EXHIBIT 10.2
$75,000,000 Principal Amount
TOREADOR RESOURCES CORPORATION
5.00% Convertible Senior Notes
due 2025
PURCHASE AGREEMENT
September 22, 2005
PURCHASE AGREEMENT
September 22, 2005
UBS SECURITIES LLC
XXXXXX XXXXXX & COMPANY, INC.
FIRST ALBANY CAPITAL INC.
STANFORD GROUP COMPANY
THE SHEMANO GROUP, INC.
as Initial Purchasers
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Toreador Resources Corporation, a Delaware corporation, (the
"Company"), proposes to issue and sell to the initial purchasers named in
Schedule A hereto (the "Initial Purchasers") $75,000,000 aggregate principal
amount of its 5.00% Convertible Senior Notes due 2025 (the "Firm Notes"). In
addition, the Company proposes to grant to the Initial Purchasers the option to
purchase from the Company up to an additional $11,250,000 aggregate principal
amount of the Company's 5.00% Convertible Senior Notes due 2025 (the "Additional
Notes"). The Firm Notes and the Additional Notes are hereinafter collectively
sometimes referred to as the "Notes."
The Notes are to be issued pursuant to an indenture (the
"Indenture") to be dated as of September 27, 2005, between the Company and The
Bank of New York Trust Company, N.A, as trustee (the "Trustee"). The Notes will
be convertible in accordance with their terms and the terms of the Indenture
into shares of the common stock (the "Common Stock") of the Company, par value
$0.15625 per share (the "Shares").
The Notes and the Shares will be offered without being registered
under the Securities Act of 1933, as amended (the "Securities Act"), to
"qualified institutional buyers" in compliance with the exemption from
registration provided by Rule 144A under the Securities Act ("Rule 144A").
The Initial Purchasers and their direct and indirect transferees
will be entitled to the benefits of a Registration Rights Agreement to be
entered into at or prior to the time of purchase (as defined herein) between the
Company and the Initial Purchasers (the "Registration Rights Agreement").
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and will prepare
a final offering
memorandum (the "Final Memorandum" and, with the Preliminary Memorandum, each a
"Memorandum") including or incorporating by reference a description of the terms
of the Notes and the Shares, the terms of the offering and a description of the
Company. As used herein, the term "Memorandum" shall include in each case the
documents incorporated by reference therein, if any, and any amendment or
supplement thereto. The terms "supplement", "amendment" and "amend" as used
herein with respect to a Memorandum shall include all documents deemed to be
incorporated by reference in such Memorandum, if any, that are filed subsequent
to the date of such Memorandum with the Securities and Exchange Commission (the
"Commission") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
The Company and the Initial Purchasers agree as follows:
1. Sale and Purchase: Upon the basis of the warranties and
representations and subject to the other terms and conditions herein set forth,
the Company agrees to sell to the Initial Purchasers, and each of the Initial
Purchasers, severally and not jointly, agrees to purchase from the Company, the
aggregate principal amount of Firm Notes set forth opposite the name of such
Initial Purchaser in Schedule A hereto at a purchase price of 96.5% of the
principal amount thereof.
In addition, the Company hereby grants to the several Initial
Purchasers the option to purchase from time to time, and upon the basis of the
representations and warranties and subject to the other terms and conditions
herein set forth, each Initial Purchaser shall have the right to purchase from
time to time from the Company, at a purchase price of 96.5% of the principal
amount thereof, plus accrued interest, if any, from the time of purchase (as
hereinafter defined) to the additional time of purchase (as hereinafter
defined), Additional Notes in an aggregate principal amount proportional to the
aggregate principal amount of Firm Notes set forth opposite such Initial
Purchaser's name on Schedule A hereto. This option may be exercised by UBS
Securities, LLC ("UBS"), on behalf of the Initial Purchasers, at any time on or
before the thirteenth day following the date the Firm Notes are issued, by
written notice to the Company. Such notice shall set forth the aggregate
principal amount of Additional Notes as to which the option is being exercised,
and the date and time when the Additional Notes are to be delivered (such date
and time being herein referred to as the "additional time of purchase");
provided, however, that the additional time of purchase shall not be earlier
than (i) the time of purchase or (ii) the second business day(1) after the date
on which the option shall have been exercised nor later than the tenth business
day after the date on which the option shall have been exercised.
2. Payment and Delivery: Payment of the purchase price for the Firm
Notes shall be made to the Company by Federal (same day) funds, against delivery
of the Firm Notes to you, at the offices of Xxxxxx and Xxxxx, LLP in Dallas,
Texas, or at such other place as may be agreed upon by the parties hereto, for
the respective accounts of the Initial Purchasers. Such
-------------
(1) As used herein, "business day" shall mean a day on which the Nasdaq
National Market is open for trading.
2
payment and delivery shall be made at 10:00 A.M., eastern daylight time, on
September __, 2005 (unless another time shall be agreed to by you and the
Company). The time at which such payment and delivery are actually made is
herein sometimes called the "time of purchase."
Payment of the purchase price for the Additional Notes shall be made
at the additional time of purchase in the same manner and at the same office and
time of day as the payment for the Firm Notes.
One or more Notes in global form, and registered in the name of Cede
& Co., as nominee for The Depository Trust Company, and in such denominations as
you shall request in writing not later than one full business day prior to the
time of purchase or the additional time of purchase, as the case may be, shall
be delivered by the Company to the Initial Purchasers (or as they may direct)
against payment therefor by wire transfer of same day funds to the Company. For
the purpose of expediting the checking of the certificates for the Notes by you,
the Company agrees to make such global note available to UBS for inspection at
least one full business day preceding the time of purchase or the additional
time of purchase, as the case may be.
3. Representations and Warranties of the Company: The Company
represents and warrants to each of the Initial Purchasers that:
(a) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in any Memorandum
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder and (ii) the Preliminary Memorandum, as of its date did not and
as of the time of execution of this Agreement does not, and the Final
Memorandum, as amended or supplemented, prior to the time of purchase will
not, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that any representations and warranties set forth in this
paragraph do not apply to statements or omissions in any Memorandum based
upon information furnished to the Company in writing by or on behalf of
such Initial Purchaser expressly for use therein as provided in Section 11
below;
(b) As of June 30, 2005, the Company has an authorized and
outstanding capitalization as set forth under the column heading entitled
"Actual" in the section of the Final Memorandum entitled "Capitalization"
and, as adjusted to give effect to the offering of the Firm Notes and the
application of the net proceeds therefrom as described in the "Use of
Proceeds" section of the Final Memorandum, the Company would, as of June
30, 2005, have had an authorized and outstanding capitalization as set
forth under the column heading entitled "As Adjusted" in the section of
the Final Memorandum entitled "Capitalization"; since June 30, 2005, there
have been no changes in the authorized and outstanding capital stock of
the Company except as disclosed in the Memorandum; all of the issued and
outstanding shares of capital stock, including the Common Stock, of the
Company have been duly
3
authorized and validly issued and are fully paid and non-assessable, have
been issued in compliance in all material respects with all federal and
state securities laws and were not issued in violation of any statutory or
contractual preemptive rights, resale rights, rights of first refusal or
similar rights;
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Memorandum;
(d) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the
ownership or leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified
and in good standing would not, individually or in the aggregate, have a
material adverse effect on the business, properties, financial condition,
results of operation or prospects of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse Effect");
(e) Each U.S. subsidiary of the Company listed on Schedule B
hereto (the "U.S. Subsidiaries", and together with the subsidiaries listed
on Schedule B-1, the "Subsidiaries") has been duly incorporated, organized
or formed and is validly existing as a corporation, limited liability
company or limited partnership in good standing under the laws of the
jurisdiction of its incorporation, organization or formation, with
requisite power and authority to own, lease and operate its properties and
to conduct its business as described in the Memorandum; each U.S.
