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EXHIBIT 4.2
CONVERTIBLE NOTE PURCHASE AGREEMENT
This CONVERTIBLE NOTE PURCHASE AGREEMENT (this "Agreement"), dated as of
June 22, 1999, between The Meridian Resource Corporation, a Texas corporation
(the "Company"), and EOS Partners, L.P., a Delaware limited partnership
("Purchaser");
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has determined that it is
in the best interests of the Company to issue and sell to the Purchaser certain
securities of the Company, subject to the terms and conditions of this
Agreement;
WHEREAS, the Company and the Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
sale of certain securities of the Company to the Purchaser;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements herein contained, the parties agree as
follows:
ARTICLE I
DEFINITIONS
Unless otherwise specifically stated in the text of this Agreement,
the following terms shall have the following meanings:
"Affiliate" shall mean, with respect to any specified Person, any
other Person, directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For the purposes
of this definition, "control" (including, with correlative meanings,
"controlling," "controlled by" and "under common control with") means the power
to direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise and, with respect to a corporation or partnership,
control shall mean direct or indirect ownership of more than 50% of the voting
stock or general partnership interest or voting interest in any such
corporation or partnership.
"Closing Date" shall mean the date hereof.
"Commission" shall have the meaning subscribed thereto in Section
3.1 hereof.
"Conversion Price" shall have the meaning assigned to it in the
Notes.
"Credit Agreement" means the Amended and Restated Credit Agreement
dated May 22, 1998, among the Company, the several lenders from time to time
party thereto (the "Lenders"), The Chase Manhattan Bank, as administrative
agents, Bankers Trust Company, as Syndication Agent, Chase Securities, Inc., as
Advisor, Chase Securities Inc., B T Alex. Xxxxx Incorporated, Toronto Dominion
(Texas), Inc. and Credit Lyonnais New York Branch, as Co-arrangers, and Toronto
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Dominion (Texas), Inc. and Credit Lyonnais New York Branch, as Co-Documentation
Agents, as amended.
"Exhibit" shall refer to the Exhibits to this Agreement, unless
otherwise stated, and an Exhibit may be attached to this Agreement or set forth
in a separate document denoted as an Exhibit to this Agreement.
"Governmental Authority" shall mean any and all foreign, federal,
state or local governments, governmental institutions, public authorities and
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including, but not limited to, departments, boards,
bureaus, commissions, agencies, courts, administrations and panels, and any
divisions or instrumentalities thereof, whether permanent or ad hoc and whether
now or hereafter constituted and existing.
"Governmental Requirement" shall mean any and all laws (including,
but not limited to, applicable common law principles), statutes, ordinances,
codes, rules, regulations, interpretations, guidelines, directions, orders,
judgments, writs, injunctions, decrees, decisions or similar items or
pronouncements that are promulgated, issued, passed or set forth by any
Governmental Authority.
"Notes" shall mean the $5 million in principal amount of
subordinated convertible notes, which shall be in substantially the form
attached hereto as Exhibit A.
"Person" shall mean any natural person, any Governmental Authority
and any entity the separate existence of which is recognized by any
Governmental Authority or Governmental Requirement, including, but not limited
to, corporations, partnerships, limited liabilities companies, joint ventures,
joint stock companies, trusts, estates, companies and associations, whether
organized for profit or otherwise.
"Purchaser" shall have the meaning ascribed thereto in the
introduction to this Agreement.
"Purchase Price" shall have the meaning ascribed thereto in Section
2.2 hereof.
"Registering Parties" or "Registering Party" have the meaning
ascribed thereto in Section 8.4(a).
"SEC Documents" shall have the meaning ascribed thereto in Section
4.5 hereof.
"Securities Act" shall have the meaning ascribed thereto in Section
3.1 hereof.
"TMRC Common Stock" shall mean the common stock, $0.01 per value, of
the Company.
"TMRC Converted Shares" shall mean any TMRC Common Stock that the
Purchaser holds as a result of a conversion of the Notes into TMRC Common Stock
or as a result of the exercise of the Warrants.
"Warrants" shall mean the stock purchase warrants described on Annex
A to the Notes.
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ARTICLE II
AUTHORIZATION, PURCHASE AND SALE OF THE NOTES
Section 2.1 Authorization of the Notes. The Company has authorized
the issuance and sale of up to $25 million principal amount of Notes.
