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EXHIBIT 10.2
HARKEN ENERGY CORPORATION
Up to US$70,000,000
5.5% Senior Convertible Notes Due 2002
PLACING AGREEMENT
June 3, 1997
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CONTENTS
Clause Heading
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Page
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1. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Release of the Press Announcement and Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Placing of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Representations and Warranties of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. The Placing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. Undertakings of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. Indemnification and Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12. Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
13. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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THIS AGREEMENT is made on June 3, 1997, BETWEEN
(1) HARKEN ENERGY CORPORATION (the "Company");
(2) HSBC INVESTMENT BANK PLC ("HSBC"), RAUSCHER PIERCE & CLARK,
INC. and RAUSCHER PIERCE & CLARK LIMITED (together "RPC")
(together with HSBC, the "Lead Managers"); and
(3) BANCA DEL GOTTARDO, JEFFERIES INTERNATIONAL LIMITED and
INVESTMENTBANK AUSTRIA A.G. (together with the Lead Managers,
the "Managers").
WHEREAS
(A) The Company has authorised the creation and issue of up to
U.S.$70,000,000 in aggregate principal amount of 5.5% Senior Convertible Notes
Due 2002 (the "Notes"). The Notes will be in bearer form and are to be
convertible into shares of the common stock (the "Common Stock") of the Company
(the "Shares") at the Conversion Price of U.S.$5.00.
(B) The Notes will be in the denominations of U.S.$10,000 and
U.S.$50,000, and integral multiples thereof. The Notes will initially be
represented by a temporary global bearer note (the "Global Note") which will be
exchangeable for bearer notes in definitive form ("Bearer Notes"), with
interest coupons ("Coupons") attached, in the circumstances specified in the
Global Note.
(C) The Notes will be subject to and have the benefit of a trust
indenture (the "Trust Indenture"), a draft of which is in the agreed form and
to which will be scheduled the forms of the Global Note and the Bearer Notes.
The Trust Indenture, will be made between the Company and Marine Midland Bank
(the "Trustee") as trustee for the holders of the Notes from time to time.
(D) The Company will, in relation to the Notes, enter into a
paying and conversion agency agreement (the "Agency Agreement") with Midland
Bank plc (the "Principal Paying Agent", "Principal Conversion Agent" and
"Authenticating Agent"), Kredietbank S.A. Luxembourgeoise (the "Listing Agent",
"Luxembourg Paying Agent" and "Luxembourg Conversion Agent") and Swiss Bank
Corporation (a "Paying Agent" and "Conversion Agent") and the Trustee, a draft
of which is in the agreed form.
(E) The Lead Managers have conditionally agreed on and subject to
the terms hereof to act as agent for the Company to use their best efforts to
procure Placees for all the Notes. The Issue is not underwritten.
IT IS AGREED as follows:
1. Interpretation
1.1 Definitions: In this Agreement, in addition to the definitions
contained in the recitals, the following expressions have the following
meanings:
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"agreed form" means that the form of the document in question has
been agreed between the proposed parties thereto and by the parties
hereto prior to the Closing Date and (for the purposes of
identification signed by or on behalf of) each of such parties and
that either a copy thereof has been signed for the purpose of
identification on behalf of Bracewell & Patterson, L.L.P. or such
document has been signed on behalf of the parties thereto and
delivered to Bracewell & Patterson, L.L.P. to be held in escrow
pending release on the Closing Date;
"AMEX" means The American Stock Exchange, Inc.;
"Cedel" means Cedel Bank, societe anonyme;
"Closing Date" means, subject to Clause 9.2, June 11, 1997;
"Conditions" means the terms and conditions of the Notes as scheduled
to the agreed form of the Trust Indenture as the same may be modified
prior to the Closing Date, and any reference to a numbered "Condition"
is to a correspondingly numbered provision thereof;
"Conversion Price" has the meaning given to it in Condition 6;
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear System;
"Event of Default" means one of those events specified in Condition 12;
"Issue" means the proposed issue of the Notes described in the Offering
Circular;
"Issue Documents" means the Trust Indenture and the Agency Agreement;
"Issue Price" means 100 percent of the aggregate principal amount of
the Notes;
"Lien" has the meaning given to it in the Trust Indenture;
"Offering" means the offering of the Notes pursuant to the Offering
Circular;
"Offering Circular" means the preliminary offering circular dated May
28, 1997, as amended by the final offering circular, including all
documents incorporated by reference therein to the extent such
documents are not superseded in the Offering Circular prepared in
connection with the Issue, as the same may be amended or supplemented
on or before the Closing Date;
"Placees" has the meaning given to it in Clause 5.1;
"Placement" means the offering of Notes made pursuant to the Offering
Circular;
"Person" has the meaning given to it in the Trust Indenture;
"Press Announcement" means the press announcement to be mutually agreed
by the Company and the Lead Managers;
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"Principal Subsidiary" has the meaning given to it in the Trust
Indenture;
"Restricted Period" means the period commencing on the day after the
Closing Date and continuing for a period of forty days; it being
understood that in accordance with the terms of the Notes in the event
that Regulation S under the Securities Act is amended and such
amendment is deemed applicable to the Notes, the term "Restricted
Period" with respect to the Notes shall be subject to extension as
then required by Regulation S as amended;
"Securities Act" means the United States Securities Act of 1933, as
amended;
"Stabilising Manager" means HSBC, acting in the capacity as stabilising
manager;
"Subsidiary" has the meaning given to it in the Trust Indenture;
"U.S.$" and "U.S. dollars" denote the lawful currency for the time
being of the United States of America; and
"Warrant Shares" means the shares of Common Stock of the Company
issuable upon exercise of the Lead Manager Warrants.
1.2 Clauses and Schedules: Any reference in this Agreement to a
Clause or a Schedule is, unless otherwise stated, to a clause hereof
or a schedule hereto.
1.3 Headings: Headings and sub-headings are for ease of reference
only and shall not affect the construction of this Agreement.
2. Release of the Press Announcement and Delivery of Documents
2.1 On or immediately following the Closing Date, the Company
shall release the Press Announcement in the agreed form to the press
in compliance with Regulation S of the Securities Act and shall
subsequently file a Report on Form 8-K describing the Offering, as
required and when due in accordance with the terms of the form.
2.2 The Company shall as soon as practicable following execution
of this Agreement and in any event, subject to Clause 2.3, by no later
than 10.00 a.m. (London time) on the Closing Date, deliver, or procure
that there are delivered, to the Lead Managers, in the agreed form:
(a) the Issue Documents;
(b) a legal opinion of Haynes and Boone, L.L.P.;
(c) the closing certificates of the Company; and
(d) the auditors comfort letter.
