Compton Petroleum Finance Corporation 75/8% Senior Notes due 2013 PURCHASE AGREEMENT
EXHIBIT
3.1
U.S.$300,000,000
▇▇▇▇▇▇▇ Petroleum Finance Corporation
75/8% Senior Notes due 2013
November 15, 2005
Credit Suisse First Boston LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
As Representatives of the Several Purchasers,
c/o Credit Suisse First Boston LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
As Representatives of the Several Purchasers,
c/o Credit Suisse First Boston LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. ▇▇▇▇▇▇▇ Petroleum Finance Corporation, an Alberta corporation (the
“Issuer”), proposes, subject to the terms and conditions stated herein, to issue and sell to the
several initial purchasers named in Schedule A hereto (the “Purchasers”) U.S.$300,000,000 principal
amount of its 75/8% Senior Notes due December 1, 2013 (the “Notes”) to be issued under an indenture
agreement, to be dated as of November 22, 2005 (the “Indenture”), among the Issuer, ▇▇▇▇▇▇▇
Petroleum Corporation, an Alberta corporation (“Parent”), the subsidiary guarantors listed on
Schedule B hereto (the “Subsidiary Guarantors” and, together with Parent, the “Guarantors”) and The
Bank of Nova Scotia Trust Company of New York, as Trustee. The Notes will be fully, irrevocably
and unconditionally guaranteed (the “Parent Guarantee”), as to payment of principal, premium, if
any, and interest by Parent, and will be fully, irrevocably and unconditionally guaranteed (the
“Subsidiary Guarantees”) as to payment of principal, premium, if any, and interest by the
Subsidiary Guarantors. Each of the Subsidiary Guarantees will be fully, irrevocably and
unconditionally guaranteed (the “Parent-Subsidiary Guarantees” and, together with the Parent
Guarantee and the Subsidiary Guarantees, the “Guarantees,” and, together with the Notes, the
“Offered Securities”) as to payment of principal, premium, if any, and interest on a senior basis
by Parent.
The holders of the Offered Securities will be entitled to the benefits of a Registration
Rights Agreement dated as of the Closing Date (as defined below) among the Issuer, the Guarantors
and the Purchasers (the “Registration Rights Agreement”), pursuant to which the Issuer agrees to
file a registration statement with the United States Securities and Exchange Commission (the
“Commission”) registering the resale of the Offered Securities under the United States Securities
Act of 1933, as amended (the “Securities Act”).
2. Representations and Warranties of the Issuer and the Guarantors. Each of the Issuer and
the Guarantors, jointly and severally, represents and warrants to, and agrees with, the several
Purchasers as set forth below, provided, however, that each representation concerning Mazeppa
Processing Partnership Ltd. (“MPP”) is a representation solely to the knowledge of the Parent, the
Issuer or any of the Guarantors, as applicable, without any inquiry beyond those that would
reasonably be expected to made (1) in connection with the Parent’s management of MPP pursuant to
the management agreement, (2) as a party to the various other agreements by and among the Parent,
the Issuer or any of the Guarantors, and MPP, and (3) as necessary to properly record the results
and financial condition of MPP and to include MPP as part of ▇▇▇▇▇▇▇’▇ consolidated financial
statements:
(a) A preliminary offering circular (the “Preliminary Offering Circular”) and an
offering circular (the “Offering Circular”) relating to the Offered Securities have been
prepared by the Issuer and the Guarantors. Such Preliminary Offering Circular and Offering
Circular, and all documents, if any, incorporated by reference therein, are hereinafter
collectively referred to as the “Offering Document”. On the date of this Agreement, the
Offering Document does not include any 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, not misleading. The preceding sentence does not
apply to statements in or omissions from the Offering Document based upon written
information furnished to the Issuer or the Guarantors by any Purchaser through Credit Suisse
First Boston LLC (“CSFB”) or its counsel specifically for use therein, it being understood
and agreed that the only such information is that described as such in Section 7(b) hereof.
The Parent’s Annual Report on Form 40-F most recently filed with the Commission pursuant to
the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), when it
was filed with the Commission, conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder.
(b) Parent is a corporation, incorporated, valid and subsisting under the laws of the
Province of Alberta, with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and Parent is duly qualified
to do business as an extra-provincial or foreign corporation, as applicable, in good
standing in all other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not individually or in the aggregate have a
material adverse effect on the condition (financial or other), business, properties or
results of operations of Parent, its subsidiaries and MPP taken as a whole (“Material
Adverse Effect”).
(c) Each subsidiary of Parent other than ▇▇▇▇▇▇▇ Petroleum (U.S.A.) Corporation and
Redwood Energy (U.S.A.) Ltd. (each a “Subsidiary” and collectively, the “Subsidiaries”) is a
corporation, limited liability company, partnership or other legal entity, as the case may
be, incorporated or formed, valid and subsisting under the laws of the jurisdiction of its
incorporation or formation, with power and authority (corporate or such similar power and
other) to own its properties and conduct its business as described in the Offering Document;
and each Subsidiary is duly qualified to do business as an extra-provincial or foreign
corporation or partnership, as applicable, and, to the extent such jurisdictions have such a
concept, is in good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not have a Material Adverse
Effect; all of the issued and outstanding shares in the capital of each Subsidiary have been
duly authorized and validly issued and are fully paid and nonassessable; and all of the
shares of capital or partnership interests, as applicable, of each Subsidiary owned by
Parent, directly or through subsidiaries, are owned free from liens, encumbrances and
defects, except for those liens arising out of the senior secured credit facility (the
“Senior Credit Facility”), dated April 2, 2004, as amended, by and among Parent and the
lenders party thereto, the Indenture, the Notes and the Indenture dated May 8, 2002 (the
“2002 Indenture”) by and among Parent, the guarantors named therein and the Trustee.
(d) Each of the management agreement, dated August 18, 2004 by and among Parent and
MPP, the option agreement between Enstar Midstream Services Ltd. and 1121893 Alberta Ltd and
Parent, dated August 18, 2004 and the processing agreement between MPP and Parent, dated
August 18, 2004 is in full force and effect.
(e) The Indenture has been duly authorized by the Issuer; the Notes have been duly
authorized by the Issuer; and when the Notes are delivered and paid for pursuant to this
Agreement on the Closing Date (as defined below), the Indenture will have been duly executed
and delivered, such Notes will have been duly executed, authenticated, issued and delivered
and will conform to the description thereof contained in the Offering Document, and the
Indenture and such Notes will constitute valid and legally binding obligations of the
Issuer, enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles (regardless of
whether enforceability is considered in a proceeding in equity or law).
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(f) The Indenture has been duly authorized by each of the Guarantors; the Guarantees
have been duly authorized by each of the Guarantors; and when the Notes are delivered and
paid for pursuant to this Agreement on the Closing Date (as defined below), the Indenture
will have been duly executed and delivered by each of the Guarantors, such Guarantees will
have been duly executed, authenticated, issued and delivered and will conform to the
description thereof contained in the Offering Document, and the Indenture and such
Guarantees will constitute valid and legally binding obligations of each Guarantor,
enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors’ rights and to general equity principles (regardless of whether
enforceability is considered in a proceeding in equity or law).
(g) Except as disclosed in the Offering Document and for the agreement between Parent
and ▇▇▇▇▇▇ & Co. Inc. as information agent in connection with the tender offer for the
Parent’s outstanding 9.90% Senior Notes due 2009 (the “2009 Notes”) described in the
Offering Document, there are no contracts, agreements or understandings between the Issuer
or any Guarantor and any person that would give rise to a valid claim against the Issuer or
any Purchaser for a brokerage commission, finder’s fee or other like payment in connection
with the consummation of the transaction contemplated by this Agreement.
(h) No consent, approval, authorization, or order of, or filing with, any governmental
agency or body or any court is required for the consummation of the transactions
contemplated by this Agreement and the Registration Rights Agreement in connection with the
issuance and sale of the Notes by the Issuer or the Guarantees by the Guarantors except for
(i) those that, as of the date hereof, have been obtained or made; (ii) the order of the
Commission declaring the Exchange Offer Registration Statement or the Shelf Registration
Statement (each as defined in the Registration Rights Agreement) effective; and (iii) the
filing of a Form 45-106F1 with applicable Canadian securities regulatory authorities within
10 days of the distribution of Offered Securities on a private placement basis pursuant to
National Instrument 45-106 — Prospectus and Registration Exemptions.
(i) Subject to the assumptions and qualifications set forth in the Offering Document,
under current laws and regulations of Canada and any political subdivision thereof, all
interest, principal, premium, if any, and other payments due or made on the Offered
Securities may be paid by the Issuer to the beneficial owner thereof in United States
dollars or Canadian dollars that may be converted into foreign currency and freely
transferred out of Canada and all such payments made to beneficial owners thereof who are
non-residents of Canada and do not use or hold the Notes in connection with or in the course
of carrying on business in Canada and, in the case of a beneficial owner that is an insurer,
establishes that the Notes are not “designated insurance property” for purposes of the
Income Tax Act (Canada), will not be subject to income, withholding or other taxes under
laws and regulations of Canada or any political subdivision or taxing authority thereof or
therein and will otherwise be free and clear of any other tax, duty, withholding or
deduction in Canada or any political subdivision or taxing authority thereof or therein and
without the necessity of obtaining any governmental authorization in Canada or any political
subdivision or taxing authority thereof or therein.