Section 2.2 Sale and Purchase of the Notes. Subject to the terms and
conditions hereof and in reliance upon the representations, warranties and
agreements contained herein, on the Closing Date, the Company will issue and
sell to the Purchaser, and the Purchaser will purchase from the Company, $5
million in principal amount of Notes at a purchase price equal to the principal
amount of such Notes (the "Purchase Price").
Section 2.3 Purchase Price. The Company shall deliver, upon receipt
of the Purchase Price, to the Purchaser, Notes in the principal amount of $5
million. Each Purchaser shall deliver to the Company the Purchase Price, by
cash, check, wire transfer or any combination of the foregoing as designated by
the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company that:
Section 3.1 Investment Purpose; Accredited Investor. Such Purchaser
(i) is an accredited investor as that term is defined in Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), and (ii) is acquiring the Notes for its own account, for investment
purposes and not with a view to, or for resale in connection with, any
distribution or public offering thereof within the meaning of the Securities
Act, except pursuant to a valid registration statement under the Securities Act
declared effective by the Securities and Exchange Commission (the "Commission")
or pursuant to a valid exemption from registration under the Securities Act.
Section 3.2 Restrictions on Resale. The Purchaser acknowledges that
the Notes and any shares of TMRC Converted Shares (if and when issued) must be
held indefinitely unless and until they are subsequently registered under the
Securities Act or an exemption from such registration is available and that all
certificates representing TMRC Converted Shares if and when issued, unless such
shares have been registered under the Securities Act, shall have endorsed
thereon the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH SHARES
ARE REGISTERED UNDER SUCH ACT, OR SUCH STATE LAWS, OR AN OPINION OF
COUNSEL IS FURNISHED TO THE COMPANY (WHICH OPINION AND COUNSEL
RENDERING SAME SHALL BE REASONABLY SATISFACTORY TO THE
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COMPANY) TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.
The Purchaser also acknowledges that the Notes will bear a legend substantially
in the form included in the form of Note attached hereto as Exhibit A. The
legends contained on the Notes and the certificates representing TMRC Converted
Shares shall be removed by the Company upon delivery to it of an opinion of
counsel to the Company (which opinion and counsel rendering same shall be
reasonably satisfactory to the Company) that a registration statement under the
Securities Act is at the time effective with respect to the transfer of the
legended security or that such security may be transferred without such
registration statement being in effect and without the requirements of a legend
on the certificate in the hands of the transferee.
3.3 Access to Data. The Purchaser has had an opportunity to review
the SEC Documents and is not subscribing for the Notes as a result of any
advertisement, article, notice or other communication published in any
newspaper, newswire, magazine or similar media or broadcast over television,
radio or any electronic media (including the internet).
3.4 Authorization. The Purchaser has full power and authority to
enter into and to perform this Agreement in accordance with its terms. All
action (corporate or otherwise) on the part of the Purchaser necessary for the
authorization, execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated herein has been
taken. This Agreement is a valid and binding obligation of the Purchaser,
enforceable in accordance with its terms except as limited by applicable
bankruptcy, moratorium, insolvency or other similar laws affecting generally
the rights of creditors or by principles of equity.
3.5 NYSE Affiliate. The Purchaser and its Affiliates (after issuance
of the Notes to the Purchaser hereunder) will not beneficially own (as defined
under Rule 13d-3 promulgated pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) 5% or more of the outstanding TMRC Common
Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that:
Section 4.1 Due Incorporation and Qualification and Capital
Structure. The Company is a corporation duly incorporated and validly existing
under the laws of the state of Texas and has all requisite corporate power to
carry on its business as now being conducted. The Company is qualified to do
business in each other jurisdiction in which its failure to so qualify would
materially and adversely affect the Company or its financial condition,
business or ability to perform the transactions contemplated by this Agreement.
Section 4.2 Performance of Agreement.
(a) The Company has all necessary corporate power and
authority to enter into and carry out the transactions contemplated by this
Agreement, to issue the Notes, to execute and
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deliver the Warrants, and to issue the TMRC Converted Shares pursuant to the
Notes or the Warrants, as the case may be.
(b) The Company's execution, delivery and performance of
this Agreement, the issuance of the Notes, the execution and delivery of the
Warrants, and the issuance of the TMRC Converted Shares pursuant to the Notes
or the Warrants, as the case may be, have been duly and validly authorized and
approved by all necessary corporate action on the part of the Company.
