As filed with the Securities and Exchange Commission on February 26, 1996
Registration No. 333-00229
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
on
FORM S-3
to
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
TESORO PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-0862768
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8700 Tesoro Drive
San Antonio, Texas 78217
(210) 828-8484
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
James C. Reed, Jr., Esq.
Executive Vice President, General Counsel and Secretary
Tesoro Petroleum Corporation
8700 Tesoro Drive
San Antonio, Texas 78217
(210) 828-8484
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Jean W. Gleason, Esq.
Fulbright & Jaworski L.L.P.
801 Pennsylvania Avenue, N.W., Suite 400
Washington, D.C. 20004-2604
(202) 662-0200
Approximate date of commencement of proposed sale to the public: As soon as
possible after this Post-Effective Amendment becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
TESORO PETROLEUM CORPORATION
Cross-reference Sheet Pursuant to Rule 404(a) of Regulation C and Item
501(b) of Regulation S-K showing the Location in the Prospectus of the
information required by Part I of Form S-3.
Location or Heading
Item of S-3 in Prospectus
________________________________________________ _____________________________
PART I - INFORMATION REQUIRED IN PROSPECTUS
Item 1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus . . . . . . . . . . . . . . Forepart of Registration
Statement; Outside Front
Cover Page of Prospectus
Item 2. Inside Front and Outside Back Cover
Pages of Prospectus. . . . . . . . . .
Available Information;
Incorporation of Certain
Documents by Reference;
Table of Contents
Item 3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges . . *
Item 4. Use of Proceeds. . . . . . . . . . . . Use of Proceeds
Item 5. Determination of Offering Price. . . . *
Item 6. Dilution . . . . . . . . . . . . . . . *
Item 7. Selling Security Holders . . . . . . . *
Item 8. Plan of Distribution . . . . . . . . . Plan of Distribution
Item 9. Description of Securities to be
Registered . . . . . . . . . . . . . . *
Item 10. Interests of Named Experts and Counsel *
Item 11. Material Changes . . . . . . . . . . . *
Item 12. Incorporation of Certain Information
by Reference . . . . . . . . . . . . . Incorporation of Certain
Documents by Reference
Item 13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities. . . . . . . . . . . . . . *
____________________________
* Not applicable or the answer is negative.
(i)
PROSPECTUS
TESORO PETROLEUM CORPORATION
____________________________________
Up to 440,861 shares of Common Stock
____________________________________
This Prospectus relates to up to 440,861 shares of common stock, par value
$.16-2/3 per share ("Tesoro Common Stock"), of Tesoro Petroleum Corporation, a
Delaware corporation ("Tesoro" or the "Company") that may be issued upon (a) the
exercise of outstanding transferable stock warrants (the "Warrants"), (b) the
exercise of outstanding stock options (the "Stock Options") and (c) upon the
conversion of outstanding convertible debentures (the "Convertible Debentures").
The Warrants, Stock Options and Convertible Debentures were originally issued by
Coastwide Energy Services, Inc. ("Coastwide") prior to its merger (the "Merger")
into a wholly-owned subsidiary of Tesoro.
On February 20, 1996, Coastwide was merged with and into CNRG Acquisition
Corp. ("CNRG"), a wholly-owned subsidiary of Tesoro. As a result of such
Merger, Coastwide effectively became a wholly-owned subsidiary of Tesoro and (i)
each outstanding share of Coastwide common stock, $.01 par value ("Coastwide
Common Stock"), was converted into the right to receive $2.55 in cash and .41
share of Tesoro Common Stock (and cash in lieu of any fractional share) together
with any associated Preferred Stock Purchase Rights (the "Merger Consideration")
and (ii) each outstanding Warrant, Stock Option and Convertible Debenture was
adjusted so that, upon exercise or conversion, the holder will receive, in
effect, the Merger Consideration for the number of shares of Coastwide Common
Stock that would have been issuable upon exercise or conversion immediately
prior to the Merger.
No person has been authorized to give any information or to make any
representation other than those contained or incorporated by reference in this
Prospectus in connection with the offering of securities described herein and,
if given or made, such information or representation should not be relied upon
as having been authorized by Tesoro or any other person. This Prospectus does
not constitute an offer to sell, or the solicitation of an offer to purchase,
any securities in any jurisdiction in which, or to any person to whom, it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any distribution of the securities described herein shall, under
any circumstances, create any implication that there has been no change in the
affairs of Tesoro since the date hereof or that the information set forth or
incorporated by reference herein is correct as of any time subsequent to its
date.
____________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Prospectus is February _____, 1996.
AVAILABLE INFORMATION
Tesoro is and Coastwide was, prior to its acquisition by Tesoro, subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information filed
with the Commission can be inspected at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and the regional offices of the Commission at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven
World Trade Center, New York, New York 10048. Copies of such material may be
obtained from the Public Reference Section of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, such material can be inspected at the offices of the New
York Stock Exchange and Pacific Stock Exchange, where Tesoro Common Stock is
listed.
Tesoro has filed with the Commission a Post-Effective Amendment No. 1 on
Form S-3 to its Registration Statement (No. 333-00229) on Form S-4 (herein,
together with all amendments and exhibits thereto, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the securities offered hereby. This
Prospectus constitutes the prospectus of Tesoro filed as part of the
Registration Statement and does not contain all the information contained in the
Registration Statement, certain portions of which are omitted as permitted by
the rules and regulations of the Commission. For further information with
respect to Tesoro and the securities offered hereby, reference is made to the
Registration Statement, including the exhibits thereto, which may be inspected
at the Commission's offices, without charge, or copies of which may be obtained
from the Commission upon payment of prescribed fees. Statements contained in
this Prospectus as to the contents of any contract or other document filed as an
exhibit to the Registration Statement are not necessarily complete, and in each
instance reference is hereby made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Tesoro incorporates herein by reference (a) Tesoro's Annual Report on Form
10-K for the year ended December 31, 1994, (b) Tesoro's Quarterly Reports on
Form 10-Q for the quarterly periods ended March 31, June 30, and September 30,
1995, (c) Tesoro's current reports on Form 8-K, filed October 11, 1995 and
January 31, 1996, (d) the description of Tesoro Common Stock set forth in the
Registration Statement on Form 8-A dated April 21, 1969 (as amended by a Form 8
dated April 23, 1969), (e) the description of Tesoro's Preferred Stock Purchase
Rights set forth in the Registration Statement on Form 8-A dated December 3,
1985 (as amended by a Form 8 dated December 12, 1985 and as extended as reported
in Form 8-K dated December 15, 1995) and (f) Tesoro's Proxy Statement/Prospectus
dated January 17, 1996, filed as part of the Registration Statement under the
Securities Act (the "Proxy Statement/Prospectus").
This Prospectus incorporates documents by reference relating to Tesoro that
are not presented herein or delivered herewith. Copies of such documents will
be provided without charge (excluding exhibits, unless such exhibits are
specifically incorporated therein by reference) to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon oral or written
request of any such person. Requests should be directed to Tesoro Petroleum
Corporation, ATTN: Corporate Communications, 8700 Tesoro Drive, San Antonio,
Texas 78217 (telephone (800) 837-6768).
All reports and definitive proxy or information statements filed by Tesoro
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to
the date of this Prospectus and prior to the termination of the offering of the
Tesoro Common Stock to which this Prospectus relates, shall be deemed to be
incorporated by reference into this Prospectus from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated herein by reference modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
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THE COMPANY
Tesoro is a natural resource company engaged in petroleum refining and
marketing, natural gas exploration and production, and wholesale marketing of
fuel and lubricants. Tesoro was incorporated in Delaware in 1968 (a successor
by merger to a California corporation incorporated in 1939).
Tesoro's Refining and Marketing segment's operations in Alaska include: a
refinery that produces gasoline, jet fuel, diesel fuel, heavy distillates and
residual products; a retail marketing system that sells gasoline through the
Company's chain of licensed 7-Eleven stores; a distribution system that
wholesales gasoline to both branded and unbranded dealers and jobbers; and a
wholesale marketing operation that supplies a substantial portion of the
commercial jet fuel and diesel fuel sold in Alaska. In addition, this segment's
marketing operations provide supply, storage and distribution services in
California and the Pacific Northwest and has recently commenced selling gasoline
on a wholesale basis in the Russian Far East and to Tesoro-branded service
stations in the Pacific Northwest.
Tesoro's Exploration and Production segment is primarily focused in the Bob
West Field in South Texas, which was discovered by Tesoro in 1990. During the
third quarter of 1995, Tesoro sold certain interests in its producing and
non-producing properties in the Bob West Field for an adjusted price of
approximately $68 million, resulting in an after-tax gain of approximately $33
million. The interests sold represented approximately 77 Bcf, or 40%, of
Tesoro's total proved domestic natural gas reserves at the time of the sale. A
portion of the consideration received by Tesoro for the sale of these interests,
which is subject to post-closing adjustments, was used to redeem $34.6 million
principal amount of Tesoro's outstanding 12 % Subordinated Debentures. The
remainder of the consideration received was used to reduce borrowings under
Tesoro's Revolving Credit Facility and improve Tesoro's liquidity. Tesoro does
not expect any final post-closing adjustments to be material. Tesoro also has
operations in southern Bolivia that include significant natural gas reserves,
the majority of which are shut-in awaiting access to gas-consuming markets.
Tesoro's former Oil Field Supply and Distribution segment sold lubricants,
fuels and specialty petroleum products, primarily to offshore drilling
contractors. In the third quarter of 1995, Tesoro consolidated certain
operations in this segment by exiting the land-based portion of its petroleum
product distribution business in Texas, and continued to operate shore-based
terminals on the Texas and Louisiana Gulf Coast. On February 20, 1996,
Coastwide's operations were combined with Tesoro's Oil Field Supply and
Distribution segment forming a Marine Services segment. As a combined
operation, the Marine Services segment consists of 18 terminals, primarily
marine based, providing a broad range of products and logistical support
services to the offshore industries operating in the U.S. Gulf of Mexico.
During 1994, Tesoro consummated a recapitalization plan and equity offering
whereby a major portion of its outstanding debt was restructured and all of its
preferred stock and dividend arrearages were eliminated and which, among other
matters, deferred $44 million of debt service requirements, increased
stockholders' equity by approximately $82 million and eliminated $9.2 million of
annual preferred dividend requirements. In addition, the recapitalization
enabled Tesoro to enter into a $125 million Corporate Revolving Credit Facility
and to obtain $15 million financing for a major addition to the Company's
refinery.
The Company's principal executive offices are located at 8700 Tesoro Drive,
San Antonio, Texas 78217, and its telephone number is (210) 828-8484.
Information concerning the business of Tesoro and the results of its
operations for the three most recent fiscal years is contained in Tesoro's
Annual Report on Form 10-K for the year ended December 31, 1994, with updates in
quarterly reports on Form 10-Q for the quarterly periods ended March 31, June 30
and September 30, 1995, as well as current reports on Form 8-K dated October 11,
1995, December 15, 1995 and January 31, 1996, all of which are incorporated by
reference in this Prospectus.
USE OF PROCEEDS
There are not expected to be any material proceeds to the Company because
the exercise price of the Warrants and of most of the Stock Options is less than
the cash portion of the Merger Consideration.
PLAN OF DISTRIBUTION
In connection with the Merger, each outstanding Warrant, Stock Option and
Convertible Debenture of Coastwide was adjusted so that, upon exercise or
conversion, the holder will receive the Merger Consideration for the number of
shares of Coastwide Common
-3-
Stock that would have been issuable upon exercise or conversion immediately
prior to the Merger. The following is a description of the Warrants,
Convertible Debentures and Stock Options.
Warrants. As of the effective time of the Merger (the "Effective Time"),
Coastwide had outstanding Warrants to purchase approximately 355,946 shares of
Coastwide Common Stock for $1.54 per share (the "Warrant Price"), subject to the
terms and conditions of a Warrant Agreement, effective as of October 29, 1993,
between Coastwide and Chemical Shareholder Services Group, Inc. as Warrant Agent
(the "Warrant Agreement"). The Warrants expire December 22, 1996. Tesoro has
entered into an amendment to the Warrant Agreement with the Warrant Agent,
giving each holder of Warrants the right (prior to the expiration date of the
Warrants and upon payment of the Warrant Price), to receive upon exercise of
each Warrant the Merger Consideration that could have been received at the
Effective Time if the Warrant had been exercised immediately prior thereto. For
example, a holder of 10,000 Warrants would, after the Effective Time, and prior
to December 22, 1996, be entitled to receive, upon payment of the exercise price
of $15,400 ($1.54 times 10,000), $25,500 in cash ($2.55 times 10,000) and 4,100
shares of Tesoro Common Stock (.41 share of Tesoro Common Stock times 10,000).
The Company has reserved 145,938 shares of Tesoro Common Stock for issuance upon
the exercise of the Warrants.
Convertible Debentures. As of the Effective Time, Coastwide had
outstanding $2,545,000 of Convertible Debentures due July 1, 2004, convertible
into Coastwide Common Stock at $4.25 per share (598,824 shares of Coastwide
Common Stock). Pursuant to a Debenture Assumption and Conversion Agreement
entered into among Tesoro, CNRG and Coastwide, CNRG assumed the Convertible
Debentures and from and after the Effective Time. The holders of the
Convertible Debentures have the right to convert such Convertible Debentures
into the Merger Consideration that would have been received by a holder had such
Convertible Debentures been converted immediately prior to the Merger. Thus,
for example, a holder of $42,500 principal amount of the Convertible Debentures,
which prior to the Effective Time would have been convertible into 10,000 shares
of Coastwide Common Stock, would be entitled after the Merger to convert the
Convertible Debentures into 4,100 shares of Tesoro Common Stock and $25,500 in
cash, which is the number of shares of Tesoro Common Stock and the amount of
cash, respectively, that a holder of 10,000 shares of Coastwide Common Stock
would have received upon conversion of his shares in the Merger. The Company
has reserved 245,518 shares of Tesoro Common Stock for issuance upon conversion
of the Convertible Debentures.
