A INFORMATION") required by Rule 144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in
this Agreement are consummated or this Agreement is terminated, to pay or cause
to be paid all expenses incident to the performance of the obligations of the
Company and the Guarantors under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Company and the Guarantors and
accountants of the Company and the Guarantors in connection with the sale and
delivery of the Notes to the Initial Purchasers and pursuant to Exempt Resales,
and all other fees and expenses in connection with the preparation, printing,
filing and distribution of the Offering Memorandum and all amendments and
supplements to any of the foregoing (including financial statements), including
the mailing and delivering of copies thereof to the Initial Purchasers and
persons designated by them in the quantities specified herein, (ii) all costs
and expenses related to the transfer and delivery of the Notes to the Initial
Purchasers and pursuant to Exempt Resales, including any transfer or other taxes
payable thereon, (iii) all costs of printing or reproducing this Agreement, the
other Operative Documents and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Notes, (iv) all expenses in
connection with the registration or qualification of the Notes and the
Subsidiary Guarantees for offer and sale under the securities or Blue Sky laws
of the several states and all costs of printing or producing any preliminary and
supplemental Blue Sky memoranda in connection therewith (including the filing
fees and fees and disbursements of counsel for the Initial Purchasers in
connection with such registration or qualification and memoranda relating
thereto), (v) the cost of printing certificates representing the Notes and the
Subsidiary Guarantees, (vi) all expenses and
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listing fees in connection with the application for quotation of the Notes in
the National Association of Securities Dealers, Inc. ("NASD") Automated
Quotation System - PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee
and the Trustee's counsel in connection with the Indenture, the Notes and the
Subsidiary Guarantees, (viii) the costs and charges of any transfer agent,
registrar and/or depositary (including DTC), (ix) any fees charged by rating
agencies for the rating of the Notes, (x) all costs and expenses of the Exchange
Offer and any Registration Statement, as set forth in the Registration Rights
Agreement, and (xi) and all other costs and expenses incident to the performance
of the obligations of the Company and the Guarantors hereunder for which
provision is not otherwise made in this Section.
(j) To use its reasonable best efforts to effect the
inclusion of the Notes in PORTAL and to maintain the listing of the Notes on
PORTAL for so long as the Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry"
transfer of the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof
and continuing to and including the Closing Date, not to offer, sell, contract
to sell or otherwise transfer or dispose of any debt securities of the Company
or any Guarantor or any warrants, rights or options to purchase or otherwise
acquire debt securities of the Company or any Guarantor substantially similar to
the Notes and the Subsidiary Guarantees (other than (i) the Notes and the
Subsidiary Guarantees and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Notes to the Initial Purchasers or
pursuant to Exempt Resales in a manner that would require the registration of
any such sale of the Notes under the Act.
(n) Not to voluntarily claim, and to actively resist
any attempts to claim, the benefit of any usury laws against the holders of any
Notes and the related Subsidiary Guarantees.
(o) To file an Exchange Offer Registration Statement
and to use its reasonable best efforts to have the Exchange Offer Registration
Statement declared effective, all in accordance with and subject to the terms of
the Registration Rights Agreement, to permit Exchange Notes and guarantees
thereof by the Guarantors registered pursuant to the Act to be offered in
exchange for the Notes and the Subsidiary Guarantees and to comply with all
applicable federal and state securities laws in connection with the Exchange
Offer.
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(p) To comply with all of its agreements set forth in
the Registration Rights Agreement.
(q) To use its reasonable best efforts to do and
perform all things required or necessary to be done and performed under this
Agreement by it prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Notes and the Subsidiary Guarantees.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
AND THE GUARANTORS. As of the date hereof, each of the Company and the
Guarantors represents and warrants to, and agrees with, the Initial Purchasers
that:
(a) The Offering Memorandum does not, and any
supplement or amendment to it will not, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to statements in or
omissions from the Offering Memorandum (or any supplement or amendment thereto)
based upon information relating to the Initial Purchasers furnished to the
Company in writing by the Initial Purchasers expressly for use therein. No stop
order preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration requirements of
the Act, has been issued.