(c) The execution, delivery and performance of this
Agreement by the Company, and the transactions contemplated hereby, the
issuance of the Notes, the execution and delivery of the Warrants, and the
issuance of the TMRC Converted Shares pursuant to the Notes or the Warrants, as
the case may be, will not violate (i) any provision of the articles of
incorporation or bylaws of the Company, (ii) any material agreement or
instrument to which the Company is a party or by which the Company is bound,
(iii) any judgment, order, ruling or decree applicable to the Company as a
party in interest or (iv) any Governmental Requirement applicable to the
Company.
(d) This Agreement is, and each Note and Warrant, if and
when executed and delivered by the Company, will be, a valid and binding
agreement and obligation of the Company, enforceable against the Company in
accordance with its terms, except as limited by (i) applicable bankruptcy,
moratorium, insolvency or other similar laws affecting generally the rights of
creditors, (ii) general principles of equity or (iii) the indemnification
provisions contained in this Agreement being subject to limitations under
public policy.
Section 4.3 Brokers and Finders. No agent, broker, investment
banker, person or firm acting on behalf of the Company or under its authority
is or will be entitled to any broker's or finder's fee or any other commission
or similar fee directly or indirectly from the Purchaser in connection with any
of the transactions contemplated hereby.
Section 4.4 Authorization for TMRC Common Stock. The Company has
taken all necessary corporate action to permit it to issue the number of shares
of TMRC Common Stock to be issued upon conversion of the Notes or exercise of
the Warrants. The shares of TMRC Common Stock to be issued upon conversion of
the Notes or exercise of the Warrants will, when issued pursuant to the terms
of this Agreement, the Notes and the Warrants, as the case may be, be validly
issued, fully paid and nonassessable and not subject to preemptive rights.
Section 4.5 SEC Documents. The Company has provided or made
available to the Purchaser the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 (the "10-K"), Amendment No. 1 to the 10-K on Form
10-K/A, the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999, the Company's Current Report on Form 8-K dated May 5, 1999, and the
Company's proxy statement with respect to its Annual Meeting of Shareholders
for 1999 (such documents collectively referred to herein as the "SEC
Documents"). As of their respective dates, (i) the SEC Documents complied in
all material respects with the requirements of the Exchange Act, and the rules
and regulations of the Commission promulgated thereunder applicable to such SEC
Documents, and (ii) none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were
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made, not misleading. The consolidated financial statements of the Company
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the Commission with respect thereto, were prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended. Since March 31, 1999,
other than as discussed in the SEC Documents, there has been no material
adverse change in the business of the Company and its subsidiaries, taken as a
whole.
Section 4.6 Adequate Security. The Mortgages (as defined in the
Credit Agreement) and Additional Mortgages (as defined in the Credit Agreement)
constitute adequate security for the outstanding borrowings under the Credit
Agreement. The Company covenants and agrees that it will not challenge the
adequacy of the Mortgages or Additional Mortgages that secure the outstanding
borrowings under the Credit Agreement.
Section 4.7 Other Notes. The Company will not repurchase, prepay or
redeem all or any part of the outstanding principal under that certain 9 1/2%
Subordinated Note dated June 18, 1999 (the "Kayne Note") payable to Xxxxx
Xxxxxxxx Energy Fund, L.P. ("Kayne") in the principal amount of $15,000,000,
which was issued pursuant to that certain Note Purchase Agreement dated June
18, 1999 between the Company and Kayne (the "Kayne Note Purchase Agreement")
unless the Company redeems all or part (in the same proportion that the Kayne
Note is redeemed) of the Note.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser hereunder are subject to
satisfaction of the conditions set out in this Article V at or before the
Closing Date.
Section 5.1 Opinion of Counsel. The Purchaser shall have received
the opinion of counsel to the Company in a form reasonably satisfactory to the
Purchaser.
Section 5.2 Performance and Obligations of the Company. All of the
terms and conditions of this Agreement to be complied with and performed by the
Company at or before the Closing Date shall have been complied with and
performed in all material respects.
Section 5.3 Absence of Litigation. No suit, action or other
proceeding by a third party or governmental entity shall have been instituted
or threatened before any court, Governmental Authority or legislative body to
enjoin, restrain or prohibit, or to obtain substantial damages in respect of,
or which is related to or arises out of, this Agreement or the consummation of
the transactions contemplated hereby, which, in the reasonable judgment of the
Purchaser, would make it inadvisable to consummate such transactions.
Section 5.4 Representations and Warranties. All of the
representations and warranties of the Company shall be true and correct on the
Closing Date.
