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EXHIBIT 10.41
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EXCHANGE AGREEMENT
BY AND AMONG
VERITAS DGC LAND, INC.
AND
▇▇▇▇▇▇▇ EXPLORATION COMPANY
DATED AS OF MARCH 30, 1999
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EXCHANGE AGREEMENT
This Exchange Agreement (the "Agreement") is made this 30th day of
March, 1999, by and between ▇▇▇▇▇▇▇ Exploration Company ("BEXP" or the
"Company") and Veritas DGC Land, Inc. ("Veritas" or the "Investor"). Certain
capitalized terms not defined in the text of this Agreement are defined in
Appendix A to this Agreement.
WHEREAS, BEXP or its affiliates currently owe Veritas certain amounts
for certain seismic services rendered by Veritas;
WHEREAS, the parties hereto desire to exchange BEXP Common Stock (as
defined below) for (i) all of the current payables owed to Veritas and its
affiliates by ▇▇▇▇▇▇▇ Oil & Gas, L.P. ("BOG"), (ii) certain future payables and
other liabilities which will be due to Veritas on or before December 31, 1999
pursuant that certain Anadarko Basin Seismic Operations Agreement II, dated
April 1, 1997, by and between BOG and Veritas, as amended (the "Alliance
Agreement II"), and (iii) certain future seismic processing services provided by
Veritas Geoservices, Ltd. ("Veritas Geoservices"); and
WHEREAS, each of the parties hereto is making certain representations,
warranties, covenants and indemnities herein to induce the other to enter into
this Agreement;
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and indemnities contained herein, BEXP and Veritas hereby
agree as follows:
ARTICLE I.
ISSUANCE OF SECURITIES
1.1 AUTHORIZATION AND ISSUANCE OF COMMON STOCK.
Exchange for Existing Payables. Upon execution of this Agreement, the
Company will authorize the issuance and sale to the Investor, and, within
fifteen (15) days of the date hereof, shall deliver to Investor certificates
evidencing 918,989 shares of BEXP's common stock, par value $.01 per share (the
"Common Stock"), in exchange for and in full extinguishment of $3,216,459.88 of
existing payables and other liabilities, identified on Schedule 1.1 hereto, that
BOG owes to Veritas and its Affiliates (including without limitation Veritas
Geoservices) as of March 26, 1999, pursuant to the Alliance Agreement II, that
certain Anadarko Basin Seismic Operations Agreement dated February 15, 1996 by
and between BOG and Veritas' predecessor, as amended (the "Alliance Agreement
I"), and any processing agreements between BOG and any Affiliates of Veritas
(the "Processing Agreements"); provided that the extinguishment of such
liability is conditioned upon the delivery to Investor of such shares. In the
event that it is subsequently determined by mutual agreement of the parties that
as of March 26, 1999, there existed payables and other liabilities that were
owed to Veritas and its Affiliates under any of such agreements in excess of
$3,216,459.88, the first $100,000 of such additional payables or liabilities in
existence as of March 26, 1999, shall
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be paid for by the Company using shares of the Common Stock (using a value of
$3.50 per share), such shares to be delivered within thirty (30) days of the
date that the parties mutually agree on the existence and amount of such
additional payable or liability. Any remaining payables or liabilities shall be
paid for by the Company in cash according to Veritas standard payment terms, net
thirty (30) days. Interest shall accrue at ten percent (10%) per annum on all
balances (other than those exchanged for common stock as provided herein) due
for more than fifteen (15) days after the original thirty (30) days.
1.2 ADDITIONAL CONSIDERATION.
(A) Stock Exchange for Additional Alliance Agreement II
Payables. In addition to the exchange described in Section 1.1 above, on the
date hereof, the Company shall issue to Investor, and Investor shall purchase,
83,876 shares of the Common Stock as payment for an additional $293,566 in
payables and liabilities for services already performed by Investor under and
pursuant to the Alliance Agreement II. The delivery of these shares will
extinguish BEXP's and BOG's obligation to pay such additional $293,566 of
payables under the Alliance Agreement II. Any additional payables and
liabilities, other than those extinguished through the issuance of the Common
Stock pursuant to this Section 1.2(A), that become due and payable under the
Alliance Agreement II on or after March 26, 1999, are to be paid to the Investor
in cash in accordance with the terms of the Alliance Agreement II; provided that
any such amounts that remain due and payable for fifteen (15) days after such
amounts are due under the Alliance Agreement II shall bear interest at ten
percent (10%) per annum.
(B) Payment for Future Seismic Processing Services. In
addition to the exchanges described in Sections 1.1 and 1.2(A), to the extent
Veritas Geoservices performs or has performed additional seismic processing
services which have not been invoiced to BOG prior to March 26, 1999, the
Investor will invoice the Company for such services according to its standard
billing practices, and the Company will be obligated to pay those invoices that
it receives during each calendar quarter or prior to the tenth day after the end
of such quarter, in cash within thirty (30) days from the end of each calendar
quarter, and any amounts that remain due and payable for forty-five (45) days
after the end of each quarter shall bear interest at ten percent (10%) per
annum; provided, however, that if the Company has not paid such amounts within
fifteen (15) days after the end of each quarter, the Company must pay such
amounts with shares of the Common Stock (deemed to be valued at $3.50 per share)
which shares shall be issued within thirty (30) days of the end of the Calendar
Quarter. The Company's obligation to pay such liabilities using the Common Stock
shall only apply to the first $1 million of such liabilities, and shall only
apply to seismic processing services provided by Veritas Geoservices during
calendar year 1999.