Subsidiary is duly qualified to do business as a foreign corporation,
limited liability company or limited partnership and is in good standing
in each jurisdiction where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing would not, individually or
in the aggregate, have a Material Adverse Effect; all of the issued and
outstanding shares of capital stock, limited liability company interests,
partnership interests or other equity interests of the U.S. Subsidiaries
have been duly and validly authorized and issued, are (to the extent
applicable) fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims except for pledges of capital stock or other equity
interests in the U.S. Subsidiaries pursuant to credit agreements of the
Company or the U.S. Subsidiaries as described in the Memorandum; the
Company does not have any subsidiaries and does not own or control,
directly or indirectly, any interest in any corporation or other entity
except as set forth on Schedule B or Schedule B-1 and except for the
Company's less than majority interests in USA Interlink, LLC (d/b/a
ePsolutions), XxxxxxXxx.xxx, Inc. and Capstone Royalty, LLC described in
the Memorandum;
4
(f) Each foreign subsidiary listed on Schedule B-1 hereto (the
"Foreign Subsidiaries") of the Company has been duly organized or formed
and is validly existing and in good standing (to the extent such concept
is applicable) under the laws of the jurisdiction of its incorporation,
organization or formation and has all requisite power and authority to
own, lease and operate its properties and to conduct its business as
described in the Memorandum. Each Foreign Subsidiary is duly qualified or
licensed as a foreign entity to transact business and is in good standing
(to the extent such concept is applicable) in each jurisdiction in which
the ownership or lease of property or the conduct of its business requires
such qualification or license, except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or
in the aggregate, result in a Material Adverse Effect. All of the issued
and outstanding equity of each Foreign Subsidiary has been duly authorized
and validly issued (to the extent such concept is applicable) and is owned
by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim except for
pledges of capital stock or other equity interests in the Foreign
Subsidiaries pursuant to credit agreements of the Company or the Foreign
Subsidiaries as described in the Memorandum;
(g) Neither the Company nor any of the Subsidiaries is in
breach or violation of, or in default under (nor has any event occurred
which with notice, lapse of time, or both would result in any breach or
violation of, constitute a default under or give the holder of any
indebtedness (or person acting on such holder's behalf), the right to
require the repurchase, redemption or repayment of all or part of such
indebtedness under) (i) its respective charter, by-laws, partnership
agreement, operating agreement or similar organizational documents or (ii)
any indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or their respective properties may be
bound or affected, or (iii) any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company or any of the Subsidiaries, except in the case of clauses (ii) and
(iii) for such breaches, violations and defaults as would not,
individually or in the aggregate, have a Material Adverse Effect;
(h) The execution, delivery and performance of this Agreement,
the Registration Rights Agreement, the Indenture and the Notes and
consummation of the transactions contemplated hereby and thereby including
the issuance of the Notes and the issuance of the Shares upon conversion
of the Notes, will not conflict with, result in any breach or violation of
or constitute a default under (nor constitute any event which with notice,
lapse of time or both would result in any breach or violation of or
constitute a default under), (i) the charter, by-laws, partnership
agreement, operating agreement or similar organizational documents of the
Company or any of the Subsidiaries or (ii) any indenture, mortgage, deed
of trust, bank loan or credit agreement or other evidence of indebtedness,
or any license, lease, contract or other
5
agreement or instrument to which the Company or any of the Subsidiaries is
a party or by which any of them or their respective properties may be
bound or affected, or (iii) any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company or any of the Subsidiaries, except in the case of clause (ii) for
such breaches, violations and defaults as would not, individually or in
the aggregate, have a Material Adverse Effect;
(i) The Indenture has been duly authorized by the Company and
when duly executed and delivered by the Company, and assuming due
authorization, execution and delivery by the Trustee, will be a legal,
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditors' rights generally
and general principles of equity;
(j) The Registration Rights Agreement has been duly authorized
by the Company, and when executed and delivered by the Company, and
assuming due authorization, execution and delivery by the Initial
Purchasers, will be a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws affecting
creditors' rights generally and general principles of equity;
(k) The Notes have been duly authorized by the Company and
when executed and delivered by the Company, and assuming due
authentication by the Trustee in accordance with the terms of the
Indenture and delivery to and payment for by the Initial Purchasers in
accordance with the terms hereof, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
similar laws affecting creditors' rights generally and general principles
of equity, and will be entitled to the benefits of the Indenture and the
Registration Rights Agreement; the Shares initially issuable upon
conversion of the Notes have been duly authorized and reserved for
issuance upon conversion of the Notes, and are sufficient in number to
meet the current conversion requirements, and such Shares, when so issued
upon such conversion in accordance with the terms of the Indenture, will
be duly and validly issued and fully paid and non-assessable;
(l) This Agreement has been duly authorized, executed and
delivered by the Company;
(m) The terms of the Notes, the Registration Rights Agreement,
the Indenture and the capital stock of the Company, including the Shares,
conform in all material respects to the description thereof contained in
the Final Memorandum;
6
(n) No approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, or of or with the rules of
the Nasdaq National Market, or approval of stockholders of the Company, is
required in connection with the issuance and sale by the Company of the
Notes or the issuance of Shares upon conversion of the Notes or the
consummation of the transactions as contemplated hereby and by the
Indenture, the Registration Rights Agreement and the Notes other than (i)
as may be required under the securities or blue sky laws of the various
jurisdictions in which the Notes and the Shares are being offered by the
Initial Purchasers and (ii) as may be required by federal and state
securities laws with respect to the Company's obligations under the
Registration Rights Agreement and the listing of the Shares on the Nasdaq
National Market in connection therewith;
(o) The Company has obtained for the benefit of the Initial
Purchasers the agreement (a "Lock-Up Agreement"), in the form set forth as
Exhibit B hereto, of each of its executive officers and directors named in
Exhibit B-1 hereto;
(p) Except as described in the Memorandum, (i) no person has
any preemptive rights or similar rights to purchase any shares of Common
Stock or shares of any other capital stock or other equity interests of
the Company and (ii) no person has the right to act as an initial
purchaser to the Company in connection with the offer and sale of the
Notes, in the case of each of the foregoing clauses (i) and (ii), whether
as a result of the sale of the Notes as contemplated hereby or otherwise;
and except as described in the Memorandum or as set forth on Exhibit B-2
hereto, no person has the right, contractual or otherwise, to cause the
Company to include any shares of Common Stock or shares of any other
capital stock or other securities of the Company in the registration
statement to be filed with the Commission pursuant to the Registration
Rights Agreement, whether as a result of the sale of the Notes as
contemplated hereby or otherwise; it being understood that holders of
Common Stock that acquired such shares in a private placement dated
September 2005, may include their shares in any such registration
statement;
(q) Xxxx & Associates, L.L.P. and Ernst & Young LLP, who have
expressed their opinions on the consolidated financial statements,
including notes thereto, of the Company and the Subsidiaries included in
the Memorandum, are each independent public accountants with respect to
the Company as required by the Securities Act, and the applicable
published rules and regulations thereunder;
(r) Each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals (collectively,
"Consents") and has made all necessary filings required under any federal,
state, local or foreign law, regulation or rule and has obtained all
necessary Consents from other persons, in order to conduct its respective
business as currently conducted; neither the Company nor any of the
Subsidiaries received notice of any proceedings relating to revocation or
modification of any such Consent or any federal, state, local or foreign
law,
7
regulation or rule or any decree, order or judgment applicable to the
Company or any of the Subsidiaries, except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect;
(s) Except as described in the Memorandum, there are no legal
actions, suits, claims, investigations or proceedings pending or, to the
actual awareness of any of the following persons of a fact or matter: G.