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ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY
The obligations of the Company hereunder are subject to satisfaction
of the conditions set out in this Article VI at or before the Closing Date.
Section 6.1 Absence of Litigation. No suit, action or other
proceeding by a third party or governmental entity shall have been instituted
or threatened before any court, Governmental Authority or legislative body to
enjoin, restrain or prohibit, or to obtain substantial damages in respect of,
or which is related to or arises out of, this Agreement or the consummation of
the transactions contemplated hereby, which, in the reasonable judgment of the
Company, would make it inadvisable to consummate such transactions.
Section 6.2 Performance and Obligations of the Purchaser. All of the
terms and conditions of this Agreement to be complied with and performed by the
Purchaser at or before the Closing Date hereof shall have been complied with
and performed in all material respects.
Section 6.3 Representations and Warranties. The representations and
warranties of each of the Purchaser shall be true and correct on the Closing
Date.
ARTICLE VII
NATURE OF STATEMENTS AND SURVIVAL
Section 7.1 Representations and Warranties. The several
representations and warranties of the parties shall survive the execution and
delivery of this Agreement for three years.
Section 7.2 Effect of Investigation. All representations,
warranties, covenants and agreements made by the parties shall not be affected
by any investigation heretofore or hereafter made by and on behalf of any of
them and shall not be deemed merged into any instruments or agreements
delivered in connection with this Agreement or otherwise in connection with the
transactions contemplated hereby.
Section 7.3 Survival of Covenants and Agreements. The covenants and
agreements entered into pursuant to this Agreement shall survive the execution
and delivery of this Agreement without limitation.
ARTICLE VIII
REGISTRATION
Section 8.1 Demand Rights. On three occasions during the period
ending on the first anniversary of the date of this Agreement and on one
occasion after the first anniversary of the date of this Agreement, the
Purchaser may request in writing (on behalf of itself and all of its Affiliates
to whom rights under this Agreement have been assigned pursuant to Section 9.1
and in the aggregate as a group) to the Company (a "Demand Request"), pursuant
to this Section 8.1, that the Company
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register under the Securities Act any TMRC Converted Shares owned by the
Purchaser and its Affiliates pursuant to a non-underwritten offering, having a
period of distribution not to exceed 60 days; provided, however, the Company
shall not be obligated to prepare and file any registration statement pursuant
to this Section 8.1, or prepare or file any amendment or supplement thereto,
and may suspend sales thereunder, at any time when the Company reasonably
believes that the filing thereof at the time requested, or the offering of
securities pursuant thereto, would materially and adversely affect a pending or
proposed public offering of securities of the Company, a proposed acquisition,
merger, recapitalization, consolidation, reorganization or similar transaction
relating to the Company or negotiations, discussions or pending proposals with
respect thereto or require premature disclosure of information not otherwise
required to be disclosed to the potential detriment of the Company; provided,
however, that such period of sale or distribution shall resume after any such
suspension for a number of additional days necessary so that such registration
has been kept effective for permitted sales thereunder for an aggregate term of
60 days. In the event the filing of a registration statement, or any amendment
or supplement thereto, by the Company is deferred, or the sale and distribution
of shares is suspended, in each case pursuant to the foregoing provisions, for
more than 15 business days, then the Purchaser (on behalf of itself and its
Affiliates) may (only in the event the Purchaser or its Affiliates have not yet
sold more than 50% of the TMRC Converted Shares owned by any of them that are
included in the registration statement) give the Company written notice of the
Purchaser's and its Affiliates' intent to abandon the registration, and, in
such circumstance, no additional TMRC Converted Shares owned by the Purchaser
or its Affiliates may be sold by the Purchaser or its Affiliates pursuant to
such registration statement and the registration or request for registration
shall not be considered one of the Purchaser's and its Affiliates' Demand
Requests permitted by this Section 8.1. Any Demand Request made by the
Purchaser (on behalf of itself and its Affiliates) during the period ending on
the first anniversary of the date of this Agreement must be for registration of
a minimum of 250,000 shares of TMRC Converted Shares owned by the Purchaser or
its Affiliates. Any Demand Request made by the Purchaser (on behalf of itself
and its Affiliates) at any time after the first anniversary of the date of this
Agreement must be for registration of a minimum of 500,000 shares of TMRC
Converted Shares owned by the Purchaser or its Affiliates. The filing of a
registration statement, or any amendment or supplement thereto, by the Company
may not be deferred, and the sale and distribution of shares may not be
suspended, in each case pursuant to the foregoing provisions, for more than 60
days after the abandonment or consummation (or the completion of the
distribution of securities in the case of a public offering) of any of the
proposals or transactions described therein or, in any event, for more than 180
days during any one year.