(b) Each of the Company, the Guarantors and their
subsidiaries has been duly organized, is validly existing as a corporation,
limited liability company or limited partnership in good standing under the laws
of its jurisdiction of incorporation or formation and has the requisite power
and authority to carry on its business as described in the Offering Memorandum
and to own, lease and operate its properties, and each is duly qualified and is
in good standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, or draw into question the validity of this
Agreement or the other Operative Documents (a "MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable.
(d) The entities listed on Schedule C hereto are the
only subsidiaries, direct or
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indirect, of the Company. All of the outstanding shares of capital stock of, or
ownership interests in, each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more subsidiaries,
free and clear of any security interest, claim, lien, encumbrance or adverse
interest of any nature (each, a "LIEN") except for Liens described in the
Offering Memorandum.
(e) This Agreement has been duly authorized, executed
and delivered by the Company and each of the Guarantors.
(f) The Indenture and the Series A Supplemental
Indenture have been duly authorized by the Company and each of the Guarantors
and, on the Closing Date, will have been validly executed and delivered by the
Company and each of the Guarantors. When the Indenture and the Series A
Supplemental Indenture have been duly executed and delivered by the Company and
each of the Guarantors, the Indenture and the Series A Supplemental Indenture
will be a valid and binding agreement of the Company and each Guarantor,
enforceable against the Company and each Guarantor in accordance with its terms
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, moratorium or similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether such rights
and remedies are sought to be enforced at law or in equity). On the Closing
Date, the Indenture will conform in all material respects to the requirements of
the Trust Indenture Act of 1939, as amended (the "TIA" or "TRUST INDENTURE
ACT"), and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
(g) The Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Notes have been issued, executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Notes will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, moratorium or similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether such rights
and remedies are sought to be enforced at law or in equity). On the Closing
Date, the Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum, in all material respects.
(h) On the Closing Date, the Exchange Notes will have
been duly authorized by the Company. When the Exchange Notes are issued,
executed and authenticated in accordance with the terms of the Exchange Offer
and the Indenture, the Exchange Notes will be entitled to the benefits of the
Indenture and will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy,
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insolvency, fraudulent conveyance, moratorium or similar laws now or hereafter
in effect relating to or affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of whether such rights
and remedies are sought to be enforced at law or in equity).
(i) The Subsidiary Guarantee arising under the
Indenture of each Guarantor has been duly authorized by such Guarantor and, on
the Closing Date, will have been duly executed and delivered by each such
Guarantor. When the Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, the Subsidiary
Guarantee of each Guarantor will be entitled to the benefits of the Indenture
and will be the valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether such rights and remedies are sought
to be enforced at law or in equity). On the Closing Date, the Subsidiary
Guarantees to be endorsed on the Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum, in all material
respects.
(j) The Subsidiary Guarantee arising under the
Indenture of by each Guarantor has been duly authorized by such Guarantor and,
when issued, will have been duly executed and delivered by each such Guarantor.
When the Exchange Notes have been issued, executed and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, the
Subsidiary Guarantee of each Guarantor will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability. When the Exchange Notes are issued, authenticated and
delivered, the Subsidiary Guarantees to be endorsed on the Exchange Notes will
conform as to legal matters to the description thereof in the Offering
Memorandum, in all material respects.
(k) The Registration Rights Agreement has been duly
authorized by the Company and each of the Guarantors and, on the Closing Date,
will have been duly executed and delivered by the Company and each of the
Guarantors. When the Registration Rights Agreement has been duly executed and
delivered, the Registration Rights Agreement will be a valid and binding
agreement of the Company and each of the Guarantors, enforceable against the
Company and each Guarantor in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, moratorium or similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability (regardless of whether such rights and remedies are sought
to be enforced at law or in equity). On the Closing Date, the Registration
Rights Agreement will conform as to legal
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matters to the description thereof in the Offering Memorandum, in all material
respects.
(l) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument, the
violation which would have a Material Adverse Effect, to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound.
(m) The execution, delivery and performance of this
Agreement and the other Operative Documents by the Company and each of the
Guarantors, compliance by the Company and each of the Guarantors with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under the securities
or Blue Sky laws of the various states), except for such consents, approvals,
authorizations or orders that have been, or will be, obtained prior to Closing,
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective property is
bound, except for such conflicts or breaches that have been, or will be, waived
prior to Closing or would not have a Material Adverse Effect, (iii) violate or
conflict with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Company, any of its subsidiaries or their respective property except for
matters of non-compliance that would not have a Material Adverse Effect, (iv)
result in the imposition or creation of (or the obligation to create or impose)
a Lien under, any 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
their respective property is bound, or (v) result in the termination, suspension
or revocation of any Authorization (as defined below) of the Company or any of
its subsidiaries or result in any other impairment of the rights of the holder
of any such Authorization.