2.3 The Lead Managers may, in their discretion, waive the
requirement that the Company deliver to them any of the documents
listed in Clause 2.2 or may extend the time for delivery of
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any of the documents. Any waiver or extension may be granted by the
Lead Managers subject to such conditions as they determine.
3. Placing of the Notes
3.1 The Company undertakes to the Managers that:
(a) subject to and in accordance with the provisions of this
Agreement, the Company will issue the Notes on the Closing Date, in
accordance with this Agreement and the Trust Indenture; and
(b) the Company will, execute and deliver the Issue Documents on
the Closing Date.
3.2 In connection with this issue, the Stabilising Manager may
over-allot or effect transactions which stabilise or maintain the
market price of the Notes at a level which might not otherwise
prevail. Such stabilising, if commenced, may be discontinued at any
time. Such stabilising shall be conducted in accordance with all
applicable laws and rules. Any loss or profit sustained as a
consequence of any such over-allotment or stabilising shall, as
against the Company, be for the account of the Managers. The Managers
acknowledge that the Company has not authorised the creation and issue
of Notes in excess of U.S.$70,000,000 in aggregate principal amount.
3.3 Each Manager warrants and represents to the Company and each
other Manager that each contract note in the agreed form executed by
such Manager selling the Notes shall contain the following legend:
"Neither the Notes nor the Shares of Common Stock issuable upon
conversion of the Notes have been or will be registered under the
United States Securities Act of 1933, as amended (the "Securities
Act"), and the Notes and the Shares may not be offered, sold,
transferred, pledged, converted or otherwise disposed of in the U.S.
or to, or for the account or benefit of, any "U.S. person" unless the
Notes and the Shares have been registered under the Securities Act and
any applicable state securities or blue sky laws or exemptions from
the registration requirements of such laws are available.
Any United States person who holds this obligation will be subject to
limitations under the U.S. income tax laws, including the limitations
provided in Sections 165(j) and 1287(a) of the United States Internal
Revenue Code of 1986, as amended".
4. Representations and Warranties of the Company
4.1 The Company represents and warrants to the Managers, in their
capacity as Managers and as representatives of each of the Holders of
the Notes, that:
(a) the Company is duly incorporated and in good standing under
the laws of the State of Delaware and has the requisite power and
authority to create, issue, offer and sell the Notes, to execute this
Agreement and each of the Issue Documents and to undertake and perform
its obligations herein and therein. Neither the Company nor any
Principal Subsidiary has commenced
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voluntary or involuntary proceedings to effect the winding up,
liquidation or dissolution of the Company;
(b) each Principal Subsidiary of the Company is (i) a corporation
duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or establishment, (ii) has all
requisite power and authority and all necessary licenses and permits
to own and operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted, except as would
not have a material adverse effect on the Company and the Subsidiaries
taken as a whole, and (iii) is duly licensed or qualified and is
authorized to do business and is in good standing as a foreign
corporation in each jurisdiction where the character of its Properties
or the nature of its activities makes such licensing or qualification
necessary, except as would not have a material adverse effect on the
Company and the Subsidiaries taken as a whole;. None of the Principal
Subsidiaries nor any other party has commenced voluntary or
involuntary proceedings to effect the winding up, liquidation or
dissolution of any of the Principal Subsidiaries;
(c) the authorized and outstanding capital stock of the Company is
as set out in the Offering Circular, and all of the issued Shares have
been duly and validly authorized and issued and are fully paid and
non-assessable. All of the outstanding shares of capital stock of the
Subsidiaries have been duly and validly authorized and issued and are
fully paid and non-assessable. All of the outstanding shares of
capital stock of each Principal Subsidiary are owned directly or
indirectly by the Company free and clear of any Liens. Except as
disclosed in the Offering Circular, the Company does not own, directly
or indirectly, any equity or debt securities of any other company,
corporation, partnership, joint venture or other entity which are
material to the business or operations of the Company. Except as
disclosed in the Offering Circular or the documents incorporated by
reference therein, at the date hereof and at the Closing Date, there
are and will not be any outstanding options, warrants or other rights
to purchase any Shares of the Company;
(d) the execution, delivery and performance of this Agreement and
the Issue Documents has been duly authorized by all requisite
corporate action of the Company;
(e) the creation, offer, sale and issue of the Notes, the
execution of this Agreement and the Issue Documents and the
undertaking and performance by the Company of the obligations
expressed to be assumed by it herein and therein will not violate:
(i) the Certificate of Incorporation or By-laws of the
Company;
(ii) assuming compliance by the Managers with the United
States securities law requirements set forth in the
Schedule, any law applicable to the Company or any
Principal Subsidiary or any rule, regulation or order
of any court or governmental agency or body having
jurisdiction over the Company or any Principal
Subsidiary; or
(iii) any provision of any indenture, mortgage, agreement,
contract or other instrument to which the Company or
any Principal Subsidiary is a party or by which the
Company or any Principal Subsidiary is bound or to
which any of the properties or assets of the Company
or any Principal Subsidiary are subject, or be in
conflict
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with, or result in a breach of or constitute (upon
notice or lapse of time or both) a default under any
such indenture, mortgage, agreement, contract or
other instrument or result in the creation or
imposition of any Lien upon any of the properties or
assets of the Company or any Principal Subsidiary
(except any such violation or conflict described
therein or herein which would not have a material
adverse effect on the Company and its Subsidiaries,
taken as a whole);
(f) (i) this Agreement constitutes;
(ii) upon due execution by or on behalf of the Company and
the other parties thereto, the Issue Documents will
constitute; and
(iii) upon due execution of the Trust Indenture, the Global
Note and the Bearer Notes by or on behalf of the
Company and the other parties thereto and due
authentication of the Global Note and the Bearer
Notes, the Notes will constitute:
legal, valid, binding and enforceable obligations of the Company,
enforceable against the Company in accordance with their respective
terms, except that the enforceability thereof may be limited by any
applicable bankruptcy, insolvency, reorganisation or other similar
laws relating to or affecting the enforcement of creditors' rights
generally and by equitable principles regardless of whether such
enforceability is considered in a proceeding in equity or at law and
except as rights to indemnity or contribution may be limited under
applicable law;
(g) Each of the Global Note, the Bearer Notes, the Coupons and the
Shares conform in all material respects to the description of such
Global Note, Bearer Notes, Coupons and Shares contained in the
Offering Circular, and the Shares conform to the terms of the Common
Stock contained in the Certificate of Incorporation;
(h) upon issuance of the Notes in accordance with the Trust
Indenture, the Notes will constitute direct, general and unconditional
obligations of the Company which:
(i) rank pari passu among themselves and with the 6.5%
Senior Convertible Notes Due 2000 of the Company, and
with all present and future Indebtedness other than
Subordinated Obligations and Indebtedness secured by
Liens (all as defined in the Trust Indenture) of the
Company; and
(ii) will rank senior to all existing and future
Subordinated Obligations (as defined in the Trust
Indenture), except to the extent permitted by the
applicable laws relating to creditors' rights;
(i) the Shares, as and when issued by the Company from time to
time pursuant to conversion of the Notes in accordance with the terms
of the Issue Documents, will be validly issued and outstanding, fully
paid and non- assessable and will not be subject to any pre-emptive or
similar right, and the Holder of each Note will receive good and valid
title to the Shares upon conversion of such Note in accordance with
the terms of the Issue Documents, free and clear of any Lien, except
such as may have been created by the Holder of the Note and such
