$75,000,000
MIDLAND ENTERPRISES INC.
___% FIRST PREFERRED SHIP MORTGAGE BONDS DUE 2008
UNDERWRITING AGREEMENT
_______________, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Midland Enterprises Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation (the
"Underwriter") an aggregate of $75,000,000 in principal amount of its ___% First
Preferred Ship Mortgage Bonds Due 2008 (the "Bonds"), subject to the terms and
conditions set forth herein. The Bonds are to be issued pursuant to the
provisions of an indenture (the "Indenture"), to be dated as of the Closing Date
(as defined below), between the Company and The Chase Manhattan Bank, as trustee
(the "Trustee"). The Bonds will be secured by a first preferred ship mortgage on
the Vessels referred to in the Granting Clause of the Indenture (the "Vessels"),
and by an assignment of charter hire on the Vessels. This Agreement, the Bonds
and the Indenture are hereinafter sometimes referred to as the "Operative
Documents." Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-3, including a prospectus, relating
to the Bonds. The registration statement, as amended at the time it became
effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the "Registration Statement"; and the
prospectus in the form first used to confirm sales of the Bonds is hereinafter
referred to as the "Prospectus" (including, in the case of all references to the
Registration Statement or the Prospectus, documents incorporated therein by
reference). If the Company has filed or is required pursuant to the
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terms hereof to file a registration statement pursuant to Rule 462(b) under the
Act registering additional ___% First Preferred Ship Mortgage Bonds Due 2008 (a
"Rule 462(b) Registration Statement"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement. The terms "supplement" and "amendment"
or "amend" as used in this Agreement with respect to the Registration Statement
or the Prospectus shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder (the "Exchange Act")
that are deemed to be incorporated by reference in the Registration Statement or
the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the representations,
warranties and covenants contained in this Agreement, and subject to the terms
and conditions contained herein, the Company agrees to issue and sell to the
Underwriter, and the Underwriter agrees to purchase from the Company, an
aggregate principal amount of $75,000,000 of Bonds at a purchase price equal to
___% of the principal amount thereof (the "Purchase Price").
3. Terms of Public Offering. The Underwriter has advised the Company that
the Underwriter proposes (i) to make a public offering of the Bonds as soon
after the execution and delivery of this Agreement as is advisable in the
judgment of the Underwriter, and (ii) initially to offer the Bonds upon the
terms set forth in the Prospectus.
4. Delivery and Payment. The Bonds shall be represented by definitive
certificates and shall be issued in such authorized denominations and registered
in such names as the Underwriter shall request no later than two business days
prior to the Closing Date (as defined below). The Company shall deliver the
Bonds, with any transfer taxes thereon duly paid by the Company, to the
Underwriter through the facilities of The Depository Trust Company ("DTC"), for
the account of the Underwriter, against payment to the Company of the Purchase
Price therefor by wire transfer of Federal or other funds immediately available
in New York City. The certificates representing the Bonds shall be made
available for inspection not later than 9:30 A.M., New York City time, on the
business day prior to the Closing Date (as defined below), at the office of DTC
or its designated custodian (the "Designated Office"). The time and date of
delivery and payment for the Bonds shall be 9:00 A.M., New York City time, on
September __, 1998 or such other time on the same or such other date as the
Underwriter and the Company shall agree in writing. The time and date of such
delivery and payment are hereinafter referred to as the "Closing Date".
The documents to be delivered on the Closing Date on behalf of the parties
hereto pursuant to Section 8 of this Agreement shall be delivered at the offices
of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, Exchange Place, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the Bonds shall be delivered at the Designated Office,
all on the Closing Date.
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5. Agreements of the Company. The Company hereby agrees with the
Underwriter as follows:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Bonds for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when such Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Underwriter two (2) signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits and documents incorporated therein by reference,
and to furnish to the Underwriter such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without exhibits
but including documents incorporated therein by reference, as the Underwriter
may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be satisfactory to the Underwriter, and to file the Prospectus in such form with
the Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which the Underwriter shall not previously have
been advised or to which the Underwriter shall reasonably object after being so
advised; and, during such period, to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or amendment or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Securities by the
Underwriter, and to use its best efforts to cause any such amendment to the
Registration Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriter a prospectus is required
by law to be delivered in connection with sales by the Underwriter or a dealer,
to furnish in New York City to the Underwriter and any dealer as many copies of
the Prospectus (and of any amendment or
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supplement to the Prospectus) and any documents incorporated by reference, as
the Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriter, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriter, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with applicable law, and to furnish to the
Underwriter and to any dealer as many copies thereof as the Underwriter or
dealer may reasonably request.