(n) There are no legal or governmental proceedings
pending or, to the Company's knowledge, threatened to which the Company or any
of its subsidiaries is or could be a party or to which any of their respective
property is or could be subject, which could reasonably be expected to result,
singly or in the aggregate, in a Material Adverse Effect.
(o) Neither the Company nor any of its subsidiaries
has violated any foreign, federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), any
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provisions of the Foreign Corrupt Practices Act or the rules
and regulations promulgated thereunder, except
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for such violations which, singly or in the aggregate, would not have a Material
Adverse Effect.
(p) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
(q) Each of the Company, the Guarantors and their
respective subsidiaries has such permits, licenses, consents, exemptions,
franchises, authorizations of governmental or regulatory authorities
("PERMITS"), including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate its respective properties, and
to conduct its business and is in compliance with all terms and conditions
thereof; and no event has occurred which allows or, after notice or lapse of
time or both, would allow, revocation or termination of such permits or results
or, after notice or lapse of time or both, would result in any other impairment
of the rights of the holder of any such permit; and such permits contain no
restrictions that are burdensome to the Company, the Guarantors or any of their
respective subsidiaries; except where such failure to have, or comply with the
terms or conditions of, such permits, the occurrence of any such event or the
presence of any such restriction would not, singly or in the aggregate, have a
Material Adverse Effect.
(r) The accountants, KPMG Peat Marwick LLP, that have
certified the financial statements incorporated by reference in the Offering
Memorandum for the years ended December 31, 1995, 1996 and 1997 are independent
public accountants with respect to the Company and the Guarantors, as required
by the Act and the Exchange Act.
(s) The historical financial statements, together
with related schedules and notes incorporated by reference in the Offering
Memorandum (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated in the Offering
Memorandum at the respective dates or for the respective periods to which they
apply; such statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data incorporated by reference in the
Offering Memorandum (and any amendment or supplement thereto) are, in all
material respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company.
(t) The pro forma financial data included in the
Offering Memorandum have been prepared on a basis consistent with the historical
financial statements of the Company and its subsidiaries and give effect to
assumptions used in the preparation thereof on a reasonable basis and in good
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faith and present fairly the historical and proposed transactions contemplated
by the Offering Memorandum.
(u) The Company is not and, after giving effect to
the offering and sale of the Notes and the application of the net proceeds
thereof as described in the Offering Memorandum, will not be, an "investment
company," as such term is defined in the Investment Company Act of 1940, as
amended.
(v) There are no contracts, agreements or
understandings between the Company or any Guarantor and any person granting such
person the right to require the Company or such Guarantor to include such
person's securities with the Notes and Subsidiary Guarantees registered pursuant
to any Registration Statement.
(w) Neither the Company nor any of its subsidiaries
nor any agent thereof acting on the behalf of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance or sale of
the Notes to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R.
Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part
224) of the Board of Governors of the Federal Reserve System.
(x) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act (i) has imposed (or has informed the Company or any Guarantor that it is
considering imposing) any condition (financial or otherwise) on the Company's or
any Guarantor's retaining any rating assigned to the Company or any Guarantor,
any securities of the Company or any Guarantor or (ii) has indicated to the
Company or any Guarantor that it is considering (a) the downgrading, suspension,
or withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company, any Guarantor or any securities of
the Company or any Guarantor.
(y) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there has not occurred any change
having a Material Adverse Effect or any development that could reasonably be
expected to have a Material Adverse Effect, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any liability or obligation, direct or contingent, except as did not,
or could be reasonably expected not to have, a Material Adverse Effect.
(z) The Offering Memorandum, as of its date, contains
all the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Act.
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(aa) When the Notes and the Subsidiary Guarantees are
issued and delivered pursuant to this Agreement, neither the Notes nor the
Subsidiary Guarantees will be of the same class (within the meaning of Rule 144A
under the Act) as any security of the Company or the Guarantors that is listed
on a national securities exchange registered under Section 6 of the Exchange Act
or that is quoted in a United States automated inter-dealer quotation system.
