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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
---------------------
Date of Report (Date of earliest event reported): APRIL 1, 1998
UNION TEXAS PETROLEUM HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 1-9019 76-0040040
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
</TABLE>
1330 POST OAK BOULEVARD, HOUSTON, TEXAS 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 623-6544
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<PAGE> 2
ITEM 5. OTHER EVENTS.
On this Current Report on Form 8-K, the Registrant is filing with the
Securities and Exchange Commission certain items that are to be incorporated by
reference into its Registration Statement on Form S-3 (Registration No.
333-31039).
Preferred Stock Offering. On March 6, 1998, the Registrant issued 1,750,000
shares of 7.14% Series A Cumulative Preferred Stock ($.01 par value per share,
liquidation preference $100 per share)(the "Preferred Stock") under a shelf
registration of up to $500 million aggregate amount of securities of the
Registrant. Net proceeds from the sale of the Preferred Stock in the amount of
approximately $171.3 million were used to reduce a portion of the Registrant's
debt under its $450 million revolving credit agreement and its uncommitted and
unsecured lines of credit incurred primarily in connection with the Registrant's
acquisition of interests in operating service contracts in Venezuela. In
addition, the Registrant declared a dividend to all holders of the Preferred
Stock of record on March 15, 1998, which was paid on March 31, 1998.
Financing Activities. On March 9, 1998, the Registrant terminated its $100
million revolving credit facility with NationsBank of Texas, N.A., as agent,
Bank of America National Trust and Savings Association and Union Bank of
Switzerland, Houston Agency, as co-agents, and replaced it on March 10, 1998,
with a new $100 million revolving credit agreement on the same terms that
provides for conversion of amounts outstanding on March 8, 1999 to a one-year
term loan maturing March 8, 2000.
Appointments. Union Texas Americas Limited, an indirect subsidiary of the
Registrant, appointed Carlos del Solar, as President and General Manager of
Union Texas Venezuela Limited, and Charlie Latch, as Executive Vice President of
Operations for Union Texas Venezuela Limited. Together, Mr. del Solar and Mr.
Latch will direct the Registrant's growing activities in Venezuela from its new
Venezuelan headquarters in Caracas. Union Texas Petroleum Limited, a
London-based subsidiary of the Registrant, appointed Roger P. Coe as Managing
Director. Mr. Coe succeeds John E. Kennedy, who was recently named President of
Union Texas Central Asia Limited, based in Kazakhstan. Mr. Kennedy is replacing
John W. J. Hardy, who recently announced his retirement plans.
Recent Developments. In March 1998, oil prices fell to their lowest levels
since 1988. For example, the spot price for West Texas Intermediate averaged
approximately $15.92 for the first quarter of 1998 down from approximately
$22.74 for the first quarter of 1997. As compared to the first quarter of 1997,
which was favorably impacted by higher oil prices with net income of $64 million
or $.74 per share, lower oil prices in 1998 will result in the Company recording
significantly lower earnings in the first quarter of 1998. In light of the
current low oil price environment, the Company is reviewing its capital
expenditure budget for 1998 and expects that any reductions in capital and
operating expenses would not significantly impact current operations but defer
certain exploration and development plans. Any such deferrals could limit
opportunities for new reserves from exploration successes and delay anticipated
production from certain properties thus impacting future net income and cash
flows.
This Current Report contains forward-looking statements within the meaning
of and in reliance upon the "safe harbor" provisions of the Private Securities
Litigation Reform Act, as set forth in Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that involve risks and uncertainties, including price volatility (as
evidenced by the recent decline in market prices for crude oil), development,
operational, marketing and opportunity risks, and other factors described from
time to time in the registrant's publicly available SEC reports, which could
cause actual results to differ materially.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 -- Underwriting Agreement between the Company and the
Underwriters with respect to the MAPS(SM) (the "MAPS")
4.13 -- Form of % Mandatory Putable/remarketable Securities
(MAPS(SM)) due April , 2038
5.1 -- Opinion of King & Spalding regarding legality of the MAPS
12.1 -- Computation of Ratio of Earnings to Fixed Charges;
Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends
23.2 -- Consent of legal counsel included in Exhibit 5.1
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By: /s/ LARRY D. KALMBACH
----------------------------------
Larry D. Kalmbach
Vice President and Chief Financial
Officer
Date: April 1, 1998
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1.1 -- Underwriting Agreement between the Company and the
Underwriters with respect to the MAPS(SM) (the "MAPS")
4.13 -- Form of % Mandatory Putable/remarketable Securities
(MAPS(SM)) due April , 2038
5.1 -- Opinion of King & Spalding regarding legality of the MAPS
12.1 -- Computation of Ratio of Earnings to Combined Fixed
Charges; Computation of Ratio of Earnings to Combined
Fixed Charges and Preferred Stock Dividends
23.2 -- Consent of legal counsel included in Exhibit 5.1
</TABLE>
<PAGE> 1
EXHIBIT 1.1
UNION TEXAS PETROLEUM HOLDINGS, INC.
