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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________)*
Tom Brown, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.10
- --------------------------------------------------------------------------------
(Title of Class of Securities)
11566020
----------------------------------------
(CUSIP Number)
Brigitte M. Dewez
Corporate Secretary
Union Oil Company of California
2141 Rosecrans Avenue, Suite 4000
El Segundo, CA 90245
(310) 726-7600
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 2, 1999
------------------------------------------------------
(Date of Event which Requires Filing of this
Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box /_/.
Check the following box if a fee is being paid with the statement /_/. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
- ------------------------- ----------------------------
CUSIP No. Page 2 of 12 pages
- ------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Union Oil Company of California, a California corporation 95-1315450
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) /_/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00 1
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) /X/
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 5,800,000
REPORTING ------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,800,000
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,800,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/_/
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
____________________________
1The source of funds was the contribution of certain properties
and assets to Tom Brown, Inc.
<PAGE>
SCHEDULE 13D
- ------------------------- ----------------------------
CUSIP No. Page 3 of 12 pages
- ------------------------- ----------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Unocal Corporation, a Delaware corporation 95-3825062
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /x/
(b) /_/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) /X/
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 5,800,000
REPORTING ------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,800,000
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,800,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/_/
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 4 of 12 pages
ORIGINAL REPORT ON SCHEDULE 13D
Item 1. Security and Issuer
-------------------
This statement relates to the shares (the "Shares") of common stock, par
value $0.10 per share (the "Common Stock"), of Tom Brown, Inc., a Delaware
corporation (the "Issuer"), which has its principal executive offices at 508
West Wall, Suite 500, Midland, Texas 79702.
Item 2. Identity and Background
-----------------------
a. Name: Union Oil Company of California, a
California corporation and a wholly
owned subsidiary of Unocal Corporation
("Union")
b. Principal Business: Oil and gas exploration and production
c. Principal Business
Address: 2141 Rosecrans Avenue, Suite 4000
El Segundo, CA 90245
a. Name: Unocal Corporation, a Delaware corporation
("Unocal")
b. Principal Business: Oil and gas exploration and production
c. Principal Business
Address: 2141 Rosecrans Avenue, Suite 4000
El Segundo, CA 90245
Attached as Appendix A is information concerning the executive officers
and directors of Union and Unocal required to be disclosed in response to Item 2
and General Instruction C to Schedule 13D. Such executive officers and directors
may be deemed, but are not conceded to be, controlling persons of Union and
Unocal. Collectively, Union and Unocal are hereinafter referred to as the
"Reporting Persons."
(d) During the past five years, Union has been convicted of a
number of misdemeanor criminal violations. These cases usually involved minor
violations of state or local environmental laws. However, two of these
misdemeanor convictions were significant. In 1994, Union plead no contest to a
number of misdemeanor violations of California statutes which prohibit the
discharge of petroleum into the environment. The case was filed in Municipal
Court for the County of San Luis Obispo, California. Fines and civil penalties
in excess of $1,000,000 were paid to resolve the violations. On July 19, 1995,
Union plead no contest to a number of misdemeanor violations of California state
laws which prohibit the unlawful discharge of airborne contaminants into the
environment. The case was filed in Municipal Court for the County of Contra
Costa, California. A fine of $951,000 was paid to resolve the violations. In
addition, civil penalties in the amount of $2,050,000 were paid in a companion
civil case.
During the past five years, neither Unocal nor any of the persons
referred to in Appendix A has been convicted in a criminal proceeding (excluding
traffic violations and similar misdemeanors).
(e) To the best knowledge of each Reporting Person, none of Union,
Unocal nor any of the persons referred to in Appendix A has been the subject of
a civil judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities laws
or finding any violation with respect to such laws, during the last five years.
<PAGE>
Page 5 of 12 pages
(f) All persons named in Appendix A are citizens of the United
States.
Item 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
On July 2, 1999, Union closed a transaction pursuant to which it sold
certain properties and assets valued at approximately $76 million to the Issuer
in exchange for 5,800,000 shares of Common Stock and $5 million in cash.
Item 4. Purpose of Transaction
----------------------
Union purchased the shares of Common Stock reported herein for the
purpose of investment. Under the Stock Ownership and Registration Rights
Agreement, dated as of June 29, 1999 between Union and the Issuer, a copy of
which is attached hereto as Exhibit B (the "Stock Ownership Agreement"), Union
retains the absolute right to vote its shares of Common Stock as it individually
determines except as otherwise described in Item 6 hereof or in the Stock
Ownership Agreement. With respect to plans or proposals that Union may have that
relate to any change in the present board of directors or management of the
Issuer, including Union's right to designate one member of the board of
directors of the Issuer, please see Article III of the Stock Ownership
Agreement. Subject to the Stock Ownership Agreement, Union may make additional
purchases of Common Stock either in the open market or in private transactions.
Item 5. Interest in Securities of the Issuer
------------------------------------
(a) There were 35,144,489 shares of Common Stock outstanding as of July
2, 1999. The Reporting Persons are deemed to be the beneficial owners of
5,800,000 shares of Common Stock, which constitute approximately 16.5% of the
total issued and outstanding Common Stock as of July 2, 1999.
(b) Union is a wholly owned subsidiary of Unocal Corporation, and
therefore, Unocal may be deemed to control Union. Thus, the two entities may be
deemed to share voting power and investment power with respect to the Shares.
(c) Except for the purchase of the 5,800,000 shares, to the best
knowledge of each Reporting Person, none of Union, Unocal nor any person listed
on Appendix A has effected any transactions in the Shares during the past 60
days.
(d) To the best of the knowledge of the Reporting Persons, none of Union,
Unocal nor any person listed on Appendix A beneficially owns any Common Stock of
the Issuer except as set forth above. To the best of the knowledge of each
Reporting Person, no persons other than Union has the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of Common Stock beneficially owned by the Reporting Persons.
(e) Not applicable.
<PAGE>
Page 6 of 12 pages
Item 6. Contracts, Arrangements, Understandings or Relationships with
respect to Securities of the Issuer
-------------------------------------------------------------------
The Shares acquired by Union were acquired in a private placement and are
restricted securities. Pursuant to the Stock Ownership Agreement, Union retains
the absolute right to vote its shares of Common Stock as it individually
determines except that for so long as Union owns greater than 10% of Common
Stock, it must vote its shares in favor of the director nominees recommended by
the management of the Issuer. In addition, certain transfer restrictions, and
registration rights granted by the Issuer are set forth in the Stock Ownership
Agreement, a copy of which is included as Exhibit B to this Schedule 13D.
Item 7. Material to be filed as Exhibits
--------------------------------
Exhibit "A" - Agreement of Joint Filing.
Exhibit "B" - Stock Ownership and Registration Rights Agreement.
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
Date: July 12, 1999
Unocal Corporation
Union Oil Company of California
By: /s/ Joe D. Cecil
----------------------------------
Name: Joe D. Cecil
Title: Vice President,
and Comptroller
<PAGE>
Page 7 of 12 pages
APPENDIX A
DIRECTORS AND EXECUTIVE OFFICERS
OF UNION OIL COMPANY OF CALIFORNIA
The following table sets forth the name, business address and present principal
occupation or employment of each director and executive officer of Union. Unless
otherwise indicated below, each such person is a citizen of the United States of
America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS ADDRESS
<S> <C>
Roger C. Beach Director, Chairman & Chief Executive Officer
Union Oil Company of California
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
John F. Imle, Jr. Director, Vice Chairman
Union Oil Company of California
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Timothy H. Ling Director, Executive Vice President, North American
Energy Operations, and Chief Financial Officer
Union Oil Company of California
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Charles R. Williamson Director, Executive Vice President, International Energy
Operations
Union Oil Company of California
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
</TABLE>
<PAGE>
Page 8 of 12 pages
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS ADDRESS
<S> <C>
L.E. (Ed) Scott Group Vice President, Diversified Business Group
Union Oil Company of California
376 South Valencia Ave.
Brea, CA 92823
Dennis P.R. Codon Vice President, Chief Legal Officer and General Counsel
Union Oil Company of California
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Joe D. Cecil Vice President and Comptroller
Union Oil Company of California
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Joseph A. Householder Vice President, Corporate Development, and Assistant
Chief Financial Officer
Union Oil Company of California
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
William T. Wilson Vice President, Transportation, Commodity Trading and
Risk Management
Union Oil Company of California
14141 Southwest Freeway
Sugar Land, TX 77478
</TABLE>
<PAGE>
Page 9 of 12 pages
DIRECTORS AND EXECUTIVE OFFICERS
OF UNOCAL CORPORATION
The following table sets forth the name, business address and present principal
occupation or employment of each director and executive officer of Unocal.
