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EXHIBIT 1.1
Draft
APPALACHIAN NATURAL GAS TRUST
7,875,000 TRUST UNITS
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UNDERWRITING AGREEMENT
, 1999
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▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
PAINEWEBBER INCORPORATED
CIBC WORLD MARKETS CORP.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
A DIVISION OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
MCDONALD INVESTMENTS INC.
As Representatives of the several
Underwriters named in Schedule 1 hereto,
c/▇ ▇▇▇▇▇▇ BROTHERS INC.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Eastern States Oil & Gas, Inc., a Delaware corporation (the "Company"),
proposes to sell to the Underwriters named in Schedule 1 hereto (the
"Underwriters") 7,875,000 units (the "Firm Units") of beneficial interest (the
"Trust Units") in the Appalachian Natural Gas Trust, a grantor trust formed
under the laws of the State of Delaware (the "Trust") to hold net profits
interests (the "Net Profits Interests") in certain natural gas producing
properties owned by the Company (the "Underlying Properties") in the Appalachian
Basin area of Kentucky and West Virginia. In addition, the Company proposes to
grant to the Underwriters an option to purchase up to an additional 1,181,250
Trust Units on the terms and for the purposes set forth in Section 2 (the
"Option Units"). The Firm Units and the Option Units, if purchased, are
hereinafter collectively called the "Units."
1. Representations and Warranties of the Statoil Parties. The Company,
Statoil Energy, Inc., a Virginia corporation ("Statoil Energy"), and Statoil
Energy Holdings, Inc., a Delaware corporation ("Statoil Energy Holdings" and,
collectively with the Company and Statoil Energy, the
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"Statoil Parties"), jointly and severally represent and warrant to, and agree
with, each of the Underwriters that:
(a) A joint registration statement on Form S-1 (File No. 333-85955)
with respect to the Units (i) has been prepared by the Company and the Trust in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the rules and regulations (the "Rules and Regulations")
of the Securities and Exchange Commission (the "Commission") thereunder, (ii)
has been filed with the Commission under the Securities Act and (iii) has become
effective under the Securities Act. Copies of such registration statement as
amended to date have been delivered by the Company to you as the representatives
(the "Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such registration
statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective under
the Securities Act and any prospectus filed with the Commission by the Company
and the Trust with the consent of the Representatives pursuant to Rule 424(a) of
the Rules and Regulations; "Registration Statement" means such registration
statement, as amended at the Effective Time, including, if the Effective Date is
on or before the date of this Agreement, all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations ("Rule 424(b)") in accordance with Section 5(a) hereof and deemed to
be a part of the registration statement as of the Effective Time pursuant to
paragraph (b) of Rule 430A of the Rules and Regulations; and "Prospectus" means
such final prospectus, as first filed with the Commission pursuant to paragraph
(1) or (4) of Rule 424(b) of the Rules and Regulations. If it is contemplated,
at the time this Agreement is executed, that a registration statement or
post-effective amendment will be filed pursuant to Rule 462(b) or Rule 462(d)
under the Securities Act before the offering of the Units may commence, the term
"Registration Statement" as used in this Agreement includes such registration
statement. The Commission has not issued any order preventing or suspending the
use of any Preliminary Prospectus.
(b) Any Preliminary Prospectus, at the date of filing thereof with the
Commission, conformed in all material respects with the requirements of the
Securities Act and the Rules and Regulations and did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
Registration Statement conforms, and the Prospectus and any further amendments
or supplements to the Registration Statement or the Prospectus will, when they
become effective or are filed with the Commission, conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations
and do not and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of the applicable
filing date (as to the Prospectus and any amendment or supplement thereto)
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Each of the statements made by the Company and the Trust in such
documents within the coverage of Rule 175(b) of the Rules and Regulations,
including (but not limited to) any statements with respect to future cash
distributions of the Trust, was made or will be made with a reasonable basis and
in good faith.
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Notwithstanding the foregoing, no representation and warranty is made as to
information contained in or omitted from the Registration Statement, the
Prospectus or any Preliminary Prospectus in reliance upon and in conformity with
written information furnished to the Company or the Trust by or on behalf of any
Underwriter through the Representatives specifically for inclusion therein.
(c) Each of the Company and Statoil Energy Holdings has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with full corporate power and authority to own or
lease its properties and conduct its business, in each case in all material
respects as described in the Registration Statement and the Prospectus. Each of
the Company and Statoil Energy Holdings has been duly registered or qualified as
a foreign corporation for the transaction of business and is in good standing
under the laws of each jurisdiction (in the case of the Company, including but
not limited to, Kentucky and West Virginia) in which the character of the
business conducted by it or the nature or location of the properties owned or
leased by it makes such registration or qualification necessary, except where
the failure to so register or qualify would not have a material adverse effect
on the condition (financial or other), business, prospects, properties, net
worth or results of operations of the Statoil Parties or the Trust.
(d) Statoil Energy has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Virginia, with full corporate power and authority to own or lease its properties
and conduct its business, in each case in all material respects as described in
the Registration Statement and the Prospectus. Statoil Energy has been duly
registered or qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each jurisdiction (in the case of the
Company, including but not limited to, Kentucky and West Virginia) in which the
character of the business conducted by it or the nature or location of the
properties owned or leased by it makes such registration or qualification
necessary, except where the failure to so register or qualify would not have a
material adverse effect on the condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of the Statoil Parties
or the Trust.
(e) None of the subsidiaries of the Company is a "significant
subsidiary" (as such term is defined in Rule 405 of the Rules and Regulations).
(f) Statoil Energy owns 100% of the outstanding common stock of Statoil
Energy Holdings; such common stock has been duly authorized and validly issued
and is fully paid and nonassessable; and Statoil Energy owns such common stock
free and clear of all liens, encumbrances, security interests, equities, charges
or claims.
(g) Statoil Energy Holdings owns 100% of the outstanding common stock
of the Company; such common stock has been duly authorized and validly issued
and is fully paid and nonassessable; and Statoil Energy Holdings owns such
common stock free and clear of all liens, encumbrances, security interests,
equities, charges or claims.
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(h) The Trust has been duly formed and is validly existing as a
business trust under the laws of the State of Delaware and has full trust power
and authority to own or lease its properties as described in the Prospectus.
(i) This Agreement has been duly authorized, executed and delivered by
the Statoil Parties; at or before the First Delivery Date (as defined in Section
4), an amended and restated trust agreement (the "Trust Agreement") will have
been duly authorized, executed and delivered by the Company, as grantor, Bank
One Texas, N.A., a banking association organized under the laws of the United
States (the "Trustee"), as trustee, and Bank One Delaware, Inc., a banking
association organized under the laws of the United States (the "Delaware
Trustee"), as Delaware trustee, and will be a valid and legally binding
obligation of the Company enforceable against the Company in accordance with its
terms; at or before the First Delivery Date, each of the Net Overriding Royalty
Conveyance (Kentucky), as amended and restated, effective September 1, 1999,
executed by the Company in favor of the Trustee, and the Net Overriding Royalty
Conveyance (West Virginia), as amended and restated, effective September 1,
1999, executed by the Company in favor of the Trustee (collectively, the
"Conveyances"), will have been duly authorized, executed and delivered by the
Company and will be a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms; provided that the
enforceability of the Trust Agreement and the Conveyances may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and provided further that the indemnity,
contribution and exoneration provisions contained in any of such agreements may
be limited by applicable laws and public policy. The Trust Agreement, the Trust
Units and the Conveyances will conform in all material respects to the
descriptions thereof in the Prospectus.
(j) Each of the Trustee and the Delaware Trustee is a national banking
association duly authorized and empowered to act as trustee of the Trust
pursuant to the Trust Agreement.
(k) Prior to the First Delivery Date, the Company will have made all
necessary filings in the jurisdictions referred to in the Conveyances and, with
respect to Net Profits Interests burdening federal or Indian lands, all
necessary filings required under federal law, including without limitation the
filing of the Conveyances for recordation in the appropriate records pursuant to
local recordation laws and, with respect to Net Profits Interests burdening
federal and Indian lands, pursuant to applicable federal law.
(l) At or prior to the First Delivery Date, the Company will have
assigned and contributed to the Trust the Net Profits Interests as described in
the Prospectus.
(m) At the First Delivery Date, except for liens and encumbrances
described in clauses (i), (ii), (iii), (iv) and (v) of Section 1(z) hereof, (i)
any and all liens or encumbrances on the Underlying Properties will be
subordinated to the Net Profits Interests, and (ii) all future liens or
encumbrances on the Underlying Properties shall be subordinate and inferior to
the Net Profits Interests.
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(n) Immediately prior to the First Delivery Date, the Company will own
10,500,000 Trust Units; all of such Trust Units will have been duly authorized
in accordance with the Trust Agreement and, when duly executed and countersigned
in accordance with the provisions of the Trust Agreement and delivered to the
Company in exchange for the Net Profits Interests pursuant to the Conveyances,
will be validly issued, fully paid and nonassessable and entitled to the
benefits of the Trust Agreement; and the Company will own such Trust Units free
and clear of all liens, encumbrances, security interests, equities, charges or
claims.
