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EXHIBIT 1.1
XXXXXXXX-LEEVAC MARINE SERVICES, INC.
$175,000,000 10 5/8% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
July 19, 2001
RBC DOMINION SECURITIES CORPORATION
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
c/o RBC Dominion Securities Corporation
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
XXXXXXXX-LEEVAC Marine Services, Inc., a Delaware corporation (the
"Company"), and the undersigned subsidiaries of the Company (the "Guarantors"),
hereby confirm their agreement with you (the "Initial Purchasers") as set forth
below.
1. The Securities. On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company shall issue and sell to the Initial
Purchasers an aggregate of $175,000,000 principal amount of its 10 5/8% Series A
Senior Notes due 2008 (the "Senior Notes"). The Senior Notes are to be issued
under an indenture (the "Indenture") to be dated as of the Closing Date (as
defined in Section 3 below) by and among the Company, the Guarantors and Xxxxx
Fargo Bank Minnesota, National Association, as trustee (the "Trustee"). The
Guarantors will guarantee the Senior Notes on a senior unsecured basis (the
"Guarantees"). The Senior Notes and the Guarantees are sometimes referred to
herein collectively as the "Securities."
The Securities are being offered and sold to the Initial Purchasers
without being registered under the United States Securities Act of 1933, as
amended (the "Act") in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum dated July 2, 2001 (the "Preliminary
Memorandum"), and a final offering memorandum dated the date hereof (the "Final
Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum"), setting forth or including, among other
things, a description of the terms of the Securities, the terms of the offering
of the Securities and a description of the business of the Company and any
material developments relating to the Company occurring after the date of the
most recent historical financial statements included therein.
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The Initial Purchasers and their direct and indirect transferees of the
Securities will be entitled to the benefits of a Registration Rights Agreement
to be dated as of the Closing Date (the "Registration Rights Agreement"),
pursuant to which the Company and the Guarantors shall agree, among other
things, 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 $175,000,000
principal amount of 10 5/8% Series B Senior Notes due 2008 of the Company (the
"Exchange Notes") to be guaranteed by the Guarantors on a senior unsecured basis
and offered in exchange (the "Exchange Offer") for the Senior Notes, and (ii) as
and to the extent required by the Registration Rights Agreement, 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 Senior Notes, and to use their reasonable best efforts to cause
such Registration Statements to be declared effective. This Purchase Agreement
(this "Agreement"), the Securities, the Exchange Notes, the Indenture and the
Registration Rights Agreement are hereinafter referred to collectively as the
"Operative Documents."
2. Representations and Warranties. The Company and the Guarantors
jointly and severally represent and warrant to and agree with the Initial
Purchasers that:
(a) As of its date, the Preliminary Memorandum did not, and on the date
of this Agreement and on the Closing Date, the Final Memorandum does not and
will not, and any amendment or supplement thereto will not, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties set
forth in this Section 2(a) do not apply to statements or omissions made in
reliance upon and in conformity with information relating to the Initial
Purchasers finished to the Company in writing by any of the Initial Purchasers
expressly for use in the Final Memorandum or any amendment or supplement
thereto.
(b) The Company has the authorized, issued and outstanding equity
capitalization as set forth in the Final Memorandum; each subsidiary, direct or
indirect, of the Company is listed on Exhibit A hereto (each, a "Subsidiary" and
collectively, the "Subsidiaries"); all of the outstanding shares of capital
stock of the Company, and all of the outstanding shares of capital stock of, or
other equity interests in, each of the Subsidiaries, have been duly authorized
and validly issued, are fully paid and non-assessable and were not issued in
violation of any preemptive or similar rights; except as set forth on Exhibit A
hereto, all of the outstanding shares of capital stock of, or other equity
interests in, each Subsidiary are owned by the Company, directly or indirectly
through one or more other Subsidiaries, free and clear of all liens,
encumbrances, other adverse claims or restrictions on transferability (other
than those imposed by the Act and the securities or "Blue Sky" laws of certain
jurisdictions) or voting, except as described in the Final Memorandum; and
except as set forth in the Final Memorandum, there are no outstanding (i)
options, warrants or other rights to purchase, (ii) agreements or other
obligations of the Company to issue or (iii) other rights to convert any
obligation into, or exchange any securities for, shares of capital stock of or
other equity interests in the Company or any of its Subsidiaries. Except for the
Subsidiaries, neither the Company nor any of its Subsidiaries owns, directly or
indirectly, any shares of capital stock or any other equity securities or has
any equity interest in any firm, partnership, joint venture or other entity.
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(c) Each of the Company and its Subsidiaries is duly incorporated (or
otherwise organized), validly existing and in good standing, as applicable,
under the laws of its jurisdiction of organization, with all requisite corporate
or similar power and authority to own its properties and to conduct its business
as now conducted and as described in the Final Memorandum; each of the Company
and its Subsidiaries is duly qualified to do business as a foreign corporation,
limited partnership or limited liability company (as the case may be) in good
standing, as applicable, in all other jurisdictions where the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing
would not, individually or in the aggregate, have a material adverse effect on
the business, condition (financial or otherwise), prospects or results of
operations of the Company and its Subsidiaries, taken as a whole (any such
event, a "Material Adverse Effect").
(d) Each of the Company and the Guarantors has all requisite corporate
or similar power and authority to execute, deliver and perform its obligations
under this Agreement and the other Operative Documents to which it is a party
and to consummate the transactions contemplated hereby and thereby, including,
without limitation, the power and authority to issue, sell and deliver the
Securities as contemplated by this Agreement.
(e) This Agreement has been duly and validly authorized, executed and
delivered by the Company and the Guarantors and is the legally valid and binding
agreement of each of the Company and the Guarantors, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer or conveyance, reorganization, moratorium and other similar
laws of general applicability relating to or affecting creditors' rights and to
general equity principles and except that rights to indemnification and
contribution thereunder may be, limited by federal or state securities laws or
public policy relating thereto.
(f) The Senior Notes and the Guarantees have been duly and validly
authorized for issuance and sale to the Initial Purchasers by the Company and
the Guarantors, respectively, pursuant to this Agreement and, when each global
certificate representing the Senior Notes has been issued and authenticated in
accordance with the terms of the Indenture and delivered against payment
therefor in accordance with the terms hereof, the Senior Notes and the
Guarantees will be the legally valid and binding obligations of the Company and
the Guarantors, respectively, entitled to the benefits of the Indenture and
enforceable against them in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer or conveyance,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(g) The Exchange Notes and the related guarantees have been duly and
validly authorized for issuance by the Company and the Guarantors, respectively,
and, when the global certificate representing the Exchange Notes has been issued
and authenticated in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Exchange Offer, the Exchange Notes and the
related guarantees will be the legally valid and binding obligations of the
Company and the Guarantors, respectively, entitled to the benefits of the
Indenture and enforceable against them in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
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(h) The Indenture has been duly and validly authorized by the Company
and the Guarantors and, when duly executed and delivered by them (assuming the
due authorization, execution and delivery thereof by the Trustee), will be the
legally valid and binding agreement of each of the Company and the Guarantors,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(i) The Registration Rights Agreement has been duly and validly
authorized by the Company and the Guarantors and, when duly executed and
delivered by them (assuming the due authorization, execution and delivery
thereof by the Initial Purchasers), will be the legally valid and binding
agreement of each of the Company and the Guarantors, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer or conveyance, reorganization, moratorium and other similar
laws of general applicability relating to or affecting creditors' rights and to
general equity principles and except that rights to indemnification and
contribution thereunder may be limited by federal or state securities laws or
public policy relating thereto.
