Exhibit
10.1
$250,000,000
HORNBECK
OFFSHORE SERVICES, INC.
8%
Senior Notes due 2017
Purchase
Agreement
August 12,
2009
J.P. Morgan
Securities Inc.
As
Representative of the
several Initial
Purchasers listed
in
Schedule 1 hereto
c/o J.P.
Morgan Securities Inc.
270 Park
Avenue
New York, New
York 10017
Ladies and
Gentlemen:
Hornbeck
Offshore Services, Inc., a Delaware corporation (the
“Company”), proposes to issue and sell to the several
initial purchasers listed in Schedule 1 hereto (the “Initial
Purchasers”), for whom you are acting as representative (the
“Representative”), $250,000,000 principal amount of its
8% Senior Notes due 2017 (the “Securities”). The
Securities will be issued pursuant to an Indenture to be dated as
of August 17, 2009 (the “Indenture”) among the
Company, the guarantors listed in Schedule 2 hereto (the
“Guarantors”) and Wells Fargo Bank, National
Association, as trustee (the “Trustee”), and will be
guaranteed on an unsecured senior basis by each of the Guarantors
(the “Guarantees”).
The Securities
will be sold to the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance upon an exemption therefrom. The Company
and the Guarantors have prepared a preliminary offering memorandum
dated August 12, 2009 (the “Preliminary Offering
Memorandum”) and will prepare an offering memorandum dated
the date hereof (the “Offering Memorandum”) setting
forth information concerning the Company and the Securities. Copies
of the Preliminary Offering Memorandum have been, and copies of the
Offering Memorandum will be, delivered by the Company to the
Initial Purchasers pursuant to the terms of this Agreement. The
Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum, the other Time of Sale Information
(as defined below) and the Offering Memorandum in connection with
the offering and resale of the Securities by the Initial Purchasers
in the manner contemplated by this Agreement. Capitalized terms
used but not defined herein shall have the meanings
given to such
terms in the Preliminary Offering Memorandum. References herein to
the Preliminary Offering Memorandum, the Time of Sale Information
and the Offering Memorandum shall be deemed to refer to and include
any document incorporated by reference therein.
At
or prior to the time when sales of the Securities were first made
(the “Time of Sale”), the following information shall
have been prepared (collectively, the “Time of Sale
Information”): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on
Annex A hereto.
Holders of the
Securities (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, to be dated the Closing Date (as
defined below) and substantially in the form attached hereto as
Exhibit A (the “Registration Rights Agreement”),
pursuant to which the Company and the Guarantors will agree to file
one or more registration statements with the Securities and
Exchange Commission (the “Commission”) providing for
the registration under the Securities Act of the issuance or resale
of the Securities or the Exchange Securities referred to (and as
defined) in the Registration Rights Agreement.
The Company
hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and resale of the Securities, as
follows:
1.
Purchase and Resale of the Securities . (a) The Company
agrees to issue and sell the Securities to the several Initial
Purchasers as provided in this Agreement, and each Initial
Purchaser, on the basis of the representations, warranties and
agreements set forth herein and subject to the conditions set forth
herein, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Securities set forth
opposite such Initial Purchaser’s name in Schedule 1 hereto
at a price equal to 95.123% of the principal amount thereof plus
accrued interest, if any, from August 17, 2009 to the Closing
Date. The Company will not be obligated to deliver any of the
Securities except upon payment for all the Securities to be
purchased as provided herein.
(b) The
Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale
Information. Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that:
(i) it is a
qualified institutional buyer within the meaning of Rule 144A under
the Securities Act (a “QIB”) and an accredited investor
within the meaning of Rule 501(a) under the Securities
Act;
(ii) it has
not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities by means of any form
of general solicitation or general advertising within the meaning
of Rule 502(c) of Regulation D under the Securities Act
(“Regulation D”) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities
Act; and
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(iii) it has
not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities as part of their
initial offering except:
(A) within the
United States to persons whom it reasonably believes to be QIBs in
transactions pursuant to Rule 144A under the Securities Act
(“Rule 144A”) and in connection with each such sale, it
has taken or will take reasonable steps to ensure that the
purchaser of the Securities is aware that (1) such sale is
being made in reliance on Rule 144A, (2) the Securities have
not been and, except as described in the Offering Memorandum, will
not be registered under the Securities Act and (3) the
Securities may not be offered, sold or otherwise transferred except
as described in the Offering Memorandum; or
(B) in
accordance with the restrictions set forth in Annex C
hereto.