(j) The execution, delivery and performance of the Indenture, this Agreement and the
Registration Rights Agreement by the Issuer and each of the Guarantors, and the issuance and
sale of the Offered Securities and compliance with the terms and provisions thereof will not
result in a breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any governmental agency or body
or any court, domestic or foreign, having jurisdiction over Parent or any Subsidiary, or any
of their properties, or any agreement or instrument to which Parent or any Subsidiary is a
party or by which Parent or any Subsidiary is bound or to which any of the properties of
Parent or any Subsidiary is subject, or the charter or by-laws (or similar organizational
document) of Parent or any Subsidiary, and the Issuer and each of the Guarantors has full
power and authority to authorize, issue and sell the Offered Securities being issued by them
as contemplated by this Agreement.
(k) This Agreement and the Registration Rights Agreement have been duly authorized,
executed and delivered by the Issuer and each of the Guarantors.
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(l) Except as disclosed in the Offering Document, Parent, its Subsidiaries and MPP have
(i) good and marketable title to all real properties and all other properties and assets
(excluding oil and gas properties and oil and gas mineral rights) owned by them, in each
case free from liens, encumbrances and defects that would affect the value thereof (other
than liens and encumbrances which may effect the value of MPP or its real property, other
property or assets) or interfere with the use made or to be made thereof by them; and (ii)
except as disclosed in the Offering Document, Parent, its Subsidiaries and MPP hold any
leased real or personal property under valid and enforceable leases with no exceptions that
would interfere with the use made or to be made thereof by them, in all cases except where
the failure to have such title or hold such leases would not have a Material Adverse Effect
(as defined below).
(m) Although it does not warrant title, neither the Issuer nor any Guarantor has reason
to believe that the Parent or its Subsidiaries does not have title to or the right to
produce and sell its petroleum, natural gas and related hydrocarbons (for the purposes of
this clause, the forgoing are referred to as the “Interests”) as described in the Offering
Document. The Interests are free and clear of adverse claims created by, through or under
the Parent or its Subsidiaries, except as disclosed in the Offering Document, or those
arising in the ordinary course of business, which are individually or in the aggregate not
material. The Parent and its Subsidiaries hold their respective Interests under valid and
subsisting leases, licenses, permits, concessions, concession agreements, contracts,
subleases, reservations or other agreements.
(n) Parent, its Subsidiaries and MPP possess adequate certificates, authorities or
permits issued by appropriate governmental agencies or bodies necessary to conduct the
business now operated by them and have not received any notice of proceedings relating to
the revocation or modification of any such certificate, authority or permit that, if
determined adversely to Parent, any of its Subsidiaries or MPP, would individually or in the
aggregate have a Material Adverse Effect or except where the failure to possess such
certificate, authorities, or permit would not have a Material Adverse Effect.
(o) No labor dispute with the employees of Parent, any Subsidiary or MPP exists or, to
the knowledge of the Issuer or any Guarantor, is imminent that, in any case, might have a
Material Adverse Effect.
(p) Parent, its Subsidiaries, and MPP own, possess or can acquire on reasonable terms,
adequate rights to use all material trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other intellectual property
(collectively, “intellectual property rights”) necessary to conduct the business now
operated by them, or presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to Parent, any of its Subsidiaries or MPP,
would individually or in the aggregate have a Material Adverse Effect.
(q) Except as disclosed in the Offering Document, none of Parent, any of its
subsidiaries or MPP is in violation of any statute, any rule, regulation, decision or order
of any governmental agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic substances
(collectively, “environmental laws”), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any off-site disposal
or contamination pursuant to any environmental laws, or is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and neither the Issuer nor
any Guarantor is aware of any pending investigation which might lead to such a claim.
(r) Except as disclosed in the Offering Document, there are no pending actions, suits
or proceedings against or affecting Parent, any of its subsidiaries, MPP or any of their
respective properties that, if determined adversely to Parent, any of its subsidiaries or
MPP, would individually or in the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Issuer or any Guarantor to perform its
obligations under the Indenture, this Agreement or the Registration Rights Agreement; and to
the Issuer’s or any Guarantor’s knowledge, no such actions, suits or proceedings are
threatened or contemplated.
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(s) The financial statements included in the Offering Document present fairly in all
material respects the consolidated financial position of Parent and its consolidated
subsidiaries and MPP, as of the dates shown and the consolidated results of operations and
cash flows for the periods shown, and such financial statements have been prepared in
conformity with generally accepted accounting principles (“GAAP”) in Canada (“Canadian
GAAP”) and have been reconciled to GAAP in the United States (“U.S. GAAP”) in accordance
with Item 18 of Form 20-F under the Exchange Act, in each case applied on a consistent
basis.
(t) Except as disclosed in the Offering Document, since the date of the latest audited
financial statements included in the Offering Document there has been no material adverse
change, nor any development or event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of operations of Parent, its
subsidiaries and MPP taken as a whole, and, except as disclosed in or contemplated by the
Offering Document, there has been no dividend or distribution of any kind declared, paid or
made by Parent on any class of its capital stock.
(u) Neither the Issuer nor any of the Guarantors is an open-end investment company,
unit investment trust or face-amount certificate company that is or is required to be
registered under Section 8 of the United States Investment Company Act of 1940 (the
“Investment Company Act”); and neither the Issuer nor any Guarantor is or, after giving
effect to the offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Offering Document, will be an “investment company” as
defined in the Investment Company Act.
(v) No securities of the same class (within the meaning of Rule 144A(d)(3) under the
Securities Act) as the Offered Securities are listed on any national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
(w) The offer and sale of the Offered Securities in the manner contemplated by this
Agreement will be exempt from the registration requirements of the Securities Act, and it is
not necessary to qualify the indenture in respect of the Offered Securities under the United
States Trust Indenture Act of 1939, as amended.
(x) None of the Issuer, the Guarantors, nor any of their respective affiliates, nor any
person acting on its or their behalf (i) has, within the six-month period prior to the date
hereof, offered or sold in the United States or to any U.S. person (as such terms are
defined in Regulation S under the Securities Act) the Offered Securities or any security of
the same class or series as the Offered Securities or (ii) has offered or will offer or sell
the Offered Securities (A) in the United States by means of any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the Securities Act, except no
representation, warranty or agreement is made by the Issuer or the Guarantors pursuant to
this paragraph with respect to action undertaken by the Purchasers. None of the Issuer or
any Guarantor has entered and neither will enter into any contractual arrangement with
respect to the distribution of the Offered Securities except for this Agreement.
(y) The Issuer, the entities listed on Schedule B hereto as Subsidiary Guarantors,
▇▇▇▇▇▇▇ Petroleum (U.S.A.) Corporation and Redwood Energy (U.S.A.) Ltd., are the only
subsidiaries, direct or indirect, of Parent.
(z) Any statistical and market-related data included in the Offering Document are based
on or derived from sources that the Issuer and each of the Guarantors believe to be reliable
and accurate, and the Issuer has obtained the written consent to the use of such data from
such sources as may be required.
(aa) The working interests in crude oil, natural gas and natural gas liquids held by
Parent and its Subsidiaries reflect in all material respects the right of Parent and its
Subsidiaries to explore or receive production from such underlying properties, and the
action taken by Parent and its Subsidiaries with respect to acquiring or otherwise procuring
such leases or interests was generally consistent with standard industry practices for
acquiring or procuring leases and interests therein to explore for such products.
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(bb) None of the Issuer or any Guarantor is aware of any defects, failures or
impairments in the title of any of the Issuer or any Guarantor to its properties (including
in respect of any action, suit, proceeding or inquiry, whether instituted, pending or, to
the knowledge of any of the Issuer or any Guarantor, threatened or whether or not discovered
by any third party) which, in the aggregate, could reasonably be expected to have a material
adverse effect on the quantity and pre-tax discounted present value of the estimated future
net revenue values of crude oil, natural gas and natural gas liquids reserves attributable
to properties owned by the Issuer and the Guarantors as at December 31, 2004 as shown in the
reserve report prepared for Parent by Netherland, Sewell, & Associates, Inc. (the “Reserve
Report”).
(cc) Parent and its subsidiaries have made available to Netherland, Sewell, &
Associates, Inc., prior to the issuance of the Reserve Report, for the purposes of preparing
the Reserve Report, all information requested by Netherland, Sewell, & Associates, Inc. No
facts have arisen that lead the Issuer or any Guarantor to believe that the information
supplied was not correct in any material respect. Since the date of the Reserve Report, to
the knowledge of Parent or any Guarantor, and other than by reason of production of crude
oil, natural gas and natural gas liquids since the date of the Reserve Report, there has
been no material adverse change to Parent’s and its subsidiaries’, taken as a whole,
aggregate crude oil, natural gas and natural gas liquids reserves as reported therein and
such parties believe the Reserve Report fairly presents in all material respects the
determination of the petroleum and natural gas reserves of Parent and its subsidiaries
attributable to the properties evaluated in such Reserve Report and the production profile
and costs associated therewith, as of the date thereof.
(dd) (i) None of Parent or any Subsidiary is in violation of its respective articles or
bylaws (or similar organizational documents) and (ii) none of Parent, any Subsidiary or MPP
is in default in the performance of any obligation, agreement, covenant or condition
contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument
that is material to Parent, its subsidiaries, and MPP taken as a whole, to which Parent, any
Subsidiary, or MPP is a party or by which Parent, any Subsidiary, MPP or their respective
property is bound, except in the case of clause (ii) where such default would not reasonably
be expected to have a Material Adverse Effect and provided that with respect to agreements
of MPP, such representation is limited to (1) agreements of MPP known to Parent or its
subsidiaries as a result of their management of MPP or by virtue of being a party to the
agreement with MPP and (2) defaults by MPP that have otherwise been conveyed to Parent or
its subsidiaries.
(ee) Neither the Issuer nor any agent thereof acting on the behalf of the Issuer has
taken, and none of them will take, any action that might cause this Agreement or the
issuance or sale of the Offered Securities to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System; provided that none of
the Issuer or any Guarantor makes any representation as to actions taken or to be taken by
the Purchasers.
