BRISTOW GROUP INC. UNDERWRITING AGREEMENT
Exhibit
1.2
Execution version
$100,000,000
▇▇▇▇▇▇▇ GROUP INC.
3.00% Convertible Senior Notes due 2038
June 11, 2008
Credit Suisse Securities (USA) LLC
▇▇▇▇▇▇▇, Sachs & Co.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse Securities (USA) LLC,
▇▇▇▇▇▇▇, Sachs & Co.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. ▇▇▇▇▇▇▇ Group Inc., a Delaware corporation (“Company”), agrees with the
several Underwriters named in Schedule A hereto (“Underwriters”) to issue and sell to the several
Underwriters $100,000,000 principal amount (“Firm Securities”) of its 3.00% Convertible Senior
Notes due 2038 (“Notes”) and also agrees to issue and sell to the Underwriters, at the option of
the Underwriters, an aggregate of not more than $15,000,000 additional principal amount (“Optional
Securities”) of its Notes as set forth below, all to be issued under an indenture, dated as of June
17, 2008, and as supplemented through the First Closing Date (“Indenture”), between the Company and
U.S. Bank National Association, as Trustee. The Firm Securities and the Optional Securities,
together with the related Guarantees, are herein collectively called the “Offered Securities”. The
Notes will be guaranteed (the “Guarantees”) on a senior unsecured basis by the subsidiaries of the
Company listed on the signature pages hereof (the “Guarantors”). The Notes and the Guarantees are
herein collectively called the “Securities”.
2. Representations and Warranties of the Company. The Company and each of the Guarantors,
jointly and severally, represent and warrant to, and agree with, the several Underwriters that:
(a) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The
Company and the Guarantors have filed with the Commission a registration statement on Form
S-3 (No. 333-151519), including a related prospectus or prospectuses, covering the
registration of the Offered Securities under the Act, which has become effective.
“Registration Statement” at any particular time means such registration statement in the
form then filed with the Commission, including any amendment thereto, any document
incorporated by reference therein and all 430B Information and all 430C Information with
respect to such registration statement, that in any case has not been superseded or
modified. “Registration Statement” without reference to a time means the Registration
Statement as of the Effective Time. For purposes of this definition, 430B Information shall
be considered to be included in the Registration Statement as of the time specified in Rule
430B.
For purposes of this Agreement:
“430B Information” means information included in a prospectus then deemed to be a
part of the Registration Statement pursuant to Rule 430B(e) or retroactively deemed
to be a part of the Registration Statement pursuant to Rule 430B(f).
“430C Information” means information included in a prospectus then deemed to be a
part of the Registration Statement pursuant to Rule 430C.
“Act” means the Securities Act of 1933, as amended.
“Applicable Time” means 6:00 pm (Eastern time) on the date of this Agreement.
“Closing Date” has the meaning defined in Section 3 hereof.
“Commission” means the Securities and Exchange Commission.
“Effective Time” of the Registration Statement relating to the Offered Securities
means the time of the first contract of sale for the Offered Securities.
“Exchange Act” means the Securities Exchange Act of 1934.
“Final Prospectus” means the Statutory Prospectus that discloses the public offering
price, other 430B Information and other final terms of the Offered Securities and
otherwise satisfies Section 10(a) of the Act.
“General Use Issuer Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors, as
evidenced by its being so specified in Schedule B to this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Offered Securities in the form filed or
required to be filed with the Commission or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule 433(g).
“Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not a General Use Issuer Free Writing Prospectus.
“Rules and Regulations” means the rules and regulations of the Commission.
“Securities Laws” means, collectively, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
(“▇▇▇▇▇▇▇▇-▇▇▇▇▇”), the Act, the Exchange Act, the Trust Indenture Act, the Rules
and Regulations, the auditing principles, rules, standards and practices applicable
to auditors of “issuers” (as defined in ▇▇▇▇▇▇▇▇-▇▇▇▇▇) promulgated or approved by
the Public Company Accounting Oversight Board and, as applicable, the rules of the
New York Stock Exchange and the NASDAQ Stock Market (“Exchange Rules”).
“Statutory Prospectus” with reference to any particular time means the prospectus
relating to the Offered Securities that is included in the Registration Statement
immediately prior to that time, including all 430B Information and all 430C
Information with respect to the Registration Statement. For purposes of the
foregoing definition, 430B Information shall be considered to be included in the
Statutory Prospectus only as of the actual time that form of prospectus (including a
prospectus supplement) is filed with the Commission pursuant to Rule 424(b) and not
retroactively.
“Trust Indenture Act” means the Trust Indenture Act of 1939.
Unless otherwise specified, a reference to a “rule” is to the indicated rule under
the Act.
“Underlying Shares” shall mean shares of common stock, par value $0.01 per share, of
the Company into which the Securities are convertible.
(b) Compliance with Securities Act Requirements. (i) (A) At the time the Registration
Statement initially became effective, (B) at the time of each amendment thereto for the
purposes of complying with Section 10(a)(3) of the Act (whether by post effective amendment,
incorporated report or form of prospectus), (C) at the Effective Time relating to the
Offered Securities and (D) on the Closing Date, the Registration Statement conformed and
will conform in all material respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations and did not and will not include any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading and (ii) (A) on its date, (B) at the time of
filing the Final
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Prospectus pursuant to Rule 424(b) and (C) on the Closing Date, the Final Prospectus
will conform in all material respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations, and will not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances under which they were
made. The preceding sentence does not apply to statements in or omissions from any such
document based upon written information furnished to the Company by any Underwriter through
the Representatives specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 8(b) hereof.
(c) Automatic Shelf Registration Statement. (i) Well-Known Seasoned Issuer Status.
(A) At the time of initial filing of the Registration Statement, (B) at the time of the
most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Act
(whether such amendment was by post-effective amendment, incorporated report filed pursuant
to Section 13 or 15(d) of the Exchange Act or form of prospectus), and (C) at the time the
Company or any person acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Offered Securities in reliance on the exemption
of Rule 163, the Company was a “well known seasoned issuer” as defined in Rule 405,
including not having been an “ineligible issuer” as defined in Rule 405.
(i) Effectiveness of Automatic Shelf Registration Statement. The Registration
Statement is an “automatic shelf registration statement,” as defined in Rule 405,
that initially became effective within three years of the date of this Agreement.
If immediately prior to the Renewal Deadline (as hereinafter defined), any of the
Offered Securities remain unsold by the Underwriters, the Company will prior to the
Renewal Deadline file, if it has not already done so and is eligible to do so, a
new automatic shelf registration statement relating to the Offered Securities, in a
form satisfactory to the Lead Underwriter (as defined in Section 3). If the
Company is no longer eligible to file an automatic shelf registration statement,
the Company will prior to the Renewal Deadline, if it has not already done so, file
a new shelf registration statement relating to the Offered Securities, in a form
satisfactory to the Lead Underwriter, and will use its best efforts to cause such
registration statement to be declared effective within 180 days after the Renewal
Deadline. The Company will take all other action necessary or appropriate to
permit the public offering and sale of the Offered Securities to continue as
contemplated in the expired registration statement relating to the Offered
Securities. References herein to the Registration Statement shall include such new
automatic shelf registration statement or such new shelf registration statement, as
the case may be. “Renewal Deadline” means the third anniversary of the initial
effective time of the Registration Statement.
(ii) Eligibility to Use Automatic Shelf Registration Form. The Company has
not received from the Commission any notice pursuant to Rule 401(g)(2) objecting to
use of the automatic shelf registration statement form. If at any time when
Offered Securities remain unsold by the Underwriters the Company receives from the
Commission a notice pursuant to Rule 401(g)(2) or otherwise ceases to be eligible
to use the automatic shelf registration statement form, the Company will (i)
promptly notify the Lead Underwriter, (ii) promptly file a new registration
statement or post-effective amendment on the proper form relating to the Offered
Securities, in a form satisfactory to the Lead Underwriter, (iii) use its best
efforts to cause such registration statement or post-effective amendment to be
declared effective as soon as practicable, and (iv) promptly notify the Lead
Underwriter of such effectiveness. The Company will take all other action
necessary or appropriate to permit the public offering and sale of the Offered
Securities to continue as contemplated in the registration statement that was the
subject of the Rule 401(g)(2) notice or for which the Company has otherwise become
ineligible. References herein to the Registration Statement shall include such new
registration statement or post-effective amendment, as the case may be.
(iii) Filing Fees. The Company has paid or shall pay the required Commission
filing fees relating to the Offered Securities within the time required by Rule
456(b)(1) without regard to the proviso therein and otherwise in accordance with
Rules 456(b) and 457(r).
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(d) Ineligible Issuer Status. (i) At the earliest time after the filing of the
Registration Statement that the Company or another offering participant made a bona fide
offer (within the meaning of Rule 164(h)(2)) of the Offered Securities and (ii) at the date
of this Agreement, the Company was not and is not an “ineligible issuer,” as defined in Rule
405, including (x) the Company or any other subsidiary in the preceding three years not
having been convicted of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in Rule 405 and (y) the Company in
the preceding three years not having been the subject of a bankruptcy petition or insolvency
or similar proceeding, not having had a registration statement be the subject of a
proceeding under Section 8 of the Act and not being the subject of a proceeding under
Section 8A of the Act in connection with the offering of the Securities, all as described in
Rule 405.