Section 8.2 Piggyback Rights. If, at any time after the date hereof,
the Company proposes to register under the Securities Act (i) any shares of
TMRC Common Stock for sale by it pursuant to an underwritten public offering of
TMRC Common Stock (except with respect to registration statements (a) filed on
Forms X-0, X-0 or such other forms as shall be prescribed under the Securities
Act for the same purposes as such form or (b) registration statements filed
pursuant to demand registration rights contained in the SLOPI Registration
Rights Agreement (as hereinafter defined)) or a non-underwritten public
offering of TMRC Common Stock filed pursuant to a demand request made by
another Purchaser and its Affiliates pursuant to this Agreement; or (ii) TMRC
Common Stock issued pursuant to the terms and provisions of the Kayne Note (or
warrant attached as Annex A to the Kayne Note), the Company will at each such
time, prior to the filing of any such registration statement, give written
notice to each Purchaser (other than a Purchaser making a Demand Request)
(which also shall be deemed to be notice to the Purchaser's Affiliates) of the
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Company's intention to do so, regardless of whether any the Purchaser and its
Affiliates have previously exercised piggyback registration rights or demand
registration rights as to any other shares of TMRC Common Stock owned by them,
and, upon the written request (which must specify the number of shares of TMRC
Converted Shares that the Purchaser and its Affiliates propose to include in
such offering) from the Purchaser (on behalf of itself and each of its
Affiliates) delivered to the Company within 20 days (or such shorter period,
but in any event not less than five days, as the Company shall specify in its
notice to the Purchaser) of the Purchaser's receipt of the Company's notice,
the Company will use commercially reasonable efforts to cause any TMRC
Converted Shares as to which registration shall have been so requested to be
included in the shares to be covered by the registration statement proposed to
be filed by the Company. Nothing contained in this Section 8.2 shall, however,
limit the Company's right to cancel, postpone or withdraw any such proposed
registration for any reason (except in connection with a registration pursuant
to a Demand Request, in which case the terms of Section 8.1 hereof shall
apply). Any request by a Purchaser and its Affiliates (through the Purchaser)
pursuant to this Section 8.2 to register TMRC Converted Shares for sale in an
underwritten offering shall be on the same terms and conditions as the other
shares of TMRC Common Stock to be registered and sold through the underwriters
under such registration; provided, however, that as a condition to such
inclusion each the Purchaser and its Affiliates shall execute an underwriting
agreement acceptable to the underwriters and, if requested, a custody agreement
having such customary terms as the underwriters shall request, including
indemnification, and if the managing underwriter determines and advises in
writing that the inclusion in the underwriting of all TMRC Converted Shares
proposed to be included by the Purchaser and its Affiliates and any other
shares of TMRC Common Stock sought to be registered by any other shareholder of
the Company exercising rights comparable to those of the Purchaser and its
Affiliates under this Section 8.2 would, in the reasonable and good faith
judgment of the underwriters, interfere with the successful marketing of the
securities proposed to be registered for underwriting by the Company or by any
holder of TMRC Common Stock having the right to require the Company to register
such TMRC Common Stock (the "Other Common Stock"), then the number of TMRC
Converted Shares and Other Common Stock requested to be included in the
underwriting shall be reduced (subject to the rights of Shell Louisiana Onshore
Properties Inc. and its Affiliates and assignees ("SLOPI") under that certain
Registration Rights Agreement between the Company and SLOPI dated June 30, 1998
(the "SLOPI Registration Rights Agreement")) pro rata among the Purchaser and
its Affiliates and the holders of Other Common Stock requesting such
registration and inclusion in the underwriting and may, in the determination of
such managing underwriter and consistent with pro rata reduction, be reduced to
zero. In the event any Purchaser or its Affiliates elects pursuant to this
Section 8.2 to include TMRC Converted Shares in a registration statement being
filed pursuant to a "demand request" made pursuant to the Kayne Note Purchase
Agreement, such inclusion shall be considered as the use of one of the Demand
Requests under Section 8.1 hereof.
