UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
* Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Quarterly period ended March 31, 1998
or
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period to
COMMISSION FILE NUMBER 0-23383
OMNI ENERGY SERVICES CORP.
(Exact name of registrant as specified in its charter)
LOUISIANA 72-1395273
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4500 N.E. EVANGELINE THRUWAY
CARENCRO, LOUISIANA
(Address of principal executive offices) 70520
(Zip Code)
Registrant's telephone number, including area code: (318) 896-6664
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes * No
As of May 13, 1998 there were 15,789,867 shares of the Registrant's
common stock, $0.01 par value per share outstanding.
<PAGE>
TABLE OF CONTENTS
Part I - Financial Information
Item 1 - Financial Statements
Consolidated Balance Sheets as of March 31, 1998 (unaudited) and
December 31, 1997.............................................. 1
Consolidated Statements of Income for the three months ended March
31, 1998 and 1997 (unaudited).................................. 3
Consolidated Statements of Cash Flows for the three months ended
March 31, 1998 and 1997 (unaudited)............................ 4
Notes to Financial Statements.................................. 5
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 7
Item 3 - Quantitative and Qualitative Disclosures About Market
Risk................................................................. 10
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K............................ 10
Signatures................................................................. S-1
Exhibit Index.............................................................. E-1
<PAGE>
OMNI ENERGY SERVICES CORP.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(Thousands of dollars)
<TABLE>
<CAPTION>
ASSETS March 31, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 2,283 $ 8,723
Accounts receivable, net 16,979 11,958
Parts and supplies inventory 4,652 2,988
Data held for sale 1,320 0
Deferred tax asset 212 212
Prepaid expenses and other 2,276 1,753
Total current assets 27,722 25,634
PROPERTY AND EQUIPMENT:
Land 359 359
Building and improvements 4,459 3,949
Drilling, field and support equipment 23,572 21,940
Shop equipment 465 408
Office equipment 610 582
Aircraft 8,455 9,266
Vehicles 3,764 3,448
Construction in progress 711 800
42,395 40,752
Less: accumulated depreciation 3,728 2,909
Total property and equipment 38,667 37,843
OTHER ASSETS:
Goodwill, net 10,669 10,680
Other 1,062 756
Total other assets 11,731 11,436
Total assets $ 78,120 $ 74,913
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(Thousands of dollars)
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES AND EQUITY March 31, December 31,
1998 1997
(Unaudited)
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,687 $ 5,713
Accounts payable 4,896 5,998
Accrued expenses 2,965 1,772
Unearned revenue 51 637
Total current liabilities 12,599 14,120
LONG-TERM LIABILITIES:
Long-term debt, less current maturities 13,529 14,558
Line of credit 3,876 0
Deferred taxes 1,650 1,650
Total long-term liabilities 19,055 16,208
EQUITY:
Common Stock, $.01 par value, 45,000,000 157 157
shares authorized; 15,726,282 issued and
outstanding
Additional paid-in capital 44,074 44,038
Retained earnings 2,235 390
Total equity 46,466 44,585
Total liabilities and equity $ 78,120 $ 74,913
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Thousands of dollars, except per share amounts)
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
(Unaudited) (Unaudited)
<S> <C> <C>
Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
Operating revenue $ 18,329 $ 5,420
Operating expenses 12,728 4,328
Gross profit 5,601 1,092
General and administrative expenses 2,272 731
Operating income 3,329 361
Interest expense 307 278
Other income (expense) 53 5
(254) (273)
Income before taxes 3,075 88
Income tax expense(a) 1,230 35
Net income $ 1,845 $ 53
Weighted average shares outstanding(b):
Basic 15,726 10,709
Dilutive 15,789 10,709
Net income per share(b):
Basic $ 0.12 $ 0.01
Dilutive(c) $ 0.12 $ (0.01)
</TABLE>
(a)At March 31, 1997 the Company was exempt from income tax, and thus the
historical financial statements reflect no provision for income taxes. The
pro forma adjustment reflects a provision for income taxes at a combined 40%
federal and state income tax rate.
(b)Pro forma common shares at March 31, 1997 reflect the exchange of interests
in the Company's predecessor, OMNI Geophysical, L.L.C., pursuant to which
holders of such interests exchanged 101,263 common units of OMNI
Geophysical, L.L.C. for 10,708,562 shares of the Company's common stock.
(c)Gives effect to the payment of dividends on the outstanding preferred units
of OMNI Geophysical, L.L.C. of approximately $117,000 for the three month
period ended March 31, 1997.
The accompanying notes are an integral part of these financial statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Thousands of dollars)
<TABLE>
<CAPTION>
SUCCESSOR PREDECESSOR
(Unaudited) (Unaudited)
<S> <C> <C>
Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,845 $ 88
Adjustments to reconcile net income to net cash
provided by (used in)operating activities-
Depreciation 933 393
Amortization 141 16
Loss on fixed asset disposition 21 0
Deferred compensation 36 0
Provision for bad debts 150 0
Changes in operating assets and liabilities-
Decrease (increase) in assets-
Receivables-
Trade (3,242) 132
Other 648 (57)
Inventory (1,664) (312)
Prepaid expenses 29 147
Data held for sale (1,320) 0
Other (436) (203)
Increase (decrease) in liabilities-
Accounts payable (1,102) 1,284
Accrued expenses 1,020 350
Unearned revenue (586) 0
Due to affiliates and stockholders/members 0 5
Net cash provided by (used in) operating
activities (3,527) 1,843
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of fixed assets 354 0
Purchase of fixed assets (4,709) (3,179)
Net cash used in investing activities (4,355) (3,179)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 223 1,451
Principal payments on long-term debt (2,657) (632)
Net borrowings/(payments) on line of credit 3,876 (188)
Capital contributions 0 1,000
Distributions to members 0 (321)
Net cash provided by financing
activities 1,442 1,310
NET DECREASE IN CASH (6,440) (26)
CASH, at beginning of period 8,723 39
CASH, at end of period $ 2,283 $ 13
SUPPLEMENTAL CASH FLOW DISCLOSURES:
CASH PAID FOR INTEREST $ 233 $ 237
CASH PAID FOR TAXES $ 0 $ 0
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OMNI ENERGY SERVICES CORP.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
These financial statements have been prepared without audit as permitted by the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the financial
statements have been condensed or omitted pursuant to such rules and
regulations. However, OMNI Energy Services Corp. (the "Company" or the
"Successor") believes that this information is fairly presented. These
unaudited condensed consolidated financial statements and notes thereto should
be read in conjunction with the financial statements contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997
and "Management's Discussion and Analysis of Financial Condition and Results
of Operations." Information with respect to the three months ended March 31,
1997, reflects the results of operations of OMNI Geophysical, L.L.C., the
Company's Predecessor (the "Predecessor").
Certain reclassifications have been made to the prior year's financial
statements in order to conform with the classifications adopted for reporting
in fiscal 1998.
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments, consisting of only normal,
recurring adjustments, necessary to fairly present the financial results for
the interim periods presented.
SEASONALITY AND WEATHER RISKS
The Company's operations are subject to seasonal variations in weather
conditions and daylight hours. Since the Company's activities take place
outdoors, the average number of hours worked per day, and therefore the number
of holes drilled or surveyed per day, generally is less in winter months than
in summer months, due to an increase in rainy, foggy, and cold conditions and a
decrease in daylight hours. Furthermore, demand for seismic data acquisition
activity by oil and gas companies in the first quarter is generally lower than
at other times of the year. As a result, the Company's revenue and gross
profit during the first quarter of each year are typically low as compared to
the other quarters. Therefore, the results of operations for interim periods
are not necessarily indicative of the operating results that may be expected
for the full fiscal year.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
NOTE 2. EARNINGS PER SHARE
In 1997, the Company adopted Statement of Financial Accounting Standards No.
128, "Earnings Per Share," which simplifies the standards required under
existing accounting rules for computing earnings per share and replaces the
presentation of primary earnings per share and fully diluted earnings per share
with basic earnings per share ("basic EPS") and diluted earnings per share
("diluted EPS"), respectively. Basic EPS excludes dilution and is determined
by dividing income available to common stockholders by the weighted average
number of shares of common stock outstanding during the period. Diluted EPS
reflects the potential dilution that could occur if securities and other
contracts to issue shares of common stock were exercised or converted into
common stock.
NOTE 3. LONG-TERM DEBT
On January 20, 1998, the Company restructured its credit arrangements with
Hibernia National Bank. Under the restructured facility (the "New Facility"),
the Company refinanced an $11.0 million loan, obtained a $10.0 million
revolving line of credit to finance working capital requirements, and obtained
a $9.0 million line of credit to finance capital expenditures and acquisitions.
As of March 31, 1998, the Company had approximately $14.8 million outstanding
under the New Facility. The New Facility has a final maturity of January 20,
2000, and bears interest at LIBOR plus an applicable margin, ranging from 1.25%
to 2.25% (7.125% at March 31, 1998).
NOTE 4. SALE OF FIXED WING DIVISION
On March 31, 1998, the Company sold the assets of its fixed wing division for
approximately $2.9 million. This transaction had no significant impact on the
Company's quarterly operating results.
NOTE 5. SUBSEQUENT EVENTS
Effective April 1, 1998, the Company acquired Eagle Surveys International,
Inc., a seismic survey support company, headquartered in Houston, Texas. The
aggregate purchase price was $1.8 million consisting of 1.1 million in cash and
53,039 shares of common stock.
Effective April 20, 1998, the Company acquired the assets of Coastal Turbines,
Inc., a helicopter support company, based in Lafayette, Louisiana. The
aggregate purchase price was approximately $1.2 million consisting of 1.1
million in cash and 4,546 shares of common stock.
Effective May 1, 1998, the Company acquired Hamilton Drill Tech, Inc., a
specialty drilling support company, headquartered in Canada. The purchase
price was approximately $0.9 million in cash.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion should be read in conjunction with the financial
statements and the accompanying notes and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.
GENERAL
Demand. Demand for the Company's services is principally affected by
conditions affecting geophysical companies engaged in the acquisition of 3-D
seismic data. The level of activity among geophysical companies is primarily
affected by the level of capital expenditures by oil and gas companies for
seismic data acquisition activities. A number of factors influence the
decision of oil and gas companies to pursue the acquisition of seismic data,
including (i) prevailing and expected oil and gas demand and prices; (ii) the
cost of exploring for, producing and developing oil and gas reserves; (iii) the
discovery rate of new oil and gas reserves; (iv) the availability and cost of
permits and consents from landowners to conduct seismic activity; (v) local and
international political and economic conditions; (vi) governmental regulations;
and (vii) the availability and cost of capital. The ability to finance the
acquisition of seismic data in the absence of oil and gas companies' interest
in obtaining the information is also a factor as some geophysical companies
will acquire seismic data on a speculative basis. Onshore 3-D seismic data
acquisition activity has substantially increased over the past few years;
however, any significant reduction in seismic exploration activity in the areas
where the Company operates would result in a reduction in the demand for the
Company's services and could have a material adverse effect on the Company's
financial condition and results of operations.
Within the last decade, improvements in drilling and production
techniques and the acceptance of 3-D imaging as an exploration tool have
resulted in significantly increased seismic activity throughout the Transition
Zone (the marsh, swamp, shallow water and contiguous dryland areas along the
U.S. Gulf Coast). Due to this increased demand, the Company has significantly
increased its capacity as measured by drilling units, support equipment and
employees. The additional capacity and related increase in work force have led
to significant increases in the Company's revenue and generally commensurate
increases in operating expenses and selling, general and administrative
expenses. If anticipated increases in seismic activity are realized,
management would also expect these expenses to continue to increase as a direct
correlation.
Backlog. Most of the Company's seismic drilling projects are awarded
pursuant to a competitive bidding process. Once the Company's bid on a
particular project has been accepted and a start date for the project has been
scheduled, the Company will include the project in its backlog. As of March
31, 1998, the Company's backlog was $76.0 million, compared to $70.0 million at
December 31, 1997. Projects currently included in the Company's backlog are
subject to rescheduling or termination without penalty at the option of the
customer, which could substantially reduce the amount of backlog currently
reported and the revenue generated from the backlog. Historically, the Company
has not experienced a large volume of project delays or terminations, and those
projects that have been delayed or terminated have typically been replaced by
unscheduled projects. Nevertheless, delay or termination of a number of large
projects in the Company's existing backlog could have a material adverse effect
on the Company's revenue, net income and cash flow.
Seasonality and Weather. The Company's operations are subject to
seasonal variations in weather conditions and daylight hours. Since the
Company's activities take place outdoors, the average number of hours worked
per day, and therefore the number of holes drilled or surveyed per day, is
generally less in the winter months than in summer months. Furthermore, demand
for seismic data acquisition activity by oil and gas companies in the first
quarter is generally lower than at other times of the year. In addition, the
Company's operations in the Rocky Mountain area are subject to the seasonal
climatic conditions of that area. As a result, the Company's revenue and gross
profit during the first quarter of each year are typically less as compared to
the other quarters.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
QUARTER ENDED QUARTER ENDED
March 31, 1998 March 31, 1997
<S> <C> <C>
(unaudited) (unaudited)
Operating revenue $18,329 $5,420
Operating expense 12,728 4,328
Gross profit 5,601 1,092
General and administrative expenses 2,272 731
Operating income 3,329 361
Interest expense 307 278
Other income 53 5
Income before taxes 3,075 88
Income tax expense 1,230 0
Net income $ 1,845 $ 88
</TABLE>
Operating revenues increased 239%, from $5.4 million for the three month
period ended March 31, 1997 to $18.3 million for the three month period ended
March 31, 1998. Internal growth resulting from the increase in industry demand
for 3-D seismic data accounted for approximately $8.6 million, or 67%, of this
increase. The remaining increase was due to the acquisition of six companies
completed during 1997. The Company's aviation division contributed
approximately $2.1 million in revenues, while the Company's survey division
generated revenues of approximately $2.2 million. The Company employed 684
employees for both field and administrative operations at March 31, 1998
compared to 347 at March 31, 1997, a 97% increase. As of March 31, 1998, the
Company had increased its number of drilling units 141% to 171 units compared
to 71 total drilling units at March 31, 1997. At March 31, 1997, the Company
owned one helicopter, compared to eighteen helicopters at March 31, 1998 of
which seventeen were owned.
Operating expenses increased 195%, from $4.3 million in the three month
period ended March 31, 1997 to $12.7 million in the three month period ended
March 31, 1998, due to both the internal growth of the Company in 1997 and the
expanded scope of the Company's operations that resulted from the acquisitions
described above. Total payroll expense increased 232% from $1.9 million in the
first quarter of 1997 to $6.3 million in the first quarter of 1998, due to the
significant increase in the size of the Company's workforce. Repairs and
maintenance costs were $1.8 million in the three month period ended March 31,
1998, a 125% increase over the three month period ended March 31, 1997 costs of
$0.8 million, primarily due to the increase in the number and utilization of
the Company's seismic drilling and transportation equipment. The Company's
surveying division incurred $1.3 million in contract service expenses from
third party survey companies during the first quarter of 1998; there were
generally no similar expenses in the first quarter of 1997. Explosives costs
increased from $0.3 million to $1.1 million for the three month periods ended
March 31, 1997 and 1998, respectively, due to the increased number of projects
for which the Company provided explosives. Depreciation expense increased 125%
to $0.9 million in the first quarter of 1998, from $0.4 million in the first
quarter of 1997, primarily due to the increased number of seismic drilling and
support equipment units owned by the Company, and the addition of the aircraft
acquired in July 1997.
Gross profit increased 409%, from $1.1 million to $5.6 million in the
three months ended March 31, 1997 and 1998, respectively. Gross margins
increased from 20% in the first quarter of 1997 to 31% in the first quarter of
1998. The lower margins in the first quarter of 1997 were a result of a
decreased utilization of assets, which was not matched with decreases in the
Company's workforce. In contrast, during the first quarter of 1998, due to
higher demand for the Company's services, the Company was able to utilize its
employees at a higher rate.
General and administrative expenses were $2.3 million for the first three
months of 1998, compared to $0.7 million for the first three months of 1997, a
229% increase. Increases in office personnel, payroll taxes and insurance
accounted for $0.6 million of this increase. Other components of general and
administrative expenses, including business promotions, travel and
entertainment, utilities, office and rentals increased $0.7 million from $0.2
million in the first quarter of 1997 to $0.9 million in the first quarter of
1998. Additionally, bad debt and amortization expense totaled $0.3 million for
the three month period ended March 31, 1998, with generally no similar expense
in the first quarter of 1997. Although general and administrative expenses
increased significantly, due to the increase in the size and the scope of the
Company's operations, as a percentage of revenue, general and administrative
expenses decreased from 14% to 12% for the first quarter of 1997 and 1998,
respectively.
Income tax expense was $1.2 million for the first three months of 1998.
The Company converted to a taxable entity on December 4, 1997. Accordingly,
no provision for income taxes were paid during the first quarters of 1997. The
proforma adjustment included in the Company's statement of income reflects a
provision for income taxes at a combined 40% federal and state income tax rate.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company had approximately $2.3 million in cash,
compared to approximately $8.7 million at December 31, 1997. The decrease in
cash was primarily due to capital expenditures in the three month period
ended March 31, 1998, totaling approximately $4.7 million and the increase
in accounts receivable. The Company's cash position at December 31, 1997, was
also higher due to the receipt of the net proceeds of the Company's initial
public offering of common stock that was completed in December 1997. The
Company had working capital of $15.1 million at March 31, 1998 compared to
approximately $11.5 million at December 31, 1997. This increase was primarily
due to increased accounts receivable generated from operations.
On January 20, 1998, the Company restructured its credit arrangements
with its commercial lender, Hibernia National Bank. Under the restructured
facility (the "New Facility"), the Company refinanced an $11.0 million term
loan, obtained a $10.0 million revolving line of credit to finance working
capital requirements, and obtained a $9.0 million line of credit to finance
capital expenditures and acquisitions. As of March 31, 1998, the Company had
approximately $14.8 million outstanding under the New Facility. The loans
under the New Facility bear interest at LIBOR plus an applicable margin,
ranging from 1.25% to 2.25% (7.125% at March 31, 1998). The New Facility has a
final maturity of January 20, 2000, is required to be guaranteed by all of the
Company's subsidiaries, requires the Company to maintain certain financial
ratios, imposes certain limitations in the Company's ability to pay cash
dividends and is collateralized by a mortgage on the Company's land and
buildings and by substantially all of the Company's assets not used as
collateral for the Company's asset-based loans.
The Company had approximately $7.3 million in outstanding indebtedness in
addition to outstanding indebtedness under the New Facility at March 31, 1998.
The majority of this debt (approximately $6.3 million) consists of several
asset-based financing loans with another lender. Of the principal outstanding
under these loans, approximately $4.9 million bears interest at LIBOR plus
3.75% (the "Variable Rate") and matures on July 19, 2001. Prior to August 19,
1998, the Company may elect to pay interest on this portion of the loan at a
fixed rate equal to the interest rate on U.S. Treasury securities of a
comparable maturity to the loan at the time of election plus 4.25% (the "Fixed
Rate"). The remaining portion of this loan bears interest at LIBOR plus 3.0%
and is collateralized by various seismic drilling, support equipment and
aircraft. Remaining indebtedness at March 31, 1998 was approximately $1.0
million, including approximately $0.8 million owed to finance companies
incurred to finance certain of the Company's insurance premiums.
In the first quarter of 1998, the Company made capital expenditures of
approximately $4.7 million, including $1.7 million for the purchase or
construction of seismic drilling and support equipment, $2.1 million for the
purchase of four helicopters and one airplane (which was subsequently sold),
$0.4 million for the purchase of support vehicles and $0.5 for various building
and leasehold improvements. Currently, the Company is committed to additional
estimated capital expenditures for the remainder of 1998 totaling $9.1 million
(in addition to the acquisitions described below), including $6.7 million for
additional drilling, survey and other support equipment, $1.7 million for
helicopters, $0.4 million for vehicles and $0.3 million for computers and
leasehold improvements.
On March 31, 1998, the Company sold all of its fixed-wing airplane and
related assets for approximately $2.9 million. This transaction had no
significant impact on the Company's quarterly operating results.
Effective April 1, 1998, the Company acquired Eagle Surveys
International, Inc., a seismic survey support company, headquartered in
Houston, Texas. The purchase price was $1.1 million in cash and $0.7 million
in common stock. Effective April 20, 1998, the Company acquired the assets of
Coastal Turbines, Inc., a helicopter support company, based in Lafayette,
Louisiana. The purchase price was approximately $1.1 million in cash and $0.1
million in common stock. Effective May 1, 1998, the Company acquired Hamilton
Drill Tech, Inc., a specialty drilling support company, headquartered in
Canada. The purchase price was approximately $0.9 million in cash.
Management believes that cash generated from operations and the Company's
New Facility will be sufficient to meet the Company's anticipated capital
expenditures for 1998. However, part of the Company's strategy is to acquire
companies with operation related or complementary to the Company's current
operations. Depending on the size of such future acquisitions, the Company may
require additional debt financing, possibly in excess of the limits of the New
Facility, or equity financing.
Forward-Looking Statements and Assumptions
This quarterly report on Form 10-Q may contain certain forward-looking
statements, including by way of illustration and not of limitation, statements
relating to the Company's liquidity, revenues, expenses and margins. Any
statement made herein that is not a historical fact is a forward-looking
statement. The Company strongly encourages readers to note that such
statements are based on assumptions made about the Company's financial
position, operations and industry which management considers reasonable at this
time. Most of the factors upon which such assumptions are made are beyond the
Company's ability to control or estimate precisely, and may in some cases be
subject to rapid and material changes.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
PART II - OTHER INFORMATION
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. See Exhibit Index on Page E-1
(b) REPORTS ON FORM 8-K. None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OMNI ENERGY SERVICES CORP.
Dated: May 15, 1998 /s/ David A. Jeansonne
David A. Jeansonne
Chief Executive Officer
Dated: May 15, 1998 /s/ David E. Crays
David E. Crays
Vice President and Chief Financial
Officer
(Principal Financial and Accounting
Officer)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. NUMBERED PAGE
<S> <C> <C>
3.1 Amended and Restated Articles of Incorporation of the
Company.(1)
3.2 By-laws of the Company.(1)
10.1 Sales Agreement, dated March 31, 1998, by and between American
Aviation, L.L.C. and American Aviation Charters, L.L.C.
10.2 Aircraft Lease and Services Agreement, dated March 31, 1998,
by and between American Aviation, L.L.C. and American Aviation
Charters, L.L.C.
10.3 Asset Purchase Agreement dated April 17, 1998, by and among
the Company, Coastal Turbines, Inc., Paul E. Graham and Tina
Taylor Graham.
10.4 Agreement and Plan of Merger, dated May 5, 1998, by and among
the Company, Eagle Surveys International, Inc. and Timothy O.
Flaman.
10.5 Stock Purchase Agreement, dated May 13, 1998, by and among the
Company, Burt Hamilton and Hamilton Drill Tech Inc.
27.1 Financial Data Schedule
</TABLE>
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1 (Registration Statement No. 333-36561).
SALES AGREEMENT
THIS SALES AGREEMENT, entered into as of this 31st day of March 1998, by and
between American Aviation, L.L.C., a limited liability company organized and
existing under the laws of the State of Missouri ("Seller") and American
Aviation Charters, L.L.C., a limited liability company organized and existing
under the laws of the State of Louisiana ("Buyer");
WHEREAS, Seller owns each of the four aircraft described in Appendix A hereto
(the "Aircraft") and the Other Property (as defined in Section 1.01); and
WHEREAS, Buyer desires to purchase the Equipment (as defined in Section 1.01)
from Seller and Seller desires to sell the Equipment to Buyer in accordance
with the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer agree as follows:
1. DEFINITIONS
1.01 In this Agreement, unless the context otherwise requires:
"Acceptance Certificate" means a certificate substantially in the form set
out in Appendix B hereto to be signed by Buyer immediately after Delivery.
"Aircraft" means the aircraft identified in Appendix A hereto.
"Closing" or "Delivery" means the time at which the property, risk and
title in the Equipment shall pass to Buyer in accordance with this Agreement.
"Dollars" or "$" means the lawful currency of the United States of America.
"Equipment" means the Aircraft, the Intangible Property and the Other
Property.
"FAA" means the United States Federal Aviation Administration or any
successor agency thereto.
"Intangible Property" means the Learjet training expenses and the
assistance provided by Seller pursuant to Section 11.01(a).
"Manuals and Technical Records" means the manuals, historical technical
data and other records relating to the Aircraft in the possession of Seller.
"Other Property" means the Vehicle (as defined herein) and the office
equipment.
"Purchase Price" means the sum of Two Million Nine Hundred Seventeen
Thousand Dollars ($2,917,000) allocated as set forth in Exhibit C.
"Vehicle" means one (1) used Chevrolet Tahoe truck.
1.02 In this Agreement, unless the context otherwise requires, references
to Sections and the Appendices are to be construed as references to the
Sections of, and the appendices to, this Agreement and references to this
Agreement include its Recital and Appendices.
1.03 Words importing the plural shall include the singular and vice versa,
and references to a person shall be construed as references to an individual,
firm, company, corporation, unincorporated body of persons or any State of
agency thereof.
2. AGREEMENT TO SELL
Seller agrees to sell and Buyer agrees to buy the Equipment for the
Purchase Price and otherwise upon and subject to the terms and conditions of
this Agreement.
3. CONDITION OF AIRCRAFT AND OTHER PROPERTY
The Aircraft and Other Property shall be tendered for Delivery by Seller to
Buyer on an "AS IS, WHERE IS" basis.
4. DELIVERY AND ACCEPTANCE
4.01 Delivery shall take place in such location as shall be agreed by the
parties, such delivery to occur on March 31, 1998. It is agreed and
understood that time is of the essence with respect to the Delivery and with
respect to all other provisions of this Agreement.
4.02 Upon receipt by Seller of the Purchase Price from Buyer, Seller shall
deliver the Aircraft and Other Property to Buyer and Buyer shall execute and
deliver to Seller the Acceptance Certificates.
4.03 Immediately upon Delivery and by delivery of the Aircraft and Other
Property to Buyer title to and risk of loss of or damage to the Aircraft and
Other Property shall pass from Seller to Buyer. At Delivery Seller shall
deliver to Buyer or its representatives FAA form bills of sale for the
Aircraft and title documents for the Vehicle.
5. PAYMENT
5.01 The Purchase Price shall be paid to and received by Seller in the
account set forth in Section 5.02.
5.02 All payments to Seller shall be made by wire transfer received by
Seller in immediately available funds at such accounts as are specified by
Seller.
5.03 All payments shall be made in full, without any set-off,
counterclaim, deduction, recoupment or defense and without abatement,
suspension, deferment, diminution or proration by reason of any circumstance
or occurrence whatsoever, free and clear of and without deduction of or
withholding for or on account of any present or future taxes, duties, fees or
other charges. If any such taxes, duties, fees or charges are levied or
imposed, Buyer agrees to pay the full amount of such taxes and such additional
amounts as may be necessary so that Seller shall receive in full, after
withholding or deduction for or on account of such taxes, duties, fees or
charges, all amounts due hereunder.
6. CONDITIONS PRECEDENT
6.01 Seller's obligation to sell the Equipment to Buyer is subject to the
following conditions being fulfilled to the satisfaction of Seller on or prior
to the date of Delivery:
(a) Buyer shall have paid and Seller shall have received the Purchase
Price in accordance with Section 5;
(b) Buyer shall have executed and delivered to Seller the Acceptance
Certificates;
(c) Buyer shall have delivered to Seller an insurance certificate
evidencing the insurance required by Section 10;
(d) The representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects at Delivery as
though made at such time.
6.02 Buyer's obligation to purchase the Equipment from Seller is subject
to the following conditions being fulfilled to the satisfaction of Buyer on or
prior to the date of Delivery:
(a) Seller shall deliver to Buyer the bills of sale and title
documents specified in Section 4.03.
7. REPRESENTATIONS AND WARRANTIES
7.01 Buyer hereby represents and warrants that
(a) it is a limited liability company duly organized and validly
existing under the laws of the State of Louisiana;
(b) the execution, delivery and performance of its obligations under
this Agreement (and all agreements, document, and instruments to be executed
and delivered by Buyer contemporaneously herewith or pursuant to the
provisions hereof) have been duly authorized by all necessary action on the
part of Buyer and do not and will not conflict with, or constitute a violation
of, or a default under Buyer's organizational documents or any agreement of
any kind or nature, or contravene any law, governmental rule, regulation or
order binding on Buyer;
(c) neither the execution, delivery or performance by Buyer of this
Agreement nor any document, certificate or opinion to be delivered in
connection herewith by Buyer requires the consent or approval of, the giving
of notice to, registration with, or the taking of any other action in respect
of any federal or state governmental authority or agency, including any
judicial body or any other person, entity or corporation or if such consent,
approval, notice, registration or other action is required, it will have been
obtained;
(d) this Agreement constitutes the valid, legal and binding obligation
of Buyer in accordance with its terms; and
(e) there are no suits, action or proceedings (including but not
limited to counter or cross claims) pending or threatened against Buyer or
before or by any federal, state, municipal or other governmental agency,
department, commission, board, bureau or instrumentality which, if adversely
determined, would have a material adverse effect on Buyer's ability to perform
this Agreement or any obligation hereunder.