Unless otherwise indicated below, each such person is a citizen of the United
States of America.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS ADDRESS
<S> <C>
Roger C. Beach Director, Chairman & Chief Executive Officer
Unocal Corporation
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
John F. Imle, Jr. Director, Vice Chairman
Unocal Corporation
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Timothy H. Ling Executive Vice President, North American
Energy Operations, and Chief Financial Officer
Unocal Corporation
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Charles R. Williamson Executive Vice President, International Energy
Operations
Unocal Corporation
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
L.E. (Ed) Scott Group Vice President, Diversified Business Group
Unocal Corporation
376 South Valencia Ave.
Brea, CA 92823
</TABLE>
<PAGE>
Page 10 of 12 pages
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS ADDRESS
<S> <C>
Dennis P.R. Codon Vice President, Chief Legal Officer and General Counsel
Unocal Corporation
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Joe D. Cecil Vice President and Comptroller
Unocal Corporation
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
Joseph A. Householder Vice President, Corporate Development, and Assistant
Chief Financial Officer
Unocal Corporation
2141 Rosecrans Avenue
Suite 4000
El Segundo, CA 90245
William T. Wilson Vice President, Transportation, Commodity Trading and
Risk Management
Unocal Corporation
14141 Southwest Freeway
Sugar Land, TX 77478
John W. Amerman Former Chairman of the Board and Chief Executive
Director Officer of Mattel, Inc.
2101 Rosecrans Avenue
Suite 6280
El Segundo, CA 90245
</TABLE>
<PAGE>
Page 11 of 12 pages
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME BUSINESS ADDRESS
<S> <C>
John W. Creighton, Jr. Former President and Chief Executive Officer of
Director Weyerhaeuser Company
Madrona Investment Group
1000 Second Avenue
Suite 3700
Seattle, WA 98104
James W. Crownover Former Director of McKinsey & Company, Inc.
Director
c/o McKinsey & Company, Inc.
909 Fannin
Suite 3675
Houston, Texas 77010
Frank C. Herringer Chairman and Chief Executive Officer of Transamerica
Director Corporation
Transamerica Corporation
600 Montgomery Street
San Francisco, CA 94111
Donald B. Rice President and Chief Executive Officer of UroGenesys,
Director Inc.
UroGenesys, Inc.
1701 Colorado Avenue
Santa Monica, CA 90404
Kevin W. Sharer President and Chief Operating Officer of Amgen, Inc.
Director
Amgen Inc.
One Amgen Center
Thousand Oaks, CA 91320-1789
Marina v. N. Whitman Professor of Business Administration and Public Policy,
Director University of Michigan
Institute of Public Policy Studies
University of Michigan
411 Lorch Hall
Ann Arbor, MI 48109-1220
</TABLE>
<PAGE>
Page 12 of 12 pages
INDEX TO EXHIBITS
Item Description
---- -----------
Exhibit A Agreement of Joint Filing
Exhibit B Stock Ownership and Registration Rights Agreement
<PAGE>
EXHIBIT A
Agreement re Joint Filing of Schedule 13D
-----------------------------------------
The undersigned hereby agree that they are filing jointly pursuant to
Rule 13d-1 of the Securities Exchange Act of 1934 the statement dated July 12,
1999, containing the information required by Schedule 13D, for the 5,800,000
Shares of the Common Stock of Tom Brown, Inc. held by Union Oil Company of
California.
Date: July 12, 1999
Unocal Corporation
Union Oil Company of California
By:/s/ Joe D. Cecil
------------------------------
Name: Joe D. Cecil
Title: Vice President,
and Comptroller
A-1
<PAGE>
EXHIBIT B
--------
STOCK OWNERSHIP
AND
REGISTRATION RIGHTS AGREEMENT
between
UNION OIL COMPANY OF CALIFORNIA
and
TOM BROWN, INC.
June 29, 1999
<PAGE>
<TABLE>
<CAPTION>
INDEX
STOCK OWNERSHIP AND
REGISTRATION RIGHTS AGREEMENT
<S> <C> <C>
ARTICLE I
Transfer Restrictions with Respect to TBI Common Stock...........................................................1
Section 1.1 Restrictions on Resale or other Distribution...........................................1
Section 1.2 Acceleration Event.....................................................................3
Section 1.3 Undertaking to File Reports and Cooperate in Rule 144 Transactions.....................3
Section 1.4 Applicability of Article I.............................................................3
ARTICLE II
Voting, Stock Legends............................................................................................4
Section 2.1 Right to Vote Shares...................................................................4
Section 2.2 Legends................................................................................4
ARTICLE III
Board Representation.............................................................................................4
Section 3.1 Board Seat; Nomination.................................................................4
Section 3.2 Unocal Representative..................................................................5
ARTICLE IV
Acquisition Rights; Percentage Retention.........................................................................5
Section 4.1 Acquisition Rights.....................................................................5
Section 4.2 Percentage Retention...................................................................6
ARTICLE V
Standstill.......................................................................................................6
ARTICLE VI
Registration Rights..............................................................................................7
Section 6.1 Demand Registrations...................................................................7
Section 6.2 Piggyback Registrations...............................................................10
Section 6.3 Holdback Agreements...................................................................11
Section 6.4 Information to be Furnished by Unocal.................................................14
Section 6.5 Suspension of Offering Pending Prospectus Supplement or Amendment
......................................................................................................15
Section 6.6 Registration Expenses.................................................................15
Section 6.7 Underwritten Offerings................................................................15
Section 6.8 Indemnification.......................................................................16
Section 6.9 Third Party Registration Rights.......................................................19
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C> <C>
ARTICLE VII
Miscellaneous....................................................................................................19
Section 7.1 Injunctive Relief.....................................................................19
Section 7.2 Severability..........................................................................19
Section 7.3 Amendments............................................................................19
Section 7.4 Descriptive Headings..................................................................19
Section 7.5 Counterparts..........................................................................19
Section 7.6 Notices...............................................................................19
Section 7.7 Law Applicable........................................................................20
Section 7.8 Successors and Assigns................................................................20
</TABLE>
-ii-
<PAGE>
STOCK OWNERSHIP AND
REGISTRATION RIGHTS AGREEMENT
BETWEEN
UNION OIL COMPANY OF CALIFORNIA
AND
TOM BROWN, INC.
THIS STOCK OWNERSHIP AND REGISTRATION RIGHTS AGREEMENT (the
"Agreement"), dated as of June 29, 1999 (the "Closing Date"), is between UNION
OIL COMPANY OF CALIFORNIA, a California corporation ("Unocal"), and TOM BROWN,
INC., a Delaware corporation ("TBI").