(c) Each
Initial Purchaser acknowledges and agrees that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 6(f) and 6(g), counsel for the Company and
counsel for the Initial Purchasers, respectively, may rely upon the
accuracy of the representations and warranties of the Initial
Purchasers, and compliance by the Initial Purchasers with their
agreements, contained in paragraph (b) above (including Annex
C hereto), and each Initial Purchaser hereby consents to such
reliance.
(d) The
Company acknowledges and agrees that the Initial Purchasers may
offer and sell Securities to or through any affiliate of an Initial
Purchaser and that any such affiliate may offer and sell Securities
purchased by it to or through any Initial Purchaser.
(e) The
Company and the Guarantors acknowledge and agree that the Initial
Purchasers are acting solely in the capacity of an arm’s
length contractual counterparty to the Company and the Guarantors
with respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the
offering) and not as financial advisors or fiduciaries to, or
agents of, the Company, the Guarantors or any other person.
Additionally, neither the Representative nor any other Initial
Purchaser is advising the Company, the Guarantors or any other
person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. The Company and the Guarantors shall
consult with their own advisors concerning such matters and shall
be responsible for making their own independent investigation and
appraisal of the transactions contemplated hereby, and neither the
Representative nor any other Initial Purchaser shall have any
responsibility or liability to the Company or the
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Guarantors
with respect thereto. Any review by the Representative or any
Initial Purchaser of the Company, the Guarantors, and the
transactions contemplated hereby or other matters relating to such
transactions will be performed solely for the benefit of the
Representative or such Initial Purchaser, as the case may be, and
shall not be on behalf of the Company, the Guarantors or any other
person.
2.
Payment and Delivery . (a) Payment for and delivery of
the Securities will be made at the offices of Vinson &
Elkins LLP, First City Tower, 1001 Fannin, Suite 2500, Houston,
Texas 77002-6760, at 10:00 A.M., New York City time, on
August 17, 2009, or at such other time or place on the same or
such other date, not later than the fifth business day thereafter,
as the Representative and the Company may agree upon in writing.
The time and date of such payment and delivery is referred to
herein as the “Closing Date”.
(b) Payment
for the Securities shall be made by wire transfer in immediately
available funds to the account(s) specified by the Company to the
Representative against delivery to the Trustee as custodian for The
Depository Trust Company, for the account of the Initial
Purchasers, of one or more global notes representing the Securities
(collectively, the “Global Note”), with any transfer
taxes payable in connection with the sale of the Securities duly
paid by the Company. The Global Note will be made available for
inspection by the Representative not later than 1:00 P.M., New York
City time, on the business day prior to the Closing
Date.
3.
Representations and Warranties of the Company and the
Guarantors . The Company and the Guarantors jointly and
severally represent and warrant to each Initial Purchaser
that:
(a)
Preliminary Offering Memorandum, Time of Sale Information and
Offering Memorandum. The Preliminary Offering Memorandum, as of
its date, did not, the Time of Sale Information, at the Time of
Sale, did not, and at the Closing Date, will not, and the Offering
Memorandum, in the form first used by the Initial Purchasers to
confirm sales of the Securities and as of the Closing Date, will
not, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided that the Company and the
Guarantors make no representation or warranty with respect to any
statements or omissions made in reliance upon and in conformity
with information relating to any Initial Purchaser furnished to the
Company in writing by such Initial Purchaser through the
Representative expressly for use in the Preliminary Offering
Memorandum, the Time of Sale Information or the Offering
Memorandum.
(b)
Additional Written Communications . The Company (including
its agents and representatives, other than the Initial Purchasers
in their capacity as such) has not prepared, made, used,
authorized, approved or referred to and will not prepare,
make,
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use,
authorize, approve or refer to any written communication that
constitutes an offer to sell or solicitation of an offer to buy the
Securities (each such communication by the Company or its agents
and representatives (other than a communication referred to in
clauses (i), (ii) and (iii) below) an “Issuer
Written Communication”) other than (i) the Preliminary
Offering Memorandum, (ii) the Offering Memorandum,
(iii) the documents listed on Annex A hereto, including a term
sheet substantially in the form of Annex B hereto, which constitute
part of the Time of Sale Information, and (iv) any electronic
road show or other written communications, in each case used in
accordance with Section 4(c). Each such Issuer Written
Communication, when taken together with the Time of Sale
Information, did not, and at the Closing Date will not, contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided that the Company makes no
representation and warranty with respect to any statements or
omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to any
Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through the Representative expressly for use in
any Issuer Written Communication.