7.02 Seller hereby represents and warrants that
(a) it is a limited liability company duly organized and validly
existing under the laws of the State of Missouri;
(b) that on Delivery it will transfer title to the Equipment free from
all liens, mortgages and encumbrances;
(c) the execution, delivery and performance of its obligations under
this Agreement (and all agreements, documents, and instruments to be executed
and delivered by Seller contemporaneously herewith or pursuant to the
provisions hereof) have been duly authorized by all necessary action on the
part of Seller and do not and will not conflict with, or constitute a
violation of, or a default under Seller's organizational documents or any
agreement of any kind or nature, or contravene any law, governmental rule,
regulation or order binding on Seller;
(d) neither the execution, delivery or performance by Seller of this
Agreement nor any document or certificate to be delivered in connection
herewith by Seller requires the consent or approval of, the giving of notice
to, registration with, or the taking of any other action in respect of any
federal or state governmental authority or agency, including any judicial body
or any other person, entity or corporation or if such consent, approval,
notice, registration or other action is required, it will have been obtained;
and
(e) this Agreement constitutes the valid, legal and binding obligation
of Seller in accordance with its terms.
8. EXTENT OF SELLER'S LIABILITY & TAXES
8.01 Buyer expressly agrees and acknowledges that the Aircraft and Other
Property will be accepted by it in an "AS IS WHERE IS" condition and that NO
CONDITION, WARRANTY OR REPRESENTATION OF ANY KIND IS OR HAS BEEN GIVEN BY OR
ON BEHALF OF SELLER IN RESPECT OF THE AIRCRAFT OR OTHER PROPERTY. ACCORDINGLY
BUYER CONFIRMS THAT IT HAS NOT, IN ENTERING INTO THIS AGREEMENT, RELIED ON ANY
CONDITION, WARRANTY OR REPRESENTATION BY SELLER, EXPRESS OR IMPLIED, STATUTORY
OR OTHERWISE, WHETHER ARISING BY LAW, COURSE OF TRADE, COURSE OF DEALING OR
OTHERWISE HOWSOEVER IN RELATION TO THE AIRCRAFT OR OTHER PROPERTY, WHETHER OR
NOT ANY DEFECT IN THE AIRCRAFT OR OTHER PROPERTY IS APPARENT OR LATENT AT THE
TIME OF ITS ACCEPTANCE BY BUYER, (INCLUDING, WITHOUT LIMITATION, CONDITIONS,
WARRANTIES OR REPRESENTATIONS AS TO THE COMPLIANCE WITH DESCRIPTION,
AIRWORTHINESS, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, QUALITY,
WORKMANSHIP, VALUE, CONDITION, DESIGN, MANUFACTURE, PERFORMANCE OR OPERATION
OF THE AIRCRAFT OR OTHER PROPERTY), AND IF DEEMED TO EXIST, THE BENEFIT OF ANY
SUCH WARRANTY OR REPRESENTATION BY SELLER IS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVED BY BUYER.
8.02 Buyer acknowledges that this Section 8 has been the subject of full
discussions and negotiation. Buyer further acknowledges that the Purchase
Price takes account, inter alia, of the terms of this section and that
provisions similar to or to the same effect as those contained in this Section
8 are normal in transactions of this type.
8.03 Buyer shall be liable for all taxes, duties, fees, imposts or charges
associated with this transaction except for those taxes assessed upon Seller's
income or profits. Buyer will indemnify and hold harmless Seller, and
reimburse Seller upon its written request, for the amount of such taxes,
duties, fees, imposts or charges so levied or imposed and paid by Seller.
9. INDEMNITY AND RELEASES
9.01 Buyer agrees to indemnify and hold Seller, its affiliates and their
respective members, officers, directors, employees and agents (hereinafter
called "Indemnitees") harmless on a continuing basis from and against any and
all losses, costs, damages, judgments, awards, fines, penalties, expenses,
charges, fees, payments, demands, claims, liabilities and proceedings of any
kind whatsoever, arising from and after the Closing ("Claims") that may be
brought against or suffered or incurred by the Indemnitees in relation to, or
arising directly or indirectly in any manner whatsoever out of, or in
connection with
(a) any breach of this Agreement by Buyer;
(b) the Aircraft or Vehicle including, but without prejudice to the
generality of the foregoing, the condition, testing, delivery, design,
manufacture, purchase, registration, ownership, possession, control, use,
leasing, operation, disposal, insurance, alteration, exploration, importation,
maintenance, repair, service, modification, overhaul, removal, loss, action or
damage of the Aircraft or Vehicle at any time, and whether or not the same
shall arise out of or be attributable to, any defect in the Aircraft or
Vehicle or any part thereof, or the testing, design, use, maintenance, repair,
service, overhaul, modification or otherwise of the Aircraft or Vehicle or any
part thereof or for any other reason whatsoever, regardless of when the same
shall or may have been carried out or put into effect; and
(c) all Claims which may be made or brought on the ground that any
design, article or material in the Aircraft or Vehicle or the operation or use
thereof constitutes an infringement of patent, copyright, design or other
intellectual property right or any other right whatsoever.
9.02 Buyer hereby releases Seller from all Claims arising or suffered from
and after Closing and caused directly or indirectly by the Aircraft or Vehicle
or any part thereof or any inadequacy thereof for any purpose, or any
deficiency or defect therein or the use or performance thereof or any
maintenance, service, repair, overhaul or modification thereto, or any delay
in providing or failure to provide any thereof or any interruption or loss of
service or use thereof or any loss of business or other consequential damage
or any damage whatsoever and howsoever caused.
9.03 The indemnities and releases contained in this Section 9 are given to
Seller for itself, its affiliates, successors and assigns and their respective
members, officers, directors, employees and agents.
10. INSURANCE
Buyer undertakes and agrees with Seller that as from Delivery and
throughout the period of two years thereafter Buyer will, at its expense,
maintain or cause to be maintained in full force and effect aircraft liability
insurance in respect of the Aircraft, including cover for the indemnity
referred to in Section 9, naming Seller, its affiliates, successors and
assigns and their respective officers, directors, members, employees and
agents, as additional insureds for an amount which is not less than $50
million for the Beech 300 and $20 million for each of the Cessna aircraft
combined single limit bodily injury (including passenger liability and death)
and property damage liability. Such insurance shall include a breach of
warranty clause in favor of Seller stating that coverage shall not be
invalidated by any act or omission (including misrepresentation and non-
disclosure) of Buyer, shall provide for thirty (30) days prior written notice
to be received by Seller before any lapse, alteration, termination or
cancellation shall be effective as to Seller, shall include provisions whereby
the insurers irrevocably and unconditionally waive all rights of subrogation
they may have against Seller, its affiliates, successors and assigns and their
respective officers, directors, members, employees and agents, and shall
contain a cross liability clause to the effect that this insurance, except for
the limits of liability shall operate to give each of the additional insureds
the same protection as if there were a separate policy issued to each. Buyer
further undertakes and agrees with Seller that Buyer shall when requested from
time to time by Seller produce to Seller a certificate of insurance reflecting
such coverage and all relevant extracts from such insurance policies and, in
addition, such certificates and/or other evidence as Seller may request to
show that Buyer has complied with the obligations set forth in this Section
10.
11. ADDITIONAL COVENANTS OF SELLER AND BUYER
11.01 Seller's Covenants.
(a) Seller hereby covenants and agrees that it shall consult with
Buyer in connection with Buyer's application to the FAA for an operating
certificate authorizing Buyer to engage in operations with the Aircraft under
Part 135 of the FARs. In connection with such consultation, Seller shall make
available to Buyer the manuals and procedures covering the Aircraft at the
time of Closing, which Seller represents to have been approved by the FAA for
the operation of the Aircraft by Seller under Part 135. Seller shall provide
such assistance as shall reasonably be requested to enable Buyer to develop
programs and procedures required by the FAA for the operation of the Aircraft
by Buyer under Part 135 of the FARs and shall arrange Learjet training for
Buyer. The items covered by this Section 11.01(a) shall collectively be
referred to as "Intangible Property."
(b) Buyer hereby acknowledges that Seller cannot guarantee timing or
results and agrees that Seller shall have no liability to Buyer or any third
party relating to or arising out of the inability of Buyer to obtain an
certificate from the FAA authorizing to operate the Aircraft under Part 135 of
the FARs, any restrictions associated with the issuance of any such
certificate or any delay in obtaining such certificate.
11.02 Buyer's Covenants.
(a) In consideration of the sale of the Equipment and the services to be
provided by Seller in connection with the transactions contemplated herein,
Buyer covenants and agrees that it shall not engage in seismic services,
including but not limited to longline helicopter operations, transportation of
seismic field support personnel or any other form of helicopter seismic
support.
12. FAILURE OR DELAY IN PERFORMANCE
Seller shall not be liable for any delay or failure in Delivery or in the
performance of any other obligation under this Agreement where such failure or
delay is the result of any cause or matter beyond Seller's reasonable control,
including but not limited to Acts of God or the public enemy, acts or failures
to act by any relevant government authority, civil war or insurrection or
riots, fires or explosions or serious accidents, strikes or labor disputes, or
Seller's inability to obtain necessary materials or equipment needed to
correct repairable damage. Seller agrees to notify Buyer promptly of the
occurrence of any such cause.
13. NOTICES
13.01 Every notice, request or other communication under this Agreement
shall be in writing and delivered as follows:
If to Seller: American Aviation, L.L.C.
4500 NE Evangeline Thruway
Carencro, Louisiana 70520
Attn: David Jeansonne
Fax: 318-896-6655
Telephone: 318-896-6664
If to Buyer: American Aviation Charters, L.L.C.
301 Shepard Dr.
Lafayette, LA 70508-2135
Attn: Wayne Patin
Fax: 318-266-5837
Telephone: 318-266-5833
or to such other address or facsimile numbers as is notified by one party to
the others under this Agreement or for such purposes, and shall be deemed to
have been received in the case of a facsimile, 24 hours after dispatch
(provided that if the date of dispatch is not a business day it shall be
deemed to have been received at the opening of business on the next such
business day), and in the case of personal delivery, upon actual delivery or
the intended recipient's refusal to accept delivery.
14. ASSIGNMENT
None of the parties may assign any of its rights or duties under this
Agreement without the prior written consent of the other, such consent not to
be unreasonably withheld or delayed.
15. MISCELLANEOUS
15.01 This Agreement constitutes the entire agreement, both written and
oral, between the parties or their respective representatives with respect to
the subject matter hereof and is not intended to confer upon any other person
any rights or remedies hereunder not expressly granted thereto. This
Agreement shall not be further amended or modified unless in writing duly
signed by the parties hereto.
15.02 The provisions of this Agreement shall be deemed independent and
severable and the invalidity, partial invalidity or unenforceability of any
one provision or portion of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement. Any provision of
this Agreement which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability and any prohibition or unenforceability in any particular
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
15.03 No failure or delay on the part of either party hereto in exercising
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power preclude any
other further exercise of any such right or power. The remedies provided
herein are cumulative, and not exclusive of any remedies provided by law.
15.04 Each party shall be liable for its own legal fees, costs, expenses
and disbursements associated with the transaction contemplated hereby.
15.05 The covenants, agreements, indemnifications, representations and
warranties made herein shall survive the execution and delivery of the
Agreement and the bills of sale and the consummation of the transactions
described herein.
15.06 This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, all of which together shall constitute one
and the same agreement.
15.07 The captions contained in this Agreement are for convenience
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
16. GOVERNING LAW
This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Louisiana without
giving effect to the principles of conflicts of law thereunder.
SIGNATURES ON NEXT PAGE
<PAGE>
IN WITNESS WHEREOF the parties hereto have entered into this Agreement on the
date first above written.
SELLER: BUYER:
AMERICAN AVIATION, L.L.C. AMERICAN AVIATION CHARTERS, L.L.C.
By:/s/ Roger E. Thomas By:/s/ Wayne Patin
Name: Roger E. Thomas Name: Wayne Patin
Title: Member Title: Manager
<PAGE>
APPENDIX A
AIRCRAFT
1. One (1) used Beech 300 aircraft which consists of an airframe bearing FAA
Registration No. N3AH and Manufacturer's Serial No. FA-130 together with its
installed Pratt & Whitney PT6A-60A engines bearing manufacturer's serial
numbers PCE 95267 and PCE 95264.
2. One (1) used Cessna A185F aircraft which consists of an airframe bearing
FAA Registration No. N9667Q and Manufacturer's Serial No. 18503785 together
with its installed Continental IO550D17B engine bearing manufacturer's serial
number 284183-R.
3. One (1) used Cessna 172N aircraft which consists of an airframe bearing
FAA Registration No. N4693J and Manufacturer's Serial No. 17273663 together
with its installed Continental O-320-H2AD engine bearing manufacturer's serial
number L-5620-7673655.
4. One (1) used Cessna 414 aircraft which consists of an airframe bearing FAA
Registration No. N414WE and Manufacturer's Serial No. 414A-0309 together with
its installed Continental TSIO-520-NB engines bearing manufacturer's serial
numbers L-514074 and R-509722.
<PAGE>
APPENDIX B-1
ACCEPTANCE CERTIFICATE FOR ONE BEECH 300 AIRCRAFT
FAA REGISTRATION NUMBER N3AH AND
MANUFACTURER'S SERIAL NUMBER FA-130 TOGETHER WITH
ITS INSTALLED PRATT & WHITNEY PT6A-60A ENGINES
RECEIPT is hereby acknowledged of one (1) used Beech 300 aircraft which
consists of an airframe bearing Federal Aviation Administration ("FAA")
Registration No. N3AH and Manufacturer's Serial No. FA-130 together with its
installed Pratt & Whitney PT6A-60A engines bearing manufacturer's serial
numbers PCE 95267 and PCE 95264, and the Manuals and Technical Records.
The Aircraft is hereby accepted and acknowledged to be in all respects in
accordance with the terms of a Sales Agreement dated the 31st day of March
1998 between American Aviation LLC ("Seller") and American Aviation Charters,
L.L.C. ("Buyer").
Dated this 31st day of March, 1998 at Lafayette, La.
BUYER:
American Aviation Charters, L.L.C.
By: /s/ Wayne Patin
Name: Wayne Patin
Title: Manager
<PAGE>
APPENDIX B-2
ACCEPTANCE CERTIFICATE FOR ONE CESSNA 172N AIRCRAFT
FAA REGISTRATION NUMBER N4693J AND
MANUFACTURER'S SERIAL NUMBER 17273663 TOGETHER WITH
ITS INSTALLED CONTINENTAL IO550D17B ENGINE
RECEIPT is hereby acknowledged of one (1) used Cessna 172N aircraft which
consists of an airframe bearing Federal Aviation Administration ("FAA")
Registration No. N4693J and Manufacturer's Serial No. 17273663 together with
its installed Continental IO550D17B engine bearing manufacturer's serial
number 284183-R, and the Manuals and Technical Records.
The Aircraft is hereby accepted and acknowledged to be in all respects in
accordance with the terms of a Sales Agreement dated the 31st day of March
1998 between American Aviation LLC ("Seller") and American Aviation Charters,
L.L.C. ("Buyer").
Dated this 31st day of March, 1998 at Lafayette, La.
BUYER:
American Aviation Charters, L.L.C.
By: /s/Wayne Patin
Name: Wayne Patin
Title: Manager
<PAGE>
APPENDIX B-3
ACCEPTANCE CERTIFICATE FOR ONE CESSNA A185F AIRCRAFT
FAA REGISTRATION NUMBER N9667Q AND
MANUFACTURER'S SERIAL NUMBER 18503785 TOGETHER WITH
ITS INSTALLED CONTINENTAL O-320-H2AD ENGINES
RECEIPT is hereby acknowledged of one (1) used Cessna A185F aircraft which
consists of an airframe bearing Federal Aviation Administration ("FAA")
Registration No. N9667Q and Manufacturer's Serial No. 18503785 together with
its installed Continental I0550D17B engine bearing manufacturer's serial
number L-5620-7673655, and the Manuals and Technical Records.
The Aircraft is hereby accepted and acknowledged to be in all respects in
accordance with the terms of a Sales Agreement dated the 31st day of March
1998 between American Aviation LLC ("Seller") and American Aviation Charters,
L.L.C. ("Buyer").
Dated this 31st day of March, 1998 at Lafayette, La.
BUYER:
American Aviation Charters, L.L.C.
By: /s/Wayne Patin
Name: Wayne Patin
Title: Manager
<PAGE>
APPENDIX B-4
ACCEPTANCE CERTIFICATE FOR ONE CESSNA 414 AIRCRAFT
FAA REGISTRATION NUMBER N414WE AND
MANUFACTURER'S SERIAL NUMBER 414A-0309 TOGETHER WITH
ITS INSTALLED CONTINENTAL TSIO-520-NB ENGINES
RECEIPT is hereby acknowledged of one (1) used Cessna 414 aircraft which
consists of an airframe bearing Federal Aviation Administration ("FAA")
Registration No. N414WE and Manufacturer's Serial No. 414A-0309 together with
its installed Continental TSIO-520-NB engines bearing manufacturer's serial
numbers L-514074 and R-509722, and the Manuals and Technical Records.
The Aircraft is hereby accepted and acknowledged to be in all respects in
accordance with the terms of a Sales Agreement dated the 31st day of March
1998 between American Aviation LLC ("Seller") and American Aviation Charters,
L.L.C. ("Buyer").
Dated this 31st day of March, 1998 at Lafayette, La.
BUYER:
American Aviation Charters, L.L.C.
By: /s/ Wayne Patin
Name: Wayne Patin
Title: Wayne Patin
<PAGE>
APPENDIX B-5
ACCEPTANCE CERTIFICATE FOR ONE CHEVROLET TAHOE TRUCK
RECEIPT is hereby acknowledged of one (1) used Chevrolet Tahoe Truck (the
"Vehicle"). The Vehicle is hereby accepted and acknowledged to be in all
respects in accordance with the terms of a Sales Agreement dated the 31st day
of March 1998 between American Aviation, L.L.C. ("Seller") and American
Aviation Charters, L.L.C. ("Buyer").
Dated this 31st day of March, 1998 at Lafayette, La.
BUYER:
American Aviation Charters, L.L.C.
By: /s/ Wayne Patin
Name: Wayne Patin
Title: Manager
<PAGE>
APPENDIX C
ALLOCATION OF PURCHASE PRICE
<TABLE>
<CAPTION>
<S> <C>
EQUIPMENT: PRICE
1. Beech 300 aircraft bearing FAA 1. $ 1,878,000
Registration No. N3AH and
Manufacturer's Serial No. FA-130.
2. Cessna A185F aircraft bearing FAA 2. $ 159,000
Registration No. N9667Q and
Manufacturer's Serial No. 18503785.
3. Cessna 172N aircraft bearing FAA 3. $ 43,000
Registration No. N4693J and
Manufacturer's Serial No. 17273663.
4. Cessna 414 aircraft bearing FAA 4. $ 430,000
Registration No. N414WE and
Manufacturer's Serial No. 414A-0309.
5. 1997 Chevrolet Tahoe Truck 5. $ 30,000
6. Office Equipment 6. $ 37,000
7. Consulting Services in connection 7. $ 300,000
with Buyer's Application for FAA Part
135 Certificate (including relevant
manuals)
8. Learjet Training Expenses 8. $ 40,000
TOTAL $ 2,917,000
</TABLE>
AIRCRAFT LEASE AND SERVICES AGREEMENT
This Aircraft Lease and Services Agreement (the "Agreement") is entered
into as of this 31st day of March 1998, by and between American Aviation,
L.L.C., a limited liability company organized and existing under the laws
of the State of Missouri ("AALLC") and American Aviation Charters, L.L.C.,
a limited liability company organized and existing under the laws of the
State of Louisiana ("Owner");
WHEREAS, AALLC desires to the sell to Owner the aircraft described in
Exhibit A attached hereto (the "Aircraft"); and
WHEREAS, to induce Owner to purchase the Aircraft, AALLC has agreed to
lease the Aircraft from Owner for charter operations under AALLC's Federal
Aviation Regulation ("FAR") Part 135 operating certificate and related
operations specifications (the "Operating Certificate"); and
WHEREAS, Owner desires that AALLC lease and operate the Aircraft in
accordance with the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for good and valuable consideration, the parties
hereby agree as follows:
1. LEASE OF THE AIRCRAFT. Owner hereby enters into a non-continuous
lease of the Aircraft to AALLC during the Term of this Agreement, only
during such time as the Aircraft shall be operated on AALLC's Operating
Certificate pursuant hereto such time periods herein referred to as "Lease
Periods".
2. TERM. The Term shall commence on the 31st day of March 1998 and shall
continue for a period of ninety days terminating on June 28, 1998 unless
terminated earlier in accordance with this Agreement (the "Term").
3. CONDITION OF THE AIRCRAFT.
3.1 MAINTENANCE AND REPAIR COSTS. Owner agrees that if AALLC performs
any maintenance or repairs to or for the Aircraft for any reason deemed
reasonably necessary by AALLC or Owner, such work shall be billed at
AALLC's posted prices for service and parts and Owner shall pay for all
such maintenance and repairs at the time that AALLC performs the services
upon the Aircraft. In the event an AALLC-authorized repair station
performs any maintenance or repairs to or for the Aircraft for any reason
deemed reasonably necessary by AALLC or Owner, Owner shall pay the repair
station directly and be solely responsible for the payment of any such
work or parts.
3.2 FLIGHT CREWS. Owner shall report to AALLC's Flight Control, all
commercial duty and flight times of any person who Owner nominates to
operate the Aircraft in order to permit AALLC to determine whether the
flight crew has sufficient flight and duty time to operate each Part 135
Aircraft flight. OWNER HEREBY RELINQUISHES AND GRANTS TO AALLC EACH AND
EVERY RIGHT OWNER MAY HAVE TO CONTROL, DIRECT, INSTRUCT OR IN ANY WAY
INFLUENCE THE MANNER OF PERFORMANCE OF ALL FLIGHT OPERATIONS BY ANY FLIGHT
CREW MEMBERS DURING EACH AND EVERY PERIOD THAT THE AIRCRAFT IS LEASED
HEREUNDER TO AALLC FOR PART 135 OPERATIONS. OWNER ACKNOWLEDGES THAT
DURING EACH AND EVERY LEASE PERIOD, THE FLIGHT CREW MEMBERS WILL BE
TEMPORARY EMPLOYEES OF AALLC AND THE FLIGHT CREW MEMBERS SHALL SERVE UNDER
THE EXCLUSIVE DIRECTION AND CONTROL OF AALLC. THE TERMS AND CONDITIONS OF
THE TEMPORARY EMPLOYMENT OF THE FLIGHT CREW MEMBERS ARE SET OUT IN THE
TEMPORARY EMPLOYMENT AGREEMENT BETWEEN THE OWNER AND AALLC DATED March 31,
1998 attached hereto as Exhibit 2. Prior to commencement of Part 135
flight operations, each Flight Crew member shall sign a letter
substantially in the form of Exhibit 3 hereto which AALLC shall
acknowledge, and which will be retained by AALLC in the individual pilot
file. Owner shall immediately report to AALLC any information it may
receive with respect to any governmental action of which it has knowledge
affecting the licenses and permits and medical certifications of flight
crew members, including but not limited to all modifications, suspensions
or terminations thereof.
4. CHARTER BOOKINGS AND BILLING.
4.1 Owner shall serve and is hereby appointed a non-exclusive agent of
AALLC for the limited purpose of booking charter service, and collecting
and disbursing the revenues therefrom, for the Aircraft listed herein
only. Owner may not, as a non-exclusive agent of AALLC, book or bill for
charter services on any aircraft other than the Aircraft. Owner shall
indemnify, hold harmless and reimburse AALLC on demand for any refunds or
claims for fees or expenses paid which arise out of the negligent actions
or negligent failure to act on the part of Owner or its employees.
4.2 As a non-exclusive agent of AALLC, Owner may advertise AALLC's
charter service to the public. All advertising, whether written, visual
or verbal, must indicate that the charter service is "Operated By American
Aviation LLC" and must be approved in writing by AALLC prior to release or
publication. Owner may not advertise or represent the availability of any
aircraft other than the Aircraft.
5. OPERATION OF AIRCRAFT BY AALLC.
5.1 OPERATING CERTIFICATE. AALLC shall comply with the requirements of
and shall retain operational control of the Aircraft under FAR Part 135
during Lease Periods.
5.2 MAINTENANCE AND REPAIRS. Once the Aircraft is initially found
suitable for charter operations, AALLC or a AALLC-approved maintenance
facility shall perform all maintenance and repairs to the Aircraft in
accordance with AALLC's FAA-approved maintenance program during the Term
of this Agreement. AALLC shall perform maintenance and/or repairs to the
Aircraft only upon notice to and consent from Owner, or Owner's
representative. AALLC may terminate this Agreement immediately upon
written notice to Owner in the event any subsequent inspection of the
Aircraft or maintenance records uncovers any mechanical, structural or
other conditions unacceptable to AALLC, or in violation of Federal
Aviation Regulations, in its discretion.
5.3 FLIGHT CREWS. AALLC or a training facility approved by AALLC shall
provide all training for any person authorized to operate the Aircraft
during Lease Periods. Such flight crew members will be trained and
checked in accordance with AALLC's FAA-approved training program. During
Lease Periods, such crew members shall serve under the exclusive direction
and control of AALLC. AALLC shall have the exclusive right to refuse to
allow any crew member to participate in charter operations at its sole
discretion.
5.4 COMPLIANCE WITH LAWS. AALLC operate the Aircraft in accordance with
all applicable laws and regulations, including all FARs.
5.5 COMPLIANCE WITH ANTI-DRUG PLAN. Owner agrees to obtain and initiate
coverage under an FAA approved Anti-Drug Program or establish its own
program as required by FAR 135.1 (c). Owner will provide proof of such
coverage by providing AALLC a copy of the FAA approval letter bearing
Owner's unique approval number. Owner will maintain its program in good
standing for all covered employees and vendors (as defined by the rule).
Owner shall notify AALLC immediately if Owner ceases to be in compliance
with it approval plan in which case all Part 135 operations will cease
immediately.
6. OPERATION OF THE AIRCRAFT BY OWNER. When Owner is operating the
Aircraft under the rules of FAR Part 91, Owner will have exclusive
operational control of the Aircraft and AALLC shall have no responsibility
or liability to Owner for any such operations. Owner shall ensure that
the Aircraft are maintained in accordance with the relevant AALLC Manuals
and procedures.
7 TAXES. Owner shall pay on its own behalf and on behalf of AALLC all
taxes (including but not limited to), federal excise taxes, fees,
assessments, sales tax, personal property tax, license and registration
fees together with all fines and penalties assessed by any governmental
taxing authority ("Taxes") which relate in any way to the ownership, use
or operation of the Aircraft or with respect to any charter flight booked
and billed by Owner; provided that Owner shall be entitled to any fuel tax
credit(s) which apply to operations of the Aircraft under part 135. Taxes
paid by Owner shall not include those federal excise and/or sales taxes
collected by AALLC for charter flights booked and billed by AALLC, and
those Taxes based upon AALLC's income.
8. RECORDKEEPING; AUDIT AND INSPECTIONS.
8.1 Among its obligations as the holder of the Operating Certificate,
AALLC specifically acknowledges its obligation to maintain an individual
record of each pilot used in Part 135 operations pursuant to FAR Section
135.63(a)(4).
8.2 As support for AALLC's obligation to discharge its record keeping
requirements as the holder of the Operating Certificate, Owner, as non-
exclusive agent for AALLC, shall at all times and for two years following
termination of this Agreement keep complete and accurate books, records,
Aircraft logs and accounts from which it shall be determined, (i) the
amount of charges to be paid to AALLC, (ii) all flight crew duty times,
(iii) all maintenance performed on the Aircraft; and (iv) all Aircraft
flights and operating hours, pursuant to and during the term of this
Agreement. Owner shall maintain such books, records, accounts and logs in
accordance with generally accepted accounting principles and FAA
regulations.
8.3 All such accounts and records shall, at all reasonable times, be
accessible to and open for inspection, examination, copying and audit by
the other party or its designated representative, such inspection,
examination, copying and audit not to interfere with the ability of the
party being inspected to conduct its normal business. Either party shall
have the right, but not the obligation, to inspect the Aircraft at all
reasonable times that will not interfere with the operation of the
aircraft or the other party's ability to conduct its normal business.