(A DELAWARE CORPORATION)
% MANDATORY PUTABLE/REMARKETABLE SECURITIES DUE 2038
UNDERWRITING AGREEMENT
April , 1998
SALOMON BROTHERS INC
Chase Securities Inc.
NationsBanc Montgomery Securities LLC
c/o Salomon Brothers Inc
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Union Texas Petroleum Holdings, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Salomon Brothers Inc, Chase Securities Inc. and NationsBanc
Montgomery Securities LLC, Inc. (the "Underwriters") an aggregate of
$ principal amount of % MAndatory Putable/remarketable Securities
due 2038 of the Company (the "MAPS(SM)" or the "Notes").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(i) A registration statement in respect of the Notes has been filed
with the Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, have been declared effective by the Commission in such
form; no other document with respect to such registration statement or
document incorporated by reference therein has heretofore been filed with
the Commission; and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission; the various parts of
such registration statement, including all exhibits thereto (other than the
Statement of Eligibility and Qualification on Form T-1 of the Trustee (as
defined below)) and including the documents incorporated by reference in
the prospectus contained in the registration statement at the time such
part of the registration statement became effective, each as amended at the
time such part of the registration statement became effective, being
hereinafter called the "Registration Statement"; the final prospectus, as
supplemented by any prospectus supplement (the "Prospectus Supplement"),
used in connection with the offering of the Notes, in the final form filed
with the Commission pursuant to Rule 424(b) under the Securities Act of
1933, as amended (the "Act"), being hereinafter called the "Prospectus";
any reference herein to the Prospectus being deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Act, as of the date of such Prospectus; any reference to any
amendment or supplement to the Prospectus being deemed to refer to and
include any documents filed after the date of such Prospectus under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Prospectus; and any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement;
(ii) The documents incorporated by reference in the Prospectus or any
amendment or supplement thereto, when they became effective or were filed
with the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and the
published
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rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(iii) The Registration Statement and the Prospectus conforms, and any
further amendment or supplement to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the published rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Registration Statement and any amendment thereto and as of the
applicable filing date as to the Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by you expressly for use therein;
(iv) The Prospectus was filed with the Commission pursuant to Rule
424(b)(5) within the applicable time period prescribed for such filing by
the rules and regulations under the Act;
(v) None of the Company or any of its subsidiaries or, to the best of
the Company's knowledge, Unimar Company, a Texas general partnership
("Unimar"), has sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any loss
or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus, which loss or interference is material
to the Company and its subsidiaries taken as a whole; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital
stock (other than (i) any shares of capital stock of the Company sold upon
exercise of a subscription, option or warrant or the conversion of a
security outstanding on the date of this Agreement or (ii) any shares of
such capital stock, or other securities convertible or exercisable or
exchangeable for such shares, in either case issued pursuant to any
employee stock option, benefit or deferred compensation plan of the Company
existing on the date of this Agreement) or any increase of more than
$75,000,000 in the consolidated short-term or long-term debt of the Company
or any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the Registration Statement or the Prospectus;
(vi) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which it owns
or leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction; each
subsidiary of the Company identified in Annex II hereto (collectively, the
"Material Subsidiaries") has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation; Unimar has been duly formed and is validly existing as a
partnership under the laws of the State of Texas; and the Company does not
have any subsidiary that is a "significant subsidiary" (within the meaning
of the published rules and regulations of the Commission under the Act)
that is not identified in Annex II hereto;
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(vii) All of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and
non-assessable; and all of the issued shares of capital stock of each
Material Subsidiary have been duly and validly authorized and issued and
are fully paid and non-assessable, and all of such shares of capital stock
and 50% of the equity interests in Unimar (except for directors' qualifying
shares and shares held by third parties solely to satisfy local law
requirements and except as set forth in the Prospectus) are owned directly
or indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(viii) The Notes have been duly authorized by the Company and, when
issued and delivered pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered by the Company and will
constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the indenture dated as of March 15, 1995, as
supplemented by the supplemental indenture dated November 7, 1995 (the
"Indenture"), among the Company, the subsidiaries of the Company named
therein and The First National Bank of Chicago, as Trustee (the "Trustee"),
under which they are to be issued, which was filed as an exhibit to the
Registration Statement; the Indenture has been duly authorized by the
Company and duly qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and constitutes a valid and legally
binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Notes will, and the Indenture does, conform to the descriptions thereof in
the Prospectus;
(ix) The issue and sale of the Notes and the compliance by the Company
with all of the provisions of the Notes, the Indenture and this Agreement
and the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries or, to the best of the