Xxxxxx Xxxxxx III, Xxxxxxx X. Xxxx, Xxxxxxx X. Xxxxxxxxxx or Xxxxxxx
Xxxxxxx ("Knowledge"), threatened or contemplated to which the Company or
any of the Subsidiaries is or would be a party or of which any of their
respective properties is or would be subject at law or in equity, or
before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, except any such
action suit, claim, investigation or proceeding which, if determined
adversely, would not either (A) have, individually or in the aggregate, a
Material Adverse Effect or (B) prevent the consummation of the
transactions contemplated hereby and by the Indenture, the Registration
Rights Agreement and the Notes; this representation and warranty shall not
apply to environmental matters;
(t) All tax returns required to be filed by the Company and
each of the Subsidiaries have been filed, and all taxes and other
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such entities have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided and other than those in which the
failure to file or pay would not result, individually or in the aggregate,
in a Material Adverse Effect;
(u) Except as disclosed in the Memorandum, the Company and
each of the Subsidiaries maintains insurance covering its properties,
operations, personnel and businesses as the Company deems adequate; such
insurance insures against such losses and risks to an extent that is in
accordance with customary industry practices; all such insurance is in
full force on the date hereof and will be in full force at the time of
purchase and any additional time of purchase hereunder;
(v) Neither the Company nor any of the Subsidiaries has
sustained since the date of the last audited financial statements included
in the Memorandum any loss or interference with its respective 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;
(w) The Company has not sent or received any termination of,
or notification of intent not to renew, any of the contracts or agreements
referred to, described in the Memorandum the termination or non-renewal of
which, either individually or when aggregated with the termination or
non-renewal of all other such contracts or agreements as to which any such
termination or notification has been sent or received, would have a
Material Adverse Effect, and no such termination or non-
8
renewal has been threatened by the Company or, to the Company's Knowledge,
any other party to any such contract or agreement;
(x) Neither the Company nor the Subsidiaries are engaged in
any unfair labor practice; except for matters which would not,
individually or in the aggregate, have a Material Adverse Effect, (i)
there is (A) no unfair labor practice complaint pending or, to the
Company's Knowledge, threatened against the Company or any of the
Subsidiaries before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under collective bargaining
agreements is pending or threatened, (B) no strike, labor dispute,
slowdown or stoppage pending or, to the Company's Knowledge, threatened
against the Company or any of the Subsidiaries and (C) no union
representation dispute currently existing concerning the employees of the
Company or any of the Subsidiaries and (ii) to the Company's Knowledge,
(A) no union organizing activities are currently taking place concerning
the employees of the Company or any of the Subsidiaries and (B) there has
been no violation of any federal, state, local or foreign law relating to
discrimination in the hiring, promotion or pay of employees, any
applicable wage or hour laws or any provision of the Employee Retirement
Income Security Act of 1974 ("ERISA") or the rules and regulations
promulgated thereunder concerning the employees of the Company or any of
the Subsidiaries;
(y) The Company and its Subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, domain names,
licenses, approvals, trade secrets and other similar rights (collectively,
"Intellectual Property Rights") reasonably necessary to conduct their
businesses as described in the Memorandum; and the expected expiration of
any of such Intellectual Property Rights if not renewed or replaced would
not result in a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result in a
Material Adverse Effect. None of the technology employed by the Company
and/or any of its Subsidiaries has been obtained or is being used by the
Company and/or any of its Subsidiaries in violation of any contractual
obligation binding on the Company or any of its Subsidiaries or otherwise
in violation of the rights of any persons, except for such violations as
would not, individually or in the aggregate, have a Material Adverse
Effect;
(z) The audited and unaudited financial statements included in
the Memorandum, together with the related notes and schedules, present
fairly in all material respects the consolidated financial position of the
Company and the Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and the
Subsidiaries for the periods specified and have been prepared in
compliance in all material respects with the requirements of the Exchange
Act and in compliance with the requirements of generally accepted
accounting principles applied on a consistent basis throughout the periods
involved,
9
except as expressly stated in the related notes thereto; the other
financial and statistical data set forth in the Memorandum are, in all
material respects, accurately presented and prepared, in all material
respects, on a basis consistent with the financial statements and books
and records of the Company; any non-GAAP financial measures (as such term
is defined in Regulation G promulgated by the Commission ("Regulation G"))
included in the Memorandum are presented in compliance, in all material
respects, with Regulation G; and neither the Company nor the Subsidiaries
have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the
Memorandum;
(aa) Subsequent to June 30, 2005, and except as may be
otherwise disclosed in the Memorandum, there has not been (A) any material
adverse change, or any development involving a prospective material
adverse change, in the business, properties, prospects, management,
financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole, (B) any transaction which is material to
the Company and the Subsidiaries, taken as a whole, (C) any obligation,
direct or contingent (including any off-balance sheet obligations),
incurred by the Company or any of the Subsidiaries, which is material to
the Company and the Subsidiaries, taken as a whole, (D) any change in the
capital stock of the Company or any material change in the capital stock
of the Subsidiaries or any material change in the outstanding indebtedness
of the Company or the Subsidiaries or (E) except for regular quarterly
dividends in the Company's Series A and Series A-1 Preferred Stock, any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company;
(bb) The Company and the Subsidiaries and their properties,
assets and operations are in compliance with, and hold all permits,
authorizations and approvals required under, Environmental Laws (as
defined below), except to the extent that failure to so comply or to hold
such permits, authorizations or approvals would not, individually or in
the aggregate, have a Material Adverse Effect; there are no past, present
or, to the Company's Knowledge, reasonably anticipated future events,
conditions, circumstances, activities, practices, actions, omissions or
plans that would give rise to any material costs or liabilities to the
Company or the Subsidiaries under, or to interfere with or prevent
compliance by the Company or the Subsidiaries with, Environmental Laws;
except as would not, individually or in the aggregate, have a Material
Adverse Effect and except as disclosed in the Memorandum, the Company and
each of the Subsidiaries (i) is not the subject of any investigation, (ii)
has not received any notice or claim, (iii) is not a party to or affected
by any pending, or to the Company's Knowledge, threatened action, suit or
proceeding, (iv) is not bound by any judgment, decree or order or (v) has
not entered into any material agreement, in each case relating to any
alleged violation of any Environmental Law or any actual or alleged
release or threatened release or cleanup at any location of any Hazardous
Materials (as defined below) (as used herein, "Environmental Law" means
any federal, state, local or foreign law, statute, ordinance, rule,
regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement,
10
relating to the pollution, protection, cleanup or restoration of the
environment or natural resources, including those relating to the
distribution, processing, generation, treatment, storage, disposal,
transportation, other handling or release of Hazardous Materials, and
"Hazardous Materials" means any material (including, without limitation,
pollutants, contaminants, hazardous or toxic substances or wastes) that is
regulated by or may give rise to liability under any Environmental Law);
(cc) When the Notes are issued pursuant to this Agreement, the
Notes will not be of the same class (within the meaning of Rule 144A) as
securities that are listed on a national securities exchange registered
pursuant to Section 6 of the Exchange Act or quoted in a U.S. automated
inter-dealer quotation system;
(dd) Neither the Company nor any Affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act) (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 would 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) offered,
solicited offers to buy or sold the Notes by 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;
(ee) It is not necessary in connection with the offer, sale
and delivery of the Notes to the Initial Purchasers pursuant to this
Agreement to register the Notes or the Shares deliverable upon conversion
of the Notes under the Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended;
(ff) Neither the Company nor any of the Subsidiaries is, nor
after giving effect to the offering and sale of the Notes and the
application of the proceeds thereof as described in the Final Memorandum
will any of them be, required to register as an "investment company" as
defined in the Investment Company Act of 1940, as amended;
(gg) Except as disclosed in the Memorandum, the Company and/or
each of the Subsidiaries have good and marketable title to all property
(real and personal) described in the Memorandum as being owned by them,
free and clear of all liens, claims, security interests or other
encumbrances except (i) such as would not materially and adversely affect
the value of such properties and would not materially interfere with the
current use of such properties by the Company or such Subsidiary, as the
case may be, and (ii) for liens granted pursuant to credit agreements of
the Company or the Subsidiaries as described in the Memorandum; all the
property described in the Memorandum as being held under lease by the
Company or a Subsidiary is held thereby under valid and enforceable leases
with such exceptions as would not materially interfere with the current
use of such properties; as used herein,
11
the term "lease" shall not include any exploration, exploitation or
rehabilitation permit held by the Company and/or its Subsidiaries;
(hh) The information underlying the estimates of the reserves
of the Company and the Subsidiaries that was supplied by the Company to
XxXxxxx Petroleum Consultants, Ltd. ("XxXxxxx"), independent petroleum
engineers, for purposes of preparing the reserve reports referenced in the
Memorandum (the "Reserve Reports"), including, without limitation,
production, volumes, sales prices for production, contractual pricing
provisions under oil or gas sales or marketing contracts, costs of
operations and development, and working interest and net revenue interest
information relating to the Company's or the Subsidiaries' interests, was
true and correct in all material respects on the dates of such Reserve
Reports; the estimates of future capital expenditures and other future
exploration and development costs supplied to XxXxxxx were prepared in
good faith and with a reasonable basis; the information provided to
XxXxxxx for purposes of preparing the Reserve Reports was prepared in
accordance with customary industry practices; XxXxxxx was, as of the dates
of the Reserve Reports, and is, as of the date hereof, independent
petroleum engineers with respect to the Company; other than the decrease
in reserves resulting from the sale of the Company's U.S. royalty and
mineral interests in January 2004 and normal production of the reserves
and intervening spot market product price fluctuations disclosed in the
Memorandum, there are not any facts or circumstances that would adversely
effect the reserves in the aggregate, or the aggregate present value of
future net cash flows therefrom, as disclosed in the Memorandum and
reflected in the Reserve Reports such as to cause a Material Adverse
Effect; estimates of such reserves and the present value of the future net
cash flows therefrom as disclosed in the Memorandum and reflected in the
Reserve Reports comply in all material respects to the applicable
requirements under the Securities Act;
(ii) The Company and each of the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences;
(jj) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-15(e) under
the Exchange Act), which (i) are designed to ensure that material
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified by the
Securities and Exchange Commission, particularly during the periods in
which the periodic reports required under the Exchange Act are being
prepared; (ii) have been
12
evaluated for effectiveness as of June 30, 2005 and (iii) were effective
in all material respects, to provide reasonable assurance regarding the
functions for which they were established. Based on the evaluation of its
disclosure controls and procedures as of June 30, 2005, the Company is not
aware of (i) any significant deficiency or material weakness in the design
or operation of internal controls which would adversely affect the
Company's ability to record, process, summarize, and report financial
data; or (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's internal
control over financial reporting. Since June 30, 2005, the most recent
date as of which the Company evaluated its disclosure controls and
procedures, there have been no significant changes in the Company's
internal control over financial reporting (as defined in Rule 13a-15) or
in other factors that have materially affected, or are reasonably likely
to materially affect, the Company's internal control over financial
reporting, including any corrective actions with regard to significant
deficiencies and material weaknesses in the Company's internal controls.