(ff) Parent maintains, and will maintain, a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed in
accordance with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in conformity with
Canadian GAAP and to maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(gg) Parent maintains, and will maintain, disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act), which (i) are designed to ensure
that material information relating to the Parent, including its consolidated subsidiaries
and MPP, is made known to the Company’s principal executive officer and its principal
financial officer by others within those entities; and (ii) are effective in all material
respects to perform the functions for which they were established.
(hh) Except as would not reasonably be expected to have a Material Adverse Effect,
Parent, its subsidiaries and MPP are in compliance with, and conduct their businesses in
conformity with, all applicable U.S. and Canadian federal, state, provincial, local and
foreign laws, rules and regulations, and all
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applicable ordinances, judgments, decrees, orders, units and injunctions of any court,
governmental agency or body or the Toronto Stock Exchange.
(ii) Provided that a Purchaser is a non-resident of Canada for purposes of the Income
Tax Act (Canada) and deals at arm’s length (within the meaning of the Income Tax Act
(Canada) with the Issuer and does not provide services in Canada or hold the Offered
Securities in connection with a business carried on in Canada and except as disclosed in the
Offering Document and, in the case of a Purchaser that is an insurer, establishes that the
Notes are not “designated insurance property” for purposes of the Income Tax Act (Canada),
no stamp tax or other issuance, goods and services or transfer taxes or duties and no
capital gains, income, withholding or other taxes are payable by or on behalf of the
Purchasers to any Canadian federal, provincial or other taxing authority in connection with
(A) the creation, issuance, sale and delivery of the Offered Securities to the Purchasers in
the manner contemplated in this Agreement, the Registration Rights Agreement and the
Indenture; or (B) the resale and delivery of such Offered Securities by the Purchasers
outside of Canada in the manner contemplated in this Agreement, the Registration Rights
Agreement and the Indenture.
(jj) Each of the Issuer and the Guarantors has filed all foreign, federal, state,
provincial and local tax returns that are required to be filed by it or has requested
extensions thereof (except in any case in which failure so to file would not have a Material
Adverse Effect), and has paid all taxes required to be paid by it and any other assessment,
interest, fine or penalty levied against it, to the extent that any of the foregoing is
material and due and payable, except for any such assessment, interest, fine or penalty that
is currently being contested in good faith or as would not have a Material Adverse Effect.
(kk) The accountants that audited the financial statements of Parent included in the
Offering Document are independent with respect to each of the Issuer and the Guarantors
within the meaning of the Securities Act.
(ll) Each of the Issuer and the Guarantors is a “foreign private issuer” (as defined in
Rule 405 under the Securities Act).
(mm) No withholding tax imposed under the federal laws of Canada, any province or
territory of Canada or any political subdivision or taxing authority thereof or therein is
or will be payable in respect of the payment or crediting of the commissions contemplated by
this Agreement by the Issuer to a Purchaser that is not, and is not deemed to be, a resident
of Canada for the purposes of the Income Tax Act (Canada), provided that the Purchaser deals
at arm’s length (as such term is understood for purposes of the Income Tax Act (Canada))
with the Issuer and the Guarantors, and that such commissions are payable in respect of
services rendered by the Purchaser wholly outside of Canada that are performed in the
ordinary course of business carried on by the Purchaser outside of Canada that includes the
performance of such services for a fee, and the Purchaser is a resident of the U.S. for
purposes of the Canada/United States Tax Convention (1980).
(nn) No goods and services tax imposed under the federal laws of Canada, any province
or territory of Canada or any political subdivision or taxing authority thereof or therein
are or will be payable by the Issuer or collectable by a Purchaser in respect of the payment
of commissions as contemplated by this Agreement to a Purchaser that is a non-resident of
Canada, provided that such commissions are in respect of services performed by the Purchaser
wholly outside of Canada.
(oo) Except for the Registration Rights Agreement, there are no contracts, agreements
or understandings between the Issuer or any Guarantor and any person granting such person
the right, other than such rights which have been waived or satisfied, to require the Issuer
or any Guarantor to file a registration statement under the Securities Act with respect to
any securities of the Issuer or such Guarantor or to require the Issuer or such Guarantor to
include such securities with the Offered Securities registered pursuant to any registration
statement.
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(pp) The Issuer and the Guarantors, taken as a whole, carry, or are covered by,
insurance in such amounts and covering such risks as is customary for companies engaged in
similar businesses in similar industries.
(qq) Neither the Issuer nor any of the Guarantors, nor any director, officer, agent,
employee or other person associated with or acting on behalf of the Issuer or any of the
Guarantors, 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 United States Foreign Corrupt
Practices Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
warranties and agreements herein contained, but subject to the terms and conditions herein set
forth, the Issuer agrees to sell to the Purchasers, and the Purchasers agree, severally and not
jointly, to purchase from the Issuer, at a purchase price of 97.01% of the principal amount thereof
plus accrued interest from November 22, 2005 to the Closing Date (as hereinafter defined), the
respective principal amounts of Notes set forth opposite the names of the several Purchasers in
Schedule A hereto.
The Issuer will deliver against payment of the purchase price the Offered Securities in the
form of one or more permanent global securities in definitive form (the “Global Securities”)
deposited with the Trustee as custodian for The Depository Trust Company (“DTC”) and registered in
the name of Cede & Co., as nominee for DTC. Interests in any permanent Global Securities will be
held only in book-entry form through DTC, except in the limited circumstances described in the
Offering Document. Payment for the Offered Securities shall be made by the Purchasers in Federal
(same day) funds by official check or checks or wire transfer to an account at a bank acceptable to
CSFB drawn to the order of the Issuer at the office of Stikeman Elliott LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ at 9:00 A.M. (New York time), on
November 22, 2005, or at such other time not later than seven full business days thereafter as CSFB
and the Issuer determine, such time being herein referred to as the “Closing Date”, against
delivery to the Trustee as custodian for DTC of the Global Securities representing all of the
Notes. The Global Securities will be made available for checking at the office of Stikeman Elliott
LLP at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers. (a) Each Purchaser, severally and
not jointly represents and warrants to the Issuer that it is an “accredited investor” within the
meaning of Regulation D of the Securities Act.
(b) Each Purchaser, severally and not jointly, acknowledges that the Offered
Securities have not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons except
pursuant to an exemption from the registration requirements of the Securities Act. Each
Purchaser, severally and not jointly, represents and agrees that it has offered and sold the
Offered Securities, and will offer and sell the Offered Securities only in accordance with
Rule 144A (“Rule 144A”) or Rule 903 under the Securities Act. Accordingly, neither such
Purchaser nor its affiliates, nor any persons acting on its or their behalf, have engaged or
will engage in any directed selling efforts with respect to the Offered Securities, and such
Purchaser, its affiliates and all persons acting on its or their behalf have complied and
will comply with the offering restrictions requirements of Rule 144A.
(c) Each Purchaser, severally and not jointly, agrees that it and each of its
affiliates has not entered and will not enter into any contractual arrangement with respect
to the distribution of the Offered Securities except for any such arrangements with the
other Purchasers or affiliates of the other Purchasers or with the prior written consent of
the Issuer.
(d) Each Purchaser, severally and not jointly, agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United States by means of
any form of general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act, including, but not limited to (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
8
media or broadcast over television or radio, or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising. Each
Purchaser , severally and not jointly, agrees, with respect to resales made in reliance on
Rule 144A of any of the Offered Securities, to deliver either with the confirmation of such
resale or otherwise prior to settlement of such resale a notice to the effect that the
resale of such Offered Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(e) Each of the Purchasers, severally and not jointly, represents and agrees that (i)
it has not offered or sold and prior to the expiry of a period of six months from the
closing date, will not offer or sell any Offered Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the Financial Services and Markets ▇▇▇ ▇▇▇▇
(the “FSMA”)) received by it in connection with the issue or sale of any Offered Securities
in circumstances in which section 21(1) of the FSMA does not apply to the Issuer or any
Guarantor; and (iii) it has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to the Offered Securities in, from or
otherwise involving the United Kingdom.
5. Certain Agreements of the Issuer and the Guarantors. Each of the Issuer and the
Guarantors agrees with the several Purchasers that:
(a) The Issuer will advise CSFB promptly of any proposal to amend or supplement the
Offering Document and will not effect any amendment or supplementation without CSFB’s
consent, which consent shall not be unreasonably withheld. If, at any time prior to the
completion of the resale of the Offered Securities by the Purchasers, any event occurs as a
result of which the Offering Document 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,
not misleading, the Issuer promptly will notify CSFB of such event and promptly will
prepare, at its own expense, an amendment or supplement which will correct such statement or
omission. Neither CSFB’s consent to, nor the Purchasers’ delivery to offerees or investors
of, any such amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6.
(b) The Issuer will furnish to CSFB copies of the Offering Document and all amendments
and supplements to such documents, in each case as soon as practicable and in such
quantities as CSFB reasonably requests. At any time when the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act and is not exempt from reporting pursuant to Rule
12g3-2(b) under the Exchange Act, the Issuer will promptly furnish or cause to be furnished
to CSFB (and, upon request, to each of the other Purchasers) and, upon request of holders
and prospective purchasers of the Offered Securities, to such holders and prospective
purchasers, copies of the information required to be delivered to holders and prospective
purchasers of the Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto) in order to permit compliance with Rule 144A in
connection with resales by such holders of the Offered Securities. The Issuer will pay the
expenses of printing and distributing to the Purchasers all such documents.