(c)
Incorporated Documents. The documents incorporated by
reference in each of the Time of Sale Information and the Offering
Memorandum, when filed with the Commission, conformed or will
conform, as the case may be, in all material respects to the
requirements of the Exchange Act and the rules and regulations of
the Commission thereunder, and did not and will not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
(d)
Financial Statements. The financial statements, and the
related notes thereto, of the Company included or incorporated by
reference in the Time of Sale Information and the Offering
Memorandum present fairly, in all material respects, the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the
periods specified; and said financial statements have been prepared
in conformity with United States generally accepted accounting
principles and practices applied on a consistent basis, except as
described in the notes to such financial statements; and the other
financial and statistical information and any other financial data
included or incorporated by reference in the Time of Sale
Information and the Offering Memorandum present fairly, in all
material respects, the information purported to be shown thereby at
the respective dates or for the respective periods to which they
apply and, to the extent that such information is set forth in or
has been derived from the financial statements and accounting books
and records of the Company, have been prepared on a basis
consistent with such financial statements and the books and records
of the Company;
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(e)
No Material Adverse Change. None of the Company, the
Guarantors, or any of their subsidiaries has sustained since the
date of the latest audited financial statements included or
incorporated by reference in the Time of Sale Information any
material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or
contemplated in the Time of Sale Information and the Offering
Memorandum; and, since the respective dates as of which information
is given in the Time of Sale Information and the Offering
Memorandum, there has not been any material change in the capital
stock, material increase in long-term debt or any material
decreases in consolidated net current assets or stockholders’
equity of the Company, the Guarantors, or any of their subsidiaries
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, current or future consolidated financial
position, stockholders’ equity or results of operations of
the Company and its subsidiaries taken as a whole (a
“Material Adverse Effect”);
(f)
Organization and Good Standing. Each of the Company and the
Guarantors has been duly incorporated as a corporation or formed as
a limited liability company and is validly existing as a
corporation or limited liability company in good standing under the
laws of the State of Delaware, with the corporate or limited
liability company power and authority to own its properties and
conduct its business as described in the Time of Sale Information
and the Offering Memorandum, and has been duly qualified as a
foreign corporation or limited liability company for the
transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except
where the failure to be so qualified or in good standing in any
such jurisdiction would not have a material adverse effect on the
ability of the Company and its subsidiaries taken as a whole to own
or lease their properties or conduct their businesses as described
in the Time of Sale Information and the Offering
Memorandum;
(g)
Capitalization. The Company had, at the date indicated in
the Time of Sale Information and the Offering Memorandum, a duly
authorized, issued and outstanding capitalization as set forth in
the Time of Sale Information and the Offering Memorandum under the
caption “Capitalization”; all of the issued shares of
capital stock of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable; such authorized
capital stock of the Company conforms as to legal matters in all
material respects to the description thereof contained in the Time
of Sale Information and the Offering Memorandum; all of the equity
interests in each subsidiary of the Company, have been duly and
validly authorized and issued and are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear
of any lien, charge, encumbrance, security interest, restriction on
voting or transfer or any other claim of any third
party;
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(h)
The Indenture. The Indenture has been duly authorized,
executed and delivered by the Company and the Guarantors, and
(assuming the authorization, execution and delivery by the
Trustee), constitutes a valid and legally binding instrument of the
Company and the Guarantors, enforceable against the Company and the
Guarantors in accordance with its terms, subject as to enforcement,
to bankruptcy, insolvency, fraudulent transfer, fraudulent
conveyance, moratorium, reorganization and laws of general
applicability relating to or affecting creditors’ rights and
general equity principles (regardless of whether enforceability is
considered in a proceeding in equity or at law); the Indenture
conforms, in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the “Trust Indenture
Act”), and the rules and regulations of the Commission
applicable to an indenture that is qualified thereunder; and the
Indenture conforms, in all material respects, to the description
thereof in the Time of Sale Information and the Offering
Memorandum;
(i) The
Securities. The Securities have been duly authorized by the
Company, and, when issued and delivered as provided in this
Agreement and duly authenticated pursuant to the Indenture will be
duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture, enforceable
against the Company in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, moratorium, reorganization and laws of
general applicability relating to or affecting creditors’
rights and general equity principles (regardless of whether
enforceability is considered in a proceeding in equity or at law);
and the Securities will conform, in all material respects, to the
descriptions thereof in the Time of Sale Information and the
Offering Memorandum;
(j) The
Guarantees . The Guarantees have been duly authorized by the
Guarantors, and, when issued and delivered as provided in this
Agreement and duly authenticated pursuant to the Indenture will be
duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Guarantors