(f) Prior to any public offering of the Bonds, to cooperate with the
Underwriter and its counsel in connection with the registration or qualification
of the Bonds for offer and sale by the Underwriter and by dealers under the
state securities or Blue Sky laws of such jurisdictions as the Underwriter may
request, to continue such registration or qualification in effect so long as
required for distribution of the Bonds and to file such consents to service
of process or other documents as may be necessary in order to effect such
registration or qualification; provided, however, that the Company shall not be
required in connection therewith to qualify as a foreign corporation in any
jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Prospectus, the Registration
Statement, any preliminary prospectus or the offering or sale of the Bonds, in
any jurisdiction in which it is not now so subject.
(g) To mail and make generally available to its security holders as
soon as practicable an earnings statement covering the twelve-month period
ending December 31, 1999 that shall satisfy the provisions of Section 11(a) of
the Act, and to advise the Underwriter in writing when such statement has been
so made available.
(h) So long as the Bonds are outstanding, (i) to mail and make
generally available as soon as practicable, but not later than 120 days, after
the end of each fiscal year to the record holders of the Bonds a financial
report of the Company and its subsidiaries on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all such
financial reports to include a consolidated balance sheet, a consolidated
statement of operations, a consolidated statement of cash flows and a
consolidated statement of shareholders' equity as of the end of and for such
fiscal year, together with comparable information as of the end of and for the
preceding year, certified by independent public accountants and (ii) to mail and
make generally available as soon as practicable, but not later than 45 days,
after the end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and similar
financial reports of all unconsolidated
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subsidiaries, if any) as of the end of and for such period, and for the period
from the beginning of such year to the close of such quarterly period, together
with comparable information for the corresponding periods of the preceding year.
(i) So long as the Bonds are outstanding, to furnish to the
Underwriter as soon as available copies of all reports or other communications
furnished to its security holders or furnished to or filed with the Commission
or any national securities exchange on which any class of securities of the
Company is listed and such other publicly available information concerning the
Company and its subsidiaries as the Underwriter may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Bonds under the Act and all other fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), any preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing, including
the mailing and delivering of copies thereof to the Underwriter and dealers in
the quantities specified herein, (ii) all costs and expenses related to the
transfer and delivery of the Bonds to the Underwriter, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing this
Agreement and any other agreements or documents in connection with the offering,
purchase, sale or delivery of the Bonds, (iv) all expenses in connection with
the registration or qualification of the Bonds for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (including the filing fees and fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriter in connection with the review and clearance of the offering
of the Bonds by the National Association of Securities Dealers, Inc., (vi) all
fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Bonds and all costs and
expenses incident to the listing of the Bonds on any national securities
exchanges and/or foreign securities exchanges, (vii) the cost of printing the
Bonds, (viii) the costs and charges of any transfer agent, registrar and/or
depositary (including DTC), (ix) any fees charged by rating agencies for the
rating of the Bonds, (x) the fees and expenses of the Trustee and the Trustee's
counsel in connection with the Indenture and the Bonds and (xi) all other costs
and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
warrants, rights or options to purchase or otherwise acquire debt securities of
the Company substantially similar to the Bonds, other
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than (i) the Bonds, (ii) securities issued under the Existing Mortgage (as
defined in the Indenture), (iii) commercial paper issued in the ordinary course
of business and (iv) promissory notes issued for working capital purposes under
the Company's existing bank credit facilities, without the prior written consent
of the Underwriter.
(l) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of the Bonds.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date and to satisfy all conditions precedent to the delivery of the
Bonds.