1.3 CLOSING. The closing (the "Closing") of the transactions provided
for in this Agreement shall take place at the offices of ▇▇▇▇▇ Liddell & ▇▇▇▇
LLP, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇. The Closing shall take place on March 30,
1998 (the "Closing Date"), or at such other time and place as the parties hereto
shall mutually agree. Except as specifically provided herein, failure to
consummate the purchases and sales provided for in this Agreement on the date
and
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time and at the place determined pursuant to this Section 1.3 shall not result
in the termination of this Agreement, and shall not relieve any parties to this
Agreement of any obligation hereunder.
1.4 CROSS RECEIPT. Upon delivery of Common Stock hereunder, the Company
and the Investor shall each execute and deliver a cross receipt acknowledging
the extinguishment of BEXP's debt (to the extent provided herein) and the
receipt of the Common Stock, respectively.
1.5 OTHER DOCUMENTS TO BE DELIVERED ON THE CLOSING DATE. The Company
shall deliver to the Investor the following at the Closing (or as otherwise
indicated below):
(A) Certificates representing the shares of Common
Stock purchased by the Investor pursuant hereto, including as described
in Sections 1.1 and 1.2(A) and (B) (to be delivered as promptly as
practicable, but no later than fifteen (15) days after the Closing
Date;
(B) The Certificate of Incorporation of the Company,
as amended and in effect as of the Closing Date, certified by the
Secretary of State of the State of Delaware;
(C) Certificates, as of a date that is within five
(5) days of the Closing, as to the corporate good standing of the
Company, issued by the Secretary of State of the State of Delaware;
(D) A certificate of the Secretary of the Company
attesting to the incumbency of the Company's officers, the authenticity
of the resolutions authorizing the transactions contemplated by this
Agreement, and the authenticity and continuing validity of the
Organizational Documents of the Company;
(E) Executed copy of this Agreement.
ARTICLE II.
REPRESENTATIONS OF THE COMPANY
The Company represents and warrants to the Investor as follows:
2.1 ORGANIZATION, EXISTENCE AND GOOD STANDING. The Company is a Company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its business as now being conducted and as proposed to be conducted, and is
duly qualified as a foreign Company to do business and is in good standing in
each other jurisdiction in which the nature of the business conducted by it
makes such qualification necessary, except where the failure to so qualify would
not have a Material Adverse Effect.
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2.2 CAPITALIZATION.
(A) The authorized capital stock of the Company
consists of 40,000,000 shares of Common Stock, par value $0.01 per
share, 13,306,206 shares of which are issued and outstanding, and
10,000,000 shares of Preferred Stock, none of which are issued and
outstanding. All such issued shares have been duly issued in accordance
with applicable laws, including federal and state securities laws. All
of the outstanding shares of capital stock of the Company and each
Subsidiary have been duly authorized and are validly issued, fully paid
and nonassessable. All dividends and other distributions declared with
respect to the issued and outstanding shares of the capital stock of
the Company have been paid or distributed.
(B) The certificates representing the Common Stock to
be delivered to the Investor pursuant hereto, both at the Closing and
otherwise, and the signatures on the endorsements thereof or stock
powers delivered therewith, will be valid and genuine. The stock
certificates, endorsements, stock powers and other documents to be
delivered to the Investor on the Closing Date or subsequent thereto
will transfer to and vest in the Investor good, valid and indefeasible
title to the Common Stock to be issued hereunder, free and clear of any
adverse claims of any other person, including without limitation any
Encumbrance.
(C) No stock transfer taxes or other similar taxes
are or will be required to be paid by the Investor with respect to the
transfer of any of the Common Stock as provided herein.
(D) Except as provided in clause (A) above, the SEC
Filings (as defined herein) or on Schedule 2.2, as of the Closing Date
and except for (i) warrants to purchase an aggregate of 1,000,000
shares of Common Stock issued to Joint Energy Development II Limited
Partnership and Enron Capital & Trade Resources Corp. and (ii) options
to purchase an aggregate of 1,194,654 shares of Common Stock under the
Company's 1997 Incentive Plan, there will be no outstanding
(1) shares of Common Stock or Preferred Stock
("Capital Stock") or voting securities of
the Company;
(2) securities of the Company convertible into
or exchangeable for shares of Capital Stock
or voting securities of the Company; or
(3) options or other rights to acquire from the
Company, or other obligations of the Company
to issue, any Capital Stock, voting
securities, or securities convertible into
or exchangeable for Capital Stock or voting
securities of the Company.
(E) There are no outstanding obligations of the
Company to repurchase, redeem, or otherwise acquire any existing
securities of the Company.
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2.3 AUTHORITY. The Company has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized and approved by the board of directors of the Company, and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company, and
this Agreement constitutes the legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to (i)
bankruptcy, insolvency and other similar laws now or hereafter affecting the
enforcement of the rights of creditors generally and (ii) general principles of
equity.
2.4 SECURITIES FILINGS.
(A) The Company and each Subsidiary has filed all
forms, reports, and documents required to be filed with the Securities
and Exchange Commission (the "SEC"; such forms, reports, and documents,
the "SEC Filings") since it was first required to make such filings.
The SEC Filings:
(1) were prepared in all material respects in
accordance with the requirements of the
Securities Act or the Exchange Act, as
applicable; and
(2) did not at the time they were filed (or if
amended or superseded by a filing prior to
the date of this Agreement, then on the date
of such filing) 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,
in light of the circumstances under which
they were made, not misleading.
(B) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the
SEC Filings has been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and each fairly represents the
financial position of the Company and its Subsidiaries as at the
respective dates thereof and the results of its operations and cash
flows for the periods indicated, except that the unaudited financials
were or are subject to normal and recurring year-end adjustments which
were not or are not expected to be material in amount.