(bb) No form of general solicitation or general
advertising (as defined in Regulation D under the Act) was used by the Company,
the Guarantors or any of their respective representatives (other than the
Initial Purchasers, as to whom the Company and the Guarantors make no
representation) in connection with the offer and sale of the Notes contemplated
hereby, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising. No securities of the same
class as the Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(cc) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(dd) None of the Company, the Guarantors nor any of
their respective affiliates or any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("REGULATION S") with respect
to the Notes or the Subsidiary Guarantees.
(ee) The sale of the Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of the Act.
(ff) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation)
have complied with and will comply with the offering restrictions requirements
of Regulation S in connection with the offering of the Notes outside the United
States and, in connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902(h).
(gg) The Company is a "reporting issuer," as defined
in Rule 902 under the Act.
(hh) Assuming the accuracy of the Initial Purchasers'
representations and warranties and agreements set forth in Section 7 hereof, no
registration under the Act of the Notes or the
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Subsidiary Guarantees is required for the sale of the Notes and the Subsidiary
Guarantees to the Initial Purchasers as contemplated hereby or for the Exempt
Resales.
(ii) Each certificate signed by any officer of the
Company or any Guarantor and delivered to the Initial Purchasers or counsel for
the Initial Purchasers shall be deemed to be a representation and warranty by
the Company or such Guarantor to the Initial Purchasers as to the matters
covered thereby.
(jj) The Company and its subsidiaries have good and
indefeasible title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all Liens
and defects, except such as are described in the Offering Memorandum or such as
do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries, in each case except as described in the Offering
Memorandum.
(kk) The Company and its subsidiaries own or possess,
or can acquire on reasonable terms, all licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names ("INTELLECTUAL PROPERTY") currently employed by
them in connection with the business now operated by them except where the
failure to own or possess or otherwise be able to acquire such intellectual
property would not, singly or in the aggregate, have a Material Adverse Effect;
and neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
of such intellectual property which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(ll) 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 are prudent and customary in the businesses in
which they are engaged; and neither the Company nor any of its subsidiaries (i)
has received notice from any insurer or agent of such insurer that substantial
capital improvements or other material expenditures will have to be made in
order to continue such insurance or (ii) 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 at a cost that would
not have a Material Adverse Effect.
(mm) There is no (i) significant unfair labor
practice complaint, grievance or arbitration proceeding pending or, to the
Company's knowledge, threatened against the Company or any of its subsidiaries
before the National Labor Relations Board or any state or local labor relations
board, (ii) strike, labor dispute, slowdown or stoppage pending or, to the
Company's knowledge, threatened against the
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Company or any of its subsidiaries or (iii) union representation question
existing with respect to the employees of the Company or any of its
subsidiaries, except in the case of clauses (i), (ii) and (iii) for such actions
which, singly or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. To the knowledge of the Company, no collective
bargaining organizing activities are taking place with respect to the Company or
any of its subsidiaries.
(nn) The Company and each of its subsidiaries
maintains 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 principles 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.
(oo) All material tax returns required to be filed by
the Company and each of its subsidiaries in any jurisdiction have been filed,
other than those filings being contested in good faith, and all material taxes,
including withholding taxes, penalties and interest, assessments, fees and other
charges due pursuant to such returns or pursuant to any assessment received by
the Company or any of its subsidiaries have been paid, other than those being
contested in good faith and for which adequate reserves have been provided.
(pp) The indebtedness represented by the Notes is
being incurred for proper purposes and in good faith, and each of the Company
and the Guarantors was, at the time of the incurrence of such indebtedness that
will be repaid with the proceeds of the issuance and sale of the Notes, and will
be on the Closing Date (after giving effect to the application of the proceeds
from the issuance of the Notes) solvent and had, at the time of the incurrence
of such indebtedness that will be repaid with the proceeds of the issuance and
sale of the Notes, and will have on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Notes) sufficient capital
for carrying on its respective business and was, at the time of the incurrence
of such indebtedness that will be repaid with the proceeds of the issuance and
sale of the Notes, and will be on the Closing Date (after giving effect to the
application of the proceeds from the issuance of the Notes) able to pay its
respective debts as they mature.