(kk) Any statistical and market-related data (other than data
relating to oil and natural gas reserves) included in the Memorandum are
based on or derived from sources that the Company believes to be reliable
and accurate in all material respects;
(ll) Neither the Company nor any of the Subsidiaries nor, to
the Company's Knowledge, any of their respective directors, officers,
affiliates or controlling persons has taken, directly or indirectly, any
action designed, or which has constituted or might reasonably be expected
to cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Notes or the Shares issued upon
conversion thereof;
(mm) There is and has been no failure on the part of the
Company and the Subsidiaries or, to the Company's Knowledge, any of the
officers and directors of the Company or any of the Subsidiaries, in their
capacities as such and as to matters relating solely to the Company, to
comply in all material respects with the applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations in connection
therewith, including without limitation Section 402 related to loans and
Sections 302 and 906 related to certifications;
(nn) Neither the Company nor any of its Subsidiaries has made
any contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any applicable law,
including the Foreign Corrupt Practices Act of 1977, or of the character
required to be disclosed in the Memorandum; and
(oo) Neither the Company nor any of the Subsidiaries is
currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of
13
the U.S. Treasury Department ("OFAC"); and the Company will not directly
or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any Significant Subsidiary,
joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S.
sanctions administered by OFAC.
In addition, any certificate signed by any officer of the Company or
any of the Subsidiaries and delivered to the Initial Purchasers or counsel for
the Initial Purchasers in connection with the offering of the Notes shall be
deemed to be a representation and warranty by the Company or Subsidiary, as the
case may be, as to matters covered thereby, to each Initial Purchaser.
4. Representations and Warranties of the Initial Purchasers. The
Initial Purchasers propose to offer the Notes for sale upon the terms and
conditions set forth in this Agreement and the Final Memorandum, and each
Initial Purchaser hereby represents and warrants to and agrees with the Company
that:
(a) It (A) is not acquiring the Notes with a view to any
distribution thereof or with any present intention of offering or selling
any of the Notes in a transaction that would violate the securities laws
of the United States or any other applicable jurisdiction and (B) will
offer and sell the Notes only to persons whom it reasonably believes are
"qualified institutional buyers" ("QIBs") within the meaning of Rule 144A
in transactions meeting the requirements of Rule 144A and that in
purchasing such Notes, are deemed to have represented and agreed as
provided in the Final Memorandum under the caption "Notice to Investors";
(b) It is a QIB within the meaning of Rule 144A and has such
knowledge and experience in financial and business matters as is necessary
in order to evaluate the merits and risks of an investment in the Notes;
(c) It has not and will not, directly or indirectly, solicit
offers for, or offer or sell, the Notes by any form of general
solicitation, general advertising (as such terms are used in Regulation D)
or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act, including but not limited to articles, notices
or other communications published in any newspaper, magazine or similar
medium, over television or radio or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
Each Initial Purchaser acknowledges that the Company and, for the
purposes of the opinions to be delivered to the Initial Purchasers pursuant
hereto, counsel for the Company will rely upon the accuracy and truth of the
foregoing representations, and each Initial Purchaser consents to such reliance.
14
5. Certain Covenants of the Company: The Company hereby agrees that:
(a) The Company will prepare the Final Memorandum in a form
approved by the Initial Purchasers and will make no amendment or
supplement to the Final Memorandum to which the Initial Purchasers
reasonably object;
(b) Promptly from time to time, the Company will take such
action as the Initial Purchasers may reasonably request to qualify the
Notes and the Shares for offering and sale under the securities laws of
such jurisdictions as the Initial Purchasers may request; provided, that
in connection therewith the Company shall not be required to qualify as a
foreign corporation, to file a general consent to service of process or
subject itself to any tax in any such jurisdiction where it is not now so
qualified or subject;
(c) The Company will furnish the Initial Purchasers with as
many copies of the Final Memorandum, any documents incorporated by
reference therein and any amendment or supplement thereto as the Initial
Purchasers may from time to time reasonably request, and if, at any time
prior to the completion of the resale of the Notes by the Initial
Purchasers, any event shall have occurred as a result of which the Final
Memorandum as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such Final Memorandum is delivered, not
misleading, or, if for any other reason it shall be necessary or desirable
during such same period to amend or supplement the Final Memorandum, the
Company will notify the Initial Purchasers and upon the request of the
Initial Purchasers will prepare and furnish without charge to the Initial
Purchasers and to any dealer in securities as many copies as the Initial
Purchasers may from time to time reasonably request of an amended Final
Memorandum or a supplement to the Final Memorandum which will correct such
statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and
continuing until the date 90 days after the date of the Final Memorandum,
the Company will not, without the prior written consent of UBS, issue,
offer, sell, contract to sell, hypothecate, pledge, grant or sell any
option, right or warrant to purchase, or otherwise dispose of, or contract
to dispose of, any Shares, any securities substantially similar to the
Notes or the Common Stock, any securities that are convertible into or
exchangeable for shares of Common Stock or similar debt securities or any
securities that are convertible into or exchangeable for the Notes or such
other similar debt securities (other than (i) the issuance of the Notes;
(ii) the issuance of Shares upon conversion of the Notes; (iii) the grant
of stock and stock options pursuant to the Company's existing stock option
plans or other employee benefit plans and the issuance of shares of Common
Stock upon the exercise of such options and additional inducement grants
of restricted stock to employees, and (iv) the issuance of shares of
Common Stock upon the exercise of an option or
15
warrant or the conversion of a security outstanding on the date hereof),
or enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock or
Notes irrespective of whether any transaction mentioned above is to be
settled by delivery of the Common Stock, the Notes or other securities, in
cash or otherwise;
(e) At any time when the Company is not subject to Section 13
or 15(d) of the Exchange Act and so long as any of the Notes (or Shares
issued upon conversion thereof) are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, for the benefit of
holders from time to time of the Notes, the Company will make available,
upon request, to holders of Notes and prospective purchasers of Notes
information satisfying the requirements of subsection (d)(4)(i) of Rule
144A;
(f) The Company will use its best efforts to cause the Notes
to be eligible for trading in PORTAL for so long as the Notes are
outstanding;
(g) For so long as the Notes remain outstanding, the Company
will furnish to the Initial Purchasers copies of all reports or other
communications (financial or other) furnished to stockholders of the
Company, and will deliver or make generally available to the Initial
Purchasers (i) as soon as practicable, copies of financial statements
furnished to or filed by the Company with the Commission or any securities
exchange on which the Notes or any class of securities of the Company is
listed; and (ii) such additional information concerning the business and
financial condition of the Company as the Initial Purchasers may from time
to time reasonably request (such financial information to be on a
consolidated basis to the extent the accounts of the Company and the
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(h) The Company will use the net proceeds received by it from
the sale of the Notes pursuant to this Agreement in the manner specified
in the Final Memorandum under the caption "Use of Proceeds";
(i) The Company will reserve and keep available at all times
free of preemptive rights, Shares for the purpose of enabling the Company
to satisfy any obligations to issue Shares upon conversion of the Notes;
(j) the Company will use its best efforts to list, as promptly
as practicable but in no event later than the time that the registration
statement is declared effective in accordance with the Registration Rights
Agreement, and subject to notice of issuance, the Shares on the Nasdaq
National Market;
(k) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, the Company
will pay or cause to be paid all expenses incident to the performance of
its obligations under this Agreement, including, without limitation, (i)
the fees, disbursements and expenses of
16
the Company's counsel and the Company's accountants in connection with the
issuance and sale of the Notes and all other fees and expenses in
connection with the preparation of each Memorandum and all amendments and
supplements thereto, including all printing costs associated therewith,
and the furnishing of copies thereof to the Initial Purchasers and to
dealers (including costs of mailing and shipment), (ii) all costs related
to the preparation, issuance, execution, authentication and delivery of
the Notes and the Shares, (iii) all costs related to the transfer and
delivery of the Notes to the Initial Purchasers, including any transfer or
other taxes payable thereon, (iv) the word processing and/or printing
charges and expenses of counsel to the Initial Purchasers (but not
including their fees for professional services) of this Agreement, the
Registration Rights Agreement and the Indenture, and the reproduction
and/or printing and furnishing of copies thereof to the Initial Purchasers
and to dealers (including costs of mailing and shipment), (v) all expenses
in connection with the qualification of the Notes and the Shares for
offering and sale under state laws and the cost of printing and furnishing
of copies of any blue sky or legal investment memorandum to the Initial
Purchasers and to dealers (including filing fees and the fees and
disbursements of counsel for the Initial Purchasers in connection with
such qualification and in connection with such blue sky or legal
investment memorandum), (vi) any fees payable to investment rating
agencies with respect to the rating of the Notes, (vii) the costs and
charges of the Trustee and any transfer agent, registrar or depositary,
(viii) the fees and expenses, if any, incurred in connection with the
admission of the Notes for trading in PORTAL or any appropriate market
system, (ix) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Notes, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in connection
with the road show, and (x) all other cost and expenses incident to the
performance of the Company's obligations hereunder for which provision is
not otherwise made in this Section 5(k);
(l) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the Securities Act) which could be integrated with
the sale of the Notes in a manner which would require the registration
under the Securities Act of the offer and sale of the Notes pursuant to
this Agreement;
(m) The Company will not solicit any offer to buy or offer or
sell the Notes or the Shares by means of any form of general solicitation
or general advertising (as those terms are used in Regulation D) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act;
(n) During the period after the time of purchase or the
additional time of purchase, if later, and for a period of two years
thereafter, the Company will not,
17
will not permit Affiliates that are under its direct control and will use
its best efforts not to permit its other Affiliates to resell any of the
Notes or the Shares which constitute "restricted securities" under Rule
144 under the Securities Act that have been reacquired by any of them
except pursuant to an effective registration statement under the
Securities Act; and
(o) Neither the Company nor any Affiliate that is under its
direct control will take any action prohibited by Regulation M under the
Exchange Act in connection with the distribution of the Notes contemplated
hereby.