W I T N E S S E T H:
WHEREAS, Unocal and TBI have entered into a Purchase and Sale Agreement
(the "Purchase and Sale Agreement") pursuant to which, subject to the terms and
conditions set forth in the Purchase and Sale Agreement, Unocal will sell
certain assets (the "Assets") and TBI will purchase such Assets (the
"Acquisition"); and
WHEREAS, as part of the consideration for the Assets, TBI will issue
and sell to Unocal 5,800,000 shares as adjusted to reflect any stock dividend or
other adjustment (the "TBI Shares") of fully-paid, non-assessable common stock,
par value $.10 per share of TBI ("TBI Common Stock"), in the manner specified in
the Purchase and Sale Agreement; and
WHEREAS, as a condition to the transactions under the Purchase and Sale
Agreement, Unocal and TBI have agreed, upon the terms and subject to the
conditions set forth herein, to enter into this Agreement with respect to the
TBI Common Stock and the respective obligations of TBI and Unocal while Unocal
owns the TBI Common Stock;
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein and in the Purchase and Sale
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
Transfer Restrictions with Respect to TBI Common Stock
Section 1.1 Restrictions on Resale or other Distribution. As a
stockholder of TBI, and with respect to the TBI Common Stock it owns, Unocal is
free to sell, transfer or dispose of its shares as it desires, in its sole
discretion, subject only to the following restrictions:
-1-
<PAGE>
(a) Unocal covenants and agrees (except as provided in Section 1.1(c)
below) that for a period of twenty-four (24) months after the Closing Date, it
will not sell or transfer any beneficial interest in, or otherwise dispose of
any TBI Common Stock, except pursuant to the exercise of registration rights
afforded Unocal herein or otherwise approved by a majority of the non-interested
members of the TBI Board of Directors (the "TBI Board").
(b) After twenty-four (24) months following the Closing Date, Unocal
may sell, transfer or otherwise convey any TBI Common Stock held by it (i) in
accordance with the registration rights provided herein, (ii) in any other
manner, to any other party who Unocal reasonably believes, after diligent good
faith inquiry and consultation with the corporate secretary of TBI who, by the
end of the business day following such consultation, does not provide
information to the contrary, does not prior to or as a result of such sale,
transfer or conveyance, own an interest equal to or greater than ten percent
(10%) of the outstanding TBI Common Stock or (iii) in a transaction which
receives the prior approval of a majority of the non-interested members of the
TBI Board.
(c) The restrictions in Sections 1.1(a) and 1.1(b) shall not be
applicable to:
(i) any sale at any time pursuant to a tender offer, merger or
business combination by a person unaffiliated with Unocal, which offer, merger
or business combination has been recommended or approved by the TBI Board; or
(ii) if the proposed sale, transfer or disposition occurs
pursuant to:
(a) any transfer of all or part of such TBI
Common Stock pursuant to the rights afforded to Unocal under Article VI
below;
(b) a pro rata rights offering or pro rata
distribution to all holders of Unocal common stock;
(c) Rule 144 of the General Rules and Regula-
tions promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended
(the "Securities Act") or any successor rule or regulation thereto;
(d) a pledge of or the granting of a security
interest in such shares to a lender to secure a bona fide loan,
guarantee or financial support to the pledgor;
(e) legislation, a final decree of a court of
competent jurisdiction or a governmental order or demand, requiring
divestiture of the TBI Common Stock, subject to the limitation set
forth in Section 1.1(b)(ii) above;
(f) a transfer of TBI Common Stock among Unocal or
any Unocal subsidiary in which Unocal beneficially owns 80% of the
voting power of the subsidiary's capital stock (a "Unocal Subsidiary"),
so long as (i) such Unocal Subsidiary shall have been
-2-
<PAGE>
required, prior to the transfer thereto, to execute a counterpart of
this Agreement agreeing to the obligations and restrictions applicable
to Unocal, (ii) at least 10-day's notice of the transfer shall be given
to TBI and (iii) Unocal has executed a covenant to retain not less than
80% of the voting power of such Subsidiary's capital stock (a
"Permitted Unocal Subsidiary")
(g) a sale, transfer, or disposition following
an Acceleration Event (as defined in Section 1.2 below); or
(h) a sale, transfer or disposition which is made
after three (3) years following the date Unocal relinquishes or no
longer has a seat on the TBI Board.
Section 1.2 Acceleration Event. For the purposes of this
Agreement, "Acceleration Event" shall mean (i) the acquisition by any person or
group (within the contemplation of Rule 13d-1 of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of beneficial ownership or voting rights
with respect to more than 50% of the voting securities of TBI; (ii) the
consummation of any transaction that triggers the provisions of the Rights
Agreement by and between Tom Brown, Inc. and American Stock Transfer & Trust
Company of New York, dated March 5, 1991 (the "TBI Rights Plan"); (iii) the
removal and the replacement (at any annual or special meeting of stockholders or
otherwise) of a majority of the then current directors of TBI; (iv) the sale or
transfer of all or substantially all of the assets of TBI or (v) the execution
by TBI of an agreement which would, directly or indirectly, result in, or the
approval of the TBI Board or stockholders of, a transaction referenced in
subsections (i), (ii), (iii) or (iv) above.
Section 1.3 Undertaking to File Reports and Cooperate in Rule
144 Transactions. For as long as Unocal or any Unocal Subsidiary shall continue
to hold any TBI Common Stock, TBI shall file, on a timely basis, all annual,
quarterly and other reports required to be filed by it under Sections 13 and
15(d) of the Exchange Act, and the General Rules and Regulations promulgated by
the Commission thereunder, as amended from time to time during the term of this
Agreement. In the event of any proposed sale or transfer of TBI Common Stock by
Unocal or a Unocal Subsidiary, TBI shall cooperate with Unocal or such Unocal
Subsidiary so as to enable such sales to be made in accordance with applicable
laws, rules and regulations, the requirements of TBI's transfer agents, and the
reasonable requirements of the broker through which the sales are proposed to be
executed, and shall, upon request and subject to applicable law, furnish
unlegended certificates representing TBI Common Stock in such numbers and
denominations as Unocal or such Unocal Subsidiary shall reasonably require for
delivery pursuant to such sales.
Section 1.4 Applicability of Article I. The provisions in
Article I shall cease to be applicable at such time as Unocal has sold all of
the TBI Shares and TBI Common Stock acquired pursuant to Sections 4.1 or 4.2
hereof in accordance with or in a manner permitted under the provisions of this
Agreement.
-3-
<PAGE>
ARTICLE II
VOTING, STOCK LEGENDS
Section 2.1 Right to Vote Shares. As a stockholder of TBI,
Unocal will be free, notwithstanding any other provision in this Agreement, to
vote TBI Common Stock held by it in connection with any vote of the stockholders
of TBI provided that for so long as Unocal continues to own shares of TBI Common
Stock representing in excess of 10% of the issued and outstanding shares of TBI
Common Stock, Unocal shall vote its shares in favor of the director nominees
recommended by TBI management. This provision is not intended, however, to
absolve Unocal of any obligations it may have to the other stockholders of TBI;
provided that there should be no inference made from this provision that
obligations, of any kind or nature, are owing from Unocal to any other
stockholder of TBI.
Section 2.2 Legends. (a) To assist in effectuating the
provisions of this Agreement, Unocal hereby consents to the placement of the
following legend on all certificates representing ownership of TBI Common Stock
until such shares have been sold, transferred or disposed of in accordance with
the requirements of Article I hereof:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE PROVISIONS OF A STOCK OWNERSHIP AND REGISTRATION RIGHTS
AGREEMENT DATED JUNE 29, 1999 BETWEEN TBI AND UNOCAL AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE
THEREWITH. A COPY OF SAID AGREEMENT IS ON FILE AT THE OFFICE OF THE
SECRETARY OF TBI.
(b) TBI hereby agrees to remove the foregoing legend promptly upon the
request of Unocal in order to permit a sale or transfer permitted under this
Agreement.
