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$300,000,000
TESORO PETROLEUM CORPORATION
9% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
June 29, 1998
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World Financial Center
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Tesoro Petroleum Corporation, a Delaware corporation (the "Company"),
proposes to sell to you (the "Initial Purchasers") $300,000,000 aggregate
principal amount of 9% Senior Subordinated Notes due 2008 (the "Notes"). The
Initial Purchasers, acting severally and not jointly, propose to purchase the
respective principal amounts of Notes set forth on Schedule A hereto. The Notes
will be issued pursuant to an Indenture to be dated as of July 2, 1998 (the
"Indenture"), between the Company and U.S. Bank Trust, National Association, as
trustee (the "Trustee"). This is to confirm the agreement concerning the
purchase of the Notes from the Company by the Initial Purchasers.
As used herein, the term "Subsidiary" shall include each entity listed
on Schedule III hereto. The Notes will be guaranteed (the "Subsidiary
Guarantees") by each of the entities listed on Schedule II hereto (each as
"Guarantor" and collectively the "Guarantors").
The Notes are being issued and sold (the "Notes Offering") in
connection with the acquisition (the "Hawaii Acquisition") of BHP Petroleum
Americas Refining Inc. and BHP Petroleum South Pacific Inc. (together, "BHP
Hawaii") and the acquisition (the "Washington Acquisition," and together with
the Hawaii Acquisition, the "Acquisitions") of Shell Anacortes Refining Company
("Shell Washington") by the Company. The Company is also offering 9,000,000
Premium Income Equity SecuritiesSM (the "PIESSM") representing interests in the
Company's 7 1/4% Mandatorily Convertible Preferred Stock (the "Mandatorily
Convertible Preferred Stock"), with gross proceeds of $143.4 million, and
5,000,000 shares of the Company's Common Stock par value $0.162/3 per share (the
"Common Stock"), with gross proceeds of $79.7 million (excluding any proceeds
from the exercise of over-allotment options granted to the underwriters of the
PIES and the Common Stock). The closing of the Notes Offering is conditioned
upon the closings of the offerings of PIES
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(the "PIES Offering") and Common Stock (the "Common Stock Offering" and together
with the Notes Offering and PIES Offering, the "Offerings"), but none of the
Offerings are conditioned upon the closing of the Washington Acquisition. The
net proceeds from the Offerings, together with borrowing under the Company's
Third Amended and Restated Credit Facility (the "Senior Credit Facility") will
be used to fund the cash purchase price of the Washington Acquisition, to
refinance the Company's Second Amended and Restated Credit Facility (the
"Interim Credit Facility") (a portion of which was used to finance the cash
purchase price of the Hawaii Acquisition), to pay certain fees and expenses
related to the Transactions (as defined below) and, to the extent not used, for
general corporate purposes (including working capital requirements and capital
expenditures).
Under the terms of the stock purchase agreement relating to the
Washington Acquisition (the "Washington Agreement"), the Company will enter into
an escrow agreement (the "Escrow Agreement") to deposit into escrow the balance
of purchase price owed by the Company with respect to the Washington
Acquisition.
The Senior Subordinated Notes will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance on one or more exemptions therefrom. The
Company and the Guarantors have prepared a preliminary offering memorandum,
dated June 5, 1998 (the "Preliminary Offering Memorandum"), and will prepare a
final offering memorandum (the "Offering Memorandum"), relating to the Notes and
the Subsidiary Guarantees. Any references herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to include all documents
incorporated therein by reference. Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this Agreement. The
Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum and the Offering Memorandum in connection with the offering
and resale of the Notes by the Initial Purchasers in accordance with Section 3
hereof.
On the Closing Date (as defined herein), and as a condition to the
obligations of the Initial Purchasers hereunder, the Company and each of the
Initial Purchasers will enter into a Registration Rights Agreement (the
"Registration Rights Agreement"), substantially in the form attached hereto as
Exhibit A. Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree, among other things, to file with, and cause to be
declared effective by, the Securities and Exchange Commission (the "Commission")
a registration statement with respect to a registered exchange offer under the
Securities Act, relating to the offer to exchange the Notes for like respective
principal amount of debt securities of the Company (the "Exchange Notes")
identical in all material respects to the Notes (the "Exchange Offer").
This Agreement, the Indenture, the Notes, the Subsidiary Guarantees and
the Registration Rights Agreement are hereinafter sometimes referred to
collectively as the "Operative Documents." The Washington Agreement, the Escrow
Agreement and the Senior Credit Facility are hereinafter sometimes referred to
collectively as the "Transaction Documents." The Offerings, the Acquisitions
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and the closing of the Senior Credit Facility are hereinafter sometimes referred
to collectively as the "Transactions."
SECTION 1. Representations, Warranties and Agreements of the Company and
the Guarantors.
The Company and each of the Guarantors represents and warrants to, and
agrees with, the Initial Purchasers that as of the date hereof:
(a) The Preliminary Offering Memorandum, as of its date, and
the Offering Memorandum as of the date hereof does not, and at the Closing Date
will not, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties set forth
in this Section l(a) do not apply to statements or omissions in the Preliminary
Offering Memorandum or the Offering Memorandum made in reliance on and in
conformity with information furnished to the Company in writing by or on behalf
of the Initial Purchasers expressly for use therein.
(b) Assuming the Notes are issued, sold and delivered under
the circumstances contemplated by the Offering Memorandum and in this Agreement,
(i) the registration under the Securities Act of the Notes or the Subsidiary
Guarantees or the qualification of the Indenture in respect of the Notes under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), is not
required in connection with the offer and sale of the Notes to the Initial
Purchasers in the manner contemplated by the Offering Memorandum or this
Agreement and (ii) the initial resales of the Notes by the Initial Purchasers on
the terms and in the manner set forth in the Offering Memorandum and Section 3
hereof are exempt from the registration requirements of the Securities Act.
(c) The documents incorporated by reference in the Preliminary
Offering Memorandum and the Offering Memorandum when they became effective or
were filed with the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder, and none of
such documents, when read together with the other information in the Offering
Memorandum, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated by
reference in the Offering Memorandum when such documents became effective or are
filed with the Commission, as the case may be, will conform in all material
respects to requirements of the Exchange Act and the rules and regulations of
the Commission thereunder, and none of such documents, when read together with
the other information in the Offering Memorandum, will contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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(d) The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Offering Memorandum, and is duly
qualified and registered as a foreign corporation for the transaction of
business and is in good standing in each jurisdiction in which the character of
the business conducted by it or the location of the properties owned or leased
by it make such qualification or registration necessary (except where the
failure to so qualify or register would not have a Material Adverse Effect (as
defined below)). The Company has an authorized capitalization as set forth under
the caption "Capitalization" in the Offering Memorandum. On the date hereof and
on the Closing Date all of the issued and outstanding shares of capital stock of
the Company (including the shares of common stock to be issued in the Common
Stock Offering and upon conversion of the Company's 7 1/4% Mandatorily
Convertible Preferred Stock) have been duly authorized and will be validly
issued and fully paid and nonassessable and will conform to the description
thereof contained in or incorporated by reference in the Offering Memorandum. As
used herein, "Material Adverse Effect" means a material adverse effect on the
condition (financial or otherwise), results of operations, business, earnings or
prospects of the Company and the Subsidiaries (as defined below), taken as a
whole.