AALLC may terminate this Agreement immediately upon telephonic or written
notice to Owner in the event any subsequent inspection of the Aircraft or
maintenance records uncovers any mechanical, structural or other
conditions related to safety of flight, operation, or airworthiness
unacceptable to AALLC, or in violation of Federal Aviation Regulations, in
its discretion.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY OWNER. Owner hereby agrees to defend, indemnify
and hold AALLC and its affiliates and their respective officers, members,
directors, employees and agents (the "AALLC Indemnified Parties")
harmless from and against any and all liabilities, claims, suits,
judgments, damages, losses, awards, fines, penalties, costs and expenses,
including reasonable attorney fees and costs associated therewith
(collectively the "Claims"), arising from, but not limited to, Taxes as
defined in Section 7, injury or death of persons or the loss, damage or
destruction of property arising out of or caused by any intentional
misrepresentation or fraudulent statement made by Owner with respect to
this Agreement, any damage or loss to the extent caused by Owner's
negligence or willful misconduct, negligent actions or omissions of or the
improper performance of the duties of the flight crew members nominated by
Owner and employed by AALLC during the Term of this Agreement, including
but not limited to Claims arising from a flight crew member's breach of
the FARs.
9.2 INDEMNIFICATION BY AALLC. AALLC hereby agrees to defend, indemnify
and hold Owner, its parent corporations, affiliates, subsidiaries, their
directors, officers, employees and agents (the "Owners Indemnified
Parties") harmless from and against any and all liabilities, claims,
suits, judgments, damages, losses, awards, fines, penalties, costs, and
expenses, including reasonable attorney's fees and costs associated
therewith (collectively the "Claims"), arising from, but not limited to,
Taxes, injury or death of persons or the loss, damage or destruction of
property arising out of or caused by any intentional misrepresentation or
fraudulent statement made by AALLC with respect to this Agreement.
9.3 NOTIFICATION AND SURVIVAL. The Indemnified Party shall give prompt
and timely written notice to the indemnifying party of any claim for which
an Indemnified Party seeks indemnity herein, and the indemnifying party
shall defend against same with counsel reasonably acceptable to the
Indemnified Party. The Indemnified Party shall cooperate in the defense
of the claim to the extent reasonable and practicable under the
circumstances. The provisions of Section 9 shall survive the termination
of this Agreement.
10. INSURANCE; RISK OF LOSS.
10.1 INSURANCE BY OWNER. Prior to the commencement of charter flight
operations, Owner will obtain the insurance policies described on Exhibit
4 and will maintain policies in force for the Term. All such insurance
shall:
(a) be issued by a company or companies of recognized
responsibility and insure the AALLC Indemnified Parties;
(b) be an occurrence policy naming the AALLC Indemnified Parties,
charter customers and their successors and assigns as additional insureds
and contain a waiver of subrogation in favor of all additional insureds;
(c) be primary without any right of contribution from any insurance
maintained by the AALLC Indemnified Parties;
(d) provide the AALLC Indemnified parties with thirty days prior
written notice of cancellation or material change affecting the parties'
interests; and
(e) insure Owner's contractual liability to the AALLC Indemnified
Parties contained in this Agreement.
Owner will furnish to AALLC certificates of insurance prior to the earlier
of charter flight operations or the commencement of Aviation Services by
AALLC which demonstrate that Owner has met the requirements of this
Section.
10.2 INSURANCE BY AALLC. Prior to the commencement of this Agreement,
AALLC shall will obtain the insurance policies described on Exhibit 4 and
will maintain such policies in force for the Term. All such insurance
shall:
(a) be issued by a company or companies of recognized
responsibility and insure Owner and its directors, officers and employees,
successors and assigns;
(b) be an occurrence policy naming Owner and its respective
directors, officers, employees, successors and assigns as additional
insureds and obtain a waiver of subrogation in favor of all additional
insureds;
(c) provide Owner with thirty days' prior written notice of a
cancellation or material change affecting the parties' interests;
(d) be primary without any right of contribution from any insurance
maintained by Owner; and
(e) insure AALLC's contractual liability contained in this
Agreement.
AALLC will furnish to Owner certificates of insurance prior to charter
flight operations which demonstrate that AALLC has met the requirements of
this Section.
10.3 Risk of loss or damage to the Aircraft shall be borne by Owner.
If, during the term of this Agreement, the Aircraft is destroyed, lost or
damaged beyond repair, this Agreement shall terminate immediately.
11. PAYMENT
11.1 INVOICES. AALLC shall forward all invoices relating to the Aircraft
to Owner at the following address:
American Aviation Charters, L.L.C.
301 Shepard Dr.
Lafayette, LA 70508-2135
Attn: Wayne Patin
Fax: 318-266-5837
Telephone: 318-266-5833
Owner shall pay all invoices to the account specified by AALLC within
90 days of the date of the invoice.
12 GOVERNING LAW. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Louisiana without giving effect to the principles of conflicts of law
thereunder.
13. DEFAULT AND REMEDIES.
13.1 If either party breaches any of the provisions of this Agreement
and fails to cure such breach within ten days after receipt of written
notice from the non-breaching party, the non-breaching party may terminate
this Agreement without prejudice to any rights the non-breaching party may
have against the breaching party.
13.2 No failure or delay on the part of either party hereto in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or
power preclude any other further exercise of any such right or power.
13.3 AALLC's and Owner's rights and remedies with respect to any of the
terms and conditions of the Agreement shall be cumulative and not mutually
exclusive and shall be in addition to all other rights and remedies which
either party possesses at law or in equity except as otherwise provided in
this Agreement.
14. TERMINATION. Either party to this Agreement shall have the right,
with or without cause, to terminate this Agreement by giving thirty (30)
days prior written notice to the other party during the Term. This
Agreement shall terminate automatically in the event AALLC no longer has
the right to perform charter operations pursuant to the Operating
Certificate for any reason and Owner shall have no claim for any damages
against AALLC which result from any such termination. In the event the
Operating Certificate is suspended for any reason, Owner and AALLC shall
be relieved of all obligations under this Agreement and Owner shall have
no claim for damages against AALLC which result from any such suspension.
15. FORCE MAJEURE. AALLC shall not be liable for any delay or failure in
the performance of any obligation under this Agreement where such failure
or delay is the result of any cause or matter beyond AALLC's reasonable
control, including but not limited to Acts of God or the public enemy,
acts or failures to act by any relevant government authority, civil war or
insurrection or riots, fires or explosions or serious accidents, strikes
or labor disputes. AALLC agrees to notify Owner promptly of the
occurrence of any such cause.
16. MISCELLANEOUS.
16.1 The relationship between Owner and AALLC shall be that of lessor
and lessee with respect to operations under Part 135, except as provided
in Sections 3.3, 4.1 and 4.2 of this Agreement and independent contractors
with respect to any other services provided hereunder. Without limiting
the foregoing, except as specifically authorized in Section 4, AALLC shall
not be the agent of Owner.
16.2 This Agreement constitutes the entire agreement, both written and
oral, between the parties or their respective representatives with respect
to the subject matter hereof and is not intended to confer upon any other
person any rights or remedies hereunder not expressly granted thereto.
This Agreement shall not be further amended or modified unless in writing
duly signed by the parties hereto.
16.3 None of the parties may assign any of its rights or duties under
this Agreement without the prior written consent of the other, such
consent not to be unreasonably withheld or delayed.
16.4 The covenants, agreements, indemnifications, representations and
warranties made herein shall survive the execution and delivery of this
Agreement and the consummation of the transactions described herein.
16.5 This Agreement may be executed in one or more counterparts each of
which shall be deemed an original, all of which together shall constitute
one and the same agreement.
16.6 The captions contained in this Agreement are for convenience
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16.7 The provisions of this Agreement shall be deemed independent and
severable and the invalidity, partial invalidity or unenforceability of
any one provision or portion of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability and any prohibition or
unenforceability in any particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SIGNATURES ON NEXT PAGE
<PAGE>
IN WITNESS WHEREOF the parties hereto have entered into this Agreement on
the date first above written.
AMERICAN AVIATION, L.L.C. AMERICAN AVIATION CHARTERS, L.L.C.
By:/s/ Roger E. Thomas By:/s/ Wayne Patin
Name: Roger E. Thomas Name: Wayne Patin
Title: Member Title: Manager
<PAGE>
EXHIBIT 1
AIRCRAFT
1. One (1) used Beech 300 aircraft which consists of an airframe bearing
FAA Registration No. N3AH and Manufacturer's Serial No. FA-130 together
with its installed Pratt & Whitney PT6A-60A engines bearing manufacturer's
serial numbers PCE 95267 and PCE 95264.
2. One (1) used Cessna A185F aircraft which consists of an airframe
bearing FAA Registration No. N9667Q and Manufacturer's Serial No. 18503785
together with its installed Continental IO550D17B engine bearing
manufacturer's serial number 284183-R.
3. One (1) used Cessna 172N aircraft which consists of an airframe
bearing FAA Registration No. N4693J and Manufacturer's Serial No. 17273663
together with its installed Continental O-320-H2AD engine bearing
manufacturer's serial number L-5620-7673655.
4. One (1) used Cessna 414 aircraft which consists of an airframe bearing
FAA Registration No. N414WE and Manufacturer's Serial No. 414A-0309
together with its installed Continental TSIO-520-NB engines bearing
manufacturer's serial numbers L-514074 and R-509722.
<PAGE>
EXHIBIT 2
AGREEMENT
This Agreement (this "Agreement") is entered into as of the 31st day of
March 1998 by and between American Aviation, L.L.C. ("AALLC") and American
Aviation Charters, L.L.C. ("Owner").
WHEREAS, Owner is the employer of certain FAA-licensed crew members who
are qualified to operate the aircraft attached as Exhibit 1; and
WHEREAS, AALLC has occasional need for the services of an FAA-licensed
pilot qualified to operate such aircraft; and
WHEREAS, as the employer for such flight crew, Owner shall become the
contractor for the services of such flight crew members.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. AALLC hereby appoints Owner and Owner hereby agrees to nominate
temporary flight crews ("Temporary Crews") to AALLC from those crew
members of Owner who AALLC determines are properly trained and qualified
in accordance with the Federal Aviation Regulations and insurance
requirements during each and every period requested by AALLC for the
operation of its aircraft and during such other periods as AALLC may
require the services of the Temporary Crew.
2. The parties hereby agree that AALLC shall be the additional employer
of the Temporary Crews and the Temporary Crews correspondingly shall be
employees of AALLC during and limited to each and every period when AALLC
requests such crews for the operation of its aircraft..
3. For each flight completed with Temporary Crews aboard, AALLC shall
pay in respect of the Temporary Crews a fee of One Hundred Twenty Dollars
($120) per day ("Temporary Crew Fee"). Owner, in its capacity as
additional employer of the Temporary Crews, shall make payment to the
Temporary Crews on AALLC's behalf..
4. OWNER HEREBY RELINQUISHES AND GRANTS TO AALLC OR ITS ASSIGNEE
(WHICHEVER IS APPLICABLE) EACH AND EVERY RIGHT OWNER MAY HAVE TO CONTROL,
DIRECT, INSTRUCT OR IN ANY WAY INFLUENCE THE MANNER OF PERFORMANCE OF ALL
FLIGHT OPERATIONS BY ANY TEMPORARY CREW MEMBERS, DURING EACH AND EVERY
FLIGHT OPERATED BY AALLC OR ITS ASSIGNEE (WHICHEVER IS APPLICABLE). OWNER
ACKNOWLEDGES THAT DURING EACH AND EVERY FLIGHT OPERATED BY AALLC OR ITS
ASSIGNEE, THE TEMPORARY CREW MEMBERS WILL BE TEMPORARY EMPLOYEES OF AALLC
OR, IF THE TEMPORARY EMPLOYMENT HAS BEEN ASSIGNED, THE ASSIGNEE, AND THE
TEMPORARY CREW MEMBERS SHALL SERVE UNDER THE EXCLUSIVE DIRECTION AND
CONTROL OF AALLC OR ITS ASSIGNEE (WHICHEVER IS APPLICABLE) IN THE EVENT
THE STATUS AS TEMPORARY EMPLOYER HAS BEEN ASSIGNED.
5. Owner shall be solely responsible for any taxes, withholdings,
employment benefits, workmen's compensation insurance, disability
insurance or unemployment payments of any nature ("Charges") in respect of
the Temporary Crews. Owner further agrees that it will indemnify and hold
AALLC harmless for any Charges which may be incurred with regard to the
Temporary Crews including, but not limited to, any Charges which may
accrue as a result of Owner's failure to pay the Temporary Crews.
6. Owner shall immediately report to AALLC any information it may
receive with respect to any governmental action of which it has knowledge
affecting the licenses and permits and medical certifications of Temporary
Crew members, including but not limited to all modifications, suspensions
or terminations thereof. Owner shall not knowingly nominate a Temporary
Crew member to AALLC (i) who is not licensed, permitted and certified for
the employment described herein, or (ii) who is not trained and qualified
as required by any insurance policy carried by AALLC.
7. The terms of this Agreement shall be disclosed to any Temporary Crew
members upon request.
IN WITNESS WHEREOF the parties hereto have entered into this Agreement on
the date first above written.
OWNER:
AMERICAN AVIATION, L.L.C. AMERICAN AVIATION CHARTERS, L.L.C.
By:/s/ Roger E. Thomas By:/s/ Wayne Patin
Name: Roger E. Thomas Name: Wayne Patin
Title: Member Title: Manager
<PAGE>
EXHIBIT 3
By my signature below I further certify:
During each and every period that I am operating for American Aviation,
L.L.C. ("AALLC"), I will be the temporary employee of AALLC and shall
serve under the exclusive direction and control of AALLC and shall fly
exclusively on AALLC's behalf. The terms of my temporary employment are
described in the Agreement between AALLC and American Aviation Charters,
L.L.C. ("Owner") who serves thereunder as AALLC's temporary employment
agent. Any payments for my temporary services shall be made through the
Owner as agent for AALLC. Any taxes, withholdings, employment benefits or
unemployment payments of any nature will be the responsibility of Owner.
I understand that pursuant to such Agreement, Owner has relinquished and
granted to AALLC each and every right it may have to control, direct,
instruct or in any way influence my actions during each and every period
that the aircraft is operated on AALLC's behalf, however, nothing in this
paragraph shall be construed to abridge the authority and responsibility
of the pilot in command provided in FAR <section>91.3
Sincerely,
Pilot Signature _______________________
Pilot Name (Print) _____________________
Date: _______________________________
Acknowledged by
American Aviation, L.L.C.
By: _____________________
Name: ___________________
Title: ___________________
Date: ___________________
<PAGE>
EXHIBIT 4
INSURANCE REQUIREMENTS
For Owner:
1. AIRCRAFT LIABILITY INSURANCE - including Public Liability, Property
Damage and Passenger Liability Coverage in a total combined single limit
for each and every loss in the amount of $50,000,000 for the Beech 300
aircraft and $20 million for each of the Cessna aircraft.
2. ALL RISK HULL INSURANCE - Coverage must be on an agreed value basis.
Owner shall require its aircraft hull insurers to amend their policies to
waive any and all rights of subrogation which such insurers may or could
have against the additional insureds or their insurers.
3. Contract liability clause added to the aircraft liability policy.
For AALLC:
1. COMPREHENSIVE GENERAL LIABILITY- bodily injury and property damage in
the amount of $5,000,000 for each and every loss.
2. Contract liability clause added to the aircraft liability policy.
ASSET PURCHASE AGREEMENT
BY AND AMONG
COASTAL TURBINES, INC.,
PAUL E. GRAHAM,
TINA TAYLOR GRAHAM
AND
OMNI ENERGY SERVICES CORP.
APRIL 17, 1998
<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT"), dated as of April
17, 1998, is entered into by and among COASTAL TURBINES, INC., a Louisiana
corporation ("SELLER"), PAUL E. GRAHAM and TINA TAYLOR GRAHAM, the sole
shareholders of Seller (collectively, the "SHAREHOLDERS" and individually,
a "SHAREHOLDER), and OMNI ENERGY SERVICES CORP., a Louisiana corporation
("PURCHASER").
W I T N E S S E T H:
WHEREAS, the Shareholders own 100% of the Seller's issued and
outstanding common stock;
WHEREAS, Seller owns a turbine repair, service and overhaul business
(the "BUSINESS");
WHEREAS, Seller, in connection with the Business, owns the assets,
properties and other rights described in Section 1.01 below (collectively,
the "ASSETS"); and
WHEREAS, Seller desires to sell and Purchaser desires to buy all of
the Assets upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants set forth herein, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
PURCHASE AND SALE
SECTION 1.11834. SALE AND PURCHASE OF THE ASSETS. Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing (as
defined in Section 2.01 hereof) Seller shall convey, sell, transfer and
deliver to Purchaser and Purchaser shall purchase, acquire and accept from
Seller, all of the following Assets for the consideration specified below,
excluding those Assets, and rights specified in Section 1.02:
(1) FIXED ASSETS. All helicopters, machinery, equipment, spare
parts, furniture, and other movable assets of the Business, listed on
SCHEDULE 1.01(A) (collectively, the "FIXED ASSETS");
(2) INVENTORY. All usable inventory of the Business listed on
SCHEDULE 1.01(B) (the "INVENTORY");
(3) LICENSES AND PERMITS. All licenses, permits, consents, use
agreements, approvals, authorizations and certificates of any regulatory,
administrative or other governmental agency or body to the extent they
relate exclusively to the Business or the ownership, use or operation of
the Assets, in each case to the extent transferable by Seller including
without limitation the FAA 145 repair station certificate;
(4) TRADEMARKS, TRADE NAMES AND SIMILAR RIGHTS. All right, title and
interest of Seller in and to the name "Coastal Turbines, Inc." together
with the goodwill of the Business associated with such trade name, and all
of Seller's other intellectual property relating exclusively to the
Business or the ownership, use or operation of the Assets, including,
without limitation, trade secrets, trademarks and trade names, trademark
and trade name registrations, service marks and service mark registrations,
copyrights, copyright registrations, the applications therefor and all
rights of Seller as licensee under licenses to the extent transferable,
relating to such intellectual property, together with all of the goodwill
appurtenant thereto (all such intellectual property being hereinafter
referred to collectively as the "PROPRIETARY RIGHTS");
(5) SUPPLIES. All operating supplies, fuel, packaging supplies,
maintenance, warehouse and office supplies, tools, maintenance equipment
and all similar property owned by Seller;
SECTION 2.5. EXCLUDED ASSETS. Notwithstanding the provisions of
Section 1.01 hereof, the Assets do not include the following (the "EXCLUDED
ASSETS"):
(1) ACCOUNTS RECEIVABLE. All accounts receivable of the Business
(including intracompany liabilities or obligations owed to the Business by
Seller), together with any unpaid interest accrued thereon and any security
or collateral therefor, and all sums due for service performed or products
provided by Seller prior to the Closing Date (as defined in Section 2.01),
including, if any, unbilled receivables as of the Closing Date;
(2) INSURANCE. All insurance policies and rights thereunder,
including rights to any cancellation value on the Closing Date; and
(3) OPEN WORK ORDERS. All engine repair, service and/or engine
overhaul work orders entered into by Seller before the Closing Date ("OPEN
WORK ORDERS"), to the extent listed on SCHEDULE 1.02(B) and all rights and
obligations arising thereunder;
(4) CASH. Any and all cash on hand including deposits, accounts and
cash equivalents, on the Closing Date.
SECTION 3.4. ASSUMED LIABILITIES. Except as otherwise provided in
this Agreement, subject to and in accordance with the terms and provisions
of this Agreement, at the Closing Purchaser will assume, perform and
discharge only the following liabilities (collectively, the "ASSUMED
LIABILITIES"):
(1) TAXES. Other than the obligations of Seller, as landlord, for
the tax liabilities set forth in the Lease attached as EXHIBIT A hereto,
any and all taxes which may be applicable to the ownership, use or
operation of the Assets or the Business related thereto with respect to
periods beginning with the Closing, or arising from events or occurrences
on or after the Closing, including without limitation, income, AD VALOREM,
personal property, sales, value added, goods and services, or use taxes
resulting from Purchaser's ownership of the Assets.
SECTION 4.1. EXCLUDED LIABILITIES. Purchaser shall not assume and
shall not be responsible for any liabilities, obligations or commitments of
the Seller other than the Assumed Liabilities. In addition, to the extent
that after the Closing, the Purchaser incurs a liability, or is otherwise
responsible for personal injury or property damage, fines, penalties,
remediation costs or other damages, including any liability or
responsibility under any Environmental Laws (as defined in Section 3.15
hereof), then to the extent such liability is based upon a condition or
defect of the Assets that existed on or before the Closing Date or related
to actions taken by the Seller in (i) operating the Business or (ii) in the
ownership, use or operation of the Assets, in each case prior to the
Closing Date, such liability shall constitute an Excluded Liability.
SECTION 5.1 CONSIDERATION; PURCHASE PRICE. Upon the terms and
subject to the conditions contained in this Agreement, in consideration of
and payment for the Assets, Purchaser shall pay to Seller (i) ONE MILLION
ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,100,000) and (ii) 4,546 Shares
of OMNI Energy Services Corp. common stock (the "STOCK") (collectively, the
"PURCHASE PRICE"). The Purchase Price shall be payable to Seller as
follows: Purchaser shall pay to Seller, in cash at the Closing, ONE
MILLION ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($1,100,000.00) (the "CASH
PAYMENT"), and Purchaser shall issue to Seller at the Closing a stock
certificate(s) representing the Stock (the "STOCK CERTIFICATES").
SECTION 6.1 EMPLOYMENT AND NON-COMPETITION AGREEMENT. At the
Closing, Purchaser shall enter into an Employment and Non-Competition
Agreement with Paul E. Graham (the "EMPLOYMENT AGREEMENT"), as set forth on
EXHIBIT B attached hereto and made a part hereof.
ARTICLE II
THE CLOSING
SECTION 1.11834. TIME AND PLACE. Upon the terms and subject to the
conditions set forth in this Agreement, the closing of the purchase and
sale of the Assets and the assumption of the Assumed Liabilities (the
"CLOSING") will take place at 10:00 a.m. on the date hereof at the offices
of Jones, Walker, Waechter, Poitevent, Carrere & Denegre, located at 201
St. Charles Avenue, 51st Floor, New Orleans, Louisiana, (the "CLOSING
DATE").
SECTION 2.11834. SELLER'S DELIVERIES. At the Closing, Seller will
deliver to Purchaser the following, in form and substance reasonably
satisfactory to Purchaser and its counsel:
(1) A Bill of Sale and General Assignment in the form attached hereto
as EXHIBIT C transferring and assigning to Purchaser all of Seller's right,
title and interest in all Assets; and
<PAGE>
assigning to Purchaser (together with any necessary consents) and other
intangible rights included within the Assets to the extent assignable (to
the extent non-assignable, it is understood and agreed that Purchaser shall
receive the economic benefits thereto, to the extent reasonably
practicable);
(2) Full and complete possession of the Assets as provided herein;
(3) To the extent transferable, originals of all certificates, use
agreements, permits, licenses and governmental, administrative and
regulatory approvals and authorizations that are in Seller's possession and
that are necessary to own and operate the Assets in compliance with all
applicable federal, state and municipal laws;
(4) At the Closing, Seller shall enter into a lease agreement,
pursuant to which Seller shall lease to Purchaser Seller's facility,
located at 123 Row 3, Lafayette, Louisiana 70508, for a term to commence on
the Effective Date and otherwise on the terms and in the form of EXHIBIT A
attached hereto and made a part hereof.
(5) Copies of any consents that are referenced in Section 3.04
hereof;
(6) All original titles and registrations with the Federal Aviation
Administration relating to any of the Assets described on SCHEDULE 1.01(A)
including without limitation any of the helicopters, helicopter engines or
related spare parts listed on such schedule;
(7) The UCC-3 termination statements listed on EXHIBIT D, executed by
Bank of Sunset & Trust Co. and Bank One, respectively;
(8) Such other documents and instruments reasonably necessary to
effect the transactions contemplated hereby, including the conveyance of
title to the Assets to Purchaser.
SECTION 3.8. PURCHASER'S DELIVERIES. At the Closing, Purchaser will
deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(1) The Cash Payment, by wire transfer to an account specified in
writing by Seller to Purchaser prior to the Closing;
(2) The Stock Certificates to be delivered and issued by Purchaser to
Seller at the Closing.
(3) A Bill of Sale and General Assignment in the form attached hereto
as EXHIBIT C pursuant to which Purchaser shall assume the Assumed
Liabilities;
(4) Such other documents and instruments as shall be reasonably
necessary to effect the transactions contemplated hereby.
SECTION 4.4. OTHER DELIVERIES. Mr. Paul E. Graham and Purchaser
shall each execute and deliver the Employment Agreement contemplated by
Section 1.07.
SECTION 5.4. TITLE, POSSESSION AND RISK OF LOSS. Title, possession
and risk of loss or destruction or damage to the Assets shall pass to
Purchaser at and upon Closing. Purchaser shall take all steps and actions
as may be required to take actual possession, operation and control and
responsibility for the Assets on the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller and each of the Shareholders hereby represent and warrant to
Purchaser that:
SECTION 1.11834. CORPORATE EXISTENCE. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Louisiana. Seller has all requisite corporate power to carry on
the Business, as it is now being conducted, and to own and operate the
Assets, and is duly qualified to transact business and is in good standing
in each jurisdiction where the ownership of the Assets or the conduct of
the Business requires such qualification and the failure to be so qualified
would have a material adverse effect on the Business.
SECTION 2.11834. CORPORATE POWER AND AUTHORITY. Seller has the
requisite corporate power and authority to enter into this Agreement and
consummate the transactions contemplated hereby. All corporate action
necessary to authorize the execution, delivery and performance of this
Agreement by Seller has been duly taken and this Agreement has been duly
executed and delivered by Seller. This Agreement is a good, valid and
binding obligation of Seller and each of the Shareholders, enforceable
against Seller and each of the Shareholders in accordance with its terms
(except as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally).
SECTION 3.11834. NO CONFLICT. The execution and delivery of this
Agreement by Seller and each of the Shareholders, the compliance by Seller
and each of the Shareholders with the terms and conditions hereof and the
consummation by Seller of the transactions contemplated hereby will not (a)
result in or constitute a default, breach, or violation of any of the
terms, conditions or provisions of the Articles of Incorporation or Bylaws
of Seller, (b) violate any provision of, any judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree applicable
to, or any governmental permit or license issued to, Seller or any
Shareholder, or (c) conflict with, result in a breach of, constitute a
default or event of default (whether by notice or the lapse of time or
both) under or accelerate or permit the acceleration of the performance
required by Seller or any Shareholders, under any material indenture,
mortgage, lien, agreement or instrument to which Seller or any Shareholder
is a party or by which Seller or any of the Assets or any shareholder may
be bound.
SECTION 4.11834. CONSENTS. No authorization, consent, approval,
permit or license of or filing with any governmental or public body or
authority, any lender or lessor or any other person or entity is required
to authorize the execution, delivery and performance of this Agreement on
the part of Seller or any Shareholder, other than those which have been
obtained.
SECTION 5.11834. TITLE TO AND CONDITION OF ASSETS.
(1) Seller has good and marketable title to all of the Assets, free
and clear of all pledges, liens, defects, leases, licenses, equities,
conditional sales contracts, charges, claims, encumbrances, security
interests, easements, restrictions, chattel mortgages, mortgages or deeds
of trust (collectively, the "LIENS"). The instruments of conveyance, and
other endorsements and instruments of transfer and assignment contemplated
by this Agreement are sufficient to transfer good and marketable title to
the Assets to Purchaser, free and clear of all Liens. The Assets are in
good and usable condition and repair, ordinary wear and tear excepted.
(2) The items of Inventory sold hereunder have been manufactured,
mixed, packaged and labeled in accordance with all governmental laws and
regulations, whether federal, state or local, including all environmental
laws and regulations. The items of packaging supplies, office, warehouse,
processing, operating and storage supplies, spare parts, fuel, tools,
maintenance equipment and similar property sold to Purchaser hereunder are
suitable for use in the ordinary course of the Business.
(3) Seller has obtained all necessary releases of security interests
from any lenders and creditors of Seller holding a security interest in any
of the Assets.
SECTION 6.3 CONTRACTS. Other than Open Work Orders, there are no
contracts or commitments of Seller and/or Shareholders that are material to
the operation of the Business or the ownership, use or operation of the
Assets (including without limitation, mortgages, indentures, loan
agreements, long-term supply contracts and open contracts).
SECTION 7.3 EMPLOYEE MATTERS. None of the employees of Seller is a
member of or represented by any labor union; Seller nor any of its
employees are subject to any collective bargaining agreement; no petition
for certification or union election is pending with respect to any of
Seller's employees; and, to Seller's knowledge, there are no attempts of
any kind being made to organize any of such employees. Within one year
prior to the Closing Date, Seller had no more than 6 employees at any one
time.
SECTION 8.3 ABSENCE OF CERTAIN CHANGES. Since [December 31, 1997],
Seller has conducted the Business only in the ordinary course and there
has been no material adverse changes in the business, operations or
financial condition of the Seller or to the Assets.