ARTICLE III
BOARD REPRESENTATION
Section 3.1 Board Seat; Nomination. (a) TBI agrees that, as of
the Closing Date, TBI will increase the size of the TBI Board by one and Unocal
shall have the right to designate one person to fill the vacancy created by such
increase as soon as practicable after the Closing Date but no more than 30 days
after the Closing Date. If the person designated to fill such vacancy should
die, become disabled, resign or be removed from serving as a director, TBI
agrees, subject to applicable law, to permit Unocal to designate a successor as
a nominee to fill the vacancy created by such death, disability, resignation or
removal.
(b) Unocal shall have a continuing right to designate a director
nominee for the TBI Board at each election of directors. The right of Unocal to
designate a member to the TBI Board
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shall cease at such time after the Closing Date as Unocal or a Permitted Unocal
Subsidiary as defined in Section 1.1(c)(ii)(f) is no longer a beneficial owner
(as defined in Rule 13d-3 of the General Rules and Regulations promulgated by
the Commission under the Exchange Act) of at least ten percent (10.0%) of the
TBI Common Stock outstanding at the time the determination is made. Unocal
hereby undertakes and agrees that not later than twenty (20) days following
written notice from TBI requesting such information to furnish to TBI for
inclusion in the proxy statement the name of the designee to serve as a member
of the TBI Board and such other information with respect to such designee as is
required to comply with the applicable requirements of Items 401 and 404(a) and
(c) of Regulation S-K with respect to such designee. If Unocal fails to timely
provide such information, Unocal will be deemed to have forfeited its right to
designate a director under this Article III, until the next succeeding election
of directors to the TBI Board pursuant to this Agreement. For so long as Unocal
or a Permitted Unocal Subsidiary continues to retain such 10% ownership, TBI
agrees to and shall include Unocal's designated director nominee in the slate of
directors recommended to the stockholders by the TBI Board in accordance with
this Article III and shall endorse and recommend such nominee to the
stockholders of TBI.
Section 3.2 Unocal Representative. Notwithstanding any
provision herein to the contrary, Unocal's representative on the TBI Board will
be free to take such actions as are consistent with discharging his or her
duties to TBI and its stockholders, in his or her capacity as a director of TBI.
ARTICLE IV
ACQUISITION RIGHTS; PERCENTAGE RETENTION
Section 4.1 Acquisition Rights. Unocal shall not, during the
term of this Agreement, acquire any additional shares of TBI Common Stock other
than the TBI Shares, except: (i) for purchases approved by the majority of the
non-interested members of the TBI Board, (ii) purchases covered by the
percentage retention exceptions described in Section 4.2 below, (iii) for a
period of six months following the Closing Date, purchases on the open market,
from third parties or otherwise, so long as Unocal does not at the end of such
period or thereafter own, of record or beneficially, more than the Maximum
Percentage Ownership (as defined below) of the issued and outstanding shares of
TBI Common Stock and (iv) after the expiration of six months following the
Closing Date, purchases of additional shares of TBI Common Stock up to the
Maximum Percentage Ownership, if Unocal is advised in writing by its independent
public accountants that additional shares of TBI Common Stock are required for
Unocal to receive equity accounting treatment. To the extent practicable, Unocal
shall provide written notice to TBI prior to any acquisition pursuant to this
paragraph, and, in any event, Unocal shall provide such notice within ten (10)
days following such acquisition. For purposes hereof, "Maximum Percentage
Ownership" shall mean 19.5% less the percentage interest represented by TBI
Common Stock, if any, sold by Unocal. The provisions of this Section 4.1 shall
continue until the earlier of (i) such time as Unocal has sold or disposed of
all of the TBI Shares and TBI Common Stock acquired pursuant to Sections 4.1 or
4.2 hereof or (ii) termination of the Standstill set forth in Section 5.1(b).
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Section 4.2 Percentage Retention.
(a) In the event that TBI shall, after the Closing Date, issue
or sell or transfer additional shares of TBI Common Stock (including treasury
shares), Unocal would have the right to maintain its percentage ownership of TBI
Common Stock at the level it was immediately prior to the time of each such
issuance, sale or transfer through (i) acquiring shares of TBI Common Stock from
TBI at the price and on the same terms as the third party purchaser (or if the
issuance price is other than cash or the terms are such as cannot be satisfied
by Unocal then for cash at an agreed value which will not exceed the average
trading price for TBI Common Stock over the twenty (20) trading days preceding
the earlier of the execution of agreements to consummate such third party
transaction and public notice by TBI of such third party transaction), Unocal's
election to purchase such shares of TBI Common Stock from TBI to be made by
Unocal at any time following public notice of the execution of a definitive
agreement respecting the transaction but in any event, within ten (10) business
days following receipt of written notice from TBI of its execution of a
definitive agreement regarding the transaction or (ii) the purchase of TBI
Common Stock in the open market, provided such acquisition is made within six
(6) months of such issuance or sale. TBI shall provide Unocal with written
notice of the execution of such a definitive agreement within 48 hours following
the execution thereof.
(b) Notwithstanding subsection (a) above, following any
acquisition by a third party of shares of TBI Common Stock representing in
excess of 50% of the issued and outstanding shares of TBI Common Stock in a
transaction in which TBI survives as an ongoing entity, the right of Unocal to
acquire shares of TBI Common Stock directly from TBI pursuant to subsection
(a)(i) above shall lapse provided such transaction shall not restrict or impact
Unocal's right to acquire shares of TBI Common Stock from third parties or on
the open market as reflected in subsection (a)(ii) above.
ARTICLE V
STANDSTILL
Section 5.1 Standstill. (a) Except as provided in Section
5.1(d), Unocal will not, and will cause each of its Affiliates not to, singly or
as part of a "partnership, limited partnership, syndicate or other group" (as
those terms are used within the meaning of Section 13(d)(3) of the Exchange Act,
which meanings shall apply for all purposes of this Agreement), directly or
indirectly, through one or more intermediaries or otherwise:
(i) except as provided in Article IV, acquire, offer or
propose to acquire, or agree to acquire, by purchase or otherwise, any
securities entitled to, or that may be entitled to, vote generally in the
election of the TBI Board or any affiliate of TBI ("TBI Affiliate")
(collectively, "Voting Securities") or any direct or indirect rights or options
to acquire (through purchase, exchange, conversion or otherwise) any Voting
Securities;
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(ii) make, or in any way participate in, any "solicitation" or
"proxies" (as such terms are defined or used in Regulation 14A of the Exchange
Act) with respect to the Voting Securities (including by the execution of action
by written consent), become a "participant" in any "election contest" (as such
terms are defined or used in Rule 14a-11 of the Exchange Act) with respect to
TBI or any TBI Affiliate, seek to advise, encourage or influence any person or
entity with respect to the voting of any Voting Securities or demand a copy of
the stock ledger, list of stockholders, or other books and records of TBI or any
TBI Affiliate;
(iii) participate in or encourage the formation of any group
which owns or seeks or offers to acquire beneficial ownership of securities or
assets of TBI or any TBI Affiliates or rights to acquire such securities or
assets or which seeks or offers to affect control of TBI or any TBI Affiliate or
for the purpose of circumventing any provision of this Agreement; or
(iv) except as may be provided in Section 2.1 with respect to
voting on matters submitted to TBI stockholders for a vote, otherwise act, alone
or in concert with others (including by providing financing for another party),
to seek or offer to control or influence, in any manner, the management, the TBI
Board or policies of TBI or any TBI Affiliate.