(j) Upon payment of outstanding bank indebtedness, which will be
accomplished on the Closing Date, no consent, waiver, approval, authorization or
order of or filing, registration, qualification, license or permit of or with
any court or governmental agency or body, or third party is required for the
issuance and sale by the Company and the Guarantors of the Securities to the
Initial Purchasers or the consummation by the Company and the Guarantors of each
of the other transactions contemplated hereby or by any of the other Operative
Documents, except, in each case, such as have been or, prior to the Closing
Date, will be obtained, and other than such as may be required under state
securities or "Blue Sky" laws in connection with the purchase and resale of the
Securities by the Initial Purchasers and the receipt by the Company and the
Guarantors of an order from the Commission declaring the Exchange Offer
Registration Statement and/or the Shelf Registration Statement effective.
Neither the Company nor any of its Subsidiaries is (A) in violation of its
charter or bylaws (or similar organizational document), (B) in breach or
violation of any statute (including, without limitation, the Foreign Corrupt
Practices Act), judgment, decree, order, rule or regulation applicable to any of
them or any of their respective properties or assets, except for any such breach
or violation which would be likely not to, individually or in the aggregate,
have a Material Adverse Effect, or (C) in breach of or default under (nor has
any event occurred which, with notice or passage of time or both, would
constitute a default under) or in violation of any of the terms or provisions of
any indenture, mortgage, deed of trust, loan agreement, note, lease, license,
permit, certificate, contract or other agreement or instrument to which any of
them is a party or to which any of them or their respective properties or assets
is subject (collectively, "Contracts"), except for any such breach, default,
violation or event which would not, individually or in the aggregate, have a
Material Adverse Effect.
(k) The execution, delivery and performance by the Company and the
Guarantors of this Agreement and each of the other Operative Documents and the
consummation of the transactions contemplated hereby and thereby (including,
without limitation, the issuance and sale of the Securities to the Initial
Purchasers and the issuance of the Exchange Notes in the Exchange Offer), do not
and will not violate, conflict with or constitute or result in a breach of or a
default under (or constitute an event which with notice or passage of time or
both would constitute a default under)
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or cause an acceleration of any obligation under, or (except for the
transactions contemplated hereby) result in the imposition or creation of (or
the obligation to create or impose) any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof), on any properties or
assets of either the Company or any Subsidiary with respect to (A) the terms or
provisions of any Contract, except for any such conflict, breach, violation,
default or event which would not, individually or in the aggregate, have a
Material Adverse Effect, (B) the charter or bylaws (or similar organizational
document) of the Company or any of its Subsidiaries, or (C) (assuming compliance
with all applicable state securities or "Blue Sky" laws and assuming the
accuracy of the representations and warranties of the Initial Purchasers in
Section 8 hereof) any statute, judgment, decree, order, rule or regulation
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets, except for any such conflict, breach or violation which
would not, individually or in the aggregate, have a Material Adverse Effect.
(l) Xxxxxx Xxxxxxxx LLP, who are reporting on the audited financial
statements of both the Company and the Spentonbush/Red Star Group included in
each Memorandum, are independent public accountants within the meaning of
Regulation S-X under the Act and the rules and regulations promulgated
thereunder. The audited financial statements of the Company and the
Spentonbush/Red Star Group and related notes thereto included in the Final
Memorandum present fairly in all material respects the consolidated financial
position of the Company and the Spentonbush/Red Star Group, respectively, as of
the dates indicated, and the consolidated results of their operations and cash
flows for the periods specified, in accordance with generally accepted
accounting principles in the United States ("GAAP") consistently applied
throughout such periods, except as otherwise stated therein. The summary and
selected historical financial and statistical data included in the Final
Memorandum present fairly in all material respects the information shown therein
and have been prepared and compiled on a basis consistent with the audited
financial statements of the Company included therein, except as stated therein.
(m) Except as disclosed in the Final Memorandum, there is not pending
or, to the knowledge of the Company or any of the Guarantors, threatened any
action, suit, proceeding, inquiry or investigation to which the Company or any
of its Subsidiaries is a party, or to which the property or assets of the
Company or any of its Subsidiaries is subject, before or brought by any court,
arbitrator or governmental agency or body which (A) if determined adversely to
the Company or any of its Subsidiaries, would, individually or in the aggregate,
have a Material Adverse Effect, (B) seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Securities to
be sold hereunder or the consummation of the other transactions described in the
Final Memorandum, or (C) would be required to be described in a prospectus
pursuant to the Act; and there are no material contracts or other documents
which would be required to be described in a prospectus pursuant to the Act that
are not described in the Final Memorandum.
(n) Each of the Company and its Subsidiaries owns or possesses adequate
licenses or other rights to use all trademarks, service marks, trade names and
know-how necessary to conduct the businesses now or proposed to be operated by
it as described in the Final Memorandum, and neither the Company nor any of its
Subsidiaries has received any notice of conflict with (or knows of any such
conflict with) asserted rights of others with respect to any trademarks, service
marks, trade names or know-how which, if such assertion of conflict were
sustained, would, individually or in the aggregate, have a Material Adverse
Effect.
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(o) Each of the Company and its Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, the American Bureau of Shipping and all
courts and other tribunals, including without limitation under any applicable
Environmental Laws (as defined below), currently required or necessary to own or
lease, as the case may be, and to operate its properties and to carry on its
business as now or proposed to be conducted as set forth in the Final Memorandum
("Permits"), except where the failure to obtain such Permits would not,
individually or in the aggregate, have a Material Adverse Effect; each of the
Company and its Subsidiaries has fulfilled and performed all of its obligations
with respect to such Permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any such
Permit, except where the failure to perform such obligations or the occurrence
of such event would not have a Material Adverse Effect; and neither the Company
nor any of its Subsidiaries has received any notice of any proceeding relating
to revocation or modification of any such Permit, except as described in the
Final Memorandum and except where such revocation or modification would not,
individually or in the aggregate, have a Material Adverse Effect.
(p) Since the respective dates as to which information is given in the
Final Memorandum, except as described therein and except for the transactions
contemplated hereby, neither the Company nor any Subsidiary has incurred any
liabilities or obligations, direct or contingent (other than in the ordinary
course of business), that are material to the Company and its Subsidiaries,
taken as a whole, or entered into any transactions or contracts (written or
oral) not in the ordinary course of business that are material to the business,
condition (financial or other) or results of operations or prospects of the
Company and its Subsidiaries, taken as a whole; there has not been any adverse
change in the capital stock or long-term indebtedness of the Company or any
Subsidiary that is material to the business, condition (financial or other) or
results of operations or prospects of the Company and its Subsidiaries, taken as
a whole; and neither the Company nor any of its Subsidiaries has purchased any
of its outstanding capital stock (other than with respect to any Subsidiary, the
purchase of capital stock owned by the Company).
(q) Each of the Company and its Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns or has timely
requested extensions thereof and has paid all taxes shown as due thereon or made
adequate reserve or provision therefor; and other than tax deficiencies which
the Company or any Subsidiary of the Company is contesting in good faith and for
which the Company or such Subsidiary has provided adequate reserves, there is no
tax deficiency that has been asserted against the Company or any Subsidiary of
the Company that would, individually or in the aggregate, have a Material
Adverse Effect.
(r) To the Company's knowledge, the statistical and market-related data
included in the Final Memorandum are based on or derived from sources which are
reliable and accurate.