(e) Schedule III hereto is a complete and accurate schedule of
the names of all corporations, partnerships and joint ventures (the
"Subsidiaries") which constitute "subsidiaries," as such term is defined in Rule
405 of the rules and regulations of the Commission under the Securities Act
(collectively with the rules and regulations of the Commission under the
Exchange Act, the "Rules and Regulations"). Other than the Subsidiaries listed
on Schedule III, no corporation, partnership or other entity in which the
Company has an equity interest constitutes a "subsidiary" as defined in Rule 405
of the Rules and Regulations. Each Guarantor and each Subsidiary is duly
organized, validly existing and in good standing in the jurisdiction of its
incorporation or formation, as the case may be, with full corporate or other
power and authority to own, lease and operate its properties and to conduct its
business as described in the Offering Memorandum. Each Subsidiary is duly
qualified and registered as a foreign corporation or limited partnership, as the
case may be, for the transaction of business and is in good standing in each
jurisdiction in which the character of the business conducted by it or the
location of the properties owned or leased by it make such qualification or
registration unnecessary, save where the failure to so qualify or be in good
standing as a foreign corporation or limited partnership, as the case may be,
would not have a Material Adverse Effect.
(f) All of the issued and outstanding shares of capital stock
of each of the Guarantors and each of the Subsidiaries that is a corporation
have been duly authorized and validly issued, are fully paid and nonassessable,
and are owned by the Company directly or indirectly, free and clear of any lien,
adverse claim, security interest or other encumbrance (a "Lien"), except as
arising from the Interim Credit Facility and, as of the Closing Date, the Senior
Credit Facility or as described in the Offering Memorandum. All outstanding
equity interests in each Guarantor and each Subsidiary that is not a corporation
have been duly authorized and validly issued and are owned by the Company
directly or indirectly, free and clear of any Lien, except as arising from the
Interim Credit Facility and, as of the Closing Date, Senior Credit Facility or
as described in the Offering
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Memorandum. Except as disclosed in the Offering Memorandum and as outstanding
under employee benefit plans of the Company, there are no outstanding
subscriptions, rights (preemptive or other), warrants, calls, commitments of
sale or options to acquire, or instruments convertible into or exchangeable for,
nor any restriction on the voting or transfer of, any capital stock or other
equity interest of the Company, any Guarantor or any Subsidiary.
(g) The Company and the Guarantors have all requisite power
and authority to execute, deliver and perform their respective obligations under
this Agreement, each of the other Operative Documents and each of the
Transaction Documents to which they may be a party and to consummate the
transactions contemplated hereby and thereby, including, without limitation, the
power and authority to issue, sell and deliver the Notes and the Subsidiary
Guarantees as provided herein and therein and to consummate the Transactions.
(h) This Agreement has been duly and validly authorized,
executed and delivered by the Company and each of the Guarantors and constitutes
a valid and binding agreement of the Company and each of the Guarantors,
enforceable against the Company and each of the Guarantors in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and subject to the applicability of general
principles of equity, and except as rights to indemnity and contribution
hereunder and thereunder may be limited by Federal or state securities laws or
principles of public policy.
(i) The Indenture has been duly authorized by the Company and
each of the Guarantors and, on the Closing Date, will have been validly executed
and delivered by the Company and each of the Guarantors. When the Indenture has
been validly executed and delivered by the Company and each of the Guarantors,
assuming due authorization, delivery and performance by the Trustee, the
Indenture will constitute a valid and binding agreement of the Company and each
of the Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and general equity principles. On the
Closing Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act, and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder. The
Offering Memorandum contains an accurate summary, in all material respects, of
the terms of the Indenture.
(j) The Notes have been duly authorized for issuance and sale
to the Initial Purchasers by the Company pursuant to this Agreement and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Notes have been issued, executed and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor in accordance with
the terms hereof and thereof, the Notes will constitute valid and binding
obligations of the Company, enforceable against it in accordance with their
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and general equity principles, and entitled to the benefits
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of the Indenture. The Offering Memorandum contains an accurate summary, in all
material respects, of the terms of the Notes.
(k) The Subsidiary Guarantees to be endorsed on the Notes and
the Exchange Notes by each Guarantor have been duly authorized by each Guarantor
and, on the Closing Date, will have been validly executed and delivered by each
such Guarantor. When the Notes have been issued, executed and authenticated in
accordance with the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, the Subsidiary Guarantees of each
Guarantor endorsed thereon will constitute valid and binding obligations of such
Guarantor, enforceable against such Guarantor in accordance with their terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and general equity principles, and entitled to the benefits of
the Indenture. The Offering Memorandum contains an accurate summary, in all
material respects, of the terms of the Subsidiary Guarantees to be endorsed on
the Notes and the Exchange Notes.
(l) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors and, on the Closing Date, will have
been validly executed and delivered by the Company and each of the Guarantors.
When the Registration Rights Agreement has been duly executed and delivered by
the Company and each of the Guarantors, the Registration Rights Agreement will
constitute a valid and binding agreement of the Company and each of the
Guarantors, enforceable against the Company and each Guarantor in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and general equity principles and except as rights
to indemnity and contribution may be limited by Federal or state securities laws
or principles of public policy. The Offering Memorandum contains an accurate
summary, in all material respects, of the terms of the Registration Rights
Agreement.
(m) The Washington Agreement and the Escrow Agreement have
been duly authorized by the Company, and the Washington Agreement has been, and
on the Closing Date the Escrow Agreement will have been, validly executed and
delivered by the Company. The Washington Agreement constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and general equity principles. When the Escrow
Agreement has been duly executed and delivered by the Company, the Escrow
Agreement will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights generally and
general equity principles.
(n) The Senior Credit Facility has been duly authorized by the
Company and, on the Closing Date, will have been validly executed and delivered
by the Company and the Guarantors. When the Senior Credit Facility has been duly
executed and delivered by the Company, the Senior Credit Facility will
constitute a valid and binding agreement of the Company, enforceable against the
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Company in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and general equity
principles. The Offering Memorandum contains an accurate summary, in all
material respects, of the terms of the Senior Credit Facility.