(b) The standstill provisions in Section 5.1(a) shall remain in effect
until the earlier of (i) three (3) years after Unocal relinquishes or no longer
has its director's seat on the TBI Board or (ii) a Change of Control of TBI. For
the purposes hereof, "Change of Control" shall mean either (i) the acquisition
by any person or group (within the contemplation of Rule 13d-1 of the Exchange
Act) of beneficial ownership of more than 50% of the voting securities of TBI;
(ii) the consummation of any transaction that triggers the provisions of the TBI
Rights Plan in effect at the time of the consummation of such transaction; (iii)
the removal and the replacement at any annual or special meeting of stockholders
of a majority of the current directors of TBI; or (iv) the sale or transfer of
all or substantially all of the assets of TBI.
(c) The standstill provisions in Section 5.1 above shall supersede and
replace the standstill provisions contained in that certain Confidentiality
Agreement dated June 16, 1998 between Unocal and TBI pertaining to the receipt
by Unocal of certain information relating to TBI.
(d) Notwithstanding any other provisions in this Article V, as a
stockholder of TBI, and with respect to the TBI Shares or such additional shares
of TBI Common Stock that it may acquire in accordance with Article IV, Unocal
may freely sell, transfer or dispose of such shares as it desires, in its sole
discretion (subject only to the restrictions in Article I).
ARTICLE VI
REGISTRATION RIGHTS
Section 6.1 Demand Registrations. (a) At any time after
twenty-four (24) months following the Closing Date, Unocal by written
notice to TBI (a "Demand Notice") may require TBI
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to effect a registration (a "Demand Registration") of Registrable Securities (as
defined below) under the Securities Act for sale; provided, that (i) Unocal may
not require TBI to effect more than two (2) Demand Registrations, and (ii) the
aggregate number of shares of Registrable Securities required to be registered
in each Demand Registration shall be at least 2 million shares. Upon receipt of
any Demand Notice, TBI will give prompt written notice of the request for
registration to each holder of Registrable Securities, and TBI will include in
the Demand Registration all Registrable Securities with respect to which TBI
receives written requests for inclusion therein during the thirty (30) days
after notice is given. "Registrable Securities" means (i) the TBI Shares, (ii)
any other shares of TBI Common Stock which Unocal acquires as permitted under
this Agreement and (iii) any securities issued or issuable with respect to any
such common stock by way of stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. The terms "register," "registered" and
"registration" as used in this Agreement shall refer to a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act and applicable rules and regulations thereunder, and the
declaration or ordering of the effectiveness of such registration statement.
(b) Registration Statement Form. Demand Registrations shall be on such
appropriate registration form of the Commission (i) as shall be selected by TBI
and shall be acceptable to Unocal and (ii) as shall permit the disposition of
such Registrable Securities in accordance with the intended method or methods of
disposition specified in Unocal's request for such registration.
(c) TBI may utilize form S-2 or S-3 (or any similar "short form") under
the Securities Act to effect any Demand Registration so long as the use of such
form is permitted under the Securities Act and the regulations promulgated
thereunder and the use of such a form will not (in the reasonable judgment of
the participating holders of Registrable Securities) adversely affect the
marketing or sale price of the shares proposed to be sold in the offering.
(d) Effective Registration Statement. A registration requested pursuant
to Section 6.1(a) shall not be deemed to have been effected and will not be
considered one of the Demand Registrations which may be requested pursuant to
this Agreement if (i) a registration statement with respect thereto does not
become effective or if the request for the Demand Registration is withdrawn at
the request of TBI or at the request of Unocal provided if Unocal makes the
withdrawal request, Unocal pays the reasonable out-of-pocket expenses incurred
by TBI with respect to such withdrawn offering prior to effectiveness, (ii)
after it has become effective, it does not remain effective for a period of at
least 180 days (unless Registrable Securities registered thereunder have been
sold or disposed of prior to the expiration of such 180-day period) or such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason and has not thereafter become effective, (iii) the conditions to closing
specified in any underwriting agreement entered into in connection with such
registration are not satisfied or waived other than by reason of the failure or
refusal of Unocal to satisfy or perform a condition to such closing or (iv)
Unocal is not able to register at least 2 million shares. Except as set forth
above, TBI shall pay all Registration Expenses (as defined in Section 6.7
herein) in connection with any such registration initiated but not so effected.
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(e) Other Securities; Priority on Demand Registrations. Whenever TBI
shall effect a Demand Registration pursuant to Section 6.1(a) in connection with
an underwritten offering by Unocal, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless the managing underwriter of such offering shall have advised TBI and
Unocal in writing that the inclusion of such other securities would not have a
material adverse effect on such offering. In the event that the managing
underwriters of a requested Demand Registration advise TBI in writing that in
their opinion the number of securities proposed to be included in any such
registration exceeds the number of securities which can be sold in such offering
without having a material adverse impact on the offering, TBI shall include in
such registration only the number of Registrable Securities which in the opinion
of such underwriters can be sold without having a material adverse effect on the
offering. If the number of securities which can be sold in a Demand Registration
exceeds the number of shares of securities requested to be sold, TBI shall
include in such Demand Registration (i) first, all of Registrable Securities
requested to be included therein by Unocal, and (ii) second, securities to be
included by TBI, and (iii) third, other securities requested to be included in
such registration.
(f) Restrictions on Demand Registrations. TBI shall not be obligated to
effect any Demand Registration within four (4) months after the effective date
of a previous public offering of TBI Common Stock. In addition, TBI may postpone
(such postponement is referred to herein as a "Permitted Interruption") for a
reasonable period of time (not to exceed 90 days, which may not thereafter be
extended) the filing of a registration statement for a Demand Registration if,
at the time it receives a request for such registration (i) TBI is conducting an
offering of TBI Common Stock and is advised by its investment banker that such
offering would be affected adversely by the registration so demanded and TBI
furnishes an officer's certificate to that effect or (ii) the TBI Board shall
determine in good faith that such offering will interfere with a pending or
contemplated financing, merger, acquisition, sale of assets, recapitalization or
other similar corporate action of TBI and TBI furnishes an officer's certificate
to that effect. After such Permitted Interruption, TBI shall effect such
registration as promptly as practicable without further request from Unocal
unless such request has been withdrawn. TBI shall not invoke Permitted
Interruptions more than twice per twelve (12) month period but in any event
shall not exceed 150 days in the aggregate. In the event that TBI invokes a
Permitted Interruption hereunder and in the reasonable discretion of the TBI
Board of Directors the need for TBI to continue the Permitted Interruption
ceases for any reason, including, without limitation, abandonment or completion
of the transaction giving rise to such Permitted Interruption, TBI shall
promptly provide written notice to Unocal that such Permitted Interruption is no
longer applicable and provide Unocal the opportunity to then request a Demand
Registration.
(g) Selection of Underwriters. Unocal shall have the right to select
such investment banker(s) and manager(s) as shall be reasonably acceptable to
TBI to administer the offering of Registrable Securities for which a Demand
Registration is requested. Unocal and TBI shall negotiate the terms of the
underwriters' fees and expenses, the underwriting discount and commission and
the transfer taxes, provided, however, that TBI shall not be required to pay any
fees, expenses, or other costs attributable to the Demand Registration except as
stated herein or that are otherwise not usual and customary.
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(h) Acceleration Event. In the event of an occurrence or transaction
constituting an Acceleration Event, TBI shall, upon request of Unocal and
subject to compliance with applicable law and SEC rules and regulations, proceed
(without regard to or application of any Permitted Interruption) to immediately
register all of Unocal's remaining unregistered Registrable Securities at or
before such occurrence or the consummation of any such transaction.