(e) General Disclosure Package. As of the Applicable Time and the Closing Date,
neither (i) the General Use Issuer Free Writing Prospectus(es) issued at or prior to the
Applicable Time and the preliminary prospectus supplement, dated June 9, 2008, including the
base prospectus, dated June 9, 2008, (which is the most recent Statutory Prospectus
distributed to investors generally), and the other information, if any, stated in Schedule B
to this Agreement to be included in the General Disclosure Package, all considered together
(collectively, the “General Disclosure Package”), nor (ii) any individual Limited Use Issuer
Free Writing Prospectus, when considered together with the General Disclosure Package,
included any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does not apply to statements
in or omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists of the
information described as such in Section 8(b) hereof.
(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the public offer and sale
of the Offered Securities or until any earlier date that the Company notified or notifies
the Representatives as described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus there occurred or occurs an event or development as a result
of which such Issuer Free Writing Prospectus conflicted or would conflict with the
information then contained in the Registration Statement or as a result of which such Issuer
Free Writing Prospectus, if republished immediately following such event or development,
would include an untrue statement of a material fact or omitted or would 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, (i) the Company has promptly
notified or will promptly notify the Representatives and (ii) the Company has promptly
amended or will promptly amend or supplement such Issuer Free Writing Prospectus to
eliminate or correct such conflict, untrue statement or omission. The foregoing two
sentences do not apply to statements in or omissions from any Issuer Free Writing Prospectus
in reliance upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives specifically for use therein, it being understood
and agreed that the only such information furnished by any Underwriter consists of the
information described as such in Section 8(b) hereof.
(g) Good standing of the Company. The Company has been duly incorporated and is
existing and in good standing under the laws of the State of Delaware, with corporate power
and authority to own its properties and conduct its business as described in the General
Disclosure Package; and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification except where the failure
to be so qualified or in good standing would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a whole (“Material
Adverse Effect”).
(h) Subsidiaries. The entities listed on Schedule E hereto include every direct and
indirect subsidiary of the Company that is a “significant subsidiary” (as such term is
defined in Item 1-02(w) of
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Regulation S-X). Each Guarantor and each other significant subsidiary of the Company
has been duly incorporated or otherwise organized and is an existing corporation, limited
liability company or other business entity in good standing under the laws of the
jurisdiction of its incorporation or organization, with power and authority (corporate
limited liability company and other) to own its properties and conduct its business as
described in the General Disclosure Package; and each Guarantor and each significant
subsidiary of the Company is duly qualified to do business as a foreign corporation or other
business entity in good standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification except where the
failure to be so qualified or in good standing would not, individually or in the aggregate,
have a Material Adverse Effect; all of the issued and outstanding capital stock or other
equity securities of each Guarantor and each significant subsidiary of the Company have been
duly authorized and validly issued and are fully paid and, in the case of corporate
subsidiaries, nonassessable and the capital stock or other equity securities of each
Guarantor and each significant subsidiary owned by the Company, directly or through
subsidiaries, are owned free from liens, encumbrances and defects, except to the extent such
capital stock or other equity securities are subject to a lien or encumbrance in connection
with the Revolving Credit Agreement dated August 3, 2006 among the Company and certain
lenders, including SunTrust Bank as administrative agent, JPMorgan Chase Bank, National
Association as syndication agent, and ▇▇▇▇▇ Fargo Bank, National Association as
documentation agent and a Letter of Credit Facility Agreement dated August 3, 2006 among the
Company and certain lenders, including Suntrust Bank as administrative agent, JPMorgan Chase
Bank, National Association, as issuing bank and as syndication agent, and ▇▇▇▇▇ Fargo Bank,
National Association, as documentation agent (which are referred to herein collectively as
the “Credit Facilities”).
(i) Execution and Delivery of Indenture. The Indenture has been duly authorized and
has been duly qualified under the Trust Indenture Act; the Offered Securities have been duly
authorized and, when the Offered Securities are delivered and paid for pursuant to this
Agreement on each Closing Date, the Indenture will have been duly executed and delivered,
such Offered Securities will have been duly executed, authenticated, issued and delivered,
will conform in all material respects to the information in the General Disclosure Package
and to the description of such Offered Securities contained in the Final Prospectus and the
Indenture and such Offered Securities will constitute valid and legally binding obligations
of the Company and the Guarantors, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors’ rights and to general equity
principles.
(j) Offered Securities. When the Offered Securities are delivered and paid for
pursuant to this Agreement on each Closing Date, such Offered Securities will be convertible
into the Underlying Shares of the Company in accordance with the terms of the Indenture; the
Underlying Shares initially issuable upon conversion of such Offered Securities have been
duly authorized and reserved for issuance upon such conversion, conform in all material
respects to the information in the General Disclosure Package and to the description of such
Underlying Shares contained in the Final Prospectus; the authorized equity capitalization of
the Company is as set forth in the General Disclosure Package; all outstanding shares of
capital stock of the Company are, and when issued upon conversion the Underlying Shares will
be validly issued, fully paid and nonassessable; the stockholders of the Company have no
preemptive rights with respect to the Offered Securities or the Underlying Shares, and none
of the outstanding shares of capital stock of the Company have been issued in violation of
any preemptive or similar rights of any security holder.
(k) No Finder’s Fee. Except as disclosed in the General Disclosure Package, there are
no contracts, agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a brokerage
commission, finder’s fee or other like payment in connection with this offering.
(l) Registration Rights. Except as disclosed in the General Disclosure Package, there
are no contracts, agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration statement under the Act
with respect to any securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities registered pursuant to a
Registration Statement or in any securities being registered pursuant
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to any other registration statement filed by the Company under the Act (collectively,
“registration rights”) that have not been validly waived or satisfied prior to the date
hereof.
(m) Listing. The Underlying Shares have been approved for listing on The New York
Stock Exchange, subject to notice of issuance.
(n) Absence of Further Requirements. No consent, approval, authorization, or order of,
or filing or registration with, any person (including any governmental agency or body or any
court) is required for the consummation of the transactions contemplated by this Agreement
or the Indenture in connection with the offering, issuance and sale of the Offered
Securities and Underlying Shares, except such as have been obtained, or made and such as may
be required under state securities laws; provided, however, that a filing with the
Commission pursuant to Rule 424(b) may be made after the date hereof so long as such filing
is made within the time period specified in the applicable provision of such rule in
accordance with the terms of this Agreement.
(o) Title to Property. Except as disclosed in the General Disclosure Package, (i) the
Company and its subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens, charges,
encumbrances and defects that would affect the value thereof or materially interfere with
the use made or to be made thereof by them and (ii) the Company and its subsidiaries hold
any leased real or personal property under valid and enforceable leases with no terms or
provisions that would interfere with the use made or to be made thereof by them, except in
each case, for such liens, charges, encumbrances, defects and exceptions that would not have
a Material Adverse Effect.
(p) Absence of Defaults and Conflicts Resulting from Transaction. The execution,
delivery and performance of the Indenture, and this Agreement, and the issuance and sale of
the Offered Securities and Underlying Shares and compliance with the terms and provisions
thereof will not result in a breach or violation of any of the terms and provisions of, or
constitute a default or a Debt Repayment Triggering Event (as defined below) under, or
result in the imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of its significant subsidiaries pursuant to, (i) the charter or by-laws
or similar constitutive document of the Company or any of its subsidiaries, (ii) any
statute, rule, regulation or order of any governmental agency or body or any court, domestic
or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their
properties, (iii) or any agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to
which any of the properties of the Company or any of its subsidiaries is subject except, in
the case of clauses (ii) and (iii), where any such breach, violation or default would not,
individually or in the aggregate, have a Material Adverse Effect; a “Debt Repayment
Triggering Event” means any event or condition that gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture, or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by the Company
or any of its subsidiaries.
(q) Absence of Existing Defaults and Conflicts. Neither the Company nor any of its
subsidiaries is in violation of its respective charter or by-laws or similar constitutive
document or in default (or with the giving of notice or lapse of time would be in default)
under any existing obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument to which any of them is a
party or by which any of them is bound or to which any of the properties of any of them is
subject, except for such defaults that would not, individually or in the aggregate have a
Material Adverse Effect.
(r) Authorization of Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.
(s) Possession of Licenses and Permits. The Company and its subsidiaries possess, and
are in compliance with the terms of, adequate certificates, authorizations, franchises,
licenses and permits (“Licenses”) necessary or material to the conduct of their respective
businesses now conducted or proposed
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in the General Disclosure Package to be conducted by them, except where the lack
thereof would not, individually or in the aggregate, have a Material Adverse Effect and have
not received any notice of proceedings relating to the revocation or modification of any
Licenses that, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(t) Absence of Labor Dispute. No labor dispute with the employees of the Company or
any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the employees of any
of its or its subsidiaries’ principal suppliers, contractors or customers, that, in any such
case, is reasonably expected to have a Material Adverse Effect.
(u) Possession of Intellectual Property. The Company and its subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other intellectual
property (collectively, “intellectual property rights”) necessary to conduct the business
now operated by them, or presently employed by them, except where the failure to own,
possess or acquire such intellectual property rights would not, individually or in the
aggregate, have a Material Adverse Effect and have not received any notice of infringement
of or conflict with asserted rights of others with respect to any intellectual property
rights that, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(v) Environmental Laws. Except as disclosed in the General Disclosure Package, neither
the Company nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, “environmental laws”), owns or operates any real
property contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any environmental laws, or is
subject to any claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material Adverse Effect;
and except as disclosed in the General Disclosure Package, the Company is not aware of any
pending investigation which is reasonably expected to lead to such a claim.