(n) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Bonds, to file a Rule 462(b)
Registration Statement with the Commission registering the Bonds not so covered
in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
6. Representations, Warranties and Agreements of the Company. The Company
represents and warrants to, and agrees with, the Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement. No stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) Each document filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Prospectus complied or will comply when
so filed in all material respects with the Exchange Act; (ii) the Registration
Statement (other than any Rule 462(b) Registration Statement to be filed by the
Company after the effectiveness of this Agreement), when it became effective,
did not contain and, as amended, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iii)
the Registration Statement (other than any Rule 462(b) Registration Statement to
be filed by the Company after the effectiveness of this Agreement) and the
Prospectus comply and, as amended or supplemented, if applicable, will comply in
all material respects with the Act, (iv) if the Company is required to file a
Rule 462(b) Registration Statement after the effectiveness of this Agreement,
such Rule 462(b) Registration Statement and any amendments thereto, when they
become effective (A) will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading and (B) will comply in all material
respects with the Act and (v) the
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Prospectus does not contain and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or omissions
in the Registration Statement or the Prospectus based upon information relating
to the Underwriter furnished to the Company in writing by the Underwriter
expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and warranties
set forth in this paragraph do not apply to statements or omissions in any
preliminary prospectus based upon information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly for use
therein.
(d) Each of the Company and its subsidiaries has been duly formed, is
validly existing and in good standing under the laws of its jurisdiction of
formation and has the power and authority to carry on its business as described
in the Prospectus and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign organization authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect").
(e) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid, non-assessable and not
subject to any preemptive or similar rights, and all of such shares are owned
beneficially and of record by Eastern Enterprises, an unincorporated voluntary
association organized in Massachusetts.
(f) The entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding shares
of capital stock or other ownership interests of each of the Company's
subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable, and are owned by the Company, directly or indirectly through one
or more subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "Lien").
(g) This Agreement has been duly authorized, executed and delivered by
the Company.
(h) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "TIA" or "Trust Indenture Act"), has been duly
authorized,
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executed and delivered by the Company and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms except
as (i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(i) The Indenture constitutes a first "preferred mortgage" on each of
the Vessels under the Ship Mortgage Act, as amended, and the Bonds are validly
secured by the Indenture in accordance with the terms thereof.
(j) The Bonds have been duly authorized and, on the Closing Date, will
have been validly executed and delivered by the Company. When the Bonds have
been issued, executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriter in accordance with
the terms of this Agreement, the Bonds will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company, enforceable
in accordance with their terms, subject to the qualifications set forth in (i)
and (ii) of Section 6(h) of this Agreement. On the Closing Date, the Bonds will
conform as to legal matters to the description thereof contained in the
Prospectus.
(k) Neither the Company nor any of its subsidiaries is in violation of
its respective charter documents or by-laws or in default in the performance of
any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, and to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or their respective properties are bound.
(l) The execution, delivery and performance of this Agreement and the
other Operative Documents, compliance by the Company with all provisions hereof
and thereof and the consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries or their respective properties
are bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company, any of its subsidiaries or their
respective properties, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under any agreement or instrument (other
than the Indenture) to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
properties are bound, or (v) result in the termination, suspension or revocation
of any Authorization (as defined below) of the Company or any of
8
its subsidiaries or result in any other impairment of the rights of the holder
of any such Authorization.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is or could be a
party or to which any of their respective properties are or could be subject
that are required to be described in the Registration Statement or the
Prospectus and are not so described; nor are there any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not so described or filed as required.
(n) Neither the Company nor any of its subsidiaries has violated any
provision of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or any provision of the Foreign Corrupt Practices Act, as amended
("Corrupt Practices Act"), or the rules and regulations promulgated under such
statutes, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
(o) Neither the Company nor any of its subsidiaries has violated any
foreign, federal, state or local law, regulation or code relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), except
for such violations that, singly or in the aggregate, would not have a Material
Adverse Effect. There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any Authorization (as defined below), any related constraints on
operating activities or any potential liabilities to third parties) which would,
singly or in the aggregate, have a Material Adverse Effect.
(p) There is no (i) unfair labor practice complaint, grievance or
arbitration proceeding pending or threatened against the Company or any of its
subsidiaries before the National Labor Relations Board or any state or local
labor relations board, or (ii) strike, labor dispute, slowdown or stoppage
pending or threatened against the Company or any of its subsidiaries, except in
the case of both clauses (i) and (ii) for such actions which, singly or in the
aggregate, would not have a Material Adverse Effect.