(o) The Company has, and immediately prior to each Delivery Date (as
defined in Section 4) the Company will have, good and valid title to the Units
to be sold by the Company hereunder, free and clear of all liens, encumbrances,
security interests, equities, charges or claims, and the Company has full
corporate power and authority to sell, assign, transfer and deliver such Trust
Units hereunder; and, upon the delivery to the Underwriters of certificates
evidencing the Units issued in the name of the Underwriters or their designees
and payment therefor pursuant hereto, good and valid title to the Units, free
and clear of all liens, encumbrances, security interests, equities, charges or
claims, will pass to the several Underwriters or their designees.
(p) Except as described in the Prospectus, there are no (i) preemptive
rights or other rights to subscribe for or to purchase, (ii) restrictions upon
the voting or transfer of, or (iii) outstanding options or warrants to purchase,
any Units or other interests in the Trust.
(q) There are no contracts, agreements or understandings between the
Company or the Trust and any person granting such person the right to require
the Company or the Trust to file a registration statement under the Securities
Act with respect to any securities of the Company or the Trust owned or to be
owned by such person or to require the Company or the Trust to include such
securities in the securities registered pursuant to the Registration Statement
or in any securities being registered pursuant to any other registration
statement filed by the Company or the Trust under the Securities Act.
(r) None of the formation of the Trust by the execution and delivery of
the Trust Agreement and the transfer of the Net Profits Interests by the Company
to the Trust by the execution and delivery of the Conveyances, the sale of the
Units by the Company hereunder, the compliance by the Statoil Parties and the
Trust with all of the provisions of this Agreement, the Trust Agreement and the
Conveyances and the consummation of the transactions herein contemplated (i)
conflicts or will conflict with or constitutes or will constitute a violation of
the Trust Agreement or the certificate or articles of incorporation or bylaws or
other organizational documents of any of the Statoil Parties or any of their
subsidiaries, (ii) conflicts or will conflict with or constitutes or will
constitute a breach or violation of, or a default under (or an event which, with
notice or lapse of time or both, would constitute such an event), any other
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which any of the Statoil Parties or any of their subsidiaries or
the Trust is a party or by which any of the Statoil Parties or any of their
subsidiaries or the Trust is bound or to which any of the property or assets of
any of the Statoil Parties or any of their subsidiaries or the Net Profit
Interests is subject, (iii) violates or will violate any statute, law, rule or
regulation or any order, judgment, decree or injunction of any court or
governmental agency or body having jurisdiction
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over any of the Statoil Parties or any of their subsidiaries or the Trust or any
of their properties in a proceeding to which any of them or their property is a
party or (iv) will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of any of the Statoil Parties or any of
their subsidiaries or the Trust.
(s) No permit, consent, approval, authorization, order, registration,
filing, recordation or qualification of or with any court, governmental agency
or body is or was required in connection with the execution and delivery of, or
the consummation by the Statoil Parties and the Trust of the transactions
contemplated by, this Agreement, the Trust Agreement or the Conveyances, except
as required under the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and state securities or "Blue Sky" laws.
(t) All consents, approvals, authorizations and orders necessary for
the transfer of the Net Profits Interests to the Trust as described in the
Prospectus have been obtained and such transfer has not had the effect of
creating any lien, encumbrance, security interest, equity, charge or claim of
any kind in favor of any person with respect to any of the Net Profits Interests
(including any preferential right of purchase, or, with respect to any
properties in which the Company has acted as operator, any right to remove the
Company as operator) except to the extent such rights have been validly waived
in writing.
(u) None of the Statoil Parties nor any of their subsidiaries is in (i)
violation of its certificate or articles of incorporation or bylaws or other
organizational documents, or of any law, statute, ordinance, administrative or
governmental rule or regulation applicable to it or of any order, judgment,
decree or injunction of any court or governmental agency or body having
jurisdiction over it, or (ii) breach, default (or an event which, with notice or
lapse of time or both, would constitute such an event) or violation in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which it is a party or by which it or
any of its properties may be bound. To the knowledge of the Statoil Parties, no
third party to any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any of the Statoil Parties is a party or by
which any of them is bound or to which any of their properties are subject, is
in default under any such agreement.
(v) Neither the Company nor any of its subsidiaries nor the Underlying
Properties has sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, (i) neither the Company nor any of its
subsidiaries or the Trust has incurred any liability or obligation, indirect,
direct or contingent, or entered into any transactions, not in the ordinary
course of business, that, singly or in the aggregate, is material to the Company
and its subsidiaries, taken as a whole, or the Trust, (ii) there has not been
any change in the long-term debt of the Company or any of its subsidiaries or
any change in the number of outstanding Trust Units or (iii) there has not been
any
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material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, the Trust or the Underlying Properties,
otherwise than as set forth or contemplated in the Prospectus.
(w) The financial statements (including the related notes and
supporting schedules) included in the Registration Statement and the Prospectus
(and any amendment or supplement thereto) present fairly in all material
respects the financial position, results of operations and cash flows of the
entities or properties purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except to the extent disclosed therein. The pro forma statement of
distributable cash of the Trust included in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) has been prepared in all
material respects in accordance with the applicable accounting requirements of
Article 11 of Regulation S-X of the Commission; the assumptions used in the
preparation of such pro forma financial statement are, in the opinion of the
management of the Statoil Parties, reasonable; and the pro forma adjustments
reflected in such pro forma financial statement have been properly applied to
the historical amounts in compilation of such pro forma financial statement.
(x) Ernst & Young LLP, who have certified certain financial statements
of the Trust, the Company and the Underlying Properties included in the
Prospectus, are independent public accountants as required by the Securities Act
and the Rules and Regulations.
(y) The information supplied by the Company to its independent
petroleum engineering consultants, ▇▇▇▇▇ ▇▇▇▇▇ Company, L.P., for purposes of
preparing the reserve reports used to calculate estimates of reserves of the
Company, the Underlying Properties and the Net Profits Interest included in the
Prospectus, including, without limitation, information relating to production,
costs of operation and development, current prices for production, agreements
relating to current and future operations and sales of production, was true and
correct in all material respects on the date supplied and was prepared in
accordance with customary industry practices. ▇▇▇▇▇ ▇▇▇▇▇ Company, L.P. is
independent with respect to the Statoil Parties and the Trust.
(z) The Company has good and marketable title to the Underlying
Properties, free and clear of all liens, claims, security interests or other
encumbrances, except (i) royalties, overriding royalties and other burdens under
oil and gas leases that do not reduce the Company's net revenue interests in the
Underlying Properties below those stated in ▇▇▇▇▇ ▇▇▇▇▇ Company, L.P.'s reserve
report for the Underlying Properties included in the Prospectus, (ii) easements,
restrictions, rights-of-way and other matters that commonly affect property,
(iii) liens securing taxes and other governmental charges, or claims of
materialmen, mechanics and similar persons, not yet due and payable, (iv) liens
and encumbrances under operating agreements and unitization, pooling and
communitization agreements, declarations and orders, securing payment of amounts
not yet due and payable and of a scope and nature customary in the oil and gas
industry and (v) liens, encumbrances and defects that do not in the aggregate
materially affect the value of the Underlying Properties or materially interfere
with the use made or proposed to be made of such Underlying Properties by the
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Company. All contracts, agreements or underlying leases that comprise a portion
of the Underlying Properties are in full force and effect, and the Company has
paid all royalties, rents and other charges to the extent due and payable
thereunder, is not in default under any of such underlying contracts, agreements
or leases, has received no notice of default from any other party thereto and
knows of no material default by any other party thereto.
(aa) The working interests in oil, gas and mineral leases or mineral
interests which constitute a portion of the Underlying Properties held by the
Company reflect in all material respects the right of the Company to explore or
receive production from such Underlying Properties, and the care taken by the
Company and its subsidiaries with respect to acquiring or otherwise procuring
such leases or mineral interests was generally consistent with standard industry
practices for acquiring or procuring leases and interests therein to explore for
hydrocarbons.
(bb) At each Delivery Date, the Trust will have good and marketable
title to the Net Profits Interests, free and clear of all liens, encumbrances,
security interests, equities, charges or claims, except liens securing taxes and
other governmental charges and liens, encumbrances and defects that do not in
the aggregate materially affect the value of the Net Profits Interests. The
descriptions of the Net Profits Interests in the Conveyances, including the
exhibits thereto, are complete and accurate in all material respects.
(cc) The Company and its subsidiaries maintain insurance covering their
properties, operations, personnel and businesses against such losses and risks
as are reasonably adequate to protect them and their businesses in a manner
consistent with other businesses similarly situated. None of the Company nor its
subsidiaries has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be made in
order to continue such insurance; and all such insurance is outstanding and duly
in force on the date hereof and will be outstanding and duly in force on each
Delivery Date.