(qq) No action has been taken and no law, statute,
rule or regulation or order has been enacted, adopted or issued by any
governmental agency or body which prevents the execution, delivery and
performance of any of the Operative Documents, the issuance of the Notes or the
Subsidiary Guarantees, or suspends the sale of the Notes or the Subsidiary
Guarantees in any jurisdiction referred to in Section 4(e); and no injunction,
restraining order or other order or relief of any nature by a federal or state
court or other tribunal of competent jurisdiction has been issued with respect
to the Company or any of its subsidiaries which would prevent or suspend the
issuance or sale of the Notes or the Subsidiary Guarantees in any jurisdiction
referred to in Section 4(e).
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(rr) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
The Company and the Guarantors acknowledge that the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 9 hereof, counsel to the Company and the Guarantors and
counsel to the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and hereby consent to such reliance.
7. INITIAL PURCHASERS' REPRESENTATIONS AND WARRANTIES. Each of
the Initial Purchasers, severally, and not jointly, represents and warrants to
the Company and the Guarantors, and agrees that:
(a) Such Initial Purchaser is a QIB with such
knowledge and experience in financial and business matters as is necessary in
order to evaluate the merits and risks of an investment in the Notes.
(b) Such Initial Purchaser (A) is not acquiring the
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Notes in a transaction that would violate the Act
or the securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Notes only to (x) QIBs
in compliance with the exemption from the registration requirements of the Act
provided by Rule 144A and (y) in offshore transactions in compliance with
Regulation S under the Act.
(c) No form of general solicitation or general
advertising (within the meaning of Regulation D under the Act) has been or will
be used by such Initial Purchaser or any of its representatives in connection
with the offer and sale of the Notes pursuant hereto, including, but not limited
to, articles, notices or other communications published in any newspaper,
magazine or similar medium or broadcast over television or radio, or any seminar
or meeting whose attendees have been invited by any general solicitation or
general advertising.
(d) In connection with Exempt Resales, such Initial
Purchaser will solicit offers to buy the Notes only from, and will offer to sell
the Notes only to, Eligible Purchasers. Each Initial Purchaser further agrees
that it will offer to sell the Notes only to, and will solicit offers to buy the
Notes only from (A) Eligible Purchasers that the Initial Purchaser reasonably
believes are QIBs purchasing for its account or for the account of another QIB
in a transaction meeting the requirements of Rule 144A under the Act, and (B)
Regulation S Purchasers, in each case, that agree that (x) the Notes purchased
by them may be resold, pledged or otherwise transferred within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule 144(d)
under the Act, if applicable) under the Act, as in effect on the date of
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the transfer of such Notes, only (I) to the Company or any of its subsidiaries,
(II) to a person whom the seller reasonably believes is a QIB purchasing for its
own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A under the Act, (III) in an offshore transaction (as
defined in Rule 902 under the Act) meeting the requirements of Rule 904 of the
Act, (IV) in a transaction meeting the requirements of Rule 144 under the Act,
(V) in accordance with another exemption from the registration requirements of
the Act (and based upon an opinion of counsel acceptable to the Company) or (VI)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person to whom
such Notes or an interest therein is transferred a notice substantially to the
effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any
person acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Notes or the Subsidiary Guarantees.
(f) The Notes offered and sold by such Initial
Purchaser in reliance on Regulation S have been and will be offered and sold
only in offshore transactions.
(g) The sale of the Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) It has not offered or sold and will not offer or
sell the Notes in the United States or to, or for the benefit or account of, a
U.S. Person (other than a distributor), in each case, as defined in Rule 902
under the Act (i) as part of its distribution at any time and (ii) otherwise
until 40 days after the later of the commencement of the offering of the Notes
pursuant hereto and the Closing Date, other than in accordance with Regulation S
of the Act or another exemption from the registration requirements of the Act.
Such Initial Purchaser agrees that, during such 40-day distribution compliance
period, it will not cause any advertisement with respect to the Notes (including
any "tombstone" advertisement) to be published in any newspaper or periodical or
posted in any public place and will not issue any circular relating to the
Notes, except such advertisements as are permitted by and include the statements
required by Regulation S.