Stock Options. As of the Effective Time, Coastwide had 120,500 shares of
Coastwide Common Stock reserved for issuance pursuant to options granted and
currently outstanding under Coastwide's stock option plans. Each of the shares
reserved for issuance pursuant to the Stock Options is fully vested and
exercisable. As of the Effective Time, each holder of a Stock Option entered
into a Cancellation/Substitution Agreement pursuant to which each outstanding
and unexercised Stock Option immediately prior to the Effective Time became
exercisable for the Merger Consideration rather than for Coastwide Common Stock.
More specifically, as of the Effective Time, each Stock Option was automatically
converted into an option to purchase Tesoro Common Stock in an amount and at an
exercise price determined as provided below (and otherwise having the same
duration and other terms as the original option):
(1) The number of shares of Tesoro Common Stock to be subject to the
new option is equal to the product of the number of shares of Coastwide Common
Stock subject to the original option and .41, provided that any fractional
shares of Tesoro Common Stock resulting from such multiplication are rounded to
the nearest whole share; and
(2) The exercise price per share of Tesoro Common Stock to be subject
to the new option is equal to (a) the exercise price of the number of shares of
Coastwide Common Stock under the original option divided by .41 minus (b)
$6.2195 (rounded to the nearest cent), provided that if such amount is less than
$0, the holder of such option shall, upon exercise, receive, in cash, the amount
by which such amount is less than $0.
The Company has reserved 49,405 shares of Tesoro Common Stock for issuance upon
exercise of the Stock Options.
LEGAL MATTERS
The validity of the shares of Tesoro Common Stock issuable upon the
exercise or conversion of the Warrants, Stock Options and Convertible Debentures
has been passed upon by Fulbright & Jaworski L.L.P.
-4-
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus from Tesoro's Annual Report on Form 10-K for the year ended December
31, 1994 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated by reference and have been so
incorporated in reliance upon the report of said firm given upon their authority
as experts in accounting and auditing.
-5-
TESORO PETROLEUM
CORPORATION
COMMON STOCK ISSUABLE UPON THE
TABLE OF CONTENTS EXERCISE OF OUTSTANDING
WARRANTS, STOCK OPTIONS AND
Page SUBORDINATED DEBENTURES
Available Information. . . . 2
Incorporation of Certain
Documents by Reference . . 2
The Company. . . . . . . . . 3
Use of Proceeds. . . . . . . 3
Plan of Distribution . . . . 4
Legal Matters. . . . . . . . 5
Experts. . . . . . . . . . . 6
PROSPECTUS
February ____, 1996
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The only fees incurred in connection with this transaction are legal fees
and expenses, which are estimated to be approximately $5,000.
The related filing fee has previously been paid.
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law empowers Tesoro to, and
the Bylaws of Tesoro provide that it shall, indemnify to the fullest extent
authorized or permitted by the laws of the State of Delaware any person who is
made, or threatened to be made, a party to an action, suit or proceeding
(whether civil, criminal, administrative or investigative) by reason of the fact
that he, his testator or intestate is or was a director, officer or employee of
Tesoro, respectively, or serves or served any other enterprise at the request of
Tesoro.
Item 16. Exhibits.
4.1 Warrant Agreement dated effective as of October 29, 1993, between
Coastwide Energy Services, Inc. and Chemical Shareholder Services
Group, Inc., as Warrant Agent.
4.2 Warrant Assumption and Conversion Agreement dated as of February 20,
1996, between the Company, Coastwide Energy Services, Inc. and
Chemical Shareholder Services Group, Inc., as Warrant Agent.
4.3 Form of 8% Convertible Subordinated Debenture.
4.4 Debenture Assumption and Conversion Agreement dated as of February 20,
1996, between the Company, Coastwide Energy Services, Inc. and CNRG
Acquisition Corp.
4.5 Form of Stock Option Agreement for option grant under the Coastwide
Energy Services, Inc. 1993 Long-Term Incentive Plan.
4.6 Form of Cancellation/Substitution Agreement by and between the
Company, Coastwide Energy Services, Inc. and Optionee.
*5. Opinion of Fulbright & Jaworski L.L.P. (incorporated by reference to
Exhibit 5 to the Company's Registration Statement on Form S-4,
Registration No. 333-00229).
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Fulbright & Jaworski L.L.P.
*24. Power of Attorney.
______________________________________
* Previously filed.
II-1
Item 17. Undertakings.
A. Undertaking Pursuant to Rule 415.
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply, if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
B. Undertaking Regarding Documents Subsequently Filed Under the Exchange
Act.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Undertaking Regarding Request for Acceleration of Effective Date.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment for the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-Effective
Amendment No. 1 on Form S-3 to its Form S-4 Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the city of San
Antonio, State of Texas, on the 26th day of February, 1996.
TESORO PETROLEUM CORPORATION
By: /s/ Bruce A. Smith
Bruce A. Smith
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 on Form S-3 to the Form S-4 Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
Signature Title Date
___________________________ _________________________________ _________________
/s/ Bruce A. Smith President and Chief Executive
Bruce A. Smith Officer and Director (Principal
Executive Officer) February 26, 1996
William T. Van Kleef* Senior Vice President and Chief
William T. Van Kleef Financial Officer (Principal
Financial Officer and Principal
Accounting Officer) February 26, 1996
Robert J. Caverly* Chairman of the Board and
Robert J. Caverly Director February 26, 1996
Stephen H. Grapstein* Vice Chairman of the Board and February 26, 1996
Stephen H. Grapstein Director
Peter M. Detwiler* Director February 26, 1996
Peter M. Detwiler
Director
Raymond K. Mason, Sr.
John J. McKetta, Jr.* Director
John J. McKetta, Jr. February 26, 1996
II-3
Murry L. Weidenbaum* Director February 26, 1996
Murry L. Weidenbaum
* By: /s/ Bruce A. Smith
Bruce A. Smith
Attorney-in-Fact
II-4
COASTWIDE ENERGY SERVICES, INC.
and
CHEMICAL SHAREHOLDER SERVICES GROUP, INC.
as Warrant Agent
Class B Warrants to Purchase
Approximately 400,000 Shares of Common Stock
Par Value $.01
WARRANT AGREEMENT
Effective as of October 29, 1993
THIS WARRANT AGREEMENT, dated as of September 30, 1993, is made by and
between COASTWIDE ENERGY SERVICES, INC., a Delaware corporation (the "Company"),
and Chemical Shareholder Services Group, Inc., a national banking association,
as warrant agent (the "Warrant Agent"). The Company proposes to issue Class B
warrants, as hereinafter described (the "Warrants"), to purchase up to an
aggregate of approximately 400,000 shares of its common stock, par value $.Ol
per share (the "Common Stock") (the shares of Common Stock issuable in exercise
of the Warrants being referred to herein as the "Warrant Shares").
The Company has requested the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Warrants (the "Warrant Certificates"), and the exercise of the Warrants.
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder and hereunder of the Company, the Warrant Agent, the registered
owners of the Warrants (the "Holders"), and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged and
confirmed, the Company and the Warrant Agent agree as follows:
Section 1 Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions set forth in this Agreement, and the Warrant Agent hereby accepts
such appointment.
Section 2 Form of Warrant Certificates. The text of the Warrant
Certificates (and the form of election to purchase Warrant Shares and of
assignment to be printed on the reverse thereof) shall be substantially as set
forth in Exhibit A hereto, and may have such letters, numbers or other marks of
identification or designation and such legends, summaries or endorsements
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may from time to time be listed, or to conform to usage. Warrant
Certificates shall be dated as of the date of issuance thereof by the Warrant
Agent, rather upon initial issuance or upon transfer or exchange, and on their
face shall entitle the holders thereof to purchase one share (for each Warrant)
of Common Stock, but no purchase shall be permitted except with respect to one
share or multiples of one share and the number of such shares and the purchase
price per share shall be subject to adjustment as provided herein.
Pending the preparation of definitive Warrant Certificates, the Company may
execute and the Warrant Agent shall countersign in lieu thereof temporary
Warrant Certificates, substantially in the form of the definitive Warrant
Certificates but with such omissions, insertions and variations as may be
determined to be appropriate by the Board of Directors of the Company.
Temporary Warrant Certificates may be issued with such provisions with respect
to exchanges of temporary Warrant Certificates as may be determined by the Board
of Directors of the Company and may contain such references to provisions of
this Warrant Agreement as may be appropriate. Every temporary Warrant
Certificate shall be executed by the Company and be countersigned by the Warrant
Agent upon the same conditions and in substantially the same manner and with the
like effect as the definitive Warrant Certificates. In the case of the issuance
of temporary Warrant Certificates, the Company shall prepare and execute
definitive Warrant Certificates without unnecessary delay and thereupon any and
all temporary Warrant Certificates may be surrendered in exchange therefor at
the principal office of the Warrant Agent and the Warrant Agent shall
countersign and deliver in exchange for such temporary Warrant Certificates
definitive Warrant Certificates for an equal aggregate number of Warrants as may
be requested by the holders thereof. Until so exchanged, each temporary Warrant
Certificate shall be entitled to the same benefits as a definitive Warrant
Certificate.
Section 3 Counter Signature and Registration. The Warrant Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
President or a Vice President, by manual or facsimile signature, and have
affixed thereto a facsimile of the Company's seal which shall be attested by the
Secretary or an Assistant Secretary of the Company by manual or facsimile
signature. The Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Warrant
Certificates shall cease to be such officer of the Company before
countersignature by the Warrant Agent and issuance and delivery by the Company,
such Warrant Certificates, nevertheless, may be countersigned by the Warrant
Agent and issued and delivered with the same force and effect as though the
person who signed such Warrant Certificates had not ceased to be such officer of
the Company.
The Warrant Agent will keep or cause to be kept, at its principal office,
books for registration and transfer of the Warrants issued hereunder. The
Warrants shall be issued in registered form only. The registration books shall
show the names and addresses of the respective Holders, the number of Warrants
evidenced on its face by each of the Warrant Certificates, and the date of each
of the Warrant Certificates. The Company and the Warrant Agent shall be
entitled to treat a Holder as the owner in fact for all purposes of each Warrant
registered in such Holder' s name and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person, and shall not be liable for any registration of transfer of Warrants
that are registered or to be registered in the name of a fiduciary or the
nominee of a fiduciary unless made with the actual knowledge that a fiduciary or
nominee is committing a breach of trust in requesting such registration of
transfer, or with such knowledge of such facts that its participation therein
amounts to bad faith.
Section 4 Transfer. The Warrants shall be transferable only on the books of
the Company maintained at the principal office of the Warrant Agent in Dallas,
Texas, upon delivery thereof duly endorsed by the Holder or by his duly
authorized attorney or representative, which endorsement shall be guaranteed by
a commercial bank or a trust company located in the United States or by a member
firm of a registered national securities exchange or a member of the National
Association of Securities Dealers, Inc., or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of transfer by an
attorney, the original power of attorney, duly approved, or an official copy
thereof, duly certified, shall be deposited and remain with the Warrant Agent.
In case of transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Warrant Agent
in its discretion. Upon any registration of transfer, the Warrant Agent shall
countersign and deliver a new Warrant Certificate or Certificates to the persons
entitled thereto.
Section 5 Exchange of Warrant Certificates. Each Warrant Certificate
may be exchanged at the option of the Holder thereof for another certificate or
certificates entitling the Holder thereof to purchase a like aggregate number of
Warrant Shares as the certificate or certificates surrendered then entitle such
Holder to purchase. Any Holder desiring to exchange a Warrant certificate or
certificates shall make such request in writing delivered to the Warrant Agent,
and shall surrender, properly endorsed, which endorsement shall be guaranteed as
provided in Section 4 hereof if the certificate or certificates are to be issued
other than in the name of the Holder, the certificate or certificates to be so
exchanged at the office of the Warrant Agent in Dallas, Texas. Thereupon, the
Warrant Agent shall countersign and deliver to the person entitled thereto a new
Warrant Certificate or Certificates as the case may be, as so requested.
Section 6 Term of Warrants: Exercise of Warrants.
6.1 Term of Warrants. Subject to the provisions of this Agreement,
each Holder shall have the right at any time prior to 5:00 P.M., Dallas, Texas
time, on December 22, 1996 (the "Expiration Date"), to purchase from the Company
the number of fully paid and nonassessable Warrant Shares that the Holder may at
the time be entitled to purchase on exercise of such Warrants. After the
Expiration Date, any previously unexercised Warrants shall be void and have no
value.
6.2 Exercise of Warrants. A Warrant may be exercised upon surrender to
the Command at the office of the Warrant Agent in Dallas, Texas of the
certificate or certificates evidencing no fewer than the number of Warrants to
be exercised, together with the duly completed and signed form of election to
purchase on the reverse thereof, and upon payment to the Warrant Agent for the
account of the Company of the Warrant Price (as defined in and determined in
accor- dance with the provisions of Section 10 and 11 hereof) for the number of
Warrant Shares in respect of which such Warrants are then exercised. Payment of
the aggregate Warrant Price shall be made in lawful, money of the United States
of America, in cash, by cashier's check, certified check or bank draft payable
to the order of the Company.