(dd) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
or the Trust is a party or of which any Underlying Property or the Net Profits
Interests is the subject which are required to be described in the Prospectus;
and, to the best of the Company's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others; and there
are no agreements, contracts, indentures, leases or other instruments that are
required to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement that are not described or
filed as required by the Securities Act.
(ee) Except as described in the Prospectus, no labor dispute by the
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company, is imminent which might reasonably be expected to have a
material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company or the
Trust.
(ff) Each of the Company and its subsidiaries has filed (or has
obtained extensions with respect to) all material tax returns required to be
filed through the date hereof, which returns are
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complete and correct in all material respects, and has timely paid all taxes
shown to be due pursuant to such returns, other than those (i) which, if not
paid, would not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and its subsidiaries, taken as a whole, or (ii) which are being
contested in good faith.
(gg) The Company and its subsidiaries have, or at each Delivery Date
will have, such permits, consents, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own or
lease their properties and to conduct their business in the manner described in
the Prospectus, subject to such qualifications as may be set forth in the
Prospectus and except for such permits which, if not obtained, would not have,
individually or in the aggregate, a material adverse effect upon the ability of
the Company and its subsidiaries, considered as a whole, to conduct their
businesses in all material respects as currently conducted and as contemplated
by the Prospectus to be conducted; the Company and its subsidiaries have, or at
each Delivery Date will have, fulfilled and performed all their material
obligations with respect to such permits and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or termination thereof
or results in any impairment of the rights of the holder of any such permit,
except for such revocations, terminations and impairments that would not have a
material adverse effect upon the ability of the Company and its subsidiaries
considered as a whole to conduct their businesses in all material respects as
currently conducted and as contemplated by the Prospectus to be conducted,
subject in each case to such qualification as may be set forth in the
Prospectus.
(hh) The Company (i) makes and keeps books, records and accounts,
which, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of assets and (ii) maintains systems of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions are
executed in accordance with management's general or specific authorization; (B)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(ii) To the knowledge of the Company, neither the Company nor any of
its subsidiaries, nor any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its subsidiaries,
has used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.
(jj) The Company has reviewed its operations and that of its
subsidiaries and is in the process of reviewing the relevant operations of third
parties with which the Company or any of its subsidiaries has a material
relationship to evaluate the extent to which the business or operations of the
Company or any of its subsidiaries will be affected by the Year 2000 Problem. As
a result of such review, the Company has no reason to believe, and does not
believe, that the Year 2000 Problem will
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have a material adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and its
subsidiaries or result in any material loss or interference with the Company's
business or operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the receipt,
transmission, processing, manipulation, storage, retrieval, retransmission or
other utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods occurring
after December 31, 1999, function at least as effectively as in the case of
dates or time periods occurring prior to January 1, 2000.
(kk) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of their predecessors in
interest) at, upon or from any of the property now or previously owned or leased
by the Company or its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not have, or would not be reasonably likely to have, singularly or
in the aggregate with all such violations and remedial actions, a material
adverse effect on the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries; there has been no material spill, discharge, leak, emission,
injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the Company
or any of its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or would
not be reasonably likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a material adverse effect on the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries; and their terms "hazardous waster," "toxic wastes,"
"hazardous substances" and "medical wastes" shall have the meanings specified in
any applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(ll) Except as described in the Prospectus, there is (i) no action,
suit or proceeding before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now pending or, to the knowledge of the
Statoil Parties, threatened, to which any of the Statoil Parties or the Trust is
or may be a party or to which the business or property of any of the Statoil
Parties or the Trust is or may be subject, (ii) no statute, rule, regulation or
order that has been enacted, adopted or issued by any governmental agency or
that has been proposed by any governmental body, and (iii) no injunction,
restraining order or order of any nature issued by a federal or state court or
foreign court of competent jurisdiction to which any of the Statoil Parties or
the Trust is or may be subject, that, in the case of clauses (i), (ii) and (iii)
above, is reasonably expected to (A) singly or in the aggregate have a material
adverse effect on the condition (financial or otherwise), business, prospects,
properties, net worth or results of operations of the Statoil Parties, taken as
a whole, or the Trust or (B) prevent or result in the suspension of the offering
and issuance of the Units.
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(mm) Neither the Company nor the Trust is or, after giving effect to
the offering and sale of Trust Units, will be (i) an "investment company" or a
company "controlled by" an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act") or
(ii) a "public utility company," "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" thereof, under the Public Utility Holding
Company Act of 1935, as amended.
(nn) The Company has not distributed and, prior to the later to occur
of (i) the First Delivery Date and (ii) completion of the distribution of the
Units, will not distribute, any prospectus (as defined under the Securities Act)
in connection with the offering and sale of the Units other than the
Registration Statement, any Preliminary Prospectus, the Prospectus or other
materials, if any, permitted by the Securities Act, including Rule 134 of the
Rules and Regulations.
(oo) The Units have been approved for listing on the New York Stock
Exchange ("NYSE"), subject only to official notice of issuance.
2. Purchase of the Units by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 7,875,000 Firm Units
to the several Underwriters, and each of the Underwriters, severally and not
jointly, agrees to purchase the number of Firm Units set opposite that
Underwriter's name in Schedule 1 hereto. The respective purchase obligations of
the Underwriters with respect to the Firm Units shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 1,181,250 Option Units. Such option is granted solely for the
purpose of covering over-allotments in the sale of Firm Units and is exercisable
as provided in Section 4 hereof. Option Units shall be purchased severally for
the account of the Underwriters in proportion to the number of Firm Units set
opposite the names of such Underwriters in Schedule 1 hereto. The respective
purchase obligations of each Underwriter with respect to the Option Units shall
be adjusted by the Representatives so that no Underwriter shall be obligated to
purchase Option Units other than in 100 Unit amounts. The price of both the Firm
Units and any Option Units shall be $_____ per Unit.
The Company shall not be obligated to deliver any of the Units to be
delivered on the First Delivery Date or the Second Delivery Date (as defined in
Section 4), as the case may be, except upon payment for all the Units to be
purchased on such Delivery Date as provided herein.
3. Offering of Units by the Underwriters. Upon authorization by the
Representatives of the release of the Firm Units, the several Underwriters
propose to offer the Firm Units for sale upon the terms and conditions set forth
in the Prospectus.
4. Delivery of and Payment for the Units. Delivery of and payment for
the Firm Units shall be made at the office of ▇▇▇▇▇▇ Brothers Inc. at 10:00
A.M., New York City time, on the fourth full business day following the date of
this Agreement or at such other date or place as shall be
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determined by agreement between the Representatives and the Company. This date
and time are sometimes referred to as the "First Delivery Date." On the First
Delivery Date, the Company shall deliver or cause to be delivered certificates
representing the Firm Units to the Representatives for the account of each
Underwriter against payment to or upon the order of the Company of the purchase
price by wire transfer of immediately available funds. Time shall be of the
essence, and delivery at the time and place specified pursuant to this Agreement
is a further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Firm Units shall be registered in such names and in such
denominations as the Representatives shall request in writing not less than two
full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Units,
the Company shall make the certificates representing the Firm Units available
for inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to the First Delivery Date.
At any time on or before the thirtieth day after the date of this
Agreement, the option granted in Section 2 may be exercised by written notice
being given to the Company by the Representatives. Such notice shall set forth
the aggregate number of Option Units as to which the option is being exercised,
the names in which the Option Units are to be registered, the denominations in
which the Option Units are to be issued and the date and time, as determined by
the Representatives, when the Option Units are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option
Units are delivered are sometimes referred to as the "Second Delivery Date," and
the First Delivery Date and the Second Delivery Date are sometimes each referred
to as a "Delivery Date."
Delivery of and payment for the Option Units shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Units to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer of immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Units shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Units, the Company shall make the certificates
representing the Option Units available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.
5. Further Agreements of the Company and the Trust. (a) The Company and
the Trustee, on behalf of the Trust, agree:
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(i) (A) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than Commission's close of business on the second
business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act; (B) to make no further amendment or any supplement to the
Registration Statement or to the Prospectus except as permitted herein; (C) to
advise the Representatives, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Representatives with copies thereof; (D) to advise the
Representatives, promptly after it receives notice thereof, of the issuance by
the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Units for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose or of any
request by the Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information; and (E) in the event
of the issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its reasonable commercial efforts to obtain its
withdrawal.
(ii) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission and of each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith.
(iii) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed and of each
amendment thereto, but without exhibits, and (ii) each Preliminary Prospectus,
the Prospectus and any amended or supplemented Prospectus; and if the delivery
of a prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Units or any other securities relating thereto
and if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Prospectus in order to
comply with the Securities Act, to notify the Representatives and, upon their
request, to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance.
(iv) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the reasonable judgment of the Company or the Representatives, be
required by the Securities Act or requested by the Commission.