restrictions on transfer as may be imposed under United States federal
or state securities or blue sky laws. Other than the
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approval of the listing of the Shares by AMEX and any applicable
registration requirements, no consent or approval by the stockholders
of the Company or any other Person is required to be obtained by the
Company for the consummation of the issuance of the Shares by the
Company pursuant to conversion of the Notes. As and from the expiry
of the Restricted Period (so long as not extended) (i) each stock
certificate representing any of the Shares shall be free of any type
of restrictive legend, (ii) the Shares represented by each such stock
certificate shall not be subject to any "stop transfer" or similar
order at the Company's transfer agent for its Common Stock, and (iii)
the Company shall have filed with the AMEX or Alternative Stock
Exchange all necessary filings in respect of the inclusion of the
Shares in the shares of Common Stock of the Company listed for trading
on the AMEX or Alternative Stock Exchange;
(j) upon delivery to the Lead Managers, the Lead Manager Warrants
(as defined in Clause 8.2 hereof) will be duly issued and will
constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as the enforceability thereof may be limited by any applicable
bankruptcy, insolvency, reorganization or other similar laws relating
to or affecting the enforcement of creditors' rights, regardless of
whether such enforceability is considered in a proceeding in equity or
at law. The shares of Common Stock issuable upon exercise of the Lead
Manager Warrants have been duly and validly authorized for issuance in
accordance with the terms of the Warrants and reserved for issuance to
the extent authorized by applicable law. The shares of Common Stock
issuable upon exercise of Lead Manager Warrants, as and when issued
and delivered in accordance with the terms thereof, and upon receipt
by the Company of the exercise price therefor, will be duly and
validly issued and outstanding, fully paid and non- assessable, and
will not be subject to any pre-emptive or similar right;
(k) assuming compliance by the Managers with the United States
securities law requirements as set out in the Schedule and other than
the approval of AMEX, all authorizations, consents and approvals
required by the Company for or in connection with the creation and
issue of the Notes, the execution of this Agreement and the Issue
Documents, the performance by the Company of the obligations
undertaken by it herein and therein and the distribution of the
Offering Circular in accordance with the provisions set out in the
Schedule have been obtained and are in full force and effect;
(l) neither the nature of the Company nor of any Subsidiary, nor
of any of their respective businesses or Properties, nor any
relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the execution and
delivery of the Indenture or the offer, issue, sale or delivery of the
Global Note, or the Bearer Notes, or the Shares 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 as a condition to the execution and delivery of this Indenture
or the offer, issue, sale or delivery of the Global Note or the Bearer
Notes or the issuance of Shares pursuant to conversion of the Notes;
(m) the Offering Circular sets forth a description of the business
conducted and proposed to be conducted as of the date thereof by the
Company orits Principal Subsidiaries, and the principal Properties of
the Company or its Principal Subsidiaries, which description is true
and correct in all material respects. The Company shall use its best
efforts to ensure that the Offering Circular will comply with the
requirements of the Luxembourg Stock Exchange on the Closing Date;
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(n) each of the Company and its Principal Subsidiaries, has (i)
Good Title to its Oil and Gas Properties and (ii) good and defensible
title to all other material Properties and assets described in the
Offering Circular as owned by it, in the case of such other Properties
and assets free and clear of all Liens, except as disclosed in the
Offering Circular or which are not material to the business of the
Company and its Subsidiaries taken as a whole or which will not
conflict with the obligations of the Company under this Agreement, the
Issue Documents and the Notes. Each of the Company and its
Subsidiaries has a valid, subsisting lease for the real Property
(other than its Oil and Gas Properties, subject to clause (i) of this
sentence) described in the Offering Circular as leased by it. To the
knowledge of the Company's management, except as otherwise disclosed
in the Offering Circular, the Company and each of its Subsidiaries
owns or possesses or is the valid licensee of all patents, trademarks,
service marks, trade names, copyrights and other intellectual property
necessary to carry on its business as described in the Offering
Circular, and neither the Company nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any of the foregoing which, if the subject of an
unfavourable decision, ruling or finding, would result, individually
or in the aggregate, in any material adverse change in, or which would
materially and adversely affect the business, operations, financial
position or business prospects of, the Company and its Subsidiaries
taken as a whole;
(o) based on the laws currently in effect and subject to the
provisos set forth in the Offering Circular, all payments of principal
and interest in respect of the Notes and the Coupons, and all other
payments that may become due and payable under the terms of the Notes
or the Coupons may be made free and clear of, and without withholding
or deduction for, any taxes, duties, assessments or governmental
charges of any nature whatsoever imposed, levied, collected, withheld
or assessed by United States federal and state taxing authorities or
any political subdivision or authority thereof or therein having power
to tax other than in the case of payments to be made by the Company to
U.S. persons in circumstances where the Company is obliged to withhold
payments due to U.S. back-up withholding tax but not gross-up under
Condition 9;
(p) the Offering Circular is true and accurate in all material
respects and is not misleading in any material respect in light of the
circumstances under which they were made; any opinions, predictions or
intentions expressed in the Offering Circular are true and honestly
held or made and are not misleading in any material respect and have
been made after due and careful consideration of all relevant factors
known to the Company; the Offering Circular does not contain any
untrue statement of a material fact and does not omit to state any
material fact necessary to make such information not misleading in any
material respect in light of the circumstances under which they were
made; provided, that this representation and warranty shall not apply
to any statement or omission relating to matters of foreign law or
made in reliance and in conformity with information furnished in
writing to the Company by any Manager for use in the Offering
Circular;
(q) the Company will use the proceeds from the sale of the Notes
for the purposes described in the Offering Circular;
(r) neither the Company nor any of its Subsidiaries is, directly
or indirectly, controlled by, or acting on behalf of any Person which
is, an "investment company" or an "affiliated person" of, "promoter"
or "principal" of an "investment company," within the meaning of the
Investment Company Act of 1940, as amended;
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(s) neither the Company nor any of its Subsidiaries is a "holding
company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or a "public utility" within the meaning of the
Federal Power Act, as amended;
(t) except as disclosed in the Offering Circular at the date
hereof or at the date when this representation is deemed to be
repeated, as the case may be, there are no actions, suits,
investigations or proceedings pending to which the Company or any
Principal Subsidiary is a party before or by any court or governmental
agency or body, which would result, individually or in the aggregate,
in any material adverse change in the financial condition or results
of operations of the Company and its Subsidiaries, taken as a whole,
or which would materially and adversely affect the properties or
assets of the Company, its subsidiaries or any branch thereof, and to
the knowledge of the Company, no such actions, suits, investigations
or proceedings are threatened by any Person;
(u) except as disclosed in the Offering Circular and since
December 31, 1996 there has been no adverse change, or any development
reasonably likely to involve an adverse change, in the condition
(financial or otherwise) or general affairs of the Company that is
material in the context of the issue of the Notes; and
(v) to the knowledge of the Company, no event has occurred which
is or would (with the passage of time, the giving of notice, the
making of any determination or otherwise) become an Event of Default.