(C) For purposes hereof, "SEC Filings" shall include
the draft Annual Report Form 10-K for the fiscal year ended December
31, 1998, together with all Exhibits being filed therewith, excluding
exhibits regarding Enron or its affiliates previously filed in draft
form with the Company's Registration Statement declared effective in
August, 1998, attached hereto as Schedule 2.4 (the "Draft 1998 10-K").
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2.5 NO VIOLATION. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, or the compliance by the
Company or any Subsidiary with any of the provisions hereof will not (i)
conflict with or result in any breach of any provision of the Articles of
Incorporation, Bylaws or other Organizational Document of the Company or any
Subsidiary, (ii) result in a violation or breach of or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or require any
consent or other action by any Person as a result of, any of the terms,
conditions or provisions of any note, contract, agreement, commitment, bond,
mortgage, indenture, license, pledge agreement or other instrument or obligation
to which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary may be bound, or (iii) violate any law, regulation, judgment, order,
writ, injunction or decree applicable to the Company or any Subsidiary.
2.6 GOVERNMENTAL CONSENTS. None of the circumstances in connection with
the offer, issue, sale or delivery of the Common Stock or the execution and
delivery of this Agreement is such as to require a consent, approval or
authorization of, or filing, registration or qualification with any Governmental
Authority on the part of the Company or any Subsidiary in connection with the
execution and delivery of this Agreement or the offer, issue, sale or delivery
of the Common Stock.
2.7 NON-CONTRAVENTION. Except for exceptions that do not have a
Material Adverse Effect on the Company or any Subsidiary, neither the Company
nor any Subsidiary is in breach of, default under, or in violation of any
applicable law, decree, order, rule or regulation, or any indenture, contract,
agreement, deed, lease, loan agreement, commitment, bond, note, deed of trust,
restrictive covenant, license or other instrument or obligation to which it is a
party or by which it is bound or to which any of its assets are subject, the
execution, delivery and performance of this Agreement and the issuance, sale and
delivery of the Common Stock and other documents will not constitute any such
breach, default or violation or require consent or approval of any court or
Governmental Authority except as contemplated herein.
2.8 FINANCIAL STATEMENTS. The audited and unaudited consolidated
financial statements, together with the notes thereto, the Company included (or
incorporated by reference) in the SEC Filings fairly present the financial
condition of the Company and its consolidated subsidiaries as of the dates
thereof and the results of their operations and changes in financial positions
for the periods then ended in accordance with GAAP (except as stated in such
financial statements, including the related notes, and except that the quarterly
financial statements do not contain all the footnote disclosures required by
GAAP), subject, in the case of the unaudited financial statements, to normal
year-end audit adjustments and any other adjustments described therein. The
information in the Draft 1998 10-K, when read together with the information
included in this Agreement and the schedules and exhibits hereto, does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. The Company has provided the Investor with a copy of each document
which is of the character of document which would otherwise be required to be
filed by the Company with the SEC as an exhibit (other than financial
statements, financial exhibits or financial schedules) to any Annual Report on
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Form 10-K, Quarterly Report on Form 10-Q or Current Report on Form 8-K required
to be filed by the Company under the Exchange Act, if filed with respect to a
period ending on the date hereof, which has not been previously filed or
incorporated by reference in the SEC Filings or which is not referred to in the
Schedules hereto.
2.9 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the SEC Filings
or Schedule 2.9, since December 31, 1998, there has not been (a) any material
adverse change in the business, properties, assets, condition (financial or
otherwise), results of operations or prospects of the Company and its
Subsidiaries, taken as a whole, (b) in the case of the Company, any declaration
setting aside or payment of any dividend or other distribution with respect to
its Capital Stock, or (c) any material change by the Company in accounting
principles or methods.
2.10 NO BROKER'S OR FINDER'S FEES. No agent, broker, investment banker,
person or firm has acted directly or indirectly on behalf of the Company or any
Subsidiary in connection with this Agreement or the transactions contemplated
hereby, and no such person or entity is or will be entitled to any broker's or
finder's fee or any other commission or similar fee or expense, directly or
indirectly, in connection with this Agreement or the transactions contemplated
hereby.
2.11 EXEMPTION FROM REGISTRATION. Based in part on the representations
of the Investor herein, the offer, sale and delivery of the Common Stock
pursuant to this Agreement is exempt from the registration requirements of the
Securities Act and all applicable state securities laws.
2.12 NO UNDISCLOSED MATERIAL LIABILITIES. There are no liabilities of
the Company or any Subsidiary of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a liability, other than:
(A) liabilities provided for in the consolidated
financial statements of the Company included in the Draft 1998 10-K, or
disclosed in the notes thereto;
(B) liabilities disclosed on any of the Schedules
attached hereto; and
(C) other undisclosed liabilities which, individually
or in the aggregate, are not material to the Company or any
Subsidiaries considered as a whole.
2.13 DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to the Investor by or on behalf of the
Company in connection herewith, contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact regarding the
Company or any Subsidiary known to the Company or any Subsidiary which the
Company or any Subsidiary reasonably believes will materially and adversely
affect the business or financial condition of the Company or any Subsidiary,
which heretofore has not been set forth in this Agreement or in the other
documents, certificates and written statements furnished or otherwise provided
in writing to the Investor by or on behalf of the Company or any Subsidiary
prior to the date hereof in connection
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with the transactions contemplated hereby. All information previously provided,
or to be provided to Investor, and all Schedules contemplated hereby are, or
shall be, respectively, true, accurate and complete in all material respects.
ARTICLE III.
REPRESENTATIONS OF THE INVESTOR
The Investor represents and warrants to the Company as follows:
3.1 ORGANIZATION AND EXISTENCE. The Investor is a Company duly
organized, validly existing and in good standing under the laws of Delaware, and
has all requisite power and authority to carry on its business as now being
conducted.