Section 6.2 Piggyback Registrations. (a) General. Whenever TBI
proposes to register any shares of TBI Common Stock under the Securities Act
(other than registrations solely for shares to be issued in connection with any
employee benefit plan on Form S-8 (or any successor form thereto) or a merger,
consolidation or other business combination registered on Form S-4 (or any
successor form thereto)) and the registration form to be used may be used for
the registration of Registrable Securities (a "Piggyback Registration"), at any
time after the Closing Date, TBI shall give prompt written notice (in any event
within 10 business days after its receipt of notice of any exercise of other
registration rights) to Unocal of its intention to effect such a registration
and shall use commercially reasonable efforts to include in such registration
all of Registrable Securities with respect to which TBI receives from Unocal a
written request for inclusion therein within 20 days after Unocal's receipt of
TBI's notice, which request shall specify the number of the shares of
Registrable Securities to be disposed of by Unocal. If TBI elects, prior to
effectiveness, not to proceed with a primary registration of TBI Common Stock,
it shall not be obligated to register any Registrable Securities, unless such
primary registration was initiated as provided in Section 6.1(a) after TBI
received a request for a Demand Registration.
(b) Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of TBI and the managing
underwriter(s) of such offering advise TBI in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can reasonably be sold in such offering without having a material
adverse impact on the offering, then TBI shall include in such registration (i)
first, subject to Section 6.2(c) below, the securities that TBI proposes to
sell, (ii) second, Registrable Securities requested to be included therein by
Unocal and parties which as of the Closing Date had registration rights on a
pari passu basis with Unocal and (iii) third, other securities requested to be
included in such registration.
(c) Mandatory Inclusion of Registrable Securities. In the event that
the number of Registrable Securities requested to be included by Unocal in any
registration pursuant to the piggyback registration rights afforded herein is
reduced, then TBI will, to the extent requested by Unocal, reduce the number of
shares which TBI desires to offer so that Unocal can include in such offering
shares representing up to 20% of the entire offering.
(d) Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of TBI's securities
other than Unocal and the managing underwriter(s) of such offering advise TBI in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can reasonably be sold in such
offering, then TBI shall include in such registration (i) first, if such
registration is being made on behalf of other stockholders of TBI exercising
demand registration rights, then the securities so
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requested to be included therein in accordance with such demand registration
rights, (ii) second, Registrable Securities requested to be included in such
registration by Unocal and parties which as of the Closing Date had registration
rights on a pari passu basis with Unocal and (iii) third, other securities
requested to be included in such registration. If the managing underwriter of
such offering subsequently advises TBI in writing that the number of securities
which can be sold exceeds the number of securities included in the offering, TBI
shall include in the registration such additional securities that (i) first,
Unocal had originally requested be included in the registration and (ii) second,
others had originally proposed to include in the registration.
(e) Other Registrations. If (i) TBI has previously filed a registration
statement with respect to any of Registrable Securities pursuant to Section
6.1(a) or 6.2(b) and (ii) such previous registration has not been withdrawn or
abandoned, TBI shall not file or cause to be effective any other registration of
any of its equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the Securities Act (except on Form
S-8 or S-4 or any successor form), whether on its own behalf or at the request
of any holder or holders of such securities, until a period of at least ninety
(90) days has elapsed from the effective date of such previous registration.
(f) Piggyback Not A Demand Registration. Should Unocal's participation
in a registration be pursuant to a Piggyback Registration in connection with (i)
an underwritten primary registration on behalf of TBI as described in Section
6.2(a), or (ii) an underwritten secondary registration on behalf of holders of
TBI's securities other than Unocal as described in Section 6.2(d), then such
participation by Unocal shall not constitute a Demand Registration for purposes
of determining the number of Demand Registrations Unocal is entitled to pursuant
to Section 6.1(a).
(g) Universal Shelf. TBI reserves the right to file and secure the
effectiveness under the Securities Act of a registration statement on Form S-3
covering undifferentiated debt and equity securities (the "Shelf Registration
Statement"). The undifferentiated securities may be converted into specific
types of debt or equity securities by describing the security in a supplement to
the prospectus set forth in the Shelf Registration Statement (a "Prospectus
Supplement"). In the event that TBI specifically considers proposing to offer
and sell TBI Common Stock pursuant to a Prospectus Supplement ("Offering"), it
shall give Unocal notice of such consideration. Such notice shall not, in any
circumstance, be delivered less than five (5) business days prior to delivery of
the Acceleration Notice (as defined below). TBI shall notify Unocal, in writing,
of its intention to file the Prospectus Supplement and shall specify the number
of shares of TBI Common Stock that it proposes to sell in the Offering (the
"Accelerated Notice"). Unocal may elect to include Registrable Securities in the
Offering by providing written notice to TBI within twenty four hours after its
receipt of the Accelerated Notice that it desires to include Registrable
Securities in the Offering, with such notice to specify the number of shares of
Registrable Securities to be included on behalf of Unocal. Registrable
Securities shall not be deemed to be registered under Securities Act for
purposes of this Agreement until a Prospectus Supplement expressly referring to
the offering and sale of TBI Common Stock for the account of Unocal is filed
with the Commission. In order to assure that sufficient securities have been
registered under the Shelf Registration Statement to
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accommodate the sale by Unocal of Registrable Securities from time to time
pursuant to one or more Prospectus Supplements, TBI shall reflect in the Shelf
Registration Statement that 20% of the securities registered thereunder have
been reserved for sale by Unocal if and only if (i) TBI elects to sell TBI
Common Stock pursuant to a Prospectus Supplement and (ii) Unocal timely elects
to include Registrable Securities for sale therein as required by this Section
6.2(g). To the extent that the express terms of this Section 6.2(g) are
inconsistent with the other provisions of Section 6.2, the terms of this Section
6.2(g) shall prevail.
Section 6.3 Holdback Agreements. (a) General. Unocal agrees
not to effect any public sale or distribution of equity securities of TBI, or
any securities convertible into or exchangeable or exercisable for such
securities, including, without limitation, sales pursuant to Rule 144 (or any
similar rule then in effect), during the 10 days prior to and the 90 days
beginning on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration in which shares of Registrable Securities
are included (except as part of such underwritten registration) unless the
underwriters managing the registered public offering otherwise agree.
(b) Agreement by TBI. TBI agrees not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the 10 days prior to and
during the 90 days beginning on the effective date of any underwritten Demand
Registration or any underwritten Piggyback Registration in which shares of
Registrable Securities are included unless the underwriters managing the
registered public offering and Unocal otherwise agree.