(w) Accurate Disclosure. The statements in the General Disclosure Package and the
Final Prospectus under the headings “Risk Factors—Risks Relating to Our Internal Review and
Governmental Investigations,” “Business—Legal Proceedings,” “U.S. Federal Income Tax
Considerations,” “Description of the Notes,” “Description of Capital Stock” and
“Underwriting,” insofar as such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are, in all material respects, accurate and fair summaries of
such legal matters, agreements, documents or proceedings.
(x) Absence of Manipulation. The Company has not taken, directly or indirectly, any
action that is designed to or that has constituted or that would reasonably be expected to
cause or result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Offered Securities.
(y) Statistical and Market-Related Data. Any third-party statistical and
market-related data included or incorporated by reference in a Registration Statement, a
Statutory Prospectus or the General Disclosure Package are based on or derived from sources
that the Company believes to be reliable and accurate.
(z) Internal Controls and Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. Except as set forth
in the General Disclosure Package, the Company, its subsidiaries and its directors (in their
capacities as such) are in compliance with ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and all applicable Exchange Rules.
The Company maintains a system of internal controls, including, but not limited to,
disclosure controls and procedures, internal controls over accounting matters and financial
reporting, an internal audit function and legal and regulatory compliance controls
(collectively, “Internal Controls”) that comply with the Securities Laws and are sufficient
to provide reasonable assurances that (i) transactions are executed in accordance with
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management’s general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with U.S. General
Accepted Accounting Principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management’s general or specific authorization,
(iv) the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences, and
(v) the Company has adopted and applies corporate governance guidelines. The Internal
Controls are overseen by the Audit Committee (the “Audit Committee”) of the Board in
accordance with Exchange Rules. The Company has not publicly disclosed or reported to the
Audit Committee or the Board, and the Company does not reasonably expect to publicly
disclose or report to the Audit Committee or the Board within the next 90 days, a
significant deficiency, material weakness or change in Internal Controls of the Company, or
fraud involving management or other employees who have a significant role in Internal
Controls (each, an “Internal Control Event”), other than those described in the General
Disclosure Package or which would not, individually or in the aggregate, have a Material
Adverse Effect.
(aa) Disclosure Controls and Procedures. The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply
with the requirements of the Exchange Act; such disclosure controls and procedures 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 officer by
others within those entities; and such disclosure controls and procedures are effective.
(bb) Absence of Accounting Issues. To the best of the knowledge of the executive
officers of the Company with reasonable diligence, except as set forth in the General
Disclosure Package, the Audit Committee is not reviewing or investigating, and neither the
Company’s independent auditors nor its internal auditors have recommended that the Audit
Committee review or investigate, (i) adding to, deleting, changing the application of, or
changing the Company’s disclosure with respect to, any of the Company’s material accounting
policies, in each case in any material respect; (ii) any matter which could reasonably be
expected to result in a restatement of the Company’s financial statements for any annual or
interim period during the current or prior three fiscal years; or (iii) any Internal Control
Event.
(cc) Litigation. Except as disclosed in the General Disclosure Package, there are no
pending actions, suits or proceedings (including any inquiries or investigations by any
court or governmental agency or body, domestic or foreign) against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if determined adversely
to the Company or any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect the ability of the Company
or the Guarantors to perform its obligations under the Indenture or this Agreement, or which
are otherwise material in the context of the sale of the Offered Securities; and no such
actions, suits or proceedings (including any inquiries or investigations by any court or
governmental agency or body, domestic or foreign) are threatened or, to the Company’s
knowledge, contemplated.
(dd) Financial Statements. The financial statements included in the Registration
Statement and the General Disclosure Package present fairly in all material respects the
financial position of the Company and its consolidated subsidiaries as of the dates shown
and their results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis
(ee) No Material Adverse Change in Business. Except as disclosed in the General
Disclosure Package, since the end of the period covered by the latest audited financial
statements included in the General Disclosure Package (i) there has been no change, nor any
development or event involving a prospective change, in the condition (financial or
otherwise), results of operations, business, properties or prospects of the Company and its
subsidiaries, taken as a whole, that is material and adverse, (ii) except as disclosed in or
contemplated by the General Disclosure Package, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its capital stock and
(iii) except as disclosed in or contemplated by the General Disclosure Package, there has
been no material adverse change in the capital stock, short-term indebtedness, long-term
indebtedness, net current assets or net assets of the Company and its subsidiaries.
8
(ff) Investment Company Act. The Company and the Guarantors are not and, after giving
effect to the offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the General Disclosure Package, will not be an “investment
company” as defined in the Investment Company Act of 1940 (the “Investment Company Act”).
(gg) Ratings. No “nationally recognized statistical rating organization” as such term
is defined for purposes of Rule 436(g)(2) (i) has imposed (or has informed the Company that
it is considering imposing) any condition (financial or otherwise) on the Company’s
retaining any rating assigned to the Company or any securities of the Company or (ii) has
informed the Company that it is considering any of the actions described in Section 7(c)(ii)
hereof.
(hh) Private Placement. The offer, sale and issuance of 281,900 shares of the
Company’s common stock to Caledonia Investments plc pursuant to the Common Stock Purchase
Agreement, to be dated June 11, 2008 (the “Caledonia Agreement”), is exempt from the
registration requirements of the Securities Act, and the securities laws of any state having
jurisdiction with respect thereto, and the Company has not taken and will not take any
action that would cause the loss of such exemption.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, the Company and
the Guarantors agree to sell to the several Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company at a purchase price of 97.25% of the
principal amount thereof plus accrued interest from June 17, 2008 to the Closing Date (as
hereinafter defined), the respective principal amounts of Firm Securities set forth opposite the
names of the Underwriters in Schedule A hereto .
The Company will deliver the Firm Securities to or as instructed by the Representatives for
the accounts of the several Underwriters in a form reasonably acceptable to the Representatives
against payment of the purchase price by the Underwriters in Federal (same day) funds by wire
transfer to an account at a bank acceptable to Credit Suisse drawn to the order of the Company at
the office of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P. (“▇▇▇▇▇ ▇▇▇▇▇”), ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, at 10 A.M.,
New York time, on June 17, 2008, or at such other time not later than seven full business days
thereafter as the Representatives and the Company determine, such time being herein referred to as
the “First Closing Date”. For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934,
the First Closing Date (if later than the otherwise applicable settlement date) shall be the
settlement date for payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering. The Firm Securities so to be delivered or evidence of their issuance
will be made available for checking at the above office of ▇▇▇▇▇ ▇▇▇▇▇ at least 24 hours prior to
the First Closing Date.
In addition, upon written notice from the Representatives given to the Company from time to
time not more than 30 days subsequent to the date of the Final Prospectus, the Underwriters may
purchase all or less than all of the Optional Securities at the purchase price per principal amount
of Securities (including any accrued interest thereon to the related Optional Closing Date to be
paid for the Firm Securities. The Company agrees to sell to the Underwriters the principal amount
of Optional Securities specified in such notice and the Underwriters agree, severally and not
jointly, to purchase such Optional Securities. Such Optional Securities shall be purchased for the
account of each Underwriter in the same proportion as the principal amount of Firm Securities set
forth opposite such Underwriter’s name bears to the total principal amount of Firm Securities
(subject to adjustment by the Representatives to eliminate fractions) and may be purchased by the
Underwriters only for the purpose of covering over-allotments made in connection with the sale of
the Firm Securities. No Optional Securities shall be sold or delivered unless the Firm Securities
previously have been, or simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the extent not
previously exercised may be surrendered and terminated at any time upon notice by the
Representatives to the Company.
Each time for the delivery of and payment for the Optional Securities, being herein referred
to as an “Optional Closing Date”, which may be the First Closing Date (the First Closing Date and
each Optional Closing Date, if any, being sometimes referred to as a “Closing Date”), shall be
determined by the Representatives but shall be not later than five full business days after written
notice of election to purchase Optional Securities is given. The Company will deliver the Optional
Securities being purchased on each Optional Closing Date to or as instructed by
9
the Representatives for the accounts of the several Underwriters in a form reasonably
acceptable to the Representatives against payment of the purchase price therefor in Federal (same
day) funds by wire transfer to an account at a bank acceptable to the Representatives drawn to the
order of the Company, at the above office of ▇▇▇▇▇ ▇▇▇▇▇. The Optional Securities being purchased
on each Optional Closing Date or evidence of their issuance will be made available for checking at
the above office of ▇▇▇▇▇ ▇▇▇▇▇ at a reasonable time in advance of such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer
the Offered Securities for sale to the public as set forth in the Final Prospectus.
5. Certain Agreements of the Company and the Guarantors. The Company and the Guarantors,
jointly and severally, agree with the several Underwriters that:
(a) Filing of Prospectuses. The Company has filed or will file each Statutory
Prospectus (including the Final Prospectus), pursuant to and in accordance with
Rule 424(b)(2) (or, if applicable and if consented to by the Representatives,
subparagraph (5) not later than the second business day following the earlier of the date it
is first used or the execution and delivery of this Agreement. The Company has complied and
will comply with Rule 433.