Subject to Section 7 hereof, upon such surrender of Warrants and
payment of the Warrant Price, the Company shall issue and cause to be delivered
with all reasonable dispatch to or upon the written order of the Holder and in
such name or names as the Holder may designate, a certificate or certificates
for the number of full Warrant Shares so purchased upon the exercise of such
Warrants, together with cash, as provided in Section 12 hereof, in respect of
any fractional Warrant Shares otherwise issuable upon such surrender. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrants
and payment of the Warrant Price; provided, however, that if, at the date of
surrender of such Warrants and payment of such Warrant Price, the transfer books
for the Warrant Shares or other class of stock purchasable upon the exercise of
such Warrants shall be closed, the certificates for the Warrant Shares in
respect of which such Warrants are then exercised shall be issuable as of the
date on which such books shall next be opened (whether before or after the
Expiration Date) and until such date the Company shall be under no duty to
deliver any certificate for such Warrant Shares. The rights of purchase
represented by the Warrants shall be exercisable, at the election of the Holders
thereof, either in full or from time to time in part and, if a certificate
evidencing Warrants is exercised in respect of less than all of the Warrant
Shares purchasable on such exercise at any time prior to the Expiration Date or
earlier redemption of such Warrants, a new certificate evidencing the remaining
Warrant or Warrants will be issued, and the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrant Certificates
pursuant to the provisions of this Section and of Section 3 hereof and the
Company, whenever required by the Warrant Agent, will supply the Warrant Agent
with Warrant Certificates duly executed on behalf of the Company for such
purpose.
Section 7 Payment of Taxes. The Company will pay any documentary stamp
taxes attributable to the issuance of Warrant Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes that may be payable in respect of any transfer involved in the
issue or delivery of any Warrant Shares, Warrants or Warrant Certificates in a
name other than that of the registered Holder of Warrants in respect of which
such Warrant Shares are issued, and the Company shall not be required to issue
or deliver such certificates unless or until the person or persons requesting
the issuance thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has been
paid.
Section 8 Mutilated or Missing Warrant Certificates. If any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue, and the Warrant Agent shall countersign and deliver
in exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent right or interest: but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and a bond or other indemnity satisfactory to them. An
applicant for such a substitute Warrant Certificate shall also comply with such
other reasonable requirements and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
Section 9 Reservation of Warrant Shares: Purchase of Warrants.
9.1 Reservation of Warrant Shares. Prior to the issuance of any
Warrants the Company shall reserve, and the Company shall thereafter at all
times keep reserved, free from preemptive rights, out of its authorized Common
Stock, a number of shares of Common Stock sufficient to provide for the exercise
of the rights of purchase represented by the outstanding Warrants. The transfer
agent and every subsequent transfer agent for any shares of the Company's
capital stock issuable upon the exercise of any of the rights of purchase will
be irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be requisite for such purpose. The Company will keep
a copy of this Agreement on file with every transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the Warrants. Each
transfer agent for the Common Stock is hereby irrevocably authorized to cause to
be issued from time to time the stock certificates required to honor outstanding
Warrants upon exercise thereof in accordance with the terms of this Agreement.
The Company will supply such transfer agent with duly executed stock
certificates for such purposes and will provide or otherwise make available any
cash which may be payable as provided in Section 12 hereof. All Warrants
surrendered upon the exercise of the rights thereby evidenced shall be canceled
by the Warrant Agent and shall thereafter be delivered to the Company. Promptly
after the Expiration Date, the Warrant Agent shall certify to the Company the
aggregate number of Warrants then outstanding, and thereafter no shares of
Common Stock shall be subject to reservation in respect of such Warrants.
The Company covenants that all shares issued upon exercise of the
Warrants will, upon issuance in accordance with the terms of this Agreement, be
fully paid and nonassessable and free from all taxes, liens, charges and
security interests created by the Company with respect to the issuance thereof.
9.2 Purchase of Warrants by the Company. The Company shall have the
right, except as limited by law, to contract with individual holders of Warrants
to purchase or otherwise acquire Warrants at such times, in such manner and for
such consideration as may be agreed upon with such holders.
9.3 Cancellation of Warrants. In the event the Company shall purchase
or otherwise acquire Warrants, the same shall thereupon be delivered to the
Warrant Agent and be canceled by the Warrant Agent and retired. The Warrant
Agent shall cancel any Warrant surrendered for exchange, substitution, transfer
or exercise in whole or in part.
Section 1O Warrant Exercise Price. The price per share at which
Warrant Shares shall be purchasable upon exercise of Warrants (the "Warrant
Price") shall be $1.54 per share, subject to adjustment pursuant to Section 11
hereof.
Section 11 Adjustment of Warrant Price and Number of Shares. The
number and kind of securities purchasable upon the exercise of each Warrant, and
the Warrant Price, shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter described.
11.1 Mechanical Adjustments. The number of Warrant Shares purchasable
upon the exercise of each Warrant and the Warrant Price shall be subject to
adjustment as follows.
(a) If the Company shall (i) issue a dividend in, or make a
distribution of, shares of Common Stock to holders of Common Stock, (ii)
subdivide its outstanding shares of Common stock, (iii) combine its outstanding
shares of Common Stock into a small number of shares of Common Stock or (iv)
issue by reclassification of its shares of Common Stock other securities of the
Company, the number of Warrant Shares purchasable upon exercise of each Warrant
immediately prior thereto shall be adjusted so that the Holder of each Warrant
shall be entitled to receive the kind and number of Warrant Shares or other
securities of the Company that he would have owned or have been entitled to
receive after the happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of such event or any
record date with respect thereto. Any adjustment made pursuant to this
paragraph (a) shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
(b) For purposes of any computation under Section 12 and paragraph (e)
of this Section, the current or closing market price per share of Common Stock
at any date shall be the average of the daily closing prices for 15 consecutive
trading days commencing 20 trading days before the date of such computation.
The closing price for each day shall be the daily closing prices of the Common
Stock as reported on the composite transactions tape for the principal exchanges
on which the Common Stock is listed or admitted to trading (the "Composite
Tape"). The closing price for each day shall be the last sale price regular way
or, in case no such sale takes place on such day, the average of the closing bid
and asked prices regular way, in either case as reported on the Composite Tape,
or, if the Common Stock is not reported on the Composite Tape, on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or if the Common Stock is not listed or admitted to trading on any
national securities exchange, the average of the highest reported bid and lowest
reported asked prices on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), or a similar service if NASDAQ is no
longer reporting such information. Although the Common Stock is not currently
listed on any exchange and is not quoted on NASDAQ, the foregoing provisions
will be applicable if the Common Stock is subsequently so listed or quoted. If
on any date at which determination of the current market price per share of
Common Stock is required the Common Stock is not guoted by any such service, the
current or closing market price per share of the Common Stock on such date shall
be determined by the Board of Directors of the Company on the basis of such
quotations or other information as it in good faith considers appropriate or
such other relevant evidence as may be appropriate under the circumstances, and
such determination, if made in good faith, shall be binding upon all Holders.
(c) No adjustment in the number of Warrant Shares purchasable hereunder
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in the number of Warrant Shares purchasable upon
the exercise of each Warrant; provided, however, that any adjustments that by
reason of this paragraph (c) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
shall be made to the nearest one-thousandth of a share.
(d) Whenever the number of Warrant Shares purchasable upon the exercise
of each Warrant is adjusted as provided in paragraph (a) of this Section, the
Warrant Price payable upon exercise of each Warrant shall be adjusted by
multiplying such Warrant Price immediately prior to such adjustment by a
fraction, the numerator of which shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and the denominator of which shall be the number of Warrant Shares
so purchasable immediately thereafter.
(e) If the Company shall sell and issue shares of Common Stock, or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock (excluding (i)
shares, rights, options, warrants or convertible or exchangeable securities
issued in any of the transactions described in paragraph (a) above, (ii) shares
issuable upon exercise of stock options or shares of Common Stock granted or to
be granted to employees or directors of the Company, (iii) the Warrant Shares or
(iv) shares issued to stockholders of any corporation that is acquired by,
merged into or becomes part of the Company or a subsidiary of the Company in
proportion to their stock holdings of such corporation immediately prior to such
merger, upon such merger) at a price per share of Common Stock (determined, in
the case of such rights, options, warrants or convertible or exchangeable
securities, by dividing (i) the total amount received or receivable by the
Company in consideration of the sale and issuance of such rights, options,
warrants or convertible or exchangeable securities, plus the total consideration
payable to the Company upon exercise, conversion or exchange thereof, by (ii)
the total number of shares of Common Stock covered by such rights, options,
warrants or convertible or exchangeable securities) lower than the then current
Warrant Price in effect immediately prior to such sale and issuance, then the
Warrant Price shall be reduced to a price (calculated to the nearest cent)
determined by dividing (i) an amount equal to the sum of (A) the number of
shares of common Stock outstanding immediately prior to such sale and issuance
multiplied by the then existing Warrant Price, plus (B) the consideration
received by the Company upon such sale and issuance, by (ii) the total number of
shares of Common Stock outstanding immediately after such sale and issuance.
Such adjustment shall be made successively whenever such an issuance is made.
For the purposes of such adjustments, the shares of Common Stock that the holder
of any such rights, options, warrants or convertible or exchangeable securities
shall be entitled to subscribe for or purchase shall be deemed to be issued and
outstanding as of the date of such sale and issuance and the consideration
received by the Company therefor shall be deemed to be the consideration
received by the Company for such rights, options, warrants or convertible or
exchangeable securities, plus the consideration or premiums stated in such
rights, options, warrants or convertible or exchangeable securities to be paid
for the shares of Common Stock covered thereby. If the Company shall sell and
issue shares of Common Stock, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase shares
of Common Stock, for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in determining the "price per
share of Common Stock" and the "consideration received by the Company" for
purposes of the first sentence of this paragraph (e), the Board of Directors
shall determine, in its discretion, the fair value of such property, and such
determination, if made in good faith, shall be binding upon all Holders. There
shall be no adjustment of the Warrant Price pursuant to this paragraph (e) if
the amount of such adjustment shall be less than $0.10 per Warrant Share;
provided however, that any adjustments that by reason of this provision are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment.
(f) For the purpose of this subsection 11.1, the term "shares of Common
Stock" shall mean (i) the class of stock designated as the Common Stock of the
Company at the date of this Agreement, or (ii) any other class of stock that may
be subsequently designated as the Common Stock of the Company by the Board of
Directors in lieu of the Common Stock as currently constituted. In the event
that at any time, as a result of an adjustment made pursuant to paragraph (a)
above, the Holders shall become entitled to purchase any shares of the Company
other than shares of Common Stock, thereafter the number of such other shares so
purchasable upon exercise of each Warrant and the Warrant Price of such shares
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Warrant
Shares contained in paragraph (a) above, and the provisions of Section 6 and
subsections 11.2 through 11.5, inclusive, with respect to the Warrant Shares,
shall apply on like terms to any such other shares.
11.2 Notice of Adjustment. Whenever the number of Warrant Shares
purchasable upon the exercise of each Warrant or the Warrant Price of such
Warrant Shares is adjusted as herein provided, the Company shall cause the
Warrant Agent promptly to give written notice (as provided in Section 19 hereof)
of such adjustment or adjustments to each Holder and shall deliver to the
Warrant Agent a certificate from the chief financial officer of the Company
setting forth the number of Warrant Shares purchasable upon the exercise of each
Warrant and the Warrant Price of such War- rant Shares after such adjustment,
setting forth a brief statement of the facts requiring such adjustment and
setting forth the computation by which such adjustment was made. Such
certificate shall be conclusive evidence of the correctness of such adjustment.
The Warrant Agent shall be entitled to rely on such certificate and shall be
under no duty or responsibility with respect to any such certificate, except to
exhibit the same, from time to time, to any Holder desiring an inspection
thereof during reasonable business hours. The Warrant Agent shall not at any
time be under any duty or responsibility to any Holders to determine whether any
facts exist that may require any adjustment of the Warrant Price or the number
of Warrant Shares or other stock or property purchasable on exercise thereof, or
with respect to the nature or extent of any such adjustment when made, or with
respect to the method employed in making such adjustment.
11.3 No Adjustment for Dividends. Except as provided in subsection
11.1, no adjustment in respect of any dividends paid on shares of any capital
stock of the Company shall be made during the term of a Warrant or upon the
exercise of a Warrant.
11.4 Preservation of Purchase Rights Upon Reclassification.
Consolidation. etc. In case of any consolidation or merger of the Company with
or into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, the Company or such successor or purchasing corporation, as the case
may be, 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
Holder shall have the right thereafter (but prior to the Expiration Date) upon
payment of the Warrant Price in effect immediately prior to such action, to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities and property that he would have owned or have been entitled to
receive after the happening of such consolidation, merger, sale or conveyance
had such Warrant been exercised immediately prior to such action. Such
agreement shall provide for adjustments that shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 11 and shall
also provide for the express assumption by any such successor or purchasing
company of the due and punctual performance and observance of each and every
covenant and condition of this Agreement to be performed and observed by the
Company. The Company shall mail by first class mail, postage prepaid, to each
Holder, notice of the execution of any such agreement. The provisions of this
subsection 11.4 shall similarly apply to successive consolidations, mergers,
sales or conveyances. The Warrant Agent shall be under no duty or
responsibility to determine the correctness of any provisions contained in any
such agreement relating either to the kind or amount of shares of stock or other
securities or property receivable upon exercise of Warrants or with respect to
the method employed and provided therein for any adjustments.
11.5 Statement on Warrants. Irrespective of any adjustments in the
Warrant Price or the number or kind of shares purchasable upon the exercise of
the Warrants, Warrant Certificates theretofore or thereafter issued may continue
to express the same price and number and kind of shares as are stated in the
Warrant Certificates initially issuable pursuant to this Agreement.
Section 12 Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares that shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 12,
be issuable in the exercise of any Warrant (or specified portion thereof), the
Company shall calculate and pay an amount in cash equal to the then current
market price per Warrant Share (as defined in Section 11.1(b) above) multiplied
by such fraction.