4.2 The Company's consolidated audited financial statements
including its statement of operations for the three fiscal years ended
December 31, 1994, December 31, 1995 and December 31, 1996,
respectively, and its balance sheets at December 31, 1994, December
31, 1995 and December 31, 1996, and the related consolidated
statements of operations, stockholders' equity and cash flows of the
Company and its Subsidiaries for the fiscal years ended on such dates,
were prepared in accordance with generally accepted accounting
principles in the United States consistently applied and present
fairly (in conjunction with the notes thereto) the financial condition
of the Company and its Subsidiaries (taken as a whole) as at the date
they were prepared and the results of the operations of the Company
and its Subsidiaries (taken as a whole) during the respective fiscal
years then ended. The Company's unaudited condensed consolidated
financial statements, including its statement of operations for the
quarterly period ended March 31, 1997, and its balance sheet at March
31, 1997, and related condensed statements of stockholders' equity and
cash flows of the Company and its Subsidiaries for the period ended on
such date contain all adjustments necessary to present fairly the
Company's financial position as of March 31, 1997 and the results of
its operations and changes in cash flows for the quarterly period then
ended. Except as set forth in the Offering Circular, since March 31,
1997, there has been no change in the properties, business, profits or
condition (financial or otherwise) of the Company and its Subsidiaries
except changes in the ordinary course of business, none of which
individually or in the aggregate have had a material adverse effect on
the properties, business, assets, profits or financial condition of
the Company and its Subsidiaries taken as a whole.
4.3 The Company shall forthwith notify the Lead Managers of
anything which at any time prior to payment into the Segregated
Account of the net proceeds of the issue of the Notes to the Company
on the Closing Date has or may have rendered, or will or may render,
untrue or incorrect
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in any material respect any representation and warranty by the Company
in this Agreement as if it had been made or given at such time with
reference to the facts and circumstances then subsisting.
4.4 The representations and warranties in Clause 4.1 which refer
to the Offering Circular shall be deemed to be repeated (with
reference to the relevant text of the Offering Circular and to the
facts and circumstances then subsisting) on each date falling on or
before the Closing Date on which the Offering Circular is amended or
supplemented and distributed by the Managers.
5. The Placing
5.1 The Lead Managers, relying on the representations and
warranties given by the Company herein, hereby undertake to the
Company that, subject to and in accordance with the provisions of this
Agreement they will act as agent for the Company (which appointment
the Company hereby confirms) to use their best efforts to procure
qualified subscribers ("Placees") to subscribe for all of the Notes on
the Closing Date at the Issue Price free from all Liens and with all
rights attached thereto. Neither of the Lead Managers shall have any
obligations themselves to subscribe for any Notes.
5.2 The Company hereby confirms that the foregoing appointment
confers on the Lead Managers all powers, authorities and discretions
on behalf of the Company which are reasonably necessary for or
reasonably incidental to the making of the Issue on the basis set out
in this Agreement, the Offering Circular and the Trust Indenture and
hereby agrees to ratify and confirm everything which the Lead Managers
shall lawfully and properly do in the exercise of, or in accordance
with, such appointment, powers, authorities and discretions.
5.3 The Lead Managers shall by no later than June 11, 1997 (or
such later date as the Lead Managers and the Company may agree) notify
the Company of the number of Notes, with an aggregate principal amount
of up to U.S.$70,000,000, in respect of which subscription commitments
have been obtained ("Placed Notes").
6. Undertakings of the Company
6.1 The Company shall deliver to the Managers on the date hereof
and hereafter from time to time as requested as many copies of the
Offering Circular as the Lead Managers may reasonably request.
6.2 Without prejudice to their obligations under applicable law
and the requirements of the Luxembourg Stock Exchange, the Company
shall at the request of the Lead Managers at any time prior to payment
of the net proceeds of the issue of the Notes to the Company on the
Closing Date amend or supplement the Offering Circular in order to
correct any untrue statement of 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 and the
Company shall deliver to the Managers from time to time as many copies
of the relevant amendment or supplement as the Managers may reasonably
request.
6.3 Except as requested by the Managers in connection with the
sale of the Notes, neither the Company or any affiliate of the Company
nor anyone acting on behalf of the Company or any such
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affiliate, other than the Managers shall, directly or indirectly,
offer or sell, or attempt to offer, sell or dispose of, any of the
Notes, or solicit any offer to buy, or otherwise approach or negotiate
in respect of, any of the Notes.
6.4 Assuming compliance with the terms of the Schedule by the
Managers, the Company shall furnish such information, execute such
instruments and take such action, if any, as may be required to effect
the placement of the Notes under the securities laws of each
jurisdiction in which the Notes are offered for sale or sold;
provided, however, that with respect to the U.S. securities laws the
foregoing shall only be in accordance with the safe harbor provided by
Regulation S and in no event shall the Company be required to qualify
to do business in any jurisdiction where it is not now so qualified or
which would subject the Company to taxation or to take any action that
would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
6.5 The Company shall furnish or make available to the Lead
Managers or their counsel such additional documents and information
regarding the Company and its affairs as the Lead Managers may from
time to time request, including any and all documentation reasonably
requested in connection with their due diligence efforts regarding
information in the Offering Circular and in order to evidence the
accuracy or completeness of any of the conditions contained in this
Agreement; and all actions taken by the Company to authorize the
issuance and sale of the Notes and to reserve for issuance the shares
of Common Stock issuable upon exercise of the Lead Manager Warrants
shall be reasonably satisfactory in form and substance to the Lead
Managers.