(s) Except as described in the Final Memorandum, each of the Company
and the Subsidiaries has good and marketable title to all real property and good
title to all barges, tugs and other vessels (collectively, "Vessels") and other
personal property described in the Final Memorandum as being owned by it and
good and marketable title to a leasehold estate in the real and personal
property described in the Final Memorandum as being leased by it, free and clear
of all liens, charges, encumbrances or restrictions with such exceptions as are
either described in the
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Final Memorandum or are not material and do not interfere with the use made and
proposed to be made of such property by the Company or its Subsidiaries.
(t) Except as described in the Final Memorandum or as would not,
individually or in the aggregate, have a Material Adverse Effect (A) each of the
Company and its Subsidiaries is in compliance with and not subject to any known
liability under applicable Environmental Laws (as defined below), (B) each of
the Company and its Subsidiaries has made all filings and provided all notices
required under any applicable Environmental Laws, and has, and is in compliance
with, all Permits required under any applicable Environmental Laws and each of
them is in full force and effect, (C) there is no civil, criminal or
administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for information
pending or, to the knowledge of the Company and the Guarantors, threatened
against the Company or its Subsidiaries under any Environmental Law, (D) no
lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property owned,
operated, leased or controlled by the Company or any of its Subsidiaries, (E)
neither the Company nor any of its Subsidiaries has received notice that it has
been identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law, (F) no property or facility of the
Company or any of its Subsidiaries is (i) listed or, to the knowledge of the
Company and the Guarantors, proposed for listing on the National Priorities List
under CERCLA or (ii) listed in the Comprehensive Environmental Response,
Compensation, Liability Information System List promulgated pursuant to CERCLA,
or on any comparable list maintained by any state or local governmental
authority and (G) each Vessel complies with the Federal Water Pollution Control
Act, as amended, and has secured and carries on board a current U.S. Coast Guard
Certificate of Financial Responsibility (Water Pollution).
For purposes of this Agreement, "Environmental Laws" means the common
law, all federal treaties and all applicable federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or protection
of public or employee health and safety or the environment, including, without
limitation, laws relating to (i) emissions, discharges, releases or threatened
releases of hazardous materials into the environment (including, without
limitation, ambient air, surface water, ground water, sea water, land surface or
subsurface strata), (ii) the manufacture, processing, distribution, use,
generation, treatment, storage, disposal, transport or handling of hazardous
materials, and (iii) underground and above ground storage tanks and related
piping, and emissions, discharges, releases or threatened releases therefrom.
(u) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of its Subsidiaries which is pending or, to
the knowledge of the Company, threatened. Neither the Company nor any Subsidiary
is a party to or has any obligation under any collective bargaining agreement or
other labor union contract, white paper or side agreement with any labor union
or organization. Except as described in the Final Memorandum, to the knowledge
of the Company and the Guarantors, no collective bargaining organizing
activities are taking place with respect to the Company or any of its
Subsidiaries. The Company has a policy on drug and alcohol abuse applicable to
each of the Vessels that meets or exceeds the standards contained in the current
edition of the Oil Companies International Marine Forum Guidelines for the
Control of Drugs and Alcohol Onboard Ship.
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(v) Each of the Company or its Subsidiaries carries insurance in such
amounts and covering such risks as in its determination is adequate for the
conduct of its business or the value of its properties.
(w) None of the Company or its Subsidiaries has any liability for any
prohibited transaction or funding deficiency or any complete or partial
withdrawal liability with respect to any pension, profit sharing, 401(k) plan or
other plan which is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), to which the Company or any Subsidiary makes or ever
has made a contribution and in which any employee of the Company or any
Subsidiary is or has ever been a participant, except for such liabilities which
would not, individually or in the aggregate, have a Material Adverse Effect.
With respect to such plans, the Company and each Subsidiary is in compliance in
all material respects with all applicable provisions of ERISA.
(x) The Company is not, and after giving effect to the offering and
sale of the Senior Notes will not be, an "investment company," as such term is
defined in, and that is or is required to be registered under Section 8 of, the
Investment Company Act of 1940, as amended.
(y) The Securities, the Exchange Notes, the Indenture and the
Registration Rights Agreement conform in all material respects to the
descriptions thereof in the Final Memorandum.
(z) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the Registration Statements
required to be filed by the Company pursuant to the Registration Rights
Agreement other than as expressly permitted thereby.
(aa) Neither the Company, any of its affiliates (as defined in Rule 501
under the Act) nor any person acting on its behalf (excluding the Initial
Purchasers as to which no representation or warranty is made) has offered or
sold the Securities by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Act or, with respect to Securities
sold outside the United States to non-U.S. persons (as defined in Rule 902 under
the Act), by means of any directed selling efforts within the meaning of Rule
902 under the Act, and the Company, any affiliate of the Company and any person
acting on its or their behalf (other than the Initial Purchasers) have complied
with and will implement the "offering restriction" within the meaning of Rule
902 under the Act.
(bb) Except as disclosed in the Final Memorandum, within the six months
preceding the date hereof, neither the Company nor any other person acting on
behalf of the Company has offered or sold to any person any Securities, or any
securities of the same or a similar class as the Securities, other than
Securities offered or sold to the Initial Purchasers hereunder; and the Company
will take reasonable precautions designed to insure that any offer or sale,
direct or indirect, in the United States or to any U.S. person (as defined in
Rule 902 under the Act) of any Securities or any substantially similar security
issued by the Company, within six months subsequent to the date on which the
distribution of the Securities has been completed (as notified to the Company by
the Initial Purchasers), is made under restrictions and other circumstances
reasonably designed not to affect the status of the offer and sale of the
Securities in the United States and to U.S. persons contemplated by this
Agreement as transactions exempt from the registration provisions of the Act.
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(cc) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning of
Rule 144A under the Act) as any other securities of the Company or any
Subsidiary of the Company that are listed on a national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended
("Exchange Act") or that are quoted in a United States automated inter-dealer
quotation system.
(dd) Assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 8 hereof, it is not necessary in connection with
the offer, sale and delivery of the Securities to the Initial Purchasers in the
manner contemplated by this Agreement to register any of the Securities under
the Act or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended (the "TIA").
(ee) The Company and each of its Subsidiaries is a "citizen of the
United States" within the meaning of that term under Section 2 of the Shipping
Act of 1916, as amended.
(ff) The Company is, and immediately after the Closing Date will be,
Solvent. As used herein, the term "Solvent" means, with respect to the Company
on a particular date, that on such date (A) the fair market value of the assets
of the Company is greater than the total amount of liabilities (including
contingent liabilities) of the Company, (B) the present fair salable value of
the assets of the Company is greater than the amount that will be required to
pay the probable liabilities of the Company on its debts as they become absolute
and matured, (C) the Company is able to realize upon its assets and pay its
debts and other liabilities, including contingent obligations, as they mature,
and (D) the Company does not have unreasonably small capital.
(gg) Neither the Company, any of its Subsidiaries, nor any of its
officers, directors or controlling persons has taken, directly or indirectly,
any action designed to cause or to result in, or that has constituted or which
could reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of the
Securities.
Any certificate signed by any officer of the Company or any of the
Guarantors and delivered to the Initial Purchasers or to counsel for the Initial
Purchasers shall be deemed a representation and warranty by the Company and the
Guarantors to the Initial Purchasers as to the matters covered thereby.