Company's knowledge, Unimar is a party or by which the Company or any of
its subsidiaries or Unimar is bound or to which any of the property or
assets of the Company or any of its subsidiaries or Unimar is subject, or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, any of its
subsidiaries or Unimar or any of their properties (excluding conflicts,
breaches, violations and defaults that, individually or in the aggregate,
will not have any material adverse effect on the general affairs,
management, financial position, stockholders' equity, results of operations
or prospects of the Company and its subsidiaries taken as a whole), nor
will any such action result in any violation of the provisions of the
Restated Certificate of Incorporation or By-laws of the Company; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this
Agreement or the Indenture, except the registration under the Act of the
Notes, the qualification under the Trust Indenture Act of the Indenture and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Notes by the Underwriters;
(x) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries or, to the best of the Company's knowledge, Unimar is a party
or of which any property of the Company or any of its subsidiaries or, to
the best of the Company's knowledge, Unimar is the subject which, if
determined adversely to the Company or any of its subsidiaries or Unimar,
would individually or in the aggregate have a material adverse effect on
the consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and, to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xi) Price Waterhouse LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
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(xii) The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the published rules and regulations of the Commission
thereunder, and the offer and sale of the Notes will not subject the
Company to registration under, or result in a violation of, the Investment
Company Act; and
(xiii) Neither the Company nor any of its affiliates does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes.
2. Subject to the terms and conditions herein set forth, the Company agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of % of the principal amount thereof, plus accrued interest, if any,
from April , 1998 to the Time of Delivery (as defined in Section 4 hereof),
the principal amount of the Notes set forth opposite the name of such
Underwriter on Schedule A hereto.
3. Upon the authorization by you of the release of the Notes, the several
Underwriters propose to offer the Notes for sale upon the terms and conditions
set forth in the Prospectus.
4. The Notes to be purchased by each Underwriter hereunder, in definitive
form and in such denominations and registered in such names as Salomon Brothers
Inc, on behalf of the Underwriters, may request upon at least forty-eight hours'
prior notice to the Company, shall be delivered by or on behalf of the Company
to you against payment by you by certified or official bank check or checks,
payable to the order of the Company, in immediately available funds, all at the
office of Salomon Brothers Inc, 388 Greenwich Street, New York, New York. The
time and date of such delivery and payment shall be 9:30 a.m., New York time, on
April , 1998 or such other time and date as you and the Company may agree upon
in writing, such time and date being herein called the "Time of Delivery." Such
certificates will be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at such office of Salomon
Brothers Inc.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus Supplement in a form approved by you and
to file the Prospectus Supplement pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if applicable,
such earlier time as may be required by Rule 424(b) under the Act; to make
no further amendment or supplement to the Registration Statement or
Prospectus after the date of this Agreement and prior to the Time of
Delivery which shall be reasonably disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time after the Time of Delivery when any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you
copies thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Notes; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any prospectus, of the suspension
of the qualification of the Notes for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any stop order or of any order preventing or
suspending the use of any prospectus or suspending any such qualification,
to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Notes for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in
such jurisdictions for as long as may be necessary to complete the
distribution of the Notes, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
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(c) To furnish you with copies of the Prospectus in such quantities as
you may from time to time reasonably request, and, if the delivery of a
prospectus is required in the judgment of counsel for the Underwriters at
any time prior to the expiration of nine months after the date of this
Agreement and if at such time any event shall have occurred as a result of
which the Prospectus would include an untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act
or the Exchange Act, to notify you and upon your request to file such
document and to prepare and furnish without charge to each Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a prospectus
in connection with sales of any of the Notes at any time nine months or
more after the date of this Agreement, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including at the option
of the Company Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the earlier of (i) the termination of trading restrictions on
the Notes as notified to the Company by you and (ii) the Time of Delivery,
not to offer, sell, contract to sell or otherwise dispose of debt
securities of the Company which mature more than one year after the Time of
Delivery and which are substantially similar to the Notes, except (x) with
your prior written consent, (y) as described in the Prospectus or (z)
pursuant to borrowings under the Company's credit facilities or other lines
of credit established by the Company prior to the date hereof;
(f) To furnish to the holders of the Notes as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail; and
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and deliver
to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the
Company is listed; and (ii) such additional information concerning the
business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its stockholders generally or to the
Commission).