(b) Filing of Amendments; Response to Commission Requests. The Company will promptly
advise the Representatives of any proposal to amend or supplement the Registration Statement
or any Statutory Prospectus at any time and will offer the Representatives a reasonable
opportunity to comment on any such amendment or supplement; and the Company will also advise
the Representatives promptly of (i) the filing of any such amendment or supplement, (ii) any
request by the Commission or its staff for any amendment to the Registration Statement, for
any supplement to any Statutory Prospectus or for any additional information, (iii) the
institution by the Commission of any stop order proceedings in respect of the Registration
Statement or the threatening of any proceeding for that purpose, and (iv) the receipt by the
Company of any notification with respect to the suspension of the qualification of the
Offered Securities in any jurisdiction or the institution or threatening of any proceedings
for such purpose. The Company will use its reasonable best efforts to prevent the issuance
of any such stop order or the suspension of any such qualification and, if issued, to obtain
as soon as possible the withdrawal thereof.
(c) Continued Compliance with Securities Laws. If, at any time when a prospectus
relating to the Offered Securities is (or but for the exemption in Rule 172 would be)
required to be delivered under the Act by any Underwriter or dealer, any event occurs as a
result of which the Final Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Registration Statement or
supplement the Final Prospectus to comply with the Act, the Company will promptly notify the
Representatives of such event and will promptly prepare and file with the Commission and
furnish, at its own expense, to the Underwriters and the dealers and any other dealers upon
request of the Representatives, an amendment or supplement which will correct such statement
or omission or an amendment which will effect such compliance. If any such amendment to the
Registration Statement or supplement to the Final Prospectus (or any new registration
statement contemplated by Section 2(c)) is required to be filed or delivered at any time
during the nine months immediately following the date that the Final Prospectus is filed
with the Commission pursuant to Rule 424(b), the costs of preparing and filing such
amendment or supplement (or such new registration statement), and the other costs incidental
thereto, shall be at the Company’s expense; if any such amendment to the Registration
Statement or supplement to the Final Prospectus (or such new registration statement) is
required to be filed or delivered at any time later than nine months immediately following
the date that the Final Prospectus is filed with the Commission pursuant to Rule 424(b), the
costs of preparing and filing such amendment or supplement (or such new registration
statement), and the other costs incidental thereto, shall be at the Underwriters’ expense.
Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions set forth in
Section 7 hereof.
10
(d) Rule 158. As soon as practicable, but not later than 17 months after the date of
this Agreement, the Company will make generally available to its securityholders an earnings
statement covering a period of at least 12 months beginning after the date of this Agreement
and satisfying the provisions of Section 11(a) of the Act and Rule 158.
(e) Furnishing of Prospectuses. The Company will furnish to the Representatives copies
of the Registration Statement, including all exhibits, any Statutory Prospectus, the Final
Prospectus and all amendments and supplements to such documents, in each case as soon as
available and in such quantities as the Representatives reasonably request. The Company
will pay the expenses of printing and distributing to the Underwriters all such documents.
(f) Blue Sky Qualifications. The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility for investment under
the laws of such jurisdictions as the Representatives designate and will continue such
qualifications in effect so long as required for the distribution of the Offered Securities;
provided, however, that neither the Company nor the Guarantors shall be obligated to qualify
or register as a foreign corporation or as a dealer in securities or to take any action that
would subject it to general service of process in any such jurisdiction or to subject itself
to taxation in respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) Reporting Requirements. During the period of five years hereafter, the Company
will furnish to the Representatives and, upon request, to each of the other Underwriters, as
soon as practicable after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the Representatives (i) as soon
as available, a copy of each report and any definitive proxy statement of the Company filed
with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to
time, such other publicly available information concerning the Company as the
Representatives may reasonably request. However, so long as the Company is subject to the
reporting requirements of either Section 13 or Section 15(d) of the Exchange Act and is
timely filing reports with the Commission on its Electronic Data Gathering, Analysis and
Retrieval system (“▇▇▇▇▇”), it is not required to furnish such reports or statements to the
Underwriters.
(h) Payment of Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including but not limited to any filing fees and
other expenses (including fees and disbursements of counsel to the Underwriters) incurred in
connection with qualification of the Offered Securities for sale under the laws of such
jurisdictions as the Representatives designate and the preparation and printing of memoranda
relating thereto, costs and expenses related to the review by the National Association of
Securities Dealers, Inc. of the Offered Securities (including filing fees and the fees and
expenses of counsel for the Underwriters relating to such review), costs and expenses
relating to investor presentations or any “road show” in connection with the offering and
sale of the Offered Securities including, without limitation, any travel expenses of the
Company’s officers and employees and any other expenses of the Company including the
chartering of airplanes, fees and expenses incident to listing the Offered Securities on the
New York Stock Exchange, American Stock Exchange, NASDAQ Stock Market and other national and
foreign exchanges, fees and expenses in connection with the registration of the Offered
Securities under the Exchange Act, and expenses incurred in distributing preliminary
prospectuses and the Final Prospectus (including any amendments and supplements thereto) to
the Underwriters and for expenses incurred for preparing, printing and distributing any
Issuer Free Writing Prospectuses to investors or prospective investors, but not including
travel and lodging expenses of the Underwriters.
(i) Use of Proceeds. The Company will use the net proceeds received in connection with
this offering in the manner described in the “Use of Proceeds” section of the General
Disclosure Package and, except as disclosed in the General Disclosure Package, the Company
does not intend to use any of the proceeds from the sale of the Offered Securities hereunder
to repay any outstanding debt owed to any affiliate of any Underwriter.
(j) Absence of Manipulation. The Company will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be expected to cause or
result in, stabilization
11
or manipulation of the price of any securities of the Company to facilitate the sale or
resale of the Offered Securities.
(k) Restriction on Sale of Securities. For the period specified below (the “Lock-Up
Period”), the Company will not, directly or indirectly, take any of the following actions
with respect to its Securities, the Underlying Shares or any securities convertible into or
exchangeable or exercisable for any of its Securities or Underlying Shares (“Lock-Up
Securities”): (i) offer, sell, issue, contract to sell, pledge or otherwise dispose of
Lock-Up Securities, (ii) offer, sell, issue, contract to sell, contract to purchase or grant
any option, right or warrant to purchase Lock-Up Securities, (iii) enter into any swap,
hedge or any other agreement that transfers, in whole or in part, the economic consequences
of ownership of Lock-Up Securities, (iv) establish or increase a put equivalent position or
liquidate or decrease a call equivalent position in Lock-Up Securities within the meaning of
Section 16 of the Exchange Act or (v) file with the Commission a registration statement
under the Act relating to Lock-Up Securities other than a registration statement on Form S-8
or any successor form in connection with the registration of securities pursuant to any
employee benefit plan in effect on the date hereof, or publicly disclose the intention to
take any such action, without the prior written consent of the Representatives except
issuances of Lock-Up Securities pursuant to the conversion or exchange of convertible or
exchangeable securities or the exercise of warrants or options, in each case outstanding on
the date hereof, issuances pursuant to the Company’s concurrent offering of up to 4,715,000
shares of common stock, grants under director and employee stock plans in effect on the date
hereof, issuances of Lock-Up Securities pursuant to the issuance, vesting or exercise of an
award under any such plan including forfeiture to the Company of common stock in
satisfaction of tax withholding obligations arising in connection with such issuance,
vesting or exercise, any private sales of up to 2,000,000 shares of the Company’s common
stock or other securities convertible into or exchangeable or exercisable for such shares in
connection with acquisitions in which the purchaser agrees to be bound by the restrictions
described in this Section, issuance pursuant to the Caledonia Agreement, or the sale of any
shares of Offered Securities to the Underwriters pursuant to this Agreement, issuances of
the Underlying Shares pursuant to this Agreement. The initial Lock-Up Period will commence
on the date hereof and continue for 90 days after the date hereof or such earlier date that
the Representatives consent to in writing.
6. Free Writing Prospectuses. (a) Issuer Free Writing Prospectuses. The Company represents
and agrees that, unless it obtains the prior consent of Credit Suisse, and each Underwriter
represents and agrees that, unless it obtains the prior consent of the Company and Credit Suisse,
it has not made and will not make any offer relating to the Offered Securities that would
constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free
writing prospectus consented to by the Company and Credit Suisse is hereinafter referred to as a
“Permitted Free Writing Prospectus.” The Company represents that it has treated and agrees that it
will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as
defined in Rule 433, and has complied and will comply with the requirements of Rules 164 and 433
applicable to any Permitted Free Writing Prospectus, including timely Commission filing where
required, legending and record keeping.
(b) Term Sheets. The Company will prepare a final term sheet relating to the
Offered Securities, containing only information that describes the final terms of
the Offered Securities and otherwise in a form consented to by Credit Suisse, and
will file such final term sheet within the period required by Rule 433(d)(5)(ii)
following the date such final terms have been established for the offering of the
Offered Securities. Any such final term sheet is an Issuer Free Writing Prospectus
and a Permitted Free Writing Prospectus for purposes of this Agreement. The Company
also consents to the use by any Underwriter of a free writing prospectus that
contains only (i)(x) information describing the preliminary terms of the Offered
Securities or their offering or (y) information that describes the final terms of
the Offered Securities or their offering and that is included in the final term
sheet of the Company contemplated in the first sentence of this subsection or (ii)
other information that is not “issuer information,” as defined in Rule 433, it being
understood that any such free writing prospectus referred to in clause (i) or (ii)
above shall not be an Issuer Free Writing Prospectus for purposes of this Agreement.