entitled to the benefits provided by the Indenture enforceable
against the Guarantors in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, moratorium, reorganization and laws of
general applicability relating to or affecting creditors’
rights and general equity principles (regardless of whether
enforceability is considered in a proceeding in equity or at law);
and the Guarantees will conform, in all material respects, to the
descriptions thereof in the Time of Sale Information and the
Offering Memorandum;
(k) The
Exchange Securities. The notes and related guarantees having
terms substantially identical to (1) the Securities (the
“Exchange Securities”) issuable in exchange for the
Securities in an exchange offer (the “Exchange Offer”)
pursuant to the Registration Rights Agreement and (2) the
Guarantees, respectively, have been duly authorized by the Company
and the Guarantors, and, when issued and delivered pursuant to the
Registration Rights Agreement and duly authenticated pursuant to
the
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Indenture,
will have been duly executed, authenticated, issued and delivered
and will constitute valid and legally binding obligations of the
Company and the Guarantors entitled to the benefits provided by the
Indenture, enforceable against the Company and the Guarantors in
accordance with its terms, subject as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance,
moratorium, reorganization and laws of general applicability
relating to or affecting creditors’ rights and general equity
principles (regardless of whether enforceability is considered in a
proceeding in equity or at law);;
(l)
Purchase Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and the
Guarantors;
(m)
Registration Rights Agreements. The Registration Rights
Agreement has been duly authorized by the Company and the
Guarantors and, when duly executed and delivered by the Company and
the Guarantors, shall constitute the valid and legally binding
obligation of the Company and the Guarantors, enforceable against
the Company and the Guarantors in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, fraudulent conveyance, moratorium, reorganization and
laws of general applicability relating to or affecting
creditors’ rights and general equity principles (regardless
of whether enforceability is considered in a proceeding in equity
or at law); and except that rights to indemnification thereunder
may be limited by federal or state securities laws or public policy
relating thereto; and the Registration Rights Agreement will
conform, in all material respects, to the description thereof in
the Time of Sale Information and the Offering
Memorandum;
(n) Legal
Summaries. The statements set forth in the Time of Sale
Information and the Offering Memorandum under the captions
“Description of Notes,” “Registration
Rights,” and “Certain United States Federal Income Tax
Considerations”, insofar as they constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly
present, in all material respects, the information called for with
respect to such legal matters, documents or proceedings;
(o) No
Violation. None of the Company, the Guarantors, or any of their
subsidiaries is in violation of its certificate of incorporation or
certificate of formation, or its bylaws or limited liability
company agreement (or other organizational documents), or in
default in the performance or observance of any obligation,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to
which it is a party or by which it or any of its properties may be
bound, other than such defaults that individually or in the
aggregate would not have a Material Adverse Effect;
(p) No
Conflicts. The issue and sale of the Securities (including the
Guarantees) and the compliance by the Company and the Guarantors
with all of the provisions of the Securities, the Guarantees, the
Indenture, the Registration Rights
8
Agreement and
this Agreement and the consummation of the transactions herein and
therein contemplated (A) will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, except such conflict, breach or violation as would not
have a Material Adverse Effect, (B) will not result in any
violation of the provisions of the Certificate of Incorporation or
bylaws of the Company, and (C) will not result in the
violation of any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties,
except such violations as would not have a Material Adverse
Effect;
(q) No
Consents Required. Except as disclosed in the Time of Sale
Information and the Offering Memorandum, no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Securities (including the Guarantees) or the
consummation by the Company of the transactions contemplated by
this Agreement, the Registration Rights Agreement or the Indenture,
except for the filing and effectiveness of a registration statement
by the Company with the Commission pursuant to the Securities Act
and the Registration Rights Agreement, the qualification of the
Indenture under the Trust Indenture Act in relation to the Exchange
Securities and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Initial Purchasers in the
manner contemplated by this Agreement, the Time of Sale Information
and the Offering Memorandum and except for such consents the
failure to obtain would not have a Material Adverse
Effect;
(r) Legal
Proceedings. Except as set forth in the Time of Sale
Information and the Offering Memorandum, there are no legal or
governmental proceedings pending to which the Company, the
Guarantors, or any of their subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a
Material Adverse Effect; and, to the best of the Company’s
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(s)
Independent Accountants. Ernst & Young LLP, who
have certified the audited consolidated financial statements of the
Company and its subsidiaries, are independent public accountants as
required under the Securities Act and the rules and regulations of
the Commission thereunder and the rules and regulations of the
Public Company Accounting Oversight Board;
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(t)
Title to Personal Property. The Company and its subsidiaries
own no real property; the Company and its subsidiaries have good
title to (i) all barges, tugs, tankers, offshore supply
vessels, multi-purpose supply vessels, anchor-handling towing
supply vessels and other vessels (collectively,
“Vessels”) owned by them and (ii) all other
personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Time of Sale Information and the Offering Memorandum or such as do
not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and none of the real
property and building space held under lease by the Company and its
subsidiaries are material to the Company and its subsidiaries taken
as a whole and, should their existing leases expire or terminate,
the cost to secure new facilities would not result in a Material
Adverse Effect;
(u)
Intellectual Property. The Company and its subsidiaries own
or possess 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 them as described in
the Time of Sale Information and the Offering 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;
(v) No
Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its subsidiaries, on
the one hand, and the directors, officers, stockholders or other
affiliates of the Company or any of its subsidiaries, on the other,
that would be required by the Securities Act to be described in a
registration statement to be filed with the Commission and that is
not so described in each of the Time of Sale Information and the
Offering Memorandum.
(w)
Investment Company Act. The Company and the Guarantors are
not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described
in the Time of Sale Information and the Offering Memorandum, will
not be required to register as an “investment company”
as such term is defined in the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the “Investment Company
Act”);
(x)
Taxes. The Company and its subsidiaries have filed all
necessary federal, state, local and foreign income and franchise
tax returns or have timely requested extensions thereof and have
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 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 that would individually or in the
aggregate have a Material Adverse Effect;
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(y)
Licenses and Permits. The Company and its subsidiaries
possess all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and have made all
declarations and filings with, all federal, state, local or foreign
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 their properties and to carry on their business
as now and proposed to be conducted as set forth in the Time of
Sale Information and the Offering Memorandum
(“Permits”), except where the failure to obtain such
Permits would not individually or in the aggregate have a Material
Adverse Effect; the Company and its subsidiaries have fulfilled and
performed all of their 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 Time of
Sale Information and the Offering Memorandum and except where such
revocation or modification would not individually or in the
aggregate have a Material Adverse Effect;
(z) No
Labor Disputes. 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 best of the
Company’s knowledge, threatened; neither the Company nor any
of its subsidiaries 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 Time of Sale Information and the
Offering Memorandum, to the best of the Company’s knowledge,
no collective bargaining organizing activities are taking place
with respect to the Company or any of its subsidiaries; and 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;
(aa)
Compliance With Environmental Laws. Except as described in
the Time of Sale Information and the Offering Memorandum or as
would not individually or in the aggregate have a Material Adverse
Effect (A) the Company and its subsidiaries are in compliance
with and not subject to any known liability under applicable
Environmental Laws (as defined below), (B) the Company and its
subsidiaries have made all filings and provided all notices
required under any applicable Environmental Laws, and have, and are
in compliance with, all Permits required under any applicable
Environmental Laws
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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 best of the
Company’s knowledge, 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 best of the Company’s knowledge,
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;
(bb)
Compliance With ERISA. Neither the Company nor any of 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 of its subsidiaries makes or ever has made a contribution
and in which any employee of the Company or any of its subsidiaries
is or has ever been a participant, except for such liabilities
which would not individually or in the aggregate have a Material
Adverse Effect; and with respect to such plans, the Company and
each of its subsidiaries are in compliance in all material respects
with all applicable provisions of ERISA;
(cc)
Disclosure Controls. The Company maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e)
of the Exchange Act) that comply with the requirements of the
Exchange Act; such disclosure controls and procedures
12
have been
designed to ensure that material information relating to the
Company and its subsidiaries is made known to the Company’s
principal executive officer and principal financial executive
officer by others within those entities; and such disclosure
controls and procedures are effective;
(dd)
Accounting Controls. Company maintains a system of internal
control over financial reporting (as such term is defined in Rule
13a-15(f) of the Exchange Act) that complies with the requirements
of the Exchange Act and has been designed by the Company’s
principal executive officer and principal financial officer, or
under their supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles; the Company’s
internal control over financial reporting is effective, and the
Company is not aware of any material weaknesses in its internal
control over financial reporting;
(ee)
Insurance. The Company and its subsidiaries carry insurance
in such amounts and covering such risks as in their determination
is adequate for the conduct of their business or the value of their
properties;
(ff) No
Unlawful Payments. Neither the Company nor any of its
subsidiaries nor, to the best knowledge of the Company and each of
the Guarantors, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of
its subsidiaries has (i) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or
is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or (iv) made any other unlawful payment from
corporate funds, whether as a bribe, rebate, payoff, influence
payment, kickback or otherwise.