6. The Company covenants and agrees with the several Underwriters that it
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Company's counsel and accountants in connection with the
registration of the Notes under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
preliminary prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing this Agreement, the Indenture,
the Blue Sky Memorandum and any other documents in connection with the offering,
purchase, sale and delivery of the Notes; (iii) all expenses in connection with
the qualification of the Notes for offering and sale under state securities laws
as
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provided in Section 5(b) hereof, including the fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky survey; (iv) any fees charged by securities rating services
for rating the Notes; (v) the filing fees incident to securing any required
review by the National Association of Securities Dealers, Inc. of the terms of
the sale of the Notes; (vi) the costs of preparing and delivering the Notes to
the Underwriters, including any capital, stamp or other tax or duty payable upon
the issuance of the Notes; (vii) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Notes; (viii) all expenses and listing
fees in connection with the listing of the Notes on the New York Stock Exchange;
and (ix) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that except as provided in this Section,
Section 8 and Section 11 hereof, you will pay all of your own costs and
expenses, including the fees of your counsel, transfer taxes on resale of any of
the Notes by you, and any advertising expenses connected with any offers you may
make.
7. The obligations of the Underwriters hereunder shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus Supplement shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act and
in accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to you such opinion or opinions, dated such Time of
Delivery, with respect to the incorporation of the Company, the
authorization of this Agreement and the Indenture, the validity of the
Notes, the Registration Statement, the Prospectus and other related matters
as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) King & Spalding, counsel for the Company, shall have furnished to
you its written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with requisite corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
(ii) The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of each other jurisdiction in which it owns or leases a material amount
of properties, or conducts any material business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of matters of fact upon
certificates of public officials or officers of the Company, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such certificates);
(iii) Each Material Subsidiary has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation; to the best of such counsel's knowledge
after reasonable investigation, Unimar has been duly formed and is
validly existing as a partnership under the laws of the State of Texas;
and all of the issued shares of capital stock of each Material
Subsidiary have been duly and validly authorized and issued and are
fully paid and non-assessable, and (except for directors' qualifying
shares and shares held by third parties solely to satisfy local law
requirements and except as otherwise set forth in the Prospectus), to
the best of such counsel's knowledge after reasonable investigation and
except as set forth in a schedule
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<PAGE> 7
to such counsel's opinion, all of such shares of capital stock and 50%
of the equity interests in Unimar are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims within the meaning of the Uniform Commercial Code (such counsel
being entitled to (A) state that the opinion in this clause relating to
the ownership of capital stock and equity interests is based solely on a
review of the corporate records of the Company and its subsidiaries and
the records of Unimar, the certificate or certificates representing such
shares of capital stock and evidence of such equity interests in Unimar,
and a certificate or certificates in respect of matters of fact as to
ownership of and liens, encumbrances, equities or claims on such shares
of capital stock and equity interests, provided that such counsel shall
state that they believe that both you and they are justified in relying
upon such certificate or certificates and (B) rely in respect of matters
of fact upon certificates of public officials or officers of the Company
or its subsidiaries furnished to you at such Time of Delivery, provided
that such counsel shall state that they believe that both you and they
are justified in relying upon such certificates);
(iv) To the best of such counsel's knowledge after reasonable
investigation, other than as set forth in the Prospectus, there is no
pending or threatened action, suit or proceeding before any court or any
governmental agency or body or any arbitrator involving the Company, any
Material Subsidiary or Unimar required to be disclosed in the
Registration Statement that is not adequately disclosed therein;
(v) This Agreement has been duly authorized, executed and delivered
by the Company;
(vi) The Notes have been duly authorized, executed, issued and
delivered by the Company and, assuming the due authentication thereof by
the Trustee, constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Indenture; and the
Notes and the Indenture conform to the descriptions thereof in the
Prospectus;
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution
and delivery thereof by the Trustee, constitutes a valid and legally
binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing; and the Indenture has been duly qualified under the Trust
Indenture Act;
(viii) The issue and sale of the Notes and the compliance by the
Company with all of the provisions of the Notes, the Indenture and this
Agreement and the consummation of the transactions herein and therein
contemplated will not result in any violation of the Restated
Certificate of Incorporation or By-laws of the Company and, to the best
of such counsel's knowledge after reasonable investigation, such action
will not result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its Material Subsidiaries or, to the best of such
counsel's knowledge, Unimar is a party or by which the Company or any of
its Material Subsidiaries or, to the best of such counsel's knowledge,
Unimar is bound or to which any of the property or assets of the Company
or any of its Material Subsidiaries or, to the best of such counsel's
knowledge, Unimar is subject, or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company, any of its Material
Subsidiaries or, to the best of such counsel's knowledge, Unimar or any
of their properties (excluding breaches, violations and defaults that,
individually or in the aggregate, will not have any material adverse
effect on the general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the Company
and its subsidiaries taken as a whole);
(ix) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
having jurisdiction over the Company is required for the consummation by
the Company of the transactions contemplated by this Agreement or the
7
<PAGE> 8
Indenture, except such as have been obtained under the Act and the Trust
Indenture Act, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase and
distribution of the Notes by the Underwriters;
(x) The statements made in the Prospectus under the captions
"Description of the MAPS" and "Description of the Debt Securities"
insofar as such statements constitute summaries of the legal matters and
documents referred to therein, fairly present the information called for
with respect to such legal matters and documents and fairly summarize
such legal matters and documents;
(xi) The Company is not an "investment company" within the meaning
of the Investment Company Act and the published rules and regulations of
the Commission thereunder, and no registration of the Company under the
Investment Company Act is required for, or will be required as a
consequence of, the issuance, offer and sale of the Notes pursuant to
this Agreement;
(xii) The documents incorporated by reference in the Prospectus or
any amendment or supplement thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
schedules and engineering and statistical data therein, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the published rules and regulations of the
Commission thereunder; and
(xiii) The Registration Statement and the Prospectus and any
amendments and supplements thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
schedules and engineering and statistical data therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the published rules and regulations of the Commission thereunder.
Such counsel shall state that, although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in any of the documents referred to in subclause (xii) of this
Clause (c) or in the Registration Statement or the Prospectus (except as
and to the extent described in subclause (x) of this Clause (c)), they have
no reason to believe that (i) any of the documents referred to in subclause
(xii) of this Clause (c) when such documents became effective or were so
filed, as the case may be, contained an untrue statement of a material
fact, or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the case of
other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact, or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; or (ii) as of
its effective date, the Registration Statement or any amendment thereto
made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion or belief) contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or that,
as of its date, the Prospectus or any amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion or belief) contained an untrue statement of a material
fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the Registration
Statement or the Prospectus or any amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion or belief) contains an untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and such counsel does not know of any amendment to the
Registration Statement required to be filed or of any contracts or other
documents of a character required to be filed as
8
<PAGE> 9
an exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus or any amendment or supplement thereto or
required to be described in the Registration Statement or the Prospectus or
any amendment or supplement thereto which are not filed or incorporated by
reference or described as required.
In rendering the opinions referred to in subclauses (ii), (iii), (iv),
(viii) and (ix) of this Clause (c), such counsel may rely upon an opinion
of Alan R. Crain, Jr., Esq., Vice President and General Counsel of the
Company, furnished to you at such Time of Delivery, provided that such
counsel shall state that it believes that both you and it are justified in
relying upon such opinion.
In rendering such opinion, such counsel may state that it expresses no
opinion as to the laws of any jurisdiction other than the Federal laws of
the United States, the laws of the State of New York and the State of Texas
and the General Corporation Law of the State of Delaware.