12
7. Conditions of the Obligations of the Underwriters. The obligations of the several
Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional
Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the
representations and warranties of the Company and the Guarantors herein (as though made on such
Closing Date), to the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company and the Guarantors of its obligations
hereunder and to the following additional conditions precedent:
(a) Accountants’ Comfort Letter. The Representatives shall have received letters,
dated, respectively, the date hereof and each Closing Date, of KPMG LLP confirming that they
are a registered public accounting firm and independent public accountants within the
meaning of the Securities Laws and substantially in the form of Schedule C hereto (except
that, in any letter dated a Closing Date, the specified date referred to in Schedule C
hereto shall be a date no more than three days prior to such Closing Date).
(b) Filing of Prospectus. The Final Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) hereof. No stop
order suspending the effectiveness of the Registration Statement or of any part thereof
shall have been issued and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Company or any Underwriter, shall be contemplated by the Commission.
(c) No Material Adverse Change. Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company and its subsidiaries taken as a
whole, other than as set forth or contemplated in the General Disclosure Package, which, in
the judgment of the Representatives, is material and adverse and makes it impractical or
inadvisable to market the Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any “nationally recognized statistical rating organization” (as
defined for purposes of Rule 436(g)), or any public announcement that any such organization
has under surveillance or review its rating of any debt securities of the Company (other
than an announcement with positive implications of a possible upgrading, and no implication
of a possible downgrading, of such rating); (iii) any change in U.S. or international
financial, political or economic conditions or currency exchange rates or exchange controls
the effect of which is such as to make it, in the judgment of the Representatives,
impractical to market or to enforce contracts for the sale of the Offered Securities,
whether in the primary market or in respect of dealings in the secondary market; (iv) any
suspension or material limitation of trading in securities generally on the New York Stock
Exchange or The NASDAQ Stock Market, or any setting of minimum or maximum prices for trading
on such exchange; (v) any suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market; (vi) any banking moratorium declared by any U.S.
federal New York authorities; (vii) any major disruption of settlements of securities,
payment, or clearance services in the United States or any other country where such
securities are listed or (viii) any attack on, outbreak or escalation of hostilities or act
of terrorism involving the United States, any declaration of war by Congress or any other
national or international calamity or emergency if, in the judgment of the Representatives,
the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency
is such as to make it impractical or inadvisable to market the Offered Securities or to
enforce contracts for the sale of the Offered Securities.
(d) Opinion of Counsel for Company. The Representatives shall have received an
opinion, dated such Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇ L.L.P., counsel for the Company and the
Guarantors, to the effect that:
(i) Good Standing of the Company. The Company has been duly incorporated and
is existing and in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the General Disclosure Package; and the Company is duly qualified to
do business as a foreign corporation in good standing in the State of Texas;
(ii) Indenture; Offered Securities. The Indenture has been duly authorized,
executed and delivered by the Company and each Guarantor and has been duly
qualified under the Trust
13
Indenture Act; the Offered Securities delivered on such Closing Date have been
duly authorized and executed by the Company and each Guarantor and conform in all
material respects to the description of such Offered Securities contained in the
General Disclosure Package and the Final Prospectus; and the Indenture (assuming
the due authorization, execution and delivery thereof by the Trustee) and the
Offered Securities delivered on such Closing Date (when authenticated by the
Trustee in the manner provided in the indenture and delivered through the
facilities of DTC against payment of the purchase price therefore) constitute valid
and legally binding obligations of the Company and the Guarantors enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles and
entitled to the benefits provided by the Indenture;
(iii) Underlying Shares. The Offered Securities delivered on such Closing
Date are convertible into the Underlying Shares of the Company in accordance with
the terms of the Indenture; the Underlying Shares initially issuable upon
conversion of such Offered Securities have been duly authorized and reserved for
issuance upon such conversion, conform as to legal matters in all material respects
to the description of such Underlying Shares contained in the General Disclosure
Package and the Final Prospectus; the stockholders of the Company have no
preemptive rights with respect to the Underlying Shares under the Certificate of
Incorporation and Bylaws of the Company, the Delaware General Corporation Law or,
to the knowledge of such counsel, any other agreements or instrument to which the
Company is a party, with respect to the Offered Securities; the authorized equity
capitalization of the Company is as set forth in the General Disclosure Package;
when issued upon conversion the Underlying Shares will be, validly issued, fully
paid and nonassessable;
(iv) Registration Rights. To the knowledge of such counsel, there are no
contracts, agreements or understandings between the Company and any person granting
such person registration rights that have not been validly waived or satisfied
prior to the date hereof
(v) Investment Company Act. Each of the Company and the Guarantors is not
and, after giving effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the General Disclosure Package,
will not be an “investment company” as defined in the Investment Company Act;
(vi) Absence of Further Requirements. No consent, approval, authorization or
order of, or filing with, any governmental agency or body or any court is required
to be obtained or made by the Company or the Guarantors for the consummation of the
transactions contemplated by this Agreement in connection with the offering,
issuance and sale of the Offered Securities and Underlying Shares by the Company or
the Guarantors, except such as have been obtained or made and such as may be
required by FINRA or under state securities laws;
(vii) Absence of Defaults and Conflicts Resulting from Transaction. The
execution, delivery and performance of the Indenture and this Agreement by the
Company and the Guarantors and the issuance and sale of the Offered Securities and
Underlying Shares and compliance by the Company and the Guarantors with the terms
and provisions thereof will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, or result in the imposition of
any lien, charge or encumbrance upon any property or assets of the Company or any
of its subsidiaries pursuant to (i) the charter or by-laws or similar constitutive
document of the Company or of its significant subsidiaries, (ii) any statute, rule,
regulation or order known to such counsel of any governmental agency or body or any
court having jurisdiction over the Company or any of its subsidiaries or any of
their properties(provided, however, that such counsel need express no opinion with
respect to compliance with any state securities or other federal or state
anti-fraud statutes, rules, or regulations), or (iii) any agreement or instrument
that is an exhibit to the Registration Statement except, in the case of clauses
(ii) and (iii), where any such breach, violation or default would not, individually
or in the aggregate, have a Material Adverse Effect;
14
(viii) Compliance with Registration Requirements; Effectiveness. The
Registration Statement has become effective under the Act, the Final Prospectus was
filed with the Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein, and, to the best of the knowledge of
such counsel, no stop order suspending the effectiveness of the Registration
Statement or any part thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated by the Commission under the
Act; the Registration Statement, as of the Effective Time relating to the Offered
Securities, and the Final Prospectus, as of the date of this Agreement, and each
amendment or supplement thereto, as of this date, complied as to form in all
material respects with the requirements of the Act, the Trust Indenture Act and the
Rules and Regulations;
(ix) Description of Securities and Offering. The statements in the
Registration Statements, General Disclosure Package and Final Prospectus under the
captions “Description of Notes,” “Description of Capital Stock” and “Underwriting”
of legal matters, agreements, documents or proceedings are accurate summaries
thereof in all material respects;
(x) Description of Tax Considerations. The statements in the Registration
Statements, General Disclosure Package and Final Prospectus under the
caption “Material U.S.
Federal Income and Estate Tax Considerations” of legal matters, agreements, documents or
proceedings are accurate summaries thereof in all material respects;
(xi) Legal or Governmental Proceedings. Such counsel do not know of any legal
or governmental proceedings pending or threatened by or before any court or
governmental agency, authority or body required to be described in a Registration
Statement or the Final Prospectus which are not described as required or of any
contracts or documents of a character required to be described in a Registration
Statement or the Final Prospectus or to be filed as exhibits to a Registration
Statement which are not described and filed as required; and
(xii) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and the Guarantors.
(xiii) Valid Private Placement. The offer, sale and issuance of 281,900
shares of the Company’s common stock to Caledonia Investments plc pursuant to the
Caledonia Agreement, is exempt from the registration requirements of the Securities
Act and the securities laws of the state of Texas.