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchasers, and each Initial Purchaser severally
agrees to purchase from the Company, that principal amount of Senior Notes as is
set forth opposite such Initial Purchaser's name on Schedule I hereto at 95.193%
of their principal amount, plus accrued and unpaid interest thereon, if any,
from July 24, 2001. One or more certificates in definitive global form for the
Securities that the Initial Purchasers have agreed to purchase hereunder, with
Securities to be sold pursuant to Rule 144A under the Act to be represented by a
different global certificate than the global certificate representing any
Securities to be sold pursuant to Regulation S under the Act, shall be delivered
by or on behalf of the Company to the Initial Purchasers through the facilities
of The Depository Trust Company ("DTC") against payment by or on behalf of the
Initial Purchasers of the purchase price therefor in United States dollars, by
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wire transfer (immediately available funds) to such bank account or accounts in
the United States as the Company shall specify prior to the Closing Date. Such
delivery of and payment for the Securities shall be made at 10:00 a.m., New York
time, on July 24, 2001, at Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., 000 Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, or at such other place, time or date as the Initial
Purchasers, on the one hand, and the Company, on the other hand, may agree upon,
such time and date of delivery against payment being herein referred to as the
"Closing Date." The global Securities in book-entry form will be deposited on
the Closing Date, by or on behalf of the Company, with the Trustee as custodian
for DTC, and registered in the name of Cede & Co.
4. Offering by the Initial Purchasers. The Initial Purchasers propose
to make an offering of the Securities at the price and upon the terms set forth
in the Final Memorandum, as soon as practicable after this Agreement is entered
into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company. The Company covenants and agrees with the
Initial Purchasers that:
(a) The Company shall not make any amendment or supplement to the Final
Memorandum of which the Initial Purchasers shall not previously have been
advised and furnished a copy for a reasonable period of time prior to the
proposed amendment or supplement and as to which the Initial Purchasers shall
not have given their consent. The Company shall promptly, upon the reasonable
request of the Initial Purchasers, make any amendments or supplements to the
Final Memorandum that may be necessary or advisable in connection with the
resale of the Securities by the Initial Purchasers.
(b) The Company shall cooperate with the Initial Purchasers in
arranging for the qualification of the Securities for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial
Purchasers may reasonably designate and shall continue such qualifications in
effect for as long as may be necessary to complete the resale of the Securities;
provided, however, that in connection therewith, the Company shall not be
required to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation in excess
of a nominal dollar amount in any such jurisdiction where it is not then so
subject.
(c) If, at any time prior to the earlier of (1) consummation of the
exchange offer and (2) completion of the initial resale by the Initial
Purchasers of the Securities to persons other than affiliates of the Initial
Purchasers (as determined by the Initial Purchasers), any event occurs as a
result of which it is necessary, in the reasonable opinion of any of the
Company, its counsel, the Initial Purchasers or counsel for the Initial
Purchasers, to amend or supplement the Final Memorandum in order that the Final
Memorandum does not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or to comply with
applicable law, the Company will promptly prepare an amendment or supplement to
the Final Memorandum (in form and substance reasonably satisfactory to counsel
for the Initial Purchasers) so that, as so amended or supplemented, the Final
Memorandum does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or to effect such
compliance with applicable law.
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(d) The Company will, without charge, provide to the Initial Purchasers
and to counsel for the Initial Purchasers as many copies of the Final Memorandum
or any amendment or supplement thereto as the Initial Purchasers may reasonably
request.
(e) The Company will apply the net proceeds from this offering as set
forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Securities remain outstanding, the
Company will furnish to the Initial Purchasers copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Senior Notes and, as soon as available, copies of any
reports or financial statements furnished to or filed by the Company with the
Securities and Exchange Commission (the "Commission") or any U.S. national
securities exchange on which any class of securities of the Company may be
listed.
(g) Prior to the Closing Date, the Company will furnish to the Initial
Purchasers, as soon as they have been prepared, if at all, a copy of any
unaudited interim financial statements of the Company for any period subsequent
to the period covered by the most recent financial statements appearing in the
Final Memorandum.
(h) Neither the Company nor any of its affiliates will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Securities in a manner which would require the registration under the Act of
the Securities.
(i) Neither the Company, any of its affiliates (as defined in Rule 501
under the Act) nor any person acting on its behalf (excluding the Initial
Purchasers) will offer or sell the Securities by means of any general
solicitation or general advertising within the meaning of Rule 502(c) under the
Act or, with respect to Securities sold outside the United States to non-U.S.
persons (as defined in Rule 902 under the Act), by means of any directed selling
efforts within the meaning of Rule 902 under the Act.
(j) For so long as any of the Securities remain outstanding, the
Company will make available, upon request, to any seller or prospective
purchaser designated by such seller of such Securities the information specified
in Rule 144A(d)(4) under the Act, unless the Company is then subject to Section
13 or 15(d) of the Exchange Act.
(k) The Company will (i) cooperate with the Initial Purchasers in their
efforts to permit the Securities to be designated PORTAL securities in
accordance with the rules and regulations adopted by the NASD relating to
trading in The Portal Market and (ii) use its reasonable best efforts to permit
the Securities to be eligible for clearance and settlement through DTC,
including preparation and filing with DTC of a Letter of Representations signed
by the Company and the Trustee.
(l) The Company shall use its reasonable best efforts to do and
perform, or to cause the Guarantors to do and perform, all things required or
necessary to be done and performed under this Agreement by the Company or any
Guarantor prior to the Closing Date and to satisfy all conditions precedent to
the delivery of the Securities.
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6. Expenses. The Company and each of the Guarantors jointly and
severally agree to pay all costs and expenses incident to the performance of
their obligations under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 11 hereof, including all costs and expenses incident to (i) the
printing, word processing or other production of documents with respect to the
transactions contemplated hereby, including any costs of printing the
Preliminary Memorandum and the Final Memorandum and any amendment or supplement
thereto, (ii) all arrangements relating to the delivery to the Initial
Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company, (iv) preparation, issuance and delivery to the Initial
Purchasers of the Securities, (v) the qualification of the Securities under
state securities and "Blue Sky" laws, including filing fees and reasonable fees
and disbursements of counsel incurred by the Initial Purchasers relating
thereto, (vi) expenses in connection with any meetings with prospective
investors in the Securities, including "road show" expenses but excluding air
transportation expenses, which shall be paid 50% by the Initial Purchasers and
50% by the Company, (vii) fees and expenses incurred by the Trustee and
reasonable fees and expenses incurred by its counsel, (viii) all expenses and
listing fees incurred in connection with the application for quotation of the
Securities on The Portal Market, and (ix) all fees charged by investment rating
agencies for the rating of the Securities. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 7 hereof is not satisfied,
because this Agreement is terminated or because of any failure, refusal or
inability on the part of the Company or any Guarantor to perform all obligations
and satisfy all conditions on its part to be performed or satisfied hereunder
(other than solely by reason of a default by an Initial Purchaser on its
obligations hereunder after all conditions hereunder have been satisfied in
accordance herewith, in which event neither the Company nor the Guarantors shall
have any obligation to reimburse the Initial Purchasers for the out-of-pocket
expenses of the Initial Purchasers indicated below), the Company and each of the
Guarantors jointly and severally agree to promptly reimburse the Initial
Purchasers upon demand for all reasonable out-of-pocket expenses (including
reasonable fees, disbursements and charges of Xxxxxx & Xxxxxx L.L.P., counsel
for the Initial Purchasers) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Securities.
Neither the Company nor any of the Guarantors shall be liable to the Initial
Purchasers for loss of contemplated profits from the transactions covered by
this Agreement. Other than as set forth in this Section 6, each of the parties
hereto shall bear all out-of-pocket costs and expenses incurred by it.