(d) On the date of execution hereof and at the Time of Delivery, Price
Waterhouse LLP shall have furnished to you a letter, dated the respective
dates thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto;
(e)(i) None of the Company or any of its subsidiaries or Unimar shall
have sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus, which loss or interference is material
to the Company and its subsidiaries taken as a whole, and (ii) since the
respective dates as of which information is given in the Prospectus there
shall not have been any change in the capital stock (other than (A) any
shares of capital stock of the Company sold upon the exercise of a
subscription, option or warrant or the conversion of a security outstanding
on the date of this Agreement or (B) any shares of such capital stock, or
other securities convertible or exercisable or exchangeable for such
shares, in either case issued pursuant to any employee stock option,
benefit or deferred compensation plan of the Company existing on the date
of this Agreement) or any increase of more than $75,000,000 in the
consolidated short-term or long-term debt of the Company or any change, or
any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in Clause (i) or (ii), is in your judgment so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Notes being delivered at
such Time of Delivery on the terms and in the manner contemplated in the
Registration Statement or the Prospectus or any amendment or supplement
thereto;
(f) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act and (ii) no such
organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities (other than Moody's Investors Services, Inc.'s
"negative outlook" on its rating of the Company's debt securities, which
outlook was publicly announced prior to the date hereof);
(g) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York declared by either
Federal or New York State authorities; or (iii) the outbreak or escalation
of hostilities involving the United States or the declaration by the United
States of a national emergency or war if the effect of any such event
specified in this Clause (iii) in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Notes on the terms and in the manner contemplated in the Prospectus; and
(h) The Company shall have furnished or caused to be furnished to you
at such Time of Delivery certificates of the Company (executed by
appropriate officers of the Company) satisfactory to you as to
9
<PAGE> 10
the accuracy of the representations and warranties of the Company herein at
and as of such Time of Delivery, as to the performance by the Company of
all of its respective obligations hereunder to be performed at or prior to
such Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (e) of this
Section, and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus, the
Prospectus Supplement, the related preliminary Prospectus Supplement, 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, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company shall 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
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Prospectus, the Prospectus Supplement, the related
preliminary Prospectus Supplement, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter expressly for use therein; and provided, further,
that the Company shall not be liable to any Underwriter under the indemnity
agreement in this subsection (a) with respect to any preliminary prospectus to
the extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold Notes to a person as to whom it
shall be established that there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) in any case where such delivery
is required by the Act if the Company has previously furnished copies thereof to
such Underwriter and the loss, claim, damage or liability of such Underwriter
results from an untrue statement or omission of a material fact contained in the
preliminary prospectus which was corrected in the Prospectus (excluding
documents incorporated by reference) or in the Prospectus as then amended or
supplemented (excluding documents incorporated by reference).
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, the
Prospectus Supplement, the related preliminary Prospectus Supplement, 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 each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the Prospectus, the
Prospectus Supplement, the related preliminary Prospectus Supplement, or
any such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by such Underwriter expressly
for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by a party entitled to indemnification
under subsection (a) or (b) above (the "indemnified party") of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against a party required to provide
indemnification to such indemnified party under such subsection (the
"indemnifying party"), notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such
10
<PAGE> 11
subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (which shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation. In
no event shall an indemnifying party be liable for the fees and expenses of
more than one counsel (in addition to any local counsel), apart from
counsel to such indemnifying party, for all indemnified parties in
connection with any one action or separate but similar or related actions
arising out of the same general allegations or circumstances. No
indemnifying party shall be liable for any settlement of any such action
effected without its consent, provided that such consent is not
unreasonably withheld or delayed.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Notes.
If, however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law or if the indemnified party failed to
give the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Notes
purchased under this Agreement (before deducting expenses) received by the
Company on the one hand bear to the total underwriting discounts and
commissions received by the Underwriters on the other with respect to the
Notes purchased under this Agreement, in each case as set forth in the
table on the cover page of the Prospectus Supplement. The relative fault
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Notes underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The Underwriters' obligations in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
11
<PAGE> 12
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Notes which it has agreed to purchase hereunder at the Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Notes on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Notes,
then the Company shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to you to
purchase such Notes on such terms. In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Notes, or the Company notifies you that it has so arranged for
the purchase of such Notes, you or the Company shall have the right to postpone
such Time of Delivery for a period of not more than seven days in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion and the opinion of the Company may thereby
be made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section 9 with like effect as if such
person had originally been a party to this Agreement with respect to such Notes.