3.2 AUTHORITY. The Investor has full power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by the board of directors of the Investor, and no other proceedings on
the part of the Investor are necessary to authorize this Agreement or the
consummation of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Investor and constitutes the
legal, valid and binding agreement of the Investor, enforceable against the
Investor in accordance with its terms, subject to (i) bankruptcy, insolvency and
other similar laws now or hereafter affecting the enforcement of the rights of
creditors generally and (ii) general principles of equity.
3.3 NO VIOLATION. Neither the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the compliance by
the Investor with any of the provisions hereof will (i) conflict with or result
in any breach of any provision of the Certificate of Incorporation or Bylaws of
the Investor, (ii) result in a violation or breach of or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, contract, agreement, commitment, bond,
mortgage, indenture, license, pledge agreement or other instrument or obligation
to which the Investor is a party or by which such Investor may be bound, or
(iii) violate any law, regulation, judgment, order, writ, injunction or decree
applicable to the Investor.
3.4 NO BROKER'S OR FINDER'S FEES. No agent, broker, investment banker,
person or firm has acted directly or indirectly on behalf of such Investor in
connection with this Agreement or the transaction contemplated hereby, and no
such person or entity is or will be entitled to any broker's or finder's fee or
any other commission or similar fee or expense, directly or indirectly, in
connection with this Agreement or the transaction contemplated hereby.
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3.5 INVESTMENT INTENT. The Investor represents that it has had an
opportunity to ask questions of and receive answers from the Company regarding
the Company and its business, assets, results of operation and financial
condition and the terms and conditions of the issuance of the Common Stock
hereunder for the purpose of evaluating the proposed acquisition of the Common
Stock.
(A) The Investor is acquiring the Common Stock hereunder
solely by and for its own account, for investment purposes only and not
for the purpose of resale or distribution; and Investor has no
contract, undertaking, agreement or arrangement with any person or
entity to sell, transfer or pledge to such person or anyone else any of
the Common Stock; and Investor has no present plans or intentions to
enter into any such contract, undertaking or arrangement.
(B) The Investor acknowledges and understands that (i) no
registration statement relating to the Common Stock has been or is to
be filed with the SEC under the Securities Act or pursuant to the
securities laws of any state; (ii) the Common Stock cannot be sold or
transferred without compliance with the registration provisions of the
Securities Act or compliance with exemptions, if any, available
thereunder; (iii) the certificates representing the Shares will include
a legend thereon that refers to the foregoing; and (iv) the Company has
no obligation or intention to register the Common Stock under any
federal or state securities act or law; except to the extent in each
case that the terms of the Registration Rights Agreement shall
otherwise provide.
(C) The Investor (i) is an "accredited investor" as defined in
Rule 501 of the rules promulgated pursuant to the Securities Act; (ii)
has such knowledge and experience in financial and business matters in
general that it has the capacity to evaluate the merits and risks of an
investment in the Common Stock and to protect its own interest in
connection with an investment in the Common Stock; (iii) has such a
financial condition that it has no need for liquidity with respect to
its investment in the Common Stock to satisfy any existing or
contemplated undertaking, obligation or indebtedness; and (iv) is able
to bear the economic risk of its investment in the Common Stock for an
indefinite period of time.
(D) The acquisition of the Common Stock by the Investor at the
Closing, as applicable, shall constitute Investor's confirmation of the
foregoing representations.
3.6 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES. The Investor is making
no representations or warranties, express or implied, of any nature whatsoever
except as specifically set forth in Article III of this Agreement.
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ARTICLE IV.
POST-CLOSING COVENANTS OF THE COMPANY
4.1 POST-CLOSING COVENANTS. From the date hereof and for as long as the
Investor continues to hold Common Stock, the Company covenants that it will make
all SEC Filings required to be made pursuant to the Securities Act or the
Exchange Act, or the rules promulgated thereunder. No investigation by the
Investor or other information received by the Investor shall operate as a waiver
or otherwise affect any representation, warranty, or agreement given or made by
the Company hereunder.
4.2 INFORMATION REQUIREMENTS. As long as the Investor or an Affiliate
of the Investor owns any of the Common Stock it acquires hereby, the Company
covenants to the Investor that it will deliver to the Investor,
contemporaneously with the filing, publication or distribution of such, copies
of all SEC Filings, communications from the Company to its shareholders after
the date of this Agreement. Nothing contained in this Article IV is intended to
influence the general management or overall operations of the Company or any
Subsidiary in a manner not permitted by applicable law and the provisions hereof
shall automatically be reduced in compliance therewith.
ARTICLE V.
POST-CLOSING COVENANTS OF THE PARTIES
5.1 RESTRICTIONS ON TRANSFER. For a period of six months from the date
hereof, the Investor will not sell, exchange or assign any of the Common Stock
received pursuant to this Agreement. Thereafter, the Investor will have no
further restrictions on its right to sell, exchange or otherwise transfer the
Common Stock, except as provided by applicable law.