(c) The Issuer and the Guarantors will cooperate with CSFB and their counsel in
connection with the qualification of the Offered Securities for sale and the determination
of their eligibility for investment under the laws of such jurisdictions in the United
States and Canada as CSFB designates and will continue such qualifications in effect so long
as required for the resale of the Offered Securities by the Purchasers, provided that except
as contemplated by the Registration Rights Agreement, the Issuer will not be required to
file a prospectus or registration statement, and provided further that the Issuer will not
be required to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to service of process in suits (other than
those suits arising out of the offering or sale of the Offered Securities) in any
jurisdiction where it is not now so subject.
9
(d) Whether or not required by the SEC, so long as any Notes are outstanding Parent
will furnish to CSFB and, upon request, to each of the other Purchasers, as soon as
practicable after the end of each fiscal year, a copy of its annual report to shareholders
for such year; and Parent will furnish to CSFB and, upon request, to each of the other
Purchasers (i) all quarterly and annual financial information and current reports as
described in Section 4.25 of the Indenture and (ii) from time to time, such other
information concerning the Issuer or any of the Guarantors as CSFB may reasonably request.
(e) During the period of two years after the Closing Date, the Issuer will, upon
request, furnish to CSFB, each of the other Purchasers and any holder of Offered Securities
a copy of the restrictions on transfer applicable to the Offered Securities.
(f) During the period of two years after the Closing Date, neither the Parent nor any
of Parent’s subsidiaries will, and will use their best efforts to cause any of its
affiliates (as defined in Rule 144 under the Securities Act) not to, resell any of the
Offered Securities that have been reacquired by any of them.
(g) During the period of two years after the Closing Date, none of the Issuer or the
Guarantors will be, or become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under Section 8 of
the Investment Company Act.
(h) The Issuer will pay all expenses (together with Goods & Services Tax where
applicable) incidental to the performance of its obligations under this Agreement, the
Indenture and the Registration Rights Agreement, including (i) the fees and expenses of the
Trustee and its professional advisers; (ii) all expenses in connection with the execution,
issue, authentication, packaging and initial delivery of the Offered Securities and, as
applicable, the Exchange Securities (as defined in the Registration Rights Agreement), the
preparation and printing of this Agreement, the Registration Rights Agreement, the Offered
Securities, the Offering Document, the Indenture and amendments and supplements thereto, and
any other document relating to the issuance, offer, sale and delivery of the Offered
Securities and, as applicable, the Exchange Securities; (iii) the cost of qualifying the
Offered Securities for trading in The PortalSM Market and any expenses incidental
thereto; (iv) the cost of any advertising approved by the Issuer in connection with the
issue of the Offered Securities; (v) any expenses (other than fees and disbursements of
counsel for the Purchasers which are to be paid as set forth below) incurred in connection
with qualification of the Offered Securities or the Exchange Securities for sale under the
laws of such jurisdictions in the United States and Canada as CSFB designates (subject to
Section 5(c) of this Agreement) and the printing of memoranda relating thereto, (vi) for any
fees charged by investment rating agencies for the rating of the Offered Securities or the
Exchange Securities, and (vii) for expenses incurred in distributing the Offering Document
(including any amendments and supplements thereto) to the Purchasers. The Issuer will also
pay or reimburse the Purchasers (to the extent incurred by them) for fifty percent (50%) of
all reasonable travel expenses of the Purchasers and the Issuer’s or any Guarantor’s
officers and employees and any other reasonable expenses of the Purchasers and the Issuer or
the Guarantors in connection with attending or hosting meetings with prospective purchasers
of the Offered Securities from the Purchasers. Except as otherwise explicitly provided in
this Agreement, the Purchasers shall pay their own costs and expenses, including the costs
and expenses of their counsel and any transfer taxes on the Offered Securities.
(i) In connection with the offering of the Offered Securities, until CSFB shall have
notified the Issuer and the other Purchasers of the completion of the resale of the Offered
Securities, neither the Parent nor any of Parent’s subsidiaries will, and will use their
best efforts to cause any of its affiliates (as defined in Rule 144 under the Securities
Act) not to, either alone or with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial interest any Offered
Securities or attempt to induce any person to purchase any Offered Securities; and neither
the Parent nor any of Parent’s subsidiaries will, and will use their best efforts to cause
any of its affiliates (as defined in Rule 144 under the Securities Act) not to, make bids or
purchases for the purpose of creating actual, or apparent, active trading in, or of raising
the price of, the Offered Securities.
(j) For a period of 180 days after the date of the initial offering of the Offered
Securities by the Purchasers, neither the Issuer nor any Guarantor will offer, sell,
contract to sell, pledge or otherwise
10
dispose of, directly or indirectly, or file with the Commission a registration
statement under the Securities Act relating to, any United States dollar-denominated debt
securities issued or guaranteed by the Issuer or the Guarantors and having a maturity of
more than one year from the date of issue, or publicly disclose the intention to make any
such offer, sale, pledge, disposition or filing, without the prior written consent of CSFB
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated. Neither the Issuer nor the Guarantors will at any
time offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any securities under circumstances where such offer, sale, pledge, contract or disposition
would cause the exemption afforded by Section 4(2) of the Securities Act or the safe harbor
of Rule 144A or Regulation S thereunder to cease to be applicable to the offer and sale of
the Offered Securities.
(k) The Issuer and the Guarantors will indemnify and hold harmless the Purchasers
against any documentary, stamp or similar issuance tax, including any interest and
penalties, on the creation, issuance and sale of the Offered Securities and on the execution
and delivery of this Agreement. All payments to be made by the Issuer or any Guarantor
hereunder shall be made without withholding or deduction for or on account of any present or
future taxes, duties or governmental charges whatsoever unless the Issuer or the Guarantors
are compelled by law to deduct or withhold such taxes, duties or charges. In that event,
the Issuer or any Guarantor shall pay such additional amounts as may be necessary in order
that the net amounts received after such withholding or deduction shall equal the amounts
that would have been received if no withholding or deduction had been made.
(l) The Issuer will use the net proceeds received by it from the sale of the Offered
Securities in the manner specified in the Offering Document under “Use of Proceeds.”
6. Conditions of the Obligations of the Purchasers. The obligations of the several
Purchasers to purchase and pay for the Offered Securities will be subject to the accuracy of the
representations and warranties on the part of the Issuer and the Guarantors herein, to the accuracy
of the statements of officers of the Issuer and the Guarantors made pursuant to the provisions
hereof, to the performance by the Issuer and the Guarantors of their obligations hereunder and to
the following additional conditions precedent:
(a) The Purchasers shall have received a letter, dated the date of this Agreement, of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP in agreed form confirming that they are independent public accountants
within the meaning of the Securities Act and the applicable published rules and regulations
thereunder (“Rules and Regulations”), the Securities Act of Alberta and the rules of
professional conduct of the Institute of Chartered Accountants of Alberta and to the effect
that:
(i) in their opinion the financial statements examined by them and included in
the Offering Document comply as to form in all material respects with the applicable
accounting requirements of the Canadian Institute of Chartered Accountants (the
“CICA”), the Securities Act of Alberta, the Securities Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by the Public Company
Accounting Oversight Board (the “PCAOB”) for a review of interim financial
information as described in Statement of Auditing Standards No. 100, Interim
Financial Information, on the unaudited financial statements included in the
Offering Document;
(iii) on the basis of the review referred to in clause (ii) above, a reading
of the latest available interim financial statements of the Issuer, inquiries of
officials of the Issuer who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that caused them to
believe that:
(A) the unaudited financial statements included in the Offering
Document do not comply as to form in all material respects with the
applicable accounting requirements of the CICA, the Securities Act of
Alberta, the Securities Act and the related published Rules and Regulations
or any material modifications should be made to such unaudited financial
statements for them to be in conformity with generally accepted accounting
principles;
11
(B) at November 11, 2005 there was any change in the capital stock or
any increase in short-term indebtedness or long-term debt of Parent and its
consolidated subsidiaries or any decrease in consolidated net current assets
or net assets, as compared with amounts shown on the latest balance sheet
included in the Offering Document; or
(C) for the period from September 30, 2005 to November 15, 2005, there
were any decreases, as compared with the corresponding period of the
previous year, in consolidated net sales, net operating income, consolidated
net income or in the ratio of earnings to fixed charges;
except in all cases set forth in clauses (B) and (C) above for changes, increases or
decreases which the Offering Document disclose have occurred or may occur or which
are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages derived from
such dollar amounts) and other financial information contained in the Offering
Document (in each case to the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting records of Parent and
its subsidiaries subject to the internal controls of Parent’s accounting system or
are derived directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar amounts, percentages
and other financial information to be in agreement with such results, except as
otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there shall not have
occurred (i) any change, or any development or event involving a prospective change, in the
condition (financial or other), business, properties or results of operations of Parent, its
subsidiaries and MPP, taken as one enterprise which, in the judgment of a majority in
interest of the Purchasers including CSFB, is material and adverse and makes it impractical
or inadvisable to proceed with completion of the offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt securities of the Issuer
or any Guarantor by any “nationally recognized statistical rating organization” (as defined
for purposes of Rule 436(g) under the Securities Act), or any public announcement that any
such organization has under surveillance or review its rating of any debt securities of the
Issuer or any Guarantor (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating) or any announcement
that the Issuer or any Guarantor has been placed on negative outlook; (iii) any change in
U.S., Canadian or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of a majority in interest of
the Purchasers including CSFB, be likely to prejudice materially the success of the proposed
issue, sale or distribution of the Offered Securities, whether in the primary market or in
respect of dealings in the secondary market, (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock Exchange or the Toronto
Stock Exchange, or any setting of minimum prices for trading on such exchange; (v) any
suspension of trading of any securities of Parent on any exchange or in the over-the-counter
market; (vi) any banking moratorium declared by U.S. Federal, New York or Canadian
authorities; (vii) any major disruption of settlements of securities or clearance services
in the United States or Canada or (viii) any attack on, outbreak or escalation of
hostilities or act of terrorism involving the United States or Canada, any declaration of
war by Congress or any other national or international calamity or emergency if, in the
judgment of a majority in interest of the Purchasers including CSFB, the effect of any such
attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical
or inadvisable to proceed with completion of the offering or sale of and payment for the
Offered Securities.