Section 8.3 Procedure. If and whenever the Company is requested
pursuant to the provisions of this Agreement to effect the registration of any
TMRC Converted Shares under the Securities Act, the Company will, subject to
the other provisions of this Article VIII, including the rights of the Company
pursuant to Section 8.1 hereof to delay, or suspend sales under, any such
registration):
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(a) as expeditiously as reasonably practicable after
demand therefor, prepare and file with the Commission a registration statement
on the appropriate form with respect to such TMRC Converted Shares and seek to
cause such registration statement to become and remain effective;
(b) as expeditiously as reasonably practicable, prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act with respect to the disposition of such
TMRC Converted Shares covered by such registration statement in accordance with
the intended method of distribution set forth in such registration statement;
(c) as expeditiously as reasonably practicable, furnish to
each Purchaser (in the event the Purchaser or its Affiliates is participating
in the registration) (on behalf of the Purchaser and its Affiliates) such
number of copies of final prospectuses and preliminary prospectuses in
conformity with the requirements of the Securities Act, and such other
documents as the Purchaser (or behalf of itself and its Affiliates) may
reasonably request, in order to facilitate the public sale or other disposition
of such TMRC Converted Shares; provided, however, that the obligation of the
Company to deliver copies of final prospectuses or preliminary prospectuses to
the Purchaser (on behalf of itself and its Affiliates) shall be subject to the
receipt by the Company of reasonable assurances from the the Purchaser and its
Affiliates participating in such offering that they will comply with the
applicable provisions of the Securities Act and of such other securities laws
as may be applicable in connection with any use by the Purchaser and its
Affiliates of any final prospectuses or preliminary prospectuses;
(d) as expeditiously as practicable, use its best efforts
to register or qualify TMRC Converted Shares covered by such registration
statement under such other securities laws of such United States jurisdictions
as a Purchaser (on behalf of the Purchaser and its Affiliates) shall reasonably
request (considering the nature and size of the offering) and do any and all
other acts and things that may be necessary or desirable to enable the
Purchaser and its Affiliates participating in such offering to consummate the
public sale or other disposition in such jurisdictions of TMRC Converted
Shares; provided, however, that the Company shall not be required to qualify to
transact business as a foreign corporation in any jurisdiction in which it
would otherwise not be required to be so qualified or to take any action that
would subject it to general service of process in any jurisdiction in which it
is not then so subject;
(e) bear all Registration Expenses (as defined below) in
connection with all registrations hereunder; provided, however, that all
Selling Expenses (as defined below) of TMRC Converted Shares and all fees and
disbursements of counsel for the Purchaser and its Affiliates participating in
the registration in connection with each registration pursuant to this Article
8 shall be borne by the Purchaser and its Affiliates. Expenses incurred by the
Company in complying with this Article 8, including, without limitation: (i)
all registration and filing fees; (ii) all printing expenses; (iii) all fees
and disbursements of counsel for the Company; (iv) all blue sky fees and
expenses; and (v) all fees and expenses of accountants for the Company, are
herein referred to as "Registration Expenses". All underwriting fees and
discounts and brokerage and selling commissions relating to TMRC Converted
Shares to be registered for sale by the Purchaser and its Affiliates
participating in the registration and fees and expenses of the counsel for the
Purchaser and its
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Affiliates and any underwriter's counsel (only to the extent the underwriting
agreement relating to such registration requires underwriter's counsel's fees
and expenses to be paid by the Company and the Purchaser and its Affiliates and
only to the extent of the Purchaser's and its Affiliates' pro rata portion of
such fees based upon the ratio the number of shares being sold by the Purchaser
and its Affiliates bears to the total number of shares being offered)
applicable to the sales by the Purchaser and its Affiliates in connection with
any such registration are herein referred to as "Selling Expenses"; and
(f) keep each registration pursuant to Section 8.1 hereof
effective for a period of up to 60 days or such shorter period of time until
the transfer or sale of all TMRC Converted Shares so registered has been
completed.
Section 8.4 Indemnification.
(a) In the event of a registration of any TMRC Converted
Shares under the Securities Act pursuant to this Article 8, the Company will
indemnify and hold harmless the Purchaser and their Affiliates participating in
the registration (the "Registering Parties" and each a "Registering Party") and
any other Person, if any, who controls any of the Registering Parties within
the meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which the Registering Parties or
such controlling Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities or actions in
respect thereof arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such TMRC Converted Shares were
registered under the Securities Act, any preliminary prospectus distributed
with the consent of the Company or final prospectus contained in such
registration statement, or any amendment thereof or supplement thereto,
including all documents incorporated by reference therein, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Registering Parties and each such
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will 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 or omission or alleged omission made in such
registration statement, such preliminary prospectus, such final prospectus or
such amendment or supplement, including all documents incorporated by reference
therein, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Registering Party or a controlling Person
of any Registering Party specifically for use in the preparation thereof.