(v) Not to (A) file any amendment to the Registration Statement or make
any amendment or supplement to the Prospectus of which ▇▇▇▇▇▇ Brothers Inc.
shall not previously have been
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advised or to which the Representatives or their counsel shall reasonably object
in writing after being so advised or (B) so long as, in the opinion of counsel
for the Underwriters, a Prospectus is required to be delivered in connection
with sales by any Underwriter or dealer, file any information, documents or
reports pursuant to the Exchange Act without delivering a copy of such
information, documents or reports to the Representatives prior to or
concurrently with such filing.
(vi) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Units for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Units; provided that in no event shall the
Company be obligated in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process.
(vii) For a period of 180 days following the date of this Prospectus,
not to, directly or indirectly, (A) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to, or
could be expected to, result in the disposition by any person at any time in the
future of) any Trust Units or any securities that are convertible into, or
exercisable or exchangeable for, or that represent the right to receive, Trust
Units, or sell or grant options, rights or warrants with respect to any Trust
Units or securities that are convertible into, or exercisable or exchangeable
for, or that represent the right to receive, Trust Units, except as disclosed in
the Prospectus, or (B) enter into any swap or other derivatives transaction that
transfers to another, in whole or in part, any of the economic benefits or risks
of ownership of such Trust Units, whether any such transaction described in
clause (A) or (B) above is to be settled by delivery of Trust Units or other
securities, in cash or otherwise, in each case without the prior written consent
of ▇▇▇▇▇▇ Brothers Inc.
(viii) To apply the net proceeds from the sale of the Units being sold
by the Company as set forth in the Prospectus.
(ix) To take such steps as shall be necessary to ensure that neither
the Company, any of its subsidiaries or the Trust shall become an "investment
company" within the meaning of such term under the Investment Company Act of
1940 and the rules and regulations of the Commission thereunder.
(x) To timely complete all required filings and otherwise fully comply
in a timely manner with all provisions of the Exchange Act, including the rules
and regulations thereunder, in connection with the registration of the Units
thereunder.
(b) The Trustee, on behalf of the Trust, agrees:
(i) As soon as practicable after the Effective Date (it being
understood that the Trust shall have at least 410 days after the end of the
first full fiscal quarter after the Effective Date) to cause the Trust to make
generally available to holders of Trust Units and to deliver to the
Representatives an earnings statement of the Trust (which need not be audited)
complying with
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Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder (including, at the option of the Trustee, Rule 158).
(ii) To cause the Trust to furnish to Trust Unitholders as
soon as practicable after the end of each fiscal year an annual report
(including financial statements of the Trust certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending
after the effective date of the Registration Statement), to make available to
its Trust Unitholders summary financial information of the Trust for such
quarter in reasonable detail, all as required by the Trust Agreement.
(iii) For a period of five years following the Effective Date,
to cause the Trust to furnish to the Representatives copies of all materials
(financial or other) furnished by the Trust to the holders of Trust Units and
all public reports and all reports and financial statements furnished by the
Trust to the principal national securities exchange upon which the Trust Units
may be listed pursuant to requirements of or agreements with such exchange or to
the Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder.
6. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Units and any taxes payable in
that connection; (b) the costs incident to the preparation, printing, filing,
delivery and shipping of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), each Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the Units; (e) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
sale of the Units; (f) any applicable listing or other similar fees; (g) the
fees and expenses of qualifying the Units under the securities laws of the
several jurisdictions as provided in Section 5(e) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (h) the cost of printing certificates representing
the Units; (i) the costs and charges of any transfer agent or registrar; and (j)
all other costs and expenses incident to the performance of the obligations of
the Company; provided that, except as provided in this Section 6 and in Section
11 the Underwriters shall pay their own costs and expenses, including the costs
and expenses of their counsel, any transfer taxes on the Units which they may
sell and the expenses of advertising any offering of the Units made by the
Underwriters.
7. Conditions of Underwriters' Obligations. The respective obligations
of the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Trustee contained herein, to the performance by the Company and the Trustee of
their respective obligations hereunder, and to each of the following additional
terms and conditions:
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(a) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 p.m. Washington,
D.C. time on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) No Underwriter shall have been advised by the Company or shall have
discovered and disclosed to the Company on or prior to such Delivery Date that
the Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of fact which, in the opinion of the
Representatives or counsel to the Underwriters, is material or omits to state a
fact, which, in the opinion of the Representatives or in the opinion of counsel
to the Underwriters, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate and trust proceedings and other legal matters
incident to the authorization, form and validity of this Agreement, the Units,
the Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass upon
such matters.
(d) ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. shall have furnished to the Representatives
their written opinion, as counsel to the Company and the Trust, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) Each of the Company and Statoil Energy Holdings has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with full corporate
power and authority to own or lease its properties and conduct its
business, in each case in all material respects as described in the
Prospectus.
(ii) Each of the Company and Statoil Energy Holdings has been
duly registered or qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
jurisdiction set forth on Exhibit A to such opinion; and, to such
counsel's knowledge, such jurisdictions are the only jurisdictions in
which the character of the business conducted by the Company or Statoil
Energy Holdings or the nature or location of the properties owned or
leased by the Company or Statoil Energy Holdings makes such
registration or qualification necessary, except where the failure to so
register or qualify would not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Statoil Parties or the Trust.
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(iii) Statoil Energy has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Virginia, with full corporate power and authority to
own or lease its properties and conduct its business, in each case in
all material respects as described in the Prospectus.
(iv) Statoil Energy has been duly registered or qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of each jurisdiction set forth on Exhibit A to
such opinion; and, to such counsel's knowledge, such jurisdictions are
the only jurisdictions in which the character of the business conducted
by Statoil Energy or the nature or location of the properties owned or
leased by it makes such registration or qualification necessary, except
where the failure to so register or qualify would not have a material
adverse effect on the condition (financial or otherwise), business,
prospects, properties, net worth or results of operations of Statoil
Parties or the Trust.
(v) Statoil Energy owns 100% of the outstanding common stock
of Statoil Energy Holdings; such common stock has been duly authorized
and validly issued and is fully paid and nonassessable; and Statoil
Energy owns such common stock free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of the
State of Delaware or the Commonwealth of Virginia naming Statoil Energy
is on file in the office of the Secretary of State of the State of
Delaware or the Commonwealth of Virginia or (b) otherwise known to such
counsel, without independent investigation, other than those created by
or arising under the Delaware General Corporation Law (the "DGCL").
(vi) Statoil Energy Holdings owns 100% of the outstanding
common stock of the Company; such common stock has been duly authorized
and validly issued and is fully paid and nonassessable; and Statoil
Energy Holdings owns such common stock free and clear of all liens,
encumbrances, security interests, charges or claims (A) in respect of
which a financing statement under the Uniform Commercial Code of the
State of Delaware or the Commonwealth of Virginia naming Statoil Energy
Holdings is on file in the office of the Secretary of State of the
States of Delaware or the Commonwealth of Virginia or (b) otherwise
known to such counsel, without independent investigation, other than
those created by or arising under the DGCL.
(vii) This Agreement, the Trust Agreement and the Conveyances
have been duly authorized, executed and delivered by the Statoil
Parties.
(viii) The Trust Agreement is the valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by (A)
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law)
and (B) public policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair dealing.
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(ix) The Company owns the Trust Units free and clear of all
liens, encumbrances, security interests, charges or claims (A) in
respect of which a financing statement under the Uniform Commercial
Code of the State of Delaware naming the Company as debtor is on file
in the office of the Secretary of State of the State of Delaware or (B)
otherwise known to such counsel, without independent investigation,
other than those created by or arising under the DGCL.
(x) The Company has all requisite power and authority to sell
the Units in accordance with and upon the terms set forth in this
Agreement. Upon delivery to the Underwriters of certificates evidencing
the Units issued in the name of the Underwriters or their designees and
payment by the Underwriters of the purchase price for the Units, the
Underwriters will acquire the Units free of any adverse claim (as such
term is defined in Article 8 of the New York Uniform Commercial Code),
assuming that the Underwriters are acting in good faith and without
notice of any adverse claim.
(xi) Except as described in the Prospectus, there are no (A)
preemptive rights or other rights to subscribe for or to purchase, (B)
restrictions upon the voting or transfer of, or (C) outstanding options
or warrants to purchase, any Units or other interests in the Trust
pursuant to any agreement or instrument known to such counsel to which
the Company or the Trust is a party or by which any one of them may be
bound. To such counsel's knowledge, there are no contracts, agreements
or understandings between the Company or the Trust and any person
granting such person the right to require the Company or the Trust to
file a registration statement under the Securities Act with respect to
any securities of the Company or the Trust owned or to be owned by such
person or to require the Company or the Trust to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company or the Trust under the
Securities Act.