6.6 The Company shall, at all times upon reasonable request from
the date hereof through the Closing Date, (i) make available to each
purchaser or its advisers, or both, prior to acceptance of its
subscription, such information (in addition to that contained in the
Offering Circular concerning the Offering, the Company and any other
relevant matters as it possesses or can acquire without unreasonable
effort or expense, and (ii) provide each purchaser or its advisers, or
both, the opportunity to ask questions of, and receive answers from,
the Company with respect to such matters.
6.7 The Company shall not offer or sell any securities of the same
class as the Notes until a period of six (6) months has elapsed from
the Closing Date of the Offering, unless the Company shall have
provided the Lead Managers with a satisfactory opinion from the
Company's legal counsel to the effect that the proposed offer or sale
will not result in any violation of the Securities Act, any state
securities or blue sky laws, and any rules or regulations promulgated
thereunder.
6.8 From the date hereof to and including the Closing Date, the
Company shall not, make any press release or other public announcement
(i) without the prior written consent of the Lead Managers, (ii) prior
to having furnished each of the Lead Managers with a copy of the
proposed form of the press release or public announcement and giving
the Lead Managers and their counsel a reasonable opportunity to review
and comment upon the same or (iii) in a manner to which the Lead
Managers or their counsel shall reasonably object, unless the Company
is required to do so by applicable law.
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6.9 The Company shall make arrangements reasonably satisfactory to
the Lead Managers to ensure that the Bearer Notes are delivered to the
Trustee or the Authenticating Agent for authentication in the form
required by, and otherwise in accordance with, the Issue Documents.
6.10 The Company shall use all reasonable endeavours to procure the
listing of the Shares and the Warrant Shares on the AMEX or an
Alternative Stock Exchange and to maintain the same until none of the
Notes or Warrants, as the case may be, are outstanding.
6.11 The Company shall use all reasonable endeavours to procure the
listing of the Notes on the Luxembourg Stock Exchange and to maintain
the same until none of the Notes are outstanding; provided, that, if
it is impracticable or unduly burdensome to maintain the listing of
the Notes on the Luxembourg Stock Exchange, the Company shall use all
reasonable endeavours to procure and maintain as aforesaid a listing
of or quotation for the Notes on such other stock exchange or
exchanges as they may (with the approval of the Lead Managers and the
Trustee) decide.
6.12 The Company has agreed that if the Restricted Period has been
lengthened because such amendments are applicable to the Notes, that
it will register the issuance or resale of the Shares under the
Securities Act as soon as practicable and maintain the effectiveness
of a registration statement covering such Shares for such period of
time as may be necessary to effectuate the resale of the Shares
without regard to any such extension of the Restricted Period, in
accordance with the Terms and Conditions of the Notes.
6.13 In the event that any potential investor is contacted and
introduced to the Company by the Managers during the Offering Period
and such investor provides financing to the Company at any time during
one (1) year from the Closing Date, the Managers shall be entitled to
the same fees provided for in Clause 8.1 below with respect to such
financing as if it had occurred as part of the Placement.
7. Indemnification and Contribution
7.1 The Company agrees to defend, indemnify, and hold each of the
Managers and their respective officers, directors, agents, employees
and controlling persons (each, an "Indemnified Person") harmless from
and against any losses, claims, damages, or liabilities (including,
without limitation, court costs and reasonable attorneys' fees) to
which any Indemnified Person may become subject insofar as the same
arises from an action which alleges or is based upon:
(a) any alleged untrue statement of a material fact contained in
the Offering Circular, or omission of a material fact, or any other
violation of applicable securities or other laws, rules and
regulations; or
(b) the performance by each of the Managers of its obligations and
services, or the performance by any other Indemnified Person on behalf
of the Managers of any obligations hereunder in accordance with this
Agreement or otherwise in connection with the subject matter hereof,
including the issue of any material provided by the Company, or after
having been approved by, the Managers; or
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(c) any breach or alleged breach of or failure to comply with, the
laws or regulations of the United States or of any other State thereof
by the Company or any Affiliate resulting from the release of the
Press Announcement, and the preparation and distribution of the
Offering Circular; or
(d) any material breach or alleged material breach of any of the
representations and warranties, or any of the undertakings or
obligations of the Company; or
(e) the creation, allotment, offer, sale, issue and placing of the
Notes;
irrespective of the role or concurrent negligence of such Indemnified
Person, by the Company or its officers, directors, agents, employees
and controlling persons and to reimburse such Indemnified Person for
any legal or other expenses reasonably incurred by them in connection
with investigating, settling or defending any action or claim in
connection therewith (including, without limitation, court costs and
reasonable attorneys' fees) up until such time as the Company assumes
the defense of any such action or claim; provided, however, that the
Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability (i) directly or indirectly
results from any untrue statement of a material fact or omission of a
material fact made in the Offering Circular in reliance upon and in
conformity with written information provided to the Company by or on
behalf of the Managers specifically for inclusion in such Offering
Circular or (ii) is found in a final judgment of a court of competent
jurisdiction to have resulted from the Indemnified Person's gross
negligence or bad faith in performing their services hereunder. If
for any reason the foregoing indemnification is unavailable to the
Indemnified Person or insufficient to hold the Indemnified Person
harmless, then the Company shall contribute to the amount paid or
payable by the Indemnified Person as a result of such loss, claim,
damage, or liability in such proportion as is appropriate to reflect
not only the relative benefits received by the Company on the one hand
and the Indemnified Person on the other hand but also the relative
fault of the Company and the Indemnified Person, as well as any
relevant equitable considerations. The Company agrees to reimburse
the Indemnified Person within ten days after presentation of any
statement by the Indemnified Person of all reasonable expenses
(including without limitation of the generality of the foregoing, the
reasonable fees and expenses of attorneys selected by the Indemnified
Person) incurred in connection with any testimony the Indemnified
Person or its employees are required to give (in court, before a
regulatory agency, by deposition or otherwise) in any regulatory or
court proceeding (including depositions), whether or not the
Indemnified Person is a party, and which related directly or
indirectly to the proposed Placement. This indemnity shall be without
prejudice to any other rights of any other Indemnified Person.
7.2 With respect to the foregoing Clause 7.1 of the
indemnification, the Company agrees that an Indemnified Person shall
not be deemed to have been grossly negligent for reasonably relying
upon any written untrue statement or alleged omission of a material
fact necessary to make the statements, in light of the circumstances
in which such statements were made, not misleading, contained in or
omitted from any information provided to the Indemnified Person by or
on behalf of the Company (including, without limitation of the
generality of the foregoing, any accountant or attorney employed or
retained by the Company). The indemnification provided in the
foregoing Clause 7.1 hereof shall extend upon the same terms and
conditions to each Person, if any, who may be deemed to control the
Indemnified Person and shall be applicable, to the extent set forth
herein, whether or not negligence of the person entitled to
indemnification is alleged or proven.