(o) The execution, delivery and performance of this Agreement,
the other Operative Documents and the Transaction Documents by the Company and
each of the Guarantors, compliance by the Company and each of the Guarantors
with all the provisions hereof and thereof, the issuance and sale of the Notes
by the Company, the issuance of the Subsidiary Guarantees by the Guarantors and
the consummation by the Company and the Guarantors of the transactions
contemplated hereby and thereby, including the Transactions and as described in
the Offering Memorandum under the caption "Use of Proceeds," (i) will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company, any
Guarantor or any Subsidiary is a party or by which the Company, any Guarantor or
any Subsidiary is bound or to which any of the properties or assets of the
Company, any Guarantor or any Subsidiary is subject, (ii) will not result in any
violation of the provisions of the charter, by-laws or other organizational
documents of the Company, any Guarantor or any Subsidiary or (iii) will not
result in any violation of the provisions of any law or statute or any order,
rule, regulation, judgment or decree of any court or governmental agency or body
having jurisdiction over the Company, any Guarantor or any Subsidiary or any of
their respective properties or assets, or (iv) result in the imposition or
creation of (or the obligation to create or impose) a Lien under any agreement
or instrument to which the Company, any Guarantor or any Subsidiary is a party
or by which the Company, any Guarantor or any Subsidiary or their respective
properties or assets is bound, except in the case of clauses (i), (iii) and (iv)
for such conflicts, breaches, defaults, violations or Liens which individually
or in the aggregate would not result in a Material Adverse Effect. Except for
such consents, approvals, authorizations, other orders, filings, qualifications
or registrations (i) as have been obtained, (ii) as may be required under
applicable state securities or Blue Sky laws of various jurisdictions in
connection with the purchase and distribution of the Notes by the Initial
Purchasers, (iii) as set forth in the Registration Rights Agreement, (iv) as may
be required under the Trust Indenture Act, (v) may be required in connection
with the Washington Acquisition, (vi) as may be required in the perfection of
liens in connection with the consummation of the Transactions and (vii) which,
the failure to obtain would not result in a Material Adverse Effect, no consent,
approval, authorization, or order of or filing, qualification or registration
with, any such court or governmental agency or body is required for the
execution, delivery and performance of this Agreement, the other Operative
Documents or the Transaction Documents by the Company and each of the
Guarantors, compliance by the Company and each of the Guarantors with all the
provisions hereof and thereof, the issuance and sale of the Notes by the
Company, the issuance of the Subsidiary Guarantees by the Guarantors and the
consummation of the transactions contemplated hereby and thereby, including the
Transactions and as described in the Offering Memorandum under the caption "Use
of Proceeds."
(p) Neither the Company, the Guarantors nor any Subsidiaries
has sustained, since the date of the latest quarterly financial statements
included in the Offering Memorandum, any
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material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth in
the Offering Memorandum, except losses or interferences which do not,
individually or in the aggregate, have a Material Adverse Effect; since such
date, there has not been any material change in the capital stock or other
equity interest or long-term debt or short-term debt of the Company, the
Guarantors or any Subsidiaries or any change having a Material Adverse Effect,
or any development involving a prospective material adverse change, in or
affecting the general affairs, management, consolidated financial position,
stockholders' equity or results of operations of the Company, the Guarantors and
the Subsidiaries, otherwise than as set forth or contemplated in the Offering
Memorandum; and since such date, except as otherwise disclosed in the Offering
Memorandum, the Company has not (i) issued or granted any securities, other than
pursuant to Company employee benefit plans or (ii) declared or paid any dividend
on its capital stock.
(q) The historical consolidated financial statements
(including the related notes and supporting schedules) of the Company, and to
the Company's knowledge, BHP Hawaii and Shell Washington which appear in the
Preliminary Offering Memorandum and the Offering Memorandum comply as to form in
all material respects with the applicable accounting requirements of Securities
Act, the Exchange Act, and the Rules and Regulations, present fairly in all
material respects the consolidated financial position and results of operations
of the entities purported to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved except as noted therein. The pro forma financial statements included in
the Preliminary Offering Memorandum and the Offering Memorandum present fairly
in all material respects the historical and proposed transactions contemplated
by this Agreement and Offering Memorandum; and such pro forma financial
statements comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, the Exchange Act and the Rules
and Regulations, have been prepared on a basis consistent with the historical
consolidated financial statements of the Company, and to the Company's
knowledge, BHP Hawaii and Shell Washington, give effect to assumptions used in
the preparation thereof on a reasonable basis. The other financial and
statistical information and operating data of the Company, and to the Company's
knowledge, BHP Hawaii and Shell Washington included in the Preliminary Offering
Memorandum and the Offering Memorandum, historical and pro forma, is in all
material respects accurately presented and prepared on a basis consistent with
the financial statements included in the Preliminary Offering Memorandum and the
Offering Memorandum and the books and records of the Company, and to the
Company's knowledge, the books and records of BHP Hawaii and Shell Washington.
(r) Except for the Registration Rights Agreement, there are no
contracts, agreements or understandings between the Company or any Guarantor and
any person granting such person the right to require the Company or such
Guarantor to file a registration statement under the Securities Act with respect
to any securities of the Company or of such Guarantor, owned or to be owned by
such person or to require the Company or such Guarantor to include such
securities with any securities being registered pursuant to any registration
statement filed by the Company under the Securities Act.
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(s) Deloitte & Touche LLP, and to the Company's knowledge,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and Price Waterhouse LLP, who have certified certain
financial statements of the Company and its Subsidiaries, BHP Hawaii and Shell
Washington, respectively, whose reports are included or incorporated by
reference in the Offering Memorandum and who have delivered the initial letters
referred to in Section 7(c) hereof, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(t) Other than as set forth in the Offering Memorandum, there
are no legal or governmental proceedings pending to which the Company, any
Guarantor or any Subsidiary is a party or to which any of their respective
properties or assets is subject which (i) could reasonable be expected to have a
Material Adverse Effect or (ii) could materially and adversely affect the
consummation by the Company and each of the Guarantors of their obligations
pursuant to this Agreement, the other Operative Documents or the Transaction
Documents; and to the Company's and each of the Guarantors' knowledge, no such
proceedings are threatened or contemplated by government authorities or
threatened by others.
(u) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as any security of the Company listed on
any national securities exchange registered under Section 6 of the Exchange Act
or quoted on an automated inter-dealer quotation system.
(v) Neither the Company nor any of the Guarantors or
Subsidiaries or any of its or their respective affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") has directly,
or through any agent, (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the Securities
Act) which is or will be integrated with the sale of the Notes in a manner that
would require the registration under the Securities Act of the Notes or (ii)
engaged in any form of general solicitation or general advertising in connection
with the offering of the Notes (as those terms are used in Regulation D under
the Securities Act), or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act; provided, however, no
representation is made as to the Initial Purchasers or any person acting on
their behalf. No securities of the same class as the Notes have been issued and
sold by the Company within the six-month period immediately prior to the date
hereof.
(w) Neither the Company nor any of the Guarantors or
Subsidiaries or any of its or their respective affiliates or any person acting
on its or their behalf has engaged or will engage in any "directed selling
efforts" within the meaning of Regulation S under the Securities Act with
respect to the Notes. The Company and each of the Guarantors and Subsidiaries,
each of their affiliates and any person acting on its or their behalf (other
than the Initial Purchasers, as to whom the Company makes no representation) has
complied and will comply with the offering restrictions requirement of
Regulation S. To the Company's knowledge, the sale of the Notes pursuant to
Regulation S is not part of a plan or scheme to evade the registration
provisions of the Securities Act.
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(x) The Company and each of the Guarantors and the
Subsidiaries has such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("permits") as are necessary to own its
respective properties and to conduct its business in the manner described in the
Offering Memorandum, subject in each case to such qualifications as may be set
forth in the Offering Memorandum and except where the failure to have such
permits would not have a Material Adverse Effect; each of the Company, the
Guarantors and the Subsidiaries has fulfilled and performed in all material
respects all of its current obligations with respect to such permits and no
event has occurred which allows, or after notice or lapse of time would allow,
revocation or termination thereof or results in any other material impairment of
the rights of the holder of any such permits, subject in each case to such
qualifications as may be set forth in the Offering Memorandum and except where
the failure so to fulfill or perform or the occurrence of such an event would
not have a Material Adverse Effect; and, except as described in the Offering
Memorandum, none of such permits contains any restriction that is materially
burdensome to the Company and the Subsidiaries, taken as a whole.