6. Reimbursement of Initial Purchasers' Expenses: If the Firm Notes
are not delivered for any reason other than the default by one or more of the
Initial Purchasers in their obligations hereunder, the Company will reimburse
the Initial Purchasers for all of their out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) reasonably incurred by the
Initial Purchasers in connection with this Agreement or the offering
contemplated hereunder.
7. Conditions of Initial Purchasers' Obligations: The several
obligations of the Initial Purchasers hereunder are subject to the accuracy in
all material respects of the representations and warranties on the part of the
Company on the date hereof and at the time of purchase. The several obligations
of the Initial Purchasers at the additional time of purchase are subject to the
accuracy in all material respects of the representations and warranties on the
part of the Company on the date hereof, at the time of purchase (unless
previously waived) and at the additional time of purchase, as the case may be.
Additionally, the several obligations of the Initial Purchasers hereunder are
subject to performance by the Company of its obligations hereunder and to the
following conditions:
(a) The Company shall furnish to UBS at the time of purchase
and at the additional time of purchase, as the case may be, an opinion of
Xxxxxx and Xxxxx, LLP, counsel for the Company, addressed to the Initial
Purchasers and dated the date of the time of purchase or the date of the
additional time of purchase, as the case may be, and in form reasonably
satisfactory to counsel for the Initial Purchasers, in the form as set
forth in Exhibit A hereto;
(b) UBS shall have received on the date of this Agreement, at
the time of purchase and the additional time of purchase, as the case may
be, from Xxxx & Associates, L.L.P. customary comfort letters dated as of
the date of this Agreement, the date of the time of purchase and the date
of the additional time of purchase, as the case may be, and addressed to
the Initial Purchasers, in form and substance satisfactory to counsel for
the Initial Purchasers;
(c) UBS shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxxxxxx
& Xxxxxxxx LLP, counsel for the Initial Purchasers, dated the date of the
time of purchase or the
18
date of the additional time of purchase, as the case may be, in form and
substance reasonably satisfactory to UBS;
(d) No amendment or supplement to the Final Memorandum, or any
document which upon filing with the Commission would be incorporated by
reference in the Final Memorandum, shall at any time have been made or
filed to which UBS has reasonably objected in writing;
(e) At the time of purchase or the additional time of
purchase, as the case may be, the Final Memorandum shall not contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(f) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may be,
(i) no material adverse change or any development involving a prospective
material adverse change in the business, properties, management, financial
condition or results of operations of the Company and the Subsidiaries,
taken as a whole, shall occur or become known and (ii) no transaction
which is material and unfavorable to the Company (other than as disclosed
in the Final Memorandum) shall have been entered into by the Company or
any of the Subsidiaries which would, in UBS' judgment 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 Final
Memorandum;
(g) The Company will, at the time of purchase and, if
applicable at the additional time of purchase, deliver to you a
certificate of its Chief Executive Officer and its Chief Financial Officer
in the form attached as Exhibit C hereto;
(h) You shall have received copies, duly executed by the
Company and the other parties thereto, of the Registration Rights
Agreement and the Indenture;
(i) Each executive officer and director of the Company shall
have entered into Lock-Up Agreements in the form attached as Exhibit B
hereto on or prior to the date hereof, and each such Lock-Up Agreement
shall have been delivered to you and shall be in full force and effect at
the time of purchase and the additional time of purchase, as the case may
be;
(j) The Company shall have furnished to you such other
documents and certificates as to the accuracy and completeness of any
statement in the Final Memorandum as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably
request;
(k) The Notes shall have been designated for trading on
PORTAL, subject only to notice of issuance at or prior to the time of
purchase;
19
(l) The Company shall have furnished to the Initial
Purchasers, at the time of purchase and at the additional time of
purchase, as the case may be, a letter from XxXxxxx addressed to the
Initial Purchasers, in form and substance reasonably satisfactory to
counsel for the Initial Purchasers, confirming certain matters relating to
the Reserve Reports and the information with respect to the oil and gas
reserves of the Company included in the Memorandum.
8. Termination: The several obligations of the Initial Purchasers
hereunder shall be subject to termination by UBS or any group of Initial
Purchasers (which may include UBS) that has agreed to purchase in the aggregate
a majority of the Notes, if, (x) since the time of execution of this Agreement
or the earlier respective dates as of which information is given in the Final
Memorandum, there has been any change or any development involving a prospective
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole, which, in
UBS' judgment or in the judgment of such group of Initial Purchasers, is
material and adverse and makes 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 Final Memorandum; (y) at any time prior to the time of
purchase or, with respect to the purchase of any Additional Notes, the
additional time of purchase, as the case may be, there shall have occurred: (i)
a suspension or material limitation in trading in securities generally on the
New York Stock Exchange, the American Stock Exchange or the NASDAQ; (ii) a
suspension or material limitation in trading in the Company's securities on the
Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) an outbreak or escalation of hostilities or
acts of terrorism involving the United States or a declaration by the United
States of a national emergency or war; or (v) any other calamity or crisis or
any change in financial, political or economic conditions in the United States
or elsewhere, if the effect of any such event specified in clause (iv) or (v) in
UBS' judgment or in the judgment of such group of Initial Purchasers makes 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 Final Memorandum; or
(z) at any time prior to the time of purchase or, with respect to the purchase
of any Additional Notes, the additional time of purchase, as the case may be,
there shall have occurred any downgrading, or any notice or announcement shall
have been given or made of (i) any intended or potential downgrading or (ii) any
watch, review or possible change that does not indicate an affirmation or
improvement in the rating accorded any securities of or guaranteed by the
Company or any Subsidiary by any "nationally recognized statistical rating
organization," as that term is defined in Rule 436(g)(2) under the Securities
Act.
If you elect to terminate this Agreement as provided in this Section
8, the Company shall be notified as provided for herein.
If the sale to the Initial Purchasers of the Notes, as contemplated
by this Agreement, is not carried out by the Initial Purchasers for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply and does not comply with any of the terms of
this Agreement, the Company shall not be under any
20
obligation or liability under this Agreement (except to the extent provided in
Sections 5(k), 6 and 9 hereof), and the Initial Purchasers shall be under no
obligation or liability to the Company under this Agreement (except to the
extent provided in Section 9 hereof) or to one another hereunder.
9. Indemnity by the Company and the Initial Purchasers:
(a) The Company agrees to indemnify, defend and hold harmless
each Initial Purchaser, its directors and officers, and any person who
controls any Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, an "Initial
Purchaser Indemnified Party"), and the successors and assigns of all the
foregoing persons, from and against any loss, damage, expense, liability
or claim (including the reasonable cost of investigation) which, jointly
or severally, any such Initial Purchaser Indemnified Party or any such
person may incur under the Securities Act, the Exchange Act, the common
law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Memorandum, as
amended or supplemented, if applicable, or arises out of or is based upon
any omission or alleged omission to state a material fact necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or omission or alleged untrue statement or omission of a
material fact contained in or omitted from and in conformity with
information furnished in writing by or on behalf of any Initial Purchaser
to the Company expressly for use therein or (ii) any untrue statement or
alleged untrue statement made by the Company in Section 3 hereof or the
failure by the Company to perform when and as required any agreement or
covenant contained herein.