(b) In the event of any registration of any TMRC Converted
Shares under the Securities Act pursuant to this Agreement, each Registering
Party shall indemnify and hold harmless the Company and each Person, if any,
who controls the Company within the meaning of Section 15 of the Securities
Act, each officer of the Company who signs the registration statement, each
director of the Company and each underwriter (if any) and each Person who
controls any underwriter (if any) within the meaning of Section 15 of the
Securities Act, against any and all such losses, claims, damages, liabilities
or actions that the Company or such officer, director, underwriter (if any) or
controlling Person may become subject under the Securities Act or otherwise,
and will reimburse the
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Company and each such officer, director, underwriter and controlling Person for
any legal or any other expenses reasonably incurred by such party in connection
with investigating or defending any such loss, claim, damage, liability or
action, if (a) such loss, claim, damage, liability or action in respect thereof
arises out of or is based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement or any such
preliminary or final prospectus, or any amendment thereof or supplement
thereto, or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and any such statement or omission
of a material fact was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Registering Party
or a controlling Person of such Registering Party specifically for use in
connection with the preparation of such registration statement or preliminary
or final prospectus, or amendment or supplement thereto, or (b) such loss,
claim, damage, liability or action in respect thereof arises out of or is based
upon the Purchaser's or its Affiliates' failure to deliver any required
prospectus or otherwise comply with applicable laws regarding the same. In
connection with any transaction contemplated by Section 8.2 hereof, each
Registering Party also agrees to indemnify each such underwriter and each
Person who controls any such underwriter within the meaning of Section 15 of
the Securities Act as may reasonably and customarily be requested by the
underwriters in connection with any underwritten offering of such TMRC
Converted Shares. Each Registering Party's obligations to indemnify pursuant to
this Section 8.4(b) shall be capped at the net proceeds received by such
Registering Party from the sale of securities pursuant to such registration.
(c) If the indemnification provided for in this Section
8.4 is unavailable or insufficient to hold harmless an indemnified Person under
paragraph (a) or (b) above, then the indemnifying Person shall contribute to
the amount paid or payable by such indemnified Person as a result of the
losses, claims, damages or liabilities referred to in paragraphs (a) and (b)
above, in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Registering Parties on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equity
considerations. 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 the Registering Parties and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and each Purchaser (on
behalf of itself and its Affiliates) agree that it would not be just and
equitable if contributions pursuant to this Section 8.4(c) were to be
determined by pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in the first
sentence of this Section 8.4(c). The amount paid by an indemnified Person as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this Section 8.4(c) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified Person in connection with
investigating or defending any action or claim (which shall be limited as
provided in Section 8.4(d) hereof if the indemnifying Person has assumed the
defense of any such action in accordance with the provisions thereof) that is
the subject of this Section 8.4(c). Notwithstanding the provisions of this
Section 8.4(c), in respect of any loss, claim, damage or liability based upon
any untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact that relates to information other
than information supplied by a Registering Party, such Registering Party shall
not be required to contribute any amount in excess of the amount by which the
total price at which the TMR Converted Shares offered by it and
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distributed to the public were offered to the public exceeds the amount of any
damages that such Registering Party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. Promptly
after receipt by an indemnified Person under this Section 8.4(c) of notice of
the commencement of any action against such party in respect of which a claim
for contribution may be made against an indemnifying Person under this Section
8.4(c), such indemnified party shall notify the indemnifying Person in writing
of the commencement thereof if the notice specified in Section 8.4(d) hereof
has not been given with respect to such action; provided, however, that the
omission so to notify the indemnifying Person shall not relieve it from any
liability that it may have to any indemnified Person under this Section 8.4(c)
to the extent such omission is not prejudicial.