(gg)
Compliance with Money Laundering Laws. The operations of the
Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(hh)
Compliance with OFAC. None of the Company, any of its
subsidiaries or, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions
administered
13
by the Office
of Foreign Assets Control of the U.S. Department of the Treasury
(“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities
hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(ii) No
Broker’s Fees. Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person (other than this Agreement) that would give rise to
a valid claim against any of them or any Initial Purchaser for a
brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Securities.
(jj) Rule
144A Eligibility. When the Securities are issued and delivered
pursuant to this Agreement, no Securities will be of the same class
(within the meaning of Rule 144A under the Securities Act) as
securities which are listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a
U.S. automated inter-dealer quotation system; the Securities
satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act;
(kk) No
Integration. Neither the Company, the Guarantors, nor any
affiliate (as defined in Rule 501(b) of Regulation D) of the
Company or the Guarantors has directly, or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security (as defined in the Securities Act)
which is or will be integrated with the sale of the Securities in a
manner that would require the registration under the Securities Act
of the offering contemplated by the Time of Sale Information and
the Offering Memorandum;
(ll) No
General Solicitation or Directed Selling Efforts. None of the
Company, the Guarantors, any affiliate of the Company or any person
acting on its or their behalf (other than the Initial Purchasers
for whom we make no representation) has (i) offered or sold
the Securities by means of any general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities
Act or (ii) engaged in any directed selling efforts within the
meaning of Regulation S under the Securities Act (“Regulation
S”), and all such persons have complied with the offering
restrictions requirement of Regulation S;
(mm)
Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained
in Section 1(b) (including Annex C hereto) and their
compliance with their agreements set forth therein, it is not
necessary, in connection with the issuance and sale of the
Securities to the Initial Purchasers and the offer, resale and
delivery of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement, the Time of Sale Information and
the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust
Indenture Act;
14
(nn) No
Stabilization. Prior to the date hereof, neither the Company
nor any of its affiliates has taken any action which is designed to
or which has constituted or which might have been expected to cause
or result in stabilization or manipulation of the price of any
security of the Company in connection with the offering of the
Securities;
(oo) Margin
Rules. None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the
sale of the Securities) will violate or result in a violation of
Section 7 of the Exchange Act, or any regulation promulgated
thereunder, including, without limitation, Regulations T, U, and X
of the Board of Governors of the Federal Reserve System;
(pp)
Forward-Looking Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in any of the Time
of Sale Information or the Offering Memorandum has been made or
reaffirmed without a reasonable basis or has been disclosed other
than in good faith.
(qq)
Statistical and Market Data. To the best of the
Company’s and the Guarantors’ knowledge, the
statistical and market related data included in the Time of Sale
Information and the Offering Memorandum are based on or derived
from sources which are reliable and accurate.
(rr)
Sarbanes-Oxley Act. There is and has been no failure on the
part of the Company or any of the Company’s directors or
officers, in their capacities as such, to comply with any provision
of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 related to loans and
Sections 302 and 906 related to certifications.
4.
Further Agreements of the Company and the Guarantors . The
Company and each of the Guarantors jointly and severally covenant
and agree with each Initial Purchaser that:
(a)
Delivery of Copies. The Company will deliver, without
charge, to the Initial Purchasers as many copies of the Preliminary
Offering Memorandum, any other Time of Sale Information, any Issuer
Written Communication and the Offering Memorandum (including all
amendments and supplements thereto) as the