(b) If, after giving effect to any arrangements for the purchase of
the Notes of a defaulting Underwriter or Underwriters by you and the
Company as provided in subsection (a) above, the aggregate principal amount
of such Notes which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Notes to be purchased hereunder, then
the Company shall have the right to require each non-defaulting Underwriter
to purchase the aggregate principal amount of Notes which such Underwriter
agreed to purchase hereunder and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
aggregate principal amount of Notes which such Underwriter agreed to
purchase hereunder) of the Notes of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of
the Notes of one or more defaulting Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Notes
which remains unpurchased exceeds one-eleventh of the aggregate principal
amount of all the Notes to be purchased hereunder, or if the Company shall
not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Notes of one or more defaulting
Underwriters, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company,
except for the expenses to be borne by the Company and the Underwriters as
provided in Section 6 hereof and the indemnity and contribution agreements
in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters as set forth in
this Agreement or made by or on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter or
any controlling person of any Underwriter, or the Company, or any officer or
director or controlling person of the Company, and shall survive delivery of and
payment for the Notes.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall have no liability to any Underwriter except as provided in Section
6 and Section 8 hereof; but, if for any other reason any Notes are not delivered
by or on behalf of the Company as provided herein, the Company will reimburse
12
<PAGE> 13
the Underwriters for all of their out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Notes not so delivered,
but the Company shall then be under no further liability to any Underwriter in
respect of the Notes not so delivered except as provided in Section 6 and
Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to Salomon Brothers Inc, 388 Greenwich Street, New York,
New York 10013, Attention: [ ] and if to the Company shall be delivered or
sent by mail, telex or facsimile transmission to the address of the Company set
forth in the Registration Statement, Attention: Secretary. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters and the Company and, to the extent provided in Sections 8
and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any Notes
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
13
<PAGE> 14
If the foregoing is in accordance with your understanding, please sign and
return to us nine counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
among each of the Underwriters and the Company.
Very truly yours,
UNION TEXAS PETROLEUM
HOLDINGS, INC.
By:
----------------------------------
Name: Larry Kalmbach
Title: Vice President and Chief
Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above
written:
SALOMON BROTHERS INC
By:
--------------------------------
Authorized Signatory
CHASE SECURITIES INC.
By:
--------------------------------
Authorized Signatory
NATIONSBANC MONTGOMERY
SECURITIES LLC
By:
--------------------------------
Authorized Signatory
14
<PAGE> 15
SCHEDULE A
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------- ----------------
<S> <C>
Salomon Brothers Inc........................................
Chase Securities Inc........................................
NationsBanc Montgomery Securities LLC ......................
-------------
Total............................................. $
=============
</TABLE>
15
<PAGE> 16
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent accountants with respect to the Company and its
subsidiaries within the meaning of the Act and the applicable published rules
and regulations thereunder;
(ii) In their opinion, the consolidated financial statements provided
pursuant to Article 12 of Regulation S-X audited by them and incorporated by
reference in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of the Act or
the Exchange Act, as applicable, and the applicable related published rules and
regulations thereunder with respect to Registration Statements on Form S-3;
(iii) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a reading
of the latest available unaudited interim financial data of the Company and its
subsidiaries, a reading of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements incorporated by
reference in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters regarding the
specified items for which representations are requested below, nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that:
(A) at the date of the latest available interim financial data and at
a specified date not more than five days prior to the date of such letter,
there have been any changes in the consolidated capital stock or any
increase of more than $75,000,000 in the consolidated short-term or
long-term debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets (working capital) or stockholders' equity
or other items heretofore determined with the Underwriters, or any
increases in any items heretofore determined with the Underwriters, in each
case as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(B) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (A) there were any decreases in consolidated net
revenues or income before taxes or the total or basic per share amounts of
consolidated net income or other items heretofore determined with the
Underwriters or any increases in any items heretofore determined with the
Underwriters, in each case as compared with the comparable period of the
preceding year, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and
(iv) In addition to the audit referred to in their report incorporated
by reference in the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in paragraphs (ii)
and (iii) above, they have carried out certain specified procedures, not
constituting an audit in accordance with generally accepted auditing
standards, with respect to certain information specified by the
Underwriters of an accounting, financial or statistical nature which are
derived from the general accounting records of the Company and its
subsidiaries (which are subject to the Company's system of internal
accounting controls), which appear in the Prospectus (excluding documents
incorporated by reference) or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Underwriters or in
documents incorporated by reference in the Prospectus, including
information set forth in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997 under the captions: "Business", "Market for
the Registrant's Common Equity and Related Stockholder Matters", "Selected
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations", and have agreed certain of such
information of an accounting, financial or statistical nature to: (a)
unaudited financial statements or (b) schedules prepared by the Company and
(x) agreed the amounts on the schedules to corresponding amounts appearing
in the accounting records of the Company and (y) determined the schedules
were mathematically correct, excluding any questions of legal
interpretation.
