WARRANT ASSUMPTION AND CONVERSION AGREEMENT
THIS WARRANT ASSUMPTION AND CONVERSION AGREEMENT, dated as of ___________,
1996 (the "Agreement"), is made by and between TESORO PETROLEUM CORPORATION, a
Delaware Corporation ("Parent"), COASTWIDE ENERGY SERVICE, INC., a Delaware
corporation ("Company") and CHEMICAL SHAREHOLDER SERVICES GROUP, INC., a
national banking association, as warrant agent (the "Warrant Agent").
WHEREAS, the respective Board of Directors of Parent, CNRG Acquisition
Corporation (the "Sub") and Coastwide Energy Services, Inc. (the "Company") have
approved a merger of the Company into Sub upon terms and conditions contained in
an Agreement and Plan of Merger dated as of November 20, 1995 (the "Merger
Agreement") by and among the Parent, the Sub and the Company;
WHEREAS, the Company and the Warrant Agent have entered into a Warrant
Agreement dated September 30, 1993 (the "Warrant Agreement") providing that the
Warrant Agent shall act on behalf of the Company in connection with the
issuance, transfer, exchange and replacement of the Warrant Certificates (as
defined in the Warrant Agreement) in respect of the Company's issuance of Class
B warrants (the "Warrants"), and the exercise of the Warrants;
WHEREAS, Section 2.2(i) of the Merger Agreement provides that Parent shall
enter into an amended Warrant Agreement with the Warrant Agent, and it is a
condition to the obligation of the Company to effect the Merger under the Merger
Agreement that the Parent shall have assumed the Warrants at the Effective Time
of the Merger (as defined in the Merger Agreement);
WHEREAS, the Warrant Agreement provides, inter alia, that in the event of
any merger of the Company with or into another corporation, the successor or
purchasing corporation shall execute with the Warrant Agent an agreement,
satisfactory in form to the Warrant Agent and executed and delivered to the
Warrant Agent, that each registered owner of the Warrants ("Holder") shall have
certain rights thereafter;
NOW, THEREFORE, it is hereby agreed;
1. Warrants. Except as the Warrants may otherwise be adjusted as provided
herein, the Warrants are subject to all the terms and conditions included in the
original grant thereof.
2. Assignment, Assumption and Conversion. As of the Effective Time of the
Merger, Parent hereby agrees that at the Effective Time, it will assume the
obligations of the Company under the Warrant Agreement, and further agrees that
each Holder (except for the Company or any wholly-owned subsidiary of the
Company, or the Parent, Sub or any wholly-owned subsidiary of Parent or Sub)
shall have the right (prior to the expiration date of the Warrants), upon
payment of the Warrant Price (as that term is defined in the Warrant Agreement),
to purchase upon exercise of each Warrant the number of shares of Parent Shares
(as that term is defined in the Merger Agreement) and cash that such Holder
would have been entitled to receive at the Effective Time of the Merger if the
Warrant had been exercised immediately prior thereto.
3. Except as the Warrant Agreement may otherwise be modified or amended by
this Agreement, the Parent and the Warrant Agent hereby agree that on and after
the Effective Time of the Merger, each shall have the same rights, duties and
obligations (i) with respect to the Parent, as the Company had under the Warrant
Agreement, and (ii) with respect to the Warrant Agent, as the Warrant Agent had
under the Warrant Agreement.
4. Parent agrees that the number and kind of securities purchasable upon
exercise of each Warrant and the Warrant Price shall be adjusted from time to
time upon the happening of certain events on as nearly equivalent as may be
practicable basis to the adjustments provided for in Section 11 of the Warrant
Agreement.
5. Parent agrees that it will at all times reserve and keep available out of
the aggregate of its authorized but unissued Common Stock, the full number of
shares of Common Stock then deliverable upon exercise of the outstanding
Warrants, as provided in Section 9.1 of the Warrant Agreement.
6. Form of Agreement. The Warrant Agent hereby agrees that this Agreement is
in form satisfactory to it, and by the signature of its duly authorized
representative hereon acknowledges that it has received an executed copy of this
Agreement.
7. Notice.
(a)Parent will at the Effective Time, mail by first class mail, postage
prepaid, to each Holder, notice of the execution of this Agreement.
8. Further Amendments. Any and all of the terms and conditions of the Warrant
Agreement are hereby amended and modified wherever necessary, even though not
specifically addressed herein, so as to conform to the amendments and
modifications contained in this Agreement.
IN WITNESS WHEREOF, Parent, the Company and the Warrant Agent have caused
this agreement to be signed by their respective officers thereunto duly
authorized all as of the date first written above.
TESORO PETROLEUM CORPORATION
By: /s/ Xxxxxxx X. Xxx Xxxxx
Name: Xxxxxxx X. Xxx Xxxxx
Title: Senior Vice President and
Chief Financial Officer
COASTWIDE ENERGY SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
CHEMICAL MELLON SHAREHOLDER SERVICES
L.L.C. (as Warrant Agent)
By: /s/ Xxx X. Xxxxxxx
Name: Xxx X. Xxxxxxx
Title: Asst. Vice Pres.