SECTION 9.3. PROPRIETARY RIGHTS. SCHEDULE 3.09 identifies all
patents, inventions, research, trademarks, trade names, copyrights, service
marks, royalty rights or design rights used now or within the last year by
Seller or the Shareholders in the operation of the Business or ownership,
use or operation of the Assets or the performance of the Assumed
Liabilities. Except as set forth on SCHEDULE 3.09, (a) neither Seller nor
the Shareholders are bound by or a party to any options, licenses or
agreements of any kind with respect to patents, trademarks, service marks,
copyrights and pending applications therefor relating to the Business or
the ownership, use or operation of the Assets or the Assumed Liabilities
and (b) there are no claims or suits pending or, to Seller's or the
Shareholder's knowledge, threatened against Seller or the Shareholder
claiming an infringement by Seller or the Shareholders of any patents,
copyrights, licenses, trademarks, service marks or trade names of others in
connection with the Business or the ownership, use or operation of the
Assets or the Assumed Liabilities.
SECTION 10.3. COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Seller
is in compliance, in all material respects, with all applicable laws,
regulations, orders, judgments, ordinances or decrees of any federal, state
or local court or any governmental authority. Neither Seller nor the
Shareholders have received any notices or orders, nor to its knowledge have
any notices or orders been issued, relating to any violation by Seller or
the Shareholders of any law, ordinance, regulation or requirement that
would have a material adverse effect on the Business or the ownership, use
or operation of the Assets or the Assumed Liabilities.
SECTION 11.3. RELATIONSHIP WITH SUPPLIERS AND CUSTOMERS. Seller has
not received notice of any intention to terminate or materially modify any
relationship with its suppliers or customers.
SECTION 12.3. TAXES. All foreign, federal, state, parish and local
tax returns and reports required to be filed by Seller in connection with
the operations of the Business or the ownership, use or operation of the
Assets have been filed within the time period and in the manner prescribed
by law. Seller has no reason to believe that any such returns and reports
filed for the five preceding calendar years do not reflect accurately all
liability for taxes required to be paid in connection with the operations
of the Business or the ownership, use or operation of the Assets for the
periods covered thereby. All taxes and assessments (including interest and
penalties) owed in connection with the operations of the Business or the
ownership, use or operation of the Assets have been paid in full or
appropriate provision for payment has been made through the date hereof,
including all estimated corporate income tax payments due and payable
through the date hereof. Seller currently has no outstanding tax liability
under the law of any jurisdiction that would subject Purchaser or the
Assets to the liability or withholding requirements of such jurisdiction's
law. To the knowledge of Seller there is no pending examination or
proceeding by any authority or agency with respect to the Business or use,
operation or ownership of the Assets relating to the assessment or
collection of any taxes.
SECTION 13.3 CONCERNING JOINT, SEVERAL AND IN SOLIDO LIABILITY OF
SELLER AND THE SHAREHOLDERS.
(a) Seller and each Shareholder is accepting joint, several and in
solido liability hereunder in consideration of the Purchase Price and other
obligations undertaken by Purchaser under this Agreement, for the mutual
benefit, directly and indirectly, of Seller and each Shareholder and in
consideration of the undertakings of each Shareholder to accept joint,
several and in solido liability for the obligations of each of them.
(b) Seller and each Shareholder jointly, severally and solidarily
hereby irrevocably and unconditionally accept, as a co-obligor, joint,
several and solidary liability with the other with respect to the payment
and performance of the all of the obligations arising under this Agreement,
it being the intention of the parties hereto that all the obligations shall
be the joint, several and solidary obligations of each of the Seller and
each Shareholder without preferences or distinction among them.
(c) If and to the extent that Seller or either Shareholder shall fail
to make any payment with respect to any of the obligations hereunder as and
when due or to perform any of such obligations in accordance with the terms
thereof, then in each such event, Seller or either Shareholder will make
such payment with respect to, or perform, such obligation.
(d) The obligations of Seller and each Shareholder under the
provisions of this Section 3.13 constitute full recourse obligations of
such party, enforceable against such party to the full extent of such
party's properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(e) Seller and each Shareholder hereby waive notice of acceptance of
its joint, several and solidary liability, notice of occurrence of any
breach of this Agreement, or of any demand for any payment or performance
under this Agreement, notice of any action at any time taken or omitted by
Purchaser under or in respect of any of the obligations hereunder, any
requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Agreement. Seller and
each Shareholder hereby assent to, and waives notice of, any extension or
postponement of the time for the payment or performance of any of the
obligations hereunder, the acceptance of any partial payment or
performance thereon, any waiver, consent or other action or acquiescence by
Purchaser at any time or times in respect of any default by Seller and/or
any Shareholder in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by Purchaser in respect of any of the obligations hereunder.
Without limiting the generality of the foregoing, Seller and each
Shareholder assents to any other action or delay in acting or failure to
act on the part of Purchaser, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder which might,
but for the provisions of this Section 3.13, afford grounds for
terminating, discharging or relieving such party, in whole or in part, from
any of its obligations under this Section 3.13, it being the intention of
Seller and each Shareholder that, so long as any of the obligations
hereunder remain unsatisfied, the obligations of such party under this
Section 3.13 shall not be discharged except by performance and then only to
the extent of such performance. The obligations of Seller and each
Shareholder under this Section 3.13 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any reconstruction or
similar proceeding with respect to Seller or any Shareholder. The joint,
several and solidary liability of the Seller and each Shareholder hereunder
shall continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of Seller or any
Shareholder.
SECTION 14.3 ERISA. Seller has never maintained or become obligated
to contribute to any plan or arrangement as defined in Section 3.3 of
ERISA, that (a) is subject to Title IV of ERISA, (b) is maintained,
administered or contributed to by Seller and (c) covers any employee or
former employee of Seller. Seller has not within the last five years
engaged in, nor is Seller a successor to an entity that has engaged in, a
transaction described in Section 4069 of ERISA.
SECTION 15.3 LEGAL PROCEEDINGS. There are no actions, suits, or
proceedings pending, or threatened investigations, against or affecting
Seller or the Shareholders, or the use, ownership or operation of the
Assets, the Business or the Assumed Liabilities, at law or in equity, by or
before any governmental authority, known to Seller or the Shareholders,
which action, suit, investigation or proceeding, if resolved against Seller
or the Shareholders is reasonably likely to have a material adverse effect
on the use, ownership or operation of the Assets, the Business or the
Assumed Liabilities, including (i) unfair labor practice charges or
complaints alleging violations of the National Labor Relations Act or any
similar state law or regulation, (ii) charges of discrimination before the
Equal Employment Opportunity Commission or any state or local government
agency responsible for the enforcement of state or local anti-
discrimination laws, (iii) claims before the United States Department of
Labor or before any local government agency responsible for the enforcement
of similar state or local laws alleging violations of the Fair Labor
Standards Act or any state or local laws covering such matters, and (iv)
claims before the United States Department of Labor or any other federal
agency or before any state or local government agency responsible for the
enforcement of state or local laws alleging violations of any occupational
safety and health laws, or Environmental Laws (as defined in Section 3.16
hereof) or any state or local law covering such matters. There are no
outstanding unsatisfied judgments, decrees, consent orders or other orders
of any governmental authority against or affecting the use, ownership or
operation of the Assets, the Business, or the Assumed Obligations known to
Seller or the Shareholders. No action or proceeding has been instituted
or, to the best of Seller's and the Shareholders' knowledge, threatened
against Seller or any Shareholder before any governmental authority by any
Person seeking to restrain or prohibit the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby or
thereby.
SECTION 16.3 ENVIRONMENTAL.
(a) "Environmental Laws" means any federal, state, local or foreign
environmental law, ordinance, criterion guideline or regulation, which
include but are not limited to: (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601-
9675, as amended by the Superfund Amendments and Reauthorization Act of
1986; (ii) the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended; (iii) the Resource Conservation and Recovery Act, as amended; (iv)
the Toxic Substances Control Act, as amended; (v) the Hazardous Material
Transportation and Uniform Safety Act; (vi) the Clean Air Act, as amended;
(vii) the Federal Water Pollution Control Act, as amended; (viii) the Oil
Pollution Act of 1990, as amended and (ix) the Louisiana Environmental
Quality Act. "Hazardous substances," "hazardous wastes," and "toxic
substances" includes materials defined as "hazardous substances,"
"extremely hazardous substances," "hazardous wastes," "hazardous
constituents," "hazardous materials," "petroleum," "chemical substances,"
"pollutants," "contaminants," "solid waste" or "toxic substances" in the
Environmental Laws.
(b) Seller has (i) obtained all necessary licenses, permits and other
authorizations and approvals required under the Environmental Laws, and
(ii) complied with all Environmental Laws concerning (x) emissions,
discharges, releases or threatened release of toxic or hazardous substances
or wastes into the environment; (y) generation, use, collection, treatment,
storage, transportation, recover, removal, discharge, disposal or handling
of toxic or hazardous substances or wastes; and (z) record-keeping,
maintenance, testing, inspection, notification and reporting requirements
with respect to toxic or hazardous substances or wastes. Seller has not
filed any notice under any Environmental Law indicating past or present on-
site treatment, storage or disposal of toxic or hazardous substances or
wastes or reporting a spill or release of toxic or hazardous substances or
wastes into the environment.
(c) Seller is not, nor has it been, subject to any civil, criminal or
administrative action, suit, demand, claim, hearing, notice or demand
letter, notice of violation, investigation, nor is any such action,
proceeding pending or threatened against Seller pursuant to any
Environmental Law. Seller has no knowledge of, nor has Seller received
notice of, any past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with
or prevent compliance or continued compliance with any Environmental Law or
which may give rise to any common law or legal liability or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation under any Environmental Law. There are no facts or
circumstances that would form the basis of a claim, citation or allegation
against Seller for a violation of, or alleging liability under, any
Environmental Law.
(d) There are not, and have not been, any underground tanks of any
type (including tanks storing gasoline, diesel fuel, oil or other petroleum
products) or disposal sites for toxic or hazardous substances or wastes
located on or under any of the real property owned or operated by Seller.
(e) Seller has not, nor has any person engaged by Seller, treated,
used, generated or manufactured any hazardous substances or wastes. Seller
has not engaged any person to handle, transport, treat store or dispose of
hazardous substances or wastes on its behalf, and disposal transportation,
treating, storage or handling by the Seller of hazardous substances and
wastes has been in compliance with all Environmental Laws.
SECTION 17.3. DISCLOSURE AND RELIANCE. None of the information,
documents, certificates or instruments furnished by Seller or the
Shareholders to Purchaser or any of its representatives in connection with
this Agreement are false or misleading in any material respect or contain
any material misstatement of fact or omit to state any material facts
required to be stated to make the statements therein not misleading. The
representations and warranties made herein are made by Seller and the
Shareholders with the knowledge and expectation that Purchaser is placing
reliance thereon. To the extent that any portion of the representations or
warranties made herein were made to Seller's or any Shareholder's
knowledge, Seller and the Shareholders represent that they have made due
and reasonable inquiry with respect thereto. Purchaser acknowledges and
affirms that such party has had access to such of the books, records, and
other materials and information regarding the Seller and the Business and
the Assets, deemed necessary by Purchaser to evaluate the merits and risks
of the transactions contemplated by this Agreement and acknowledges that it
has relied solely on the representations, warranties and covenants
contained in this Agreement and the Schedules and its own investigation in
entering into this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents and warrants to Seller that:
SECTION 1.11834. CORPORATE EXISTENCE. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Louisiana with full corporate power to carry on its business as
now being conducted and to own and operate the Assets now owned and
operated by it, and is duly qualified to transact business and is in good
standing in each jurisdiction where the ownership of its Assets or the
conduct of its business requires such qualification and the failure to be
so qualified would have a material adverse effect on Purchaser.
SECTION 2.11834. CORPORATE POWER AND AUTHORITY. Purchaser has the
requisite corporate power and authority to enter into this Agreement and
consummate the transactions contemplated hereby. All corporate action
necessary to authorize the execution, delivery and performance of this
Agreement by Purchaser has been taken, or, prior to Closing, will have been
taken, and this Agreement has been duly executed and delivered by
Purchaser. This Agreement is a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms
(except as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally).
SECTION 3.11834. ABSENCE OF BREACH. The execution and delivery of
this Agreement by Purchaser, the compliance by Purchaser with the terms and
conditions hereof and the consummation by Purchaser of the transactions
contemplated hereby will not (a) result in or constitute a default, breach,
or violation of any of the terms, conditions or provisions of the
Certificate of Incorporation or Bylaws of Purchaser, (b) to Purchaser's
knowledge, violate any provision of, any judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree applicable
to, or any governmental permit or license issued to, Purchaser, or (c)
conflict with, result in a breach of, constitute a default or event of
default (whether by notice or the lapse of time or both) under or
accelerate or permit the acceleration of the performance required by, any
material indenture, mortgage, lien, lease, agreement or instrument to which
Purchaser is a party or by which Purchaser may be bound.
SECTION 4.11834. CONSENTS. No authorization, consent, approval,
permit or license of or filing with any governmental or public body or
authority, any lender or lessor or any other person or entity is required
to authorize the execution, delivery and performance of this Agreement on
the part of Purchaser.
ARTICLE V
INDEMNIFICATION
SECTION 1.11834. INDEMNIFICATION BY SELLER. Seller and each of the
Shareholders shall, and hereby agree to, indemnify and hold Purchaser
harmless against and in respect of:
(1) All debts, liabilities and obligations of Seller and/or
Shareholders of any nature, whether accrued, absolute, contingent, or known
or unknown on the date hereof, existing or arising on or resulting from
events which occurred or failed to occur on or before the Closing Date, to
the extent not expressly assumed by Purchaser hereunder;
(2) Any liability, loss, claim, damage or deficiency resulting
directly or indirectly from any misrepresentation, breach of warranty or
nonfulfillment of any agreement on the part of Seller and/or any
Shareholder under this Agreement, or from any misrepresentation in or
omission from any certificate or other instrument furnished or to be
furnished to Purchaser hereunder; and
(3) Any debt, liability, loss, claim, damage or deficiency ("CLAIMS")
of any nature whatsoever (whether stated in contract or in tort) resulting
directly or indirectly from or relating to any of the Open Work Orders
whether arising or resulting from events which occurred before or after the
Closing Date including without limitation any and all such Claims arising
under or related to product liability, breach of warranty, workman's
compensation and Environmental Laws;
(4) All other actions, suits, claims, proceedings, demands,
assessments, adjustments, costs and expenses incident to the foregoing,
including, without limitation, attorneys' fees and other out-of-pocket
expenses.
SECTION 2.4. INDEMNIFICATION BY PURCHASER. From and after the
Closing, Purchaser will indemnify and hold harmless Seller against and in
respect of:
(1) Any and all claims, actions, debts, obligations, damages, losses,
deficiencies, liabilities, costs and expenses incurred or suffered by
Seller that result from, relate to or arise out of:
(1) any and all liabilities and obligations of Seller which have
been expressly assumed by Purchaser pursuant to this Agreement;
(2) any misrepresentation, breach of warranty or nonfulfillment
of any agreement or covenant on the part of Purchaser under this Agreement,
or from any misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished to Seller pursuant hereto; and
(2) All other actions, suits, claims, proceedings, demands,
assessments, adjustments, costs and expenses incident to the foregoing,
including, without limitation, legal fees and other out-of-pocket expenses.
ARTICLE VI
GENERAL PROVISIONS
SECTION 1.2. NOTICES. Any notices, demands, requests or other
communications required or permitted hereunder shall be in writing and
shall be deemed to have been sufficiently given if sent by fax or by
registered or certified mail, postage prepaid, addressed as follows:
TO THE SELLER: Coastal Turbines, Inc.
122 Row 3
Lafayette, LA 70508
Attention: Paul E. Graham
Fax: (318) 234-6612
WITH A COPY TO: Paul J. Hebert, Ltd.
301 Rue Beauregard, Suite B
Lafayette, LA 70508
Attention: Fred W. Davis
Fax: (318) 267-7400
TO THE PURCHASER: OMNI Energy Services Corp.
4500 North East Evangeline Thruway
Carencro, LA 70520
Attention: Roger Thomas
Fax: (318) 896-2796
WITH A COPY TO: Jones, Walker, Waechter,
Poitevent, Carr<e`>re & Den<e`>gre
201 St. Charles Avenue
51st Floor
New Orleans, Louisiana 70170
Attention: W. Philip Clinton, Esq.
Fax: (504) 582-8012
or such other addresses as shall be furnished by like notice by such party.
Any such notice or communication given by mail shall be deemed to have been
given two business days after deposit in the U.S. mails, and any such
notice or communications given by fax shall be deemed to have been given
when sent by and the appropriate acknowledgment received.
SECTION 2.2. COST AND EXPENSES. Unless otherwise provided herein,
each party shall pay its own respective costs and expenses (including
without limitation, the fees, disbursements and expenses of its attorneys,
accountants and advisors) in connection with the negotiation, preparation
and execution of this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 3.2. SUCCESSORS AND ASSIGNS. Without the other party's
written consent, this Agreement and the rights and obligations hereunder
may not be assigned by any party hereto. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and permitted assigns.
SECTION 4.2. ENTIRE AGREEMENT; AMENDMENT. This Agreement, including
the schedules and exhibits hereto, constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements with respect thereto. This Agreement may be amended, but
only in a writing signed by an authorized representative of each of the
parties hereto.
SECTION 5.2. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
SECTION 6.2. HEADINGS. The headings of Articles and Sections herein
are inserted for convenience of reference only and shall be ignored in the
construction or interpretation hereof.
SECTION 7.2. GOVERNING LAW. This Agreement and all documents
required hereunder shall be governed by and construed in accordance with
the laws of the State of Louisiana, excluding such laws that direct the
application of the laws of any other jurisdiction.
SECTION 8.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties and indemnification obligations contained in
this Agreement shall survive the Closing.
SECTION 9.11834. SEVERABILITY. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties
hereby waive any provisions of applicable law that render any provisions
hereof prohibited or unenforceable in any respect, but all the provisions
of this Agreement shall be enforced to the fullest extent permitted under
applicable law.
SECTION 10.11834. TRANSFER TAXES. All stamp, transfer, documentary,
sales, use, registration and other such taxes and fees (including any
penalties and interest incurred in connection with this Agreement and the
transactions contemplated hereby) (collectively, the "TRANSFER TAXES")
shall be paid by Purchaser, and Purchaser shall, at its own expense,
properly file on a timely basis all necessary tax returns and other
documentation with respect to any Transfer Tax.
SECTION 11.11834. ENFORCEMENT. The parties agree that irreparable
damage would occur if any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to
an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any
court of the United States located in the State of Louisiana or in
Louisiana state court, this being in addition to any other remedy to which
the parties are entitled at law or in equity.
SECTION 12.11834. NO THIRD-PARTY BENEFICIARIES. This Agreement is
not intended to create any rights, benefits or remedies in favor of any
person not a party hereto and shall not be deemed to confer upon any such
person any rights, benefits or remedies.
SECTION 13.11834 RIGHT OF SET-OFF. Purchaser shall have the right to
set-off against any amounts otherwise payable to Seller by Purchaser, under
this Agreement, the Employment and Non-Competition Agreement or otherwise,
any amounts payable by Seller to Purchaser pursuant to the indemnification
provisions herein set forth. Said right of set-off, however, shall not be
exclusive of any other right or remedy Purchaser may have with respect to
indemnification claims, whether by contract, at law or in equity. Further,
the amounts which are otherwise payable to Seller by Purchaser shall not be
deemed to limit Purchaser's right to indemnification under this Agreement,
at law or in equity.
SECTION 14.11834 FURTHER ASSURANCES. Seller, the Shareholders and
Purchaser each agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions
as may be necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement, including,
without limitation, any and all documents necessary to assign to Purchaser,
or in the case of intellectual property to grant Purchaser the right to
use, any of the Assets used by Seller in the operation of the Business or
the ownership, use or operation of the Assets that are not conveyed to
Purchaser at the Closing.
[The remainder of this page is left intentionally blank]
<PAGE>
<PAGE>
IN WITNESS WHEREOF, this Asset Purchase Agreement has been executed on
behalf of each of the parties hereto as of the day and year first above
written.
PURCHASER:
OMNI ENERGY SERVICES CORP.:
By: /S/ R. Patrick Morris
Name: R. Patrick Morris
Title: Vice President and General Manager
Aviation Division
SELLER:
COASTAL TURBINES, INC.:
By: /S/ Paul E. Graham
Name: Paul E. Graham
Title: President
SHAREHOLDERS:
By: /S/ Paul E. Graham
Name: Paul E. Graham
By: /S/ Tina Taylor Graham
Name: Tina Taylor Graham
<PAGE>
EXHIBIT A
LEASE AGREEMENT
This LEASE AGREEMENT (this "LEASE") is entered into as of the 17th day
of April, 1998 (the "EFFECTIVE DATE"), by and among COASTAL TURBINES, INC.,
a Louisiana corporation ("SELLER"), PAUL E. GRAHAM and TINA TAYLOR GRAHAM,
the sole shareholders of Seller (collectively, the "SHAREHOLDERS" and
individually, a "SHAREHOLDER"), and OMNI ENERGY SERVICES CORP., a Louisiana
corporation ("PURCHASER"), in connection with that certain Asset Purchase
Agreement (the "PURCHASE AGREEMENT") of even date herewith. Capitalized
terms not otherwise defined herein shall have the meaning provided in the
Purchase Agreement.
W I T N E S S E T H:
WHEREAS, as a condition precedent to Purchaser's agreement to enter
into the Purchase Agreement, Seller has agreed to lease to Purchaser the
facility it owns and currently occupies located at 123 Row 3, Lafayette,
Louisiana (the "FACILITY").
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Seller, Shareholders and Purchaser agree as follows:
(1) LEASE. Seller hereby leases to Purchaser all rights of Seller in
and to the Facility on the terms and conditions hereinafter set forth.
(2) TERM. The term of this Lease shall commence on the Effective
Date and shall terminate 90 days after commencement of this Lease (the
"INITIAL TERM"). Purchaser shall have an option to extend the term of
this Lease (the "RENEWAL TERM"), with such Renewal Term to be for 90 days,
commencing upon the expiration of the Initial Term. Purchaser shall renew
the Lease by notifying the Seller in writing prior to the termination of
the Initial Term.
(3) CONSIDERATION. Seller is entering into this Lease in order to
induce Purchaser to enter into the Purchase Agreement. The fulfillment of
Purchaser's obligations under the Purchase Agreement shall constitute all
rental which is due under this Lease's Initial Term. Seller and Purchaser
intend that the only expenses which Purchaser shall incur in connection
with this Lease's Initial Term are the cost of (a) any usual and customary
monthly utility charges necessary for Purchaser's use of the Facility,
including, without limitation, all water, power and sewerage, prorated as
to the Effective Date accordingly, and (b) insuring the Assets Purchaser
acquired pursuant to the Purchase Agreement and located at the Facility
during the duration of this Lease's Initial Term. In addition to the
expenses Purchaser shall incur in connection with the Initial Term, during
the Renewal Term, Purchaser shall pay to Seller rent in the amount of ONE
THOUSAND TWO HUNDRED NINETY-FIVE DOLLARS ($1,295.00) per month. However,
if the Purchaser terminates this Lease during the Renewal Term, under the
terms of this Lease, the rent shall be prorated and Purchaser shall be
reimbursed accordingly.
(4) MAINTENANCE AND REPAIRS. Seller assumes responsibility and
liability for the maintenance and repair of the Facility, and it shall be
the duty of Seller, at its own expense, to keep the Facility and any
structure located thereon in good condition during the term of this Lease,
ordinary wear and tear excepted. If Seller does not perform its required
maintenance and repair obligations within ten (10) days following receipt
of notice from Purchaser specifying the problem to be corrected, Purchaser
may arrange for the necessary maintenance and repair and Seller shall
promptly reimburse Purchaser for the reasonable cost of such maintenance or
repair.
(5) COMPLIANCE WITH LAWS. Purchaser's operations shall comply with
all zoning and nuisance laws. Seller shall be responsible for keeping the
Facility in compliance with all building codes, zoning laws, fire codes,
accessibility laws (including, without limitation, the Americans With
Disabilities Act), and other federal, state, and local laws, ordinances,
regulations, and orders relating to the physical condition of the Facility
and the improvements thereon.
(6) TAXES AND OTHER PUBLIC CHARGES. Seller shall pay, as they become
due and payable and at least 30 days before any fine, penalty, interest, or
cost may accrue thereon, all real estate taxes, assessments, service
charges, special district taxes, and all other levies and charges, which
are assessed or imposed by governmental or other taxing or levying
authority upon the Property or any part thereof, or become payable during
the term of this Lease.
(7) INSURANCE. Seller shall be responsible for maintaining all
insurance on the Facility (other than the movable contents thereof), and
Seller shall maintain such coverages as Seller shall desire in its sole
discretion. If Seller maintains any liability coverage, such coverage
shall name Purchaser as an additional insured. Any property or liability
insurance policies maintained by Seller shall contain a waiver of
subrogation in favor of Purchaser, and, upon Purchaser's request, Seller
shall provide Purchaser with copies of Seller's insurance policies and
appropriate insurance certificates in order to confirm the required waiver
of subrogation. Purchaser shall, however, insure its own movable property
located at the Facility against theft, damage, or destruction with such
property insurance coverage as Purchaser desires in its sole discretion.
Seller shall not be liable for any damage or destruction of Purchaser's
movable property located at the Facility.
(8) ALTERATIONS TO THE PROPERTY. Purchaser shall not alter or improve
the exterior or interior structural components of the Facility. With
Seller's prior written consent, Purchaser may, at Purchaser's sole expense,
alter the interior non-structural components of the building.
(9) COVENANT OF QUIET ENJOYMENT. Seller covenants that, for so long
as Purchaser fulfills its obligations hereunder, Purchaser shall have the
quiet enjoyment of the Facility throughout the term of this Lease.
(10) USE OF THE FACILITY. Purchaser shall use the Facility for any
lawful purpose in connection with the use, ownership or operation of the
Assets.
(11) INDEMNITY. Purchaser shall not be liable for any loss, injury,
death or damage to persons or property which at any time may be suffered or
sustained by any person or entity as a result, in whole or in part, of the
Facility's condition, and Seller shall indemnify Purchaser against, and
hold Purchaser harmless from, all claims, liability, loss or damage
whatsoever on account of any such loss, injury, death or damage. Seller's
indemnification obligation shall not apply to loss, injury, death, or
damage arising by reason of the negligence, gross negligence or willful
misconduct of Purchaser, its agents, or employees. Purchaser shall name
the Shareholders as insured under the Purchaser's comprehensive general
liability policy.
(12) TERMINATION. At any time during the Renewal Term, Purchaser may
terminate this Lease by notifying the Seller in writing five (5) days prior
to such termination date.
(13) SURRENDER OF THE FACILITY. At the expiration of this Lease, or
at its earlier termination for any cause provided in this Lease, Purchaser
shall surrender the Facility to Seller so that Seller can repossess the
Facility no later than noon on the tenth (10th) day following the day upon
which this Lease expires or terminates.
(14) NOTICES. All notices shall be in writing and provided in
accordance with the Purchase Agreement's notices provision.
(15) GOVERNING LAW. This Lease shall be governed by the laws of
Louisiana.
(16) COUNTERPARTS. This Lease may be executed in two counterparts,
each of which shall constitute an original but both of which when taken
together shall constitute one and the same instrument.
(17) SUCCESSORS AND ASSIGNS. This Lease shall be binding upon the
respective successors and assigns of the parties hereto.
(18) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties and indemnification obligations contained in this Lease shall
survive the Closing.
(19) SEVERABILITY. Should any provision of this Lease be held
unenforceable under any now existing or hereafter arising law, ordinance,
regulation, or jurisprudence, the remaining provisions of this Lease shall
remain in full force and effect.
[This page is left intentionally blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereunto set their hands as of the
Effective Date.
SELLER:
COASTAL TURBINES, INC.
By: /S/ Paul E. Graham
Paul E. Graham
President
SHAREHOLDERS:
By: /S/ Paul E. Graham
Paul E. Graham
By:/S/ Tina Taylor Graham
Tina Taylor Graham
PURCHASER:
OMNI ENERGY SERVICES CORP.
By:/S/ Roger E. Thomas
Roger E. Thomas
President
<PAGE>
EXHIBIT B
OMNI ENERGY SERVICES CORP.
AND
PAUL E. GRAHAM
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT is made and entered into
as of the 17th day of April, 1998 (this "AGREEMENT") by and between OMNI
ENERGY SERVICES CORP., a Louisiana corporation (as "COMPANY"), and PAUL E.
GRAHAM, a resident of the State of Louisiana ("EMPLOYEE").