(xii) None of the formation of the Trust by the execution and
delivery of the Trust Agreement and the transfer of the Net Profits
Interests by the Company to the Trust by the execution and delivery of
the Conveyances, the sale of the Units by the Company hereunder, the
compliance by the Statoil Parties with all of the provisions of this
Agreement, the Trust Agreement and the Conveyances and the consummation
of the transactions herein contemplated (A) constitutes or will
constitute a violation of the certificate or articles of incorporation
or bylaws or other organizational documents of any of the Statoil
Parties or any of their subsidiaries, (B) constitutes or will
constitute a breach or violation of, or a default under (or an event
which, with notice or lapse of time or both, would constitute such an
event), any agreement filed as an exhibit to the Registration Statement
(other than the Trust Agreement) or any credit agreement, note
agreement, indenture, promissory note or other agreement evidencing or
governing indebtedness of any of the Statoil Parties or any of their
subsidiaries, (C) violates or will violate any statute, law, rule or
regulation or any order, judgment, decree or injunction of any court or
governmental agency or body known to such counsel having jurisdiction
over any of the Statoil Parties or any of their subsidiaries or any of
their properties in a proceeding to which any of them or their property
is a party or (D)
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results or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of the Statoil
Parties or any of their subsidiaries.
(xiii) No permit, consent, approval, authorization, order,
registration, filing, recordation or qualification of or with any
court, governmental agency or body is or was required in connection
with the execution and delivery of, or the consummation by the Statoil
Parties and the Trust of the transactions contemplated by, this
Agreement, the Trust Agreement or the Conveyances, except as required
under the Securities Act, the Exchange Act and state securities or
"Blue Sky" laws.
(xiv) The statements in the Registration Statement and the
Prospectus under the captions "The Trust," "The Underlying Properties
-- Sale and Abandonment of Underlying Properties; Sale of Net Profits
Interests," "The Underlying Properties -- Title to Properties,"
"Computation of Net Proceeds," "Description of the Trust Agreement,"
and "Description of the Trust Units," insofar as they constitute
descriptions of agreements or refer to statements of law or legal
conclusions, are accurate and complete in all material respects, and
the Trust Units conform in all material respects to the description
thereof contained in the Registration Statement and the Prospectus.
(xv) The opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P. that is filed as
Exhibit 8.1 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to
them.
(xvi) The Registration Statement was declared effective under
the Securities Act on October ___, 1999; to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or threatened by the Commission; and any required filing of
the Prospectus pursuant to Rule 424(b) has been made in the manner and
within the time period required by such Rule.
(xvii) The Registration Statement and the Prospectus (except
for the financial statements and the notes and the schedules thereto,
the reserve information contained therein and the other financial,
statistical and accounting data included in the Registration Statement
or the Prospectus, as to which such counsel need not express any
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations promulgated
thereunder.
(xviii) To the knowledge of such counsel, (A) there is no
legal or governmental proceeding pending or threatened to which any of
the Statoil Parties or the Trust is a party or to which any of their
respective properties is subject that is required to be disclosed in
the Prospectus and is not so disclosed and (B) there are no agreements,
contracts or other documents to which any of the Statoil Parties or the
Trust is a party that are required to be
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described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not described
or filed as required.
(xix) None of the Statoil Parties is an "investment company"
as such term is defined in the Investment Company Act of 1940, as
amended.
In addition, such counsel shall state that they have participated in
conferences with officers and other representatives of the Statoil Parties and
the independent public accountants of the Company and the Trust and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel has not
independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Prospectus (except to the
extent specified in the foregoing opinion), no facts have come to such counsel's
attention that lead such counsel to believe that the Registration Statement
(other than (i) the financial statements included therein, including the notes
and schedules thereto and the auditors' reports thereon, (ii) the reserve report
and other reserve information included therein and (iii) the other financial and
accounting data included therein, as to which such counsel need not comment), as
of its effective date contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus (other than
(i) the financial statements included therein, including the notes and schedules
thereto and the auditors' reports thereon, (ii) the reserve report and other
reserve information included therein and (iii) the other financial and
accounting data included therein, as to which such counsel need not comment), as
of its issue date and each Delivery Date contained an untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may (A) rely in
respect of matters of fact upon certificates of officers and employees of the
Statoil Parties and upon information obtained from public officials, (B) assume
that all documents submitted to them as originals are authentic, that all copies
submitted to them conform to the originals thereof, and that the signatures on
all documents examined by them are genuine, (C) state that their opinion is
limited to federal laws, the Delaware Business Trust Act (as defined in Section
7(e)), the DGCL and the laws of the States of New York and Texas, (D) with
respect to the opinions expressed in paragraphs (ii) and (iv) above as to the
due registration or qualification as a foreign corporation of each of the
Statoil Parties, state that such opinions are based upon the opinions of Vorys,
Sater, Seymour, and ▇▇▇▇▇ LLP and ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ provided pursuant to
Section 7 (g) below and upon certificates of foreign qualification or
registration provided by the Secretaries of State of the States of Delaware,
Indiana, Kentucky, Michigan, Mississippi, New Mexico, New York, Ohio,
Pennsylvania, Virginia and West Virginia (each of which shall be dated as of a
date not more than fourteen days prior to the Closing Date and shall be provided
to you), (E) state that they express no opinion with respect to the title of any
of the Underlying Properties or the Net Profits Interest and (F) state that they
express no opinion with respect to state or local taxes or tax statutes to which
any of the Statoil Parties or the Trust may be subject.
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(e) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A. shall have furnished to the
Representatives their written opinion, as counsel to the Trust, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) The Trust has been duly formed and is validly existing as
a business trust within the meaning of the Delaware Business Trust Act
(12 Del. Code Section 3801, et seq. (the "Delaware Business Trust
Act")) and has full trust power and authority to own or lease its
properties as described in the Prospectus.
(ii) There are 10,500,000 Trust Units representing units of
undivided beneficial interest in the Trust authorized and issued under
the Trust Agreement, all of which have been duly authorized and validly
issued and are fully paid and nonassessable and conform to the
descriptions thereof in the Prospectus.
(iii) Each of the Trust Agreement and the Conveyances,
assuming the due authorization, execution and delivery thereof by the
Company, is a valid and legally binding obligation of the Trustee and
the Delaware Trustee enforceable against the Trustee and the Delaware
Trustee in accordance with their respective terms, except as such
enforceability may be limited by (A) applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and (B) public policy,
applicable law relating to fiduciary duties and indemnification and an
implied covenant of good faith and fair dealing.
(iv) All action of the Trustee, the Delaware Trustee and the
Trust required under the Delaware Business Trust Act and the Trust
Agreement with respect to the authorization and issuance of the Trust
Units has been taken; Unitholders (as defined in the Trust Agreement)
are entitled to the benefits of the Trust Agreement; except as
described in the Prospectus under the heading "Description of the Trust
Agreement -- Conditional Right of Repurchase," the issuance of such
Trust Units is not subject to any preemptive rights or similar rights
arising under the Delaware Business Trust Act or the Trust Agreement.
(v) None of the formation of the Trust by the execution and
delivery of the Trust Agreement and the transfer of the Net Profits
Interests by the Company to the Trust by the execution and delivery of
the Conveyances, the sale of the Units by the Company hereunder, the
compliance by the Statoil Parties with all of the provisions of this
Agreement, the Trust Agreement and the Conveyances and the consummation
by the Statoil Parties, the Trustee and the Delaware Trustee of the
transactions herein contemplated (A) constitutes or will constitute a
violation of the Trust Agreement or the Trust's certificate of trust,
(B) constitutes or will constitute a breach or violation of, or a
default under (or an event which, with notice or lapse of time or both,
would constitute such an event), any credit agreement, note agreement,
indenture, promissory note or any other agreement known to such counsel
to which the Trust is a party or by which the Trust is bound, (C)
violates or will violate any statute, law, rule or regulation or any
order, judgment, decree or injunction of any court or governmental
agency
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or body known to such counsel having jurisdiction over the Trust or (D)
results or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of any of the Trust.
(vi) Each Unitholder shall be entitled to the same limitation
on personal liability as is extended to stockholders of private
corporations for profit under the DGCL.
(vii) The Trust Agreement complies in all respects with the
requirements of the Delaware Business Trust Act; the conditional right
of repurchase of the Company provided for in Section 9.04 of the Trust
Agreement is permitted by and lawful under the Delaware Business Trust
Act and compliance by the Trustee with such Section 9.04 will not
violate any fiduciary duty requirements of the Trustee under applicable
provisions of Delaware law, including, without limitation, the Delaware
Business Trust Act; compliance by the Trustee and the Delaware Trustee
with Article XI of the Trust Agreement providing for arbitration will
not violate any fiduciary duty requirements of the Trustee or the
Delaware Trustee under applicable provisions of Delaware law,
including, without limitation, the Delaware Business Trust Act.
(viii) Assuming that the Trustee conducts all of its
activities with respect to the Trust at its offices in Forth Worth,
Texas, (A) the Trustee is not required to qualify to do business as a
trust company under 5 Del. Code ▇▇▇. Section 901, et seq. solely by
reason of acting as a trustee of the Trust, (B) no consent, approval,
authorization or filing is required under any other law or any rule or
regulation of the State of Delaware in order to permit the Trustee to
act as Trustee of the Trust, and (C) the compliance by the Trustee with
the provisions of the Trust Agreement will not result in the violation
of any statute, rule or regulation of the State of Delaware applicable
to the Trust.