(e) Such counsel shall also include, in a separate paragraph of its opinion, statements
to the following effect: such counsel has participated in conferences with officers and
other representatives of the Company, with representatives of the independent registered
public accounting firm of the Company, with other counsel for the Company and with
representatives of and counsel for the Underwriters, at which the contents of the
Registration Statement, the Prospectus, the General Disclosure Package and related matters
were discussed, and although such counsel did not independently verify such information, and
is not passing upon and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in, the Prospectus, the Registration Statement or the
General Disclosure Package (except to the extent stated in Sections 7(d)(ix)), on the basis
of the foregoing, no facts have come to such counsel’s attention that lead such counsel to
believe that (A) the Registration Statement (other than (i) the financial statements and
schedules contained therein, including the notes thereto and the independent registered
public accounting firm’s reports thereon, (ii) the other financial or accounting data
included therein or omitted therefrom, and (iii) the exhibits thereto, as to which such
counsel has not been asked to comment), as of its effective date, contained an untrue
statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (B) that the Final
Prospectus (other than (i) the financial statements and schedules contained therein,
including the notes thereto and the independent registered public accounting firm’s reports
thereon, and (ii) the other financial or accounting data included therein or omitted
therefrom), as of its date or as of such Closing Date, contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or (C)
15
that the General Disclosure Package (other than (i) the financial statements and
schedules contained therein, including the notes thereto and the independent registered
public accounting firm’s reports thereon, and (ii) the other financial or accounting data
included therein or omitted therefrom), as of the Applicable Time, contained an untrue
statement of a material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
(f) Opinion of General Counsel of the Company. The Representatives shall have received
an opinion, dated such Closing Date, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President and General Counsel
of the Company, to the effect that:
(i) Good Standing of the Company. The Company is duly qualified to do
business as a foreign corporation in good standing in all jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification except where the failure to be so qualified or in good standing would
not, individually or in the aggregate, have a Material Adverse Effect;
(ii) Subsidiaries. Each Guarantor and each significant subsidiary of the
Company has been duly incorporated or otherwise organized and is an existing
corporation, limited liability company or other business entity in good standing
under the laws of the jurisdiction of its incorporation or organization, with power
and authority (corporate, limited liability company and other) to own its
properties and conduct its business as described in the General Disclosure Package;
and each significant subsidiary of the Company is duly qualified to do business as a foreign
corporation or other business entity in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification except where the failure to be so qualified or in good standing
would not, individually or in the aggregate, have a Material Adverse Effect; all of
the issued and outstanding capital stock or other equity securities of each
Guarantor and each significant subsidiary of the Company have been duly authorized
and validly issued and are fully paid and, in the case of corporate subsidiaries,
nonassessable; and the capital stock or other equity securities of each Guarantor
and each significant subsidiary owned by the Company, directly or through
subsidiaries, are owned free from liens, encumbrances and defects, except to the
extent such capital stock or other equity securities are subject to a lien or
encumbrance in connection with the Credit Facilities;
(iii) Title to Property. Except as disclosed in the General Disclosure
Package, (A) the Company and its subsidiaries have good and marketable title to all
real properties and all other properties and assets owned by them, in each case
free from liens, charges, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made thereof by
them and (B) the Company and its subsidiaries hold any leased real or personal
property under valid and enforceable leases with no terms or provisions that would
materially interfere with the use made or to be made thereof by them, except, in
each case, for such liens, charges, encumbrances, defects and exceptions that would
not have a Material Adverse Effect;.
(iv) Absence of Existing Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is (A) in violation of its charter or by-laws or similar
constitutive document and (B) to the best of such counsel’s knowledge, no default
(or event which, with the giving of notice or lapse of time would be a default) has
occurred in the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument that is described or
referred to in the Registration Statement or the General Disclosure Package or
filed or incorporated by reference as an exhibit to the Registration Statement
except, in the case of clause (B), for such defaults that would not, individually
or in the aggregate, have a Material Adverse Effect;
(v) SEC Investigation and DOJ. The statements in the General Disclosure
Package and the Final Prospectus under the headings “Risk Factors—Risks Relating to
Our Internal
16
Review and Governmental Investigations” and “Business—Legal Proceedings,”
insofar as such statements summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair summaries in all material
respects of such legal matters, agreements, documents or proceedings and present
the information required to be shown; and
(vi) Shares of the Company. All outstanding shares of capital stock of the
Company and the Guarantors are validly issued, fully paid and nonassessable.
(g) Opinion of Counsel for Underwriters. The Representatives shall have received from
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to such matters as the Representatives may require, and the
Company shall have furnished to such counsel such documents as they reasonably request for
the purpose of enabling them to pass upon such matters.
(h) Officer’s Certificate. The Representatives shall have received a certificate,
dated such Closing Date, of an executive officer of the Company and the Guarantors and a
principal financial or accounting officer of the Company and the Guarantors in which such
officers shall state that: the representations and warranties of the Company and the
Guarantors in this Agreement are true and correct; the Company and the Guarantors have
complied with all agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date; no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of their knowledge and after reasonable
investigation, are contemplated by the Commission; and, subsequent to the dates of the most
recent financial statements in the General Disclosure Package, there has been no material
adverse change, nor any development or event involving a prospective material adverse
change, in the condition (financial or otherwise), results of operations, business or
properties of the Company and its subsidiaries taken as a whole except as set forth in the
General Disclosure Package or as described in such certificate.
(i) Lock-up Agreements. On or prior to the date hereof, the Representatives shall have
received lockup letters substantially in the form set forth on Schedule D from each of the
executive officers and directors of the Company and their affiliates, including Caledonia
Investments plc.
The Company will furnish the Representatives with such conformed copies of such opinions,
certificates, letters and documents as the Representatives reasonably request. The Representatives
may in its sole discretion waive on behalf of the Underwriters compliance with any conditions to
the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
8. Indemnification and Contribution. (a) Indemnification of Underwriters. The Company and
the Guarantors, jointly and severally, will indemnify and hold harmless each Underwriter, its
partners, members, directors, officers, employees, agents, affiliates and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act (each, an “Indemnified Party”), against any and all losses, claims, damages or liabilities,
joint or several, to which such Indemnified Party may become subject, under the Act, the Exchange
Act, other Federal or state statutory law or regulation 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 in any part of the
Registration Statement at any time, any Statutory Prospectus as of any time, the Final Prospectus
or any Issuer Free Writing Prospectus or any “issuer information” filed or required to be filed
pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Indemnified Party for any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating or defending against
any loss, claim, damage, liability, action, litigation, investigation or proceeding whatsoever
(whether or not such Indemnified Party is a party thereto), whether threatened or commenced, and in
connection with the enforcement of this provision with respect to any of the above as such expenses
are incurred; provided, however, that neither the Company nor any Guarantor will be liable in any
such case to the extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of
such documents in reliance upon and in conformity with written information furnished to the Company
by any
17
Underwriter through the Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of the information
described as such in subsection (b) below.
(b) Indemnification of Company. Each Underwriter will severally and not jointly
indemnify and hold harmless the Company and the Guarantors, each of its directors
and each of its officers who signs a Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act (each, an “Underwriter Indemnified Party”), against any losses,
claims, damages or liabilities to which such Underwriter Indemnified Party may
become subject, under the Act, the Exchange Act, other Federal or state statutory
law or regulation 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 in any
part of the Registration Statement at any time, any Statutory Prospectus as of any
time, the Final Prospectus, or any Issuer Free Writing Prospectus, or arise out of
or are based upon the omission or the alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by such Underwriter
Indemnified Party in connection with investigating or defending against any such
loss, claim, damage, liability, action, litigation, investigation or proceeding
whatsoever (whether or not such Underwriter Indemnified Party is a party thereto),
whether threatened or commenced, based upon any such untrue statement or omission,
or any such alleged untrue statement or omission as such expenses are incurred, it
being understood and agreed that the only such information furnished by any
Underwriter consists of (i) the following information in the Final Prospectus
furnished on behalf of each Underwriter: the concession figure appearing in the 4th
paragraph under the caption “Underwriting” and the information contained in the 10th
through 12th paragraphs under the caption “Underwriting.”
(c) Actions against Parties; Notification. Promptly after receipt by an
indemnified party under this Section of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the indemnifying party
of the commencement thereof; but the failure to notify the indemnifying party shall
not relieve it from any liability that it may have under subsection (a) or (b) above
except to the extent that it has been materially prejudiced (through the forfeiture
of substantive rights or defenses) by such failure; and provided further that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsection (a) or (b)
above. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement of
any pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release of
such indemnified party from all liability on any claims that are the subject matter
of such action and (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an indemnified party.
18
(d) Contribution. If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Offered Securities or
(ii) if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and the
Guarantors on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantors on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the Company
and the Guarantors bear to the total underwriting discounts and commissions received
by the Underwriters. 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 and the Guarantors, on the one hand, or the Underwriters, on
the other hand, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any action or claim which is the
subject of this subsection (d). Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter 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
Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d)
to contribute are several in proportion to their respective underwriting obligations
and not joint. The Company, the Guarantors and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 8(d).
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the
aggregate principal amount of Offered Securities that such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed 10% of the total principal amount of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date, Credit Suisse may
make arrangements satisfactory to the Company for the purchase of such Offered Securities by other
persons, including any of the Underwriters, but if no such arrangements are made by such Closing
Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such defaulting
Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters
so default and the aggregate principal amount of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total principal amount of Offered Securities that the
Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to Credit
Suisse and the Company for the purchase of such Offered Securities by other persons are not made
within 36 hours after such default, this Agreement will terminate without liability on the part of
any non-defaulting Underwriter or the Company, except as provided in Section 10 (provided that if
such default occurs with respect to Optional Securities after the First Closing Date, this
Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior
to such termination). As used in this Agreement, the term “Underwriter” includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
19
10. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Company and the Guarantors or
their officers and of the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Underwriter, the Company, the Guarantors or any of their
respective representatives, officers or directors or any controlling person, and will survive
delivery of and payment for the Offered Securities. If the purchase of the Offered Securities by
the Underwriters is not consummated for any reason other than solely because of the termination of
this Agreement pursuant to Section 9 hereof, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities, and the respective obligations of the
Company, the Guarantors and the Underwriters pursuant to Section 8 hereof shall remain in effect.
In addition, if any Offered Securities have been purchased hereunder, the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain in effect.