WHEREAS, the Company has agreed to acquire the assets and assume
certain liabilities of Coastal Turbines, Inc., a Louisiana corporation
("COASTAL"), of which Employee and his wife TINA TAYLOR GRAHAM are the sole
shareholders and Employee is president, (the "PURCHASE AGREEMENT") of even
date herewith. Capitalized terms not otherwise defined herein shall have
the meaning provided in the Purchase Agreement;
WHEREAS, the Company is desirous of obtaining the services of the
Employee upon the terms and conditions contained herein; and
WHEREAS, the Employee is desirous of providing services for the
Company upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements herein contained, the receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby hires the Employee and the
Employee hereby agrees to be employed upon the terms and conditions
hereinafter set forth.
2. TERM. Subject to the provisions for termination as hereinafter
provided, the term of this Agreement shall be for a period of thirty-six
(36) months from the date hereof.
3. COMPENSATION. For the period beginning on the mutual execution
of this Agreement and expiring on the termination of this Agreement,
Company shall pay Employee Sixty Thousand Dollars ($60,000) per annum.
4. BENEFITS. Effective upon the Closing and for the period of
Employee's employment under the terms of this Agreement, Company shall
provide to Employee (i) fifteen (15) days of annual paid vacation, (ii)
sick leave consistent with the Company's sick leave policy for employee
managers, (iii) enrollment in a health insurance plan consistent with the
Company's policy for providing insurance to employee managers and their
families, and (iv) enrollment in any 401K plan or other retirement benefit
plan as soon as it becomes available to Company employees. Further, the
parties agree that Company shall consider at a later date a mutually agreed
upon bonus incentive plan.
5. DUTIES. Employee shall be employed as General Manager and Chief
Inspector of the Repair Station, and shall assume all of the
responsibilities and perform all of the duties, tasks and other work as
outlined in the Coastal Turbines, Inc. Repair Station Inspection Procedures
Manual, dated January 24, 1994, and as it may from time to time be amended.
6. TERMINATION. This Agreement may be terminated at any time by the
Company, without prior notice, for cause or for breach of any obligation of
Employee to Company. For purposes of this Agreement "cause" shall mean:
(a) personal dishonesty within the course of employment with the
Company which evidences a want of integrity or is a breach
of trust;
(b) persistent failure to abide by reasonable rules and
regulations governing the transaction of business of the
Company as the Company's Board of Directors may from time to
time adopt or approve;
(c) persistent inattention to duties, or the commission of acts
within employment with the Company amounting to gross
negligence or willful misconduct;
(d) misappropriation of funds or property of the Company or
committing any fraud against the Company or against any
other person or entity in the course of employment with the
Company;
(e) misappropriation of any corporate opportunity, or otherwise
obtaining personal profit from any transaction which is
adverse to the interests of the Company or to the benefits
of which the Company is entitled;
(f) the commission of a felony involving moral turpitude; or
(g) any violation of a term of this Agreement.
7. CONFIDENTIALITY AND NON-DISCLOSURE OF INFORMATION. Employee
recognizes, acknowledges and agrees that the names of the Company's
customers and its pricing structure, processes, operations, marketing
programs, sales techniques, designs, specifications and other trade secrets
(collectively, the "PROPRIETARY INFORMATION") are valuable, special and
unique assets of the Company. Employee will not, during or after the term
of Employee's employment, directly or indirectly, utilize for the benefit
of any person, business, enterprise or entity other than Company, or
disclose any portion or part of the Company's Proprietary Information to
any person, firm, corporation, association or other entity for any reason
or purpose whatsoever. Furthermore, it is agreed that all data, lists,
papers, memoranda, documents, and all products of Employee's skill,
resulting from Employee's employment herein, shall be and remain the sole
and exclusive property of the Company, and Employee shall execute any and
all agreements and instruments that may be necessary to evidence the
Company's ownership of such property. In the event of a breach or
threatened breach by the Employee of the provisions of this Section 6, the
Company shall be entitled to an injunction restraining the Employee from
breaching the terms of this Agreement. Nothing herein shall be construed
as prohibiting the Company from pursuing any other remedy available to the
Company for such breach or threatened breach, including the recovery of
damages from the Employee.
8. COVENANT OF NON-COMPETITION. For the period of Employee's
employment and for a period ending two (2) years after termination of
Employee's employment (whether such termination occurs because of a breach
of this Agreement by the Company or by Employee, because of a termination
of this Agreement by Company or Employee or the expiration of the term of
this Agreement or for any reason following the expiration of the term of
this Agreement) the Employee will not, directly or indirectly: (a) within
any parish or municipality in Louisiana as set forth in EXHIBIT B-1 hereto
or, with respect to activity outside of Louisiana, within any jurisdiction
in which customers of the Company are located or reside, solicit, induce or
otherwise contact past, current or prospective customers of the Company for
the purpose of soliciting business from such customers, or any other
purpose whatsoever which is detrimental to the Company or its business; (b)
within any parish or municipality in Louisiana as set forth in EXHIBIT B-1
hereto or, with respect to activity outside of Louisiana, within any
jurisdiction in which Coastal or the Company engages in or has engaged in
business, own, manage, operate, control, be employed by, consult with,
participate in, or be connected in any manner with the ownership,
management, operation or control of any business, enterprise, or entity
(including a sole proprietorship of Employee) which: (i) owns, operates,
participates in, or controls any aspect of the engine overhaul and repair,
aviation, seismic support or geophysical services business, which
businesses include but are not limited to surveying, the provision of
seismic drilling and support services, the transportation of personnel
and/or equipment used in connection with seismic drilling and support
services, and the design and manufacture of such equipment, or (ii) owns,
operates, participates in, or controls any business which competes with the
Company or (c) employ, hire, offer employment to, retain, engage or
otherwise solicit or seek to obtain the services, whether as an employee,
consultant, independent contractor or otherwise, of any employee,
consultant, independent contractor or any other person or enterprise that
performs or has in the past performed services for the Company.
9. REFORMATION/SAVINGS CLAUSE. The parties agree that if either the
length of time or the geographical area of Employee's covenants contained
herein are deemed too restrictive by any court of competent jurisdiction in
any proceeding involving the validity of said covenants, then the court may
reduce the offending restriction to the maximum restriction it deems
reasonable under the circumstances so as to give the maximum permissible
effect to the intentions of the parties as set forth herein, and the court
may enforce such provisions as so reformed.
10. REMEDIES AND EQUITABLE PROVISIONS. The following provisions
shall apply in respect of Employee's covenants and agreements contained in
this Agreement:
(a) Employee acknowledges and agrees that Employee's covenants
contained in this Agreement are reasonable and necessary for the proper
protection of Company and that the Employee's agreements herein not to
compete with the Company shall not hinder Employee in obtaining gainful
employment at the termination of this Agreement in the event Employee shall
desire such employment.
(b) Employee acknowledges and agrees that Company does not have an
adequate remedy at law for the breach or threatened breach of Employee's
covenants contained in this Agreement and Employee therefore agrees that
Company, in addition to any other remedy which may be available to it,
shall be entitled to enforce Employee's covenants by injunction or other
equitable means. Without limiting the generality of the foregoing, the
Company shall be entitled to an injunction restraining the Employee from
owning, managing, operating, controlling, being employed by, participating
in, or being in any way so connected with any activity which is prohibited
in Section 8 and/or the solicitation of any business on his behalf or on
behalf of others from any customer. Nothing herein stated shall be
construed as prohibiting Company from pursuing any other remedies available
to the Company for such breach or threatened breach including the recovery
of damages from the Employee.
(c) The parties agree that if Company should institute litigation
against Employee to enforce any provisions of this Agreement, then the
prevailing party in such litigation shall be entitled to receive, in
addition to any other relief awarded such party, reasonable attorneys' fees
in respect of the prosecution or defense of such litigation.
11. NOTICES. Any notices, demands, requests or other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been sufficiently given if sent by fax or by registered or certified
mail, postage prepaid, addressed as follows:
TO THE SELLER: Coastal Turbines, Inc.
122 Row 3
Lafayette, LA 70508
Attention: Paul E. Graham
Fax: (318) 234-6612
WITH A COPY TO: Paul J. Hebert, Ltd.
301 Rue Beauregard, Suite B
Lafayette, LA 70508
Attention: Fred W. Davis
Fax: (318) 267-7400
TO THE PURCHASER: OMNI Energy Services Corp.
4500 North East Evangeline Thruway
Carencro, LA 70520
Attention: Roger Thomas
Fax: (318) 896-2796
WITH A COPY TO: Jones, Walker, Waechter,
Poitevent, Carr<e`>re & Den<e`>gre
201 St. Charles Avenue
51st Floor
New Orleans, Louisiana 70170
Attention: W. Philip Clinton, Esq.
Fax: (504) 582-8012
or such other addresses as shall be furnished by like notice by such party.
Any such notice or communication given by mail shall be deemed to have been
given two business days after deposit in the U.S. mails, and any such
notice or communications given by fax shall be deemed to have been given
when sent by and the appropriate acknowledgment received.
12. WAIVER OF BREACH. The waiver or nonenforcement by the Company of
a breach of any provision of this Agreement by the Employee shall not
operate or be construed as a waiver of any subsequent breach by the
Employee.
13. ASSIGNMENT. Employee acknowledges that the services to be
rendered by him are unique and personal. Accordingly, Employee may not
assign any of his rights or delegate any of his duties or obligations under
this Agreement. The rights and obligations of Company under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of Company.
14. SEVERABILITY. Every provision of this Agreement is entitled to
be severable. The parties agree that if any term or provision hereof is
held to be illegal, invalid, against public policy or unenforceable for any
reason whatsoever, such illegality or invalidity shall not affect the
validity of the remainder to the Agreement, and the remaining provisions of
this Agreement shall not be affected thereby.
15. AMENDMENTS. No alterations, modifications, amendments or changes
herein shall be effective or binding upon the parties unless the same shall
have been agreed in writing by all the parties.
16. SECTION HEADINGS. Section and other headings in this Agreement
are for reference purposes only, and are in no way intended to describe,
interpret, define or limit the scope or extent of any provision hereof.
17. COUNTERPART EXECUTION. This Agreement may be executed by any
number of counterparts with the same effect as if all parties hereto had
signed the same document. All counterparts shall be construed together and
shall constitute one agreement.
18. APPLICABLE LAW. COMPANY AND EMPLOYEE ACKNOWLEDGE AND AGREE THAT
THE LAW OF SEVERAL STATES COULD, CONCEIVABLY, APPLY TO THE TERMS OF THIS
AGREEMENT. IN ORDER TO PROVIDE CERTAINTY WITH RESPECT TO THE CONSTRUCTION,
INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT, IT IS THE INTENTION OF
THE PARTIES THAT THE INTERNAL LAWS OF THE STATE OF LOUISIANA SHALL GOVERN
ONLY THE CONSTRUCTION, INTERPRETATION, VALIDITY AND ENFORCEMENT OF EACH
TERM OF THE AGREEMENT WHICH RELATES TO OBLIGATIONS WHICH ARE INTENDED TO BE
PERFORMED OR RESTRICTIONS UPON THE ACTIVITIES OR CONDUCT OF THE PARTIES
WITHIN THE STATE OF LOUISIANA. THE CONSTRUCTION, INTERPRETATION, VALIDITY
AND ENFORCEMENT OF EACH TERM OF THE AGREEMENT WHICH RELATES TO OBLIGATIONS
TO BE PERFORMED OR RESTRICTIONS UPON THE ACTIVITIES OR CONDUCT OF THE
PARTIES OUTSIDE OF THE STATE OF LOUISIANA SHALL BE GOVERNED BY THE LAW OF
THE STATE IN WHICH SUCH ACTIVITIES OCCUR. THE PARTIES TO THIS AGREEMENT
HAVE AGREED TO THIS BIFURCATED CHOICE OF LAW AFTER CAREFUL CONSIDERATION
AND REFLECTION.
19. RIGHTS CUMULATIVE. The rights of Company hereunder shall be
cumulative and the enforcement by Company of any right shall not affect in
any way the ability of Company to enforce any other right hereunder or any
right or remedy of Company at law or in equity.
20. ENTIRE AGREEMENT. This instrument contains the entire agreement
of the parties and may not be changed orally but only by agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized managers, and the Employee has hereunto set
his hand as of the day and year first above written.
COMPANY:
OMNI ENERGY SERVICES CORP.,
a Louisiana corporation
By: /S/ R. Patrick Morris
R. Patrick Morris
Vice President and General Manager
Aviation Division
EMPLOYEE:
By: /S/ Paul E. Graham
Paul E. Graham
<PAGE>
EXHIBIT B-1
LOUISIANA PARISHES IN WHICH COVENANT NOT TO COMPETE APPLIES
Orleans
Jefferson
Plaquemines
St. Charles
Lafourche
Terrebonne
St. Martin
Assumption
St. James
Iberville
St. Mary
Lafayette
Acadia
Cameron
Vermilion
Calcasieu
Jefferson Davis
St. Bernard
<PAGE>
EXHIBIT "C"
BILL OF SALE AND GENERAL ASSIGNMENT
This BILL OF SALE AND GENERAL ASSIGNMENT (this "BILL OF SALE") is
dated as of the 17th day of April, 1998 (the "CLOSING DATE") by and among
COASTAL TURBINES INC., a Louisiana corporation ("SELLER") and PAUL E.
GRAHAM and TINA TAYLOR GRAHAM (the "SHAREHOLDERS") in favor of OMNI ENERGY
SERVICES CORP., a Louisiana corporation ("PURCHASER"). Capitalized terms
not otherwise defined herein shall have the meaning provided in that
certain Asset Purchase Agreement (the "PURCHASE AGREEMENT") by and among
Seller, Purchaser, and Shareholders, of even date herewith.
For and in consideration of the Purchase Price and for other good and
valuable consideration specified in the Purchase Agreement, the receipt and
sufficiency of which is hereby acknowledged, Seller and the Shareholders do
hereby bargain, grant, sell, convey, assign, transfer and deliver unto
Purchaser on the Closing Date all of the Assets including, but not limited
to, the assets listed on Schedules 1.01(a), 1.01(b), and 3.09 and Exhibits
A and B hereto.
TO HAVE AND TO HOLD, such Assets unto Purchaser and its successors and
assigns forever free and clear of any chattel mortgages, security interest,
pledges, restrictions, liens, encumbrances, equities or claims, and Seller
and the Shareholders hereby bind themselves, their respective successors
and assigns, jointly, severally, and solidarily to WARRANT AND FOREVER
DEFEND all and singular the Assets unto Purchaser, its successors and
assigns, against any person whomsoever claiming the same, or any part
thereof.
[This page is left intentionally blank]
<PAGE>
IN WITNESS WHEREOF, Seller, Shareholders and Purchaser have executed
this Bill of Sale effective as of the Closing Date.
SELLER:
COASTAL TURBINES, INC.
By: /S/ Paul E. Graham
Paul E. Graham
President
SHAREHOLDERS:
By: /S/ Paul E. Graham
Paul E. Graham
By: /S/ Tina Taylor Graham
Tina Taylor Graham
PURCHASER:
OMNI ENERGY SERVICES CORP.
By: /S/ R. Patrick Morris
R. Patrick Morris
Vice President and General
Manager
Aviation Division
<PAGE>
EXHIBIT D
UCC-3 TERMINATION STATEMENTS
<PAGE>
SCHEDULE 1.01(A)
CTI EQUIPMENT LIST
TCM 3000 lb. Fork Lift
60 Gal. 150PSI Black Max Air Compressor
Ex-Cell - 2 Ton Engine Hoist
Econoline Glass Bead Blast Cabinet
Starrett - Grade A Surface Plate 24" x 36"
Arbor Press - 12"
Table Vise
Snap-On Parts Washer
20 Ton Hydraulic Press
2ea Red Barn Machine - Engine Work Stands
Enco 10" Rotary Table
1X - 3X Microscope
Micron - Microfiche Reader
5ea Work Tables 4' x 8'
31ea Heavy Duty Parts Racks - Shop & Parts Room
2ea Office Desk with Chairs
1ea Receptionist Desk with Return & Chair
4ea Guest Chairs
Hewlett Packard Plain Paper Fax Machine 200
Xerox Copier Model 5309
Panasonic 412 Key Phone System with 6 Phone Receivers
GE 15 cu. ft. Refrigerator
Brother AX-500 Typewriter
Freightmaster 400 Scale
3ea 2 Drawer File Cabinets
1ea 4 Drawer File Cabinet
Allison 250 Series Tooling C20B - Some C28/C30
Micrometers, Dial Indicator, Depth Mic, etc. - Starrett
Special Test Fixtures
Shipping/Receiving Desk
Computer Desk
IBM 486 Computer with Lexmark 1000 Color Printer
<PAGE>
SCHEDULE 1.01(B)
INVENTORY
<TABLE>
<CAPTION>
PART NO. DESCRIPTION QUANTITY
<S> <C> <C>
Overhaul 6871486 Combustion Liner S/N 8-81-350 1
Overhaul 6871486 Combustion Liner S/N SB116 1
Overhaul 6871486 Combustion Liner S/N SA1753 1
Overhaul 6871486 Combustion Liner S/N_______ 1
Overhaul 6871486 Combustion Liner S/N_______ 1
Overhaul 6871486 Combustion Liner S/N_______ 1
Overhaul 6890040 #1 Noz Shield S/N 9-78-102 1
Overhaul 6890040 #1 Noz Shield S/N 12-86-293 1
Overhaul 6890040 #1 Noz Shield S/N 5-84-273 1
Overhaul A6890040 #1 Noz Shield PMA S/N LP94D-03 1
Overhaul 6895826 C30 #1 Noz Shield S/N 3-79-71 1
Overhaul 6895826 C30 #1 Noz Shield S/N 1-81-26 1
Overhaul 6898784 Adapter S/N 67814 1
Overhaul 6898784 Adapter S/N 51555 1
Overhaul 6898730 PT Support S/N DW14879 1
Overhaul 6898731 PT Support S/N MK35120 1
Overhaul 23005258 PT Inner Shaft S/N 58532 1
Overhaul 23001903 PT Outer Shaft S/N 55365 1
Overhaul 6851534 Scroll S/N MA24267 1
Overhaul 6851534 Scroll S/N MA11608 1
Overhaul 6870811 Shroud S/N ER22636 1
Overhaul 6870811 Shroud S/N ER32600 1
Overhaul 6892070 Oil Filter Hsg S/N 12773 1
Overhaul 6892070 Oil Filter Hsg S/N 28177 1
SCHEDULE 1.01(B) CONTD.
Overhaul 6853511 Exhaust Collector S/N 16892 1
Overhaul 6879879 Exhaust Collector S/N 26571 1
</TABLE>
SPARES
CAE-821691F
C20B Compressor CAC-39711
C20B Gearbox CAC-37383
CAE-822887F
C20B Turbine CAT-33728
CAE-830810
C20B Compressor CAC-33835
C20B Compressor CAC-31623
C20B Turbine CAT-36760
C20B Turbine CAT-22973
C20B Compressor CAC-16149
C20B Compressor CAC-34400
All of these modules are in various stages of repair / overhaul. Complete
log book records for all modules / engines.
<PAGE>
SCHEDULE 1.01(B) CONTD.
REPAIRABLES
5ea C20B GEARBOX COVERS
4ea C20B GEARBOX HOUSINGS
1ea C20F GEARBOX HOUSING
9sets C20B COMPRESSOR CASE HALVES
5ea C20B COMUSTION LINERS
3ea C20B #2 TURBINE NOZZLES
7ea C20B #4 TURBINE NOZZLES
4ea C20B SUMP COVERS
2ea C20B OUTER COMBUSTION CASES
3ea C20B COMPRESSOR SCROLLS
1ea C20B FRONT SUPPORT
4ea C20B VANE RINGS
5ea FUEL PUMPS
5ea FUEL NOZZLES
SERVICEABLE MODULES
<TABLE>
<CAPTION>
C20B Compressor CAC-31942F TSO-3289.2 (Rental)
<S> <C> <C>
C20B Compressor CAC-33739 TSO-1075.5 (TSI-0)
C20B Turbine CAT-80069 TSO-1828.1 (Rental)
C20B Turbine CAT-32460F TSO-2760.2 (Rental)
C20B Turbine CAT-33841 TSO-1835.7 (Rental)
C20B Gearbox CAG-32442F TSO-2667.7 (TSI-0)(Rental)
C20B Gearbox CAG-32507F TSO-2848.3 (TSI-0)
C20B Gearbox CAG-37864 TSN-4282.0
</TABLE>
<PAGE>
SCHEDULE 1.02(C)
OPEN WORK ORDERS
ESTIMATE OF REPAIRS
1. W/O 230 American Aviation CAT-22969 $16,000.00
3&4 wheel retired
2. W/O 233 Horizon Helicopters CAC-38671 $15,000.00
repair for F.O.D.
3. W/O 228 Texas National Helicopters $18,000.00
CAG-37040
repair for metal in oil
4. W/O 236 American Aviation CAT-22606 $10,000.00
Sudden stoppage inspection
5. W/O 238 Horizon Helicopters CAT-31290F $45,000.00
3500 hr. Overhaul
6. W/O 239 American Aviation CAC-39252 $ 2,000.00
Metal in oil
7. W/O 240 American Aviation CAG-33751 $15,000.00
Metal in oil
8. W/O 241 American Aviation CAT33412 $ 3,000.00
Metal in oil
9. W/O 242 Helicopter De Guatemala CAT30695P $23,000.00
1750 hr. Mini-Turbine
<PAGE>
SCHEDULE 3.09
PROPRIETARY RIGHTS
COASTAL TURBINES, INC.
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is executed as of
May 5, 1998, by and among EAGLE SURVEYS INTERNATIONAL, INC., a Texas
corporation ("EAGLE"), TIMOTHY J. FLAMAN its sole shareholder (the
"SHAREHOLDER") and OMNI ENERGY SERVICES CORP., a Louisiana corporation
("OMNI"), and the transactions contemplated hereby shall be effective for
accounting purposes as of April 1, 1998.
W I T N E S S E T H:
WHEREAS, the Board of Directors of Eagle and its Shareholder and the
Board of Directors of OMNI deem it advisable that Eagle be merged with and
into OMNI (the "MERGER") pursuant to the provisions of the Texas Business
Corporation Act (the "TBCA") and the Louisiana Business Corporation Law
(the "LBCL") and upon the terms and conditions hereinafter set forth; and
WHEREAS, Eagle is currently engaged in the geophysical survey
business, primarily in Texas (the "BUSINESS").
NOW, THEREFORE, it is agreed as follows:
ARTICLE 1
MERGER OF EAGLE INTO OMNI
SECTION 1.1 THE MERGER. At the Effective Time (as hereinafter
defined), in accordance with the terms and conditions of this Agreement and
the LBCL and TBCA, Eagle will merge with and into OMNI (the "MERGER"), the
separate corporate existence of Eagle shall cease and OMNI shall continue
as the surviving corporation (the "SURVIVING CORPORATION").
SECTION 1.2 THE CLOSING. Upon the terms and conditions set forth in
this Agreement, the closing of the transactions contemplated herein (the
"CLOSING") shall take place at the offices of Jones, Walker, Waechter,
Poitevent, Carr<e`>re & Den<e`>gre, L.L.P., at First NBC Center, New
Orleans, Louisiana, commencing at 10:00 a.m. on the date hereof (the
"CLOSING DATE").
SECTION 1.3 THE EFFECTIVE TIME; EFFECT OF MERGER.
(1) The Merger shall be effective upon the filing of Articles
and Certificate of Merger, in the form attached hereto as EXHIBIT A, with
the Secretary of State of Texas and Louisiana, respectively, in accordance
with the TBCA and the LBCL (the "EFFECTIVE TIME"), which shall be filed as
soon as practicable upon the execution of this Agreement. The Merger shall
have the effects as set forth in Section 115 of the LBCL and Section 5.06
of the TBCA.
(1) DIRECTORS AND OFFICERS; ARTICLES OF INCORPORATION; BY-LAWS.
After the Effective Time and until their successors shall have been duly
elected or appointed, as the case may be, the directors and officers of
OMNI as of the Effective Time will be the directors and officers of the
Surviving Corporation. The Articles of Incorporation and By-laws of OMNI,
as in effect immediately prior to the Effective Time, shall be the Articles
of Incorporation and By-laws of the Surviving Corporation until amended in
accordance with their respective terms and the LBCL.
SECTION 1.4 CONVERSION OF EAGLE SHARES.
(1) At and as of the Effective Time, by reason of the Merger (1)
all of the issued and outstanding shares of common stock, no par value per
share, of Eagle (the "EAGLE COMMON STOCK"), shall be converted into the
right to receive the Merger Consideration (as defined below).
(1) The "Merger Consideration" shall mean (1) a cash payment of
ONE MILLION EIGHTY THOUSAND AND NO/100 DOLLARS ($1,080,000.00), (1) 53,039
shares of common stock, $0.01 par value per share of OMNI (the "OMNI COMMON
STOCK"), and (1) the Earnout amount (as defined herein).
(1) Pursuant to this Agreement, OMNI shall pay to the
Shareholder within 10 business days of the first anniversary of the Closing
Date, an amount equal to the lesser of (A) the product of (1) $15,000
multiplied by (1) the number of survey crews fully trained and capable of
performing seismic and civil survey services (either GPS or conventional)
operated by OMNI, which are employed by Eagle at the Closing Date or are
hired by OMNI after the Closing Date to operate out of its Texas office, in
either such case, so long as each such survey crew has been employed by
OMNI as employees in good standing for a minimum of three (3) months prior
to the first anniversary of the Closing Date and (B) $300,000 (the
"EARNOUT"). The Earnout will be payable, at the election of the
Shareholder, in cash or in shares of OMNI Stock, or in a combination
thereof. If the Shareholder elects to receive all or a portion of the
Earnout in OMNI Common Stock, the number of shares of OMNI Common Stock to
be delivered to Shareholder shall be determined by dividing the amount of
the Earnout, or any portion thereof elected to be paid in OMNI Common
Stock, by the average closing price per share for the five (5) trading days
prior to the first anniversary of the Closing Date, as quoted on the Nasdaq
National Market or any other exchange or market upon which the OMNI common
Stock is then listed or traded.
(d) OMNI acknowledges that under the terms of this Agreement
Shareholder has a vested interest in i) maintaining the survey crews
presently employed by Eagle, and ii) hiring new survey crews in order to
obtain the maximum Earnout at the anniversary of the Closing Date as
described in Section 1.04(c) hereof. Further, so long as Shareholder
continues to operate the business in accordance with OMNI's past practices
in maintaining its survey crews and hiring new survey crews, OMNI agrees to
support and not to interfere in any way with Shareholder's efforts in these
regards.
SECTION 1.5 DELIVERY AND EXCHANGE OF CERTIFICATES . On the Closing
Date, the Shareholder shall deliver to OMNI all certificates representing
outstanding shares of Eagle Common Stock. Upon such delivery, OMNI shall
deliver to the Shareholder a check for ONE MILLION EIGHTY THOUSAND AND
NO/100 DOLLARS ($1,080,000), and within five (5) days after the Closing
Date, OMNI shall deliver to Shareholder a certificate representing 53,039
shares of OMNI Common Stock. Until so delivered, each certificate which
represented shares of Eagle Common Stock before the Effective Time shall be
deemed for all purposes to represent the right to receive the Merger
Consideration. OMNI may, at its option, refuse to pay any dividend or
other distribution payable after the Effective Time with respect to OMNI
Common Stock to the holder of certificates evidencing undelivered shares of
Eagle Common Stock. Whether or not a stock certificate represents shares
of Eagle Common Stock is delivered as provided herein, from and after the
Effective Time, such certificates shall under no circumstances evidence,
represent or otherwise constitute a share or other interest in Eagle or any
person, firm or corporation other than OMNI.
ARTICLE 2
EVENTS OCCURRING ON THE CLOSING DATE
SECTION 2.1 EAGLE'S AND SHAREHOLDER'S DELIVERIES. At the Closing,
Shareholder shall deliver to OMNI the following items:
(2) certificates representing all of the outstanding shares of
Eagle Common Stock;
(2) certified resolutions of Board of Directors of Eagle and
Shareholder approving the Merger and the other transactions
contemplated by this Agreement and all related agreements to
which Eagle is a party;
(2) letters of resignation of the members of Eagle's board of
directors and Eagle's officers as of the Closing Date;
(2) a certificate of good standing for Eagle issued by Secretary
of State of Texas as of a date within seven (7) days of the
Closing Date;
(2) articles of incorporation of Eagle, certified by the
Secretary of State of Texas, and bylaws of Eagle, certified
by its Secretary, as of a date within five (5) days of the
Closing Date; and
(f) evidence of the exchange of stock of Eagle and Eagle
Surveys, Ltd., and release by Mr. Frank W. Bower of any
claim or right to Eagle, the Merger Consideration and such
other matters, all in form and substance acceptable to OMNI
and its counsel in their sole discretion.
SECTION 2.2 OMNI'S DELIVERIES.