(c) Registration Procedures. Whenever Unocal requests registration
pursuant to this Agreement, TBI shall use commercially reasonable efforts to
effect the registration and the sale of such shares of Registrable Securities
for which registration is requested in accordance with the intended method of
disposition thereof, and pursuant thereto TBI shall as expeditiously as
possible:
(i) prepare and file with the Commission a registration
statement with respect to such securities and use commercially reasonable
efforts to cause such registration statement to become effective (provided that
before filing a registration statement or prospectus or any amendments or
supplements thereto, TBI will furnish to Unocal and the counsel selected by
Unocal copies of all documents proposed to be filed, which documents will be
subject to the review of such counsel);
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period of not less than 180 days after such registration statement is declared
effective, provided that TBI shall have no obligation pursuant to this Agreement
to maintain the effectiveness of such registration statement after the sale of
the securities registered thereunder, and shall comply with the provisions of
the Securities Act with respect to the disposition of all securities owned by
Unocal that are covered by such registration statement during such period in
accordance with the intended methods of disposition by Unocal;
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(iii) furnish to Unocal such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary prospectus)
and such other documents as Unocal may request in order to facilitate the
disposition of the shares owned by Unocal;
(iv) use commercially reasonable efforts to register or
qualify such shares of Registrable Securities under such other securities or
Blue Sky Laws of such jurisdictions as Unocal requests and do any and all other
commercially reasonable acts and things which may be necessary or advisable to
enable Unocal to consummate the disposition in such jurisdictions of Registrable
Securities (provided that TBI will not be required to (A) qualify generally to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this subclause (iv), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in such jurisdiction);
(v) cause all such Registrable Securities to be listed on each
securities exchange on which securities issued by TBI that are of the same class
as Registrable Securities are then listed;
(vi) provide a transfer agent and registrar for all such
Registrable Securities no later than the effective date of such registration
statement;
(vii) obtain a "cold comfort" letter from TBI's independent
public accountants in customary form, covering such matters of the type usually
and customarily covered by "cold comfort" letters delivered to underwriters, and
covering such other matters as Unocal may reasonably request; and obtain an
opinion of counsel for TBI in customary form, covering such matters of the type
usually and customarily covered in opinions of legal counsel delivered to
underwriters, and covering such other matters as Unocal may reasonably request;
(viii) if underwriters are engaged in connection with any
registration referred to in this Agreement, TBI shall provide usual and
customary indemnification, representations, covenants, opinions, and other
assurances to the underwriters in form and substance reasonably satisfactory to
such underwriter as consistent with current practice in the marketplace;
(ix) notify Unocal and the managing underwriters, if any,
promptly, and (if requested by any such person) confirm such advice in writing,
(A) when a prospectus or any prospectus supplement or post-effective amendment
has been filed, and, with respect to a registration statement or any
post-effective amendment, when the same has become effective, (B) of any request
by the Commission for amendments or supplements to a registration statement or
related prospectus or for additional information, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of a registration
statement or the initiation of any proceedings for that purpose, (D) of the
receipt by TBI of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose, (E) of the
happening of any event which requires the making of any changes in a
registration statement or related prospectus so that such documents will not
contain any
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untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading,
in light of the circumstances under which such statements are made, and (F) of
TBI's reasonable determination that a post-effective amendment to a registration
statement would be required;
(x) notify Unocal at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the occurrence
of any event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
Unocal, TBI shall prepare a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such shares such amended or
supplemented prospectus shall not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(xi) use commercially reasonable efforts to obtain as soon as
reasonably practicable the withdrawal of any order suspending the effectiveness
of a registration statement, or the lifting of any suspension of the
qualification of any of Registrable Securities for sale in any jurisdiction;
(xii) if requested by the managing underwriters or Unocal,
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriter(s) and Unocal agree should be included
therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being sold to such underwriters, the purchase price being
paid therefor by such underwriters and with respect to any other terms of the
underwritten (or best efforts underwritten) offering of Registrable Securities
to be sold in such offering; make all required filings of such prospectus
supplement or post-effective amendment as soon as notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
supplement or make amendments to any registration statement if requested by
Unocal or any underwriter of such shares;
(xiii) furnish to Unocal and each managing underwriter,
without charge, such signed copies of the registration statement or statements
and any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference) as Unocal or managing underwriter
may reasonably request;
(xiv) cooperate with Unocal and the managing underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing shares to be sold and not bearing any restrictive legends unless
required by applicable law; and enable such shares to be in such denominations
and registered in such names as the managing underwriter(s) may request at least
two business days prior to any sale of shares to the underwriters;
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(xv) in the case of an underwritten offering, enter into such
usual and customary agreements (including underwriting agreements in usual and
customary form) and take all such other actions as Unocal or the underwriter(s),
if any, request and which TBI can reasonably perform in order to expedite or
facilitate the disposition of such Registrable Securities; and
(xvi) make available for inspection by Unocal, any underwriter
participating in any disposition pursuant to such registration statement, and
any attorney, accountant or other agent retained by any such seller or
underwriter, all financial and other records, pertinent corporate documents and
properties of TBI, and cause TBI's officers, directors, employees and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement.
Section 6.4 Information to be Furnished by Unocal. In
connection with any registration of Registrable Securities hereunder, TBI may
require Unocal to furnish TBI with such information regarding Unocal and the
distribution of such shares as TBI may from time to time reasonably request in
writing in order to comply with the Securities Act. Unocal agrees to notify TBI
as promptly as practicable of any inaccuracy or change in information previously
furnished to TBI or of the occurrence of any event in either case as a result of
which any prospectus relating to such registration contains untrue statements of
a material fact regarding Unocal or the distribution of such shares required to
be stated therein or necessary to make the statement therein not misleading in
light of the circumstances under which such statements were made, and to
promptly furnish to TBI any additional information required to correct and
update any previously furnished information or required such that such
prospectus shall not contain, with respect to Unocal or the distribution of such
shares, an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which such statements are made.
Section 6.5 Suspension of Offering Pending Prospectus
Supplement or Amendment. Unocal agrees that, upon receipt of any notice from TBI
of the occurrence of any event of the kind described in Section 6.3(c)(ix)(B),
(C), (D), (E) or (F) hereof, Unocal will forthwith discontinue disposition of
Registrable Securities covered by such registration statement or prospectus
until such holder's receipt of the copies of the supplemented or amended
prospectus relating to such registration statement or prospectus, or until it is
advised in writing by TBI that the use of the applicable prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in such prospectus, and, if so directed by TBI,
Unocal will deliver to TBI (at TBI's expense) all copies, other than permanent
file copies then in Unocal's possession, of the prospectus covering Registrable
Securities current at the time of receipt of such notice.
Section 6.6 Registration Expenses. (a) General. All expenses
incident to TBI's performance and execution of Demand Registrations or Piggyback
Registrations, and TBI's performance of, or compliance with, this Agreement,
including without limitation, all registration and filing fees, fees and
expenses of compliance with securities or Blue Sky Laws, expenses and fees
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for listing the securities on the appropriate securities exchanges, cost of
liability insurance, all internal expenses, the expense of any annual audit or
quarterly review, printing expenses, messenger and delivery expenses, fees and
disbursements of counsel for TBI and all independent certified public
accountants (including the expenses of any special audit and "cold comfort"
letters required by or incident to such performance), and usual and customary
fees and costs of underwriters (excluding gross spreads, discounts and
commissions and fees of underwriters, selling brokers, dealer managers or
similar securities industry professionals relating to the distribution of
Registrable Securities) and other persons retained by TBI (all such expenses
being herein called "Registration Expenses"), shall be borne by TBI.
(b) Reimbursement for Counsel Fees. In connection with each Demand
Registration, TBI shall also reimburse Unocal for its reasonable legal fees of
outside counsel up to $20,000.
(c) Payment of Expenses by Unocal. Unocal shall pay the underwriters'
fees and expenses, the underwriters' gross spreads, discount and commissions and
the commissions and fees, if any, payable in respect of selling brokers, dealer
managers or similar securities industry professionals, and transfer taxes
allocable to the registration of Unocal's securities so included in any Demand
or Piggyback Registration pursuant to this Agreement.
Section 6.7 Underwritten Offerings. (a) Underwriting
Agreement. In any offering by Unocal pursuant to a registration requested under
Sections 6.1(a) or 6.2(a), TBI shall enter into a standard form of underwriting
agreement which shall be reasonably satisfactory in form and substance to TBI
and Unocal and the underwriters and which shall contain representations,
warranties and agreements (including indemnification agreements to the effect
and consistent with that provided in Section 6.8 hereof) as are usually and
customarily included by an issuer in underwriting agreements with respect to
primary distributions. Unocal shall be a party to such underwriting agreement
and may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, TBI to and for the
benefit of such underwriters shall also be made to and for the benefit of Unocal
and that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of Unocal.