5.2 AMENDMENT OF ALLIANCE AGREEMENTS. For purposes of Alliance
Agreement I, the "Exclusivity Period" (as defined in the Alliance Agreement I)
shall be deemed to have expired on September 9, 1999, and for purposes of the
Alliance Agreement II, the "Exclusivity Period" (as defined in the Alliance
Agreement II) shall be deemed to have expired on November 25, 2000. Effective as
of November 25, 1998, all seismic operating activities pursuant to Alliance
Agreement II ceased and neither Veritas nor the Company shall have any
obligation to conduct any additional seismic operating activities under Alliance
Agreement II. Any seismic processing agreements between BOG and Veritas or any
Affiliates and all other agreements related to any of the payables described in
Article I shall be deemed to have been properly and timely paid in accordance
with the terms of such agreements, provided that the Common Stock is properly
issued to Veritas in accordance with the terms set forth herein. Veritas and its
Affiliates and BOG shall enter into all amendments to the Alliance Agreement I
and the Alliance Agreement II and any processing agreements which are necessary
to cause BOG to receive credit for the payment of the payables described in
Article I in accordance with the terms hereof. In addition, the Company agrees
that in the event that "Final Payout" (as defined in the Alliance Agreement I)
does not occur under Alliance Agreement I, then to the extent allowed under the
terms of BOG's currently existing agreements with ▇▇▇▇▇▇▇▇ Production Company
and Vintage Petroleum, Inc., BOG shall provide Veritas with
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copies of all available permits, OB logs, survey notes, SEG P1 files, field
tapes, any intermediate processing files (i.e., CDP Gathers), bin and survey
maps, processing sequences, final stacked tapes and final migration tapes
related to the seismic data acquired pursuant to Alliance Agreement I; provided,
however, that Veritas shall pay for all reproduction costs incurred to provide
such copies. In the event that "Final Payout" (as defined in the Alliance
Agreement II) does not occur under Alliance Agreement II, BOG shall provide
Veritas with copies of all available permits, OB logs, survey notes, SEG P1
files, field tapes, intermediate processing files (i.e., CDP Gathers), bin and
survey maps, processing sequences, final stacked tapes and final migration tapes
related to the seismic data acquired pursuant to Alliance Agreement II;
provided, however, that Veritas shall pay for all reproduction costs incurred to
provide such copies.
5.3 FIRST RIGHT OF REFUSAL FOR SEISMIC ACQUISITION. From the date
hereof until March 26, 2004, if BOG or any successor to substantially all of the
assets of BOG receives a good-faith bid by a reputable unaffiliated service
provider to provide it with seismic processing, operations or acquisition
services, BOG or such successor will provide Veritas with the opportunity (which
must be accepted, if at all, within ten (10) days after receipt by Veritas or
any of its Affiliates of notice of the terms and conditions of the third-party
offer) to offer to BOG or such successor, the same terms and conditions as are
offered by such third party bid. In the event that the bid received by BOG or
such successor includes a risk-sharing structure or any kind of investment in
the 3-D seismic project by the service provided, Veritas also must match those
terms in order to receive the contract.
5.4 CERTAIN FILINGS. The parties hereto shall cooperate with one
another
(A) in determining whether any action by or in
respect of, or filing with, any Governmental Authority is required, or
any actions, consents, approvals, or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement; and
(B) in taking such actions or making such filings,
furnishing information required in connection therewith and seeking
timely to obtain any such actions, consents, approvals, or waivers.
5.5 PUBLICITY. Except as otherwise required by law, the parties shall
determine in advance, by mutual agreement and consent, the timing and content of
any announcement, including press releases or other public statements concerning
the transactions contemplated by this Agreement.
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ARTICLE VI.
INDEMNIFICATION
6.1 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify the
Investor, its Affiliates, and their directors, officers, employees, agents and
counsel (collectively, the "Investor Indemnified Parties") from, and hold each
of them harmless against, any and all actions, suits, losses, liabilities,
claims and damages, and expenses in connection therewith, including reasonable
counsel's fees and disbursements, whether foreseeable or unforeseeable
("Indemnified Liabilities") to which any of them may become subject arising
from:
(A) exercise by the Investor or any Affiliate of
their respective rights under this Agreement;
(B) proceedings brought against the Investor or any
Affiliate in their capacity as shareholders in the Company; and
(C) breach by the Company of this Agreement,
including without limitation any inaccuracy in any representation or
warranty of the Company under this Agreement, the Schedules hereto, or
any agreement, certificate or other document delivered or to be
delivered by the Company pursuant hereto in any respect.
Notwithstanding the foregoing, the Company shall not be required to indemnify
the Investor Indemnified Parties for Indemnified Liabilities arising from the
Investor Indemnified Parties' intentional misconduct, gross negligence or breach
of this Agreement.
6.2 INDEMNIFICATION BY THE INVESTOR. The Investor shall indemnify the
Company, its Affiliates, and its directors, officers, employees, agents and
counsel (collectively, the ACompany Indemnified Parties@) from, and hold each of
them harmless against Indemnified Liabilities to which any of them may become
subject arising in connection with this Agreement, the transactions contemplated
hereby, and any action, omission to act, occurrence or condition in connection
herewith, including Indemnified Liabilities that arise out of or relate to any:
(A) breach by the Investor of this Agreement,
including without limitation any inaccuracy in any representation or
warranty of the Investor under this Agreement, the Schedules hereto, or
any agreement, certificate or other document delivered or to be
delivered by the Investor pursuant hereto in any respect, whether or
not the Company Indemnified Party relied thereon or had Knowledge
thereof and without regard to any qualifications contained in such
representations and warranties limiting such representations and
warranties (a) to matters within the Knowledge of the Investor, or (b)
as to materiality; and
(B) breach or nonfulfillment of any covenant,
agreement or other obligation of the Investor under this Agreement or
any agreement or document delivered pursuant hereto.
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6.3 LIMITATION OF LIABILITY. No indemnification shall be required to be
made by the Company or the Investor pursuant to this Article VI with respect to
any Indemnified Liabilities unless and until the aggregate amount of Indemnified
Liabilities incurred by the Investor Indemnified Parties or the Company
Indemnified Parties, respectively (whether asserted, resulting, imposed, or
incurred before, on, or after the Closing Date), exceeds $5,000; provided,
however that once such amount exceeds $5,000, the Investor Indemnified Parties
or the Company Indemnified Parties, as applicable, shall be entitled to recover
all amounts to which they are entitled, including such initial $5,000.