(y) The Company and each of the Guarantors and Subsidiaries
owns or possesses adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights and licenses necessary for the conduct of
their respective businesses, except where the failure to have such permits would
not have a Material Adverse Effect, and have no reason to believe that the
conduct of their respective businesses will conflict with, and have not received
any notice of any claim of conflict with, any such rights of others.
(z) With the exception of producing oil and gas properties and
gas gathering properties (the "Oil and Gas Properties"), the Company and each of
the Guarantors and Subsidiaries has good and indefeasible title in fee simple to
all real property and good and defensible title to all personal property owned
by them, in each case free and clear of all liens, encumbrances and defects
except such as are described in the Offering Memorandum or such as do not
materially adversely affect the value of such property or interfere with the use
made and proposed to be made of such property by the Company, the Guarantors and
the Subsidiaries; and with the exception of the Oil and Gas Properties, all real
property, buildings and vessels held under lease by the Company, the Guarantors
and the Subsidiaries are held by them under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property, buildings and vessels by the
Company, the Guarantors and the Subsidiaries.
(aa) The Company and each of the Guarantors and Subsidiaries
has good and defensible title to its Oil and Gas Properties, free and clear of
all liens, encumbrances and defects, except (a) those described in the
Preliminary Offering Memorandum and the Offering Memorandum, (b) liens securing
taxes and other governmental charges, or claims of materialmen, mechanics and
similar persons, not yet due and payable, (c) liens and encumbrances under
operating agreements, unitization and pooling agreements, and gas sales
contracts, securing payment of amounts not yet due and payable and of a scope
and nature customary in the oil and gas industry and (d) liens, encumbrances and
defects that do not in the aggregate materially affect the value of such Oil and
Gas Properties or materially interfere with the use made or proposed to be made
of such properties by the
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Company or any of the Guarantors or Subsidiaries. Except to the extent described
in the Preliminary Offering Memorandum and the Offering Memorandum, the oil, gas
and mineral leases, coal methane leases, options to lease, drilling concessions
or other property interests therein held by the Company and each of the
Guarantors and Subsidiaries reflects in all material respects the right of the
Company and its Subsidiaries, as the case may be, to explore or receive
production from the undeveloped properties described in the Preliminary Offering
Memorandum and the Offering Memorandum, and the Company and each of the
Guarantors and Subsidiaries have exercised reasonable diligence with respect to
acquiring or otherwise procuring such leases, options to lease, drilling
concessions and other property interests.
(bb) No labor disturbance by the employees of the Company or
any of the Guarantors or Subsidiaries exists or, to the knowledge of the
Company, is imminent which might be expected to have a Material Adverse Effect;
except as disclosed in the Offering Memorandum, neither the Company nor any of
the Guarantors or Subsidiaries is party to a collective bargaining agreement;
and there are no significant unfair labor practice complaints pending against
the Company or any of the Guarantors or Subsidiaries or, to the best of the
Company's knowledge, threatened against any of them.
(cc) The Company and each of the Guarantors and Subsidiaries
is in compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or any of the
Guarantors or Subsidiaries would have any liability; neither the Company nor any
of the Guarantors or Subsidiaries has incurred and neither do any of them expect
to incur liability under (i) title IV of ERISA with respect to termination of,
or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
Internal Revenue code of 1985, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any Guarantor or Subsidiary would have any liability that
is intended to be qualified under Section 401(a) of the Code is so qualified in
all material respects and nothing has occurred, whether by action or by failure
to act, which would cause the loss of such qualification.
(dd) The Company and each of the Guarantors and Subsidiaries
has filed, and as of the Closing Date will have filed, all federal, state, local
and foreign income and franchise tax returns required to be filed through the
date hereof and has paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company or any of the Guarantors or Subsidiaries
which has had (nor does the Company have any knowledge of any tax deficiency
which, if determined adversely to the Company or any of the Guarantors or
Subsidiaries, might have) a Material Adverse Effect.
(ee) The Company and each of the Guarantors and Subsidiaries
(i) makes and keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B)
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transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
difference.
(ff) Except as described in the Preliminary Offering
Memorandum and the Offering Memorandum and except such matters as would not,
singly or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of Guarantors or Subsidiaries is in violation of any federal,
state, local or foreign statute, law, rule, regulation, ordinance, code, policy
or rule of common law or any judicial or administrative order, consent, decree
or judgment thereof, including any judicial or administrative order, consent,
decree or judgment relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened release
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and each of the Guarantors and
Subsidiaries has all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of the Guarantors or Subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the Company or any of
the Guarantors or Subsidiaries relating to Hazardous Materials or Environmental
Laws.
(gg) The Company is not, and upon the issuance and sale of the
Notes as herein contemplated and the application of the net proceeds therefrom
as described under the caption "Use of Proceeds" in the Offering Memorandum will
not be an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
(hh) As of the Closing Date, the closing of each of the Common
Stock Offering and the PIES Offering shall have previously occurred, and the
Senior Credit Facility shall be in effect and available for borrowing.
(ii) The statements set forth in the Offering Memorandum under
the captions "Offering Memorandum Summary--The Transactions--The Acquisitions,"
"Business--Government Regulation and Legislation," "Description of Other
Indebtedness," "Description of the Notes," "Description of Capital Stock" and
"Certain Federal Income Tax Considerations" insofar as such statements purport
to summarize the provisions of the documents or agreements referred to therein,
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matters of law or legal conclusions or federal statute, laws or regulations, are
accurate and fairly present the information required to be shown.
(jj) The information supplied by the Company to the
independent petroleum engineering consultants for the Company for purposes of
preparing the reserve reports and estimates of such consultants incorporated by
reference in the Preliminary Offering Memorandum and the Offering Memorandum,
including, without limitation, production, costs of operation and development,
current prices for production, agreements relating to current and future
operations and sales of production, was true and correct in all material
respects on the date supplied and was prepared in accordance with customary
industry practices; and Netherland, ▇▇▇▇▇▇ & Associates, Inc., independent
petroleum engineers, who prepared estimates of the extent and value of proved
oil and natural gas reserves of the Company are independent with respect to the
Company.
(kk) None of the Company, the Guarantors or the Subsidiaries
has taken, nor will any of them take, directly or indirectly, any action
prohibited by Regulation M under the Securities Act.
(ll) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Securities Act (i) has imposed (or has informed the Company or any Guarantor
that it is considering imposing) any condition (financial or otherwise) on the
Company's or any Guarantor's retaining any rating assigned as of the date hereof
to the Company, any Guarantor or any securities of the Company or any Guarantor
or (ii) has indicated to the Company or any Guarantor that it is considering (A)
the downgrading, suspension or withdrawal of, or any review for a possible
change that does not indicate the direction of the possible change in, any
rating so assigned or (B) any change in the outlook for any rating of the
Company or any Guarantor.
(mm) None of the Company, the Guarantors or the Subsidiaries
nor any agent thereof acting on the behalf of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance or sale of
the Notes or the Transactions to violate Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System.