(q) Each of the Company and its subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
its subsidiaries is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has
9
occurred (including, without limitation, the receipt of any notice from any
authority or governing body) which allows or, after notice or lapse of time or
both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would result
in any other impairment of the rights of the holder of any such Authorization;
and such Authorizations contain no restrictions that are burdensome to the
Company or any of its subsidiaries; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such event
or the presence of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
(r) The Company has good and marketable title to each of the Vessels,
and all other real property and personal property described in the Prospectus as
being owned by it (if any), free and clear of any Liens, other than the Liens
established pursuant to or permitted by the Indenture. No party other than the
Company and its subsidiaries has any right, option or first refusal to purchase
or lease any of the Vessels.
(s) Each of the Company and its subsidiaries, as applicable, carries
insurance on the Vessels in such amounts and covering such risks as is customary
for companies engaged in similar businesses. Neither the Company nor any of its
subsidiaries has received notice from any insurer that capital improvements or
expenditures are necessary or required to be made in order to continue such
insurance.
(t) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP is an independent public accountant with
respect to the Company and its subsidiaries as required by the Act.
(u) The consolidated, historical financial statements included in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), together with related schedules and notes, present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and its subsidiaries on the basis stated therein at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; the supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
generally accepted accounting principles the information required to be stated
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(v) The Company is not and, after giving effect to the offering and
sale of the Bonds and the application of the net proceeds thereof as described
in the Prospectus, will not be, an "investment company," as such term is defined
in the Investment Company Act of 1940, as amended.
(w) 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
10
registration statement under the Act with respect to any securities of the
Company or to require the Company to include such securities with the Bonds
registered pursuant to the Registration Statement.
(x) No "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act (i) has imposed (or
has informed the Company that it is considering imposing) any condition
(financial or otherwise) on the Company's retention of any rating assigned to
the Company or any securities of the Company or (ii) has indicated to the
Company that it is considering (A) the downgrading, suspension, or withdrawal
of, or any review for a possible change that does not indicate the direction of
the possible change in, any rating so assigned or (B) any change in the outlook
for any rating of the Company or any securities of the Company.
(y) Since the respective dates as of which information is given in the
Prospectus, other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any Material Adverse Effect or any development involving
a prospective Material Adverse Effect, (ii) there has not been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
its subsidiaries and (iii) neither the Company nor any of its subsidiaries has
incurred any material liability or obligation, direct or contingent.
(z) Each certificate signed by any officer of the Company and
delivered to the Underwriter or counsel for the Underwriter shall be deemed to
be a representation and warranty by the Company to the Underwriter as to the
matters covered thereby.
The Company acknowledges that the Underwriter and, for purposes of the
opinions to be delivered to the Underwriter pursuant to Section 8 hereof,
counsel to the Underwriter will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Underwriter,
its directors, its officers 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, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
reasonably incurred in connection with investigating or defending any matter,
including any action, that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment or supplement thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading,
11
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Underwriter furnished in writing
to the Company by such Underwriter expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of the Underwriter if it failed to
deliver a Prospectus, as then amended or supplemented, (so long as the
Prospectus and any amendment or supplement thereto was provided by the Company
to the Underwriter in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the Closing Date) to the person asserting any
losses, claims, damages, liabilities or judgements caused by any untrue
statement or alleged untrue statement of a material act contained in any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Prospectus, as so
amended or supplemented, and such Prospectus was required by law to be delivered
at or prior to the written confirmation of sale to such person.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
its directors, its officers who sign the Registration Statement and each person,
if any, who controls (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) the Company, to the same extent as the foregoing indemnity
from the Company to the Underwriter but only with reference to information
relating to the Underwriter furnished in writing to the Company by the
Underwriter expressly for use in the Registration Statement (or any amendment or
supplement thereto), the Prospectus (or any amendment or supplement thereto) or
any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses
12
available to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by the Underwriter, in the case of the parties indemnified pursuant
to Section 7(a), and by the Company, in the case of parties indemnified pursuant
to Section 7(b). The indemnifying party shall indemnify and hold harmless the
indemnified party from and against any and all losses, claims, damages,
liabilities and judgments by reason of any settlement of any action (i) effected
with its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the indemnifying party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement or compromise of, or
consent to the entry of judgment with respect to, any pending or threatened
action in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by the
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 7
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Underwriter on the other hand from the
offering of the Bonds or (ii) if the allocation provided by clause 7(d)(i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 7(d)(i) above but
also the relative fault of the Company, on the one hand, and the Underwriter, on
the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, on the one hand and the Underwriter, on the other hand, shall be deemed
to be in the same proportion as the total net proceeds from the offering of the
Bonds (after underwriting discounts and commissions, but before deducting
expenses) received by the Company, and the total discounts and commissions
received by the Underwriter bear to the total price to investors of the Bonds,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault of
13
the Company, on the one hand, and the Underwriter, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or the Underwriter, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 7, the Underwriter
shall not be required to contribute any amount in excess of the amount by which
the total discounts and commissions received by the Underwriter exceeds the
amount of any damages which the 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.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
8. Conditions of Underwriter's Obligations. The obligation of the
Underwriter to purchase the Bonds under this Agreement is subject to the
satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission
(c) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any
14
potential or intended downgrading, suspension or withdrawal of, or of any review
(or of any potential or intended review) for a possible change that does not
indicate the direction of the possible change in, any rating of the Company or
any securities of the Company (including, without limitation, the placing of any
of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Bonds than that on which the Bonds were marketed.