(b) Each Initial Purchaser agrees to indemnify, defend and
hold harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and the successors and assigns of
all of the foregoing persons, (each, a "Company Indemnified Party") from
and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, such
Company Indemnified Party may incur under the Securities Act, the Exchange
Act or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in information furnished in
writing by or on behalf of such Initial Purchaser to the Company expressly
for use in any Memorandum or arises out of or is based upon any omission
or alleged omission to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, in connection with such information.
21
(c) If any action, suit or proceeding (each, a "Proceeding")
is brought against any person in respect of which indemnity may be sought
pursuant to either subsection (a) or (b) of this Section 9, such person
(the "Indemnified Party") shall promptly notify the person against whom
such indemnity may be sought (the "Indemnifying Party") in writing of the
institution of such Proceeding and such Indemnifying Party shall assume
the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such Indemnified Party and payment of all fees
and expenses; provided, however, that the omission to so notify such
Indemnifying Party shall not relieve such Indemnifying Party from any
liability which it may have to such Indemnified Party or otherwise. Such
Indemnified Party shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless the employment of such counsel
shall have been authorized in writing by such Indemnifying Party in
connection with the defense of such Proceeding or such Indemnifying Party
shall not have employed counsel to have charge of the defense of such
Proceeding within a reasonable period of time in light of circumstances or
such Indemnified Party shall have reasonably concluded upon written advice
of counsel that there may be defenses available to it that are different
from, additional to, or in conflict with those available to such
Indemnifying Party (in which case such Indemnifying Party shall not have
the right to direct that portion of the defense of such Proceeding on
behalf of such Indemnified Party, but such Indemnifying Party may employ
counsel and participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such Indemnifying Party), in
any of which events such reasonable fees and expenses shall be borne by
such Indemnifying Party and paid as incurred (it being understood,
however, that such Indemnifying Party shall not be liable for the expenses
of more than one separate counsel in any one Proceeding or series of
related Proceedings together with reasonably necessary local counsel
representing the Indemnified Parties who are parties to such Proceeding).
An Indemnifying Party shall not be liable for any settlement of any such
Proceeding affected without its written consent, but if settled with the
written consent of such Indemnifying Party, such Indemnifying Party agrees
to indemnify and hold harmless an Indemnified Party from and against any
loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an Indemnified Party shall have
requested an Indemnifying Party to reimburse such Indemnified Party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then such Indemnifying Party agrees that it shall be
liable for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60 business days
after receipt by such Indemnifying Party of the aforesaid request, (ii)
such Indemnifying Party shall not have reimbursed such Indemnified Party
in accordance with such request prior to the date of such settlement and
(iii) such Indemnified Party shall have given such Indemnifying Party at
least 30 days' prior notice of its intention to settle. An Indemnifying
Party shall not, without the prior written consent of any Indemnified
Party, effect any settlement of any pending or threatened Proceeding in
respect of which such Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such
22
Indemnified Party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are
the subject matter of such Proceeding and does not include an admission of
fault, culpability or a failure to act, by or on behalf of such
Indemnified Party.
(d) If the indemnification provided for in this Section 9 is
unavailable to an Indemnified Party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or
claims referred to therein, then each applicable Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
losses, damages, expenses, liabilities or claims (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on
the one hand and the Initial Purchasers on the other hand 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 on the one
hand and of the Initial Purchasers on the other in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Initial Purchasers on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of Initial
Purchasers' discounts and commissions but before deducting expenses)
received by the Company bear to the discounts and commissions received by
the Initial Purchasers. The relative fault of the Company on the one hand
and of the Initial Purchasers on the other shall be determined by
reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Initial
Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities and claims referred to above shall be
deemed to include any reasonable legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any Proceeding.
(e) The Company and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 9 were
determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in
subsection (d) above. Notwithstanding the provisions of this Section 9, no
Initial Purchaser shall be required to contribute any amount in excess of
the amount by which the total price at which the Notes resold by it in the
initial placement of such Notes were offered to investors exceeds the
amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Initial Purchasers' respective
23
obligations to contribute pursuant to this Section 9 are several in
proportion to the respective principal amount of Notes they have purchased
hereunder, and not joint. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the
Company and the Initial Purchasers contained in this Agreement shall
remain in full force and effect (regardless of any investigation made by
on behalf of any Initial Purchaser, its directors or officers or any
person who controls such Initial Purchaser within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of the Company, its directors and officers or any person who
controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act), and shall survive any termination
of this Agreement or the issuance and delivery of the Notes. The Company
and the Initial Purchasers agree promptly to notify the other of the
commencement of any litigation or proceeding against it and, in the case
of the Company, against any of the Company's officers and directors, in
connection with the issuance and sale of the Notes, or in connection with
any Memorandum.
10. Effectiveness; Increase in Initial Purchasers' Commitments: This
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
Subject to Sections 8 and 9, if, at the time of purchase, or the
additional time of purchase, as the case may be, any Initial Purchaser shall
default in its obligation to take up and pay for the Notes to be purchased by it
at such time hereunder (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 8 hereof) and if
the aggregate principal amount of Notes which all Initial Purchasers so
defaulting shall have agreed but failed to take up and pay for at such time does
not exceed 10% of the total aggregate principal amount of Notes to be purchased
at such time, the non-defaulting Initial Purchasers shall take up and pay for
(in addition to the aggregate number of Notes they are obligated to purchase at
such time pursuant to Section 1 hereof) the aggregate principal amount of Notes
agreed to be purchased by all such defaulting Initial Purchasers at such time,
as hereinafter provided. Such Notes shall be taken up and paid for by such
non-defaulting Initial Purchaser or Initial Purchasers in such amount or amounts
as such Initial Purchasers may designate with the consent of each Initial
Purchaser so designated or, in the event no such designation is made, such Notes
shall be taken up and paid for by all non-defaulting Initial Purchasers pro rata
in proportion to the aggregate principal amount of Firm Notes set opposite the
names of such non-defaulting Initial Purchasers in Schedule A.
Without relieving any defaulting Initial Purchaser from its
obligations hereunder, the Company agrees with the non-defaulting Initial
Purchasers that it will not sell any Firm Notes hereunder unless all of the Firm
Notes are purchased by the Initial Purchasers (or by
24
substituted Initial Purchasers selected by you with the approval of the Company
or selected by the Company with your approval).
If a new Initial Purchaser or Initial Purchasers are substituted by
the Initial Purchasers or by the Company for a defaulting Initial Purchaser or
Initial Purchasers in accordance with the foregoing provision, the Company or
the Initial Purchasers shall have the right to postpone the time of purchase for
a period not exceeding five business days in order that any necessary changes in
the Final Memorandum and other documents may be effected.
The term "Initial Purchaser" as used in this Agreement shall refer
to and include any Initial Purchaser substituted under this Section 10 with like
effect as if such substituted Initial Purchaser had originally been named in
Schedule A.
If, at the time of purchase, the aggregate principal amount of Firm
Notes which the defaulting Initial Purchaser or Initial Purchasers agreed to
purchase exceeds 10% of the total principal amount of Firm Notes which all
Initial Purchasers agreed to purchase hereunder, and if neither the
non-defaulting Initial Purchasers nor the Company shall make arrangements within
the five business day period stated above for the purchase of all the Firm Notes
which the defaulting Initial Purchaser or Initial Purchasers agreed to purchase
hereunder, this Agreement shall be terminated without further act or deed and
without any liability on the part of the Company to any non-defaulting Initial
Purchaser and without any liability on the part of any non-defaulting Initial
Purchaser to the Company. If, at the additional time of purchase, the aggregate
principal amount of Additional Notes which the defaulting Initial Purchaser or
Initial Purchasers agreed to purchase exceeds 10% of the total principal amount
of Additional Notes which all Initial Purchasers agreed to purchase hereunder,
the non-defaulting Initial Purchasers shall have the option to (a) terminate
their obligation hereunder to purchase the Additional Notes or (b) purchase not
less than the principal amount of Additional Notes that such non-defaulting
Initial Purchasers would have been obligated to purchase in the absence of such
default. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.
11. Information Furnished by the Initial Purchasers: The statements
set forth in the last paragraph on the cover page of the Final Memorandum, the
list of the Initial Purchasers under the caption "Plan of Distribution" in the
Final Memorandum and the statements set forth under the caption "Plan of
Distribution-Over-Allotment, Price Stabilization" and in the third paragraph
under the caption "Plan of Distribution-Transfer Restrictions, Sales in the
United Kingdom" in the Final Memorandum constitute the only information
furnished by or on behalf of the Initial Purchasers.