6.4 NOTICE AND DEFENSE OF THIRD-PARTY CLAIMS. If any Proceeding shall
be brought or asserted under this Article VI against a party claiming
indemnification under this Agreement (for purposes of this Section 6.4, an
"Indemnified Party") in respect of which indemnity may be sought under this
Article from the party from whom indemnification is sought (for purposes of this
Section 6.4, an "Indemnifying Party"), the Indemnified Party shall give prompt
written notice of such Proceeding to the Indemnifying Party who shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party and the payment of all expenses; provided, that any delay
or failure so to notify the Indemnifying Party shall relieve the Indemnifying
Party of its obligations hereunder only to the extent, if at all, that it is
prejudiced by reason of such delay or failure. In no event shall any Indemnified
Party be required to make any expenditure or bring any cause of action to
enforce the Indemnifying Party's obligations and liability under and pursuant to
the indemnifications set forth in this Article. In addition, actual or
threatened action by a Governmental Authority or other Person is not a condition
or prerequisite to the Indemnifying Party's obligations under this Article. The
Indemnified Party shall have the right to employ separate counsel in any of the
foregoing Proceedings and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the Indemnified Party
unless the Indemnified Party shall in good faith determine that there exist
actual or potential conflicts of interest which make representation by the same
counsel inappropriate. The Indemnified Party's right to participate in the
defense or response to any Proceeding should not be deemed to limit or otherwise
modify the Indemnifying Party's obligations under this Article. In the event
that the Indemnifying Party, within five days after notice of any such
Proceeding, fails to assume the defense thereof, the Indemnified Party shall
have the right to undertake the defense, compromise or settlement of such
Proceeding for the account of the Indemnifying Party, subject to the right of
the Indemnifying Party to assume the defense of such Proceeding with counsel
reasonably satisfactory to the Indemnified Party at any time prior to the
settlement, compromise or final determination thereof. Anything in this Article
VI to the contrary notwithstanding, the Indemnifying Party shall not, without
the Indemnified Party's prior written consent, settle or compromise any
Proceeding or consent to the entry of any judgment with respect to any
Proceeding for anything other than money damages paid by the Indemnifying Party.
The Indemnifying Party may, without the Indemnified Party's prior written
consent, settle or compromise any such Proceeding or consent to entry of any
judgment with respect to any such Proceeding that requires solely the payment of
money damages by the Indemnifying Party and that includes as an unconditional
term thereof the release by the claimant or the plaintiff of the Indemnified
Party from all liability in respect of such Proceeding.
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6.5 PARTICIPATION IN PUBLIC OFFERING. No Person may participate in any
Public Offering hereunder unless such Person (a) agrees to sell such Person's
securities on the basis provided in any underwriting agreement approved by the
Persons entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements and the provisions of this Agreement in respect of
registration rights.
6.6 STOCK LEGENDS. All stock certificates representing Registerable
Shares issued pursuant to the provisions of this Agreement shall bear a legend
stating that such shares are subject to the provisions of this Agreement.
ARTICLE VII.
MISCELLANEOUS
7.1 EXPENSES. Whether or not the purchase of the Common Stock herein
contemplated is consummated, all costs and expenses incurred by Investor in
connection with this Agreement and the transactions contemplated hereby
(including but not limited to attorneys and brokerage fees and expenses) shall
be paid by Investor and all such costs and expenses incurred by the Company
shall be paid by the Company.
7.2 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified
or supplemented only by the written agreement of the parties hereto.
7.3 WAIVER OF COMPLIANCE; CONSENTS. Any failure of the Investor, on the
one hand, or the Company, on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived by the Company or the
Investor, respectively, only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
7.3.
7.4 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if (i) delivered personally, (ii) mailed by
registered or certified mail (return receipt requested), whereupon notice shall
be deemed given three days after mailing, or (iii) sent by telecopy with
confirmation, to the other party at the following addresses (or at such other
address for a party as shall be specified by like notice; provided that notices
of a change of address shall be effective only upon receipt thereof):
If to the Company: ▇▇▇▇▇▇▇ Exploration Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇. ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & Knight
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ Exploration Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇. ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investor: Veritas DGC Land, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇ Liddell & ▇▇▇▇ LLP
2600 Texas Commerce Tower
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
and
Veritas DGC, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇
7.5 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by the Company
without the prior written consent of the Investor. No permitted assignment shall
relieve the assigning party of any of its obligations hereunder.
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7.6 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Texas (regardless of the laws that might otherwise govern under
applicable Texas principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect, performance and
remedies.
7.7 DISPUTE RESOLUTION.
(A) If a dispute arises between the parties hereto
regarding any issue that relates to this Agreement, the parties agree
that their respective representatives shall meet and consult in good
faith in an attempt to settle the dispute, within thirty (30) days of
written notice thereof, as a condition precedent to the initiative of
arbitration proceedings under the Commercial Arbitration Rules of the
American Arbitration Association.
(B) In the event the parties are unable to resolve
their differences, such dispute shall be submitted to arbitration.
Arbitration shall be conducted in Houston, Texas, under the Commercial
Arbitration Rules then in force of the American Arbitration
Association. The arbitration proceedings shall be conducted before a
panel of three (3) members of the State Bar of Texas in which the
arbitration is conducted, actively engaged in commercial transactions.