(d) The Underwriter shall have received on the Closing Date a
certificate dated the Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company, confirming the matters
set forth in Sections 6(y), 8(a), 8(b) and 8(c) and that the Company has
complied with all of the agreements and satisfied all of the conditions herein
contained and required to be complied with or satisfied by the Company on or
prior to the Closing Date.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(e)(i),
8(e)(ii) or 8(e)(iii), in the Underwriter's reasonable judgment, is material and
adverse and, in the Underwriter's reasonable judgment, makes it impracticable to
market the Bonds on the terms and in the manner contemplated in the Prospectus.
(f) The Underwriter shall have received on the Closing Date an opinion
(satisfactory to the Underwriter and its counsel), dated the Closing Date, of
Ropes & Gray, counsel for the Company, to the effect that:
(i) each of the Company and its subsidiary, Orgulf Transport Co.
("Orgulf"), has been duly incorporated, is validly existing and in
good standing under the laws of its jurisdiction of incorporation and
has the corporate power and authority to carry on its business as
described in the Prospectus and to own, lease and operate its
properties;
15
(ii) the Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Bonds.
(iii) the Bonds have been duly executed, authorized
authenticated, issued and delivered, are entitled to the benefits
provided by the Indenture and constitute valid and binding obligations
of the Company, enforceable in accordance with their terms except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(y) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
(iv) the Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Indenture.
(v) the Indenture has been duly qualified under the TIA, has been
duly authorized, executed and delivered by the Company and is a valid
and binding instrument of the Company, enforceable in accordance with
its terms subject to the qualifications set forth in (x) and (y) of
clause (iii) above;
(vi) the Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement.
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the Charter Agreement (the "Charter Agreement"), dated as
of September __, 1998 between the Company and Orgulf, and the
Assignment, dated as of September __, 1998, between the Company and
The Chase Manhattan Bank, as Trustee, together with the signed Consent
and Agreement ("Consent and Assignment") with respect thereto of
Orgulf have each been duly authorized, executed and delivered by each
of the respective parties thereto and constitute valid and binding
instruments, enforceable in accordance with their respective terms.
Such conclusion may be subject to the qualifications set forth in (x)
and (y) of clause (iii) above;
(ix) the Registration Statement has become effective under the
Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's
16
knowledge after due inquiry, pending or threatened before or
contemplated by the Commission;
(x) the statements under the captions "Description of The Bonds"
and "Underwriting" in the Prospectus, and Item 15 of Part II of the
Registration Statement, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to
therein, fairly present in all material respects such legal matters,
documents and proceedings;
(xi) the Company is not and, after giving effect to the offering
and sale of the Bonds and the application of the proceeds thereof as
described in the Prospectus, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended; and
(xii) (A) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements
and other financial or statistical data included therein as to which
no opinion need be expressed) comply as to form in all material
respects with the Act, (B) such counsel has no reason to believe that
at the time the Registration Statement became effective or on the date
of this Agreement, the Registration Statement and the prospectus
included therein (except for the financial statements and other
financial and statistical data as to which such counsel need not
express any belief and except for that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1)
under the Trust Indenture Act) contained any untrue statement of a
17
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (C) such counsel has no reason to believe that the
Prospectus, as amended or supplemented, if applicable (except for the
financial statements and other financial data, as aforesaid) contains
any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
In rendering its opinion, Ropes & ▇▇▇▇ will not pass upon the security
afforded by the Indenture and may rely as to such matters and all matters
governed by admiralty law upon the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ referred to below.