(ix) The specimen temporary certificate for the Trust Units
and the specimen definitive certificate for the Trust Units are in
proper legal form.
In rendering such opinion, such counsel may (A) rely in respect of matters of
fact upon certificates of officers and employees of the Statoil Parties and upon
information obtained from public officials, (B) assume that all documents
submitted to them as originals are authentic, that all copies submitted to them
conform to the originals thereof, and that the signatures on all documents
examined by them are genuine and (C) state that their opinion is limited to the
laws of the State of Delaware.
(f) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall have furnished to the Representatives his
written opinion, as General Counsel of the Company, addressed to the
Underwriters and dated such Delivery Date, in form and substance reasonably
satisfactory to the Representatives, to the effect that:
(i) None of the formation of the Trust by the execution and
delivery of the Trust Agreement and the transfer of the Net Profits
Interests by the Company to the Trust by the execution and delivery of
the Conveyances, the sale of the Units by the Company hereunder, the
compliance by the Statoil Parties and the Trust with all of the
provisions of this
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Agreement, the Trust Agreement and the Conveyances and the consummation
of the transactions herein contemplated (A) constitutes or will
constitute a breach or violation of, or a default under (or an event
which, with notice or lapse of time or both, would constitute such an
event), any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument known to such counsel to which any of
the Statoil Parties or any of their subsidiaries or the Trust is a
party or by which any of the Statoil Parties or any of their
subsidiaries or the Trust is bound or to which any of the property or
assets of any of the Statoil Parties or any of their subsidiaries or
the Net Profit Interests is subject (other than any agreement filed as
an exhibit to the Registration Statement or any credit agreement, note
agreement, indenture, promissory note or other agreement evidencing or
governing indebtedness of any of the Statoil Parties or their
subsidiaries) or (B) violates or will violate any order, judgment,
decree or injunction of any court or governmental agency or body known
to such counsel directed to any of the Statoil Parties or any of their
subsidiaries or the Trust or any of their properties in a proceeding to
which any of them or their property is a party.
(ii) All consents, approvals, authorizations and orders
necessary for the transfer of the Net Profits Interests to the Trust as
described in the Prospectus have been obtained and such transfer has
not had the effect of creating any lien, encumbrance, security
interest, equity, charge or claim of any kind in favor of any person
with respect to any of the Net Profits Interests (including any
preferential right of purchase, or, with respect to any properties in
which the Company has acted as operator, any right to remove the
Company as operator) except to the extent such rights have been validly
waived in writing.
(iii) To the knowledge of such counsel, none of the Statoil
Parties nor any of their subsidiaries is in (A) violation of its
certificate or articles of incorporation or bylaws or other
organizational documents, or of any law, statute, ordinance,
administrative or governmental rule or regulation applicable to it or
of any order, judgment, decree or injunction of any court or
governmental agency or body having jurisdiction over it, or (B) breach,
default (or an event which, with notice or lapse of time or both, would
constitute such an event) or violation in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any agreement,
indenture, lease or other instrument to which it is a party or by which
it or any of its properties may be bound, which breach, default or
violation would, if continued, have a material adverse effect on the
condition (financial or other), business, prospects, properties, net
worth or results of operations of the Statoil Parties, taken as a
whole, or the Trust or could materially impair the ability of any of
the Statoil Parties or the Trust to perform its obligations under this
Agreement, the Trust Agreement or the Conveyances.
(iv) To the knowledge of such counsel, the Company and its
subsidiaries have such permits, consents, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as
are necessary to own or lease their properties and to conduct their
business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus and except for
such permits which, if not obtained, would not have, individually or in
the aggregate, a material adverse effect upon the ability of the
Company and
-23-
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its subsidiaries, considered as a whole, to conduct their businesses in
all material respects as currently conducted and as contemplated by the
Prospectus to be conducted; and, to the knowledge of such counsel,
neither the Company nor its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
permits which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected
to have a material adverse effect upon the operations conducted by the
Trust.
(v) Except as described in the Prospectus, to the knowledge of
such counsel, there is no litigation, proceeding or governmental
investigation pending or threatened against any of the Statoil Parties
or their subsidiaries or the Trust which, if adversely determined to
such party, is reasonably likely to have a material adverse effect on
the financial condition, business, properties or results of operations
of the Trust.
In addition, such counsel shall state that he has participated in
conferences with officers and other representatives of the Statoil Parties and
the independent public accountants of the Company and the Trust and your
representatives, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed, and although such counsel has not
independently verified, is not passing on, and is not assuming any
responsibility for the accuracy, completeness or fairness of the statements
contained in, the Registration Statement and the Prospectus, no facts have come
to such counsel's attention that lead such counsel to believe that the
Registration Statement (other than (i) the financial statements included
therein, including the notes and schedules thereto and the auditors' reports
thereon, (ii) the reserve report and other reserve information included therein
and (iii) the other financial and accounting data included therein, as to which
such counsel need not comment), as of its effective date contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus (other than (i) the financial statements included therein,
including the notes and schedules thereto and the auditors' reports thereon,
(ii) the reserve report and other reserve information included therein and (iii)
the other financial and accounting data included therein, as to which such
counsel need not comment), as of its issue date and each Delivery Date contained
an untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may (A) rely in
respect of matters of fact upon certificates of officers and employees of the
Statoil Parties and upon information obtained from public officials, (B) assume
that all documents submitted to him as originals are authentic, that all copies
submitted to him conform to the originals thereof, and that the signatures on
all documents examined by him are genuine, (C) state that such opinions are
limited to federal laws, the DGCL and the laws of the State of Virginia, (D)
state that he expresses no opinion with respect to the title of any of the
Underlying Properties or the Net Profits Interest and (E) state that he
expresses no opinion with respect to state or local taxes or tax statutes.
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(g) Each of Vorys, Sater, Seymour, and ▇▇▇▇▇ LLP, special local counsel
for the Company and the Trust in the State of Kentucky, and ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇,
special local counsel for the Company and the Trust in the State of West
Virginia, shall have furnished to the Representatives its written opinion,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly registered or qualified as a
foreign corporation for the transaction of business and is in good
standing under the laws of [insert applicable state].
(ii) Neither the Trust, the Trustee nor the Delaware Trustee
is required to qualify to transact business or appoint an agent for
service of process in [insert applicable state] as a result of the
ownership, operation or activities of the Trust, the Trustee or the
Delaware Trustee with respect to the Trust, and the activities of the
Trustee and the Delaware Trustee pursuant to the Trust Agreement will
not require the appointment of an ancillary trustee in the State of
[insert applicable state].
(iii) The [applicable] Conveyance, assuming the due
authorization, execution and delivery thereof by the parties thereto,
is the valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such
enforceability of the [applicable] Conveyance may be limited by (A)
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law)
and (B) public policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair dealing.
A court of competent jurisdiction of [insert applicable state] should
give effect to the choice of law provisions of the [applicable]
Conveyance.
(iv) The Net Profits Interests constitute real property
interests under the laws of [insert applicable state].
(v) The [applicable] Conveyance (A) has been properly filed of
record and recorded in the appropriate real property records in [insert
applicable state], (B) is adequate and sufficient to legally convey to
the Trustee the Net Profits Interests in [insert applicable state], and
(C) constitutes, in [insert applicable state], a perfected Conveyance
and effective notice of the Net Profits Interests in the Underlying
Properties located in [insert applicable state], which is and will be
valid and binding against third parties subsequently acquiring
interests in the Underlying Properties and is and will be superior to
all future liens and encumbrances on the Underlying Properties (except
for such liens and encumbrances for taxes and assessments not yet due
and payable, and liens and encumbrances under operating agreements and
unitization, pooling and communitization agreements, declarations and
orders, securing payments of amounts not yet due and payable). No
actions other than those described above are necessary to convey the
Net Profits Interests in [insert applicable state] and to publish
notice thereof.
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(vi) A beneficial owner of a Trust Unit will not be subject to
personal liability under state and local laws in [insert applicable
state] by virtue of said ownership, including liability regulating the
discharge of materials into the environment or otherwise relating to
the protection of the environment.
(vii) There is no restriction on the ownership of interests in
minerals or Units by non-U.S. residents under the laws of the State of
[insert applicable state].
(viii) None of the formation of the Trust by the execution and
delivery of the Trust Agreement and the transfer of the Net Profits
Interests by the Company to the Trust by the execution and delivery of
the Conveyances, the sale of the Units by the Company hereunder, the
compliance by the Statoil Parties and the Trust with all of the
provisions of this Agreement, the Trust Agreement and the Conveyances
and the consummation of the transactions herein contemplated results or
will result in any violation of any statute, law, rule or regulation or
any order, judgment, decree or injunction of any court or governmental
agency or body in the State of [insert applicable state] known to such
counsel directed to any of the Statoil Parties or any of their
subsidiaries or the Trust or any of their properties in a proceeding to
which any of them or their property is a party.