The parties agree that discovery shall be limited and shall be handled
expeditiously. Discovery proceedings available in litigation before the
courts shall not apply in an arbitration conducted pursuant to this
Agreement. However, each party shall produce relevant and
non-privileged documents or copies thereof requested by the other party
within the time limits set and to the extent required by order of the
arbitrators. All disputes regarding discovery shall be promptly
resolved by the arbitrators. Strict rules of evidence shall not apply
in such arbitration. The parties may offer such evidence as they desire
and the arbitrators shall accept such evidence as the arbitrators deems
relevant to the issues and accord it such weight as the arbitrators
deem appropriate. In rendering the award, the arbitrators shall
determine the respective rights and obligations of the parties
according to the laws of the State of Texas. The arbitrators shall
award to the prevailing party, if any, as determined by the arbitrator
all of the prevailing party's costs and fees. "Costs and fees" shall
include the reasonable pre-award expenses of the arbitration, including
arbitrator's fees, administrative fees, witness fees and attorney's
fees. The parties and arbitrators shall treat all aspects of the
arbitration proceedings, including without limitation, discovery,
testimony and other evidence, briefs and the award, as strictly
confidential. The arbitrators' decision may include any remedy
contemplated by this Agreement.
(C) It is the intent of the parties that, excepting
extraordinary circumstances, any arbitration shall be concluded within
four (4) months of the date arbitration is commenced. The parties may,
upon agreement, extend the time limits or the arbitrators may determine
that such an extension is necessary in the interest of justice.
(D) The arbitrators will use their best efforts to
issue a final award within forty-five (45) days after closure of the
proceedings. The arbitration award shall be in writing and specify the
factual and legal basis for the award.
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(E) Either party may appeal the arbitrators' award to
an appellate arbitrator by filing with the AAA within twenty (20) days
after transmittal of the award, a written brief, not to exceed twenty
(20) pages stating the reason(s) why the arbitrators' decision should
be reversed or modified. The opposing party shall file with the AAA and
serve on the appealing party within twenty (20) days of receiving the
appeal brief, and opposition brief not to exceed twenty (20) pages. The
appellate arbitrator shall be appointed directly by the AAA without
submission of a list by the parties, and shall be a retired judge of a
court of record of the State in which the arbitration is conducted.
(F) If no appeal is filed, the arbitrators' decision
shall be final and binding upon the parties. If an appeal is filed, the
decision of the appellate arbitrator's decision shall be final and
binding upon the parties. Judgment upon the award of the arbitrators,
if no appeal was made, or upon the decision of the appellate
arbitrator, if an appeal was filed, may be ordered and enforced by a
court of competent Jurisdiction.
7.8 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.9 NO THIRD-PARTY BENEFICIARIES. No provision of this Agreement is
intended to confer upon any Person other than the Parties hereto any rights or
remedies hereunder, other than wholly-owned subsidiaries of the Parties hereto,
which shall be considered third party beneficiaries hereof.
7.10 INTERPRETATION. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
7.11 ENTIRE AGREEMENT. This Agreement, including the documents,
instruments and agreements referred to herein, and the agreements and documents
executed contemporaneously herewith embody the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof.
There are no restrictions, promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth or referred to herein or
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter. Notwithstanding the
foregoing, this Agreement does not supersede the Confidentiality Agreement
between the Parties dated February 15, 1999.
7.12 ATTORNEYS' FEES. In the event any party hereto institutes a
lawsuit against any other party hereto for a claim arising out of or to
specifically enforce this Agreement, the losing party shall pay the reasonable
attorneys' fees incurred by the prevailing party in connection with such
lawsuit.
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7.13 FURTHER ASSURANCES. The parties hereto agree (i) to furnish upon
request to each such further information, (ii) to execute and deliver to each
other such other documents, and (iii) to do such other acts and things, all as
the other party hereto may at any time reasonably request, for the purpose of
carrying out the intent of this Agreement and the documents referred herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first above written.
▇▇▇▇▇▇▇ EXPLORATION COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
VERITAS DGC LAND, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President Finance
-------------------------------------
Appendix A - Definitions
Schedule 1.1 - Extinguished Liabilities
Schedule 2.4 - Draft Annual Report on Form 10-K for fiscal year ended December
31, 1998
Schedule 2.9 - Absence of Certain Changes
19
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APPENDIX A
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings specified or referred to below whether or not capitalized when used in
this Agreement. Where a defined term in this Agreement derives its meaning from
a statutory reference, for the purposes of this Agreement any regulatory
definition promulgated pursuant to the applicable statute shall be deemed to be
applicable to the extent its definition is broader than the statutory reference
and any reference or citation to a statute or regulation shall be deemed to
include any amendments to that statute or regulation and judicial and
administrative interpretations of it. Any specific references to a law shall
include any amendments to it promulgated from time to time.
"Affiliate" means, with respect to a specified Person, (a) any Entity of
which such Person is an executive officer, director, partner, trustee or other
fiduciary or is directly or indirectly the Beneficial Owner of ten percent (10%)
or more of any class of equity security thereof or other financial interest
therein; (b) if such Person is an individual, any relative or spouse of such
individual, or any relative of such spouse (such relative being related to the
individual in question within the second degree) and any Entity of which any
such relative, spouse, or relative of spouse is an executive officer, director,
partner, trustee or other fiduciary or is directly or indirectly the Beneficial
Owner of ten percent (10%) or more of any class of equity security thereof or
other financial interest therein; (c) if such Person is an Entity, any director,
executive officer, partner, trustee or other fiduciary or any direct or indirect
Beneficial Owner of ten percent (10%) or more of any class of equity security
of, or other financial interest in, such Entity; or (d) any Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the Person specified. For
purposes of this definition, "executive officer" means the president, any vice
president in charge of a principal business unit, division or function such as
sales, administration, research and development, or finance, and any other
officer, employee or other Person who performs a policy making function or has
the same duties as those of a president or vice president. For purposes of this
definition, "control" (including "controlling", "controlled by" and "under
common control with") means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
When used without reference to a particular Person, "Affiliate" means an
Affiliate of the Company or the Shareholders.