The opinion of Ropes & Gray shall be rendered to the Underwriter at the request
of the Company and shall so state therein. In giving such opinion with respect
to the matters covered by Section 8(f)(xii), Ropes & Gray may state that its
opinion and belief are based upon their participation in the preparation of the
Registration Statement and Prospectus and any amendments or supplements thereto
(other than documents incorporated therein by reference) and review and
discussion of the contents thereof (including the documents incorporated therein
by reference), but are without independent check or verification except as
specified.
(g) The Underwriter shall have received on the Closing Date an opinion
(satisfactory to the Underwriter and its counsel), dated the Closing Date, of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General Counsel and Secretary to the Company, to the
effect that:
(i) each of the Company and its subsidiaries has been duly
formed, is validly existing and in good standing under the laws of its
jurisdiction of formation and has the corporate power and authority to
carry on its business as described in the Prospectus and to own, lease
and operate its properties;
(ii) each of the Company and its subsidiaries is duly qualified
and is in good standing as a foreign organization authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect;
(iii) all the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights,
and all such shares are owned beneficially and of record by Eastern
Enterprises, an unincorporated voluntary association organized in
Massachusetts;
18
(iv) all of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the
Company, free and clear of any Lien;
(v) the Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Bonds. The
Bonds have been duly executed, authorized authenticated, issued and
delivered, are entitled to the benefits provided by the Indenture and
constitute valid and binding obligations of the Company, enforceable
in accordance with their terms except as (x) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (y) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability;
(vi) the Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Indenture.
The Indenture has been duly authorized, executed and delivered and is
a valid and binding instrument, enforceable in accordance with its
terms subject to the qualifications set forth in (x) and (y) of clause
(v) above;
(vii) the Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement.
This Agreement has been duly authorized, executed and delivered by the
Company;
(viii) The Charter Agreement (the "Charter Agreement"), dated as
of September __, 1998 between the Company and Orgulf and the
Assignment, dated as of September __, 1998, between the Company and
The Chase Manhattan Bank, as Trustee, together with the signed Consent
and Agreement ("Consent and Assignment") with respect thereto of
Orgulf have each been duly authorized, executed and delivered by each
of the respective parties thereto and constitute valid and binding
instruments, enforceable in accordance with their respective terms.
Such conclusion may be subject to the qualifications set forth in (x)
and (y) of clause (v) above;
(ix) the statements under the caption "Description of The Bonds"
in the Prospectus, insofar as such statements constitute a summary of
the legal matters, documents or proceedings referred to therein,
fairly present in all material respects such legal matters, documents
and proceedings;
19
(x) neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws and, to the best of
such counsel's knowledge after due inquiry, neither the Company nor
any of its subsidiaries is in default in the performance of any
obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound;
(xi) the execution, delivery and performance of this Agreement
and the other Operative Documents by the Company, the compliance by
the Company with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and thereby will
not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency
(except such as may be required under the securities or Blue Sky laws
of the various states as to applicability of which I express no
opinion), (ii) conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or by-laws of
the Company or any of its subsidiaries or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective properties
are bound, (iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any
of its subsidiaries or their respective property, (iv) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under, any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound, or (v) result in
the termination, suspension or revocation of any Authorization (as
defined above) of the Company or any of its subsidiaries or result in
any other impairment of the rights of the holder of any such
Authorization;
(xii) after due inquiry, such counsel does not know of any legal
or governmental proceedings pending or threatened to which the Company
or any of its subsidiaries is or could be a party or to which any of
their respective properties is or could be subject, that are required
to be described in the Registration Statement or the Prospectus and
are not so described, or of any statutes, regulations, contracts or
other documents that are required to be described in the Registration
Statement and are not so described or filed;
(xiii) neither the Company nor any of its subsidiaries has
violated any Environmental Law, or any provisions of ERISA or the
20
Corrupt Practices Act or the rules and regulations promulgated under
such statutes, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect;
(xiv) each of the Company and its subsidiaries has such
Authorizations of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease, license and operate its respective properties and to
conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice would not, singly