(2) At the Closing OMNI shall deliver to Shareholder a check
made payable to the account of Shareholder in the amount of
ONE MILLION EIGHTY THOUSAND AND NO/100 DOLLARS
($1,080,000.00); and
(2) Within five (5) days after the Closing Date, OMNI shall
deliver to Shareholder a certificate in the name of
Shareholder and bearing the legend set forth in Section
3.24(d) representing 53,039 shares of OMNI Common Stock.
SECTION 2.3 DELIVERY OF DOCUMENTS BY ALL PARTIES. At the Closing, all
parties to this Agreement shall execute and deliver the following
documents:
(2) An Employment Agreement between Shareholder and OMNI, which
shall be substantially in the form attached hereto as
EXHIBIT "B".
(b) The Articles and the Certificate of Merger in the form
attached as "EXHIBIT A".
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER
The Shareholder hereby represents and warrants to OMNI that:
SECTION 3.1 CORPORATE EXISTENCE. Eagle is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Texas. Eagle has all requisite corporate power to carry on the
Business, as currently conducted, and to own and operate its assets and
properties, and is duly qualified to transact business and is in good
standing in each jurisdiction where the ownership of its assets and
properties or the conduct of the Business requires such qualification.
SECTION 3.2 CORPORATE POWER AND AUTHORITY. Eagle has the requisite
corporate power and authority to enter into this Agreement and consummate
the transactions contemplated hereby. All corporate action necessary to
authorize the execution, delivery and performance of this Agreement by
Eagle has been duly taken and this Agreement has been duly executed and
delivered by Eagle. This Agreement is a good, valid and binding obligation
of Eagle and Shareholder, enforceable against Eagle and Shareholder in
accordance with its terms (except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors generally).
SECTION 3.3 NO CONFLICT. The execution and delivery of this Agreement
by Eagle and Shareholder, the compliance by Eagle and Shareholder with the
terms and conditions hereof and the consummation by Eagle and Shareholder
of the transactions contemplated hereby will not (a) result in or
constitute a default, breach, or violation of any of the terms, conditions
or provisions of the Articles of Incorporation or Bylaws of Eagle, (b)
violate any provision of, any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree applicable to Eagle or
Shareholder, or any governmental permit or license issued to Eagle, or (c)
conflict with, result in a breach of, constitute a default or event of
default (whether by notice or the lapse of time or both) under or
accelerate or permit the acceleration of the performance required by Eagle,
under any material indenture, mortgage, lien, agreement or instrument to
which Eagle is a party or by which Eagle or any of its assets or properties
may be bound.
SECTION 3.4 CAPITALIZATION AND OWNERSHIP. The authorized capital
stock of Eagle consists of 1,000,000 shares of common stock, no par value
per share, of which 100 shares are issued and outstanding. All of the
issued and outstanding shares of such common stock have been duly
authorized and are validly issued fully paid and non-assessable. There are
no outstanding warrants, options, rights, calls or other commitments,
claims or interests of any nature relating to any share of capital stock of
Eagle, and there are no outstanding securities or debt obligations of Eagle
convertible into shares of capital stock of Eagle. Other than the shares
of Eagle Common Stock owned by Shareholder, there are no shares of Eagle
capital stock outstanding. No person, other than the Shareholder, has any
right, call, claim or interest of any nature relating to the Merger
Consideration. Eagle has no subsidiaries and does not own or control
directly or indirectly, any equity or ownership interest in any other
entity.
SECTION 3.5 CORPORATE RECORDS. Correct and complete copies of Eagle's
articles of incorporation (and all amendments thereto) and bylaws as
amended and in effect as of the date hereof, have been delivered to OMNI.
Eagle's minute books, copies of which have been made available to OMNI
contain accurate minutes of all formally noticed meetings of, and written
consents to all actions taken without meetings by, the board of directors
(and any committees thereof) and shareholders of Eagle since its formation.
SECTION 3.6 INSURANCE. Eagle has heretofore made available for
inspection by OMNI a true and complete copy of all policies of fire,
liability, workers' compensation, and other forms of insurance owned or
held by Eagle. All such policies are in full force and effect, all
premiums with respect thereto covering all periods up to and including the
Closing Date have been paid, and no notice of cancellation or termination
has been received with respect to any such policy.
SECTION 3.7 INFORMATION. The Shareholder acknowledges that (a) he has
received and has reviewed to his satisfaction this Agreement and such
additional material information with respect to the Merger and OMNI, if
any, as he has requested and (b) such information is sufficient for him to
determine objectively whether to approve the Merger and enter into this
Agreement.
SECTION 3.8 CONSENTS. No authorization, consent, approval, permit or
license of or filing with any governmental or public body or authority, any
lender or lessor or any other person or entity is required to authorize the
execution, delivery and performance of this Agreement on the part of
Shareholder or Eagle, other than those which have been obtained.
SECTION 3.9 FINANCIAL STATEMENTS. Eagle has heretofore delivered to
OMNI its balance sheets as of December 31, 1997 (the "BALANCE SHEET") and
March 31, 1998 and the related statement of operations for the year and
period then ended, together with its balance sheets as of December 31, 1996
and March 31, 1997 and the related statement of operations for the year and
period then ended. The financial statements referred to in the preceding
sentence are hereinafter collectively referred to as the "Financial
Statements." Each of the Financial Statements was prepared from the books
and records of Eagle in conformity with generally accepted accounting
principles consistently applied, and fairly present the financial condition
and results of operations of Eagle for the periods and as of the dates
stated therein. Except to the extent reflected in the Financial
Statements, Eagle has no liabilities or obligations required to be
reflected in the Financial Statements (or the notes thereto) in accordance
with generally accepted accounting principles other than current
liabilities incurred in the ordinary course of business, consistent with
past practice subsequent to March 31, 1998.
SECTION 3.10 TITLE TO ASSETS; LIENS. Eagle has good and indefeasible
title to all assets and properties that it purports to own in each case
subject to no security interest, pledge, lien, lease, encumbrance or charge
other than: (a) liens for taxes not yet due and payable, (b) liens that
secure debt that is reflected on Eagle's Financial Statements, and (c)
servitudes, easements, encroachments, rights-of-way, restrictions,
covenants, and similar encumbrances which do not affect the current use of
such assets. The assets and properties owned or leased by Eagle are the
only assets necessary for the conduct of the business of Eagle, as
presently conducted.
SECTION 3.11 LEASES AND IMMOVABLE PROPERTY. Attached hereto as
SCHEDULE 3.11 is a list of each lease pursuant to which Eagle is the lessee
with respect to each parcel of immovable property leased by it
(collectively, "LEASED PROPERTY"). Eagle possesses and occupies all of the
Leased Property. Eagle does not own any immovable property. All
improvements (including all buildings, or portions thereof, and all
fixtures) on any of the Leased Property are in good repair and operating
condition, normal wear and tear and required maintenance (which has
heretofore been regularly performed) excepted, and are suitable and fit for
the purposes for which they are currently being used. The use and
occupation of the Leased Property and the improvements thereon by Eagle
comply in all material respects with all legal requirements, zoning
regulations and building codes.
SECTION 3.12 CONTRACTS. (a) SCHEDULE 3.12 describes all contracts or
commitments of Eagle and/or Shareholder that are material to the operation
of the Business or the ownership, use or operation of Eagle's assets and
properties (including without limitation, mortgages, indentures, loan
agreements, long-term supply contracts and open contracts).
SECTION 3.13 RECEIVABLES; PAYABLES.
(a) All accounts and notes receivable accrued in connection with the
operation of the Business as of the Effective Date, including their
respective balances and an accurate aging thereof are shown on Eagle's
Financial Statements. (Such notes and receivables are referred to
collectively as "RECEIVABLES"). The Receivables have been earned and
recorded in the ordinary course of business consistent with past practices,
and no Receivables are subject to any counterclaim or offset. None of the
Receivables have been sold, transferred, or otherwise disposed of by Eagle
and are fully collectible. Other than those Receivables shown on its
Financial Statements, there are no accounts or notes receivable by Eagle
which either individually or in the aggregate are material to the Business.
(b) All accounts and trade payables of the Business as of the
Effective Date, including the dollar amounts thereof are shown on Eagle's
Financial Statements (such accounts and trade payables being referred to as
"ACCOUNTS PAYABLE"). All such payables of Eagle have arisen in the
ordinary course of business, and no such payables are more than 45 days
past due, except for those account or trade payables with respect to which
there is an amount disputed in good faith and which are marked "Disputed"
on its Financial Statements. All Accounts Payable are accurately reflected
in the Financial Statements. Other than those Accounts Payable set forth
on its Financial Statement, there are no accounts or trade payables by
Eagle which either individually or in the aggregate are material to the
Business.
SECTION 3.14 EMPLOYEE MATTERS. None of the employees of Eagle is a
member of or represented by any labor union; Eagle nor any of its employees
are subject to any collective bargaining agreement; no petition for
certification or union election is pending with respect to any of Eagle's
employees; and, to Shareholder's knowledge, there are no attempts of any
kind being made to organize any of such employees.
SECTION 3.15 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1997, Eagle has conducted the Business only in the ordinary course and
there has been no material adverse changes in the business, operations or
financial condition of Eagle or to its assets, except as expressly
contemplated by this Agreement. Since March 31, 1997, Eagle has not:
(3) made any change in its authorized capital or outstanding
securities or redeemed, purchased or otherwise acquired, or agreed to
redeem, purchase or otherwise acquire, or issued, sold or delivered, or
agreed to issue, sell or deliver, any capital stock or other securities
(whether authorized and unissued or held in the treasury) or rights to
acquire such capital stock or other securities, except changes affecting
the Shareholder's acquisition of all capital stock of Eagle not owned by
him on March 31, 1997;
(3) declared or made, or agreed to declare or make, any payment
of dividends or distributions of any assets of any kind whatsoever in
respect of its capital stock;
(3) borrowed or agreed to borrow any funds or incurred; or
become subject to any obligation or liability (absolute or contingent)
except obligations and liabilities incurred in the ordinary course of
business consistent with past practices;
(3) paid any obligation or liability (absolute or contingent)
other than current liabilities then due and owing and paid in the ordinary
course of business;
(3) except as occurred in the ordinary course of business and
consistent with the past practices of Eagle sold, transferred or otherwise
disposed of, or agreed to sell, transfer or otherwise dispose of, or
acquired, or agreed to acquire, any assets, properties or rights;
(3) mortgaged, pledged or otherwise subjected, or agreed to
mortgage, pledge or otherwise subject, any of its assets to any lien,
charge or other encumbrance, or agreed to do so;
(3) entered or agreed to enter into any agreement or arrangement
granting any preferential rights to purchase any of its assets, properties
or rights (including management and control thereof), or requiring the
consent of any party to the transfer and assignment of any of such assets,
properties or rights (including management and control thereof);
(3) written up or written down the carrying value of any of its
assets;
(3) changed the job costing system or depreciation methods of
accounting for its assets;
(3) other than in the ordinary course of business, made or
permitted any amendment or termination of any contract, agreement or
license to which it is a party or by which it or its assets or properties
are subject, or forgiven or canceled any debts or claims or released or
waived any rights or claims;
(3) entered into any employment, compensation or consulting
agreement that is not terminable by Eagle, at will at any time, or
collective bargaining agreement with any person or group, or modified or
amended the terms of any such existing agreement;
(3) other than in the ordinary course of business, increased or
agreed to increase the rate of compensation payable to become payable by
Eagle or to any of its officers, directors or employees or adopted any new,
or made any amendment in any existing, profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement or other employee
benefit plan;
(3) experienced any labor trouble or lost or terminated any key
employees, or material customers or suppliers;
(3) received any citation for any violations of any material
legal requirement including, without limitation, the Federal Occupational
Safety and Health Act of 1970 or any rules or regulations promulgated
thereunder;
(3) suffered any material adverse change in its financial
condition, prospects, assets, liability or business or suffered any
material damages, destruction or losses (whether or not covered by
insurance); or
(3) entered into any other commitment or transaction or
experienced any other event that has materially and adversely affected, or
is likely to materially and adversely affect, the business, operations,
prospects, assets, liabilities or financial condition of Eagle.
SECTION 3.16 PATENTS, TRADEMARKS, AND SIMILAR RIGHTS.
(a) (i) Eagle has the sole and exclusive right to use all patents,
copyrights, trademarks, trade names, technology, know-how, processes, trade
secrets, inventions, proprietary data, formulae, research and development
data, computer software programs, and other intangible property, and any
applications for the same, owned by Eagle or the Shareholder and used in
the Business, and all goodwill associated with such intangible property
(collectively, the "INTANGIBLE PROPERTY"), and the consummation of the
transactions contemplated by this Agreement will not alter or impair any
such rights;
(ii) Eagle has the right to use all Intangible Property which is
currently used by Eagle in connection with the Business either as provided
in clause (i) above or as licensed or authorized by others, and the
consummation of the transactions contemplated by this Agreement will not
alter or impair any such rights;
(iii) No claims have been asserted by any person or entity for
the use of any such Intangible Property or challenging or questioning the
validity or effectiveness of any such license or agreement, and the
Shareholder has no knowledge of any valid basis for any such claim;
(iv) The use of such Intangible Property by Eagle does not
infringe on the rights of any person or entity and no proceedings have been
instituted, are pending, or threatened that challenge the rights of Eagle
in respect thereof; and
(v) None of Eagle's Intangible Property rights, to the best of
the Shareholder's knowledge, are being infringed by the products,
activities, operations, trade names, trademarks, service marks, trade dress
rights or copyrights of any other person or persons and none are subject to
any outstanding order, judgment, decree, stipulation or agreement
restricting the use thereof.
SECTION 3.17 COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Eagle is in
compliance, in all material respects, with all applicable laws,
regulations, orders, judgments, ordinances or decrees of any federal, state
or local court or any governmental authority. Eagle has not received any
notices or orders, nor to its knowledge have any notices or orders been
issued, relating to any violation by Eagle of any law, ordinance,
regulation or requirement that would have a material adverse effect on the
Business or the ownership, use or operation of its assets and properties.
SECTION 3.18 RELATIONSHIP WITH SUPPLIERS AND CUSTOMERS. Eagle has not
received notice of any intention to terminate or materially modify any
relationship with its suppliers or customers.
SECTION 3.19 TAXES. All foreign, federal, state, parish and local tax
returns and reports required to be filed by Eagle in connection with the
operations of the Business or the ownership, use or operation of its assets
and properties have been filed within the time period and in the manner
prescribed by law. All such returns and reports filed for the five
preceding calendar years reflect accurately all liability for taxes
required to be paid in connection with the operations of the Business or
the ownership, use or operation of Eagle's assets and properties for the
periods covered thereby. All taxes and assessments (including interest and
penalties) owed in connection with the operations of the Business or the
ownership, use or operation of Eagle's assets and properties have been paid
in full or appropriate provision for payment has been made through the date
hereof, including all estimated corporate income tax payments due and
payable through the date hereof. Neither Shareholder nor Eagle currently
has any outstanding tax liability under the law of any jurisdiction that
would subject OMNI or Eagle's assets and properties to the liability or
withholding requirements of such jurisdiction's law. There is no pending
examination or proceeding by any authority or agency with respect to the
Business or use, operation or ownership of Eagle's assets and properties
relating to the assessment or collection of any taxes.
SECTION 3.20 ERISA. Eagle has never maintained or become obligated to
contribute to any plan or arrangement as defined in Section 3.3 of ERISA,
that (a) is subject to Title IV of ERISA, (b) is maintained, administered
or contributed to by Eagle and (c) covers any employee or former employee
of Eagle. Eagle has not within the last five years engaged in, nor is
Eagle a successor to an entity that has engaged in, a transaction described
in Section 4069 of ERISA.
SECTION 3.21 LEGAL PROCEEDINGS. There are no actions, suits, or
proceedings pending, or threatened investigations, against or affecting
Eagle or Shareholder, or the use, ownership or operation of the Eagle's
assets or properties, or the Business at law or in equity, by or before any
governmental authority, which action, suit, investigation or proceeding, if
resolved against Eagle or Shareholder is reasonably likely to have a
material adverse effect on the use, ownership or operation of its assets or
properties, the Business, including (i) unfair labor practice charges or
complaints alleging violations of the National Labor Relations Act or any
similar state law or regulation, (ii) charges of discrimination before the
Equal Employment Opportunity Commission or any state or local government
agency responsible for the enforcement of state or local anti-
discrimination laws, (iii) claims before the United States Department of
Labor or before any local government agency responsible for the enforcement
of similar state or local laws alleging violations of the Fair Labor
Standards Act or any state or local laws covering such matters, and (iv)
claims before the United States Department of Labor or any other federal
agency or before any state or local government agency responsible for the
enforcement of state or local laws alleging violations of any occupational
safety and health laws, or Environmental Laws (as defined in Section 3.22
hereof) or any state or local law covering such matters. There are no
outstanding unsatisfied judgments, decrees, consent orders or other orders
of any governmental authority against or affecting the use, ownership or
operation of its assets or properties, or the Business. No action or
proceeding has been instituted or threatened against Eagle or Shareholder
before any governmental authority by any Person seeking to restrain or
prohibit the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby or thereby.
SECTION 3.22 ENVIRONMENTAL.
(3) "Environmental Laws" means any federal, state, local or
foreign environmental law, ordinance, criterion guideline or regulation,
which include but are not limited to: (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601-
9675, as amended by the Superfund Amendments and Reauthorization Act of
1986; (ii) the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended; (iii) the Resource Conservation and Recovery Act, as amended; (iv)
the Toxic Substances Control Act, as amended; (v) the Hazardous Material
Transportation and Uniform Safety Act; (vi) the Clean Air Act, as amended;
(vii) the Federal Water Pollution Control Act, as amended; (viii) the Oil
Pollution Act of 1990, as amended and (ix) the Louisiana Environmental
Quality Act. "Hazardous substances," "hazardous wastes," and "toxic
substances" includes materials defined as "hazardous substances,"
"extremely hazardous substances," "hazardous wastes," "hazardous
constituents," "hazardous materials," "petroleum," "chemical substances,"
"pollutants," "contaminants," "solid waste" or "toxic substances" in the
Environmental Laws.
(3) Eagle has (i) obtained all necessary licenses, permits and
other authorizations and approvals required under the Environmental Laws,
and (ii) complied with all Environmental Laws concerning (x) emissions,
discharges, releases or threatened release of toxic or hazardous substances
or wastes into the environment; (y) generation, use, collection, treatment,
storage, transportation, recover, removal, discharge, disposal or handling
of toxic or hazardous substances or wastes; and (z) record-keeping,
maintenance, testing, inspection, notification and reporting requirements
with respect to toxic or hazardous substances or wastes. Eagle has not
filed any notice under any Environmental Law indicating past or present on-
site treatment, storage or disposal of toxic or hazardous substances or
wastes or reporting a spill or release of toxic or hazardous substances or
wastes into the environment.
(3) Eagle is not, nor has it been, subject to any civil,
criminal or administrative action, suit, demand, claim, hearing, notice or
demand letter, notice of violation, investigation, nor is any such action,
proceeding pending or threatened against Eagle pursuant to any
Environmental Law. Eagle has no knowledge of, nor has Eagle received
notice of, any past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with
or prevent compliance or continued compliance with any Environmental Law or
which may give rise to any common law or legal liability or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation under any Environmental Law. There are no facts or
circumstances that would form the basis of a claim, citation or allegation
against Eagle for a violation of, or alleging liability under, any
Environmental Law.
(3) There are not, and have not been, any underground tanks of
any type (including tanks storing gasoline, diesel fuel, oil or other
petroleum products) or disposal sites for toxic or hazardous substances or
wastes located on or under any of the real property owned or operated by
Eagle.
(3) Eagle has not, nor has any person engaged by Eagle, treated,
used, generated or manufactured any hazardous substances or wastes. Eagle
has not engaged any person to handle, transport, treat store or dispose of
hazardous substances or wastes on its behalf, and disposal transportation,
treating, storage or handling by the Eagle of hazardous substances and
wastes has been in compliance with all Environmental Laws.
SECTION 3.23 DISCLOSURE AND RELIANCE. None of the information,
documents, certificates or instruments furnished by Eagle to OMNI or any of
its representatives in connection with this Agreement are false or
misleading in any material respect or contain any material misstatement of
fact or omit to state any material facts required to be stated to make the
statements therein not misleading.
SECTION 3.24 RESTRICTIONS ON RESALE; INVESTMENT INTENT.
(3) The Shareholder is acquiring the OMNI Common Stock to be
received in connection with the Merger for investment for its own account
and has no present intention of reselling or otherwise distributing or
participating in a distribution of such stock. The Shareholder understands
that the shares of OMNI Common Stock to be issued in the Merger will not be
registered under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), that such shares will be "restricted securities" as that term is
defined in Rule 144 ("RULE 144") promulgated by the Securities and Exchange
Commission (the "COMMISSION") under the Securities Act, and that the
Shareholder cannot transfer any of such shares unless they are subsequently
registered under the Securities Act and under any applicable state
securities law or are transferred in a transfer that, in the opinion of
counsel satisfactory to OMNI, is exempt from such registration. Each
Shareholder further understands that OMNI is not obligated by this
Agreement to register such shares under the Securities Act or under any
such state laws and that OMNI will, as a condition to the transfer of any
such shares, require that the request for transfer be accompanied by an
opinion of counsel, in form and substance satisfactory to OMNI, to the
effect that the proposed transfer does not result in a violation of the
Securities Act or any applicable state securities law, unless such transfer
is covered by an effective registration statement. The Shareholder
understands that such shares of OMNI Common Stock may not be sold publicly
in reliance on the exemption from registration under the Securities Act
afforded by Rule 144 unless and until the minimum holding period and other
requirements of Rule 144 have been satisfied.
(3) The Shareholder has been represented by competent and
experienced legal counsel in connection with the negotiation and execution
of this Agreement, has been granted the opportunity to make a thorough
investigation of and to obtain information with respect to the affairs of
OMNI and his acquisition of OMNI Common Stock, and has availed himself of
such opportunity either directly or through its legal counsel and other
authorized representatives.
(3) The Shareholder has been advised that the shares of OMNI
Common Stock issued hereunder have not been and are not being registered
under the Securities Act and that OMNI in issuing such shares is relying
upon, among other things, the representations and warranties of the
Shareholder contained in this Section in concluding that such issuance does
not require compliance with the registration provisions of the Securities
Act.
(3) The Shareholder understands and agrees that all certificates
evidencing the shares of OMNI Common Stock issued hereunder will bear
restrictive legends in substantially the following form:
The securities represented by this
certificate have not been registered under
the Securities Act of 1933, as amended (the
"Act"), or any applicable state law, and may
not be transferred without registration under
the Act and any such state law or an opinion
of counsel satisfactory to the corporation
that registration is not required.
SECTION 3.25 NO UNDISCLOSED MATERIAL LIABILITIES. There are no
liabilities, commitments, debts, obligations or claims of any kind
whatsoever, whether absolute, accrued, fixed, contingent, known, unknown,
matured, unmatured or otherwise, against Eagle or any Subsidiary and there
is no condition, situation or set of circumstances which could reasonably
be expected to result in such a liability, except:
(a) as and to the extent reflected or reserved against in the
Financial Statements;
(b) specifically described and identified as an exception to this
section in any of the Schedules delivered to OMNI pursuant to this
Agreement;
(c) incurred since March 31, 1998, in the ordinary course of business
consistent with prior practice and Section 3.15 hereof; or
(d) open purchase or sales orders or agreements for the delivery of
services in the ordinary course of business consistent with prior practice.
SECTION 3.26 INTERESTS IN CLIENTS, SUPPLIERS, ETC. Except as
contemplated in Section 6.04, no officer, director or stockholder of the
Company or any of its Subsidiaries possesses, directly or indirectly, any
financial interest in, or is a director, officer or employee of, any
corporation, firm, association or business organization that is a supplier,
customer, lessor, lessee, or competitor or potential competitor of the
Company or any of its Subsidiaries. Ownership by all or any of such
persons of less than 10% of any class of securities of a company shall not
be deemed to be a financial interest for purposes of this Section 3.26.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF OMNI
OMNI represents and warrants to Shareholder that:
SECTION 4.1 CORPORATE EXISTENCE. OMNI is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Louisiana with full corporate power to carry on its business as now being
conducted and is duly qualified to transact business and is in good
standing in each jurisdiction where the ownership of its assets and
properties or the conduct of its business requires such qualification and
the failure to be so qualified would have a material adverse effect on
OMNI.
SECTION 4.2 CORPORATE POWER AND AUTHORITY. OMNI has the requisite
corporate power and authority to enter into this Agreement and consummate
the transactions contemplated hereby. All corporate action necessary to
authorize the execution, delivery and performance of this Agreement by OMNI
has been taken, or, prior to Closing, will have been taken, and this
Agreement has been duly executed and delivered by OMNI. This Agreement is
a legal, valid and binding obligation of OMNI, enforceable against OMNI in
accordance with its terms (except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors generally).
SECTION 4.3 ABSENCE OF BREACH. The execution and delivery of this
Agreement by OMNI, the compliance by OMNI with the terms and conditions
hereof and the consummation by OMNI of the transactions contemplated hereby
will not (a) result in or constitute a default, breach, or violation of any
of the terms, conditions or provisions of the Articles of Incorporation or
Bylaws of OMNI, (b) to OMNI's knowledge, violate any provision of, any
judicial, administrative or arbitration order, award, judgment, writ,
injunction or decree applicable to, or any governmental permit or license
issued to, OMNI, or (c) conflict with, result in a breach of, constitute a
default or event of default (whether by notice or the lapse of time or
both) under or accelerate or permit the acceleration of the performance
required by, any material indenture, mortgage, lien, lease, agreement or
instrument to which OMNI is a party or by which OMNI may be bound.
SECTION 4.4 CONSENTS. No authorization, consent, approval, permit or
license of or filing with any governmental or public body or authority, any
lender or lessor or any other person or entity is required to authorize the
execution, delivery and performance of this Agreement on the part of OMNI.
SECTION 4.5 HOUSTON AREA OFFICE. OMNI agrees to maintain a Houston
area office for survey operations, for at least one year from the Closing
Date, to support Shareholder's effort to reach the maximum Earnout under
the terms of this Agreement.
ARTICLE 5
LIABILITY AND INDEMNIFICATION
SECTION 5.1 NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in Articles 3 and 4 of this
Agreement shall survive the Closing Date. The liability of any party to
indemnify any other party pursuant to this Article 5 shall be limited to
claims as to which notice has been given to the indemnifying party on or
prior to the second anniversary of the Closing Date, whether or not any
damages have been actually been sustained as of such date.
SECTION 5.2 INDEMNIFICATION BY THE SHAREHOLDER. The Shareholder binds
himself to protect, indemnify and hold harmless OMNI and its respective
shareholders, officers, directors, agents, attorneys and affiliated
parties, and their respective legal representatives, successors and
assigns, from and against any demand, claim, action, cause of action, suit,
proceeding, investigation, liability, obligation, judgment, loss, damage,
cost or expense (including, without limitation, reasonable attorneys' fees)
as they are incurred or suffered by any of them and caused by or arising
out of:
(5) any breach or default in the performance by Shareholder of
any covenant or agreement of the Shareholder contained in this Agreement,
or any agreement attached hereto as an exhibit;
(5) any breach of any representation or warranty made by
Shareholder in Article 3 of this Agreement, or in any agreement attached
hereto as an exhibit;
(c) any claim, right, call or interest of any person or entity,
other than the Shareholder, in or to the capital stock of Eagle, or any
derivative thereof, or the Merger Consideration; or
(d) any and all actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal and accounting
fees) incident to any of the foregoing.
SECTION 5.3 INDEMNIFICATION BY OMNI. OMNI binds itself to protect,
indemnify and hold harmless the Shareholder and his respective heirs,
beneficiaries, legal representatives, successors, assigns and affiliated
persons, from and against any demand, claim, action, cause of action, suit,
proceeding, investigation, liability, obligation, judgment, loss, damage,
cost or expense (including, without limitation, reasonable attorneys' fees)
as they are incurred or suffered by any such indemnified person and caused
by or arising out of:
(5) any breach or default in the performance by OMNI of any
covenant or agreement of OMNI contained in this Agreement, or any agreement
attached hereto as an exhibit;
(5) any breach of any representation or warranty made by OMNI in
Article 4 of this Agreement or any agreement attached hereto as an exhibit;
(5) any and all actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal and accounting
fees) incident to any of the foregoing; or
(d) any failure by OMNI to timely perform any obligation of
Eagle for which Shareholder is personally liable or which Shareholder has
personally guaranteed in connection with the obligations of the Business
and listed on Schedule 6.08.