(c) The Purchasers shall have received an opinion, dated the Closing Date, of Paul,
Weiss, Rifkind ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, United States counsel for the Issuer to the effect
set forth in Exhibit A.
(d) The Purchasers shall have received an opinion, dated the Closing Date, of Stikeman
Elliott LLP, Canadian counsel for the Issuer, that:
12
(i) The Parent is a corporation, incorporated, valid and subsisting under the
laws of the Province of Alberta, with corporate power and authority to own its
properties and conduct its business as described in the Offering Document; and the
Parent is registered or qualified to do business as a foreign or extra-provincial
corporation, as applicable, and to the extent such jurisdictions have such a
concept, is in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such qualification; all of
the issued and outstanding shares in the capital of the Issuer have been duly
authorized and validly issued and are fully paid and nonassessable.
(ii) Each Subsidiary is a validly existing corporation, limited liability
company, partnership or other legal entity, as the case may be, incorporated or
formed, valid and subsisting under the laws of the jurisdiction of its incorporation
or formation, with power and authority (corporate or such similar power and other)
to own its properties and conduct its business as described in the Offering
Document; and each Subsidiary is registered or qualified to do business as a foreign
or extra-provincial corporation, and to the extent that such jurisdictions have such
a concept, is in good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such qualification; all of
the issued and outstanding shares in the capital of each Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable; and the shares
in the capital or partnership interests of each Subsidiary owned by Parent, directly
or through subsidiaries, are owned free from liens, encumbrances and defects, except
for those liens arising out of the Senior Credit Facility, the Indenture, the Notes
and the 2002 Indenture.
(iii) Each of the Issuer and the Guarantors has the necessary power and
authority (corporate or partnership) to execute, deliver, and perform its
obligations under each of this Agreement, the Registration Rights Agreement and the
Indenture.
(iv) This Agreement has been duly authorized by each of the Issuer and the
Guarantors and, to the extent that execution and delivery thereof are governed by
applicable Alberta provincial and federal laws of Canada (“Canadian Law”), has been
duly executed and delivered by the Issuer and each of the Guarantors.
(v) The Registration Rights Agreement has been duly authorized by each of the
Issuer and the Guarantors and, to the extent that execution and delivery thereof are
governed by Canadian Law, has been duly executed and delivered by the Issuer and
each of the Guarantors.
(vi) The Indenture has been duly authorized by each of the Issuer and the
Guarantors and, to the extent that execution and delivery thereof are governed by
Canadian Law, has been duly executed and delivered by the Issuer and each of the
Guarantors.
(vii) The Issuer has all necessary corporate power and capacity to authorize,
issue and sell the Notes, and the Notes have been duly authorized for issuance by
all necessary corporate action on the part of the Issuer and have been duly issued
by the Issuer and, to the extent that execution and delivery are matters governed by
Canadian Law, the global certificates representing the Notes have been duly executed
and delivered by the Issuer.
(viii) The Issuer has all necessary corporate power and capacity to authorize,
issue and sell the Exchange Securities, and the Exchange Securities have been duly
authorized for issuance by all necessary corporate action on the part of the Issuer.
(ix) The Guarantors have all necessary corporate or partnership power and
capacity (as applicable) to authorize, issue and grant the Guarantees, and the
Guarantees have been duly authorized by all necessary corporate or partnership power
(as applicable) on the part of the Guarantors, and, to the extent execution and
delivery are matters governed by Canadian Law, the Guarantees have been duly
executed and delivered by each of the Guarantors.
13
(x) The statements set forth in the Offering Circular under the captions
“Enforceability of Civil Liabilities Against Foreign Persons,” and “Certain Income
Tax Considerations—Canadian Federal Income Tax Considerations,” insofar as they
constitute summaries of Canadian legal matters or documents referred to therein,
fairly summarize in all material respects the matters referred to therein.
(xi) No consent, approval, authorization, order, registration or qualification
of or with any Canadian federal, Alberta or Ontario provincial, court or
governmental agency or body is required by the Issuer and the Guarantors in
connection with the transactions contemplated by the Purchase Agreement, the
Registration Rights Agreement or the Indenture (other than the delivery of the
Offering Circular, with a Canadian wrap, to the Ontario Securities Commission if any
purchasers reside in Ontario and other than the filing and clearing of the
Prospectus pursuant to the Registration Rights Agreement (as defined therein) with
respect to the Exchange Securities.)
(xii) To such counsel’s knowledge, (i) there are no pending actions, suits or
proceedings against or affecting Parent or any of its subsidiaries, or any of their
respective properties that, if determined adversely to Parent or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse Effect,
or would materially and adversely affect the ability of Issuer or any of the
Guarantors to perform their obligations under the Indenture, this Agreement or the
Registration Rights Agreement; and (ii) no such actions, suits or proceedings are
threatened or contemplated.
(xiii) The execution, delivery and performance by the Issuer and each of the
Guarantors of this Agreement, the Registration Rights Agreement and the Indenture
and compliance with the terms and provisions thereof, and the issue and sale of the
Offered Securities, will not (A) result in a breach or violation of or cause a
default under the Senior Credit Facility; (B) result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any Canadian federal,
or Alberta or Ontario provincial, statute, rule or regulation applicable to the
Issuer or any of the Guarantors, (C) to such counsel’s knowledge, result in a breach
or violation of any judgment, order or decree of any Canadian federal, or Alberta or
Ontario, provincial, government, governmental, regulatory or administrative agency,
authority, commission or instrumentality or court having jurisdiction over the
Issuer or any Guarantor or any of their properties or assets, or any agreement or
instrument to which the Issuer or any such Guarantor is bound or to which any of the
properties of the Issuer or any such Guarantor is subject, or (D) result in a breach
or violation of the charter or by-laws of any of the Issuer or the Guarantors,
except for such breaches, violations or defaults related to the opinions set forth
in (A), (B) and (C) of this paragraph (xiii) which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
(xiv) To such counsel’s knowledge, no order having the effect of ceasing or
suspending the distribution of the Offered Securities has been issued by any
Canadian federal or Alberta or Ontario provincial securities commission or the
Toronto Stock Exchange and no proceedings for that purpose have been instituted or
are pending.
(xv) The Issuer is not, to such counsel’s knowledge, on any list of defaulting
reporting issuers maintained under the securities legislation of Alberta or Ontario.
(xvi) The Indenture and the issuance of the Offered Securities thereunder
comply, to the extent applicable, with the provisions of the Business Corporations
Act (Alberta); and no registration, filing or recording of the Indenture under the
federal laws of Canada or the laws of Alberta or Ontario is necessary in order to
preserve or protect the validity or enforceability of the Indenture or the Offered
Securities issued thereunder.
(xvii) Subject to the assumptions and qualifications set forth in the Offering
Document, under the current laws and regulations of Canada and any political
subdivision thereof, all interest, principal, premium, if any, and other payments
due or made on the Offered Securities may be paid
14
by the Issuer to the beneficial owner thereof in United States dollars or
Canadian dollars that may be converted into foreign currency and freely transferred
out of Canada and all such payments made to beneficial owners thereof who are
non-residents of Canada and do not use or hold the Notes in connection with or in
the course of carrying on business in Canada and, in the case of a beneficial owner
that is an insurer, establishes that the Notes are not “designated insurance
property” for purposes of the Income Tax Act (Canada) will not be subject to income,
withholding or other taxes under the laws and regulations of Canada or any political
subdivision or taxing authority thereof or therein and all such payments will
otherwise be free and clear of any other tax, duty, withholding or deduction in
Canada or any political subdivision or taxing authority thereof or therein and
without the necessity of obtaining any Canadian federal, provincial or other
governmental authorization.
(xviii) Provided that a Purchaser is a non-resident of Canada for the purposes
of the Income Tax Act (Canada) and deals at arms-length (within the meaning of the
Income Tax Act (Canada) with the Issuer and does not provide services in Canada or
hold the Offered Securities in connection with a business carried on in Canada and
except as disclosed in the Offering Document and, in the case of a Purchaser that is
an insurer, establishes that the Notes are not “designated insurance property” for
purposes of the Income Tax Act (Canada), no stamp tax or other issuance, goods and
services or transfer taxes or duties and no capital gains, income, withholding or
other taxes are payable by or on behalf of the Purchasers to any Canadian federal,
provincial or other taxing authority in connection with (A) the creation, issuance,
sale and delivery of the Offered Securities to the Purchasers in the manner
contemplated in this Agreement and the Indenture; or (B) the resale and delivery of
such Offered Securities by the Purchasers outside of Canada in the manner
contemplated in this Agreement and the Indenture.
(xix) In any proceeding before a court of competent jurisdiction in the
Province of Alberta (an “Alberta Court”) for the enforcement of this Agreement, the
Registration Rights Agreement, the Indenture or the Offered Securities, the Alberta
Court would apply the laws of the State of New York (“New York Law”), in accordance
with the parties’ choice of New York Law as the governing law of this Agreement, the
Registration Rights Agreement, the Indenture and the Offered Securities to all
issues that under the conflict of laws rules of the Province of Alberta are to be
determined in accordance with the chosen law of the contract, provided that:
(a) the choice of New York Law is bona fide and legal and there is no reason
for avoiding the choice of law on the grounds of public policy, as these
criteria are interpreted and applied under laws of the province of Alberta;
and
(b) in any such proceeding, and notwithstanding the parties’ choice of law,
the Alberta Court:
(i) will not take judicial notice of the provisions of New York Law,
but will only apply these provisions if they are pleaded and proven
to its satisfaction by expert testimony;
(ii) will apply the laws of the province of Alberta (“Alberta Law”)
that under Alberta Law would be characterized as procedural and will
not apply any New York Law that under Alberta Law would be
characterized as procedural;
(iii) will apply Alberta Laws that have overriding effect; and
(iv) will not apply (directly or indirectly) any New York Law that
under Alberta Law would be characterized as a foreign revenue, penal,
expropriatory or other public law or if its application would be
contrary to public policy, as such term is interpreted under Alberta
Law (“public policy”).