(ix) No permit, consent, approval, authorization, order,
registration, filing, recordation or qualification of or with any
court, governmental agency or body of the State of [insert applicable
state] is or was required (A) to permit the Trustee to act as trustee
with respect to the Underlying Properties located in [insert applicable
state] or (B) in connection with the execution and delivery of, or the
consummation by the Statoil Parties and the Trust of the transactions
contemplated by, this Agreement, the Trust Agreement or the
Conveyances, except for such permits, consents, approvals and similar
authorizations required under state securities or "Blue Sky" laws.
(x) The income from the Net Profits Interests received by the
Trust will not be subject to taxation at the Trust level by [insert
applicable state] or any political subdivision thereof. A Unitholder
will be subject to taxation by [insert applicable state] with respect
to income from the Net Profits Interests or ownership of Trust Units
and is required to report such income to [insert applicable state] only
if the amount of gross income attributable to sources in [insert
applicable state][during a fiscal year] exceeds $____________.
(xi) The Trust is not required to withhold [insert applicable
state] taxes from distributions to Unitholders.
(xii) A non-resident holder of a Trust Unit will not be
subject to inheritance or gift taxation, intestate succession, elective
shares of community property or require the filing of ancillary probate
proceedings in the State of [insert applicable state] solely by reason
of ownership of Trust Units.
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In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Statoil
Parties and the Trust and upon information obtained from public officials, (B)
assume that all documents submitted to them as originals are authentic, that all
copies submitted to them conform to the originals thereof, and that the
signatures on all documents examined by them are genuine, (C) state that such
opinions are limited to federal laws and the laws of the State of [insert
applicable state], excepting therefrom municipal and local ordinances and
regulations, (D) state that they express no opinion with respect to the title of
any of the Underlying Properties or the Net Profits Interest and (E) state that
they express no opinion with respect to state or local taxes or tax statutes to
which any of the Statoil Parties may be subject.
In rendering such opinion, such counsel shall state that (A) ▇▇▇▇▇▇▇ &
▇▇▇▇▇ L.L.P. is hereby authorized to rely upon such opinion letter in connection
with the transactions contemplated by this Agreement as if such opinion letter
were addressed and delivered to them on the date hereof and (B) subject to the
foregoing, such opinion letter may be relied upon only by the Underwriters and
its counsel in connection with the transactions contemplated by this Agreement
and no other use or distribution of this opinion letter may be made without such
counsel's prior written consent.
(h) ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., counsel for the Trustee and the Delaware
Trustee, shall have furnished to the Representatives their written opinion,
addressed to the Underwriters and dated such Delivery Date, in form and
substance reasonably satisfactory to the Representatives, to the effect that:
(i) Each of the Trustee and the Delaware Trustee is a national
banking association authorized and empowered to act as trustee of the
Trust pursuant to the Trust Agreement, and no consent, approval,
authorization or filing is required under any law, rule or regulation
of the State of Delaware or of the United States of America in order to
permit the Trustee or the Delaware Trustee to act as trustee of the
Trust.
(ii) The Trust Agreement has been executed and delivered by
each of the Trustee and the Delaware Trustee and, assuming the due
authorization, execution and delivery thereof by the Company, is a
valid and binding obligation of each of the Trustee and the Delaware
Trustee, enforceable against the Trustee and the Delaware Trustee in
accordance with its terms; provided that the enforceability of the
Trust Agreement may be limited by (A) applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar
laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and (B) public
policy, applicable law relating to fiduciary duties and indemnification
and an implied covenant of good faith and fair dealing.
(i) ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel for the Underwriters, shall have
furnished to you such opinion or opinions, dated such Delivery Date, with
respect to the issuance and sale of the Units, the Registration Statement, the
Prospectus and other related matters as the Representatives may reasonably
request, and such counsel shall have received such papers and information as
they may reasonably request to enable them to pass upon such matters.
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(j) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, executed on behalf of the Company by the
chief executive officer and the chief financial officer of the Company, to the
effect that:
(i) The representations and warranties of the Company
contained in this Agreement are true and correct, as if made at and as
of such Delivery Date, and the Company have complied with all the
agreements and satisfied all the conditions on their part to be
complied with or satisfied at or prior to such Delivery Date.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceeding for that
purpose has been initiated or threatened by the Commission.
(iii) They have carefully examined the Registration Statement
and the Prospectus, and any amendments or supplements thereto, and, in
their opinion (A) as of the Effective Date, the Registration Statement
and Prospectus did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein
not misleading, and (B) since the Effective Date no event has occurred
which should have been set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been so set
forth.
(iv) No event contemplated by Section 7(p) in respect of the
Company, the Trust, or the Underlying Properties shall have occurred.
(k) The Trustee shall have furnished to the Representatives a
certificate, dated such Delivery Date, executed by a duly authorized officer of
the Trustee, representing and warranting to each of the Underwriters that:
(i) The Trustee is a national banking association authorized
and empowered to act as trustee of the Trust pursuant to the Trust
Agreement, and no consent, approval, authorization or filing is
required under any law, rule or regulation of the State of Delaware or
of the United States of America in order to permit the Trustee to act
as trustee of the Trust.
(ii) The Trust Agreement has been executed and delivered by
the Trustee and, assuming the due authorization, execution and delivery
thereof by the Company, is a valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
except as such enforceability may be limited by (A) applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
or similar laws relating to or affecting creditors' rights generally
and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
(B) public policy, applicable law relating to fiduciary duties and
indemnification and an implied covenant of good faith and fair dealing.
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(iii) There are 10,500,000 Trust Units authorized and
outstanding under the Trust Agreement, all of which have been properly
issued in accordance with the Trust Agreement; certificates
representing the Trust Units have been duly executed by the Trustee;
and holders of certificates representing the Trust Units are entitled
to the benefits of the Trust Agreement.
(iv) Since the date the Trust was formed through each Delivery
Date, except as may otherwise be disclosed in the Registration
Statement and the Prospectus, the Trustee has not on behalf of the
Trust (A) incurred any liability or obligation, indirect, direct or
contingent, or entered into any transactions not in the ordinary course
of business, (B) issued or granted any Trust Units or (C) made any
distribution to the holders of Trust Units.
(v) There is no litigation, proceeding or governmental
investigation pending or, to the knowledge of the Trustee, threatened
to which the Trust is a party.
(l) The Delaware Trustee shall have furnished to the Representatives a
certificate, dated such Delivery Date, executed by a duly authorized officer of
the Delaware Trustee, representing and warranting to each of the Underwriters
that:
(i) The Delaware Trustee is a national banking association
authorized and empowered to act as trustee of the Trust pursuant to the
Trust Agreement, and no consent, approval, authorization or filing is
required under any law, rule or regulation of the State of Delaware or
of the United States of America in order to permit the Delaware Trustee
to act as trustee of the Trust.
(ii) The Trust Agreement has been executed and delivered by
the Delaware Trustee and, assuming the due authorization, execution and
delivery thereof by the Company, is a valid and binding obligation of
the Delaware Trustee, enforceable against the Delaware Trustee in
accordance with its terms, except as such enforceability may be limited
by (A) applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (B) public policy, applicable law
relating to fiduciary duties and indemnification and an implied
covenant of good faith and fair dealing.
(iii) Since the date the Trust was formed through each
Delivery Date, except as may otherwise be disclosed in the Registration
Statement and the Prospectus, the Delaware Trustee has not on behalf of
the Trust (A) incurred any liability or obligation, indirect, direct or
contingent, or entered into any transactions not in the ordinary course
of business, (B) issued or granted any Trust Units or (C) made any
distribution to the holders of Trust Units.
(iv) There is no litigation, proceeding or governmental
investigation pending or, to the knowledge of the Delaware Trustee,
threatened to which the Trust is a party.
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(m) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter, in form and substance
satisfactory to the Representatives, addressed to the Underwriters and dated the
date hereof (i) confirming that they are independent public accountants within
the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of
Regulation S-X of the Commission, (ii) stating, as of the date hereof (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letter" to underwriters in
connection with registered public offerings.
(n) With respect to the letter of Ernst & Young referred to in the
preceding paragraph and delivered to the Representatives concurrently with the
execution of this Agreement (the "initial letter"), the Company shall have
furnished to the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii) confirming
in all material respects the conclusions and findings sets forth in the initial
letter.
(o) The Company shall have furnished or caused to be furnished to the
Representatives a letter from ▇▇▇▇▇ ▇▇▇▇▇ Company, L.P., addressed to the
Underwriters and dated the respective date of delivery in form and substance
satisfactory to you.
(p) (i) Neither the Company nor any of its subsidiaries, taken
together, the Trust nor the Underlying Properties shall have sustained since the
date of the latest audited financial statements included in the Prospectus any
loss or interference with its business by fire, flood, explosion or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus nor (ii) since such date there shall not have
been any change in the capital stock, short-term debt or long-term debt of the
Company, its subsidiaries or the Trust or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company, its subsidiaries or the Trust, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Units being delivered on such Delivery
Date on the terms and in the manner contemplated in the Prospectus.