Section 13 No Rights as Stockholder; Notices to Holders. No holder of
Warrants, as such, shall be entitled to vote on or be deemed the holder of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise of Warrants for any purpose, nor shall anything
contained in this Agreement be construed to confer upon a Holder, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or give or withhold consent to any corporate action (whether
upon any recapitalization, issue of stock, reclassification of stock, change of
par value or change of stock to no par value, consolidation, merger, conveyance
or otherwise) or to receive notice of meetings or other actions affecting
stockholders (except as provided below), or to receive dividends or subscription
rights or otherwise, until the Warrants shall have been exercised and the Common
Stock purchasable upon the exercise thereof shall have become deliverable as
provided in this Agreement. If, however, at any time prior to the expiration of
the Warrants and prior to their exercise, any of the following events shall
occur:
(a) the Company shall declare any dividend payable in any securities
(other than additional shares of Common Stock) upon its shares of Common Stock
or make any distribution (other than a cash dividend) to the holders of its
shares of Common Stock; or
(b) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company be any transfer of all or
substantially all the assets of the Company to, or consolidation or merger of
the Company with or into, any other corporation; or
(c) a voluntary or involuntary dissolution, liquidation or winding up
of the Company shall be proposed; then in any one or more of said events, the
Company shall give notice in writing of such event to the Warrant Agent and the
Holders as provided in Section 19 hereof, such giving of notice to be completed
at least 20 days prior to the date fixed as a record date or the date of closing
the transfer books for the determination of the stockholders entitled to such
dividend, or distribution, or for the determination of stockholders entitled to
vote on such reorganization, recapitalization, transfer of assets, consolidation
or merger or on such proposed dissolution, liquidation or winding up. Such
notice shall specify such record date or the date of closing of the transfer
books, as the case may be. Failure to mail such notice or any defect therein or
in the mailing thereof shall not affect the validity of any action taken in
connection with ' such dividend, distribution, or reorganization,
recapitalization, transfer of assets, consolidation or merger or on such
proposed dissolution, liquidation or winding up.
Section 14 Disposition of Proceeds on Exercise of Warrants: Inspection
of Warrant Agreement. The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and currently pay to the Company all
immediately available funds received by the Warrant Agent for the purchase of
the Warrant Shares through the exercise of such Warrants. The Warrant Agent
shall, upon request of the Company from time to time, deliver to the Company
such complete reports of registered ownership of the Warrants and such complete
records or transactions with respect to the Warrants and the shares of Common
Stock as the Company may request. The Warrant Agent shall also make available
to the Company for inspection by the Company's agents or employees, from time to
time as the Company may request, such original books of accounts and records
maintained by the Warrant Agent in connection with the issuance and exercise of
Warrants hereunder, such inspection to occur at the Warrant Agent's principal
office in Dallas, Texas as specified in Section 19, during normal business
hours.
The Warrant Agent shall keep copies of this Agreement and any notice
given or received hereunder available for inspection by the Holders during
normal business hours at its principal office in Dallas, Texas.
Section 15 Merger or Consolidation or Change of Name of Warrant Agent.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto provided that such
corporation must be eligible for appointment as a successor Warrant Agent under
the provisions of Section 17 hereof. If at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement any of the
Warrants shall have been countersigned but not delivered, any such successor to
the Warrant Agent may adopt the countersignature of the original Warrant Agent
and deliver such Warrants so countersigned; and if at that time any of the
Warrants shall not have been countersigned, any successor to the Warrant Agent
may countersign such Warrants either in the name of the predecessor Warrant
Agent or in the name of the successor Warrant Agent; and in all such cases
Warrants shall have the full force provided in the Warrants and in this
Agreement.
If at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrants shall have been countersigned but not delivered,
the Warrant Agent may adopt the countersignatures under its prior name and
deliver such Warrants so countersigned; and if at that time any of the Warrants
shall not have been countersigned, the Warrant Agent may countersign such
Warrants either in its prior name or in its changed name; and in all such cases
such Warrants shall have the full force provided in the Warrants and in this
Agreement.
Section 16 Concerning the Warrant Agent. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the Holders, by their acceptance
of Warrants, shall be bound:
16.1 Correctness of Statements. The statements contained herein and in
the Warrants shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken by it.
16.2 Breach of Covenants. The Warrant Agent shall not be responsible
for any failure of the Company to comply with any of the covenants contained in
this Agreement or in the Warrants to be complied with by the Company.
16.3 Performance of Duties. The Warrant Agent may execute and exercise
any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents (which shall not include
its employers) and shall not be responsible for the misconduct or negligence of
any agent appointed with due care.
16.4 Reliance on Counsel. The Warrant Agent may consult at any time
with legal counsel satisfactory to it (who may be counsel for the Company) and
the Warrant Agent shall incur no liability or responsibility to the Company or
to any Holder in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the advice of such
counsel provided that such counsel shall have been selected with due care.
16.5 Proof of Actions Taken. Whenever in the performance of its duties
under this Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed conclusively to
be proved and established by a certificate signed by the Chairman of the Board,
the President, any Vice President, the Secretary or any Assistant Secretary of
the Company and delivered to the Warrant Agent; and such certificate shall be
full authorization to the Warrant Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
16.6 Compensation. The Company agrees to pay the Warrant Agent
reasonable compensation as set forth in the attached fee schedule for all
services rendered by the Warrant Agent in the performance of its duties under
this Agreement, to reimburse the Warrant Agent for all out-of-pocket expenses,
taxes and governmental charges incurred by the Warrant Agent in the performance
of its duties under this Agreement, and to indemnify the Warrant Agent and save
it harmless against any and all liabilities, including judgments, costs and
counsel fees, for anything done or omitted by the Warrant Agent in the
performance of its duties under this Agreement except as a result of the Warrant
Agent's negligence or misconduct.
16.7 Legal Proceedings. The Warrant Agent shall be under no obligation
to institute any action, suit or legal proceeding or to take any other action
likely in its reasonable judgment to involve material expense unless the Company
or one or more Holders shall furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses that may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such action as
the Warrant Agent may consider proper, whether with or without any such security
or indemnity. All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of the Holders, as their respective rights or
interests may appear.
16.8 Other Transactions in Securities of the Company. The Warrant
Agent and any stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants or other securities of the Company
or become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
16.9 Liability of Warrant Agent. The Warrant Agent shall act hereunder
solely as agent, and its duties shall be determined solely by the provisions
hereof. The Warrant Agent shall not be liable for anything that it may do or
refrain from doing in connection with this Agreement except for its own
negligence or misconduct. Anything in this Agreement to the contrary
notwithstanding, in no event shall Chemical be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including, but not limited
to, lost profits), even if Chemical has been advised of the likelihood of such
loss or damage and regardless of the form of action.
16.10 Reliance on Documents. The Warrant Agent will not incur any
liability or responsibility to the Company or to any Holder for any action taken
in reliance on any notice, resolution, waiver, consent, order, certificate, or
other paper, document or instrument reasonably believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
16.11 Validity of Agreement. The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant (except its countersignature
thereof); nor shall the Warrant Agent by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any Warrant
Shares (or other stock) to be issued pursuant to this Agreement or any Warrant,
or as to whether any Warrant Shares (or other stock) will, when issued, be
validly issued, fully paid and nonassessable, or as to the Warrant Price or the
number or amount of Warrant Shares or other securities or other property
issuable upon exercise of any Warrant.
16.12 Instructions from Company. The Warrant Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary or any Assistant Secretary of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer or officers.
Section 17 Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving the Company 30
days' notice in writing cf its intention to resign, but such resignation shall
take effect upon the appointment of a successor to the Warrant Agent. The
Warrant Agent may be removed by like notice to the Warrant Agent from the
Company. If the Warrant Agent shall give notice of its intention to resign or
shall be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Warrant Agent. If the Company shall fail to
make such appointment within a period of 30 days after such removal or after it
has been notified in writing of such intended resignation or incapacity by the
resigning or incapacitated Warrant Agent, or as notified in writing by any
Holder (who shall with such notice submit his Warrant for inspection by the
Company), then any Holder may apply to any court of competent jurisdiction for
the appointment of a successor to the Warrant Agent. If at any time there shall
be no warrant agent with respect to the Warrants, the Company shall perform the
duties of the Warrant Agent. Any successor warrant agent, whether appointed by
the Company or such a court, shall be a bank or trust company, in good standing,
incorporated under the laws of the United States of America or any state thereof
and having at the time of its appointment as warrant agent a combined capital
and surplus of at least $10,000,000. After appointment, the successor warrant
agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Warrant Agent without further act or deed;
but the former Warrant Agent shall deliver and transfer to the successor warrant
agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure
to file any notice provided for in this Section 17, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Warrant Agent or the appointment of the successor warrant agent, as the
case may be. In the event of such resignation or removal, the successor warrant
agent shall give to each Holder written notice (in accordance with Section 19
hereof) of such removal or resignation and the name and address of such
successor warrant agent.
Section 18 Identity of Transfer Agent. Forthwith upon the appointment
of any subsequent transfer agent for the Common Stock, or any other shares of
the Company's capital stock issuable upon the exercise of the Warrants, the
Company will file with the Warrant Agent a statement setting forth the name and
address of such subsequent transfer agent.
Section 19 Notices. Any notice pursuant to this Agreement by the
Company or by any Holder to the Warrant Agent, or by the Warrant Agent or any
Holder to the Company, shall be in writing and shall be mailed first class,
postage prepaid, to be delivered (a) to the Company, at its office at 11111
Wilcrest Green Drive, Suite 300, Houston, Texas 77042, Attention: President,
with a copy to the Company's General Counsel at said address; or (b) to the
Warrant Agent, to Chemical Shareholder Services Group, Inc., 2323 Bryan Street,
Suite 2300, Dallas, TX 75201, Attention: Sam A. Sellers. Each party hereto may
from time to time change the address to which notices to it are to be delivered
or mailed hereunder by giving like notice in writing to the other party.
Any notice mailed pursuant to this Agreement by the Company or the
Warrant Agent to the Holders shall be in writing and shall be mailed first
class, postage prepaid, or delivered to such Holders at their respective
addresses on the books of the Warrant Agent. Notice shall be effective three
days after mailing or upon delivery.
Section 20 Supplements and Amendments. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement, without notice
to or the approval of any Holder, in order to cure any ambiguity or to correct
or supplement any provision contained herein that may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder that the Company and the
Warrant Agent may deem necessary or desirable and that shall not be inconsistent
with the provisions of the Warrants and that shall not adversely affect the
interests of the Holders in any material respect.
Section 21 Successor. All covenants and provisions of this Agreement
by or for the benefit of the Company or the Warrant Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
Section 22 APPLICABLE LAW. THIS AGREEMENT AND EACH WARRANT ISSUED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OF
LAWS.
Section 23 Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the Holders.
Section 24 CCounterparts This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 25 Captions. The captions of the Sections and subsections of
this Agreement have been inserted for convenience only and shall have not
substantive effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the 29th day of October, 1993, to be effective as of October 29,
1993.
COMPANY: COASTWIDE ENERGY SERVICES, INC.
By:
Name:
Title:
WARRANT AGENT: CHEMICAL SHAREHOLDER SERVICES
GROUP, INC.
By:
Name:
Title:
EXHIBIT A
WARRANT CERTIFICATE
Certificate Number Number of Warrants
VOID AFTER 5:00 P.M., NEW YORK TIME, ON DECEMBER 22, 1996
COASTWIDE ENERGY SERVICES, INC.
CLASS B WARRANTS TO PURCHASE COMMON STOCK
THIS CERTIFIES THAT, for value received, __________ or registered
assigns, is the registered holder of the number of Class B warrants ("Warrants")
set forth above. Each Warrant entitles the holder thereof to purchase from
Coastwide Energy Services, Inc., a Delaware corporation (herein called the
"Company"), subject to the terms and conditions set forth hereinafter and in the
Warrant Agreement hereinafter referred to, one fully paid and non-assess- able
share of Common Stock, par value $.01 per share, of the Company (hereinafter
called the "Common Stock"), upon presentation and surrender of this Warrant
Certificate, with the Form of Election to Purchase duly executed, with the
instructions for the registration and delivery of Common Stock filled in, at any
time at or prior to 5:00 P.M., New York time on December 22, 1996, at the
offices of Chemical Shareholder Services Group, Inc., Warrant Agent of the Com-
pany (hereinafter called the "Warrant Agent") in Dallas, Texas or of its
successor warrant agent or, if there be no successor warrant agent, at the
corporate offices of the Company, and upon payment of the Warrant Price (as
hereinafter defined) and any applicable taxes. The price per share at which
Common Stock shall be purchasable upon exercise of Warrants (the "Warrant
Price") is $1.54 per share. The Warrant Price and the number and kind of shares
of stock of the Company purchasable upon the exercise of the Warrants
represented hereby are subject to modification and adjustment upon the happening
of certain events set forth in the Warrant Agreement.
This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of October 29, 1993 (the "Warrant
Agreement"), between the Company and the Warrant Agent with respect to Class B
Warrants to purchase 399,917 shares of Common Stock, to all of which terms,
provisions and conditions the registered holder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is hereby incorporated
herein by this reference and made a part hereof. Reference is hereby made to
the Warrant Agreement for a full description of the rights, limitation of
rights, obligations, duties and immunities hereunder of the Warrant Agent, the
Company and the registered holders of the Warrant Certificate. Copies of the
Warrant Agreement are available for inspection at the offices of the Warrant
Agent.
As provided in the Warrant Agreement, payment of the aggregate Warrant
Price shall be made in lawful money of the United States of America in cash, by
cashier's check, certified check or bank draft payable to the order of the
Company.
The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of shares, but shall
make adjustment therefor in cash on the basis of the current market price of
shares of Common Stock for any fractional interest (computed as provided in the
Warrant Agreement), all as provided in the Warrant Agreement. In no event shall
the Company be required to issue fractions of Warrants.