15
Such counsel is not aware of any reason for avoiding on the grounds of
public policy or the Alberta Laws of overriding effect the choice of New
York Law to govern this Agreement, the Registration Rights Agreement, the
Indenture or the Offered Securities assuming that the meaning that would be
given to the terms used in such documents under New York Law would be the
same as the meaning given to such terms under Alberta Law.
(xx) An Alberta Court would give a judgment based upon a final and conclusive
in personam judgment of a court exercising jurisdiction in the State of New York (a
“New York Court”) for a sum certain, obtained against the Issuer and the Guarantors
with respect to a claim arising out of this Agreement, the Registration Rights
Agreement, the Indenture or the Offered Securities, without reconsideration of the
merits:
| (a) | provided that: |
(i) the New York Court had jurisdiction over the Issuer and
the Guarantors, as recognized under Alberta Law; and
(ii) the action to enforce the judgment is commenced within
the relevant limitation period under applicable law;
| (b) | subject to the following defences: |
(i) the judgment is subsisting and unsatisfied and not
impeachable as void or voidable under New York Law;
(ii) the judgment is obtained by fraud or in a manner
contrary to natural justice;
(iii) the judgment is directly or indirectly for a claim in
respect of any law of any jurisdiction which under Alberta
Law would be characterized as a foreign revenue, penal,
expropriatory or other public law; and
(iv) the judgment is contrary to principles of public policy
in the Alberta.
The submission by the Issuer and the Guarantors to the non-exclusive jurisdiction of
the New York Court pursuant to this Agreement, the Registration Rights Agreement,
the Indenture and the Offered Securities would be recognized by the Alberta Court as
conferring jurisdiction on the New York Courts within the meaning of (a)(i) above.
(xxi) No withholding tax imposed under the federal laws of Canada, any province
or territory of Canada or any political subdivision or taxing authority thereof or
therein will be payable in respect of the payment or crediting of the commissions
contemplated by this Agreement by the Issuer to a Purchaser that is not, and is not
deemed to be, a resident of Canada for the purposes of the Income Tax Act (Canada),
provided that the Purchaser deals at arm’s length (as such term is understood for
purposes of the Income Tax Act (Canada))with the Issuer and the Guarantors, and that
such commissions are payable in respect of services rendered by the Purchaser wholly
outside of Canada that are performed in the ordinary course of business carried on
by the Purchaser outside of Canada that includes the performance of such services
for a fee, and the Purchaser is a resident of the U.S. for purposes of the
Canada/United States Tax Convention (1980).
16
(xxii) No goods and services tax imposed under the federal laws of Canada, any
province or territory of Canada or any political subdivision or taxing authority
thereof or therein are or will be payable by the Issuer or collectable by a
Purchaser in respect of the payment of commissions as contemplated by this Agreement
to a Purchaser that is a non-resident of Canada, provided that such commissions are
in respect of services performed by the Purchaser wholly outside of Canada.
(xxiii) In addition, such counsel shall state that it has participated in
conferences with certain officers and employees of the Issuer and Parent, U.S.
counsel for the Issuer and the Guarantors, auditors of Parent, the Purchasers and
U.S. and Canadian counsel for the Purchasers at which the contents of the Offering
Document and related matters were discussed. Such counsel have no reason to believe
that the Offering Document, or any amendment or supplement thereto, as of the date
hereof and as of the Closing Date, contained any untrue statement of a material fact
or omitted to state any material fact necessary to make the statements therein not
misleading; it being understood that such counsel need express no opinion as to the
financial statements or other financial data, or information derived from reports of
Netherland, Sewell, & Associates, Inc. or Outtrim ▇▇▇▇▇ Associates Ltd. (now
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ Canada Limited), contained in the Offering Document.
(e) The Purchasers shall have received from Shearman & Sterling LLP, United States
counsel for the Purchasers, such opinion or opinions, dated the Closing Date, in form and
substance reasonably satisfactory to you, and the Issuer shall have furnished to such
counsel such documents as they reasonably request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, Shearman & Sterling LLP may rely as to the
incorporation of the Issuer and all other matters governed by Canadian or Alberta law upon
the opinion of Stikeman Elliott LLP referred to above.
(f) The Purchasers shall have received a letter, dated the Closing Date, of
Netherland, ▇▇▇▇▇▇ & Associates, Inc., in form and substance satisfactory to the Purchasers,
with respect to the reserve information included in the Offering Circular.
(h) The Purchasers shall have received a certificate, dated the Closing Date, of the
President or any Vice President and a principal financial or accounting officer of the
Issuer in which such officers, to the best of their knowledge after reasonable
investigation, shall state (i) that the representations and warranties of the Issuer in this
Agreement are true and correct, (ii) that the Issuer has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date, and (iii) that, subsequent to the date of the most recent financial
statements in the Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of the Parent, its
subsidiaries and MPP, taken as a whole, except as set forth in the Offering Document or as
described in such certificate.
(i) The Purchasers shall have received a certificate, dated the Closing Date, of the
President or any Vice President and a principal financial or accounting officer of each
Guarantor in which such officers, to the best of their knowledge after reasonable
investigation, shall state (i) that the representations and warranties of such Guarantor in
this Agreement are true and correct, (ii) that such Guarantor has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and (iii) that, subsequent to the date of the most recent
financial statements in the Offering Document there has been no material adverse change, nor
any development or event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of such Guarantor and
its subsidiaries taken as a whole except as set forth in the Offering Document or as
described in such certificate.
(j) The Purchasers shall have received a letter, dated the Closing Date, of ▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, which meets the requirements of subsection (a) of this Section, except that
the specified date referred to in such subsection will be a date not more than three days
prior to the Closing Date for the purposes of this subsection.
17
(k) The Parent will have received the requisite consents to amend the indenture dated
as of May 8, 2002, among the Parent, the guarantors named therein and The Bank of Nova
Scotia Trust Company of New York, as trustee relating to the 2009 Notes and will have
entered into a supplemental indenture with respect to the 2009 Notes giving effect to
certain proposed amendments as set forth in the Offer to Purchase and Consent Solicitation
Statement, dated October 31, 2005.
(l) The Purchasers shall have received a letter, dated the Closing Date, of Outtrim
▇▇▇▇▇ Associates Ltd., in form and substance satisfactory to the Purchasers, with respect to
the reserve information included in the Offering Circular.
(m) At the Closing Date, the written consent of each of the lenders under the Senior
Credit Facility, as required under the Senior Credit Facility to permit the Issuer and the
Guarantors to enter into this Agreement, perform its obligations hereunder and execute the
transactions contemplated hereby shall remain in effect and shall not have been revoked or
amended on the Closing Date and any conditions precedent to such consents becoming effective
shall have been met prior to or on the Closing Date.
The Issuer will furnish the Purchasers with such conformed copies of such opinions,
certificates, letters and documents as the Purchasers reasonably request. CSFB may in its sole
discretion waive on behalf of the Purchasers compliance with any conditions to the obligations of
the Purchasers hereunder, whether in respect of an Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Issuer and the Guarantors, jointly and
severally, will indemnify and hold harmless each Purchaser, its officers, partners, members,
employees, directors and its affiliates and each person, if any, who controls such Purchaser within
the meaning of Section 15 of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Purchaser may become subject, under the Securities Act
or the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any breach of any of the representations
and warranties of the Issuer and the Guarantors contained herein or any untrue statement or alleged
untrue statement of any material fact contained in or incorporated by reference into the Offering
Document, or any amendment or supplement thereto or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, including
any losses, claims, damages or liabilities arising out of or based upon the Issuer’s or any
Guarantor’s failure to perform its obligations under Section 5(a) of this Agreement, and will
reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Issuer will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished to the Issuer by
any Purchaser through CSFB specifically for use therein, it being understood and agreed that the
only such information consists of the information described as such in subsection (b) below; and
provided, further, that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary offering circular the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any Purchaser that sold the
Securities concerned to the person asserting any such losses, claims, damages or liabilities, to
the extent that such sale was an initial resale by such Purchaser and any such loss, claim, damage
or liability of such Purchaser results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Offered Securities to such
person, a copy of the Offering Document (exclusive of any material included therein but not
attached thereto) if the Company had previously furnished copies thereof to such Purchaser; and
provided further that the Issuer and Guarantors will not be liable to reimburse the Purchasers for
the legal and other expenses of more than one firm of legal counsel in addition to any local
counsel.