or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the
Company and its subsidiaries is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including the receipt of any
notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension
or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the
Company or any of its subsidiaries; except where such failure to be
valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse Effect;
(xv) to the best of such counsel's knowledge after due inquiry,
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 or to require the Company to include
such securities with the Bonds registered pursuant to any Registration
Statement; and
(xvi) (A) each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus (except for financial
statements and other financial or statistical data included therein as
to which no opinion need be expressed) complied when so filed as to
form with the Exchange Act), (B) the Registration Statement and the
Prospectus and any supplement or amendment thereto (except for the
financial statements and other financial or statistical data included
therein as to which no opinion need be expressed) comply as to form
with the Act, (C) such counsel has no reason to believe that at the
time the Registration
21
Statement became effective or on the date of this Agreement, the
Registration Statement and the prospectus included therein (except for
the financial statements and other financial data as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Statement of Eligibility
(Form T-1) under the Trust Indenture Act) contained any 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 and (D) such counsel has no reason to believe
that the Prospectus, as amended or supplemented, if applicable (except
for the financial statements and other financial and statistical data,
as aforesaid) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
In rendering his opinion, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. may rely upon the
opinion of Ropes & Gray as to all matters governed by Massachusetts law. The
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. shall be rendered to the Underwriter at the
request of the Company and shall so state therein.
(h) The Underwriter shall have received on the Closing Date an opinion
(satisfactory to the Underwriter and its counsel), dated the Closing Date, of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, special admiralty counsel for the Company, to the effect that:
(i) The Company has good and marketable title to each of the
Vessels referred to in the granting clause of the Indenture
("Vessels") and each of the Vessels is a "vessel of the United
States", as defined in Chapter 313 of Title 46 of the United States
Code, as amended (the "Ship Mortgage Act"), duly and lawfully
documented under the laws of the United States in the name of the
Company. The Company and its subsidiary, Orgulf, are each citizens of
the United States within the meaning of Section 2 of the Shipping Act,
1916, as amended.
(ii) The Indenture has been duly authorized, executed and
delivered, and constitutes a valid and binding instrument in
accordance with its terms; the Indenture is a "preferred mortgage" as
defined in the Ship Mortgage Act, as amended, has been duly executed
and delivered as such by duly authorized officers of the Company and
was duly filed at ____ o'clock A.M. and recorded on the Closing Date
in the Office of the U.S. Coast Guard National Vessel Documentation
Center in Falling Waters, West Virginia in Book _____ at page ___.
(iii) The Indenture constitutes a "preferred mortgage" lien on
each of the Vessels under the Ship Mortgage Act having the effect and
with the priority provided for by said Act, and the Bonds are validly
secured by the
22
Indenture in accordance with the terms thereof. Such conclusions may
be subject to qualification with respect to the effect of certain laws
and judicial decisions upon the remedies provided in the Indenture,
which will not materially interfere with the practical realization of
the benefits of the security provided by such Indenture, and to the
further qualifications set forth in (x) and (y) of Section 8(f)(iii)
above;
(iv) Original jurisdiction of a suit to foreclose the Indenture
rests in the District Courts of the United States and may be enforced
in such courts by a suit in admiralty; such jurisdiction is exclusive
of the courts of the States to enforce the preferred mortgage lien of
the Indenture in a civil action in rem for a vessel documented under
the laws of the United States;
(v) The Charter Agreement and the Assignment, together with the
Consent and Agreement with respect thereto of Orgulf have each been
duly authorized, executed and delivered by each of the respective
parties thereto and constitute valid and binding instruments,
enforceable in accordance with their respective terms. Such conclusion
may be subject to qualification with respect to the effect of certain
laws and judicial decisions upon the remedies provided in such Charter
Agreement and Assignment, which will not materially interfere with the
practical realization of the benefits of the security provided by such
Charter Agreement and Assignment, and to the further qualifications
set forth in (x) and (y) of Section 8(f)(iii) above;
(vi) No consent or approval of or filing or recording with any
federal, state or local governmental regulatory authority with respect
to maritime matters (except as described in (ii) above) is required as
a condition precedent to the validity or enforceability of the Bonds,
the Indenture, the Charter Agreement, the Assignment or the Consent
and Agreement in accordance with the respective terms thereof; and
(vii) Assuming the Bonds have been duly executed, authenticated,
issued and delivered, they constitute valid and legally binding
obligations of the Company entitled to the benefits provided by the
Indenture.