(d) Promptly after any indemnified Person receives notice
of any claim or commencement of any action in respect of which indemnity is to
be sought against an indemnifying Person pursuant to this Agreement, such
indemnified Person shall notify the indemnifying Person in writing of such
claim or of the commencement of such action, and, subject to provisions
hereinafter stated, in case any such action shall be brought against an
indemnified Person and such indemnifying Person shall have been notified of the
same, such indemnifying Person shall be entitled to participate therein and, to
the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified Person, and after notice from the
indemnifying Person to such indemnified Person of its election to assume the
defense thereof, such indemnifying Person shall not be liable to such
indemnified Person, in connection with the defense thereof; provided, however,
if there exists or will exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the indemnified Person for the same
counsel to represent both the indemnified Person and such indemnifying Person
then such indemnified Person shall be entitled to retain its own counsel at the
expense of such indemnifying Person; provided further, however, the
indemnifying Person shall not be required to pay for more than one separate
counsel for all of the indemnified Persons in addition to any local counsel.
Section 8.5 Termination. If Rule 144 or Rule 145 promulgated under
the Securities Act or any successor or similar rule or statute shall permit the
sale by the Purchaser or its Affiliates of TMRC Converted Shares in compliance
with the conditions thereof without volume limitations, the rights of the
Purchaser and its Affiliates and any of their permitted assignees as to
registration provided for in this Agreement as to TMRC Converted Shares shall
terminate immediately.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Binding Agreement. All the provisions, covenants,
representations, warranties and conditions of this Agreement shall be binding
upon, and inure to the benefit of and be enforceable by, the parties hereto and
their respective successors and assigns. After the Closing Date, no party may
assign its rights hereunder except to an Affiliate of such party (with written
notice of the assignment being given to the other party), provided that such
Affiliate acknowledges in writing to the Company that such Affiliate shall be
bound by the terms and obligations of this Agreement as if such Affiliate was
originally a signatory hereto.
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Section 9.2 Notices. All notices, requests, waivers and other
communications required or permitted to be given pursuant to this Agreement
shall be in writing and shall be deemed to have been duly given upon receipt by
personal delivery, messenger delivery, first-class mail or telecopier, at the
addresses set forth below (or at such other address for the Purchaser as the
Purchaser shall specify by like notice):
- if to Eos Partners, L. P., to:
Eos Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopier No.: (000) 000-0000
- if to the Company, to: The Meridian Resource Corporation
00000 X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
Telecopier No.: (000) 000-0000
with copies to: Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
In the event the Purchaser assigns all or part of its right under this
Agreement to one or more of its Affiliates pursuant to Section 9.1, any
required notices or communications required to be made to any such Affiliates
to whom rights under this Agreement have been assigned shall be deemed to have
been properly given when delivered to the Purchaser at the addresses (or
telecopier numbers) set forth above.
Section 9.3 Entire Agreement. This Agreement is the entire agreement
among the parties with respect to the subject matter hereof, and supersedes all
prior agreements and understandings, written and oral, the parties hereto with
respect to the subject matter hereof.
Section 9.4 Expenses. Except as otherwise provided herein, each
party shall be solely responsible for all expenses incurred by it in connection
with this transaction (including, without limitation, fees and expenses of its
own counsel and accountants).
Section 9.5 Severability. If any term or other provision of this
Agreement is held invalid, illegal or incapable of being enforced under any
rule or law, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in a
materially adverse manner with respect to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement
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so as to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
Section 9.6 Waivers. The failure of any party at any time to require
performance of any provision hereof shall not affect its right later to require
such performance. No waiver in any one or more instances shall (except as
otherwise stated therein) be deemed to be a further or continuing waiver of any
such condition or breach in other instances or a waiver of any condition or
breach of any other term, covenant, representation or warranty.
Section 9.7 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 9.8 Headings. The headings preceding the text of articles
and sections of this Agreement are for convenience only and are not part of
this Agreement.
Section 9.9 Applicable Law. This Agreement is governed by and shall
be construed and enforced in accordance with the internal laws of the State of
Texas.
Section 9.10 Construction of Agreement. This Agreement constitutes a
negotiated agreement among the parties and the fact that one party or the other
shall have drafted a particular provision or provisions shall not be material
in the construction of any provision. All Exhibits referred to in this
Agreement are a part of this Agreement.
Section 9.11 References to Articles, Sections and Exhibits. Unless
the context otherwise requires, all references herein to Articles, Sections and
Exhibits shall be to the Articles, Sections and Exhibits of and to this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
THE MERIDIAN RESOURCE CORPORATION
By: /s/ P. Xxxxxxx Xxxxxxxxx
-----------------------------------------
Name: P. Xxxxxxx Xxxxxxxxx
Title: Executive Vice President and Chief
Financial Officer
EOS PARTNERS, L.P.
By /s/ Authorized Signatory
-----------------------------------------
Name:
Title:
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