(nn) The Company and each of the Guarantors and Subsidiaries
has complied with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with Cuba, codified
as Section 517.075 of the Florida statutes, and the rules and regulations
thereunder or is exempt therefrom.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 7
hereof, counsel to the Company and the Guarantors and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance. Each certificate signed by
any officer of the Company or any Guarantor and delivered to the Initial
Purchasers or counsel for the Initial
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Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
SECTION 2. Purchase of the Notes by the Initial Purchasers.
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Initial Purchaser, severally and not jointly, and each
Initial Purchaser, severally and not jointly, agrees to purchase from the
Company, the aggregate principal amount of the Notes set forth on Schedule I
opposite the name of such Initial Purchaser, plus any additional principal
amount of Notes which such Initial Purchaser may become obligated to purchase
pursuant to the provisions of Section 9 hereof at a purchase price equal to
99.429% of the principal amount of such Notes.
(b) The Company shall not be obligated to deliver any of the
Notes, except upon payment for all of the Notes to be purchased as hereinafter
provided.
SECTION 3. Sale and Resale of the Notes by the Initial Purchasers.
(a) You have advised the Company that you propose to offer the
Notes for resale upon the terms and conditions set forth in this Agreement and
in the Offering Memorandum. You hereby represent and warrant to, and agree with,
the Company that you (i) are purchasing the Notes pursuant to a private sale
exempt from registration under the Securities Act, (ii) will not solicit offers
for, or offer or sell, the Notes by means of any form of general solicitation or
general advertising or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act, and (iii) will solicit offers for
the Notes only from, and will offer, sell or deliver the Notes, as part of their
initial offering, only to (A) in the case of offers inside the United States,
persons whom you reasonably believe to be qualified institutional buyers
("Qualified Institutional Buyers") as defined in Rule 144A under the Securities
Act, as such rule may be amended from time to time ("Rule 144A") or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to you that
each such account is a Qualified Institutional Buyer, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A and (B)
in the case of offers outside the United States, persons other than U.S. persons
(as defined in Regulation S) in accordance with Rule 903 of Regulation S.
(b) In connection with the transactions described in
subsection (a)(iii)(B) of this Section 3, you have offered and sold the Notes,
and will offer and sell the Notes, (i) as part of your distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date (the "Distribution Compliance Period"), only in
accordance with Rule 903 of Regulation S. Accordingly, the Initial Purchasers
represent and agree that, with respect to the transactions described in
subsection (a)(iii)(B) of this Section 3, neither they, nor any of their
Affiliates, nor any person acting on their behalf has engaged or will engage in
any directed selling efforts with respect to the Notes, and that it and they
have complied and will comply with the offering restrictions requirements of
Regulation S. They agree that, at or prior to the confirmation of sale of
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the Notes pursuant to subsection (a)(iii)(B) of this Section 3, they shall have
sent to each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Notes from the Initial Purchasers during
the Distribution Compliance Period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (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
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and the time of delivery of
the Securities, except in either case in accordance with Regulation S or Rule
144A under the Securities Act. The terms used above have the meaning given to
them by Regulation S."
SECTION 4. Delivery of and Payment for the Notes.
(a) Payment of the purchase price for, and delivery of, the
Notes shall be made at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or at such other place as shall be agreed upon by the
Company and you, at 8:30 a.m. (Houston time), on July 2, 1998 or at such other
time or date as you and the Company shall determine (such date and time of
payment and delivery being herein called the "Closing Date").
(b) On the Closing Date, payment shall be made to the Company
in immediately available funds by wire transfer to such account or accounts as
the Company shall specify prior to the Closing Date or by such means as the
parties hereto shall agree prior to the Closing Date against delivery to you of
the certificates evidencing the Notes. Upon delivery, the Notes shall be
registered in such names and in such denominations as the Initial Purchasers
shall request in writing not less than two full business days prior to the
Closing Date. For the purpose of expediting the checking and packaging of
certificates evidencing the Notes, the Company agrees to make such certificates
available for inspection not later than 2:00 P.M. on the business day at least
24 hours prior to the Closing Date.
SECTION 5. Further Agreements of the Company and the Guarantors.
The Company and each of the Guarantors further agrees:
(a) To furnish to you, without charge, during the period
referred to in paragraph (c) below, as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum and any supplements and amendments
thereto as you may reasonably request.
(b) Prior to making any amendment or supplement to the
Offering Memorandum, the Company shall furnish a copy thereof to the Initial
Purchasers and counsel to the Initial Purchasers and will not effect any such
amendment or supplement to which the Initial Purchasers shall reasonably object
by notice to the Company after a reasonable period to review, which shall not in
any case be longer than three business days after receipt of such copy.
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(c) If, at any time prior to completion of the distribution of
the Notes by you to purchasers, any event shall occur or condition exist as a
result of which it is necessary, in the opinion of counsel for you or counsel
for the Company, to amend or supplement the Offering Memorandum in order that
the Offering Memorandum will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein not misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue statement or
omission or so that the Offering Memorandum, as so amended or supplemented, will
comply with applicable law and to furnish you without charge such number of
copies as you may reasonably request.
(d) So long as the Notes are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities Act during
any period in which it is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, to furnish to holders of the Notes and prospective
purchasers of Notes designated by such holders, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(e) For a period of five years following the date of the
Offering Memorandum, to furnish to the Initial Purchasers copies of all
materials furnished by the Company to its stockholders and all public reports
and all reports and financial statements furnished by the Company to the
principal national securities exchange upon which the Notes may be listed
pursuant to requirements of or agreements with such exchange or to the
Commission pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder.
(f) Promptly from time to time to take such action as the
Initial Purchasers may reasonably request to qualify the Notes for offering and
sale (or obtain an exemption from registration) under the securities laws of
such jurisdictions as the Initial Purchasers may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Notes; provided, however, that the Company shall not be required to qualify
as a foreign corporation or a dealer in securities or to execute a general
consent to service of process in any jurisdiction in any action other than one
arising out of the offering or sale of the Notes.
(g) For a period of 90 days from the Closing Date, not to,
directly of indirectly, (A) offer, sell, contract to sell or otherwise dispose
of any additional securities of the Company substantially similar to the Notes
or any securities convertible into or exchangeable for or that represent the
right to receive any such similar securities, or (B) enter into any swap or
derivatives transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such securities, whether any such
transaction described in clause (A) or (B) above is to be settled by delivery of
Notes, or other securities, in cash or otherwise, in each case, without the
prior written consent of ▇▇▇▇▇▇ Brothers Inc.
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(h) To use its best efforts to permit the Notes to be
designated Private Offerings, Resales and Trading through Automated Linkages
Market ("PORTAL") securities in accordance with the rules and regulations
adopted by the National Association of Securities Dealers, Inc. relating to
trading in the PORTAL Market and to permit the Notes to be eligible for
clearance and settlement through The Depository Trust Company (the "DTC").
(i) Except following the effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement), not to, and to
cause its affiliates (as defined in Rule 501(b) under the Act) not to, solicit
any offer to buy or offer to sell the Notes by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
(j) Not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) in a transaction that could be
integrated with the sale of the Notes in a manner that would require the
registration under the Securities Act of the Notes.
(k) To take such steps as shall be necessary to ensure that
neither the Company nor any Subsidiary of the Company shall become an
"investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(l) To comply with the agreements in the Indenture, the
Registration Rights Agreement and the other Operative Documents.