(i) At or prior to confirmation of a sale of Notes by
it to any distributor, dealer or person receiving a selling concession, fee or
other remuneration during the 40-day distribution compliance period referred to
in Rule 903(c)(2) under the Act, it will send to such distributor, dealer or
person receiving a selling concession, fee or other remuneration a confirmation
or notice to substantially the following effect:
"The Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered and sold within the United States or to,
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or for the account or benefit of, U.S. persons (i) as part of your distribution
at any time or (ii) otherwise until 40 days after the later of the commencement
of the Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or pursuant to another
transaction that is exempt from the registration requirements of the Securities
Act), and in connection with any subsequent sale by you of the Notes covered
hereby in reliance on Regulation S during the period referred to above to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration, you must deliver a notice to substantially the foregoing effect.
Terms used above have the meanings assigned to them in Regulation S."
Such Initial Purchaser acknowledges that the Company
and the Guarantors and, for purposes of the opinions to be delivered to each
Initial Purchaser pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and such Initial Purchaser hereby
consents to such reliance.
8. INDEMNIFICATION.
(a) The Company and each Guarantor agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, their
directors, their officers and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto) or any Rule 144A Information provided by the Company or any
Guarantor to any holder or prospective purchaser of Notes pursuant to Section
5(h) or caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such losses, claims, damages, liabilities or
judgments are caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to the Initial Purchasers
furnished in writing to the Company by such Initial Purchasers; provided,
further, that such indemnity with respect to the Offering Memorandum shall not
inure to the benefit of an Initial Purchaser (or any persons controlling such
Initial Purchaser) from whom the person asserting such loss, claim, damage or
liability purchased the Securities which are the subject thereof if such person
did not receive a copy of the Offering Memorandum (or the Offering Memorandum as
amended or supplemented) at or prior to the confirmation of the sale of such
Securities to such person and any such untrue statement or omission or alleged
untrue statement or omission of a material fact contained in such Offering
Memorandum was corrected in the Offering Memorandum.
(b) The Initial Purchasers, severally and not jointly
in proportion to the principal amount of Notes which they have respectively
agreed to purchase under Section 2 hereto, agree to indemnify
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and hold harmless the Company and the Guarantors, and their respective directors
and officers and each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company or the
Guarantors, to the same extent as the foregoing indemnity from the Company and
the Guarantors to the Initial Purchasers but only with reference to information
relating to the Initial Purchasers furnished in writing to the Company by the
Initial Purchasers expressly for use in the Offering Memorandum.
(c) In case any action shall be commenced involving
any person in respect of which indemnity may be sought pursuant to Section 8(a)
or 8(b) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY")
in writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party and that, as a matter of professional
responsibility, such counsel is unable to represent both the indemnifying and
indemnified (in which case the indemnifying party shall not have the right to
assume the defense of such action on behalf of the indemnified party). In any
such case, the indemnifying party shall not, in connection with any one action
or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of moe than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, in the case
of the parties indemnified pursuant to Section 8(a), and by the Company, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
in good faith without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request unless within
30 days after such reimbursement request is received, the indemnifying party
shall have made a good faith written challenge to the reasonableness of the
amount or nature of the reimbursement requested or the sufficiency of the
documentation supporting the reimbursement requested (which challenge shall set
forth the amount or nature of the requested reimbursement which the indemnifying
party in good faith
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believes to be reasonable or the basis of the good faith claim as to the
insufficiency of any supporting documentation), in which event this clause (ii)
shall apply only if, and to the extent that, such indemnifying party shall not
have reimbursed the indemnified party for the amount which is not being so
challenged. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment wit respect to, any pending or threatened action in respect of
which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in
this Section 8 is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Initial Purchasers on the
other hand from the offering of the Notes or (ii) if the allocation provided by
clause 8(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and the Initial Purchasers, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Guarantors, on the one hand and the Initial Purchasers, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Notes (after underwriting discounts and commissions, but before
deducting expenses) received by the Company, and the total discounts and
commissions received by the Initial Purchasers bear to the total price to
investors of the Notes, in each case as set forth in the table on the cover page
of the Offering Memorandum. The relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Guarantors, and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation (even if
the Initial Purchasers were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section
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8, the Initial Purchasers shall not be required to contribute any amount in
excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the respective
principal amount of Notes purchased by each of the Initial Purchasers hereunder
and not joint.