SECTION 5.4 CONDITIONS OF INDEMNIFICATION. The obligations and
liabilities of Shareholder or OMNI (for purposes of this Section 5.04, the
"INDEMNIFYING PARTIES") to protect, indemnify and hold harmless any other
party (the "INDEMNIFIED PARTY") under Sections 5.02 or 5.03 hereof with
respect to claims asserted by third parties shall be subject to the
following terms and conditions:
(5) promptly after receipt of notice of commencement of any
action evidenced by service of process or other legal pleading, or the
assertion in writing of any claim by a third party, the Indemnified Party
shall give to the Indemnifying Party, written notice thereof together with
a copy of such claim, process, or other legal pleading, and the
Indemnifying Party shall have the right to undertake the defense thereof by
representatives of its choosing (subject to the right of the Indemnified
Party to consent reasonably thereto) and at its expense; provided, however,
that the Indemnified Party may participate in the defense with counsel of
its own choice and at its expense. The failure to give the preceding
notice shall not operate as a waiver of any indemnification rights
hereunder so long as the Indemnifying Party is not prejudiced as a result
thereof, and the Indemnifying Party may undertake the defense in accordance
with the foregoing as soon as it learns of the third party claim even
though it may learn of such claims through some other means.
(5) in the event that the Indemnifying Party, by the 30th day
after receipt of notice (as set forth above) of any such claim (or, if
earlier, by the 10th day preceding the day on which an answer or other
pleading must be served in order to prevent judgment by default in favor of
the person asserting such claim), does not elect to defend against such
claim, the Indemnified Party shall have the right, but not the obligation,
to undertake the defense, compromise or settlement of such claim on behalf
of and for the account and risk of the Indemnifying Party's expense,
subject to the right of the Indemnifying Party to assume the defense of
such claims at any time prior to settlement, compromise or final
determination thereof.
(5) anything in this Section 5.04 to the contrary
notwithstanding, the Indemnifying Party shall not settle any claim without
the consent of the Indemnified Party unless such settlement involves only
the payment of money and does not involve any admission of liability or
stipulation of fact which the Indemnified Party believes in its sole
discretion may have an adverse effect on it and, if OMNI is the Indemnified
Party, on Eagle, and the claimant provides to the Indemnified Party a
release from all liability in respect of such claim. If the settlement of
the claim involves more than the payment of money or involves an admission
of liability or stipulation of fact, the Indemnifying Party shall not
settle the claim without the prior written consent of the Indemnified
Party.
(5) the Indemnified Party and the Indemnifying Party will each
cooperate with all reasonable requests of the other with respect to any
indemnified claim.
ARTICLE 6
MISCELLANEOUS
SECTION 6.1 NOTICES. Any notice or communication required or
permitted hereunder shall be given in writing, sent by (a) personal
delivery, (b) expedited delivery service with proof of delivery, (c)
registered or certified United States mail, postage prepaid or (d) fax
addressed to the appropriate party as follows:
TO THE SHAREHOLDER: Eagle Surveys International, Inc.
24194 S.H. 249, Suite 180
Tomball, Texas 77375
Attention: Timothy J. Flaman
Fax: (281) 357-4715
WITH A COPY TO: Jay S. Ginsburg P.C.
6575 West Loop South
Suite 500
Bellaire, Texas 77401
Attention: Kim Yelton
Fax: (713) 665-7167
TO THE PURCHASER: OMNI Energy Services Corp.
4500 North East Evangeline Thruway
Carencro, LA 70520
Attention: Roger E. Thomas
Fax: (318) 896-6655
WITH A COPY TO: Jones, Walker, Waechter,
Poitevent, Carr<e`>re & Den<e`>gre
201 St. Charles Avenue
51st Floor
New Orleans, Louisiana 70170
Attention: W. Philip Clinton, Esq.
Fax: (504) 582-8012
or to such other address or to the attention of such other individual as
hereafter shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of
delivery service or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or in the case of fax upon
confirmation of receipt.
SECTION 6.2 FURTHER ASSURANCES. The parties hereto agree (i) to
furnish upon request to each other such further information, (ii) to
execute and deliver to each other such other documents, (iii) to provide to
each other or each other's officers, counsel, independent accountants or
other representatives or agents reasonable access during normal business
hours to the books, records and other information relating to the Eagle
that is within their possession for the purpose of allowing the completion
of tax returns, financial statements or other reasonable business or
financial purposes and (iv) to do such other acts and things, all as the
other party hereto may at any time reasonably request for the purpose of
consummating the transactions contemplated by and carrying out the intent
of this Agreement and any other documents referred to herein.
SECTION 6.3 COSTS AND EXPENSES. Unless otherwise provided herein,
each party shall pay its own respective costs and expenses (including,
without limitation, the fees, disbursements and expenses of its attorneys,
accountants and advisors) in connection with the negotiation, preparation
and execution of this Agreement and the consummation of the transactions
contemplated thereby.
SECTION 6.4 PURCHASE OF SUPPLIES. (a) Following the Effective Time
and during the term of the Employment and Non-Compete Agreement between
OMNI and Shareholder, Shareholder shall be free to cause OMNI's Texas
office to purchase supplies and equipment necessary and appropriate to the
operation of the business (the "PURCHASE ITEMS") from Houston Survey
Supplies, Inc., a Texas corporation wholly owned and operated by
Shareholder ("HOUSTON"), provided that the price charged to OMNI by Houston
is an amount less than or equal to Houston's direct cost for each such
Purchase Item plus seventeen percent (17%) plus Houston's direct, out-of-
pocket freight cost for such Purchased Items.
(b) Following the Effective time, OMNI shall have complete access
during normal business hours to all books, records and documents of every
kind and character of Houston for purposes of verifying compliance with the
terms of this Section 6.04. Shareholder shall cause Houston to make such
books, records and documents available to OMNI at Houston's offices in
Houston, Texas for examination and reproduction by OMNI's authorized
representatives and to cause its personnel to assist OMNI in making such
investigations. During such investigations, OMNI shall have the right to
make copies of such records, files and other materials as it may reasonably
deem advisable.
In the event of a breach of this Section 6.04, in addition to all
other remedies available to OMNI, Section 6.04(a) shall terminate and be of
no further force and effect.
SECTION 6.5 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive laws and not the choice of law
rules of the State of Louisiana.
SECTION 6.6 ARBITRATION. (a) Any and all disputes, controversies,
and conflicts that arise from or in relation to, or that involve the
breach, existence, validity, and termination of, this Agreement shall, to
the extent possible, be settled amicably by the Parties. In the event of a
failure to make amicable settlement of any dispute hereunder, such dispute
shall be finally settled through arbitration, in Lafayette, Louisiana,
before an arbitration panel under the Rules of the American Arbitration
Association ("AAA") in effect as of the date hereof. In rendering any
decision or award, the arbitration panel shall determine the rights and
obligations of the Parties in accordance with the laws of the State of
Louisiana and the United States of America.
SECTION 6.7 REPRESENTATIONS AND WARRANTIES. (a) The representations
and warranties made herein are made by Shareholder with the knowledge and
expectation that OMNI is placing reliance thereon. To the extent that any
portion of the representations or warranties made herein were made to
Shareholder's knowledge, Shareholder represents that he has made due and
reasonable inquiry with respect thereto.
(b) The representations and warranties made herein are made by OMNI
with the knowledge and expectation that Shareholder is placing reliance
thereon. To the extent that any portion of the representations or
warranties made herein were made to OMNI's knowledge, OMNI represents that
it has made due and reasonable inquiry with respect thereto.
SECTION 6.8 OBLIGATIONS OF SHAREHOLDER MADE ON BEHALF OF EAGLE OMNI
will i) timely perform all obligations of Eagle listed on SCHEDULE 6.08
hereof for which Shareholder is personally liable, and ii) pay in full all
such loans within eight (8) weeks from the Closing Date. Further, OMNI
will fully perform the obligations of Shareholder in connection with (i)
the Commercial Lease between Hillegeist Family (Landlord) and Timothy Jack
Flaman (Tenant and Guarantor) as to Eagle's office lease at 24914 Tomball
Parkway, Tomball, Texas, which expires November 30, 2000, and (ii) the
Apartment Lease Contract dated February 25, 1998 between Eagle Surveys and
Tim Flaman (Tenant) and Jones Crossing (Landlord) as to 9001 Jones Road,
Apt. 1908, Houston, Texas, which expires on August 31, 1998. Also, OMNI
will use its best efforts to have each of the above referenced leases
assigned to OMNI and to have Shareholder's personal guarantees of such
leases released.
SECTION 6.9 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and
understandings (whether written or oral) among the parties with respect to
such subject matter.
SECTION 6.10 AMENDMENT. This Agreement may be amended or modified
only by written agreement of all of the parties hereto.
SECTION 6.11 PARTIES IN INTEREST. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, executors, administrators, personal representatives, heirs and
permitted assigns, and no party hereto may assign its rights or obligations
hereunder without the prior written consent of the other parties hereto.
Nothing in this Agreement is intended or shall be construed to confer upon
or to give any person other than the parties hereto any rights or remedies
under or by reason of this Agreement.
SECTION 6.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement is executed by the parties, acting
through their respective Presidents, and attested by their respective
secretaries, as of the day and year first above written.
ATTEST: OMNI ENERGY SERVICES CORP.:
/S/ Allan R. Woodard By: /S/ Roger E. Thomas
Allan R. Woodard Roger E. Thomas
Secretary President
ATTEST: EAGLE SURVEYS INTERNATIONAL, INC.:
/S/ Timothy J. Flaman By: /S/ Timothy J. Flaman
Timothy J. Flaman Timothy J. Flaman
Secretary President
<PAGE>
CERTIFICATE OF SECRETARY OF
EAGLE SURVEYS INTERNATIONAL, INC.
I hereby certify that I am the duly elected Secretary of Eagle Surveys
International, Inc., a Texas corporation, presently serving in such
capacity, and that the foregoing Agreement and Plan of Merger was, in the
manner required by the Texas Business Corporation Act, duly approved,
without alteration or amendment, by written consent of the sole shareholder
of Eagle Surveys International, Inc. duly certified and executed.
Dated: May 5, 1998
/S/ Timothy J. Flaman
Timothy J. Flaman
Secretary
CERTIFICATE OF SECRETARY OF
OMNI ENERGY SERVICES CORP.
I hereby certify that I am the duly elected Secretary of OMNI Energy
Services Corp., a Louisiana corporation, presently serving in such
capacity, and that the foregoing Agreement and Plan of Merger was not
required to be approved by the shareholders of OMNI Energy Services Corp.
pursuant to Section 112E(1) of the Louisiana Business Corporation Law.
Dated: May 5, 1998.
/S/ Allan R. Woodard
Allan R. Woodard
Secretary
<PAGE>
ACKNOWLEDGMENT AS TO EAGLE SURVEYS INTERNATIONAL, INC.
STATE OF LOUISIANA )
)
PARISH OF ORLEANS )
BEFORE ME, the undersigned authority, personally came and appeared
TIMOTHY J. FLAMAN, being duly sworn, declared and acknowledged before me
that he is the President of Eagle Surveys International, Inc., a Texas
corporation, and that in such capacity he was duly authorized to and did
execute the foregoing Agreement and Plan of Merger on behalf of such
Corporation, for the purposes therein expressed, and as his and such
Corporation's free act and deed and that the facts stated therein are true.
Sworn to and subscribed /S/ Timothy J. Flaman
before me Timothy J. Flaman
this 5th day of May, President
1998.
/s/Roger Hamilton
Notary Public
ACKNOWLEDGMENT AS TO OMNI ENERGY SERVICES CORP.
STATE OF LOUISIANA )
)
PARISH OF ORLEANS )
BEFORE ME, the undersigned authority, personally came and appeared
ROGER E. THOMAS, who, being duly sworn, declared and acknowledged before me
that he is the President of OMNI Energy Services Corp., a Louisiana
corporation, and that in such capacity he was duly authorized to and did
execute the foregoing Agreement and Plan of Merger on behalf of such
Corporation, for the purposes therein expressed, and as his and such
Corporation's free act and deed and that the facts stated therein are true.
Sworn to and subscribed /S/ Roger E. Thomas
before me Roger E. Thomas
this 5th day of May, President
1998.
/s/ Roger Hamilton
Notary Public
<PAGE>
SCHEDULE 3.11 - LEASED PROPERTY
<PAGE>
SCHEDULE 3.12 - CONTRACTS
(1) Term Promissory Note dated 02/24/98 executed by Eagle Surveys
International, Inc., in the principal amount of $90,330 payable to
Chase Bank of Texas, N.A. in monthly installments; secured by General
Security Agreement on All Accounts, All Equipment, All Inventory;
(2) Term Promissory Note dated 11/14/97 executed by Eagle Surveys
International, Inc., in the principal amount of $18,532.50 payable to
Texas Commerce Bank NA (now chase Bank of Texas N.A.) in monthly
installments until 12/01/01; secured by Security Agreement - Equipment
and Fixtures and personal guarantee of Timothy J. Flaman;
(3) Business Revolving Credit Account Agreement and Promissory Note dated
03/13/98 executed by eagle Surveys International, Inc., in the
principal amount of $150,000 payable to Chase Bank of Texas N.A. in
monthly installments until 03/26/99; secured by General Security
Agreement and personal guarantee;
(4) Loan from Eagle Surveys Ltd., balance due on 4/30/98 of $146,912.75;
(5) Shareholder's Loan payable to Frank Bower, balance due on 04/30/98 of
$12,816.68;
(6) Shareholder's Loan payable to Timothy J. Flaman, balance due on
04/30/98 of $28,466.59.
(7) Lease with Purchase Option (equipment lease) from Debis, balance due
on 4/30/98 of $36,988.99, secured by security agreement on Posi Track
equipment.
<PAGE>
SCHEDULE 6.08 - CONTRACTS
(1) Term Promissory Note dated 02/24/98 executed by Eagle Surveys
International, Inc., in the principal amount of $90,330 payable to
Chase Bank of Texas, N.A. in monthly installments; secured by General
Security Agreement on All Accounts, All Equipment, All Inventory;
(2) Term Promissory Note dated 11/14/97 executed by Eagle Surveys
International, Inc., in the principal amount of $18,532.50 payable to
Texas Commerce Bank NA (now chase Bank of Texas N.A.) in monthly
installments until 12/01/01; secured by Security Agreement - Equipment
and Fixtures and personal guarantee of Timothy J. Flaman;
(3) Business Revolving Credit Account Agreement and Promissory Note dated
03/13/98 executed by eagle Surveys International, Inc., in the
principal amount of $150,000 payable to Chase Bank of Texas N.A. in
monthly installments until 03/26/99; secured by General Security
Agreement and personal guarantee;
(4) Loan from Eagle Surveys Ltd., balance due on 4/30/98 of $146,912.75;
(5) Shareholder's Loan payable to Frank Bower, balance due on 04/30/98 of
$12,816.68;
(6) Shareholder's Loan payable to Timothy J. Flaman, balance due on
04/30/98 of $28,466.59.
STOCK PURCHASE AGREEMENT
BY AND AMONG
BERT HAMILTON
HAMILTON DRILL TECH INC.
AND
OMNI ENERGY SERVICES CORP.
MAY 13, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I SALE AND PURCHASE OF SHARES 1
SECTION 1.01 SALE OF SHARES. 1
SECTION 1.02 CONSIDERATION: PURCHASE PRICE. 1
SECTION 1.03 DIRECTORS AND OFFICERS. 1
SECTION 1.04 EMPLOYMENT AND NON-COMPETITION AGREEMENT. 1
ARTICLE II THE CLOSING 2
SECTION 2.01 TIME AND PLACE. 2
SECTION 2.02 THE COMPANY'S AND SHAREHOLDER'S DELIVERIES. 2
SECTION 2.03 PURCHASER'S DELIVERIES. 2
SECTION 2.04 DELIVERY OF DOCUMENTS BY ALL PARTIES. 2
ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY
AND SHAREHOLDER ...........................................3
SECTION 3.01 CORPORATE EXISTENCE. 3
SECTION 3.02 CORPORATE POWER AND AUTHORITY. 3
SECTION 3.03 NO CONFLICT. 3
SECTION 3.04 CAPITALIZATION. 3
SECTION 3.05 SHAREHOLDER RESIDENCY 4
SECTION 3.06 CORPORATE RECORDS 4
SECTION 3.07 CONSENTS. 4
SECTION 3.08 TITLE TO ASSETS; LIENS. 4
SECTION 3.09 LEASES AND IMMOVABLE PROPERTY. 4
SECTION 3.10 CONTRACTS. 4
SECTION 3.11 EMPLOYEE MATTERS. 4
SECTION 3.12 ABSENCE OF CERTAIN CHANGES. 5
SECTION 3.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. 5
SECTION 3.14 PROPRIETARY RIGHTS. 6
SECTION 3.15 COMPLIANCE WITH LAWS; LICENSES AND PERMITS. 7
SECTION 3.16 RELATIONSHIP WITH SUPPLIERS AND CUSTOMERS. 7
SECTION 3.17 TAXES. 7
SECTION 3.18 CONCERNING JOINT, SEVERAL AND IN SOLIDO LIABILITY OF
COMPANY AND THE SHAREHOLDER...........................7
SECTION 3.19 ERISA. 8
SECTION 3.20 LEGAL PROCEEDINGS. 9
SECTION 3.21 ENVIRONMENTAL. 9
SECTION 3.22 DISCLOSURE AND RELIANCE. 10
ARTICLE IV REPRESENTATIONS AND WARRANTIESOF PURCHASER 11
SECTION 4.01 CORPORATE EXISTENCE. 11
SECTION 4.02 CORPORATE POWER AND AUTHORITY. 11
SECTION 4.03 ABSENCE OF BREACH. 11
SECTION 4.04 CONSENTS. 12
ARTICLE V LIABILITY AND INDEMNIFICATION 12
SECTION 5.01 NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES 12
SECTION 5.02 INDEMNIFICATION BY THE SHAREHOLDER AND COMPANY 12
SECTION 5.03 INDEMNIFICATION BY PURCHASER 12
SECTION 5.04 CONDITIONS OF INDEMNIFICATION 13
SECTION 5.05 LIMITATIONS ON LIABILITY 14
ARTICLE VI MISCELLANEOUS 14
SECTION 6.01 NOTICES 14
SECTION 6.02 COST AND EXPENSES. 15
SECTION 6.03 FURTHER ASSURANCES 15
SECTION 6.04 RESIGNATION 15
SECTION 6.05 GOVERNING LAW. 15
SECTION 6.06 ENTIRE AGREEMENT. 15
SECTION 6.07 AMENDMENT. 15
SECTION 6.08 PARTIES IN INTEREST. 15
SECTION 6.09 COUNTERPARTS. 15
<PAGE>
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "AGREEMENT") is executed as of May
13, 1998, by and among HAMILTON DRILL TECH INC., a Canadian corporation,
formerly known as 686593 ALBERTA LTD. ("COMPANY"), BERT HAMILTON, the sole
shareholder ("SHAREHOLDER") of Company, and OMNI ENERGY SERVICES CORP.
("PURCHASER") and the transactions contemplated hereby shall be effective
for accounting purposes as of May 1, 1998 the ("EFFECTIVE DATE").
W I T N E S S E T H :
WHEREAS, Shareholder owns 100% of the issued and outstanding shares
of capital stock of Hamilton, all such shares of capital stock of Hamilton
owned by Shareholder being described on EXHIBIT "A" attached hereto and
made a part hereof (collectively, the "SHARES");
WHEREAS, Shareholder desires to sell, and Purchaser desires to
purchase, all of the Shares, subject to the terms and conditions of this
Agreement;
WHEREAS, the board of directors of Purchaser has approved the
acquisition of all of the Shares;
WHEREAS, Company owns a seismic support business (the "BUSINESS"); and
NOW, THEREFORE, in reliance upon the representations and warranties
made herein and in consideration of the mutual agreements herein contained,
the parties agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES
SECTION 1.s SALE OF SHARES. Subject to the terms and conditions set
forth in this Agreement, including, without limitation, the conditions set
forth in Section 2.02 hereof, Shareholder hereby agrees to sell to
Purchaser, and Purchaser hereby agrees to purchase from Shareholder all of
the Shares (the "STOCK PURCHASE").
SECTION 2.s CONSIDERATION: PURCHASE PRICE. Upon the terms and subject
to the conditions contained in this Agreement, in consideration of and
payment for the Shares, Purchaser shall pay to Shareholder, in cash at the
Closing (as defined in Section 2.01 hereof) EIGHT HUNDRED SIXTY-SEVEN
THOUSAND EIGHT HUNDRED SEVENTY AND NO/100 DOLLARS (U.S.$867,870.00) (the
"PURCHASE PRICE").
SECTION 3.s DIRECTORS AND OFFICERS. At the Closing, all officers and
directors of Company shall tender their resignations to Purchaser.
SECTION 4.s EMPLOYMENT AND NON-COMPETITION AGREEMENT. At the Closing,
Purchaser shall enter into (i) an Employment and Non-Competition Agreement
with Bert Hamilton, as set forth on EXHIBIT "B" attached hereto, (ii) an
Employment and Non-Competition Agreement with Leonard Lickfold as set forth
on EXHIBIT "C" attached hereto; and (iii) an Employment and Non-Competition
Agreement with Georgina Matheson as set forth on EXHIBIT "D" attached
hereto (the "EMPLOYMENT AGREEMENTS").
ARTICLE II
THE CLOSING
SECTION 1.s TIME AND PLACE. Upon the terms and subject to the
conditions set forth in this Agreement, the closing of the purchase and
sale of the Shares (the "CLOSING") will take place at 8:00 a.m. on the date
hereof at the offices of Carscallen Lockwood Cormie located at #1500, 407-
2nd Street S.W., Calgary, Alberta, Canada T2P2Y3, (the "CLOSING DATE").
SECTION 2.s THE COMPANY'S AND SHAREHOLDER'S DELIVERIES. At the
Closing, Shareholder shall deliver to Purchaser the following items:
(a) certificates representing the Shares which shall be endorsed in
blank;
(b) certified resolutions of Company approving the Stock Purchase and
other transactions contemplated by this Agreement to which
Purchaser is a party;
(c) all resignation letters required by Section 1.03 hereof;
(d) a certificate of good standing for Company issued by Province of
Alberta;
(e) articles of incorporation and bylaws for Company; and
(f) receipt for the purchase price received.
SECTION 3.s PURCHASER'S DELIVERIES. Upon execution of this Agreement
by all parties hereto, Purchaser shall pay Shareholder the Purchase Price
in cash by wire transfer to an account as designated by Shareholder.
SECTION 4.s DELIVERY OF DOCUMENTS BY ALL PARTIES. At the Closing, all
parties to this Agreement shall execute and deliver the following
documents:
(a) Bert Hamilton's Employment and Non-Competition Agreement with
Purchaser as set forth on EXHIBIT "B" attached hereto;
(b) Leonard Lickfold's Employment and Non-Competition Agreement with
Purchaser as set forth on EXHIBIT "C" attached hereto; and
(c) Georgina Matheson's Employment and Non-Competition Agreement with
Purchaser as set forth on EXHIBIT "D" attached hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDER
Company and the Shareholder hereby represent and warrant to Purchaser
that as of the Closing Date:
SECTION 1.s CORPORATE EXISTENCE. Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Province of Alberta, Canada. Company has all requisite corporate power to
carry on the Business, as it is now being conducted, and to own and operate
its assets and properties, and is duly qualified to transact business and
is in good standing in each jurisdiction where the ownership of its assets
and properties or the conduct of the Business requires such qualification.
SECTION 2.s CORPORATE POWER AND AUTHORITY. Company has the requisite
corporate power and authority to enter into this Agreement and consummate
the transactions contemplated hereby. All corporate action necessary to
authorize the execution, delivery and performance of this Agreement by
Company has been duly taken and this Agreement has been duly executed and
delivered by Company. This Agreement is a good, valid and binding
obligation of Company and Shareholder, enforceable against Company and
Shareholder in accordance with its terms (except as limited by bankruptcy
and insolvency laws and by other laws affecting the rights of creditors
generally).
SECTION 3.s NO CONFLICT. The execution and delivery of this
Agreement by Company and Shareholder, the compliance by Company and
Shareholder with the terms and conditions hereof and the consummation by
Company and Shareholder of the transactions contemplated hereby will not
(a) result in or constitute a default, breach, or violation of any of the
terms, conditions or provisions of the Articles of Incorporation or Bylaws
of Company, (b) violate any provision of, any judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree applicable
to Company or Shareholder, or any governmental permit or license issued to
Company, or (c) conflict with, result in a breach of, constitute a default
or event of default (whether by notice or the lapse of time or both) under
or accelerate or permit the acceleration of the performance required by
Company, under any material indenture, mortgage, lien, agreement or
instrument to which Company is a party or by which Company or any of its
assets or properties may be bound.
SECTION 4.s CAPITALIZATION. The Shares constitute 100% of the issued
and outstanding capital stock of Company, and there is no unanimous
shareholders agreement in place. Shareholder owns the Shares free and
clear of all security interests, pledges, liens, claims, encumbrances,
equities, voting trusts and agreements, proxies and limitations or
restrictions on the transfer thereof whatsoever. The Shares have been duly
authorized and validly issued and are fully paid and non-assessable.
There exist no options, warrants, subscriptions or other rights to
purchase, or securities convertible into or exchangeable for, Company
common stock. No shares of Company common stock have been issued or
disposed of in violation of the preemptive rights of any of Company's
present or former shareholders.
SECTION 5.s SHAREHOLDER RESIDENCY. The Shareholder is a resident of
Canada for the purpose of the Income Tax Act [Canada].
SECTION 6.s CORPORATE RECORDS. Correct and complete copies of
Company's articles of incorporation (and all amendments thereto) and bylaws
as amended and in effect as of the date hereof, will be delivered to
Purchaser pursuant to Section 2.02. Company's minute books, copies of
which have been made available to Purchaser, contain accurate minutes of
all formally noticed meetings of, and written consents to all actions taken
without meetings by, the boards of directors (and any committees thereof)
and shareholders of Company since their respective formations.
SECTION 7.s CONSENTS. No authorization, consent, approval, permit or
license of or filing with any governmental or public body or authority, any
lender or lessor or any other person or entity is required to authorize the
execution, delivery and performance of this Agreement on the part of
Shareholder or the Company, other than those which have been obtained.
SECTION 8.s TITLE TO ASSETS; LIENS. Company has good and
indefeasible title to all assets and properties that it purports to own in
each case subject to no security interest, pledge, lien, lease, encumbrance
or charge other than: (a) liens for taxes not yet due and payable, (b)
liens that secure debt that is reflected on Company's Financial Statements
previously delivered to Purchaser, and (c) servitudes, easements,
encroachments, rights-of-way, restrictions, covenants, and similar inchoate
encumbrances which do not affect the current use of such assets. The
assets and properties owned or leased by Company as of the date of Closing
are the only assets necessary for the conduct of the business of Company,
as presently conducted.
SECTION 9.s LEASES AND IMMOVABLE PROPERTY. Attached hereto as
SCHEDULE 3.09 is a list of each lease pursuant to which Company is the
lessee with respect to each parcel of immovable property leased by it
(collectively, "LEASED PROPERTY"). Company possesses and occupies all of
the Leased Property. Company does not own any immovable property. All
improvements (including all buildings, or portions thereof, and all
fixtures) on any of the Leased Property are in good repair and operating
condition, normal wear and tear and required maintenance (which has
heretofore been regularly performed) excepted, and are suitable and fit for
the purposes for which they are currently being used. The use and
occupation of the Leased Property and the improvements thereon by Company
comply in all material respects with all Legal Requirements, zoning
regulations and building codes.
SECTION 10.s CONTRACTS. Schedule 3.10 describes all contracts or
commitments of Company and/or Shareholder that are material to the
operation of the Business or the ownership, use or operation of Company's
assets and properties (including without limitation, mortgages, indentures,
loan agreements, long-term supply contracts and open contracts).
SECTION 11.s EMPLOYEE MATTERS. None of the employees of Company is a
member of or represented by any labor union; Company nor any of its
employees are subject to any collective bargaining agreement; no petition
for certification or union election is pending with respect to any of
Company's employees; and, to Company's knowledge, there are no attempts of
any kind being made to organize any of such employees. Within one year
prior to the Closing Date, Company had no more than 15 employees at any one
time.
SECTION 12.s ABSENCE OF CERTAIN CHANGES. Since December 31, 1997,
Company has conducted the Business only in the ordinary course and there
has been no material adverse changes in the business, operations or
financial condition of the Company or to the assets.