This Warrant Certificate, with or without other Warrant Certificates,
upon surrender to the Warrant Agent, any successor warrant agent or, in the
absence of any successor warrant agent, at the corporate offices of the Company,
may be exchanged for another Warrant Certificate or Certificates evidencing in
the aggregate the same number of Warrants as the Warrant Certificate or
Certificates so surrendered. If the Warrants evidenced by this Warrant
Certificate shall be exercised in part, the holder hereof shall be entitled to
receive upon surrender hereof another Warrant Certificate or certificates
evidencing the number of Warrants not so exercised.
No holder of this Warrant Certificate, as such, shall be entitled to
vote on or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained in the Warrant Agreement or herein be
construed to confer upon the holder of this Warrant Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or give or withhold consent to any corporate action (whether upon any
recapitalization, issue of stock, reclassification of stock, change of par value
or change of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Warrant Agreement), or to receive
dividends or subscription rights or otherwise, until the Warrants evidenced by
this Warrant Certificate shall have been exercised and the Common Stock
purchasable upon the exercise thereof shall have become deliverable as provided
in the Warrant Agreement.
If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Company's Common Stock or
other class of stock purchasable upon the exercise of the Warrants evidenced by
this Warrant Certificate are closed, the Company shall not be required to make
delivery of certificates for shares purchasable upon such exercise until the
date of the reopening of said transfer books.
Each holder of this Warrant Certificate by accepting the same consents
and agrees with the Company, the Warrant Agent, and with every other holder of a
Warrant Certificate that:
(a) this Warrant Certificate is transferable only on the registry books
of the Warrant Agent; and
(b) the Company and the Warrant Agent may deem and treat the person in
whose name this Warrant Certificate is registered as the absolute, true and
lawful owner hereof for all purposes whatsoever, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
The Company will pay any documentary stamp taxes attributable to the
issuance of Common Stock upon the exercise of Warrants evidenced by this Warrant
Certificate; provided, that the Company shall not be required to pay any such
taxes that may be payable in respect of any transfer involved in the issuance of
any Common Stock, Warrants or Warrant Certificates in a name other than that of
the registered holder of Warrants evidenced by this Warrant Certificate, and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated: September 30, 1993
COASTWIDE ENERGY SERVICES, INC.
By:_____________________________
Authorized Officer
ATTEST:
________________________________
Countersigned by
Chemical Shareholder Services Group. Inc.
as Warrant Agent
By: _______________________________________
Authorized Officer
FORM OF ASSIGNMENT
(To be executed by the Registered Holder if Such Holder Desires to Transfer
Warrants Evidenced by this Warrant Certificate)
FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers
unto ___________ whose address is _________ Warrants, evidenced by this Warrant
Certificate, and does hereby irrevocably constitute and appoint __________
Attorney, to transfer the said Warrants evidenced by this Warrant Certificate on
the books of the Company, with full power of substitution.
Dated: _________, 19_____ Signature ____________
NOTICE: The above signature must correspond with the name as written upon the
face of this Warrant Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Signature Guaranteed: ____________
FORM OF ELECTION TO PURCHASE
(To Be Executed if Holder Desires to Exercise Warrants Evidenced by This Warrant
Certificate)
TO COASTWIDE ENERGY SERVICES, INC.:
The undersigned hereby irrevocably elects to exercise _________ Warrants
evidenced by this Warrant Certificate to purchase full shares of Common Stock
issuable upon exercise of said Warrants, and hereby makes payment in full of the
Warrant Price of such shares and any applicable taxes. The undersigned requests
that certificates for such shares be issued in the name of
PLEASE INSERT SOCIAL SECURITY
OR TAX IDENTIFICATION NUMBER
_________________________________
___________________________________________________________
(Please print name and address)
___________________________________________________________
and, if said number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, requests that a new Warrant Certificate evidencing the
Warrants not so exercised be issued in the name of and delivered to
___________________________________________________________
(Please print name and address)
___________________________________________________________
Dated: _________, 19_____ Signature ________________
NOTICE: The above signature must correspond with the name as written upon
the face of this Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever, or if signed by
any other person the Form of Assignment hereon must be duly
executed. If the certificate representing the shares or any Warrant
Certificate representing Warrants not exercised is to be registered
in a name other than that in which this Warrant Certificate is
registered, the signature of the holder hereof must be guaranteed.
Signature Guaranteed: ___________________
COASTWIDE ENERGY SERVICES, INC.
WARRANT "B" ISSUE
FEE SCHEDULE
Service Description Fee
1. Account Administration $1,500.00 per year
2. Maintenance of Stockholder $ 1.90 per Stockholder
per Stockholder Account
Accounts
3. Process Transfers of Ownership: $ 2.00 per Certificate
Transferred
4. Proxy Agent
-- Proxy Preparation $ .15 per Proxy Card
-- Proxy Tabulation $ .50 per Proxy
-- Inspector of Election $ 75.00 per Person per
Day in Dallas
5. Mailing Services $ 30.00 per hour
Fee is $30.00 per hour; approximately
100 envelopes can be completed per hour.
Provide set of stockholder name/address $ 50.00 per List/Labels
labels for mailing by customer.
(quarterly reports, etc.)
Fee is $.05 per name, with a $50.00
minimum per set.
6. Stockholder lists, analyses, or $ .05 per Stockholder
sets of labels. Name
Minimum Fee is $50.00 each
Coastwide Energy Services, Inc.
Warrant "B" Issue
7. Out-of-Pocket Expenses
All out-of-pocket expenses such as travel, counsel
fees, stationery, binders, ledger sheets, checks,
forms, printing, envelopes, postage and insurance will
be added at cost to the regular charges for services.
Where applicable, transactions requiring research (such
as: confirmations from brokers) will involve a service
charge to the requesting party based on the time
required in completing the research.
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/ William T. Van Kleef
Name: William T. Van Kleef
Title: Senior Vice President and
Chief Financial Officer
COASTWIDE ENERGY SERVICES, INC.
By: /s/ Stephen A. Wells
Stephen A. Wells, President
CHEMICAL MELLON SHAREHOLDER SERVICES
L.L.C. (as Warrant Agent)
By: /s/ Sam A. Sellers
Name: Sam A. Sellers
Title: Asst. Vice Pres.
THIS DEBENTURE AND THE SHARES OF COMMON STOCK
("SHARES") ISSUABLE UPON CONVERSION OF THE
DEBENTURE BY A HOLDER HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS. THE DEBENTURE AND THE
SHARES MAY NOT BE SOLD UNLESS REGISTERED THEREUNDER
OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION SHALL
BE AVAILABLE. THE TRANSFER RESTRICTIONS AND OTHER
OBLIGATIONS AND CONDITIONS ARE SPECIFIED HEREIN.
COASTWIDE ENERGY SERVICES INC.
8% CONVERTIBLE SUBORDINATED DEBENTURE
__________ , 1994 $ _____________
For value received, the undersigned, COASTWIDE ENERGY SERVICES, INC.,
a Delaware corporation (the "Company"), hereby promises to pay __________ having
his or its address at __________ , or registered assigns, the principal amount
of __________ DOLLARS ($ ______ ), together with interest thereon calculated
from the date of issuance hereof in accordance with the provisions of this 8%
Convertible Subordinated Debenture ("Debenture"). The capitalized terms set
forth in the Debenture shall have the meanings set forth in Section 1, unless
otherwise defined herein.
1. Definitions. The following terms shall be defined as follows:
"Business Day" shall mean any day that is not a Saturday, Sunday, or a
day on which banks in Houston, Texas are not required to be open.
"Common Stock" shall mean the shares of common stock, $.01 par value
per share, of the Company.
"Conversion Date" shall have the meaning set forth in Section 6(b).
"Conversion Price" shall have the meaning set forth in Section 6(a).
"Conversion Rights" shall mean the rights of the Holders to convert
the Debenture into shares of Common Stock pursuant to the terms of the
Debenture.
"Events of Default" shall have the meaning set forth in Section 8.
"Holder" shall mean the original payee of this Debenture and each
registered subsequent Holder of the Debenture.
"Indebtedness" shall mean all obligations (including principal,
interest and premiums, if any) of the Company held by banks or other
financial institutions, including without limitation finance companies
and insurance companies (a) for borrowed money, (b) evidenced by
non-convertible bonds, debentures, notes or other similar instruments
(including letters of credit and bankers' acceptances) (c) all
indebtedness that is guaranteed directly or indirectly by the Company
and (d) purchase money indebtedness or indebtedness secured by
property at the time of acquisition, for the payment of which the
Company is directly or indirectly liable.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Indebtedness" shall mean the principal of, interest on, and
premiums, if any, for (a) all Indebtedness of the Company, whether
outstanding on the date of the Debenture or thereafter created or
assumed, (b) all deferrals, renewals, extensions and refundings of,
and amendments, modifications and supplements to, any Indebtedness.
unless the terms of the instrument creating or evidencing any
Indebtedness expressly provide that it is not superior in right of
payment to the Debenture.
2. Payment of Interest.
(a) Interest will accrue on the unpaid principal amount of the
Debenture outstanding from time to time at a rate equal to eight
percent (8%) per annum (calculated on the basis of a 360 day
year). Subject to Section 4 and the terms of any Senior
Indebtedness, the Company will pay interest accrued quarterly
commencing October 1, 1994 and on the first day of each January,
April July and October thereafter until repaid or converted (each
an "Interest Payment Date"). Any accrued interest which for any
reason has not theretofore been paid will be paid in full on the
date on which the final principal payment on the Debenture is
paid.
(b) Payments of inte
Holder's address stated in the Debenture, in lawful money of the
United States of America. If payment is due on any day that is
not a Business Day, the date shall be extended to the next
succeeding Business Day.
3. Payment of Principal.
(a) Subject to Section 4 and the terms of any Senior Indebtedness,
unless earlier redeemed or converted, the Company shall repay the
principal amount of the Debenture on July 1, 2004.
(b) Payments of principal are to be made on the Debenture, at the
Holder's address stated in the Debenture, in lawful money of the
United States of America. If payment is due on any day that is
not a Business Day, the due date shall be extended to the next
succeeding Business Day.
4. Subordination.
(a) Debenture Subordinated to Senior Indebtedness. The Company, for
itself, its successors and assigns, covenants and agrees, and the
Holder of the Debenture likewise covenants and agrees, that the
Indebtedness evidenced by the Debenture, including the principal
of, premium, if any, and interest thereon and any other amounts
payable with respect to the Debenture, shall be subordinate and
subject in right of payment, to the extent and in the manner
hereinafter set forth, to the prior payment of all Senior
Indebtedness of the Company and that each holder of Senior
Indebtedness of the Company whether now outstanding or hereafter
created, incurred, assumed or guaranteed shall be deemed to have
acquired Senior Indebtedness of the Company in reliance upon the
covenants and provisions contained in this Debenture.
(b) Terms of Subordination. No payment of the principal of, premium,
if any, or interest on the Debenture shall be made by the Company
or received by the Holder, and no prepayment, retirement,
purchase or other acquisition of the Debenture shall be made by
the Company, if at the time thereof or immediately thereafter
giving effect thereto, there exists (and has not been waived) any
default with respect to any provision of any Senior Indebtedness
then outstanding or under any agreement under which such Senior
Indebtedness was issued.
Upon any distribution of the assets of the Company upon any
dissolution, winding up, liquidation, reorganization or
recapitalization or readjustment of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an
assignment for the benefit of creditors or any other arrangement
or marshalling of the assets and liabilities of the Company, or
otherwise); provided that the consolidation of the Company with
or the merger of the Company into another company or the sale of
its property as an entirety, or substantially as an entirety, to
another company shall not be deemed a winding up for purposes
hereof if such company as a part of such consolidation, merger or
sale, assume the obligation to pay the indebtedness evidenced by
the Debenture:
(i) Except as hereinafter provided, the holder or holders of
Senior Indebtedness shall first be entitled to receive
payment in full, or have provisions satisfactory to such
holders made for payment in full, of the principal
thereof, premium, if any, and interest thereon, before the
Holder is entitled to receive any payment on account of
the principal of, premium, if any, or interest on the
Debenture; and
(ii) Except as hereinafter provided, any payment or
distribution of assets of the Company of any kind or
character, whether in cash, property or securities to
which the Holder would be entitled except for the
provisions hereof shall be paid by the liquidating trustee
or agent, whether a trustee in a receiver or liquidating
trustee or other trustee or agent, directly to the holder
or holders of the Senior Indebtedness of the Company or
their representative or representatives, ratably according
to the aggregate amounts remaining unpaid on account of
the principal of, premium, if any, and interest on, the
Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution, or provision therefor,
to the holder of such Senior Indebtedness; provided that
no such delivery shall be made to the holders of Senior
Indebtedness of stock or obligations which are issued
pursuant to reorganization or readjustment proceedings or
dissolution or liquidation proceedings, or upon any
merger, consolidation, sale, lease, transfer or other
disposal of property or assets not prohibited by the
provisions of the Debenture, by the Company, as
reorganized, or by the company succeeding to the Company
or acquiring its property and assets, if such stock or
obligations are subordinate and junior at least to the
extent provided in (and governed by terms substantially
identical to the provisions of) this Section 4(b) to the
payment of all Senior Indebtedness then outstanding and to
the payment of any stock or obligations which are issued
in exchange or substitution for any Senior Indebtedness
then outstanding.
In the event that any payment or distribution of assets of
the Company of any kind or character, whether in cash,
property or securities, shall be received by the Holder
which such Holder is not entitled to receive under this
Section 4(b), such payment or distribution shall be held
in trust by such Holder for, and immediately paid over to,
the holder or holders of Senior Indebtedness remaining
unpaid or unprovided for or their representative or
representatives, ratably according to the aggregate
amounts remaining unpaid on account of the principal of,
premium, if any, and interest on such Senior Indebtedness,
until all such Senior Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or
distribution, or provision therefor, to the holders of
such Senior Indebtedness.