11. Notices. All communications hereunder will be in writing and, if sent to the Underwriters,
will be mailed, delivered or telegraphed and confirmed to the Representatives, c/o Credit Suisse
Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: LCD-IBD, or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at ▇▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇; provided,
however, that any notice to an Underwriter pursuant to Section 8 will be mailed, delivered or
telegraphed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the officers and directors and controlling persons
referred to in Section 8, and no other person will have any right or obligation hereunder.
13. Representation of Underwriters. The Representatives will act for the several Underwriters
in connection with this financing, and any action under this Agreement taken by the Representatives
jointly will be binding upon all the Underwriters.
14. Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all such counterparts shall together constitute one and the
same Agreement.
15. Absence of Fiduciary Relationship. The Company and the Guarantors acknowledge and agree
that:
(a) No Other Relationship. The Representatives have been retained solely to act as
underwriters in connection with the sale of Offered Securities and that no fiduciary,
advisory or agency relationship between the Company and the Guarantors, on the one hand, and
the Representatives, on the other hand, has been created in respect of any of the
transactions contemplated by this Agreement or the Final Prospectus, irrespective of whether
the Representatives have advised or is advising the Company or the Guarantors on other
matters;
(b) Arms’ Length Negotiations. The price of the Offered Securities set forth in this
Agreement was established by the Company and the Guarantors following discussions and
arms-length negotiations with the Representatives and the Company and the Guarantors are
capable of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement;
(c) Absence of Obligation to Disclose. The Company and the Guarantors have been
advised that the Representatives and their affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of the Company and the
Guarantors and that the Representatives have no obligation to disclose such interests and
transactions to the Company and the Guarantors by virtue of any fiduciary, advisory or
agency relationship; and
(d) Waiver. The Company and each of the Guarantors waives, to the fullest extent
permitted by law, any claims it may have against the Representatives for breach of fiduciary
duty or alleged breach of
20
fiduciary duty and agrees that the Representatives shall have no liability (whether
direct or indirect) to the Company or the Guarantors in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right of the
Company, including stockholders, employees or creditors of the Company or the Guarantors.
16. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.
The Company and each of the Guarantors hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
The Company and each of the Guarantors irrevocably and unconditionally waives any objection to the
laying of venue of any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby in Federal and state courts in the Borough of Manhattan in The
City of New York and irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such suit or proceeding in any such court has been brought in an inconvenient
forum.
[Signature Page Follows]
21
If the foregoing is in accordance with the Representatives’ understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a
binding agreement among the Company, the Guarantors and the several Underwriters in accordance with
its terms.
Very truly yours,
| ▇▇▇▇▇▇▇ Group Inc. | ||||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Executive Vice President and Chief Financial Officer | ||||||
| AIR LOGISTICS, LLC | ||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
| Manager | ||||||
| Air Logistics of Alaska, Inc. | ||||||
| Airlog International ltd. | ||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
| Vice President | ||||||
[Signature page to Underwriting Agreement — Convertible Notes]
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the date first above written.
| Credit Suisse Securities (USA) LLC | ||||||
| By: | /s/ ▇▇▇▇▇ ▇▇▇▇ | |||||
| Name: ▇▇▇▇▇ ▇▇▇▇ | ||||||
| Title: Managing Director | ||||||
| ▇▇▇▇▇▇▇, Sachs & Co. | ||||||
| By: | /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. | |||||
| (▇▇▇▇▇▇▇, Sachs & Co.) | ||||||
| ▇.▇. ▇▇▇▇▇▇ Securities Inc. | ||||||
| By: | /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ | ||||||
| Title: Vice President | ||||||
| Acting on behalf of itself and as the Representatives of the several Underwriters. | ||||||
[Signature page to Underwriting Agreement — Convertible Notes]
SCHEDULE A
Underwriter
Credit Suisse Securities (USA) LLC |
$ | 50,000,000 | ||
▇▇▇▇▇▇▇, Sachs & Co. |
32,000,000 | |||
▇.▇. ▇▇▇▇▇▇ Securities Inc. |
18,000,000 | |||
Total |
$ | 100,000,000 | ||
SCHEDULE B
1. General Use Free Writing Prospectuses (included in the General Disclosure Package)
“General Use Issuer Free Writing Prospectus” includes each of the following
documents:
1. Final term sheet, dated June 11, 2008 and filed as a free writing prospectus on
June 12, 2008.
2. Press release, dated June 11, 2008 and filed as a free writing prospectus on
June 12, 2008.
2. Other Information Included in the General Disclosure Package
The following information is also included in the General Disclosure Package:
None
SCHEDULE C
June 11, 2008
The Board of Directors
▇▇▇▇▇▇▇ Group Inc.
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Group Inc.
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Credit Suisse Securities (USA) LLC
▇▇▇▇▇▇▇, Sachs &Co.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representatives of the Several Underwriters,
▇▇▇▇▇▇▇, Sachs &Co.
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representatives of the Several Underwriters,
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Ladies and Gentlemen:
We have audited the consolidated balance sheets of ▇▇▇▇▇▇▇ Group Inc. (the Company) and
subsidiaries as of March 31, 2008 and 2007, and the related consolidated statements of income,
shareholders’ investment, and cash flows for each of the years in the three-year period ended March
31, 2008, and the effectiveness of internal control over financial reporting as of March 31, 2008.
The consolidated financial statements, and management’s assessment of the effectiveness of internal
control over financial reporting as of March 31, 2008, are included in the Company’s annual report
on Form 10-K for the year ended March 31, 2008, which is incorporated by reference in the
Registration Statement (no. 333-151519) on Form S-3 including the prospectus dated June 9, 2008,
the primary prospectus supplement dated June 9, 2008, and the prospectus supplement dated June 11,
2008 (herein collectively referred to as the Registration Statement) filed by the Company under the
Securities Act of 1933 (the Act); our reports with respect thereto are also incorporated by
reference in that Registration Statement. Our report on the consolidated financial statements
referred to above refers to a change in the methods of accounting for uncertainty in income taxes
as of April 1, 2007, accounting for defined benefit plans as of March 31, 2007, and accounting for
stock-based compensation plans as of April 1, 2006.
In connection with the Registration Statement—
| 1. | We are an independent registered certified public accounting firm with respect to the Company within the meaning of the Act and the applicable rules and regulations thereunder adopted by the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (United States) (PCAOB). | |
| 2. | In our opinion, the consolidated financial statements audited by us and incorporated by reference in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Act and the Securities Exchange Act of 1934 and the related rules and regulations adopted by the SEC. | |
| 3. | We have not audited any financial statements of the Company, or the effectiveness of internal control over financial reporting as of any date or for any period subsequent to March 31, 2008; although we have conducted an audit for the year ended March 31, 2008, the purpose (and therefore the scope) of the audit was to enable us to express our opinion on the consolidated financial statements as of |
| March 31, 2008, and for the year then ended, and the effectiveness of internal control over financial reporting as of March 31, 2008, but not on the consolidated financial statements or internal control over financial reporting for any interim period within that year. | ||
| 4. | For purposes of this letter we have read the fiscal year 2009 minutes of meetings of the stockholders, the audit committee, the board of directors, the compensation committee, the disclosure committee, and the corporate governance & nominating committee of the Company and its subsidiaries as set forth in the minute books at June 9, 2008, officials of the Company having advised us that the minutes of all such meetings through that date were set forth therein. We have carried out other procedures to June 9, 2008, as follows (our work did not extend to the period from June 10, 2008 to June 11, 2008, inclusive): |
With respect to the period from April 1, 2008 to April 30, 2008, we have:
(i) Read the incomplete unaudited consolidated financial statements of the Company and
subsidiaries for April of both 2008 and 2007 furnished to us by the Company, officials of
the Company having advised us that no such financial statements as of any date or for any
period subsequent to April 30, 2008, were available. Such consolidated financial statements
are incomplete because they omit notes to the unaudited condensed consolidated financial
statements.
(ii) Inquired of certain officials of the Company who have responsibility for financial and
accounting matters whether the incomplete unaudited condensed consolidated financial
statements referred to in 4b(i) are stated on a basis substantially consistent with that of
the audited consolidated financial statements included in the Registration Statement.