(b) Each Purchaser will severally and not jointly indemnify and hold harmless the
Issuer, the Guarantors, their respective directors and officers and each person, if any, who
controls the Issuer or the Guarantors within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities to which the Issuer may become
subject, under the Securities Act or the Exchange Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact contained in the
18
Offering Document, or any amendment or supplement thereto, or any related preliminary
offering circular, or arise out of or are based upon the omission or the alleged omission to
state therein a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with written
information furnished to the Issuer by such Purchaser through CSFB specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by the Issuer in
connection with investigating or defending any such loss, claim, damage, liability or action
as such expenses are incurred, it being understood and agreed that the only such information
furnished by any Purchaser consists of (i) the following information in the Offering
Document furnished on behalf of each Purchaser: under the caption “Plan of Distribution,”
the third, the second sentence of the twelfth, the fourteenth and fifteenth paragraphs;
provided, however, that the Purchasers shall not be liable for any losses, claims, damages
or liabilities arising out of or based upon the Issuer’s failure to perform its obligations
under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under this Section of notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the failure to notify the indemnifying
party shall not relieve it from any liability that it may have under subsection (a) or (b)
above except to the extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided further that the failure to
notify the indemnifying party shall not relieve it from any liability that it may have to an
indemnified party otherwise than under subsection (a) or (b) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than reasonable costs
of investigation. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes (i) an
unconditional release of such indemnified party from all liability on any claims that are
the subject matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or failure to act by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is unavailable or insufficient
to hold harmless an indemnified party under subsection (a) or (b) above, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in subsection (a) or
(b) above (i) in such proportion as is appropriate to reflect the relative benefits received
by the Issuer and the Guarantors on the one hand and the Purchasers on the other from the
offering of the Offered Securities 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
Issuer and the Guarantors on the one hand and the Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative benefits
received by the Issuer and the Guarantors on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Issuer bear to the total discounts and
commissions received by the Purchasers from the Issuer under this Agreement. The relative
fault shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Issuer and the Guarantors or the Purchasers and
the parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims,
19
damages or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is the subject
of this subsection (d). Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the total price
at which the Offered Securities purchased by it were resold exceeds the amount of any
damages which such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers’ obligations in
this subsection (d) to contribute are several in proportion to their respective purchase
obligations and not joint.
(e) The obligations of the Issuer under this Section shall be in addition to any
liability which the Issuer may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the meaning of the
Securities Act or the Exchange Act; and the obligations of the Purchasers under this Section
shall be in addition to any liability which the respective Purchasers may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who controls the
Issuer within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in their obligations to
purchase Offered Securities hereunder and the aggregate principal amount of Offered Securities that
such defaulting Purchaser or Purchasers agreed but failed to purchase does not exceed 10% of the
total principal amount of Offered Securities, CSFB may make arrangements satisfactory to the Issuer
for the purchase of such Offered Securities by other persons, including any of the Purchasers, but
if no such arrangements are made by the Closing Date, the non-defaulting Purchasers shall be
obligated severally, in proportion to their respective commitments hereunder, to purchase the
Offered Securities that such defaulting Purchasers agreed but failed to purchase. If any Purchaser
or Purchasers so default and the aggregate principal amount of Offered Securities with respect to
which such default or defaults occur exceeds 10% of the total principal amount of Offered
Securities and arrangements satisfactory to CSFB and the Issuer for the purchase of such Offered
Securities by other persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Purchaser or the Issuer or any
Guarantor, except as provided in Section 9. As used in this Agreement, the term “Purchaser”
includes any person substituted for a Purchaser under this Section. Nothing herein will relieve a
defaulting Purchaser from liability for its default. If other Purchasers are obligated or agree to
purchase the Offered Securities of a defaulting or withdrawing Purchaser, the Issuer or CSFB may
postpone the Closing Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Issuer or counsel for the remaining Purchasers may be necessary in
the Offering Document or in any other document or arrangement.
9. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of the Issuer or its officers and of
the several Purchasers set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation, or statement as to the results thereof, made by or on
behalf of any Purchaser, the Issuer or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment for the Offered
Securities. If this Agreement is terminated pursuant to Section 8 or if for any reason the
purchase of the Offered Securities by the Purchasers is not consummated, the Issuer shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section 5 and the
respective obligations of the Issuer and the Guarantors and the Purchasers pursuant to Section 7
shall remain in effect. If the purchase of the Offered Securities by the Purchasers is not
consummated for any reason other than solely because of the termination of this Agreement pursuant
to Section 8 or the occurrence of any event specified in clause (iii), (iv), (vi), (vii) or (viii)
of Section 6(b), the Issuer and the Guarantors will reimburse the Purchasers for all out-of-pocket
expenses (including fees and disbursements of counsel) reasonably incurred by them in connection
with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent to the Purchasers
will be mailed, delivered or telegraphed and confirmed to the Purchasers, c/o Credit Suisse First
Boston LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory
Group, or, if sent to the Issuer or any Guarantor, will be mailed, delivered or telegraphed and
confirmed to it at ▇▇▇▇▇▇▇ Petroleum Corporation, Fifth Avenue Place, East Tower, Suite ▇▇▇▇,
▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: Vice President Finance and Chief
Financial Officer; provided, however, that any notice to a Purchaser pursuant to Section 7 will be
mailed, delivered or telegraphed and confirmed to such ▇▇▇▇▇▇▇▇▇.
▇▇
▇▇. Successors. This Agreement will inure to the benefit of and be binding upon the parties
hereto and their respective successors and the controlling persons referred to in Section 7, and no
other person will have any right or obligation hereunder, except that holders of Offered Securities
shall be entitled to enforce the agreements for their benefit contained in the second and third
sentences of Section 5(b) hereof against the Issuer as if such holders were parties thereto.
12. Representation of Purchasers. You will act for the several Purchasers in connection with
this purchase, and any action under this Agreement taken by you jointly or by CSFB will be binding
upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such counterparts shall together constitute one
and the same Agreement. Any counterpart delivered by facsimile transmission shall be as binding on
the parties hereto as an originally delivered counterpart.
14. Absence of Fiduciary Relationship. Each of the Issuer and the Guarantors acknowledges
and agrees that:
(a) CSFB and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (the “Representatives”) have been
retained solely to act as initial purchasers in connection with the sale of the Offered
Securities and that no fiduciary, advisory or agency relationship between the Issuer or any
of the Guarantors and the Representatives has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of whether the Representatives
have advised or are advising the Issuer or any of the Guarantors on other matters;
(b) the price of the securities set forth in the Offering Document was established by
the Issuer following discussions and arm’s-length negotiations with the Representatives, and
the Issuer is capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated by this Agreement;
(c) the Issuer has been advised that the Representatives and their affiliates are
engaged in a broad range of transactions which may involve interests that differ from those
of Issuer and that the Representatives have no obligation to disclose such interests and
transactions to the Issuer by virtue of any fiduciary, advisory or agency relationship; and
(d) each of the Issuer and the Guarantors waives, to the fullest extent permitted by
law, any claims it may have against the Representatives for breach of fiduciary duty or
alleged breach of fiduciary duty and agrees that the Representatives shall have no liability
(whether direct or indirect) to Issuer or the Guarantors in respect of such a fiduciary duty
claim or to any person asserting a fiduciary duty claim on behalf of or in right of Issuer
or the Guarantors, including stockholders, employees or creditors of the Issuer or the
Guarantors.
15. Applicable Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to principles of conflicts of laws.
Each of the Issuer and the Guarantors hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
Each of the Issuer and the Guarantors irrevocably appoints CT Corporation System, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its authorized agent in the Borough of Manhattan
in The City of New York upon which process may be served in any such suit or proceeding, and agrees
that service of process upon such agent, and written notice of said service to the Issuer and the
Guarantors, by the person serving the same to the address provided in Section 10, shall be deemed
in every respect effective service of process upon the Issuer and the Guarantors in any such suit
or proceeding. Each of the Issuer and the Guarantors further agrees to take any and all action as
may be necessary to maintain such designation and appointment of such agent in full force and
effect for a period of seven years from the date of this Agreement.
21
The obligation of the Issuer and any of the Guarantors in respect of any sum due to any
Purchaser shall, notwithstanding any judgment in a currency other than United States dollars, not
be discharged until the first business day, following receipt by such Purchaser of any sum adjudged
to be so due in such other currency, on which (and only to the extent that) such Purchaser may in
accordance with normal banking procedures purchase United States dollars with such other currency;
if the United States dollars so purchased are less than the sum originally due to such Purchaser
hereunder, the Issuer and each Guarantor agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify such Purchaser against such loss. If the United States dollars so
purchased are greater than the sum originally due to such Purchaser hereunder, such Purchaser
agrees to pay to the Issuer an amount equal to the excess of the dollars so purchased over the sum
originally due to such Purchaser hereunder.
[Remainder of page intentionally left blank]
22
If the foregoing is in accordance with the Purchasers’ understanding of our agreement,
kindly sign and return to us one of the counterparts hereof, whereupon it will become a
binding agreement between the Issuer, the Guarantors and the several Purchasers in
accordance with its terms.
| Very truly yours, | ||||||
| ▇▇▇▇▇▇▇ Petroleum Finance Corporation | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
| ▇▇▇▇▇▇▇ Petroleum Corporation, as Guarantor | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
| Hornet Energy Ltd., as Guarantor | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
| ▇▇▇▇▇▇▇ Petroleum Holdings Corporation, as Guarantor | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
| ▇▇▇▇▇▇▇ Petroleum, as Guarantor, | ||||||
| by its managing partner, ▇▇▇▇▇▇▇ Petroleum Corporation | ||||||
| By | ||||||
| Name: | ||||||
| Title: | ||||||
23
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
is hereby confirmed and accepted
as of the date first above written.