(c) Subrogation of the Debenture. Subject to the payment in full of
all Senior Indebtedness, the rights of the Holder shall be
subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities
of the Company applicable to Senior Indebtedness until the
principal of and interest on the Debenture shall be paid in full;
and, for the purposes of such subrogation, no payments or
distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the Holder would be entitled
except for the provisions of this Section 4, and no payment over,
pursuant to the provisions of this Section 4, to the holders of
Senior Indebtedness, and the Holder, be deemed to be payment by
the Company to or on account of the Senior Indebtedness. It is
understood that the provisions of this Section 4 are, and are
intended solely for the purpose of, defining the relative rights
of the Holder on the one hand, and the holder of Senior
Indebtedness on the other hand.
Nothing contained in this Section 4 or elsewhere herein is
intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the
Holder, the obligation of the Company, which is absolute and
unconditional, to pay to the Holder the principal of and interest
on the Debenture as and when the same shall become due and
payable in accordance with the terms hereof, or is intended to or
shall affect the relative rights of the holders of Senior
Indebtedness, nor shall anything herein prevent the Holder from
exercising all remedies otherwise permitted by applicable law
upon default hereunder, subject to the rights, if any, under this
Section 4 of the holders of Senior Indebtedness in respect of
cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payments or distribution of assets of the Company
refereed to in this Section 4, the Holder shall be entitled to
rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation
or reorganization proceedings are pending, or a certificate of
the receiver, trustee in bankruptcy, liquidating trustee,
custodian, agent or other party making such payment or
distribution, delivered to the Holder, for the purpose of
ascertaining the parties entitled to participate in such
distribution, the holders of the Senior Indebtedness and other
Innndebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Section 4.
The terms "paid in full" and "payment in full" as used in this
Section 4 with respect to Senior Indebtedness mean the receipt,
in money or money's worth, of the principal amount of the Senior
Indebtedness (and any premium due thereon) and full interest
thereon to the date of such payment of principal and all other
amounts due to holders of Senior Indebtedness pursuant to the
provisions of the instruments providing therefor.
Nothing contained in this Section 4 shall impair the right of the
Holder to convert this Debenture into shares of Common Stock as
provided in Section 7 hereof.
5. Optional Prepayment,
(a) To the extent that the Company shall have funds legally available
for such payment, the Company may prepay the Debenture at its
option, in whole or from time to time in part, after July 1, 1997
at a prepayment price equal to 105% of the principal amount plus
accrued interest to the prepayment date.
(b) If the Company proposes to prepay less than all of the Debentures
outstanding on any of the above dates, the Debentures to be
prepaid will be selected by lot or pro rata or any other method
as may be determined by the Board of Directors of the Corporation
to be fair. Notice of prepayment shall be mailed at least 15
business days before the prepayment date to each Holder to be
prepaid at its registered address. On and after the prepayment
date interest shall cease to accrue on the Debentures or portion
thereof called for prepayment.
6. Conversion. Each Debenture may be converted at any time, at the
option of the Holder, in whole or in part, into shares of Common Stock
on the terms and conditions set forth in this Section 6.
(a) Each Debenture shall be convertible at the option of the Holder
thereof, in whole or in part, at any time and from time to time,
as hereinafter provided, into that number of fully paid and
nonassessable shares of Common Stock (as such shares may be
constituted on the Conversion Date, as hereinafter defined) as
shall be obtained by dividing the principal amount of the
Debenture outstanding on the Conversion Date which the Holder
desires to convert by the Conversion Price, subject to adjustment
as provided herein. The Conversion Price shall be 4.25 per
share.
(b) Before any Holder of this Debenture shall be entitled to convert
the same into Common Stock, he shall deliver the Debenture, for
transfer and conversion, at the office of the Company, at 11111
Wilcrest Green, Suite 300, Houston, Texas 77042 (or such other
office or agency of the Company as the Company may designate by
notice in writing to the Holder) and shall give written notice to
the Company that he elects to convert all or part of the
Debenture and shall state in writing therein the name or names in
which he wishes the certificate or certificates of Common Stock
to be issued. Conversion shall be deemed to have been effected
on the date when such delivery is made, and such date is referred
to herein as the "Conversion Date." The Company will, as soon as
practicable thereafter, issue and deliver to such Holder
certificates for the number of shares of Common Stock to which he
shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share as hereinafter provide If surrendered
Debentures are converted only in part, the Company will issue and
deliver to the Holder, a new Debenture representing the remaining
balance of the Debenture.
(c) Adjustments to Conversion Price. The Conversion Price shall be
subject to adjustment as follows:
(i) Adjustments for Changes in Capital Stock. If the Company:
(1) pays a dividend in shares of Common Stock to holders
of Common Stock;
(2) subdivides outstanding shares of Common Stock into a
greater number of shares;
(3) combines outstanding shares of Common Stock into a
smaller number of shares;
(4) pays a dividend on shares of Common Stock in shares of
its capital stock other than Common Stock or makes a
distribution on Common Stock in shares of its capital
stock other than Common Stock; or
(5) issues by reclassification of shares of Common Stock
any other shares of its capital stock;
then the Conversion Price in effect immediately prior to
such action shall be adjusted so that the Holder of this
Debenture thereafter converted may receive the number of
shares of capital stock of the Company which such Holder
would have owned immediately following such action if such
Holder had converted the Debenture immediately prior to
such action.
For a dividend or distribution, the adjustment shall become
effective immediately after the record date for the
dividend or distribution. For a subdivision, combination
or reclassification, the adjustment shall become effective
immediately after the effective date of the subdivision,
combination or reclassification.
If after an adjustment the Holder upon conversion may
receive shares of two or more classes of capital stock of
the Company, the Board of Directors of the Company shall
determine the allocation of the adjusted Conversion Price
between or among the classes of capital stock. After such
allocation, the Conversion Price of the classes of capital
stock shall thereafter be subject to adjustment on terms
comparable to those applicable to the Common Stock
contained in this Section 6(c).
(ii) Adjustment for Rights Issue. If the Company issues any
rights or warrants to all or substantially all holders of
shares of Common Stock entitling them after the record date
mentioned below to purchase shares of Common Stock (or
securities convertible into shares of Common Stock) at a
price per share (or having a Conversion Price per share)
less than the Market Price per share on that record date,
the Conversion Price shall be adjusted in accordance with
rights or warrants.
N x P
-----
C' = C x O + M
-------
O + N
where:
C' = the adjusted Conversion Price.
C = the current Conversion Price.
O = the number of shares of Common Stock outstanding
on the record date.
N = the number of additional shares of Common Stock
offered
P = the offering price per share of the additional
shares.
M = the closing price per share of Common Stock on
the record date.
The adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive the rights or warrants.
If all of the shares of Common Stock or securities
convertible into shares of Common Stock subject to such
rights or warrants have not been issued when such rights or
warrants expire, then the Conversion Price shall promptly
be readjusted to the Conversion Price which would then be
in effect had the adjustment upon the issuance of such
rights or warrants been made on the basis of the actual
number of shares of Common Stock (or securities convertible
into shares of Common Stock) issued upon the exercise of
such rights or warrants.
(iii) Adjustment for Certain Other Distributions. If the Company
distributes to all or substantially all holders of shares
of Common Stock any assets or general evidences of
indebtedness or any rights or warrants to purchase assets
or general evidences of indebtedness of the Company, then
the Conversion Price shall be adjusted in accordance with
the formula:
C' = C x (O x M) - F
-----------
(O x M)
where:
C' = the adjusted Conversion Price.
C = the current Conversion Price.
O = the number of shares of Common Stock outstanding
on the record date.
M = the Market Price per share of Common Stock on the
F = the fair market value on the record date as
determined by the Board of Directors of the
assets or general evidences of indebtedness
distributed.
The adjustment shall be made successively whenever any such
distribution is made, and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive the distribution. This
Section does not apply to cash dividends or cash
distribution Also, this Section does not apply to rights or
warrants referred to in Section 7(c)(ii).
(iv) Voluntary Adjustment. The Company at any time may
decrease the Conversion Price, temporarily or otherwise,
by any amount but in no event shall such Conversion Price
result in the issuance of Common Stock at a price less
than the par value of the Common Stock at the time such
decrease is made. Any decreased Conversion Price shall be
available for at least 20 days from the date on which
notice of such decrease is filed by the Company with the
transfer agent for the Common Stock, and such decrease
shall be irrevocable during such period. The Company
shall notify Holders of the Debentures at least 15 days
prior to the date on which the reduced Conversion Price
takes effect.
(v) Reorganization, Consolidation, Merger or Sale. In case
the Company shall consolidate or merge into or with
another corporation, or in case the Company shall sell or
convey to any other person or persons all or substantially
all the property of the Company, the Holder of the
Debenture shall have the right thereafter to convert the
Debenture into the kind and amount of shares of stock,
other securities, cash and property receivable upon such
consolidation, merger, sale or conveyance by a holder of
the number of shares of Common Stock into which such
shares might have been converted immediately prior to such
consolidation, merger, sale or conveyance, and shall have
no other conversion rights. In any such event, effective
provision shall be made, in the certificate or articles of
incorporation of the resulting or surviving corporation or
otherwise or in any contracts of sale and conveyance so
that, so far as appropriate and as nearly as reasonably
may be, the provisions set forth herein for the protection
of the conversion rights of the Debentures shall
thereafter be made applicable.
(vi) Notice of Adjustment. Upon any adjustment of the
Conversion Price, then and in each such case, the Company
shall give written notice thereof, by first class mail,
postage prepaid, addressed to the Holder at the address of
the Holder as shown on the books of the Company, which
notice shall state the Conversion Price resulting from
such adjustment and the increase or decrease, if any, in
the number of shares purchasable at such price upon the
exercise of the conversion rights, setting forth in
reasonable detail the method of calculation and the facts
upon which such calculation is based.
(vii) Notice of Certain Events. In the event:
(a) that the Company shall authorize the granting to all
holders of its Common Stock of rights or warrants to
subscribe for of puchase shares of stock of any class
or of any other rights or warrants; or
(b) of any capital reorganization or classification of
the Common Stock, or any consolidation or merger to
which the Company is a parry and for which approval
of any stockholders of the Company is required, or of
the sale, lease or other disposition of all or
substantially all of the assets of the Company, and
in the event any such consolidation, merger or sale
will result in a change in the shares held by the
holders of Common Stock; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company, then the
Company shall cause to be mailed to the Holder a
notice stating (i) the date on "which a record is to
be taken for the purpose of such granting of rights
(the "record date"), or, if a record is not to be
taken, the date or anticipated date as of which the
holders of Common Stock of record to be entitled to
such granting of rights are to be determined or (ii)
the date or anticipated date on which such capital
reorganization, reclassification, consolidation,
merger, sale, lease, or other disposition,
dissolution, liquidation or winding-up is expected to
become effective, and which notice, in the case of
the notice specified in clause (ii), shall also state
the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other
property deliverable upon such capital
reorganization, reclassification, consolidation,
merger, sale, lease, or other disposition,
dissolution, liquidation or winding-up.
(viii) Company to Reserve Common Stock. The Company covenants
that it will at all times reserve and keep available out
of the aggregate of its authorized but unissued Common
Stock or its issued Common Stock held in its treasury, or
both, for the purpose of effecting conversions of the
Debenture, the full number of shares of Common Stock then
deliverable upon the conversion of the outstanding
principal amount of this Debenture; and if at any time the
number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of the
outstanding principal amount of the Debenture, the Company
will take such corporate action as may in the opinion of
its counsel be necessary to increase its authorized but
unissued Common Stock to such number of shares as shall be
sufficient for that purpose.
(ix) Taxes on Conversion The Company will pay any and all
documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of
Common Stock on conversion of the Debenture.
(x) Representations of the Holder. In connection with any
conversion hereunder, the Holder will supply an investor's
representation letter to the Company to the effect that:
(1) the shares of Common Stock are being acquired for
investment only and not with a view to resale or other
distribution; (2) the Company has made available to the
Holder and its representatives all documents that the
Holder has requested relating to the Company and that the
Holder has carefully read all such documents; (3) the
Company has provided answers to all of the Holder's
questions concerning the Company and the Common Stock; and
(4) such other provisions as the Company deems net to
insure that it may issue the shares of Common Stock
without registration pursuant to an applicable exemption
therefrom under the Securities Act and state securities
laws.
(d) Exercise of the Conversion Rights or Transfer of the Debenture or
Common Stock. Each certificate for shares of Common Stock
initially issued upon the exercise of the Conversion Rights shall
be stamped or otherwise imprinted with a legend in substantially
the following form:
"The transfer of the shares represented by this certificate is
subject to the conditions specified in the 8% Convertible
Subordinated Debenture of Coastwide Energy Services, Inc. and no
transfer of such shares shall be valid or effective until such
conditions have been fulfilled with respect to such transfer."
The Holder of this Debeture or the shares of Common stock issued
upon exercise of the Conversion Rights, by acceptance thereof,
agrees to give written notice to the Company before transferring
the Debenture, or any shares of Common Stock received on the
exercise of the Conversion Rights, of the Holder's intention to
do so, describing briefly the manner of any proposed transfer of
this Debenture or shares of Common stock or the Holder's
intention as to the disposition (and the intended method thereof)
accompanied by an opinion of counsel (which opinion and choice of
counsel shall be acceptable to the Company in the exercise of its
reasonable discretion) opining that the proposed transfer and
disposition of the Debenture or of shares of Common Stock may be
effected without registration or qualification under the
Securities Act or state securities laws applicable to such
transfer of the Debenture or the shares of Common stock issued
with respect thereto. No later than 15 days after receipt by the
Company of such written notice and opinion of counsel, the
Company shall notify the Holder of the Company's acceptance or
rejection of the opinion of counsel and choice of counsel, and if
the Company has accepted the same, the Holder shall be entitled
to transfer this Debenture or such shares of Common stock all in
accordance with the terms of the notice as delivered by the
Holder to the Company.