SECTION 13.s ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
expressly contemplated by this Agreement, since December 31, 1997, Company
has not:
(a) made any change in its authorized capital or outstanding
securities or redeemed, purchased or otherwise acquired, or agreed to
redeem, purchase or otherwise acquire, or issued, sold or delivered, or
agreed to issue, sell or deliver, any capital stock or other securities
(whether authorized and unissued or held in the treasury) or rights to
acquire such capital stock or other securities;
(b) declared or made, or agreed to declare or make, any payment
of dividends or distributions of any assets of any kind whatsoever in
respect of its capital stock;
(c) borrowed or agreed to borrow any funds or incurred, or
become subject to, any obligation or liability (absolute or contingent),
except obligations and liabilities incurred in the ordinary course of
business;
(d) paid any obligation or liability (absolute or contingent)
other than current liabilities then due and owing and paid in the ordinary
course of business;
(e) except as occurred in the ordinary course of business and
consistent with the past practices of Company sold, transferred or
otherwise disposed of, or agreed to sell, transfer or otherwise dispose of,
or acquired, or agreed to acquire, any assets, properties or rights;
(f) mortgaged, pledged or otherwise subjected, or agreed to
mortgage, pledge or otherwise subject, any of its assets to any lien,
charge or other encumbrance, or agreed to do so;
(g) entered or agreed to enter into any agreement or arrangement
granting any preferential rights to purchase any of its assets, properties
or rights (including management and control thereof), or requiring the
consent of any party to the transfer and assignment of any of such assets,
properties or rights (including management and control thereof);
(h) written up or written down the carrying value of any of its
assets;
(i) changed the job costing system or depreciation methods of
accounting for its assets;
(j) other than in the ordinary course of business, made or
permitted any amendment or termination of any contract, agreement or
license to which it is a party or by which it or its assets or properties
are subject, or forgiven or canceled any debts or claims or released or
waived any rights or claims;
(k) entered into any employment, compensation or consulting
agreement that is not terminable by Company as the case may be, at will at
any time, or collective bargaining agreement with any person or group, or
modified or amended the terms of any such existing agreement;
(l) other than in the ordinary course of business, increased or
agreed to increase the rate of compensation payable to become payable by
Company or to any of its officers, directors or employees or adopted any
new, or made any amendment in any existing, profit sharing, bonus, deferred
compensation, savings, insurance, pension, retirement or other employee
benefit plan;
(m) experienced any labor trouble or lost or terminated any key
employees, or material customers or suppliers;
(n) received any citation for any violations of any material
Legal Requirement including, without limitation, The Occupational Health
and Safety Act (Alberta) or any rules or regulations promulgated
thereunder;
(o) suffered any material adverse change in its financial
condition, prospects, assets, liability or business or suffered any
material damages, destruction or losses (whether or not covered by
insurance);
(p) entered into any other commitment or transaction or
experienced any other event that has materially and adversely affected, or
is likely to materially and adversely affect, the business, operations,
prospects, assets, liabilities or financial condition of Company,
considered on consolidated basis; or
(q) defaulted under any insurance coverage, failed to give any
notice or present any claim under such coverage in a timely fashion or in
the manner or detail required by the policy or binder. Futhermore, Company
has no outstanding unpaid premiums with respect to any insurance held by
the Company and has not received any notice of cancellation or non-renewal
with respect to, or disallowance of any claim under any such coverage.
SECTION 14.p PROPRIETARY RIGHTS. SCHEDULE 3.13 identifies all
patents, inventions, research, trademarks, trade names, copyrights, service
marks, royalty rights or design rights used now or within the last year by
Company in the operation of the Business or ownership, use or operation of
its assets and properties. Except as set forth on SCHEDULE 3.13, (a)
Company is not bound by or a party to any options, licenses or agreements
of any kind with respect to patents, trademarks, service marks, copyrights
and pending applications therefor relating to the Business or the
ownership, use or operation of its assets and properties and (b) there are
no claims or suits pending or, to Shareholder's knowledge, threatened
against Company claiming an infringement by Company of any patents,
copyrights, licenses, trademarks, service marks or trade names of others in
connection with the Business or the ownership, use or operation of its
assets or properties.
SECTION 15.p COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Company is
in compliance, in all material respects, with all applicable laws,
regulations, orders, judgments, ordinances or decrees of any federal,
provincial, state or local court or any governmental authority. Company
has not received any notices or orders, nor to its knowledge have any
notices or orders been issued or threatened, relating to any violation by
Company of any law, ordinance, regulation or requirement that would have a
material adverse effect on the Business or the ownership, use or operation
of its assets and properties. Company has no knowledge of any condition,
state of facts or the occurrence of any event that might reasonably form
the basis for any claim of liabilities or litigation against the Company.
SECTION 16.p RELATIONSHIP WITH SUPPLIERS AND CUSTOMERS. Company has
not received notice of any intention to terminate or materially modify any
relationship with its suppliers or customers.
SECTION 17.p TAXES. All foreign, federal, state, province, parish
and local tax returns and reports required to be filed by Company in
connection with the operations of the Business or the ownership, use or
operation of its assets and properties have been filed within the time
period and in the manner prescribed by law. Shareholder has no reason to
believe that any such returns and reports filed for the five preceding
calendar years do not reflect accurately all liability for taxes required
to be paid in connection with the operations of the Business or the
ownership, use or operation of the Company's assets and properties for the
periods covered thereby. All taxes and assessments (including interest and
penalties) owed in connection with the operations of the Business or the
ownership, use or operation of the Company's assets and properties have
been paid in full or appropriate provision for payment has been made
through the date hereof, including, without limitation, any Workers'
Compensation Board tax or payment and all estimated corporate income tax
payments due and payable through the date hereof. Neither Shareholder nor
Company currently has any outstanding tax liability under the law of any
jurisdiction that would subject Purchaser or the Company's assets and
properties to the liability or withholding requirements of such
jurisdiction's law. To the knowledge of Shareholder there is no pending
examination or proceeding by any authority or agency with respect to the
Business or use, operation or ownership of the Company's assets and
properties relating to the assessment or collection of any taxes.
SECTION 18.p CONCERNING JOINT, SEVERAL AND IN SOLIDO LIABILITY OF
COMPANY AND THE SHAREHOLDER.
(a) Company and Shareholder are accepting joint, several and in
solido liability hereunder in consideration of the Purchase Price and other
obligations undertaken by Purchaser under this Agreement, for the mutual
benefit, directly and indirectly, of Company and Shareholder and in
consideration of the undertakings of Shareholder to accept joint, several
and in solido liability for the obligations of each of them.
(b) Company and Shareholder jointly, severally and solidarily hereby
irrevocably and unconditionally accept, as a co-obligor, joint, several and
solidary liability with the other with respect to the payment and
performance of all of the obligations arising under this Agreement, it
being the intention of the parties hereto that all the obligations shall be
the joint, several and solidary obligations of each of the Company and
Shareholder without preferences or distinction among them.
(c) If and to the extent that Company or Shareholder shall fail to
make any payment with respect to any of the obligations hereunder as and
when due or to perform any of such obligations in accordance with the terms
thereof, then in each such event, Company and/or Shareholder will make such
payment with respect to, or perform, such obligation.
(d) The obligations of Company and Shareholder under the provisions
of Section 3.8 constitute full recourse obligations of such party,
enforceable against such party to the full extent of such party's
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(e) Company and Shareholder hereby waive notice of acceptance of its
joint, several and solidary liability, notice of occurrence of any breach
of this Agreement, or of any demand for any payment or performance under
this Agreement, notice of any action at any time taken or omitted by
Purchaser under or in respect of any of the obligations hereunder, any
requirement of diligence and, generally, all demands, notices and other
formalities of every kind in connection with this Agreement. Company and
Shareholder hereby assent to, and waive notice of, any extension or
postponement of the time for the payment or performance of any of the
obligations hereunder, the acceptance of any partial payment or
performance thereon, any waiver, consent or other action or acquiescence by
Purchaser at any time or times in respect of any default by Company and/or
Shareholder in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by Purchaser in respect of any of the obligations hereunder.
Without limiting the generality of the foregoing, Company and Shareholder
assent to any other action or delay in acting or failure to act on the part
of Purchaser, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully
with applicable laws or regulations thereunder which might, but for the
provisions of Section 3.8 afford grounds for terminating, discharging or
relieving such party, in whole or in part, from any of its obligations
under Section 3.8 it being the intention of Company and Shareholder that,
so long as any of the obligations hereunder remain unsatisfied, the
obligations of such party under Section 3.8 shall not be discharged except
by performance and then only to the extent of such performance. The
obligations of Company and Shareholder under Section 3.8 shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect
to any reconstruction or similar proceeding with respect to Company or
Shareholder. The joint, several and solidary liability of the Company and
Shareholder hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of
Company.
SECTION 19.p ERISA. Company has never maintained or become obligated
to contribute to any plan or arrangement as defined in Section 3.3 of
ERISA, that (a) is subject to Title IV of ERISA, (b) is maintained,
administered or contributed to by Company and (c) covers any employee or
former employee of Company. Company has not within the last five years
engaged in, nor is Company a successor to an entity that has engaged in, a
transaction described in Section 4069 of ERISA.
SECTION 20.p LEGAL PROCEEDINGS. There are no actions, suits, or
proceedings pending, or threatened investigations, against or affecting
Company or Shareholder, or the use, ownership or operation of the Company's
assets or properties, or the Business at law or in equity, by or before any
governmental authority, which action, suit, investigation or proceeding, if
resolved against Company or Shareholder is reasonably likely to have a
material adverse effect on the use, ownership or operation of its assets or
properties, the Business, including, without limitation, (i) unfair labor
practice charges or complaints alleging violations of the National Labor
Relations Act or any similar state law or regulation, (ii) charges of
discrimination before the Equal Employment Opportunity Commission or any
state or local government agency responsible for the enforcement of state
or local anti-discrimination laws, (iii) claims before the United States
Department of Labor or before any local government agency responsible for
the enforcement of similar state or local laws alleging violations of the
Fair Labor Standards Act or any state or local laws covering such matters,
(iv) claims before the United States Department of Labor or any other
federal agency or before any state or local government agency responsible
for the enforcement of state or local laws alleging violations of any
occupational safety and health laws, or Environmental Laws (as defined in
Section 3.21 hereof) or any state or local law covering such matters, and
circumstances which would reasonably give rise to claims under the
Employment Standards Code (Alberta), the Labour Relations Code (Alberta),
and the Alberta Human Rights, Citizenship and Multiculturalism Act. There
are no outstanding unsatisfied judgments, decrees, consent orders or other
orders of any governmental authority against or affecting the use,
ownership or operation of its assets or properties, or the Business. No
action or proceeding has been instituted or threatened against Company or
Shareholder before any governmental authority by any Person seeking to
restrain or prohibit the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby or thereby. The
Company has paid all Employment Insurance and Canada Pension Plan premiums
and is not in default in paying such premiums.
SECTION 21.p ENVIRONMENTAL.
(a) "Environmental Laws" means any federal, state, provincial, local
or foreign environmental law, ordinance, criterion guideline or regulation,
which include but are not limited to: (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. Section 9601-
9675, as amended by the Superfund Amendments and Reauthorization Act of
1986; (ii) the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended; (iii) the Resource Conservation and Recovery Act, as amended; (iv)
the Toxic Substances Control Act, as amended; (v) the Hazardous Material
Transportation and Uniform Safety Act; (vi) the Clean Air Act, as amended;
(vii) the Federal Water Pollution Control Act, as amended; (viii) the Oil
Pollution Act of 1990, as amended; (ix) the Louisiana Environmental Quality
Act; and (x) the Alberta Environmental Protection and Enhancement Act.
"Hazardous substances," "hazardous wastes," and "toxic substances" includes
materials defined as "hazardous substances," "extremely hazardous
substances," "hazardous wastes," "hazardous constituents," "hazardous
materials," "petroleum," "chemical substances," "pollutants,"
"contaminants," "solid waste" or "toxic substances" in the Environmental
Laws.
(b) Company, and to the best of the Company's knowledge, parties
operating on behalf of the Company have (i) obtained all necessary
licenses, permits and other authorizations and approvals required under the
Environmental Laws, and (ii) complied with all Environmental Laws
concerning (a) emissions, discharges, releases or threatened release of
toxic or hazardous substances or wastes into the environment; (b)
generation, use, collection, treatment, storage, transportation,
processing, distribution, recover, removal, discharge, disposal or handling
of toxic or hazardous substances or wastes; and (c) record-keeping,
maintenance, testing, inspection, notification and reporting requirements
with respect to toxic or hazardous substances or wastes. Company has not
filed any notice under any Environmental Law indicating past or present on-
site treatment, storage or disposal of toxic or hazardous substances or
wastes or reporting a spill or release of toxic or hazardous substances or
wastes into the environment. The Company and to the best of the Company's
knowledge, parties operating on behalf of the Company, are in compliance
with all Environmental Laws.
(c) Company is not, nor has it been, subject to any civil, criminal
or administrative action, suit, demand, claim, hearing, notice or demand
letter, notice of violation, investigation, nor is any such action,
proceeding pending or threatened against Company pursuant to any
Environmental Law. Company has no knowledge of, nor has Company received
notice of, any past, present or future events, conditions, circumstances,
activities, practices, incidents, actions or plans which may interfere with
or prevent compliance or continued compliance with any Environmental Law or
which may give rise to any common law or legal liability or otherwise form
the basis of any claim, action, demand, suit, proceeding, hearing, study or
investigation under any Environmental Law. There are no facts or
circumstances that would form the basis of a claim, citation or allegation
against Company for a violation of, or alleging liability under, any
Environmental Law.
(d) There are not, and have not been, any underground tanks of any
type (including tanks storing gasoline, diesel fuel, oil or other petroleum
products) or disposal sites for toxic or hazardous substances or wastes
located on or under any of the real property leased or operated by Company.
(e) Company has not, nor has any person engaged by Company, treated,
used, generated or manufactured any hazardous substances or wastes.
Company has not engaged any person to handle, transport, treat store or
dispose of hazardous substances or wastes on its behalf, and disposal
transportation, treating, storage or handling by the Company of hazardous
substances and wastes has been in compliance with all Environmental Laws.
(f) The written data and information disclosed or reported pursuant
to the Environmental Laws by Company does not contain any untrue statement
of a material fact or fail to state any material fact necessary to make any
such disclosure or reporting not misleading.
SECTION 22.p DISCLOSURE AND RELIANCE. None of the information,
documents, certificates or instruments furnished by Company to Purchaser or
any of its representatives in connection with this Agreement are false or
misleading in any material respect or contain any material misstatement of
fact or omit to state any material facts required to be stated to make the
statements therein not misleading. The representations and warranties made
herein are made by Shareholder with the knowledge and expectation that
Purchaser is placing reliance thereon. To the extent that any portion of
the representations or warranties made herein were made to Shareholder's
knowledge, Shareholder represents that they have made due and reasonable
inquiry with respect thereto. Purchaser acknowledges and affirms that it
has had access to such of the books, records, and other materials and
information regarding the Company and the Business and the Assets, deemed
necessary by Purchaser to evaluate the merits and risks of the transactions
contemplated by this Agreement and acknowledges that it has relied solely
on the representations, warranties and covenants contained in this
Agreement and the Schedules and its own investigation in entering into this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser represents and warrants to Shareholder that:
SECTION 1.p CORPORATE EXISTENCE. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Louisiana with full corporate power to carry on its business as
now being conducted and is duly qualified to transact business and is in
good standing in each jurisdiction where the ownership of its assets and
properties or the conduct of its business requires such qualification and
the failure to be so qualified would have a material adverse effect on
Purchaser.
SECTION 2.p CORPORATE POWER AND AUTHORITY. Purchaser has the
requisite corporate power and authority to enter into this Agreement and
consummate the transactions contemplated hereby. All corporate action
necessary to authorize the execution, delivery and performance of this
Agreement by Purchaser has been taken, or, prior to Closing, will have been
taken, and this Agreement has been duly executed and delivered by
Purchaser. This Agreement is a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms
(except as limited by bankruptcy and insolvency laws and by other laws
affecting the rights of creditors generally).
SECTION 3.p ABSENCE OF BREACH. The execution and delivery of this
Agreement by Purchaser, the compliance by Purchaser with the terms and
conditions hereof and the consummation by Purchaser of the transactions
contemplated hereby will not (a) result in or constitute a default, breach,
or violation of any of the terms, conditions or provisions of the
Certificate of Incorporation or Bylaws of Purchaser, (b) to Purchaser's
knowledge, violate any provision of, any judicial, administrative or
arbitration order, award, judgment, writ, injunction or decree applicable
to, or any governmental permit or license issued to, Purchaser, or (c)
conflict with, result in a breach of, constitute a default or event of
default (whether by notice or the lapse of time or both) under or
accelerate or permit the acceleration of the performance required by, any
material indenture, mortgage, lien, lease, agreement or instrument to which
Purchaser is a party or by which Purchaser may be bound.
SECTION 4.p CONSENTS. No authorization, consent, approval, permit or
license of or filing with any governmental or public body or authority, any
lender or lessor or any other person or entity is required to authorize the
execution, delivery and performance of this Agreement on the part of
Purchaser.
ARTICLE V
LIABILITY AND INDEMNIFICATION
SECTION 1.p NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in Articles III and IV of this
Agreement shall survive the Closing Date. The liability of any party to
indemnify any other party pursuant to this Article V shall be limited to
claims as to which notice has been given to the indemnifying party on or
prior to the fifth anniversary of the Closing Date, whether or not any
damages have been actually been sustained as of such date.
SECTION 2.p INDEMNIFICATION BY THE SHAREHOLDER AND COMPANY. The
Shareholder and Company bind themselves IN SOLIDO to protect, indemnify and
hold harmless Purchaser and its respective shareholders, officers,
directors, agents, attorneys and affiliated parties, and their respective
legal representatives, successors and assigns, from and against any demand,
claim, action, cause of action, suit, proceeding, investigation, liability,
obligation, judgment, loss, damage, cost or expense (including, without
limitation, reasonable attorneys' fees) as they are incurred or suffered by
any of them and caused by or arising out of:
(a) any breach or default in the performance by Shareholder of
any covenant or agreement of the Shareholder contained in this Agreement,
or any agreement attached hereto as an exhibit;
(b) any breach of any representation or warranty made by
Shareholder in Article III of this Agreement, or in any agreement attached
hereto as an exhibit; or
(c) any and all actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal and accounting
fees) incident to any of the foregoing.
SECTION 3.c INDEMNIFICATION BY PURCHASER. Purchaser binds itself to
protect, indemnify and hold harmless the Shareholder and his respective
heirs, beneficiaries, legal representatives, successors, assigns and
affiliated persons, from and against any demand, claim, action, cause of
action, suit, proceeding, investigation, liability, obligation, judgment,
loss, damage, cost or expense (including, without limitation, reasonable
attorneys' fees) as they are incurred or suffered by any such indemnified
person and caused by or arising out of:
(a) any breach or default in the performance by Purchaser of any
covenant or agreement of Purchaser contained in this Agreement, or any
agreement attached hereto as an exhibit;
(b) any breach of any representation or warranty made by
Purchaser in Article IV of this Agreement or any agreement attached hereto
as an exhibit;
(c) any and all actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal and accounting
fees) incident to any of the foregoing; or
(d) carrying on the business of the Company from the Closing
Date.
SECTION 4.c CONDITIONS OF INDEMNIFICATION. The obligations and
liabilities of the Company and Shareholder or Purchaser (for purposes of
this Section 5.04, the "INDEMNIFYING PARTIES") to protect, indemnify and
hold harmless any other party (the "INDEMNIFIED PARTY") under Sections 5.02
or 5.03 hereof with respect to claims asserted by third parties shall be
subject to the following terms and conditions:
(a) promptly after receipt of notice of commencement of any
action evidenced by service of process or other legal pleading, or the
assertion in writing of any claim by a third party, the Indemnified Party
shall give to the Indemnifying Party, written notice thereof together with
a copy of such claim, process, or other legal pleading, and the
Indemnifying Party shall have the right to undertake the defense thereof by
representatives of its choosing (subject to the right of the Indemnified
Party to consent reasonably thereto) and at its expense; provided, however,
that the Indemnified Party may participate at its own expense in the
defense with counsel of its own choice. The failure to give the preceding
notice shall not operate as a waiver of any indemnification rights
hereunder so long as the Indemnifying Party is not prejudiced as a result
thereof, and the Indemnifying Party may undertake the defense in accordance
with the foregoing as soon as it learns of the third party claim even
though it may learn of such claims through some other means.
(b) in the event that the Indemnifying Party, by the 30th day
after receipt of notice (as set forth above) of any such claim (or, if
earlier, by the 10th day preceding the day on which an answer or other
pleading must be served in order to prevent judgment by default in favor of
the person asserting such claim), does not elect to defend against such
claim, the Indemnified Party shall have the right, but not the obligation,
to undertake the defense, compromise or settlement of such claim on behalf
of and for the account and risk of the Indemnifying Party's expense,
subject to the right of the Indemnifying Party to assume the defense of
such claims at any time prior to settlement, compromise or final
determination thereof.
(c) anything in this Section 5.04 to the contrary
notwithstanding, the Indemnifying Party shall not settle any claim without
the consent of the Indemnified Party unless such settlement involves only
the payment of money and does not involve any admission of liability or
stipulation of fact which the Indemnified Party believes in its sole
discretion may have an adverse effect on it and, if Purchaser is the
Indemnified Party, on Company, and the claimant provides to the Indemnified
Party a release from all liability in respect of such claim. If the
settlement of the claim involves more than the payment of money or involves
an admission of liability or stipulation of fact, the Indemnifying Party
shall not settle the claim without the prior written consent of the
Indemnified Party.
(d) the Indemnified Party and the Indemnifying Party will each
cooperate with all reasonable requests of the other with respect to any
indemnified claim.
SECTION 5.d LIMITATIONS ON LIABILITY. After the Closing, except in
the case of actual fraud or willful, wanton or malicious misrepresentation
on the part of any party, the rights of the Shareholder and Purchaser under
this Article V shall be their exclusive right and remedy and in lieu of any
and all other rights or remedies that any such party may have under this
Agreement or otherwise with respect to the transactions contemplated
hereby. If any party hereto shall be obligated to indemnify another party
hereunder, then the Indemnifying Party shall, upon payment of such
indemnity, be subrogated to all rights of the Indemnified Party with
respect to claims to which such indemnification relates.
ARTICLE VI
MISCELLANEOUS
SECTION 1.d NOTICES. Any notice or communication required or
permitted hereunder shall be given in writing, sent by (a) personal
delivery, (b) expedited delivery service with proof of delivery, (c)
registered or certified United States mail, postage prepaid or (d) telegram
or telex, addressed to the appropriate party as follows:
TO THE SHAREHOLDER: Bert Hamilton
4354 47th Avenue
Olds, Alberta
Canada T4H1A2
Fax: (403) 556-7699
WITH A COPY TO: Carscallen Lockwood Cormie
1500, 407-2nd Street S.W.
Calgary, Alberta, Canada
T2P 2Y3
Attention: R. Gordon Cormie
Fax: (403) 262-2952
TO THE PURCHASER: OMNI Energy Services Corp.
4500 North East Evangeline Thruway
Carencro, LA 70520
Attention: Roger E. Thomas
Fax: (318) 896-6655
WITH A COPY TO: Jones, Walker, Waechter,
Poitevent, Carr<e`>re & Den<e`>gre
201 St. Charles Avenue
51st Floor
New Orleans, Louisiana 70170
Attention: W. Philip Clinton, Esq.
Fax: (504) 582-8012
or to such other address or to the attention of such other individual as
hereafter shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of
delivery service or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or in the case of telegram or
telex, upon receipt.
SECTION 2.d COST AND EXPENSES. Unless otherwise provided herein, each
party shall pay its own respective costs and expenses (including without
limitation, the fees, disbursements and expenses of its attorneys,
accountants and advisors) in connection with the negotiation, preparation
and execution of this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 3.d FURTHER ASSURANCES. The parties hereto agree (i) to
furnish upon request to each other such further information, (ii) to
execute and deliver to each other such other documents, (iii) to provide to
each other or each other's officers, counsel, independent accountants or
other representatives or agents reasonable access during normal business
hours to the books, records and other information relating to the Company
that is within their possession for the purpose of allowing the completion
of tax returns, financial statements or other reasonable business or
financial purposes and (iv) to do such other acts and things, all as the
other party hereto may at any time reasonably request for the purpose of
consummating the transactions contemplated by and carrying out the intent
of this Agreement and any other documents referred to herein.
SECTION 4.d RESIGNATION. Shareholder hereby resigns, effective as of
the Closing Date, from all offices, directorships and other capacities held
by Shareholder with respect to the Company.
SECTION 5.d GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of
Louisiana.
SECTION 6.d ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and
understandings (whether written or oral) among the parties with respect to
such subject matter.
SECTION 7.d AMENDMENT. This Agreement may be amended or modified only
by written agreement of all of the parties hereto.
SECTION 8.d PARTIES IN INTEREST. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors, executors, administrators, personal representatives, heirs and
permitted assigns, and no party hereto may assign its rights or obligations
hereunder without the prior written consent of the other parties hereto.
Nothing in this Agreement is intended or shall be construed to confer upon
or to give any person other than the parties hereto any rights or remedies
under or by reason of this Agreement.
SECTION 9.d COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASER:
OMNI ENERGY SERVICES CORP.
BY: /S/ Roger E. Thomas
ROGER E. THOMAS
RESIDENT
SHAREHOLDER:
/s/ Bert Hamilton
BERT HAMILTON
COMPANY:
HAMILTON DRILL TECH INC.
BY: /S/ Bert Hamilton
BERT HAMILTON
PRESIDENT
<PAGE>
ACKNOWLEDGMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned authority, on this day personally appeared
ROGER E. THOMAS, known to me to be the person whose name is subscribed to
the foregoing Stock Purchase Agreement and acknowledged to me that he
executed the same for the purposes and consideration therein expressed, as
his personal act and deed.
Given under my hand and seal of office this 7th day of May, 1998.
By: /S/ Roger E. Thomas
ROGER E. THOMAS
PRESIDENT
/s/ Mark Grafton Otts
N O T A R Y P U B L I C
My Commission Expires: At My Death
<PAGE>
ACKNOWLEDGMENT
PROVINCE OF ALBERTA
JUDICIAL DISTRICT OF CALGORY
BEFORE ME, the undersigned authority, on this day personally appeared
BERT HAMILTON, known to me to be the person whose name is subscribed to the
foregoing Stock Purchase Agreement and acknowledged to me that he executed
the same for the purposes and consideration therein expressed, as his
personal act and deed.
Given under my hand and seal of office this 13th day of May, 1998.
/S/ Bert Hamilton
BERT HAMILTON
/s/ R. Gordon Cormie
N O T A R Y P U B L I C
My Commission Expires: At The Pleasure of the Lieutenant Governor
<PAGE>
LIST OF EXHIBITS
EXHIBIT A - Description of Shares
EXHIBIT B - Employment Agreement and Non-Competition between OMNI Energy
Services Corp. and Bert Hamilton
EXHIBIT C - Employment and Non-Competition Agreement between OMNI Energy
Services Corp. and Leonard Lickfold
EXHIBIT D - Employment and Non-Competition Agreement between OMNI Energy
Services Corp. and Georgina Matheson
LIST OF SCHEDULES
SCHEDULE 3.09 - Leases
SCHEDULE 3.10 - Contracts
SCHEDULE 3.14 - Proprietary Rights
<PAGE>
EXHIBIT A
to Stock Purchase Agreement
DESCRIPTION OF SHARES
1) TEN (10) CLASS "A" VOTING PARTICIPATING SHARES with an unspecified
conversion rate attached.
<PAGE>
SCHEDULE 3.09
LEASES
<PAGE>
SCHEDULE 3.10
CONTRACT COMMITMENTS
1. Veritas Geophysical
Wasa Lake, British Columbia, Canada
2-D Program
Start-up date: May 02, 1998
400 shot holes
3 drills
2. Plains Resources Calumet Florida Inc.
Raccoon Point, Florida, U.S.A.
6.2 linear miles of 2-D Seismic Program
16.2 sq. miles of 3-D Seismic Program
CONTRACTS UNDER NEGOTIATION
1. Western Geophysical
Caroline, Alberta
3-D Speculative Program
Approx. 3000 holes
2. Western Geophysical
Anchorage, Alaska, U.S.A.
Kenai 2-D Program
700 holes
<PAGE>
SCHEDULE 3.14
PROPRIETARY RIGHTS
1. HAMILTON DRILL TECH INC.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from consolidated financial
statements for the first quarter ended March 31, 1998, filed on form 10-Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 2,283
<SECURITIES> 0
<RECEIVABLES> 17,519
<ALLOWANCES> 540
<INVENTORY> 4,652
<CURRENT-ASSETS> 27,722
<PP&E> 42,395
<DEPRECIATION> (3,728)
<TOTAL-ASSETS> 78,120
<CURRENT-LIABILITIES> 12,599
<BONDS> 0
0
1,650
<COMMON> 157
<OTHER-SE> 46,309
<TOTAL-LIABILITY-AND-EQUITY> 78,120
<SALES> 18,329
<TOTAL-REVENUES> 18,329
<CGS> 12,728
<TOTAL-COSTS> 15,000
<OTHER-EXPENSES> (21)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 307
<INCOME-PRETAX> 3,075
<INCOME-TAX> 1,230
<INCOME-CONTINUING> 1,845
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,845
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