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7.3 Each Indemnified Person shall, in the event any action (with
respect to which indemnity or reimbursement from the Company may be
sought by the Indemnified Person on account of agreements contained
herein) shall be brought or threatened against such Indemnified
Person, prompt notice will be given to the Company in writing of such
action, together with a copy of all papers served on, or received by,
the Indemnified Person in connection with such action provided that
failure to give such notice shall not affect the Indemnified Person's
right under these indemnification provisions, unless, and only to the
extent that, such failure results in the Company's forfeiture of
substantive rights or defenses. If such an event occurs the Company
shall assume the defense of such action, including the employment of
counsel and the payment of all expenses. The Indemnified Person shall
have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Person unless (a)
the employment thereof has been specifically authorized by the Company
in writing; (b) the Company has failed to assume the defense and
employ counsel; or (c) the named parties, or parties threatened to be
named, to any such action (including any impleaded parties or parties
threatened to be impleaded) include both the Indemnified Person and
the Company, and the Indemnified Person has been advised by such
counsel that there may be one or more legal defenses available to the
Indemnified Person which are different from or additional to those
available to the Company (in which cases the Indemnified Person shall
have the right to employ their own counsel and in such cases any
reasonable fees and expenses of such counsel shall be paid by the
Company).
7.4 The obligations under this Clause 7 shall survive any
termination of this Agreement, in whole or in part.
8. Fees and Expenses
8.1 The Company shall, on the Closing Date, pay to HSBC:
(i) for the account of the Lead Managers, a placement fee of
three percent (3%) of the aggregate principal amount of the Placed
Notes, which shall be allocated as between themselves, and any
Managers of the Issue as the Lead Managers see fit;
(ii) for the account of HSBC, a financial advisory fee of two
percent (2%) of the aggregate principal amount of the Placed Notes;
and
(iii) for the account of Rauscher Pierce & Clark Limited, a
financial advisory fee of two percent (2%) of the aggregate principal
amount of the Placed Notes.
Such commissions and fees shall be deducted from the Issue Price. The
Lead Managers and the Company acknowledge and agree that any fees
payable to third parties, other than the parties to the Issue
Documents as set forth in Section 8.3(d), to be agreed in a side
letter between the Company and the Lead Managers shall be payable out
of the financial advisory fees set forth in subparts (ii) and (iii)
above.
8.2 The Company shall issue to the Lead Managers or their
respective designees on the Closing Date warrants (the "Lead Manager
Warrants") pursuant to Regulation S to purchase an aggregate number of
shares of Common Stock equal in number to eight percent (8%) of the
total
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number of Shares issuable upon conversion of the Notes, at an initial
exercise price equal to U.S.$5.00, which shall be issued in the form
of Lead Manager warrant certificates (the "Lead Manager Warrant
Certificates"), a draft of which is in the agreed form. Each Lead
Manager Warrant shall entitle the holder to purchase one share at an
initial exercise price equal to the Conversion Price of the Notes, and
having a term of two and one half (22) years, and may be exercised as
to all or any lesser number of shares of Common Stock covered thereby,
commencing six (6) months after the date of issuance.
8.3 The Company is responsible for paying and shall reimburse the
party incurring:
(a) the fees and expenses of the legal, accountancy and other
professional advisers instructed by the Company in connection with the
creation and issue of the Notes and the preparation of the Offering
Circular;
(b) the costs incurred in connection with the preparation and
execution of this Agreement and the Issue Documents;
(c) the cost of setting, proofing, printing and delivering the
Offering Circular, the Global Note and the Bearer Notes;
(d) the fees and expenses of the other parties to the Issue
Documents;
(e) the cost of any advertising agreed between the Company, HSBC
and RPC; and
(f) the costs incurred in connection with the application for the
Notes to be listed on the Luxembourg Stock Exchange.
provided however, that any fees or costs incurred by HSBC and/or RPC
shall not, together with any amounts reimbursed pursuant to this
Section 8, exceed $200,000 without the prior written consent of the
Company.
8.4 In addition, the Company shall reimburse HSBC and RPC for all
legal fees and expenses and any travelling, communication, courier,
postage and other out-of-pocket expenses incurred by them in
connection with the management of the issue of the Notes and any
amount due to HSBC or RPC under this sub-clause may be deducted from
the Issue Price or paid direct by the Company to any third party to
whom such moneys are payable; provided, however, that such expenses
shall not exceed U.S.$200,000 without the prior written consent of the
Company (including the due diligence visits by the Lead Managers,
roadshow expenses (if any), listing expenses, costs associated with
production of a research report on the Company to be issued following
the Closing, other costs specified in Section 8.3 and post-closing
advertisements, but excluding the fees and expenses of the Company's
legal counsel). Such reimbursement is not contingent upon the
successful completion of the Placement.
8.5 All payments in respect of the obligations of the Company
hereunder shall be made free and clear of and without withholding or
deduction for, any taxes, duties, assessments or governmental charges
of whatsoever nature imposed, levied, collected, withheld or assessed
by United States federal or state taxing authorities or any political
subdivision or any authority thereof or therein having power to tax,
unless such withholding or deduction is required by law. In that
event, the Company shall pay such additional amounts as will result in
the receipt by the relevant
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Person of such amounts as would have been received by it if no such
withholding or deduction had been required provided that such Person
is not a U.S. Person or entity.
8.6 The Company shall pay all stamp, registration and other taxes
and duties (including any interest and penalties thereon or in
connection therewith) which may be payable upon or in connection with
the creation, sale and issue of the Notes, and the execution of this
Agreement and the Issue Documents, and the Company shall indemnify
each Manager against any claim, demand, action, liability, damages,
cost, loss or expense (including, without limitation, legal fees)
which it may incur as a result or arising out of or in relation to any
failure to pay or delay in paying any of the same.
9. Closing
9.1 Subject to this Agreement not having been terminated pursuant
to Clause 10 and subject to Clause 9.3, the closing of the Issue shall
take place on the Closing Date, whereupon, subject to and in
accordance with the terms of this Agreement and the Trust Indenture:
(a) the Company shall deliver the Global Note (in respect of the
number of Bearer Notes), duly executed on behalf of the Company and
authenticated in accordance with the Trust Indenture, to a common
depositary designated for the purpose by Euroclear and Cedel for
credit on the Closing Date to the accounts of Euroclear and Cedel with
such common depositary; and
(b) against such delivery of the Global Note referred to in Clause
9.1 the Lead Managers shall upon receipt of moneys from each Placee
make payment of such net proceeds received from the issue of the Notes
(namely the Issue Price less the fees and expenses that are to be
deducted pursuant to Clause 8) to the Segregated Account by wire
transfer in U.S. dollars either for same day value or on the business
day immediately thereafter together with interest at an annual rate of
five and one-half percent (5.5%) to such account as the Company has
designated to the Lead Managers.