If the Company rejects the opinion of counsel or the choice of
counsel as set forth above, the proposed transfer or disposition
may not be effected without registration or qualification of this
Debenture or the shares of Common stock issued upon the exercise
of the Conversion Rights, and the Company shall so notify the
Holder of such shares of Common Stock and the Holder will not
transfer such securities unless they have been so registered or
qualified. The Company shall not register or recognize, or be
required to register or recognize, any attempted transfer or
disposition of this Debenture or any shares of Common stock
issued upon conversion thereof in contravention of the Debenture.
(e) Fractional Shares: Accrued Interest: Partial Conversion. No
fractional shares or scrip representing fractional shares shall
be issued upon conversion of the Debenture. Instead of any
fractional share of Common Stock that would otherwise be issuable
upon conversion of the Debenture, the Company will pay a cash
adjustment an amount equal to the price per share of Common Stock
at the close of business on the business day prior to the day of
conversion. In case the Debenture is converted in part only, the
Company shall, upon such conversion, execute and deliver to the
Holder at the expense of the Company, a Debenture in aggregate
principal amount equal to the remaining principal balance of the
Debenture surrendered and interest from the date to which
interest has been paid on the Debenture so surrendered.
7. Registration Rights of Holder.
(a) If the Company at any time after the date hereof proposes to
register any shares of its Common stock under the Securities Act
(except with respect to any registration filed on Form S-8 or
Form S-4 or such other similar form then in effect under the
Securities Act), it will each such time promptly give written
notice to (i) each holder (a "Registration Holder") of shares of
Common Stock who has received such shares of Common Stock upon
conversion of the Debenture (such shares of Common Stock being
referred to herein as "Registrable Shares") and (ii) each Holder
of this Debenture, of its intention to do so and, upon the
written request of any Registration Holder given within 10
calendar days after receipt of any such notice (which request
shall state the intended method of disposition of such shares by
such Registration Holder), subject to the limitations set forth
in subsection (g) below, the Company will use its best efforts to
cause Registrable Shares hell by such Registration Holder as to
which registration is so requested, to be registered under the
Securities Act, all to the extent requisite to permit the sale or
other disposition (in accordance with the intended methods
thereof, as aforesaid) by such Registration Holder (each such
registration under the Securities Act being referred to herein as
a "Registration"); provided, however, that (A) the Company may at
any time withdraw or cease proceeding with any such Registration
if it shall at the same time withdraw or cease proceeding with
the ration of such other shares of its Common Stock originally
proposed to be registered, and (B) if the managing underwriter of
any offering shall state in writing that in its opinion the
inclusion of such Registrable Shares in the proposed registration
statement would have a material adverse effect on the proposed
offering, then at the Company's request, (x) the Registration
Statement shall include only that number of Registrable Shares,
if any, which the managing underwriter believes may be offered
without causing such adverse effect, and the number of
Registrable Shares shall be allocated among all Registration
Holders requesting to participate in such Registration Statement
in proportion (as nearly as practicable) to the number of
Registrable Shares requested to be included by each Registration
Holder or (y) the Registration Statement shall provide that the
effective date of the Registration Statement with respect to the
Registrable Shares shall be delayed for ninety (90) days.
Notwithstanding anything to the contrary contained herein, the
Company will not be obligated alter the date hereof to take any
action to effect more than four registrations pursuant to the
piggy-back registration rights contained in this Section 7.
(b) If Registration Holders representing the aggregate more than 40%
of the Negotiable Shares may make written request to the Company
to file, at Holder's election, a registration statement covering
the Registrable Securities owned by such Holders. The Company
agrees upon receiving such written request to comply therewith as
promptly as practicable subject to the following terms and
conditions:
(i) The Company shall have the privilege of postponing action
for a reasonable period of time (not exceeding 120 days) in
the event the filing would, in the reasonable opinion of the
Board of Directors, adversely affect a material financing
project, or a proposed or pending acquisition, merger, or
other corporate reorganization for which the Company is or
is expected to be a party.
(ii) Upon receipt of such written request, the Company shall
promptly give written notice thereof to all holders of the
Debenture at their addresses as they appear on the books of
the Borrower, offering to include such Holder's Registrable
Securities in a registration statement to be filed by the
Company as provided herein, if such Holder makes a written
request therefor within 15 days after the giving of such
notice by the Company; provided that if the Company shall
have elected under (i) above to postpone action under this
paragraph, it shall, in such notice, state the termination
date of the period of such postponement and the time for
Holders to make said written requests shall be extended to
15 days after said termination date. The Company shall not
be required to affect more than two registrations pursuant
to the demand registration rights provided herein.
(c) If and whenever the Company is required pursuant to the terms of
this Debenture to use its best efforts to effect the registration
under the Securities Act of any Registrable Shares held by the
Registration Holder, the Company will, as promptly as possible:
(i) prepare and file with the Securities and Exchange
Commission (the "SEC) a Registration Statement with
respect to such Registrable Shares and use its best
efforts to cause such Registration Statement to become and
remain effective for a period of at least ninety (90)
days;
(ii) prepare and file with the SEC such amendments and
supplement:, to such Registration Statement and the
prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective
for ninety (90) days and to comply with the provisions of
the Securities Ad with respect to the sale or other
disposition of all such Registration Holder's Registrable
Shares covered by such Registration Statement;
(iii) furnish to such Registration Holder such number of copies
of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act,
and such other documents as such Registration Holder may
reasonably request in order to facilitate the public sale
or other disposition of such Registrable Shares owned by
such Registration Holder;
(iv) register or qualify the Registrable Shares covered by such
Registration Statement under the securities or blue sky
laws of such states as the Company shall determine, and do
any and all other acts and which may be necessary or
advisable to enable such Registration Holder to consummate
the public sale or other disposition in such jurisdictions
of such Registrable Shares owned by such Registration
Holder; provided, however, that the Company shall not be
required to quality to do business as a foreign
corporation in any state where it is not then so called,
nor take any action which will subject it to general
service or process in any state where it is not then so
subject;
(v) notify such Registration Holder, at any time when a
prospectus relating to such Registration Holder's
Registrable Shares covered by such Registration Statement
is required to be delivered under the Securities Act
within the appropriate period mentioned in clause (ii)
above, of the happening of any event as a result of which
the prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then
existing, and at such Registration Holder's request,
prepare and finish to such Registration Holder a
reasonable number of copies of a supplement to or an
amendment of such prose as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable
Shares, such prospectus shall Dot include an untrue
statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the
circumstances then existing; and
(vi) furnish, at such Registration Holder's request, on the
date that such Registration Holder's Registrable Shares
are delivered to the underwriters for sale pursuant to a
registration thereof pursuant to this Debenture or, if
such Registrable Shares are not being sold through
underwriters, on the date the Registration Statement with
respect to such securities becomes effective, an opinion,
dated such date, of the counsel representing the Company
for the purposes of such Registration Statement, stating
that such Registration Statement has become effective
under the Securities Act and that (1) to the knowledge of
such counsel, no stop order suspending the effectiveness
thereof has been issued and no proceedings for that
purpose have been instituted or are pending or
contemplated under the Securities Act; (2) the
Registration Statement, the related prospectus, and each
amendment or supplement thereto, comply as to form in all
material respects with the requirements of the Securities
Act and the applicable rules and regulations of the SEC
thereunder (except that such counsel need not express an
opinion as to financial statements contained therein); (3)
the descriptions in the Registration Statement or the
prospectus, or any amendment or supplement thereto, of all
legal documents or instruments present the information
required to be shown in compliance with the Securities
Act; and (4) such counsel does not know of any legal or
governmental proceedings, pending or contemplated,
required to be described in the Registration Statement or
prose or any amendment or supplement thereto, or to be
filed as exhibits to the Registration Statement which are
not described and filed as required; such opinion of
counsel shall additionally cover such other legal matters
with respect to the registration in respect of which such
opinion is being given as such Registration Holder may
reasonably request.
(d) Expenses. All expenses incurred by the Company in complying with
this Section 7, except for registration and filing fees which
shall be borne by the Registration Holders, shall be paid by the
Company. registration Holders shall be solely responsible for any
sales commissions on the sale of their Registrable Shares
(e) Indemnification by the Company. In the event of any registration
of any of a Registration Holder's Registrable Shares under the
Securities Act pursuant to this Section, the Company will
indemnify and hold harmless such Registration Holder, its
attorneys and accountants, each underwriter of such Registrable
Shares and each other person, if any, who controls such
Registration Holder or such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Registration Holder,
such underwriter or such controlling person may become subject
under the Securities Ad or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained (on the effective
date thereof) in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any
preliminary prose or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances
then existing; and will reimburse such Registration Holder, such
underwriter and each such controlling person for reasonable legal
or any other expenses reasonably incurred by such Registration
Holder, such underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or omission or alleged omission made in said
Registration Statement, said preliminary prospectus or said
amendment or supplement in reliance upon and in conformity with
written information furnished to the Company through an
instrument duly executed by such Registration Holder or such
underwriter, as the case may be, speccically for use in the
preparation thereof.
(f) Indemnification by Registration Holders. In the event of any
registration of any of a Registration Holder's Registrable Shares
pursuant to this Section, such Registration Holder will indemnify
and hold harmless the Company, its attorneys, accountants and
each other person, if any, who controls the Company within the
meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company or
such controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained (on the effective date thereof) in
any Registration Statement under which such Registrable Shares
were registered under the Securities Act, any preliminary
prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fad required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances
then existing; in each case to the extent and only to the extent
that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in said Registration Statement,
said prep prospectus or said prospectus or said amendment or
supplement in reliance upon and in conformity with written
information finished to the Company through an instrument duly
executed by such Registration Holder specifically for use in the
preparation thereof, and such Registration Holder will reimburse
the Company and each such controlling person for reasonable legal
or any other expenses reasonably incurred by the Company or such
controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that each Registration Holder shall only be liable for
any losses, claims, damages or liabilities pursuant to this
subsection (e) for an amount up to the amount of proceeds such
Registration Holder receives from the sale of his Registrable
Shares in a Registration.
(g) Notice of Claim. In the event of any claim for which indemnity
is sought under subsection (d) or (e) above, the party seeking
indemnification shall give prompt notice of its claim to the
other party and shall permit the other party to engage counsel
and to defend against the same.
(h) Limitation on Registration Rights.
(i) The Registration Holder's right to request registration of
Registrable Shares under this Section shall cease and
terminate as to any particular Registrable Shares when
such Registrable Shares shall have been effectively
registered and sold under the Securities Act have been
transferred in a disposition exempt from such registration
requirement or a public sale can be effected without
registration. For purposes of the Debenture, shares of
Common Stock shall cease to be Registrable Shares when
such shares have been sold pursuant to an effective
Registration Statement under the Act or pursuant to an
exemption from registration thereunder.
(ii) Notwithstanding anything in this subsection to the
contrary, the Company shall only be required, in
connection with a piggy-back registration, to register in
a Registration a number of Registrable Shares that equal
up to a maximum of twenty-five percent (25%) of the shares
of Common Stock being registered by the Company in a
Registration. Such limitation will be imposed among all
Registration Holders who have requested inclusion of their
Registrable Shares and all other holders of Common Stock
who request inclusion of their shares in the Registration
Statement.
8. Events of Default. In case one or more of the following Events of
Default shall have occurred and be continuing:
(a) Default in the payment, in the manner provided herein of any
installment of interest upon this Debenture as and when the same
shall become due and payable, and the continuance of such default
for a period of 30 days; or
(b) Default in the payment of the principal of this Debenture as and
when the same shall become due and payable either at maturity, by
declaration or otherwise, and continuance of such default for a
period of 30 days; or
(c) A decree or order by a court having jurisdiction shall have been
entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of
the Company under the federal bankruptcy statutes or any other
similar applicable federal or state laws, and such decree or
order shall have continued undischarged and unswayed for a period
of days; or a decree or order of a court having jurisdiction for
the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Company or of its
properties or for the winding up or liquidation of its affairs
shall have been entered and such decree or order shall have
remained in force undischarged and unswayed for a period of days;
or
(d) The Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the fling of a bankruptcy
pro against it, or shall file a petition or answer or consent
seeking reorganization under the federal bankruptcy statutes or
any other similar applicable federal or state laws, or shall
consent to the filing of any such petition, or shall consent to
the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its properties,-
shall admit in writing its inability to pay its debts generally
as they become due; then the Holder, by notice in writing to the
Company may declare the principal of the Debenture and all
accrued and unpaid interest on this Debenture to be due and
payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in this
Debenture contained to the contrary notwithstanding; provided,
however, that it, at any time before the principal of this
Debenture shall have been so declared due and payable, all Events
of Default shall have been cured, then such Events of Default
shall be deemed to have been waived by the Holder.
9. Miscellaneous.
(a) Successors and Assigns. This Debenture shall be binding upon and
inure to the successors and assigns of the parties hereto.
(b) Governing law. This Debenture shall be construed in accordance
with the laws of Delaware.