The foregoing procedures do not constitute an audit conducted in accordance with the
standards of the PCAOB. Also, they would not necessarily reveal matters of significance with
respect to the comments in the following paragraph. Accordingly, we make no representations
regarding the sufficiency of the foregoing procedures for your purposes.
| 5. | Nothing came to our attention as a result of the foregoing procedures, however, that caused us to believe that: |
| (i) | At April 30, 2008, there was any change in the capital stock, increase in long-term debt, or decrease in consolidated net current assets or stockholders’ investment of the consolidated companies as compared with amounts shown in the March 31, 2008, audited consolidated balance sheet incorporated by reference in the Registration Statement, or | ||
| (ii) | for the period from April 1, 2008, to April 30, 2008, there were any decreases, as compared to the corresponding period in the preceding year, in consolidated revenue or in the total or per-share amounts of net income, except in all instances for changes, increases, or decreases that the Registration Statement discloses have occurred or may occur. |
| 6. | As mentioned in 4, Company officials have advised us that no consolidated financial statements as of any date or for any period subsequent to April 30, 2008, are available; accordingly, the procedures carried out by us with respect to changes in financial statement items after April 30, 2008, have, of necessity, been even more limited than those with respect to the period referred to in 4. We have inquired of certain officials of the Company who have responsibility for financial and accounting matters whether (a) at June 9, 2008, there was any change in the capital stock, increase in long-term debt or any decreases in consolidated net current assets or shareholders’ investment of the |
27
| consolidated companies as compared with amounts shown on the March 31, 2008, audited condensed consolidated balance sheet incorporated by reference in the Registration Statement or (b) for the period from May 1, 2008, to June 9, 2008, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated revenues or in the total or per-share amounts of net income. On the basis of these inquiries and our reading of the minutes as described in 4, nothing came to our attention that caused us to believe that there was any such change, increase, or decrease, except in all instances for changes, increases, or decreases that the Registration Statement discloses have occurred or may occur. | ||
| 7. | For purposes of this letter, we have also read the items identified by you on the attached copies of certain pages included in the Registration Statement and Form 10-K that is incorporated by reference in the Registration Statement, and have performed the following procedures, which were applied as indicated by the corresponding letter inserted next to the items. | |
| For purposes of reporting our findings, in those statements in which one or both of the compared amounts or percentages were rounded to some degree and the amounts or percentages were in agreement, except that they were not rounded to the same degree, we have nevertheless stated that we found the compared amounts to be in agreement. With respect to these items, we make no comment as to the Company’s determination as to what constitutes the appropriate presentations, disclosures, explanations, or causal relationships of such items. | ||
| With respect to the disclosure by the Company of any non-GAAP financial measures as defined by Regulation G, we make no comment as to whether such measures or the resulting disclosures comply with the requirements of Regulation G or Item 10 (e) of Regulation S-K. Unless otherwise indicated, the following conventions have been adopted in presenting the procedures and findings: |
| A | Compared the indicated amount or percentage to (or recomputed the indicated amount or percentage from) the Company’s audited consolidated financial statements and accompanying notes included in the Form 10-K or 10-K/A for the applicable fiscal year ended March 31, 2008, 2007, 2006, 2005 and 2004 and found such amounts or percentages to be in agreement. | ||
| (However, we make no comment as to the appropriateness of the definition or components of the computed amount of EBITDA.) | |||
| B | Compared the indicated amount or percentage to (or recomputed the indicated amount or percentage from) a schedule or schedules prepared by the Company from its accounting records and found such amounts to be in agreement. | ||
| (However as applicable, we make no representations as to the reasons given for variations in financial condition and result of operations amount or percentages in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section included in the Registration Statement.) | |||
| C | Compared to and recomputed from amounts on a schedule prepared by the Company based on information included in the Registration Statement and found the amounts to be in agreement. | ||
| (However, we make no comment as to the reasonableness of the “Use of Proceeds” or whether such use will actually take place.) |
| 8. | Our audits of the consolidated financial statements for the periods referred to in the introductory paragraphs of this letter comprised audit tests and procedures deemed necessary for the purpose of |
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| expressing an opinion on such financial statements taken as a whole. For none of the periods referred to therein, or any other period, did we perform audit tests for the purpose of expressing an opinion on individual balances of accounts or summaries of selected transactions such as those enumerated above, and accordingly, we express no opinion thereon. | ||
| 9. | It should be understood that we make no representations regarding questions of legal interpretation or regarding the sufficiency for your purposes of the procedures enumerated in the preceding paragraphs; also, such procedures would not necessarily reveal any material misstatement of the amounts or percentages listed above. It should also be understood that our procedures with respect to the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A) included in the Form 10-K/10-KA that are incorporated by reference in the Registration Statement were limited to applying the procedures stated above and therefore we make no representations regarding the accuracy of the discussion contained therein, whether any facts have been omitted, or regarding the adequacy of the disclosures in MD&A, other than with respect to the results of the procedures performed as described in paragraph 7 above. Further, we have addressed ourselves solely to the foregoing data set forth in the Registration Statement and the pages appended hereto and make no representations regarding the adequacy of disclosures or regarding whether any material facts have been omitted. | |
| 10. | This letter is solely for the information of the addressees and to assist the underwriters in conducting and documenting their investigation of the affairs of the Company in connection with the offering of the securities covered by the Registration Statement, and it is not to be used, circulated, quoted, or otherwise referred to within or without the underwriting group for any other purpose, including, but not limited to, the registration, purchase, or sale of securities, nor is it to be filed with or referred to in whole or in part in the Registration Statement or any other document, except that reference may be made to it in the underwriting agreement or in any list of closing documents pertaining to the offering of the securities covered by the Registration Statement. | |
| Very truly yours, |
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SCHEDULE ▇
▇▇▇▇▇▇▇ GROUP INC.
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Suisse Securities (USA) LLC
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇ Securities, Inc.
as the Representatives
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇.▇. ▇▇▇▇▇▇ Securities, Inc.
as the Representatives
c/o Credit Suisse Securities (USA) LLC
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
The undersigned understands that Credit Suisse Securities (USA) LLC, ▇▇▇▇▇▇▇, Sachs & Co. and
▇.▇. ▇▇▇▇▇▇ Securities Inc. (the “Representatives”), propose to enter into an Underwriting
Agreement (the “Underwriting Agreement”) with ▇▇▇▇▇▇▇ Group Inc., a Delaware corporation (together
with any successor (by merger or otherwise) thereto, the “Company”), providing for the public
offering (the “Offering”) by the several Underwriters of Convertible Senior Notes due 2038 (the
“Securities”). As an inducement to the Underwriters to execute the Underwriting Agreement, the
undersigned hereby agrees that during the period specified in the following paragraph (the “Lock-Up
Period”), the undersigned will not, directly or indirectly, take any of the following actions with
respect to any Securities, shares of the Company’s common stock into which the Securities are
convertible (the “Underlying Shares”) or any securities convertible into or exchangeable or
exercisable for any of the Securities or Underlying Shares (collectively, the “Lock-Up
Securities”): (i) offer, sell, contract to sell, pledge or otherwise dispose of Lock-Up Securities,
or enter into a transaction that would have the same effect, (ii) offer, sell, contract to sell,
contract to purchase any option, right or warrant to purchase Lock-Up Securities, or enter into a
transaction that would have the same effect, (iii) enter into any swap, hedge or any other
agreement that transfers, in whole or in part, any of the economic consequences of ownership of the
Securities, Underlying Shares or such other securities, whether any such aforementioned transaction
is to be settled by delivery of the Securities, Underlying Shares or such other securities, in cash
or otherwise, or (iv) publicly disclose the intention to make any such offer, sale, pledge or
disposition, or to enter into any such transaction, swap, hedge or other arrangement, without, in
each case, the prior written consent of the Representative on behalf of the Underwriters. In
addition, the undersigned agrees that, without the prior written consent of the Representative on
behalf of the Underwriters, it will not, during the Lock-Up Period, make any demand for or exercise
any right with respect to, the registration of any Lock-Up Securities.
The initial Lock-Up Period will commence on the date of this Lock-Up Agreement (the
“Agreement”) and continue and include the date 90 days after the public offering date set forth on
the final prospectus used to sell the Securities pursuant to the Underwriting Agreement (the
“Public Offering Date”).
Any Lock-Up Securities received upon exercise of options granted to the undersigned will also
be subject to this Agreement. A transfer of the Lock-Up Securities to a family member or trust, as
bona fide gifts or by will or intestacy may be made, provided the transferee agrees to be bound in
writing by the terms of this Agreement prior to such transfer and no filing by any party (donor,
donee, transferor or transferee) under the Securities Exchange Act of 1934 shall be required or
shall be voluntarily made in connection with such transfer (other than a filing on a Form 5 or
voluntary report made after the expiration of the Lock-Up Period).
In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby
authorized to decline to make any transfer of the Lock-Up Securities if such transfer would
constitute a violation or breach of this Agreement.
This Agreement shall be binding on the undersigned and the successors, heirs, personal
representatives and assigns of the undersigned. This Agreement shall lapse and become null and void
if the Public Offering Date shall not have occurred on or before 45 days from the date of this
Agreement. This agreement shall be governed by, and construed in accordance with, the laws of the
State of New York.
| Very truly yours, | ||||
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SCHEDULE E
▇▇▇▇▇▇▇ GROUP INC.
Significant Subsidiaries of the Registrant as of March 31, ▇▇▇▇
| ▇▇▇▇▇▇▇▇▇▇ | ||||||
| ▇▇▇▇▇ of | of Stock | |||||
| Company | Incorporation | Owned | ||||
Air
Logistics, L.L.C. |
Louisiana | 100 | % | |||
Brilog Leasing, Limited |
Cayman Islands | 100 | % | |||
▇▇▇▇▇▇▇ Aviation Holdings Limited |
England | 49 | % | |||
▇▇▇▇▇▇▇ Helicopter Group Limited |
England | 49 | % | |||
▇▇▇▇▇▇▇ Helicopters Limited |
England | 49 | % | |||
▇▇▇▇▇▇▇ Helicopters Nigeria Limited |
Nigeria | 40 | %* | |||
▇▇▇▇▇▇▇ Helicopters Eastern Ltd |
England | 49 | % | |||
Offshore Logistics International, Inc. |
Panama | 100 | % | |||
United Helicopters Limited |
England | 49 | % | |||
| * | Percentage owned by ▇▇▇▇▇▇▇ Helicopters Limited |
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