9.2 The Company and the Lead Managers may agree to postpone the
Closing Date to another date not later than June 30, 1997, whereupon
all references herein to the Closing Date shall be construed as being
to that later date.
9.3 The Lead Managers shall only be under obligation to proceed
with the foregoing if:
(a) the Lead Managers receive on or before the Closing Date:
(i) a legal opinion dated the Closing Date and addressed
to the Lead Managers and the Trustee from Haynes and
Boone, L.L.P in a form reasonably acceptable to the
Lead Managers;
(ii) closing certificates dated the Closing Date,
addressed to the Lead Managers and signed by a duly
authorised signatory on behalf of the Company in
substantially the agreed form;
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(iii) a closing auditors comfort letter dated the Closing
Date and addressed to the Managers from Arthur
Andersen L.L.P. in substantially the agreed form;
(iv) confirmation from the Luxembourg Stock Exchange that
the Notes have been approved for listing on such
exchange subject to closing;
(b) the Issue Documents are executed on or before the Closing Date
by or on behalf of all parties thereto in substantially the agreed
form;
(c) there has, since the date of this Agreement, been no adverse
change, or any development reasonably likely to involve an adverse
change, in the condition (financial or otherwise) or general affairs
of the Company or any Subsidiary that is material in the context of
the offer, sale or issue of the Notes; and
(d) the representations and warranties by the Company in this
Agreement are true and correct on the date of this Agreement in all
material respects and on each date on which they are deemed to be
repeated and would be true and correct if they were repeated on the
Closing Date with reference to the facts and circumstances then
subsisting.
10. Termination
10.1 Either of the Lead Managers may give a termination notice to
the Company at any time prior to the Closing if:
(a) any representation and warranty by the Company in this
Agreement is or proves to be untrue or incorrect in any material
respect (in the opinion of the Lead Managers) after consultation with
their legal counsel on the date of this Agreement or on any date on
which it is deemed to be repeated;
(b) the Company fails to perform any of its obligations hereunder
which in the opinion of the Lead Managers after consultation with
their legal counsel is material;
(c) any of the conditions in Clause 9.3 is not satisfied or waived
by the Lead Managers on the Closing Date; or
(d) since the date of this Agreement there has been, in the
opinion of either of the Lead Managers (after such consultation with
the Company as may be reasonably practicable in the circumstances),
such a change in national or international financial, political or
economic conditions, currency exchange rates or exchange controls on
the U.S. or international oil and gas markets as would in its view be
likely to prejudice materially the success of the offering and
distribution of the Notes or dealings in the Notes in the secondary
market.
10.2 The Company may give a termination notice to the Lead Managers
at any time prior to the delivery by the Company of the Global Note to
the common depositary on the Closing Date, if any of the Lead Managers
fails to perform any of its obligations hereunder or comply with any
of the terms hereof which in either case is material in the opinion of
the Company after consultation with its legal counsel.
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10.3 Upon the giving of a termination notice under Clause 10.1 or
10.2 and subject to Clause
10.4:
(a) the Company shall be discharged from performance of its
obligations under Clauses 3. 1 and 7. 1;
(b) the Managers shall be discharged from performance of their
respective obligations hereunder; and
(c) the provisions of Clauses 1, 7, 8.3, 8.4, 13 and 14 shall
continue in full force and effect.
10.4 A discharge pursuant to Clause 10.2 shall not affect the other
obligations of the parties hereto and shall be without prejudice to
accrued liabilities.
11. Survival
The provisions of this Agreement shall continue in full force and
effect notwithstanding the completion of the arrangements set out
herein for the issue of the Notes and regardless of any investigation
by any party hereto.
12. Time
Any date or period specified herein may be postponed or extended by
mutual written agreement among the parties but as regards any date or
period originally fixed or so postponed or extended, time shall be of
the essence.
13. Notices
13.1 All notices and other communications hereunder shall be made
in writing and in English (by letter, telex or fax) and shall be sent
as follows:
(a) if to the Company, to it at:
5605 North MacArthur Boulevard
Suite 400
Irving, Texas 75038
Attention: Bruce N. Huff
Senior Vice President and Chief Financial Officer
Tel: (972) 753 6839
Fax: (972) 753 6926
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With a copy
to: Larry E. Cummings
Vice President, Secretary and General Counsel
Tel: (972) 752 6932
Fax: (972) 753 6963
(b) if to HSBC, to it at:
Thames Exchange
10 Queen Street Place
London EC4R 1BL
Attention: Simon Eagles
Equity Capital Markets
Tel: 0171 336 2237
Fax: 0171 929 1520
Telex: 888866
(c) if to RPC, to it at:
56 Green Street
London WlY 3RH
Attention: David P. Quint
Managing Director
Tel: 0171 491 2434
Fax: 0171 491 9081
13.2 Every notice or other communication sent in accordance with
Clause 13.1 shall be effective as follows:
(a) if sent by letter or fax, upon receipt by the addressee; and
(b) if sent by telex, upon receipt by the sender of the addressee's
answerback at the end of transmission;
provided, that any such notice or other communication which would
otherwise take effect after 4.00 p.m. (Greenwich Mean Time) on any
particular day shall not take effect until 10.00 a.m. (Greenwich Mean
Time) on the immediately succeeding business day in the place of the
addressee.
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14. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to the conflict of
laws provisions thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorised representatives as of the day and year first
above written.
HARKEN ENERGY CORPORATION
By: /s/ Bruce N. Huff
-------------------------------
Name: Bruce N. Huff
-------------------------------
Title: SVP and CFO
-------------------------------
HSBC INVESTMENT BANK PLC
By: /s/ Simon Eagles
-------------------------------
Name: Simon Eagles
-------------------------------
Title: Director - Equity Capital Marke
-------------------------------
RAUSCHER PIERCE & CLARK, INC.
By: /s/ David P. Quint
-------------------------------
Name: David P. Quint
-------------------------------
Title: President
-------------------------------
RAUSCHER PIERCE & CLARK LIMITED
By: /s/ David P. Quint
-------------------------------
Name: David P. Quint
-------------------------------
Title: Managing Director
-------------------------------
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BANCA DEL GOTTARDO
By: /s/ Edward Law
--------------------------
Name: Edward Law
--------------------------
Title: Manager
--------------------------
JEFFERIES INTERNATIONAL LIMITED
By: /s/ Edward Law
--------------------------
Name: Edward Law
--------------------------
Title: Manager
--------------------------
INVESTMENTBANK AUSTRIA A.G.