7. Conditions of the Initial Purchasers' Obligations. The obligation of
the Initial Purchasers to purchase and pay for the Securities shall, in their
sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received the
opinion, dated as of the Closing Date and addressed to the Initial Purchasers,
of Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., counsel for the Company, substantially in
the form set forth in Exhibit B. In rendering such opinion, Xxxxxxxx Xxxxxxxx &
Xxxxxx P.C. may assume that the laws of the State of New York are the same as
the laws of the State of Texas and may rely, as to all matters not governed by
the laws of the State of Texas, the Delaware General Corporation Law or the
federal law of the United States, upon opinions of other counsel reasonably
satisfactory to the Initial Purchasers. Such counsel may also state that insofar
as such opinion involves factual matters, they have relied, to the extent they
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deemed proper, upon certificates of officers of the Company or any Guarantor and
certificates of public officials.
(b) On the Closing Date, the Initial Purchasers shall have received the
opinion, in form and substance satisfactory to the Initial Purchasers, dated as
of the Closing Date and addressed to the Initial Purchasers, of Xxxxxx & Xxxxxx
L.L.P., counsel for the Initial Purchasers, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchasers may require. In rendering such opinion, Xxxxxx & Xxxxxx L.L.P. may
rely, as to all matters not governed by the laws of the State of Texas or the
State of New York, the Delaware General Corporation Law or the federal law of
the United States, upon opinions of other counsel reasonably satisfactory to the
Initial Purchasers. Such counsel may also state that insofar as such opinion
involves factual matters, they have relied, to the extent they deemed proper,
upon certificates of officers of the Company or any Guarantor and certificates
of public officials.
(c) The Initial Purchasers shall have received from Xxxxxx Xxxxxxxx LLP
one or more comfort letters dated the date hereof and dated as of the closing
date, in form and substance satisfactory to the Initial Purchasers.
(d) The representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct in all material
respects on and as of the date hereof and on and as of the Closing Date as if
made on and as of the Closing Date (except for the representations and
warranties which were true and correct as of a certain specified date which
shall continue to be true and correct as of such date); the statements of the
Company's or any Guarantor's officers made pursuant to any certificate delivered
in accordance with the provisions hereof shall be true and correct in all
material respects on and as of the date made and on and as of the Closing Date;
each of the Company and the Guarantors shall have complied in all material
respects with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date; and, except as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial statements in such Final Memorandum, there shall have been no
development that, singly or in the aggregate, is reasonably likely to have a
Material Adverse Effect.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(f) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), other than as described in such Final Memorandum or contemplated
hereby, neither the Company nor any Subsidiary shall have incurred any
liabilities or obligations, direct or contingent (other than in the ordinary
course of business), that are material to the Company and its Subsidiaries,
taken as a whole, or entered into any transactions or contracts (written or
oral) not in the ordinary course of business that are material to the business,
condition (financial or other) or results of operations or prospects of the
Company and its Subsidiaries, taken as a whole; there shall not have been any
adverse change in the capital stock or long-term indebtedness of the Company or
any Subsidiary that is material to the business, condition (financial or other)
or results of operations or prospects of the Company and its Subsidiaries, taken
as a whole; and neither the Company nor any of its Subsidiaries shall have
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purchased any of its outstanding capital stock (other than with respect to any
Subsidiary, the purchase of capital stock owned by the Company).
(g) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), neither the Company nor any of its Subsidiaries shall have
sustained any loss or interference with respect to its businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work stoppage or
any legal or governmental proceeding, which loss or interference, would have a
Material Adverse Effect, nor shall there have been any material adverse change,
or any development which may reasonably be expected to involve a material
adverse change, in the properties, business, results of operations, condition
(financial or otherwise), operations or prospects of the Company and its
Subsidiaries taken as a whole (any such event, a "Material Adverse Change"), or
any event or development involving or reasonably likely to cause or result in a
Material Adverse Effect (including without limitation a change in management or
control of the Company), except in each case as described in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(h) The Initial Purchasers shall have received a certificate of the
Company, dated the Closing Date, signed on behalf of the Company by its Chief
Executive Officer and its Chief Financial Officer, to the effect that:
(i) the representations and warranties of the Company and the
Guarantors contained in this Agreement are true and correct in all material
respects as of the date hereof and as of the Closing Date (except for the
representations and warranties which were true and correct as of a certain
specified date which shall continue to be true and correct as of such date), and
each of the Company and the Guarantors has performed all covenants and
agreements and satisfied hereunder all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;
(ii) at the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Final Memorandum (exclusive
of any amendment or supplement thereto after the date hereof), no event or
events have occurred, no information has become known nor does any condition
exist that, individually or in the aggregate, would have a Material Adverse
Effect;
(iii) since the date hereof or since the date of the most
recent financial statements in the Final Memorandum (exclusive of any amendment
or supplement thereto after the date hereof), other than as described in the
Final Memorandum or contemplated hereby, neither the Company nor any Subsidiary
has incurred any liabilities or obligations, direct or contingent (other than in
the ordinary course of business), that are material to the Company and its
Subsidiaries, taken as a whole, or entered into any transactions or contracts
(written or oral) not in the ordinary course of business that are material to
the business, condition (financial or other) or results of operations or
prospects of the Company and its Subsidiaries, taken as a whole; there has not
been any change in the capital stock or long-term indebtedness of the Company or
any Subsidiary that is material to the business, condition (financial or other)
or results of operations or prospects of the Company and its Subsidiaries, taken
as a whole; and neither the Company nor any of its Subsidiaries has purchased
any of its outstanding capital stock (other than with respect to any Subsidiary,
the purchase of capital stock owned by the Company).
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(iv) the sale of the Securities hereunder has not been
enjoined (temporarily or permanently).
(i) On the Closing Date, the Initial Purchasers shall have received a
counterpart, as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(j) On the Closing Date, the Initial Purchasers shall have received the
Registration Rights Agreement duly executed by the Company and the Guarantors.
(k) At the Closing Date, the Securities shall be rated at least B1 by
Xxxxx'x Investors Service, Inc. and B+ by Standard & Poor's.
(l) At the Closing Date, the Securities shall have been designated for
trading on The Portal Market and cleared for settlement at DTC.
On or before the Closing Date, the Initial Purchasers and counsel for
the Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Guarantors as they
shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Company shall
furnish to the Initial Purchasers such conformed copies of such documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.
8. Representations and Warranties by the Initial Purchasers. Each of
the Initial Purchasers represents and warrants that it has duly authorized,
executed and delivered this Agreement. Each of the Initial Purchasers hereby
acknowledges that the Securities have not been registered under the Act; they
are being offered and sold pursuant to an exemption from registration contained
in the Act based in part on such Initial Purchaser's representations contained
in this Agreement, including, without limitation, the following: it has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Company so that it is
capable of evaluating the merits and risks of its investment in the Company; it
acknowledges that it must bear the economic risk of this investment indefinitely
unless the Securities are registered under the Act or an exemption from
registration is available; it is an "accredited investor" within the meaning of
Rule 501(a) promulgated under the Act and a qualified institutional buyer
("QIB"); it has received and read the Final Memorandum, in particular the
information set forth in the sections entitled "Forward-Looking Statements,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Investor Representations," and has had an
opportunity to discuss the Company's business, management and financial affairs
with directors, officers and other management of the Company and its
Subsidiaries and ask questions of, and receive answers from, the Company and its
management regarding the terms and conditions of its investment in the Company.