Credit Suisse First Boston LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Acting on behalf of themselves
and as the Representatives of
the several Purchasers
and as the Representatives of
the several Purchasers
By Credit Suisse First Boston LLC
Title: |
24
SCHEDULE A
| Principal Amount of | ||||
| Purchaser | Offered Securities | |||
Credit Suisse First Boston LLC |
U.S.$112,500,000 | |||
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated |
112,500,000 | |||
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corp. |
30,000,000 | |||
Hibernia Southcoast Capital, Inc. |
15,000,000 | |||
Scotia Capital (USA) Inc. |
15,000,000 | |||
TD Securities (USA) LLC |
15,000,000 | |||
Total |
U.S.$300,000,000 | |||
25
SCHEDULE B
List of Guarantors
Parent Guarantor
| Name | Jurisdiction of Organization | |
▇▇▇▇▇▇▇ Petroleum Corporation
|
Alberta, Canada |
Subsidiary Guarantors
| Name | Jurisdiction of Organization | |
Hornet Energy Ltd.
|
Canada | |
▇▇▇▇▇▇▇ Petroleum
|
Alberta, Canada | |
▇▇▇▇▇▇▇ Petroleum Holdings Corporation
|
Alberta, Canada |
26
Exhibit A
[FORM OF OPINION OF ▇▇▇▇ ▇▇▇▇▇, RIFKIND, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇]
The opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP to be delivered pursuant to
Section 6(c) of the Purchase Agreement shall be to the effect that:
1. To the extent execution and delivery are governed by the laws of the State of New
York, the Purchase Agreement has been duly executed and delivered by the Issuer and the
Guarantors.
2. To the extent execution and delivery are governed by the laws of the State of New
York, the Indenture has been duly executed and delivered by the Issuer and the Guarantors.
The Indenture constitutes a valid and legally binding obligation of the Issuer and the
Guarantors, enforceable against the Issuer and the Guarantors in accordance with its terms,
except that the enforceability of the Indenture may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors’ rights generally and subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law). The Indenture
conforms in all material respects to the description thereof contained in the Offering
Circular under the caption “Description of the Notes.”
3. To the extent execution and delivery are governed by the laws of the State of New
York, the Registration Rights Agreement has been duly executed and delivered by the Issuer
and the Guarantors. The Registration Rights Agreement constitutes a valid and legally
binding obligation of each of the Issuer and the Guarantors, enforceable against each of the
Issuer and the Guarantors in accordance with its terms, except that the enforceability of
the Registration Rights Agreement may be subject to bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights
generally and subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law) and except to the extent that the
indemnification and contribution provisions of the Registration Rights Agreement may be
unenforceable. The Registration Rights Agreement conforms in all material respects to the
description thereof contained in the Offering Circular under the caption “Description of the
Notes – Registration Rights.”
4. To the extent execution and delivery are governed by the laws of the State of New
York, the Notes have been duly executed and delivered by the Issuer. When the Notes have
been authenticated by the Trustee in accordance with the Indenture and delivered and paid
for as provided in the Purchase Agreement, the Notes will constitute valid and legally
binding obligations of the Issuer, entitled to the benefit of the Indenture and enforceable
against the Issuer in accordance with their terms, except that the enforceability of the
Notes may be subject to bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors’ rights generally and subject to
general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law). The Notes, when issued and delivered, will conform in all
material respects to the description contained in the Offering Circular under the caption
“Description of the Notes.” The Notes are in the form contemplated by the Indenture.
5. To the extent execution and delivery are governed by the laws of the State of New
York, the Guarantees have been duly executed and delivered by the Guarantors. When the Notes
have been authenticated by the Trustee in accordance with the Indenture and delivered and
paid for as provided in the Purchase Agreement, each Guarantee executed and delivered by the
Guarantors will constitute a valid and legally binding obligation of each of the Guarantors,
entitled to the benefit of the Indenture and enforceable against each of the Guarantors in
accordance with its terms, except that the enforceability of the Guarantees may be subject
to bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
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similar laws affecting creditors’ rights generally and subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding in equity or at
law). The Guarantees, when issued and delivered, will conform in all material respects to
the description contained in the Offering Circular under the caption “Description of the
Notes – Guarantees.” The Guarantees are in the form contemplated by the Indenture
6. The statements in the Offering Circular under the heading “Income Tax
Considerations—U.S. Federal Income Tax Considerations,” to the extent that they constitute
summaries of United States federal law or regulation or legal conclusions, have been
reviewed by us and fairly summarize the matters described under that heading in all material
respects.
7. Assuming (A) that the representations and warranties of the Purchasers as set forth
in the Purchase Agreement are true and correct and compliance by the Purchasers with the
covenants and agreements set forth in the Purchase Agreement and (B) that the
representations and warranties of the Issuer and the Guarantors set forth in the Purchase
Agreement are true and correct and compliance by the Issuer and the Guarantors with the
covenants and agreements set forth in the Purchase Agreement, and assuming compliance with
the offering and transfer procedures and restrictions described in the Offering Circular, no
consent, approval, authorization or order of, or filing, registration or qualification with,
any Governmental Authority which has not been obtained, taken or made (other than as
required by any United States federal or state securities laws or Blue Sky laws of the
various states as to which such counsel need express no opinion), is required under any
Applicable Law for the issuance or sale of the Offered Securities or the performance by the
Issuer and the Guarantors of their respective obligations under the Purchase Agreement, the
Indenture, the Registration Rights Agreement and the Offered Securities. For purposes of
this opinion (7), the term “Governmental Authority” means any executive, legislative,
judicial, administrative or regulatory body of the State of New York or the United States of
America, and the term “Applicable Law” means those laws, rules and regulations of the United
States of America and the State of New York, in each case which in our experience are
normally applicable to the transactions of the type contemplated by the Purchase Agreement.
8. To such counsel’s knowledge, there are no legal proceedings pending or overtly
threatened against Parent, any of its subsidiaries or any of their respective properties
that, if determined adversely to Parent or any of its subsidiaries, could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, or would
materially and adversely affect the ability of Issuer or any of the Guarantors to perform
their obligations under the Indenture, this Agreement or the Registration Rights Agreement.
9. Assuming (A) that the representations and warranties of the Purchasers as set forth
in the Purchase Agreement are true and correct and compliance by the Purchasers with the
covenants and agreements set forth in the Purchase Agreement and (B) that the
representations and warranties of the Issuer and the Guarantors set forth in the Purchase
Agreement are true and correct and compliance by the Issuer and the Guarantors with the
covenants and agreements set forth in the Purchase Agreement, and assuming compliance with
the offering and transfer procedures and restrictions described in the Offering Circular, it
is not necessary in connection with the offer, sale and delivery of the Offered Securities
to the Purchasers under the Purchase Agreement or in connection with the initial resale of
the Offered Securities by the Purchasers in accordance with the Purchase Agreement to
register the Offered Securities under the Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended, it being understood that such counsel need
express no opinion as to any subsequent resale of the Offered Securities.
10. The issuance and sale of the Offered Securities by the Issuer and the Guarantors,
the compliance by the Issuer and the Guarantors with all of the provisions of the Purchase
Agreement and the Indenture and the consummation of the transactions contemplated by them
will not violate (i) Applicable Law (ii) the indenture, dated as of May 8, 2002, as
supplemented as of November 15, 2005, among ▇▇▇▇▇▇▇ Petroleum Corporation, the guarantors
named therein, and The Bank of Nova Scotia Trust Company of New York, as trustee, or (iii)
any judgment, order or decree of any court or arbitrator known to us, except where the
breach, default or violation could not reasonably be expected to have a Material
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Adverse Effect; provided, however, that for purposes of this paragraph 10, the term
“Applicable Law” shall not include the anti-fraud provisions or disclosure requirements of
federal and state securities laws.
11. None of the Issuer or the Guarantors is or, after giving effect to the offering and
sale of the Offered Securities and the application of their proceeds as described in the
Offering Circular under the heading “Use of Proceeds,” will be required to be registered as
an investment company under the Investment Company Act of 1940, as amended, and the rules
and regulations of the Commission promulgated under that statute.
12. Under the laws of the State of New York relating to submission to jurisdiction,
each of the Issuer and the Guarantors has, as provided in Section 15 of the Purchase
Agreement, Section 13.14 of the Indenture and Section 9(j) of the Registration Rights
Agreement, has validly submitted to the non-exclusive personal jurisdiction of any state
court in the City of New York, New York in any action arising out of or relating to the
Purchase Agreement, the Indenture or the Registration Rights Agreement, has validly waived
any objection to venue of a proceeding in any such court, and has validly appointed CT
Corporation System in Section 15 of the Purchase Agreement, Section 13.14 of the Indenture
and Section 9(j) of the Registration Rights Agreement for the purposes described in the
Purchase Agreement, the Indenture and the Registration Rights Agreement; and service of
process effected on such agent in the manner set forth in Section 15 of the Purchase
Agreement, Section 13.14 of the Indenture and Section 9(j) of the Registration Rights
Agreement will be effective to confer valid personal jurisdiction over the Issuer and the
Guarantors. This opinion (12) is subject to the qualification that such counsel need
express no opinion as to the enforceability of forum selection clauses in the federal
courts.
* * *
Such counsel shall also state that they have participated in the preparation of the
Offering Circular and in conferences with officers and other representatives of the Issuer
and the Guarantors, representatives of the independent chartered accountants for the Parent,
Canadian counsel to the Issuer and Guarantors, the Purchasers and representatives of, and
counsel to, the Purchasers at which the contents of the Offering Circular and related
matters were discussed and, although the limitations inherent in the independent
verification of factual matters and in the role of outside counsel are such that such
counsel has not undertaken to verify independently, and do not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the Offering Circular
(other than as explicitly stated in paragraphs 2,3,4,5, and 6 above), based upon such
participation, no facts have come to our attention that lead such counsel to believe that
the Offering Circular (except for the financial statements, financial statement notes and
schedules and other financial data, either contained in or omitted from the Offering
Circular and information derived from the reports of Netherland, Sewell, & Associates, Inc.
and Outtrim ▇▇▇▇▇ Associates Ltd. (now ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ Canada Limited) included
therein, as to which such counsel need express no such belief), when issued contained, or on
the date of such opinion, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
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