By: /s/ Edward Law
--------------------------
Name: Edward Law
--------------------------
Title: Manager
--------------------------
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The Schedule
Selling Restrictions
1. General
1.1 Each Manager acknowledges that no action has been or will be
taken in any jurisdiction by the Company that would permit a public
offering of the Notes, or possession or distribution of any offering
material in relation thereto, in any country or jurisdiction where
action for that purpose is required.
1.2 Each Manager undertakes to the Company that it will comply
with all applicable laws and regulations in each country or
jurisdiction in which it purchases, offers, sells or delivers Notes or
has in its possession or distributes such offering material, in all
cases at its own expense including, without limitation, in the United
Kingdom, the provisions of the Criminal Justice Act 1993 and the Money
Laundering Regulations (1993).
1.3 Each Manager undertakes to the Company that it will comply
with all U.S. laws and regulations applicable to the offer and sale of
the Notes, including Regulation S of the Securities Act, the exemption
from the registration requirements of the Securities Act pursuant to
which the Notes are being offered and sold. Notwithstanding any of
the agreements, terms or procedures set forth in this Agreement, if
Regulation S is amended such amendments are deemed applicable to the
offering of the Notes, each of the Managers and the Company undertake
to comply with Regulation S, as amended, and to negotiate in good
faith the agreements, terms and procedures set forth in this Agreement
if necessary to comply with Regulations S, as amended.
2. United States
2.1 The Notes have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States
except pursuant to an exemption from the registration requirements of
the Securities Act. The Shares have not been registered under the
Securities Act and may not be offered or sold within the United States
unless registered under the Securities Act or in a transaction
pursuant to an exemption from the registration requirements of the
Securities Act.
2.2 The offers and sales of the Notes are to be effected pursuant
to the exemption from the registration requirements of the Securities
Act pursuant to Regulation S thereunder. The Company and the Managers
have established the following procedures in connection with the
offer, sale and resale of the Notes:
(a) Each offer and sale of the Notes shall be made only in an
"offshore transaction" (as defined in Regulation S) and to investors
who are not "U.S. persons" (as defined in Regulation S);
(b) no offer or sale of any of the Notes shall be made in the
United States or to, or for the account or benefit of, any "U.S.
person" (as defined in Regulation S);
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(c) no "directed selling efforts" (as defined in Regulation S) in
respect of the Notes shall be made in or directed toward the United
States;
(d) "offering restrictions" (as defined in Regulation S) in respect
of the Notes shall be implemented;
(e) each purchaser of the Notes shall be furnished with the
Offering Circular prepared by the Company together with any amendments
thereof and supplements thereto as shall have been prepared by the
Company, which describe, among other things, (i) the Notes, (ii) such
summary financial and business information concerning the Company as
is considered appropriate; and (iii) the restrictions on resale of the
Notes;
(f) no Offering Circular (or any revision or amendment thereof or
supplement thereto) shall be delivered to any "U.S. person" (as
defined in Regulation S);
(g) the Company agrees to furnish the Managers with such number of
copies of the Offering Circular and any revision or amendment thereof
or supplement thereto as the Managers may require in connection with
the offer and sale of the Notes; and
(h) each purchaser of the Notes shall be required to confirm (i)
by means of written certification, (ii) by acceptance of their
subscription allotment, or (iii) by other means of confirmation
acceptable to the Company and the Lead Managers that it is not a "U.S.
person" (as defined in Regulation S) and that such purchaser will not
offer or sell the Notes otherwise than in compliance with the
Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder.
2.3 Each Manager hereby represents, warrants and covenants with
the Company that the Manager, its affiliates, and any person acting on
behalf of, or as agent of, any of the foregoing, shall, whether as
principal or agent:
(a) comply with the procedures set forth in Sections 2.2 and 3
hereof;
(b) offer and sell the Notes to the purchasers only in "offshore
transactions" (as defined in Regulation S);
(c) not engage with respect to the Notes in any "directed selling
efforts" (as defined in Regulation S) in or directed toward the United
States;
(d) comply with all "offering restrictions" (as defined in
Regulation S) in respect of the Notes;
(e) not deliver any Offering Circular or any revision or amendment
thereof or supplement thereto to any "U.S. person" (as defined in
Regulation S);
(f) not make any offers or sales of any of the Notes or any
interest therein in the United States or to, or for the account or
benefit of, any "U.S. person" (as defined in Regulation S);
(g) comply with all laws and regulations of those jurisdictions in
which the Notes are offered or sold which are applicable to the offer
and sale of the Notes; and
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(h) on or prior to the Closing Date, send to each person who is
acting on behalf of the Manager a written confirmation or other notice
to the effect that such person is subject to the same restrictions on
offers and sales that apply to the Manager.
2.4 The Company hereby represents, warrants and covenants with the
Managers that the Company its affiliates, and any person acting on
behalf of, or as agent of, any of the foregoing, shall, whether as
principal or agent:
(a) comply with the procedures set forth in Section 2.2 hereof;
(b) offer and sell the Notes to the purchasers only in "offshore
transactions" (as defined in Regulation S);
(c) not engage with respect to the Notes in any "direct selling
efforts" (as defined in Regulation S) in or directed toward the United
States;
(d) comply with all "offering restrictions" (as defined in
Regulation S) in respect of the Notes;
(e) not deliver any Offering Circular or any revision or amendment
thereof or supplement thereto to any "U.S. person" (as defined in
Regulation S);
(f) not make any offers or sales of any of the Notes or any
interest therein in the United States or to, or for the account or
benefit of, any "U.S. person" (as defined in Regulation S); and
(g) not make any sales of any of the Notes or any interest therein
to any person other than the purchasers; provided, however, that
insofar as this representation and warranty involves any participating
broker-dealers in the offering, any affiliate of such broker-dealer or
any officer, director, employee or agent of such broker-dealer, to the
extent such broker-dealer is acting as Manager for the offering of the
Notes, such representation is made by the Company solely on the basis
of and in reliance upon the representations and warranties of such
broker-dealer.
3. United Kingdom
Each Manager represents, warrants and undertakes to the Company that:
(a) it has not offered or sold and prior to the expiry of the
period of six (6) months from the Closing Date will not offer or sell
any Notes to persons in the United Kingdom, except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of
their businesses in circumstances which have not resulted in an offer
to the public within the meaning of the Public Offer of Securities
Regulations 1995;
(b) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 and applicable orders and
regulations thereunder with respect to anything done by it in relation
to the Notes in, from or otherwise involving the United Kingdom; and
(c) it has only issued or passed on and will only issue or pass on
to any person in the United Kingdom any document received by it in
connection with the issue of the Notes, if that person is
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of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom such document may otherwise lawfully be issued or
passed on.
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