Each of the Initial Purchasers agrees with the Company that (a) neither it, any
of its affiliates (as defined in Rule 501 under the Act) nor any
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person acting on its behalf has offered or sold or will offer or sell the
Securities by means of any general solicitation or general advertising within
the meaning of Rule 502(c) under the Act or, with respect to Securities sold
outside the United States to non-U.S. persons (as defined in Rule 902 under the
Act), by means of any directed selling efforts within the meaning of Rule 902
under the Act, or in any manner involving a public offering within the meaning
of Section 4(2) of the Act and the rules and regulations promulgated thereunder,
and (b) it has and will solicit offers for the Securities only from, and will
offer the Securities only to (A) in the case of offers inside the United States
or to U.S. persons, persons whom such Initial Purchaser reasonably believes to
be QIBs, if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such person has
represented to such Initial Purchaser that each such account is a QIB, to whom
notice has been given that such sale or delivery is being made in reliance on
Rule 144A under the Act, and, in each case, in transactions under Rule 144A and
(B) in the case of offers outside the United States, persons other than U.S.
persons ("foreign purchaser"), which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust) in offshore
transactions within the meaning of Rule 902 under the Act; provided, however,
that, in the case of this clause (b), in purchasing such Securities, such
persons are deemed to have represented and agreed as provided under the caption
"Investor Representations" contained in the Final Memorandum. Each of the
Initial Purchasers acknowledges and agrees that, except as permitted by this
Agreement, it will not offer, sell or deliver any Securities (i) as part of the
distribution at any time or (ii) otherwise until 40 days (or such longer period
as may be provided under Regulation S, as amended) after the later of the
commencement of the offering of the Securities and the original issue date of
the Senior Notes, within the United States or to, or for the account or benefit
of, U.S. persons, and in any case only in accordance with Rule 903 under the
Act, and that it will send to each dealer or other person receiving a selling
concession, fee or other remuneration to which it sells Securities in reliance
on Regulation S during the restricted period a confirmation or other notice
setting forth the restrictions on offers and sales of the Securities within the
United States or to, or for the account or benefit of, U.S. persons (terms used
in this paragraph having the meanings given to them by Regulation S under the
Act). Each of the Initial Purchasers further represents, warrants and agrees
that (i) it has not offered or sold, and prior to the date six months after the
date of issue of the Securities, will not offer or sell, any Securities to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) it has complied, and will comply, with all
applicable provisions of the Financial Services Xxx 0000 of Great Britain with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom, and (iii) it has only issued or passed
on, and will only issue or pass on, in the United Kingdom, any document received
by it in connection with the issuance of the Securities to a person who is of a
kind described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 of Great Britain or is a person to whom
the document may otherwise lawfully be issued or passed on. Each of the Initial
Purchasers agrees that it will not offer, sell or deliver any of the Securities
in any jurisdiction outside the United States, its territories and possessions
except under circumstances that will result in compliance with the provisions of
Regulation S promulgated under the Act and the applicable laws of such
jurisdiction, and that it will take at its own risk and expense whatever action
is required to permit its purchase and resale of the Securities in such
jurisdictions. Each of the Initial
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Purchasers agrees not to cause any advertisement of the Securities to be
published in any newspaper or periodical or posted in any public place and not
to issue any circular relating to the Securities, except in any such case with
the consent of the Company. Each of the Initial Purchasers agrees to send and
give a copy of the Final Memorandum (as the same may be supplemented or amended)
to each purchaser of the Senior Notes at or prior to the written confirmation of
the sale of the Senior Notes to such person.
9. Indemnification and Contribution.
(a) The Company and each of the Guarantors shall jointly and severally
indemnify and hold harmless each Initial Purchaser, its officers, employees,
representatives and agents and each person, if any, who controls any Initial
Purchaser within the meaning of the Act or the Exchange Act (collectively the
"Initial Purchaser Indemnified Parties" and, each an "Initial Purchaser
Indemnified Party") against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which that Initial Purchaser
Indemnified Party may become subject, under the Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in any Memorandum or in any amendment or supplement thereto or
(ii) the omission or alleged omission to state in any Memorandum or in any
amendment or supplement thereto a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and shall reimburse each Initial Purchaser Indemnified Party
promptly upon demand for any legal or other expenses reasonably incurred by that
Initial Purchaser Indemnified Party in connection with investigating or
preparing to defend or defending against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company and the Guarantors
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from a Memorandum
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Initial
Purchaser specifically for use therein, which information the parties hereto
agree is limited to that information specified as being provided by the Initial
Purchasers in Section 12 hereof. This indemnity agreement is not exclusive and
will be in addition to any liability that the Company and the Guarantors may
otherwise have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to the Initial Purchaser Indemnified Parties.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, each Guarantor, their respective officers,
employees, representatives and agents, each of their respective directors and
each person, if any, who controls the Company within the meaning of the Act or
the Exchange Act (collectively the "Company Indemnified Parties" and each a
"Company Indemnified Party") against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Company Indemnified
Parties may become subject, under the Act, the Exchange Act, any other federal
or state statutory law or regulation, at common law or otherwise, insofar as
such loss, claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
any Memorandum or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein
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a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of that Initial Purchaser
specifically for use therein, and shall reimburse the Company Indemnified
Parties for any legal or other expenses reasonably incurred by such parties in
connection with investigating or preparing to defend or defending against or
appearing as third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided that the
parties hereto hereby agree that such written information provided by the
Initial Purchasers consists solely of the information identified as such in
Section 12 hereto. This indemnity agreement is not exclusive and will be in
addition to any liability that the Initial Purchasers might otherwise have and
shall not limit any rights or remedies which may otherwise be available at law
or in equity to the Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 9
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 9, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 9 except to the extent it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and, provided, further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 9. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by its 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 in the reasonable
judgment of its counsel it is advisable for such indemnified party to employ
separate counsel, (iii) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party or (iv) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such 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 reasonable fees and expenses of
more than one separate firm of attorneys (in addition to local counsel) at any
time for all such indemnified parties, which firm shall
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be designated in writing by RBC Dominion Securities Corporation, if the
indemnified parties under this Section 9 consist of any Initial Purchaser
Indemnified Party, or by the Company, if the indemnified parties under this
Section 9 consist of any Company Indemnified Parties. Each indemnified party, as
a condition of the indemnity agreements contained in Section 9(a) and 9(b),
shall use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. Subject to the provisions of Section 9(d)
below, no indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceedings.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by this Section 9 effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the request for reimbursement, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the
Initial Purchasers on the other from the offering of the Securities or (ii) if
the allocation provided by clause (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 (i) above but also the relative fault of the Company and
the Guarantors on the one hand and the Initial Purchasers on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, 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 with respect
to such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by the Initial Purchasers with respect to the
Securities purchased under this Agreement, in each case as set forth in the
table on the cover page of the Final Memorandum. The relative fault 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 any of the
Guarantors on the one hand or the Initial Purchasers on the other, the intent of
the parties and their relative knowledge, access to information
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Purchasers understands that no action has been taken to permit a public
offering of the Securities in any jurisdiction within or without the United
States where action would be required for such purpose. Each of the Initial and
opportunity to correct or prevent such untrue statement or omission; provided
that the parties hereto agree that the written information furnished to the
Company by the Initial Purchasers for use in the Memorandum consists solely of
the information identified as such in Section 12 hereof. The Company, the
Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 9(e) were to be 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 into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
9(e) shall be deemed to include, for purposes of this Section 9(e), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 9(e), no Initial Purchaser shall be required to
contribute any amount in excess of the total discounts, commissions and other
compensation received by such Initial Purchaser under this Agreement less the
amount of any damages which such Initial Purchaser has otherwise paid or become
liable to pay by reason of any 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 as provided in this Section 9(e) are
several in proportion to their respective underwriting obligations and not
joint.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company and the
Guarantors, their respective officers and the Initial Purchasers set forth in
this Agreement or made by or on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company or any of the Guarantors, any of their respective
officers or directors, the Initial Purchasers or any controlling person referred
to in Section 9 hereof and (ii) delivery of and payment for the Securities. The
respective agreements, covenants, indemnities and other statements set forth in
Sections 6, 9 and 11 through 16 hereof shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement.
11. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Company or any Guarantor shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing Date:
(i) either the Company or any of its Subsidiaries shall have
sustained any loss or interference with respect to its businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slow down or work stoppage or
any legal or governmental proceeding, which loss or interference, in the sole
judgment of the Initial Purchasers, has had or has a Material Adverse Effect, or
there shall have been, in the sole judgment of the Initial Purchasers, any
Material Adverse Change, or any event or development involving or reasonably
likely to cause or result in a Material Adverse Effect (including without
limitation a change in management or control of the Company), except in each
case as described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
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(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the NASDAQ National Market shall have been
suspended or minimum or maximum prices shall have been established on any such
exchange or market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an outbreak
or escalation of any other insurrection or armed conflict involving the United
States or any other national or international calamity or emergency, or (C) any
material change in the financial markets of the United States which, in the case
of clause (A), (B) or (C) and in the sole judgment of the Initial Purchasers,
makes it impracticable or inadvisable to proceed with the private offering or
the delivery of the Securities as contemplated by the Final Memorandum; or
(v) since the date of this Agreement any securities of the
Company shall have been downgraded or placed on any "watch list" for possible
downgrading by any nationally recognized statistical rating organization, as
such term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act.
(b) Termination of this Agreement pursuant to this Section 11 shall be
without liability of any party to any other party except as provided in Section
10 hereof.
(c) If on the Closing Date one of the Initial Purchasers shall fail or
refuse to purchase the Senior Notes which it has agreed to purchase hereunder on
such date and the aggregate principal amount of the Senior Notes which such
defaulting Initial Purchaser agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Senior Notes to be
purchased on such date by all of the Initial Purchasers, the non-defaulting
Initial Purchasers shall be obligated to purchase the Senior Notes which such
defaulting Initial Purchaser agreed but failed or refused to purchase on such
date in such proportions as are indicated in Schedule I hereto; provided that in
no event shall the aggregate principal amount of the Senior Notes which any
Initial Purchaser has agreed to purchase pursuant to this Agreement hereof be
increased pursuant to this Section 11 by an amount in excess of one-ninth of
such principal amount of the Senior Notes without the written consent of such
Initial Purchaser. If on the Closing Date an Initial Purchaser shall fail or
refuse to purchase Senior Notes and the aggregate principal amount of the Senior
Notes with respect to which such default occurs is more than one-tenth of the
aggregate principal amount of the Senior Notes to be purchased by all of the
Initial Purchasers and arrangements satisfactory to the other Initial Purchasers
and the Company for purchase of such Senior Notes are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of the non-defaulting Initial Purchasers or the Company. In any such case which
does not result in termination of this Agreement, either the non-defaulting
Initial Purchasers or the Company shall have the right to postpone the Closing
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 such Initial Purchaser under this Agreement.
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12. Information Supplied by the Initial Purchasers. The statements
concerning the Initial Purchasers set forth in paragraph 4 on page ii and
paragraphs 2, 3, 5, 7 and 8 under the heading "Plan of Distribution" in the
Memorandum (to the extent such statements relate to the Initial Purchasers)
constitute the only information furnished by the Initial Purchasers to the
Company for the purposes of Sections 2(a) and 9 hereof.
13. Notices. All communications hereunder shall be in writing in the
English language and, if sent to the Initial Purchasers, shall be mailed or
delivered or telecopied and confirmed in writing to RBC Dominion Securities
Corporation, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Xxxxxxxx, Facsimile No. (000) 000-0000; and if sent to the Company or any of the
Guarantors, shall be mailed or delivered or telecopied and confirmed in writing
to it at 000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Chief Financial Officer, Facsimile No. (000) 000-0000, with a copy (which shall
not constitute notice to the Company) by mail or telecopy transmission to
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C., 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
Attention: Xxxx Xxxxxxxxxx, Facsimile No. (000) 000-0000.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the United States mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if telecopied.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Guarantors and the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained, this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Guarantors contained in Section 9 of this
Agreement shall also be for the benefit of the officers, employers,
representatives and agents of each Initial Purchaser and any person or persons
who control such Initial Purchaser within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act and (ii) the indemnities of the Initial
Purchasers contained in Section 9 of this Agreement shall also be for the
benefit of the officers, employees, representatives and agents of the Company or
any Guarantor, the respective directors of the Company and the Guarantors and
any person or persons who control the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act. No purchaser of Securities from
the Initial Purchasers will be deemed a successor because of such purchase.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. Consent to Jurisdiction. Each of the Company and the Guarantors
hereby (a) irrevocably agrees that any suit, action or proceeding against it
brought by the Initial Purchasers or by any person who controls any of the
Initial Purchasers, arising out of or based upon this Agreement or the
transactions contemplated hereby may be instituted in any competent state or
federal court in the State of New York sitting in the Borough of Manhattan in
the City of New York and (b) irrevocably waives, to the fullest extent permitted
by law, any objection that it may now or
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hereafter have to the laying of venue of any such suit, action or proceeding
brought in such a court and any claim that any such suit, action or proceeding
brought in such a court has been brought in any inconvenient forum, and
irrevocably submits to the nonexclusive jurisdiction of such courts in any such
suit, action or proceeding.
Nothing in this Section shall limit the right of the Initial Purchasers
or any person who controls an Initial Purchaser to bring proceedings against the
Company or any Guarantor in the courts of any other jurisdiction.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Authorization. Each of the Initial Purchasers irrevocably
authorizes RBC Dominion Securities Corporation to execute and deliver the
Registration Rights Agreement on its behalf.
*****
[Signature pages follow.]
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Company,
the Guarantors and the Initial Purchasers.
Very truly yours,
COMPANY:
XXXXXXXX-LEEVAC MARINE SERVICES, INC.
By: /s/ XXXXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxxxx X. Xxxxxxx
Chief Executive Officer
GUARANTORS:
XXXXXXXX-LEEVAC MARINE OPERATORS, INC.
By: /s/ XXXXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxxxx X. Xxxxxxx
Chief Executive Officer
XXXXXXXX OFFSHORE SERVICES, INC.
By: /s/ XXXXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxxxx X. Xxxxxxx
Chief Executive Officers
LEEVAC MARINE, INC.
By: /s/ XXXXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxxxx X. Xxxxxxx
Chief Executive Officer
ENERGY SERVICES PUERTO RICO, INC.
By: /s/ XXXXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxxxx X. Xxxxxxx
Chief Executive Officer
25
The foregoing Agreement is hereby
confirmed and accepted in New York, New York,
as of the date first above written.
RBC DOMINION SECURITIES CORPORATION
By: /s/ XXXXXXX XXXXXXXXXX
------------------------------------
Xxxxxxx Xxxxxxxxxx
Managing Director
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By:
------------------------------------
Xxxx Xxxxxxxxx
Managing Director
26
The foregoing Agreement is hereby
confirmed and accepted in New York, New York,
as of the date first above written.
RBC DOMINION SECURITIES CORPORATION
By:
------------------------------------
Xxxxxxx Xxxxxxxxxx
Managing Director
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By: /s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx
Vice President
27
SCHEDULE I
XXXXXXXX-LEEVAC MARINE SERVICES, INC.
PRINCIPAL
AMOUNT OF
INITIAL PURCHASER SENIOR NOTES
----------------- --------------
RBC Dominion Securities Corporation ................................................ $ 122,500,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx .............................................. 52,500,000
Incorporated ..............................................................