"Agreement" means this Exchange Agreement, including the schedules and
exhibits attached hereto, which are hereby incorporated herein
"Alliance Agreement I" means that certain Anadarko Basin Seismic
Operation Agreement, dated February 15, 1996, by and between BOG and Veritas
predecessor, as amended.
"Alliance Agreement II" means that certain Anadarko Basin Seismic
Operation Agreement, dated April 1, 1997, by and between BOG and VERITAS'
predecessor, as amended.
"BOG" means ▇▇▇▇▇▇▇ Oil & Gas, L.P.
Appendix A-1
22
"Best Efforts" means those efforts which a prudent individual desirous
of achieving a result would exert in similar circumstances to ensure that such
result is achieved as expeditiously as possible.
"Closing " shall have the meaning set forth in Section 1.2.
"Closing Date" means the date and time as of which the Closing actually
takes place.
"Common Stock" means any class or series of the common stock, $.01 per
share par value, of the Company.
"Encumbrance" means any lien, pledge, hypothecation, charge, mortgage,
deed of trust, security interest, encumbrance, equity, trust, equitable
interest, claim, easement, right-of-way, servitude, right of possession, lease
tenancy, license, encroachment, burden, intrusion, covenant, infringement,
interference, proxy, option, right of first refusal, community property
interest, legend, defect, impediment, exception, condition, restriction,
reservation, limitation, impairment, imperfection of title, restriction on or
condition to the voting of any security, restriction on the transfer of any
security or other asset, restriction on the receipt of any income derived from
any security or other asset, and restriction on the possession, use, exercise or
transfer of any other attribute of ownership, whether based on or arising from
common law, constitutional provision, statute or contract.
"Entity" means any Company (including any non-profit Company), general
partnership, limited partnership, joint venture, joint stock association,
estate, trust, cooperative, foundation, union, syndicate, league, consortium,
coalition, committee, society, firm, company or other enterprise, association,
organization or entity of any nature.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted United States accounting principles,
consistently applied. As applied to the Company, GAAP means those accounting
principles and practices (a) which are recognized as such by the Financial
Accounting Standards Board, (b) which are applied for all periods after the date
hereof in a manner consistent with the manner in which such principles and
practices were applied to the most recent audited financial statements of the
Company furnished to the Purchaser, and (c) which are consistently applied for
all periods after the date hereof so as to reflect properly the financial
condition, and results of operations and cash flows, of the Company.
"Governmental Authority" means any foreign governmental authority, the
United States of America, any State of the United States, any local authority
and any political subdivision of any of the foregoing, any multi-national
organization or body, any agency, department, commission, board, bureau, court
or other authority thereof, or any quasi-governmental or private body
exercising, or purporting to exercise, any executive, legislative, judicial,
administrative, police, regulatory or taxing authority or power of any nature.
Appendix A-2
23
"Governmental Authorization" means any permit, license, franchise,
approval, certificate, consent, ratification, permission, confirmation,
endorsement, waiver, certification, registration, qualification or other
authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Authority or pursuant to any Legal Requirement.
"Legal Requirement" means any law, statute, ordinance, decree,
requirement, Order, treaty, proclamation, convention, rule or regulation (or
interpretation of any of the foregoing) of, and the terms of any Governmental
Authorization issued by, any Governmental Authority.
"Liability" means any debt, obligation, duty or liability of any nature
(including any unknown, undisclosed, unfixed, unliquidated, unsecured,
unmatured, unaccrued, unasserted, contingent, conditional, inchoate, implied,
vicarious, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with GAAP.
"Material Adverse Effect" means any material adverse change in the
condition (financial or otherwise), business, operations, properties, prospects,
assets or Liabilities of the Company or any Subsidiaries considered as a whole
(whether or not covered by insurance).
"Order" means any order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, sentence, subpoena, writ or
award issued, made, entered or rendered by any court, administrative agency or
other Governmental Authority or by any arbitrator.
"Organizational Documents" means, with respect to a Company, the
certificate of incorporation, articles of incorporation and bylaws of such
Company; with respect to a general partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture; with respect to a limited
partnership, the limited partnership agreement and the certificate of limited
partnership of such limited partnership; with respect to a trust, the instrument
establishing such trust; and with respect to any other Entity, any charter
document or other document executed, adopted, approved, ratified or filed in
connection with the formation, creation, constitution or organization of such
Entity, in each case including any and all amendments or modifications thereof.
"Person" means any individual, Entity or Governmental Authority.
"Proceeding" means any action, suit, litigation, arbitration, lawsuit,
claim, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding and any informal proceeding), prosecution, contest,
hearing, inquiry, inquest, audit, examination, investigation, challenge,
controversy or dispute commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Authority or any arbitrator.
"Public Offering" means an underwritten public offering of Common Stock
of the Company pursuant to an effective registration statement under the
Securities Act.
Appendix A-3
24
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" means, with respect to any Person, any Company,
partnership, joint venture, joint stock association, business trust or other
Entity which is, directly or indirectly, owned or controlled by another Person
or any other Person which is itself a Subsidiary within the meaning of this
definition, including, without limitation, all Persons the majority of the
Capital Stock or voting stock of which is directly or indirectly owned by the
Company.
"Threatened" - A Proceeding, dispute or other matter shall be deemed to
have been "threatened" if any demand or statement shall have been made (orally
or in writing) or any notice shall have been given (orally or in writing), or if
any other event shall have occurred or any other circumstances shall exist, that
might lead a prudent Person to conclude that such a Proceeding, dispute or other
matter might be asserted, commenced, taken or otherwise pursued in the future;
provided, however, when used in the context of "threatened releases", each term
shall have the meaning ascribed to it under Environmental Laws.
Terms which are defined in the body of this Agreement shall have the
meanings specified therein.
Appendix A-4