(b) Condition to Participation and Qualifications to Obligations Under
Registration Covenants. The obligations of TBI to use commercially reasonable
efforts to cause Registrable Securities to be registered under the Securities
Act are subject to each of the conditions that Unocal may not participate in any
underwritten offering hereunder unless Unocal (a) agrees to sell Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
Section 6.8 Indemnification. (a) By TBI. In the event of
any registration of any shares of Registrable Securities under the Securities
Act, TBI will, and hereby does, indemnify and
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hold harmless, to the fullest extent permitted by law, Unocal, its directors and
officers, each other person who participates as an underwriter in the offering
or sale of such securities and each other person, if any, who controls any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages, liabilities and expenses, joint or several, (or actions
or proceedings, whether commenced or threatened, in respect thereof) to which
they or any of them may become subject under the Securities Act or any other
statute or common law, including any amount paid in settlement of any
litigation, commenced or threatened, and to reimburse them for any legal or
other expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as any such losses, claims, damages, liabilities,
expenses or actions arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the registration
statement relating to the sale of such securities or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under Blue Sky or other securities laws or jurisdictions in which
Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged omission to state therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, if used prior to the
effective date of such registration statement (unless such statement is
corrected in the final prospectus and TBI has previously furnished copies
thereof to Unocal and the underwriters), or contained in the final prospectus
(as amended or supplemented if TBI shall have filed with the Commission, and
furnished to Unocal and the underwriters of such offering copies thereof, prior
to the written confirmation of any sale to the person asserting liability, any
amendment thereof or supplement thereto) if used within the period during which
TBI is required to keep the registration statement to which such prospectus
relates current, or the omission or alleged omission to state therein (if so
used) a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the indemnification agreement contained herein shall not (i) apply
to such losses, claims, damages, liabilities, expenses or actions arising out
of, or based upon, any such untrue statement or alleged untrue statement, or any
such omission or alleged omission, if such statement or omission was made in
reliance upon and in conformity with written information furnished to TBI by
Unocal or such underwriter specifically for use in connection with preparation
of the registration statement, any preliminary prospectus or final prospectus
contained in the registration statement, any such amendment or supplement
thereto or any Blue Sky Filing or (ii) inure to the benefit of any underwriter
or any person controlling such underwriter, to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of such person's failure to send or give a copy of the final
prospectus, as the same may be then supplemented or amended, to the person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such person if such statement or omission was corrected in such
final prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any such
director, officer or controlling person and shall survive the transfer of such
securities by such seller.
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(b) By Unocal. TBI may require, as a condition to including any TBI
Common Stock in any registration statement filed pursuant to Section 6.1 or 6.2,
that TBI shall have received an undertaking satisfactory to it from Unocal, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 6.8(a)) TBI, each director of TBI, each officer of TBI and each
other person, if any, who controls TBI within the meaning of the Securities Act,
each other person who participates as an underwriter in the offering or sale of
such securities and each other person, if any, who controls any such underwriter
within the meaning of the Securities Act with respect to any untrue statement or
alleged untrue statement in, or omission or alleged omission from, such
registration statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, if such statement or omission
was made in reliance upon and in conformity with written information furnished
to TBI by Unocal relating to Unocal specifically for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, amendment
or supplement. Such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of TBI or any such director, officer
or controlling person and shall survive the transfer of such securities by such
seller. In no event shall any indemnity paid by Unocal to TBI pursuant to this
Section 6.8(b), or otherwise, exceed the proceeds received by Unocal in such
offering.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Sections 6.8(a) or 6.8(b), such indemnified party will, if
a claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Section 6.8(a) or
6.8(b), as the case may be, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, the indemnifying party shall be entitled
to participate in and, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. In the event that the indemnifying party advises an indemnified
party that it will contest a claim for indemnification hereunder, or fails,
within 30 days of receipt of any indemnification notice to notify, in writing,
such person of its election to defend, settle or compromise, at its sole cost
and expense, any action, proceeding or claim (or discontinues its defense at any
time after it commences such defense), then the indemnified party may, at its
option, defend, settle or otherwise compromise or pay such action or claim. In
any event, unless and until the indemnifying party elects in writing to assume
and does so assume the defense of any such claim, proceeding or action, the
indemnified party's costs and expenses arising out of the defense, settlement or
compromise of any such action, claim or proceeding shall be losses subject to
indemnification hereunder. The indemnified party shall cooperate fully with the
indemnifying party
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in connection with any negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the indemnified party which relates to such action or
claim. The indemnifying party shall keep the indemnified party fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. If the indemnifying party elects to defend any such action or
claim, then the indemnified party shall be entitled to participate in such
defense with counsel of its choice at its sole cost and expense. If the
indemnifying party does not assume such defense, the indemnified party shall
keep the indemnifying party apprised at all times as to the status of the
defense; provided, however, that the failure to keep the indemnifying party so
informed shall not affect the obligations of the indemnifying party hereunder.
No indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its written consent; provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the consent of the indemnified
party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation.
(d) Contribution. If the indemnification provided for in or pursuant to
Section 6.8(a) or 6.8(b) is due in accordance with the terms thereof, but is
held by a court to be unavailable or unenforceable in respect of any losses,
claims, damages, liabilities or expenses 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 person as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative fault of the indemnifying party on the one hand and of the
indemnified person on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, by such party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement, or omission. In no event shall the liability of Unocal
be greater in amount than the amount of proceeds received by Unocal upon such
sale.
Section 6.9 Third Party Registration Rights. TBI will not
hereafter grant any registration rights to third parties which are prior to or
pari passu with the registration rights afforded Unocal hereunder, without
Unocal's prior written consent.
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ARTICLE VII
MISCELLANEOUS
Section 7.1 Injunctive Relief. Each party acknowledges and
agrees that the other party could be irreparably damaged in the event any of the
provisions of this Agreement were not performed by the party required to perform
the same in accordance with their specific terms or were otherwise breached.
Each party accordingly agrees that the other party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement in any court of the United States or any state thereof having
jurisdiction, in addition to any remedy to which a party may be entitled at law
or equity.
Section 7.2 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remainder of the terms, provisions,
covenants and restrictions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such
which may be hereafter declared invalid, void or enforceable.
Section 7.3 Amendments. This Agreement contains the entire
understanding of the parties with respect to TBI Common Stock, and may be
amended only by an agreement in writing signed by the parties hereto.
Section 7.4 Descriptive Headings. Descriptive headings are
for convenience only and shall not control or affect the meaning or construction
of any provision of this Agreement.
Section 7.5 Counterparts. For the convenience of the parties,
any number of counterparts of this Agreement may be executed by one or more
parties hereto and each such executed counterpart shall be, and shall be deemed
to be, an original instrument.
Section 7.6 Notices. All notices, consents, requests,
instructions, approvals and other communications provided for herein and all
legal process in regard hereto shall be validly given, made or served, if in
writing and delivered personally, by facsimile transmission (except for legal
process) or sent by registered mail, postage prepaid, if to:
To Unocal:
Union Oil Company of California
14141 Southwest Freeway
Sugar Land, Texas 77478
Fax No. (281) 287-5170
Attention: Director, Business Development
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with a copy to:
Union Oil Company of California
d.b.a. Spirit Energy 76
14141 Southwest Freeway
Sugar Land, Texas 77478
Fax No. (281) 287-7376
Attention: Vice President and General Counsel
To TBI:
Tom Brown, Inc.
555 17th St., Suite 1850
Denver, Colorado 80202
Fax No.: 303-260-5001
Attention: General Counsel
or to such other address and facsimile numbers as any part hereto may, from time
to time, designate in a written notice given in a like manner. Notice given by
facsimile transmission shall be deemed delivered on the day the sender receives
facsimile transmission confirmation that such notice was received at the
facsimile number of the addressee. Notice given by mail as set out above shall
be deemed delivered three days after the date the same is postmarked.
Section 7.7 Law Applicable. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the State of Texas
(without regard to the principles of conflicts of law thereof).
Section 7.8 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by Unocal and TBI
and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers, each of whom is duly and validly
authorized and empowered, all as of the day and year first above written.
TOM BROWN, INC.
By: /s/ Peter R. Scherer
___________________________
Name: Peter R. Scherer
Title: Executive Vice President
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UNION OIL COMPANY OF CALIFORNIA
By: /s/ Robert C. Gnagy
___________________________
Name: Robert C. Gnagy
Title: Attorney-In-Fact
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