(e) The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers to purchase the Notes under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the
Company and the Guarantors contained in this Agreement shall be true and correct
on the Closing Date with the same force and effect as if made on and as of the
Closing Date.
(b) On or after the date hereof, (i) there shall not
have occurred any downgrading, suspension or withdrawal of, nor shall any notice
have been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for a
possible change that does not indicate the direction of the possible change in,
any rating of the Company or any Guarantor or any securities of the Company or
any Guarantor (including, without limitation, the placing of any of the
foregoing ratings on credit watch with negative or developing implications or
under review with an uncertain direction) by any "nationally recognized
statistical rating organization" as such term is defined for purposes of Rule
436(g)(2) under the Act, (ii) there shall not have occurred any change, nor
shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any Guarantor or any securities of the
Company or any Guarantor by any such rating organization and (iii) no such
rating organization shall have given notice that it has assigned (or is
considering assigning) a lower rating to the Notes than that on which the Notes
were marketed.
(c) Since the respective dates as of which
information is given in the Offering Memorandum other than as set forth in the
Offering Memorandum (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement), (i) there shall not have occurred any
change or any development involving a material and adverse prospective change in
the condition, financial or otherwise, or the earnings, business, management or
operations of the Company and its subsidiaries, taken as a whole, (ii) there
shall not have been any change or any development involving a material and
adverse
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prospective change in the capital stock or in the long-term debt of the Company
or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(c)(i),
9(c)(ii) or 9(c)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Notes on the terms and in the
manner contemplated in the Offering Memorandum.
(d) You shall have received on the Closing Date a
certificate dated the Closing Date, signed by the President and the Chief
Financial Officer of the Company and each of the Guarantors, confirming the
matters set forth in Sections 6(y), 9(a) and 9(b) and stating that each of the
Company and the Guarantors has complied with all the agreements and satisfied
all of the conditions herein contained and required to be complied with or
satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an
opinion (satisfactory to you and counsel for the Initial Purchasers), dated the
Closing Date, of Xxxxxx & Xxxxxx, L.L.P., counsel for the Company and the
Guarantors, to the effect set forth in Exhibit B hereto.
(f) The Initial Purchasers shall have received an
opinion of Venezuelan counsel to the Company substantially in the form attached
as Schedule D hereto.
(g) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, of Xxxx, Xxxx, Xxxxxxx, Xxxxx &
Xxxx, L.L.P., counsel for the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.
(h) The Initial Purchasers shall have received, at
the time this Agreement is executed and at the Closing Date, a letter dated the
date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from KPMG Peat Marwick LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchasers
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(i) The Notes shall have been approved by the NASD
for trading and duly listed in PORTAL.
(j) The Initial Purchasers shall have received a
counterpart, conformed as executed, of the Indenture which shall have been
entered into by the Company, the Guarantors and the Trustee.
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(k) The Company and the Guarantors shall have
executed the Registration Rights Agreement and the Initial Purchasers shall have
received an original copy thereof, duly executed by the Company and the
Guarantors.
(l) Neither the Company nor the Guarantors shall have
failed at or prior to the Closing Date to perform or comply with any of the
agreements herein contained and required to be performed or complied with by the
Company or the Guarantors, as the case may be, at or prior to the Closing Date.
(m) The Company shall have received any approvals or
consents from the lenders under the Bank Credit Facility (as defined in the
Offering Memorandum) necessary in order to consummate the issuance of Notes
contemplated hereby.
(n) The Company shall have received the requisite
consent from the holders of the Series A Notes (as defined in the Offering
Memorandum) to issue the Second Supplemental Indenture (the "Series A
Supplemental Indenture") to the Indenture, dated June 27, 1997, governing the
Series A Notes, and shall have entered into the Series A Supplemental Indenture
with the trustee under such indenture.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Notes on the terms
and in the manner contemplated in the Offering Memorandum, (ii) the suspension
or material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company or any Guarantor on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States and would, in your opinion, make
it impracticable or inadvisable to market the Notes.