(m) To apply the net proceeds from the sale of the Notes as
set forth under the caption "Use of Proceeds" in the Offering Memorandum.
(n) To do all things required or necessary to be done or
performed under this Agreement prior to the Closing Date by such date and to
satisfy the closing conditions set forth in Section 7 hereof.
SECTION 6. Expenses.
Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, the Company and the Guarantors
agree to pay or cause to be paid all reasonable expenses incident to the
performance of the obligations of the Company and the Guarantors under this
Agreement, including: (i) the fees, disbursements and expenses of counsel to the
Company and the Guarantors and accountants of the Company and the Guarantors in
connection with the sale and delivery of the Notes to the Initial Purchasers and
pursuant to the resales thereof by the Initial Purchasers, and all other fees or
expenses in connection with the preparation, printing, filing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and all
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amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to the
Initial Purchasers and persons designated by them in the quantities specified;
(ii) all costs and expenses related to the delivery of the Notes to the Initial
Purchasers and pursuant to the resales thereof by the Initial Purchasers; (iii)
all expenses in connection with the registration or qualification of the Notes
and the Subsidiary Guarantees for offer and sale under the securities or Blue
Sky laws of the several states and all costs of producing any Blue Sky
memorandum in connection therewith (including the filing fees and reasonable
fees and disbursements of counsel for the Initial Purchasers in connection with
such registration or qualification and memorandum relating thereto); (iv) the
cost of printing certificates representing the Notes and the Subsidiary
Guarantees, (v) all expenses and listing fees in connection with the application
for quotation of the Notes on PORTAL; (vi) the fees and expenses of the Trustee
and the Trustee's counsel in connection with the Indenture, the Notes and the
Subsidiary Guarantees; (vii) the costs and expenses of any transfer agent,
registrar and/or depositary (including DTC); (viii) any fees charged by rating
agencies for the rating of the Notes; (ix) all costs and expenses of the
Exchange Offer and any Registration Statement, as set forth in the Registration
Rights Agreement; and (x) all other costs and expenses incident to the
performance of the obligations of the Company and the Guarantors hereunder for
which provision is not otherwise made in this Section; provided, however, that
except as provided in this Section 6 and in Section 11, the Underwriters shall
pay their own costs and expenses, including the costs and expenses of their own
counsel, any transfer taxes or other taxes payable thereon, and the expenses of
advertising any offering of the Notes made by the Initial Purchasers.
SECTION 7. Conditions to the Initial Purchasers' Obligations.
The obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and on the Closing Date, of the representations and
warranties of the Company and the Guarantors contained herein, to the
performance by the Company and the Guarantors of their respective obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Preliminary
Offering Memorandum or any amendment or supplement thereto contains any untrue
statement of a fact which, in the opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel for
the Initial Purchasers, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Initial Purchasers may agree.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of the Operative Documents, and all
other legal matters relating to this Agreement and the transactions contemplated
hereby shall be reasonable satisfactory in all material respects to
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counsel for the Initial Purchasers, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
(d) The Initial Purchasers shall have received from Fulbright
& ▇▇▇▇▇▇▇▇ L.L.P. their written opinion, as counsel to the Company, addressed to
the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Initial Purchasers
may reasonably request.
(e) The Initial Purchasers shall have received from ▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇., general counsel of the Company, written opinion, as counsel to the
Company, addressed to the Initial Purchasers and dated the Closing Date, in form
and substance reasonably satisfactory to the Initial Purchasers, to the effect
set forth in Exhibit C hereto and to such further effect as counsel to the
Initial Purchasers may reasonably request.
(f) The Initial Purchasers shall have received a letter
addressed to the Initial Purchasers and dated the Closing Date to the effect
that the Initial Purchasers may rely on the opinion delivered by such firm
pursuant to the Senior Credit Facility to the same extent as if it were
originally addressed to the Initial Purchasers. The Initial Purchasers shall
also receive the opinion delivered by Fulbright & ▇▇▇▇▇▇▇▇ L.L.P. pursuant to
the Senior Credit Facility.
(g) At the time of execution of this Agreement, the Initial
Purchasers shall have received from each of Deloitte & Touche LLP, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP and Price Waterhouse LLP a letter, in form and substance
satisfactory to the Initial Purchasers, addressed to the Initial Purchasers and
dated the date hereof, (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Offering Memorandum, as of a date not more than five business days prior to the
date hereof), the conclusions and findings of such firm with respect to the
financial information, operating data and other matters ordinarily covered by
accountants' "comfort letters" to underwriters, including the financial
information contained or incorporated by reference in the Offering Memorandum as
identified by you.
(h) With respect to the letters of Deloitte & Touche LLP,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and Price Waterhouse LLP referred to in the preceding
paragraph and delivered to the Initial Purchasers concurrently with the
execution of this Agreement (the "initial letters"), the Company shall have
furnished to the Initial Purchasers letters (the "bring-down letters") of such
accountants, addressed to the Initial Purchasers and dated the Closing Date, (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letters (or,
with
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respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Offering Memorandum,
as of a date not more than five business days prior to the date of the
respective bring-down letter), the conclusions and findings of such firm with
respect to the financial information, operating data and other matters covered
by the respective initial letter and (iii) confirming in all material respects
the conclusions and findings set forth in the respective initial letter.
(i) (A) At the time of execution of this Agreement, the
Initial Purchasers shall have received from Netherland, ▇▇▇▇▇▇ and Associates,
Inc., independent petroleum engineers for the Company, a letter dated as of such
date, in form and substance satisfactory to the Initial Purchasers; and (B) on
the Closing Date, the Initial Purchasers shall have received from Netherland,
▇▇▇▇▇▇ and Associates, Inc., independent petroleum engineers for the Company, a
letter dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter referred to in clause (i)(A) above.
(j) The Company shall have furnished to the Initial Purchasers
a certificate, dated the Closing Date, of (i) the Executive Vice President,
General Counsel and Secretary of the Company and (ii) the Vice President,
Finance and Treasurer of the Company stating that:
(i) The representations, warranties and agreements of
the Company and the Guarantors in Section 1 are true and correct as of
the Closing Date and the Company and the Guarantors have complied with
all its agreements contained herein;
(ii) (A) Neither the Company nor any of the
Guarantors or Subsidiaries has sustained since the date of the latest
quarterly financial statements included or incorporated by reference in
the Preliminary Offering Memorandum or the Offering Memorandum any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Preliminary Offering
Memorandum or the Offering Memorandum and (B) since such date there has
not been any material change in the capital stock, long-term debt or
short-term debt of the Company or any of the Guarantors or Subsidiaries
or any material change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity, results of
operations or prospects of the Company and the Subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Preliminary
Offering Memorandum or the Offering Memorandum; and
(iii) They have carefully examined the Preliminary
Offering Memorandum or the Offering Memorandum and, in their opinion
(A) the Preliminary Offering Memorandum or the Offering Memorandum, as
of their respective dates, did not include any untrue statement of a
material fact and did not omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under
which they were made, not
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misleading, and (B) since the date of the Offering Memorandum, no event
has occurred which should have been set forth in a supplement or
amendment to the Offering Memorandum.