12. Notices: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by facsimile and, if to
the Initial Purchasers, shall be sufficient in all respects if delivered or sent
to c/o UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Syndicate Department, facsimile no. (000) 000-0000, with a copy to (for
informational purposes only): Attention: Legal Department, facsimile no. (212)
821-4042 and, if to the Company, shall be sufficient in all respects if
delivered or sent to
25
the Company at the offices of the Company at 0000 Xxxx Xxxxxx, Xxxxx 000,
Xxxxxx, Xxxxx 00000, Attention: Chief Financial Officer, facsimile no. (214)
559-3945.
13. Governing Law and Construction: THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES. THE SECTION HEADINGS IN THIS AGREEMENT
HAVE BEEN INSERTED AS A MATTER OF CONVENIENCE OF REFERENCE AND ARE NOT A PART OF
THIS AGREEMENT.
14. Parties at Interest: The Agreement herein set forth has been and
is made solely for the benefit of the Initial Purchasers and the Company and the
controlling persons, directors and officers referred to in Section 9 hereof, and
their respective successors, assigns, executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from the Initial Purchasers) shall acquire or have any right under or
by virtue of this Agreement.
15. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties. Delivery of an executed counterpart by facsimile shall be effective
as delivery of a manually executed counterpart thereof.
16. Submission to Jurisdiction: Except as set forth below, no
Proceeding may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company hereby consents to the jurisdiction of such courts and personal service
with respect thereto. The Company hereby consents to personal jurisdiction,
service and venue in any court in which any Proceeding arising out of or in any
way relating to this Agreement is brought by any third party against the Initial
Purchasers. The Company hereby waives all right to trial by jury in any
Proceeding (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such Proceeding brought in any such court shall be conclusive and binding
upon the Company and may be enforced in any other courts in the jurisdiction of
which the Company is or may be subject, by suit upon such judgment.
17. Initial Purchasers Not Fiduciaries; Waiver and Release. The
Company hereby acknowledges that the Initial Purchasers are acting solely as
initial purchasers in connection with the purchase and sale of the Company's
securities. The Company further acknowledges that the Initial Purchasers are
acting pursuant to a contractual relationship created solely by this Purchase
Agreement entered into on an arm's length basis and in no event do the parties
intend that the Initial Purchasers act or be responsible as a fiduciary to the
Company, its management, stockholders or creditors or any other person in
connection with any activity that the Initial Purchasers may undertake or have
undertaken in furtherance of the purchase and sale of the Company's securities,
either before or after the date hereof. The Initial Purchasers hereby
26
expressly disclaim any fiduciary or similar obligations to the Company, either
in connection with the transactions contemplated by this Purchase Agreement or
any matters leading up to such transactions, and the Company hereby confirms its
understanding and agreement to that effect. The Company and the Initial
Purchasers agree that they are each responsible for making their own independent
judgments with respect to any such transactions, and that any opinions or views
expressed by the Initial Purchasers to the Company regarding such transactions,
including but not limited to any opinions or views with respect to the price or
market for the Company's securities, do not constitute advice or recommendations
to the Company. The Company hereby waives and releases, to the fullest extent
permitted by law, any claims that the Company may have against the Initial
Purchasers with respect to any breach or alleged breach of any fiduciary or
similar duty to the Company in connection with the transactions contemplated by
this Purchase Agreement or any matters leading up to such transactions.
27
If the foregoing correctly sets forth the understanding between the
Company and the Initial Purchasers, please so indicate in the space provided
below for the purpose, whereupon this letter and your acceptance shall
constitute a binding agreement between the Company and the Initial Purchasers.
Very truly yours,
TOREADOR RESOURCES CORPORATION
By: /s/ Xxxxxxx Xxxx
---------------------
Name: Xxxxxxx Xxxx
Title: Senior VP, CFO
Accepted and agreed to as of the date first above written on behalf of itself
and the other Initial Purchasers named in Schedule A hereto:
UBS SECURITIES LLC
By: /s/ Xxxx X. Xxxxx
-------------------------
Name: Xxxx X. Xxxxx
Title: Executive Director
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
SCHEDULE A
Principal Amount
Initial Purchasers of Firm Notes
----------------------------- -------------------
UBS SECURITIES LLC $ 48,750,000
XXXXXX XXXXXX & COMPANY, INC. 3,727,500
FIRST ALBANY CAPITAL INC. 8,587,500
STANFORD GROUP COMPANY 8,580,000
THE SHEMANO GROUP, INC. 5,355,000
-------------------
Total $ 75,000,000
===================
Sch-A-1
SCHEDULE B
U.S. SUBSIDIARIES
Toreador Exploration & Production Inc.
Toreador Acquisition Corporation
Madison Oil Company
Madison (Turkey) Inc.
Madison Petroleum Inc.
Madison Oil Company Europe
Sch-B
SCHEDULE B-1
FOREIGN SUBSIDIARIES
Toreador Exploration Ltd.
Toreador Holdings International SRL
Toreador Romania Ltd.
Toreador Trinidad Exploration and Production LTD
Toreador Turkey Ltd.
Madison Oil France X.X.
Xxxxxxx Energy France S.C.S.
Sch-B-1
EXHIBIT A
OPINION OF COMPANY COUNSEL
1. The Company has been incorporated and is validly existing as a corporation
in good standing under the laws of the State of Delaware, with requisite
corporate power and authority to own, lease and operate its properties and
conduct its business as described in the Final Memorandum and to execute,
deliver and perform its obligations under the Purchase Agreement, the
Indenture, the Notes and the Registration Rights Agreement.
2. Each of the Company's Subsidiaries (other than foreign Subsidiaries) has
been incorporated and is validly existing as a corporation in good
standing under the laws of its respective jurisdiction of incorporation
with requisite corporate power and authority to own, lease and operate its
respective properties and to conduct its respective business as described
in the Final Memorandum; all of the issued shares of capital stock of each
such Subsidiary of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances or
claims, other than pledges pursuant to the credit facilities of the
Company or its Subsidiaries as described in the Final Memorandum.
3. The Company is qualified or licensed to do business as a foreign
corporation and is in good standing in each of Texas and Oklahoma, which
are the only domestic jurisdictions where the Company has certified to us
that the nature of its business or property owned, leased or operated
requires such qualification.
4. The Company has the authorized capitalization as set forth in the Final
Memorandum as of the Closing Date.
5. The filings incorporated by reference in the Final Memorandum (except for
the financial statements and schedules and other financial and reserve
data or information as to which such counsel need not express any opinion)
complied when so filed in all material respects with the requirements of
the Exchange Act and the applicable rules and regulations of the
Commission thereunder.
6. The execution, delivery and performance by the Company of the Purchase
Agreement, the Registration Rights Agreement, the Indenture and the Notes
and consummation of the transactions contemplated thereby, including the
issuance of the Notes and the issuance of the Shares upon conversion of
the Notes, will not conflict with, result in any breach or violation of or
constitute a default under (nor constitute any event which with notice,
lapse of time or both would result in any breach or violation of or
constitute a default under), the charter or by-laws of the Company or any
of the Subsidiaries (other than any foreign Subsidiaries) or any Material
Agreement or any Material Order.
7. The execution, delivery and performance by the Company of the Purchase
Agreement, the Registration Rights Agreement, the Indenture and the Notes
and consummation of the
A-1
transactions contemplated thereby, including the issuance of the Notes and
the issuance of the shares upon conversion of the Notes, will not result
in the violation of any federal or Texas law, regulation or rule or the
Delaware General Corporation Law.
8. Except as described in the Final Memorandum, to our Knowledge, there are
no actions, suits, claims, investigations or proceedings pending or
threatened to which the Company or any of the Subsidiaries is or would be
a party or of which any of their respective properties, is or would be
subject at law or in equity, or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or
agency, which seek to prevent consummation of the transactions
contemplated by the Purchase Agreement, the Registration Rights Agreement
and the Indenture, including the issuance of the Notes, or would, if
adversely determined, result in a judgment, decree or order having,
individually or in the aggregate, a Material Adverse Effect.
9. The Purchase Agreement has been duly authorized, executed and delivered by
the Company and, assuming the due execution and delivery thereof by the
other parties thereto, constitutes a legal, valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms
except (a) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting
creditors' rights generally and general principles of equity and (b) the
rights to indemnity and contribution may be limited by applicable law.
10. The Registration Rights Agreement has been duly authorized, executed and
delivered by the Company and, when duly executed and delivered by the
other parties thereto, will constitute a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms except (a) as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
similar laws affecting creditors' rights generally and general principles
of equity and (b) the rights to indemnity and contribution may be limited
by applicable law.