(c) Notices. Any notice, communication, offer, acceptance, request,
consent, approval, reply, payment or advice (hereinafter
severally and collectively called "Notice") in this Debenture
provided or permitted to be given, made or accepted by any party
to any other party or parties hereto unless otherwise expressly
provided in this Debenture ,must be in writing and be given or
served by depositing the same in the United States mail, postage
prepaid and registered or certified, and addressed to the party
or parties to be notified or entitled to receive same, with
return receipt requested, or by delivering the same in person or
parties as may be a corporation or corporations. Notice
deposited in the mail in the manner hereinabove described shall
be effective from and after the date it is so deposited. Notice
given in any other manner shall be effective only if and when
received by the party or parties to be, or provided to be,
notified. For purposes of notice, the addresses of the Company
and the Holder shall be as follows:
The Company:
Coastwide Energy Services, Inc.
11111 Wilcrest Green
Suite 300
Houston, Texas 77042
Attention: Stephen A. Wells
To Holder:
_____________________________
_____________________________
_____________________________
The parties may change their respective addresses and specify a
new address by giving not less than seven days written notice in
the manner provided.
(d) No course of dealing between the Company and the Holder or any
delay on the part of the Holder in exercising any of its rights
hereunder shall operate as a waiver of any of its rights as a
holder hereof, except to the extent expressly waived in writing
by the Holder.
(e) This Debenture may not be modified or discharged except by an
instrument in writing executed by the Company and the Holder.
(f) The invalidity, enforceability, or illegality of any one or more
of the provisions of this Debenture for any reason shall not
affect any other provisions hereof, which other provisions shall
remain in fall force and effect.
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
by its President, and attested to by its Secretary, as of , 1994.
COASTWIDE ENERGY SERVICES, INC.
By: _______________________________
Stephen A. Wells
ATTEST
____________________
DEBENTURE ASSUMPTION AND CONVERSION AGREEMENT
THIS DEBENTURE ASSUMPTION AND CONVERSION AGREEMENT, dated as of February
____, 1996 (the "Agreement"), is made by and between TESORO PETROLEUM
CORPORATION, a Delaware corporation ("Parent"), COASTWIDE ENERGY SERVICES, INC.,
a Delaware corporation ("Company"), and CNRG ACQUISITION CORPORATION, a Delaware
corporation ("Sub") and wholly owned subsidiary of the Parent.
WHEREAS, the Company has executed in favor of the holders of its 8%
Convertible Subordinated Debentures due July 1, 2004 (the "Debentures")
promising to pay the holders ("Debenture Holders") an aggregate amount of FOUR
MILLION TWO HUNDRED SEVENTY THOUSAND AND 00/100 DOLLARS ($4,270,000.00),
together with interest thereon and in accordance with the provision thereof;
WHEREAS, the respective Board of Directors of Parent, Sub and 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, which calls for
each share of outstanding Company common stock, $.01 par value per share
("Company Common Stock") to become the right to receive $2.55 and .41 share of
Tesoro Common Stock, $.16 2/3 per share (plus cash in lieu of any fractional
share) (the "Merger Consideration");
WHEREAS, pursuant to the Section 2.2(h) of the Merger Agreement, at the
Effective Time of the Merger (as that term is defined in the Merger Agreement)
(i) Sub shall assume the Debentures which will remain outstanding, and (ii) the
holders of the Debentures shall have the right to convert such Debentures into
such number of shares of Parent Shares (as that term is defined in the Merger
Agreement) and such amount of cash received by a holder of the number of shares
of Company Common Stock into which such Debentures might have been converted
immediately prior to the Merger;
NOW, THEREFORE, it is hereby agreed:
1. Conversion Rights under the Debenture. Except as the rights of the
original payee of the Debenture and each registered holder of the Debenture to
convert the Debenture into shares of Company Common Stock pursuant to the terms
of the Debenture ("Conversion Rights") may otherwise be adjusted as provided
herein, the Conversion Rights are subject to all the terms and conditions
included in the original grant thereof.
2. Assignment, Assumption and Conversion.
(a) As of the Effective Time of the Merger, Sub hereby agrees to assume,
and does assume, all the obligations of the Company under the Debentures.
(b) Parent and Sub agree that from and after the Effective Time of the
Merger, each Debenture 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 to convert the Debenture into such number of
Parent Shares and such amount of cash as received by a holder of the number of
shares of Company Common Stock into which such Debenture might have been
converted immediately prior to the Merger. The 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 the conversion of the outstanding principal amount of the
Debentures, and that it will provide such shares of Common Stock to Sub to allow
Sub to fulfill its obligation to a Debenture Holder at such time as such
Debenture Holder exercises its Conversion Rights pursuant to the Debenture.
3. Notice. The Company agrees that at the Effective Time of the Merger it
shall give written notice of the adjustment of the Conversion Price pursuant to
Section 3(b) above, by first class mail, postage prepaid, addressed to each
Debenture Holder at the address of such Debenture Holder as shown on the books
of the Company, which notice shall state (i) the Conversion Price resulting from
such adjustment and the increase or decrease, if any, in the number of shares
purchasable at such price upon the exercise of the Conversion Rights, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based; (ii) the address to which the Debenture should be
delivered for transfer and conversion; and (iii) the address to which any
notice, communication, offer, acceptance request, consent, approval, reply,
payment or advice in the Debenture provided or permit to be given shall be sent
as provided in Section 9(c) of the Debenture.
4. Further Amendments. Any and all of the terms and conditions of the Dentures
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, Sub, and the Company 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: ________________________________
Name: ______________________________
Title: _____________________________
-2-
COASTWIDE ENERGY SERVICES, INC.
By: ________________________________
Name: ______________________________
Title: _____________________________
CNRG ACQUISITION CORPORATION
By: ________________________________
Name: ______________________________
Title: _____________________________
-3-
CANCELLATION/SUBSTITUTION AGREEMENT
TESORO PETROLEUM CORPORATION
OPTION SUBSTITUTION
COASTWIDE ENERGY SERVICES, INC.
1993 LONG-TERM INCENTIVE PLAN
OPTION CANCALLATION
THIS CANCELLATION/SUBSTITUTION AGREEMENT, made and entered into as of this
20th day of February, 1996, by and between Tesoro Petroleum Corporation
("Tesoro"), Coastwide Energy Services, Inc. ("Coastwide") and the undersigned
("Optionee"), amends the Nonqualified Stock Option Agreement(s) (the "Option
Agreement") to which the undersigned is a party under the Coastwide 1993
Long-term Incentive Plan ("Plan"), as follows:
Notwithstanding the terms of the Option Agreement, the Option granted to
Optionee under the Plan (the terms, definitions, and provisions of which are
incorporated herein and made a part hereof) is cancelled as of the Effective
Time. For purposes of this agreement, the "Effective Time" means the date and
time on which the Agreement of Merger dated as of November 20, 1995, by and
among Coastwide, CNRG Acquisition Corp., and Tesoro (the "Merger Agreement")
shall be effected, as provided in the Merger Agreement.
In consideration of the foregoing, the Optionee hereby is granted an option
(the "Substitute Option") upon the same terms and conditions as the Option to
purchase shares of Tesoro Common Stock, $.16 2/3 par value per share ("Tesoro
Common Stock"), in an amount and at an exercise price as set forth in Section
2.2(g) of the Merger Agreement, as follows:
(1) the number of shares of Tesoro Common Stock to be subject to the
Substitute Option shall be equal to the product of the number of shares of
Coastwide Common Stock subject to the Option and .41, provided that any
fractional shares of Tesoro Common Stock resulting from such multiplication
shall be rounded to the nearest whole share, and
(2) the exercise price per share of the Tesoro Common Stock to be subject
to the Substitute Option shall be equal to (i) the exercise price of the number
of shares of Coastwide Common Stock under the Option divided by .41 minus (ii)
$6.2195 (rounded to the nearest cent), provided, that if such amount is less
than $0, the holder of the Substitute Option shall, upon exercise, receive in
cash the amount by which such amount is less than $0.
The Substitute Option shall have the same terms as set forth in the Option
Agreement (including those set forth in the Plan) except that Tesoro shall be
the "Company" for purposes of the Substitute Option. Following the Effective
Time, all stock options granted to the Optionee under the Agreement or the Plan
are cancelled, and the Optionee shall have no rights under either the Agreement
or the Plan except as provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the date first written above.
COASTWIDE ENERGY SERVICES, INC. OPTIONEE
________________________
By _______________________
With regard to the following
Option Agreements:
TESORO PETROLEUM CORPORATION
________________________
By
DATE:
COASTWIDE ENERGY SERVICES, INC.
Nonqualified Stock Option Agreement
WHEREAS, _________________________ (hereinafter called the "Optionee") is
an officer, director or employee of Coastwide Energy Services, Inc. (hereinafter
called the "Company") or one of the Company's subsidiaries; and
WHEREAS, the 1993 Long-Term Incentive Plan of the Company (the "Plan") was
duly approved by the stockholders of the Company on July 23, 1993 and the terms
of the Plan are incorporated herein by reference; and
WHEREAS, subject to such approval of the Plan by the stockholders of the
Company, the execution of a Stock Option Agreement in the form hereof was
authorized by a resolution of the Board of Directors of the Company duly adopted
on October 29, 1993, and incorporated herein by reference; and
WHEREAS, the option granted hereby is intended as a nonqualified stock
option and shall not be treated as an "incentive stock option" within the
meaning of that term under Section 422A of the Internal Revenue Code of 1986.
NOW THEREFORE, the Company hereby grants to the Optionee an option pursuant
to the Plan to purchase ____________ shares of Common Stock, $.01 par value
("Common Stock"), of the Company at the price of $ __________ per share, and
agrees to cause certificates for any shares purchased hereunder to be delivered
to the Optionee upon payment of the purchase price in full, all subject,
however, to the terms and conditions hereinafter set forth.
1. (A) This option shall become exercisable to the extent of 100% of the
shares specified above on October 29, 1993. To the extent exercisable, this
option may be exercised in whole or in part from time to time.
2. The option price shall be payable in cash or by check acceptable to
the Company.
3. This option shall terminate on the earliest of the following dates:
(A) Six months after the Optionee ceases to be an employee or officer
of the Company or a subsidiary, unless he ceases to be such employee or officer
by reason of death or permanent disability.
(B) One year after the death or permanent disability of the Optionee
if the Optionee dies or becomes permanently disabled while an employee or
officer of the Company or a Subsidiary or within the six month period referred
to in paragraph (B) above;
(C) Ten years from the date on which this option was granted. In the
event the Optionee shall intentionally commit an act materially inimical to the
interests of the Company or Subsidiary, and the Plan Administrator shall so
find, this option shall terminate at the time of such act, notwithstanding any
other provision of this Agreement. Nothing contained in this option shall limit
whatever right the company or a subsidiary might otherwise have to terminate the
employment of the Optionee.
4. This option is not transferable by the Optionee otherwise than by will
or the laws of descent and distribution, and is exercisable, during the lifetime
of the Optionee, only by him or by his guardian or legal representative.
5. This option shall not be exercisable if such exercise would involve a
violation of any applicable federal or state securities law, and the Company
hereby agrees to make reasonable efforts to comply with such securities laws.
6. The Board of Directors shall make such adjustments in the option price
and in the number of kind of shares of Common Stock as such Board in its sole
discretion, exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of the Optionee that otherwise
would result from (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company, or (b)
any merger, consolidation, separation, reorganization or partial or complete
liquidation, or (c) any other corporate transaction or event having an effect
similar to any of the foregoing.
7. If the Company shall be required to withhold any federal, state, local
or foreign tax in connection with exercise of this option, it shall be a
condition to such exercise that the Optionee pay or make provision satisfactory
to the Company for payment of all such taxes. The Optionee may elect that all
or any part of such withholding requirement be satisfied by retention by the
Company of a portion of the shares purchased upon exercise of this option. If
such election is made, the shares so retained shall be credited against such
withholding requirement at the fair market value as of the date of exercise.
8. The term "Subsidiary" as used in this Agreement means any corporation
(other than the Company) in an unbroken chain of corporations beginning with the
Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing fifty percent or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain. For purposes of this Agreement, the continuous employment or service as
an officer by the Optionee with the Company or a Subsidiary shall not be deemed
interrupted, and the Optionee shall not be deemed to have ceased to be an
employee or officer of the Company or any Subsidiary, by reason or transfer
among the Company and its Subsidiaries.
9. The option provided for herein was granted by the Board of Directors
of the Company on October 29, 1993, pursuant to the Plan.
EXECUTED at Houston, Texas effective October 29, 1993.
COASTWIDE ENERGY SERVICES, INC.
________________________________
Stephen A. Wells, President
The undersigned Optionee hereby acknowledges receipt of an executed
original of this Stock Option Agreement and accepts the option granted
thereunder.
________________________________
Optionee
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to Registration Statement No. 33-00229 of Tesoro Petroleum
Corporation of our report dated February 1, 1995, appearing in the Annual Report
on Form 10-K of Tesoro Petroleum Corporation for the year ended December 31,
1994 and to the reference to us under the heading "Experts" in the Prospectus.
San Antonio, Texas
February 26, 1996
L.L.P.
A Registered Limited Libility Partnership
300 Convent Street, Suite 2200
San Antonio, Texas 78205
telephone: 210/224-5575 houston
facsimile: 210/224-8336 washington, d.c
austin
writer's direct dial number: san antonio
210/270-9367 dallas
new york
los angeles
hong kong
February 26, 1996
Tesoro Petroleum Corporation
8700 Tesoro Drive
San Antonio, Texas 78217
Dear Sirs:
We hereby consent to the incorporation by reference of our opinion dated
January 16, 1996, filed as Exhibit 5 to the Company's Registration Statement on
Form S-4 (Registration No. 333-00229), as an exhibit to this Amendment No. 1 on
Form S-3 to Form S-4 (Registration No. 333-00229) and to the reference to us
under "Legal Matters" therein. In giving this consent we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Securities
and Exchange Commission promulgated thereunder.
Very truly yours,
FULBRIGHT & JAWORSKI L.L.P.