(k) (i) Neither the Company nor any of its Subsidiaries shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Offering Memorandum any material
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Memorandum and (ii) since such date there shall not
have been any material change in the capital stock, long-term debt or short-term
debt of the Company or any of its Subsidiaries or any material change, or any
development involving a prospective material change, in or affecting the general
affairs, management, consolidated financial position, stockholders' equity or
results of operations of the Company and its Subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Offering Memorandum, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Notes on the terms and in the manner contemplated in the Offering Memorandum.
(l) The closings of the Common Stock Offering and the PIES
Offering shall have previously occurred, Company shall have entered into the
Escrow Agreement and the Senior Credit Facility shall be in effect and available
for borrowing.
(m) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Company or any
Guarantor or the securities of any Company or any Guarantor by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Notes.
(n) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have received
counterparts thereof.
(o) The Company, the Guarantors and the Initial Purchasers
shall have entered into the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts thereof.
(p) The Initial Purchasers shall have received from ▇▇▇▇▇▇ &
▇▇▇▇▇ L.L.P., counsel for the Initial Purchasers, their opinion, dated the
Closing Date, with respect to such matters as the Initial Purchasers may
reasonably require, and the Company shall have furnished to such counsel such
documents and information as they may reasonably request for the purpose of
enabling them to pass upon such matters.
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All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
SECTION 8. Indemnification and Contribution.
(a) The Company and each Guarantor, jointly and severally,
shall indemnify and hold harmless each Initial Purchaser, its officers and
employees and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but
not limited to, any loss, claim, damage, liability or action relating to
purchases and sales of Notes), to which that Initial Purchaser, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Offering Memorandum, the Offering
Memorandum or in any amendment or supplement thereto, or (B) in any Blue Sky
application or other document prepared or executed by the Company (or based upon
any written information furnished by the Company) specifically for the purpose
of qualifying any or all of the Notes under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Preliminary Offering Memorandum, the Offering
Memorandum or in any amendment or supplement thereto, or in any Blue Sky
Application, any material fact required to be stated therein or necessary to
make the statements therein not misleading or (iii) any act or failure to act,
or any alleged act or failure to act, by any Initial Purchaser in connection
with, or relating in any manner to, the Notes or the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (provided that the Company and the Guarantors shall not
be liable in the case of any matter covered by this clause (iii) to the extent
that it is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, liability or action resulted directly from any
such act or failure to act undertaken or omitted to be taken by such Initial
Purchaser through its gross negligence or willful misconduct), and shall
reimburse each Initial Purchaser and each officer, employee and controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Initial Purchaser, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company and the Guarantors shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Offering Memorandum, the
Offering Memorandum or in any such amendment or supplement, or in any Blue Sky
Application in reliance upon and in conformity with the written information
furnished to the Company by or on behalf of any Initial Purchaser specifically
for inclusion therein and described in Section 8(e); provided, further, that
with respect to any such untrue statement or omission made in the Preliminary
Offering Memorandum, the indemnity agreement contained in this Section 8(a)
shall not enure to the benefit of the Initial Purchaser from whom the person
asserting any such losses,
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claims, damages or liabilities purchased the Securities concerned if, to the
extent that such sale was an initial sale by such Underwriter and any such loss
claim, damage or liability of such Underwriter is a result of the fact that both
(A) a copy of the Offering Memorandum was not sent or given to such person at or
prior to written confirmation of the sale of such Notes to such person and (B)
the untrue statement or omission in the Preliminary Offering Memorandum was
corrected in the Offering Memorandum unless, in either case, such failure to
deliver the Offering Memorandum was a result of noncompliance by the Company
with Section 5(c) hereof. The foregoing indemnity agreement is in addition to
any liability which the Company or any of the Guarantors may otherwise have to
any Initial Purchaser or to any officer, employee or controlling person of any
Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company and the Guarantors, and their respective
directors, officers and employees and the Trustee, and each person, if any, who
controls the Company within the meaning of the Securities Act, from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company, any such director, officer or employee, or any
controlling person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Offering Memorandum, the Offering
Memorandum or in any amendment or supplement thereto, or (B) in any Blue Sky
Application or (ii) the omission or alleged omission to state in any Preliminary
Offering Memorandum, the Offering Memorandum or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
the written information furnished to the Company by or on behalf of such Initial
Purchaser specifically for inclusion therein and described in Section 8(e), and
shall reimburse the Company and the Guarantors and any such director, officer or
employee, or any such controlling person, for any legal or other expenses
reasonably incurred by the Company and the Guarantors or any such director,
officer or employee, or any controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any Initial Purchaser may
otherwise have to the Company and the Guarantors or any such director, officer
or employee, or any controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the
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indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, that the indemnified party shall have the right to employ counsel to
represent all indemnified parties who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the indemnified parties
against the indemnifying party under this Section 8 if, (i) the employment of
such counsel shall have been authorized by the indemnifying party in connection
with the defense of such action, (ii) the indemnifying party shall not have
engaged counsel reasonably promptly to take charge of the defense of such action
or (iii) counsel for any of the indemnified parties shall have reasonably
concluded that there may be defenses available to the indemnified parties that
are in addition to or in conflict with those available to the indemnifying
party, and, in that event, the fees and expenses of such separate counsel shall
be paid by the indemnifying party; provided, further, that in connection with
any proceedings or related proceedings in the same jurisdiction, the
indemnifying party shall not be liable for the legal fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel). No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss of
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Guarantors, on the one hand, and the Initial
Purchasers, on the other, from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Guarantors, on the one hand, and the Initial Purchasers on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
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Guarantors, on the one hand, and the Initial Purchasers on the other, with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Notes purchased under this Agreement
(before deducting expenses) received by the Company and the Guarantors, on the
one hand, and the total underwriting discounts and commissions received by the
Initial Purchasers with respect to the Notes purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the Notes
under this Agreement, in each case as set forth in the table on the cover page
of the Offering Memorandum. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company and the Guarantors, on the one hand, or the Initial Purchasers, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Guarantors and the Initial Purchasers agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were to be determined
by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
8(d) shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), the Initial Purchasers shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Notes sold and distributed by it was offered to the purchasers exceeds the
amount of any damages which the Initial Purchasers have otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The Initial Purchasers severally confirm and the Company
and the Guarantors acknowledge that the statements with respect to the offering
of the Notes set forth in the bottom paragraph on the cover page of, the legend
concerning stabilization and overallotment on page iii, and the ninth, tenth and
eleventh paragraphs under the caption "Plan of Distribution" relating to
stabilization and over-allotment in, the Offering Memorandum are correct and
constitute the only information furnished in writing to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Offering
Memorandum.
SECTION 9. Default by One or More of the Initial Purchasers.
If one or more of the Initial Purchasers shall fail at the Closing Time
to purchase the Notes which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the remaining Initial Purchasers shall
have the right, within 24 hours thereafter, to make arrangements for one or more
of the non-defaulting Initial Purchasers, or any other Initial Purchasers, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon
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the terms herein set forth: if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the aggregate principal amount of the Notes to be purchased hereunder, each
of the non-defaulting Initial Purchasers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Initial Purchasers; provided, however, that no
non-defaulting Initial Purchaser shall be obligated by this provision to
purchase more than 110% of the principal amount of Notes that it agreed to
purchase pursuant to the terms of Section 2, or
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Notes to be purchased hereunder, this
Agreement shall terminate without liability on the part of any non-defaulting
Initial Purchaser.