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If on the Closing Date any one or more of the Initial Purchasers
shall fail or refuse to purchase the Notes which it or they have agreed to
purchase hereunder on such date and the aggregate principal amount of the Notes
which such defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Notes to be purchased on such date by all
Initial Purchasers, each non-defaulting Initial Purchaser shall be obligated
severally, in the proportion which the principal amount of the Notes set forth
opposite its name in Schedule B bears to the aggregate principal amount of the
Notes which all the non-defaulting Initial Purchasers, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Notes which such defaulting Initial Purchaser or Initial Purchasers, as the
case may be, agreed but failed or refused to purchase on such date; provided
that in no event shall the aggregate principal amount of the Notes which any
Initial Purchaser has agreed to purchase pursuant to Section 2 hereof be
increased pursuant to this Section 10 by an amount in excess of one-ninth of
such principal amount of the Notes without the written consent of such Initial
Purchaser. If on the Closing Date any Initial Purchaser or Initial Purchasers
shall fail or refuse to purchase the Notes and the aggregate principal amount of
the Notes with respect to which such default occurs is more than one-tenth of
the aggregate principal amount of the Notes to be purchased by all Initial
Purchasers and arrangements satisfactory to the Initial Purchasers and the
Company for purchase of such the Notes are not made within 48 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Initial Purchaser and the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closig Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Offering
Memorandum or any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Initial Purchaser
from liability in respect of any default of any such Initial Purchaser under
this Agreement.
11. MISCELLANEOUS. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company or any
Guarantor, to 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (713)
435-6100, Attention: Secretary and (ii) if to the Initial Purchasers, Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Syndicate Department, or in any case to such other address as
the person to be notified may have requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company, the Guarantors
and the Initial Purchasers set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Notes, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of the Initial Purchasers, the
officers or directors of the Initial Purchasers, any person controlling the
Initial Purchasers, the Company, any Guarantor, the officers or directors of the
Company or any Guarantor, or any person controlling the Company or any
Guarantor, (ii) acceptance of the Notes and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Notes are not tendered for delivery by or
on behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the
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Company and each Guarantor, jointly and severally, agree to reimburse the
Initial Purchaser for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(i) hereof. The Company and each Guarantor also
agree, jointly and severally, to reimburse the Initial Purchasers and its
officers, directors and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act for any and all fees and expenses (including without limitation the
fees and expenses of counsel) incurred by them in connection with enforcing
their rights under this Agreement (including without limitation its rights under
Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, the directors of the Company and the
Guarantors and their respective successors and assigns, all as and to the extent
provided in this Agreement, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include a purchaser of any of the Notes from the Initial Purchaser merely
because of such purchase.
This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
[The remainder of this page intentionally left blank.]
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Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
GREY WOLF, INC.
By: /s/XXXXX X. XXXXXXXX
----------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:Senior Vice President and Chief Financial Officer
GREY WOLF DRILLING COMPANY
By:/s/ XXXXX X. XXXXXXXX
----------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:Senior Vice President and Chief Financial Officer
DI ENERGY, INC.
By: /s/ XXXXX X. XXXXXXXX
----------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:Senior Vice President and Chief Financial Officer
29
GREY WOLF INTERNATIONAL, INC.
By:/s/ XXXXX X. XXXXXXXX
----------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title:Senior Vice President and Chief Financial Officer
MURCO DRILLING CORPORATION
By:/s/ XXXXX X. XXXXXXXX
----------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
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XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
XXXXXX BROTHERS INC.
PRUDENTIAL SECURITIES INCORPORATED
By: XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By: /s/ XXXXX XXXXXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
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A-1
SCHEDULE A
INITIAL GUARANTORS
Name of Guarantor State of Incorporation
------------------------------------------ --------------------------------------------
Grey Wolf Drilling Company Texas
Murco Drilling Corporation (a Delaware
wholly-owned subsidiary of Grey
Wolf Drilling Company)
Grey Wolf International, Inc. Texas
DI Energy, Inc. Texas
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B-1
SCHEDULE B
INITIAL PURCHASERS
PRINCIPAL AMOUNT
INITIAL PURCHASER OF NOTES
----------------- ----------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation.................................................. $ 37,500,000
Xxxxxx Brothers Inc.......................................................... 18,750,000
Prudential Securities Incorporated.......................................... 18,750,000
-------------
TOTAL................................................................... $ 75,000,000
=============
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C-1
SCHEDULE C
SUBSIDIARIES
34
SCHEDULE D
OPINION OF VENEZUELAN COUNSEL
C-1
35
C-2
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