11. The Indenture has been duly authorized, executed and delivered by the
Company and, when duly executed and delivered by the other parties
thereto, will constitute a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
except (a) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar
laws affecting creditors' rights generally and general principles of
equity and (b) the rights to indemnity and contribution may be limited by
applicable law.
12. The Notes have been duly authorized, executed and delivered by the Company
and, when duly authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with
the terms of the Purchase Agreement, will constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or similar laws affecting creditors' rights generally and
A-2
general principles of equity, and will be entitled to the benefits of the
Indenture and the Registration Rights Agreement.
13. The Shares initially issuable upon conversion of the Notes have been duly
authorized for issuance upon conversion of the Notes; such Shares, when so
issued and delivered in accordance with the terms of the Indenture, will
be duly and validly issued and fully paid and non-assessable; and such
Shares conform in all material respects to the description of the
Company's Common Stock contained in the Final Memorandum.
14. No approval, authorization, consent or order of or filing with any federal
or Texas governmental or regulatory commission, board, body, authority or
agency, or approval of stockholders of the Company, is required for the
issuance and sale by the Company of the Notes or the issuance of Shares
upon conversion of the Notes or the consummation of the transactions as
contemplated in the Purchase Agreement other than (i) as may be required
under the securities or blue sky laws of the various jurisdictions in
which the Notes and the Shares are being offered to or by the Initial
Purchasers; (ii) as may be required by Federal or state securities laws
with respect to the Company's obligations under the Registration Rights
Agreement and the listing of the Shares on the Nasdaq National Market in
connection therewith; or (iii) as have been obtained or made prior to the
Closing Date.
15. It is not necessary, in connection with the issuance and sale of the Notes
to the Initial Purchasers and the offer, resale and delivery of the Notes
by the Initial Purchasers in the manner contemplated by the Purchase
Agreement and Final Memorandum, to register the Notes under the Securities
Act or to qualify the Indenture under the Trust Indenture Act; it being
understood that no opinion is expressed as to any subsequent resale of any
Note or Shares.
16. The Company is not and, after giving effect to the offering and sale of
the Notes and the application of the proceeds thereof as described in the
Final Memorandum will not be, required to register as an "investment
company" as defined in the Investment Company Act of 1940, as amended.
17. The Notes, the Registration Rights Agreement, and the Indenture conform in
all material respects as to legal matters to the respective descriptions
thereof contained in the Final Memorandum under the caption "Description
of notes".
18. The statements in the Final Memorandum under the caption "Description of
capital stock," in so far as such statements purport to constitute a
summary of the terms of the Company's Capital Stock, fairly summarize the
matters referred to therein.
19. The statements in the Final Memorandum under the caption "Certain United
States federal income tax considerations," in so far as such statements
constitute a summary of the United States federal tax laws referred to
therein, fairly summarize in all material respects the matters referred to
therein.
A-3
In addition, such counsel shall furnish the following negative assurance:
Based upon our participation in conferences with officers and other
representatives of the Company, counsel for the Company, representatives
of the independent public accountants of the Company and representatives
of the Initial Purchasers at which the contents of the Final Memorandum
and related matters were discussed, although we are not passing upon and
do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Final Memorandum (except to
the extent stated in paragraphs 4, 13, 17, 18 and 19 above), and we
express no legal opinion with respect thereto, no facts have come to our
attention in the course of our representation of the Company which lead us
to believe that the Final Memorandum as of its date or as of the date
hereof (except for the financial statements and schedules and other
financial data and any information as to reserves or reserve estimates or
quantifications, as to which we do not express any belief) contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
A-4
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
[Date]
UBS Securities LLC
Xxxxxx Xxxxxx & Company, Inc.
First Albany Capital Inc.
Stanford Group Company
The Shemano Group, Inc.
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
consummation of the transactions contemplated by the Purchase Agreement (the
"Purchase Agreement") dated as of __________, between Toreador Resources
Corporation, a Delaware corporation (the "Company"), and you as the Initial
Purchasers named therein, relating to an offering without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance on Rule 144A under
the Act, of ___% Convertible Senior Notes due 2025 (the "Notes"), of the
Company.
I agree that I will not, for a period from the date hereof until the
end of a period of 90 days after the date of the Final Memorandum (as defined in
the Purchase Agreement). without the prior written consent of UBS Securities
LLC, issue, offer, sell, contract to sell, hypothecate, pledge, sell or grant
any option, right or warrant to purchase, or otherwise dispose of, or contract
to dispose of, any shares of common stock, par value $0.15625 per share (the
"Common Stock"), any securities substantially similar to the Notes or the Common
Stock or any securities that are convertible into or exchangeable for the Notes
or shares of Common Stock (other than (i) the issuance of the Notes, (ii) the
issuance of Shares upon conversion of the Notes, (iii) the issuance of shares of
Common Stock upon conversion or exercise of convertible or exercisable or
exchangeable securities outstanding as of the date of the Purchase Agreement or
(iv) the issuance of shares of Common Stock or options pursuant to employee
stock option or employee stock purchase plans existing on, or upon exercise of
warrants outstanding as of, the date of the Purchase Agreement), or enter into
any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of the ownership of the Common Stock or Notes irrespective
of whether any transaction mentioned above is to be settled by delivery of the
Common Stock, the Notes or other securities, in cash or otherwise. The foregoing
notwithstanding, the undersigned may make gifts or transfers of shares of Common
Stock to, or for the benefit of, family members, charitable institutions, and
trusts, limited partnerships or other entities created for estate planning
purposes, the principal beneficiaries of which are family members or charitable
institutions, subject to the condition that any such family member or charitable
institution or other holder shall execute an agreement with the Initial
Purchasers stating that such transferee is receiving and holding the Common
Stock subject to the provisions
B-1
of this agreement. In addition, notwithstanding the foregoing, (i) the 665,200
shares of Common Stock owned by Firesthorn I Limited Partnership and Dane, Falb,
Stone & Co., Inc. shall not be subject to the foregoing restrictions and (ii) up
to 150,000 shares of Common Stock owned beneficially by the undersigned may be
pledged by the undersigned to secure an obligation to purchase certain real
estate with an anticipated closing date of April 2006.
If for any reason the Purchase Agreement shall be terminated prior
to the time of purchase (as defined in the Purchase Agreement), the agreement
set forth above shall likewise be terminated.
Very truly yours,
________________________________________
Name:
Title:
EXHIBIT B-1
LIST OF PARTIES TO EXECUTE LOCK-UP AGREEMENTS
NAME POSITION(S)
1. G. Xxxxxx Xxxxxx III Director, Chief Executive Officer and President
2. Xxxxxxx X. Xxxx Senior Vice President
3. Xxxxxxx X. XxxxXxxxxx Senior Vice President
4. Xxxxxxx Xxxxxxx Vice President
5. Xxxxx X. Xxxxxx Director
6. Xxxxxxx X. Xxxxxx Director
7. Xxxxx X. Xxxx Director
8. Xxxxxx X. Xxxxxxx, Xx. Director
9. Xxxxxxx X. Xxx Director
10. Xxxx Xxxx Director
XxXxxxxxxx
11. X.X. Xxxxxxx, Xx. Director
B-1-1
EXHIBIT B-2
REGISTRATION RIGHTS
Registration Rights Agreement with Xxxxx X. Xxxxxxxx dated February 22, 2005,
granting "piggyback registration rights" covering up to 14,754 shares of the
Company's Common Stock, par value $0.15625 per share.
Registration Rights Agreement with Xxxxx Xxxxxxxx dated February 22, 2005,
granting "piggyback registration rights" covering up to 4,918 shares of the
Company's Common Stock, par value $0.15625 per share.
Registration Rights Agreement with Xxxxx X. Xxxxxxxx dated February 22, 2005,
granting "piggyback registration rights" covering up to 492 shares of the
Company's Common Stock, par value $0.15625 per share.
B-2-1
EXHIBIT C
OFFICERS' CERTIFICATE
1. I have reviewed the Memorandum.
2. The representations and warranties of the Company as set forth in the
Purchase Agreement are true and correct as of the time of purchase [and,
if applicable, the additional time of purchase].
3. The Company has performed all of its obligations under the Purchase
Agreement as are to be performed at or before the time of purchase [and at
or before the additional time of purchase, as the case may be].
4. The conditions set forth in paragraphs (e) and (f) of Section 7 of the
Purchase Agreement have been met.
5. The financial statements and other financial information included in the
Final Memorandum fairly present in all material respects the financial
condition, results of operations, and cash flows of the Company as of, and
for, the periods presented in the Final Memorandum.
C-1