In rendering its opinion ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ may rely upon the opinion of
▇▇▇▇▇ & ▇▇▇▇ as to all matters governed by Massachusetts law and may rely upon
the opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. as to corporate procedures and
requirements relating to the due authorization, execution and delivery of the
Indenture, the Bonds, the Charter Agreement, the Assignment, and the Consent and
Agreement. The opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall be rendered to the Underwriter
at the request of the Company and shall so state therein.
(i) The Underwriter shall have received on the Closing Date an
opinion, dated the Closing Date, of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, counsel
for the Underwriter, in form and
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substance reasonably satisfactory to the Underwriter. In rendering such opinion,
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇ will not pass upon the security afforded by the Indenture
and may rely as to such matters and all matters governed by admiralty law upon
the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ referred to above. In giving such opinion with
respect to the Registration Statement and Prospectus, ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇ may
state that its opinion and belief are based upon its participation in the
preparation of the Registration Statement and Prospectus and any amendments or
supplements thereto (other than the documents incorporated therein by reference)
and review and discussion of the contents thereof (including the documents
incorporated therein by reference), but are without independent check or
verification except as specified.
(j) The Underwriter shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriter, from ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, independent public accountants, containing the information and
statements of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and Prospectus.
(k) The Bonds shall have been rated "A-" or better by Standard &
Poor's Corporation and "A3" or better by ▇▇▇▇▇'▇ Investor Services, Inc.
(l) The Underwriter shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Company and
the Trustee.
(m) The Company shall not have failed at or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be performed or complied with by the Company at or prior to the Closing Date.
9. Effectiveness of Agreement and Termination.
(a) This Agreement shall become effective upon its execution and
delivery by the parties hereto.
(b) This Agreement may be terminated at any time on or prior to the
Closing Date by the Underwriter by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or change in economic conditions or
in the financial markets of the United States or elsewhere that, in the
Underwriter's reasonable judgment, is material and adverse and, in the
Underwriter's reasonable judgment, makes it impracticable to market the Bonds on
the terms and in the manner contemplated in the Prospectus, (ii) the suspension
or material limitation of trading in securities or other instruments on the New
York Stock Exchange, the American Stock Exchange, the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the
Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension
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of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in the Underwriter's reasonable
opinion materially and adversely affects, or will materially and adversely
affect, the business, prospects, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole, (v) the declaration of a
banking moratorium by either federal or New York State authorities or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in the Underwriter's reasonable
opinion has a material adverse effect on the financial markets in the United
States.
10. Miscellaneous.
(a) Notices given pursuant to any provision of this Agreement shall be
addressed as follows: (i) if to the Company, to Midland Enterprises, Inc., ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Vice President, Finance,
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇ and (ii) if to the Underwriter, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Bond Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the
Underwriter set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Bonds, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of the Underwriter, the officers or
directors of the Underwriter, any person controlling the Underwriter, the
Company, the officers or directors of the Company, or any person controlling the
Company, (ii) acceptance of the Bonds and payment for them hereunder and (iii)
termination of this Agreement.
(c) If for any reason the Bonds are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 9), the Company agrees to reimburse the
Underwriter for all out-of-pocket expenses (including the fees and disbursements
of counsel) incurred by them. Notwithstanding any termination of this Agreement,
the Company shall be liable for all expenses which it has agreed to pay pursuant
to Section 5(j) hereof. The Company also agrees to reimburse the Underwriter and
its officers, directors 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
for any and all fees and expenses (including without limitation the fees and
expenses of counsel) reasonably incurred by them in connection with enforcing
their rights under this Agreement (including without limitation its rights under
Section 7).
(d) Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriter, the Underwriter's directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement, and the respective successors and assigns of each of
the foregoing, all as and to the extent provided in this
25
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Bonds from the Underwriter merely because of such
purchase.
(e) This Agreement shall be governed and construed in accordance with
the laws of the State of New York.
(f) This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Underwriter.
Very truly yours,
MIDLAND ENTERPRISES INC. (the
"Company")
By:____________________________
Name:
Title:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION (the "Underwriter")
By:_____________________
Name:
Title:
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