No action taken pursuant to this Section shall relieve any defaulting
Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Initial Purchasers or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Offering Memorandum or in any other
documents or arrangements. As used herein, the term "Initial Purchaser" includes
any person substituted for an Initial Purchaser under this Section 9.
SECTION 10. Termination.
The obligations of the Initial Purchasers hereunder may be terminated
by them by notice given to and received by the Company prior to delivery of and
payment for the Notes if, prior to that time, (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or New York State authorities, (iii) the United States shall
have become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such); provided, however, in the case
(iii) and (iv), as to make it, in the judgment of the Initial Purchasers,
impracticable or inadvisable to proceed with the offering or delivery of the
Notes on the terms and in the manner contemplated in the Offering Memorandum.
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SECTION 11. Reimbursement of Initial Purchasers' Expenses.
If the sale of Notes provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in Section 7
hereof is not satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof
other than by reason of a default by the Initial Purchasers, the Company shall
reimburse the Initial Purchasers for the reasonable fees and expenses of its
counsel and for such other out-of-pocket expenses as shall have been incurred by
it in connection with this Agreement and the proposed purchase of the Notes, and
upon demand the Company shall pay the full amount thereof to the Initial
Purchasers.
SECTION 12. Notices, etc.
All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail, telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., Three World
Financial Center, New York, New York 10285, Attention: Syndicate Department
(Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Offering Memorandum, Attention: Vice President, Finance and Treasurer
(Facsimile: 210-828-8600).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
SECTION 13. Persons Entitled to Benefit of Agreement.
This Agreement shall inure to the benefit of and be binding upon the
Initial Purchasers, the Company, the Guarantors and their respective successors.
This Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that (x) the representations, warranties, indemnities
and agreements of the Company contained in this Agreement shall also be deemed
to be for the benefit of the officers and employees of the Initial Purchasers
and the person or persons, if any, who control the Initial Purchasers within the
meaning of Section 15 of the Securities Act and (y) the indemnity agreement of
the Initial Purchasers contained in Section 8(b) of this Agreement shall be
deemed to be for the benefit of directors, officers and employees of the Company
and any person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 13, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
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SECTION 14. Survival.
The respective indemnities, representations, warranties and agreements
of the Company and the Initial Purchasers contained in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, shall survive
the delivery of and payment for the Notes and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.
SECTION 15. Definition of "Business Day."
For purposes of this Agreement, "business day" means any day on which
the New York Stock Exchange, Inc. is open for trading.
SECTION 16. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF NEW YORK.
SECTION 17. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original but all such counterparts shall together constitute one
and the same instrument.
SECTION 18. Headings.
The headings herein are inserted for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of,
this Agreement.
* * * * *
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If the foregoing correctly sets forth the agreement between the Company
and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
TESORO PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Finance and Treasurer
DIGICOMP, INC.
INTERIOR FUELS COMPANY
KENAI PIPE LINE COMPANY
TESORO ALASKA PETROLEUM COMPANY
TESORO ALASKA PIPELINE COMPANY
TESORO BOLIVIA PETROLEUM COMPANY
TESORO EXPLORATION AND
PRODUCTION COMPANY
TESORO HAWAII CORPORATION
TESORO LATIN AMERICA COMPANY
TESORO MARINE SERVICES HOLDING
COMPANY
TESORO MARINE SERVICES, INC.
TESORO NATURAL GAS COMPANY
TESORO NORTHSTORE COMPANY
TESORO PETROLEUM COMPANIES, INC.
TESORO REFINING, MARKETING &
SUPPLY COMPANY
TESORO SOUTH PACIFIC PETROLEUM
COMPANY
TESORO VOSTOK COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
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TESORO FINANCIAL SERVICES HOLDING
COMPANY
TESORO GAS RESOURCES COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
VICTORY FINANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
TESORO E&P COMPANY, L.P.
By: Tesoro Exploration and Production
Company as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
TESORO PIPELINE COMPANY, L.P.
By: Tesoro Natural Gas Company
as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
By: ▇▇▇▇▇▇ BROTHERS INC.
By: /s/ H.E. ▇▇▇▇▇ III
-----------------------------
(Authorized Representative)
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SCHEDULE I
Principal Amount
Name of Initial Purchaser of Securities
------------------------- ----------------
▇▇▇▇▇▇ Brothers Inc .................................. $225,000,000
Bear, ▇▇▇▇▇▇▇ & Co. Inc. ............................. 37,500,000
Salomon Brothers Inc. ................................ 37,500,000
Total ................................................ $300,000,000
============
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SCHEDULE II
List of Guarantors
1. Digicomp, Inc.
2. Interior Fuels Company
3. Kenai Pipe Line Company
4. Tesoro Alaska Petroleum Company
5. Tesoro Alaska Pipeline Company
6. Tesoro Bolivia Petroleum Company
7. Tesoro E&P Company, L.P.
8. Tesoro Exploration and Production Company
9. Tesoro Financial Services Holding Company
10. Tesoro Gas Resources Company, Inc.
11. Tesoro Hawaii Corporation
12. Tesoro Latin America Company
13. Tesoro Marine Services Holding Company
14. Tesoro Marine Services, Inc.
15. Tesoro Natural Gas Company
16. Tesoro Northstore Company
17. Tesoro Petroleum Companies, Inc.
18. Tesoro Pipeline Company, L.P.
19. Tesoro Refining, Marketing & Supply Company
20. Tesoro South Pacific Petroleum Corporation
21. Tesoro Vostok Company
22. Victory Finance Company
A-2
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SCHEDULE III
List of Subsidiaries*
1. Coastwide Marine Services, Inc.
2. Digicomp, Inc.
3. Interior Fuels Company
4. Kenai Pipe Line Company
5. Tesoro Alaska Petroleum Company
6. Tesoro Alaska Pipeline Company
7. Tesoro Bolivia Petroleum Company
8. Tesoro Crude Oil Company
9. Tesoro E&P Company, L.P.
10. Tesoro Environmental Products Company
11. Tesoro Environmental Resources Company
12. Tesoro Equipment Company
13. Tesoro Exploration and Production Company
14. Tesoro Financial Services Holding Company
15. Tesoro Gas Resources Company, Inc.
16. Tesoro Gasoline Marketing Company
17. Tesoro Hawaii Corporation
18. Tesoro Indonesia Petroleum Company
19. Tesoro Latin America Company
20. Tesoro Marine Services Holding Company
21. Tesoro Marine Services, Inc.
22. Tesoro Natural Gas Company
23. Tesoro Northstore Company
24. Tesoro Petroleum Companies, Inc.
25. Tesoro Petroleum (Singapore) Pte. Ltd.
26. Tesoro Pipeline Company, L.P.
27. Tesoro Pump & Valve Company
28. Tesoro Refining, Marketing & Supply Company
29. Tesoro South Pacific Petroleum Corporation
30. Tesoro Technology Partners Company
31. Tesoro Vostok Company
32. Victory Finance Company
----------------------------------------
*Subsidiaries listed in italics are not Guarantors of the Notes
A-3
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
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