--------------
Total ..................................................................... $ 175,000,000
==============
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EXHIBIT A
SUBSIDIARIES
SUBSIDIARIES STATE OF INCORPORATION % OF INTEREST
------------ ---------------------- -------------
LEEVAC Marine, Inc Louisiana 100.0
Xxxxxxxx Offshore Services, Inc. Delaware 100.0
XXXXXXXX-LEEVAC Marine Operators, Inc. Delaware 100.0
Energy Services Puerto Rico, Inc. Louisiana 100.0
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29
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR THE COMPANY AND THE GUARANTORS
Xxxxxxxx Xxxxxxxx & Xxxxxx P.C. shall have furnished to the
Initial Purchasers their written opinion, as counsel to the Company and the
Guarantors, addressed to the Initial Purchasers and dated the Closing Date, to
the effect set forth below:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its businesses requires such
qualification (except where the failure to so qualify or to be in good
standing would not have a Material Adverse Effect), and has all
corporate power and authority necessary to own its properties and to
conduct the businesses in which it is engaged as described in the Final
Memorandum;
(ii) the Company has an authorized, issued and outstanding
equity capitalization as set forth in the Final Memorandum;
(iii) each of the subsidiaries of the Company listed on
Exhibit A to the Purchase Agreement (the "Designated Subsidiaries")
that is a corporation is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own its properties and to conduct its
business as described in the Final Memorandum and is duly qualified as
a foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; all of the
issued and outstanding capital stock or other equity interests of each
Designated Subsidiary have been duly authorized and validly issued, are
fully paid and nonassessable and, to such counsel's knowledge, are
owned by the Company, directly or through other Designated
Subsidiaries, free and clear of all liens, encumbrances, other adverse
claims or restrictions on transferability (other than those imposed by
the Act and the securities or "Blue Sky" laws of certain jurisdictions)
or voting, other than as described in the Final Memorandum; and each
Designated Subsidiary that is a partnership or limited liability
company is validly existing in good standing under the laws of the
jurisdiction of its organization, has power and authority to own its
properties and to conduct its business as described in the Final
Memorandum and is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect;
(iv) the statements in the Final Memorandum under the headings
"Description of Certain Indebtedness," "Description of the Notes" and
"United States Federal Income Tax Consequences," to the extent that
they constitute summaries of matters of law or legal conclusions, have
been reviewed by such counsel and accurately summarize the matters
described therein in all material respects; to such counsel's
knowledge, there are no franchises, contracts, indentures, mortgages,
loan agreements, notes, leases or other
B-1
30
instruments that would be required to be described in the Final
Memorandum if the Final Memorandum were a prospectus included in a
registration statement on Form S-1 that are not described or referred
to in the Final Memorandum other than those described or referred to
therein, and the descriptions thereof or references thereto are correct
in all material respects; and such counsel does not know of any current
or pending legal or governmental actions, suits or proceedings which
would be required to be described in the Final Memorandum if the Final
Memorandum were a prospectus included in a registration statement on
Form S-1 which are not described as so required;
(v) the Indenture conforms in all material respects with the
requirements of the TIA and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder;
(vi) each of the Company and the Guarantors has all requisite
corporate or similar power and authority to execute and deliver each of
the Operative Documents to which it is a party, to perform its
obligations thereunder and to consummate the transactions contemplated
thereby;
(vii) each of the Purchase Agreement and the Registration
Rights Agreement has been duly authorized, executed and delivered by
the Company and each Guarantor;
(viii) the Indenture has been duly authorized, executed and
delivered by the Company and each Guarantor and, assuming that the
Indenture is the valid and legally binding obligation of the Trustee,
constitutes a valid and legally binding agreement of the Company and
each Guarantor enforceable against the Company and each Guarantor in
accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer or conveyance, reorganization, moratorium and other
similar laws of general applicability relating to or affecting
creditors' rights and by general equity principles, and a Texas court
or a federal court sitting in Texas would recognize the choice of law
of the State of New York in the Indenture as the law governing the
construction and enforcement of the Indenture, the Senior Notes and the
Guarantees;
(ix) the Senior Notes and the Guarantees have been duly and
validly authorized and issued by the Company and each Guarantor,
respectively, and, assuming each global certificate representing the
Senior Notes has been authenticated as provided in the Indenture. The
Securities constitute legally valid and binding obligations of the
Company, as issuer, and each Guarantor, as guarantor, entitled to the
benefits of the Indenture and enforceable against the Company, as
issuer, and each Guarantor, as guarantor, in accordance with their
respective terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights
generally and by general equity principles;
(x) the Exchange Securities and the guarantees have been duly
and validly authorized by the Company and each Guarantor, respectively,
and, when the global certificate representing the Exchange Notes has
been issued and authenticated in accordance
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31
with the terms of the Indenture, the Registration Rights Agreement and
the Exchange Offer, will constitute legally valid and binding
obligations of the Company, as issuer, and each Guarantor, as
guarantor, entitled to the benefits of the Indenture and enforceable
against the Company, as issuer, and each Guarantor, as guarantor, in
accordance with their respective terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer or conveyance, reorganization, moratorium and other
similar laws affecting creditors' rights generally and by general
equity principles;
(xi) the execution, delivery and performance by the Company of
each of the Operative Documents and by each Guarantor of each Operative
Document to which it is a party and the consummation of the
transactions contemplated by the Operative Documents do not and will
not violate, conflict with or constitute or result in a breach of or a
default under (or constitute an event which with notice or passage of
time or both would constitute a default under) or cause an acceleration
of any obligation under, or (except for the transactions contemplated
thereby) result in the imposition or creation of (or the obligation to
create or impose) any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof), on any
properties or assets of either the Company or any Subsidiary with
respect to (A) the terms or provisions of any Contract, except for any
such conflict, breach, violation, default or event which would not,
individually or in the aggregate, have a Material Adverse Effect, (B)
the charter or bylaws (or similar organizational document) of the
Company or any of its Subsidiaries, or (C) (assuming compliance with
all applicable state securities or "Blue Sky" laws and assuming the
accuracy of the representations and warranties of the Initial
Purchasers in Section 8 of the Purchase Agreement) any statute,
judgment, decree, order, rule or regulation applicable to the Company
or any of its Subsidiaries or any of their respective properties or
assets, except for any such conflict, breach or violation which would
not, individually or in the aggregate, have a Material Adverse Effect;
(xii) the Company is not an "investment company" or a company
"controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder; and
(xiii) assuming the accuracy of the representations,
warranties and agreements of the Company and the Guarantors and of the
Initial Purchasers contained in the Purchase Agreement, no registration
of the Securities under the Act or qualification of the Indenture under
the TIA is required in connection with the issuance and sale of the
Securities by the Company and the Guarantors and the offer, resale and
delivery of the Securities by the Initial Purchasers in the manner
contemplated by the Purchase Agreement and the Final Memorandum.
Because the primary purpose of such counsel's engagement was
not to establish factual matters and many of the statements in the Final
Memorandum are wholly or partially non-legal in character, such counsel is not
(except as aforesaid in paragraph (iv)) passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained therein. Such counsel has participated, however, in conferences with
officers and other representatives of the Company, its independent public
accountants and the Initial Purchasers at
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32
which the contents of the Final Memorandum and related matters were discussed.
On the basis of the foregoing, such counsel advises you that no facts have come
to its attention that would lead it to believe that the Final Memorandum, as of
its date or at the date hereof, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Such counsel expresses no view, belief or comment
with respect to the form, accuracy, completeness or fairness of the financial
statements, notes or schedules thereto, or other financial data or accounting
information included in the Final Memorandum.
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