(q) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange
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or the American Stock Exchange or in the over-the-counter market, or trading in
any securities of the Company or the Trust on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices shall have
been established on any such exchange or such market by the Commission, by such
exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority in interest of the
several Underwriters, impracticable or inadvisable to proceed with the public
offering or delivery of the Units being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(r) The New York Stock Exchange shall have approved the Trust Units for
listing, subject only to official notice of issuance.
(s) The Company shall have complied with the provisions of Section
5(a)(iii) hereof with respect to the furnishing of Prospectuses on the New York
business day next succeeding the date of this Agreement.
(t) The Company and the Trust shall have furnished the Representatives
such additional documents and certificates as the Representatives or counsel for
the Underwriters may reasonably request.
8. Indemnification and Contribution.
(a) The Company and the Trust (solely from the assets of the Trust and
without liability or obligation of the Trustee or any Unitholder), jointly and
severally, shall indemnify and hold harmless each Underwriter, its officers and
employees and each person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Units), to which that Underwriter, officer, employee or
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading or (iii) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Units or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon matters covered by clause (i) or (ii) above (provided that neither
the Company nor the Trust shall be liable under this clause (iii) to
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the extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful misconduct), and
shall reimburse each Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that neither the Company nor the Trust shall be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any such amendment or supplement, in reliance upon and
in conformity with written information concerning such Underwriter furnished to
the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists solely of the
information specified in Section 8(e). The foregoing indemnity agreement is in
addition to any liability which the Company and the Trust may otherwise have to
any Underwriter or to any officer, employee or controlling person of that
Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, the Trust and the Trustee, their officers and
employees, each of their directors (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of
the Company), and each person, if any, who controls the Company, the Trust or
the Trustee within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company and the Trust or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any amendment or supplement thereto, any
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company, the Trust or the Trustee through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse the Company, the Trust and the Trustee and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company, the Trust or the Trustee or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company, the Trust or the Trustee or any such director, officer, employee or
controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in
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writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure, and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i) the
employment of such counsel has been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense and employ counsel or (iii) the named parties to any such action
(including any impleaded parties) include both such indemnified party and the
indemnifying party and such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party and the fees and expenses of
such separate counsel shall be paid by the indemnifying party). No indemnifying
party shall, in connection with any one such action or proceeding or separate
but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) at any time for such indemnified
party, which firm shall be designated by the indemnified party. No indemnifying
party shall (i) without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or (ii) be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with the consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action
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in respect thereof, (i) in such proportion as shall be appropriate to reflect
the relative benefits received by the Company and the Trust, on the one hand,
and the Underwriters on the other from the offering of the Units or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Trust, on the one hand, and the Underwriters on the other, with respect to
the statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Trust, on
the one hand, and the Underwriters on the other, with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the Units purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the Units purchased
under this Agreement, on the other hand, bear to the total gross proceeds from
the offering of the Units under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company and the Trust or the Underwriters, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Trust and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 8 were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8 shall be deemed
to include, for purposes of this Section 8(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Units underwritten by
it and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or becomes liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company and the Trust
acknowledge that the statements with respect to the public offering of the Units
by the Underwriters set forth on the cover page of the Prospectus, the
information in the chart in the first paragraph under the caption "Underwriting"
in the Prospectus, the concession and reallowance figures appearing in the
fourth paragraph under the caption "Underwriting" in the Prospectus and the
statements in the eighth, ninth, tenth, eleventh, twelfth, thirteenth (to the
extent relating to the Underwriters), fourteenth and sixteenth paragraphs under
the caption "Underwriting" in the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company or
the Trust by or on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
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9. Defaulting Underwriters.
If, on either Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Units which the
defaulting Underwriter agreed but failed to purchase on such Delivery Date in
the respective proportions which the number of Firm Units set opposite the name
of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of Firm Units set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Units on such Delivery Date if the total number of Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of Units to be purchased on such Delivery
Date, and any remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of the Units which it agreed to purchase
on such Delivery Date pursuant to the terms of Section 2. If the foregoing
maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Units to be purchased on such Delivery Date. If
the remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the Units which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such Delivery Date,
this Agreement (or, with respect to the Second Delivery Date, the obligation of
the Underwriters to purchase, and of the Company to sell, the Option Units)
shall terminate without liability on the part of any non-defaulting Underwriter,
the Company or the Trust except that the Company will continue to be liable for
the payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Firm Units which a
defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages, including expenses paid by the
Company pursuant to Sections 6 and 11, caused by its default. If other
underwriters are obligated or agree to purchase the Units of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
prior to delivery of and payment for the Firm Units if, prior to that time, any
of the events described in Section 7(p) or Section 7(q) shall have occurred or
if the Underwriters shall decline to purchase the Units for any reason permitted
under this Agreement.
11. Reimbursement of Underwriters' Expenses. If the Company shall fail
to tender the Units for delivery to the Underwriters by reason of any failure,
refusal or inability on the part of the Company or the Trust to perform any
agreement on its part to be performed, or because any other
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condition of the Underwriters' obligations hereunder required to be fulfilled by
the Company or the Trust is not fulfilled, the Company and the Trust will
reimburse the Underwriters for all reasonable out-of-pocket expenses (including
fees and disbursements of counsel) incurred by the Underwriters in connection
with this Agreement and the proposed purchase of the Units, and upon demand the
Company and the Trust shall pay the full amount thereof to the Representatives.
If this Agreement is terminated pursuant to Section 9 by reason of the default
of one or more Underwriters, neither the Company nor the Trust shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
12. Notices, etc. Any notice, consent, request, instruction, approval
and other communication provided for herein shall be in writing, shall be
delivered or sent by mail, telex or facsimile transmission and shall be deemed
validly given, made or served (a) on the date on which it is delivered
personally with receipt acknowledged, (b) five business days after it is sent by
registered or certified mail (receipt requested and postage prepaid), (c) one
business day after it is sent by overnight courier (charges prepaid) or (d) on
the same business day when sent before 5:00 p.m., recipient's time (and on the
next business day when sent after 5:00 p.m., recipient's time) by telex or
telecopier, transmission confirmed and charges prepaid. Such notices shall be in
writing, and
(i) if to the Company, shall be addressed to the Company at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: President.
(ii) if to the Trust, shall be addressed to Bank One Texas, N.A., ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Department.
(iii) if to the Underwriters, such notice shall be addressed to the
Representatives in care of ▇▇▇▇▇▇ Brothers Inc., 3 World Financial Center, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Syndicate Department (Fax:
212/▇▇▇-▇▇▇▇), with a copy, in the case of any notice pursuant to Section 8(c),
to the Director of Litigation, Office of the General Counsel, ▇▇▇▇▇▇ Brothers
Inc., 3 World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its acceptance telex to the Representatives, which
address will be supplied to any other party hereto by the Representatives upon
request. Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof. The Company shall be entitled to act and rely
upon any request, consent, notice or agreement given or made on behalf of the
Underwriters by ▇▇▇▇▇▇ Brothers Inc. on behalf of the Representatives.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, the
Trust and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(a) the representations, warranties, indemnities and agreements of the Company
and the Trust contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within the
meaning of Section 15 of the Securities Act and (b) the indemnity agreement of
the Underwriters contained in Section 8(b) of this Agreement shall be deemed to
be for the benefit of directors of the Company, officers of the Company who have
signed
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the Registration Statement and any person controlling any of the Company and the
Trust within the meaning of Section 15 of the Securities Act. Nothing in this
Agreement is intended or shall be construed to give any person, other than the
persons referred to in this Section 13, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company, the Trust and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Units and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. Definition of the Terms "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means any day on which the NYSE
is open for trading, and (b) "subsidiary" has the meaning set forth in Rule 405
of the Rules and Regulations.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement among the Company,
Statoil Energy, Statoil Energy Holdings and the Underwriters, please indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
EASTERN STATES OIL & GAS, INC..
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STATOIL ENERGY, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STATOIL ENERGY HOLDINGS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
APPALACHIAN NATURAL GAS TRUST
By: Bank One Texas, N.A., Trustee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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Accepted as of the date hereof:
By: ▇▇▇▇▇▇ BROTHERS INC.
By:
---------------------------------
Authorized Representative
For themselves and as
Representatives of the
several Underwriters named
in Schedule 1 hereto
By: ▇▇▇▇▇▇ BROTHERS INC.
By:
---------------------------------
Authorized Representative
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SCHEDULE I
NUMBER OF
OPTIONAL
UNITS TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM UNITS MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
------------------------------------------------------------------- --------------- -------------------
▇▇▇▇▇▇ Brothers Inc................................................
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc...........................................
PaineWebber Incorporated...........................................
CIBC World Markets Corp. ..........................................
Credit Suisse First Boston Corporation.............................
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
a division of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated.......................
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation................
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. .........................................
MCDONALD INVESTMENTS INC...........................................
--------------- -------------------
--------------- -------------------
TOTAL......................................................... 7,875,000 1,181,250