16
<PAGE> 17
ANNEX II
MATERIAL SUBSIDIARIES
Union Texas Petroleum Energy Corporation
Union Texas International Corporation
Union Texas East Kalimantan Limited
Union Texas Petroleum Limited
Union Texas Britannia Limited
Union Texas Finance, Inc.
Union Texas Venezuela Limited
17
<PAGE> 1
EXHIBIT 4.13
FORM OF % MANDATORY PUTABLE/REMARKETABLE
SECURITIES (MAPS(SM)) DUE APRIL , 2038
<PAGE> 2
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY
PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNION TEXAS PETROLEUM HOLDINGS, INC.
% MANDATORY PUTABLE/REMARKETABLE SECURITIES DUE 2038 (MAPS(SM))
CUSIP NO.:
No. 1 $150,000,000
ORIGINAL ISSUE DATE: April , 1998
INTEREST RATE TO REMARKETING DATE: %
REMARKETING DATE: April , 2008
INTEREST RATE TO MATURITY: To be determined as provided herein and set forth
in the records of the Trustee
STATED MATURITY DATE: April , 2038
AUTHORIZED DENOMINATION: $1,000 and integral multiples thereof
INTEREST PAYMENT DATES: April and October
- ------------
"MAndatory Putable/remarketable Securities" and "MAPS(SM)" are service marks
owned by Salomon Brothers Inc.
1
<PAGE> 3
UNION TEXAS PETROLEUM HOLDINGS, INC., a Delaware corporation
(hereinafter called the "Company"), for value received, hereby promises to pay
to Cede & Co., a nominee of The Depository Trust Company ("DTC"), or its
registered assigns, upon presentation, the principal amount of One Hundred Fifty
Million Dollars ($150,000,000) on the Stated Maturity Date specified above (or
any earlier redemption date or repurchase date) (each such Stated Maturity Date,
redemption date or repurchase date being hereinafter referred to as the
"Maturity Date" with respect to the principal repayable on such date) and to pay
interest thereon, at the Interest Rate per annum specified above to April ,
2008 (the "Remarketing Date"), and thereafter, subject to the terms and
conditions set forth herein, at the Interest Rate determined by the Remarketing
Dealer (as defined below) in accordance with the procedures set forth below (the
"Interest Rate to Maturity"), until the principal hereof is paid or duly made
available for payment. The Company will pay interest in arrears on each Interest
Payment Date, if any, specified above (each, an "Interest Payment Date"),
commencing October , 1998, and on the Maturity Date. Interest on this MAPS
will be computed on the basis of a 360-day year of twelve 30-day months.
If, pursuant to the Remarketing Agreement, dated as of the date hereof
(the "Remarketing Agreement"), between Salomon Brothers Inc, as Remarketing
Dealer (the "Remarketing Dealer"), and the Company, the Remarketing Dealer
elects to remarket the MAPS, then, except as otherwise set forth herein, (i)
this MAPS shall be subject to mandatory tender to the Remarketing Dealer for
remarketing on the Remarketing Date, on the terms and subject to the conditions
set forth herein, and (ii) on and after the Remarketing Date, this MAPS shall
bear interest at the Interest Rate to Maturity determined by the Remarketing
Dealer in accordance with the procedures set forth in Section 3 herein.
Interest on this MAPS will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly
provided for (or from, and including, the Original Issue Date if no interest
has been paid or duly provided for) to, but excluding, the applicable Interest
Payment Date or the Maturity Date, as the case may be. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will,
subject to certain exceptions described herein, be paid to the person in whose
name this MAPS (or one or more predecessors ) is registered at the close of
business on the fifteenth calendar day (whether or not a Business Day, as
defined below) immediately preceding such Interest Payment Date (the "Regular
Record Date"); provided, however, that interest payable on the Maturity Date
will be payable to the person to whom the principal hereof and premium, if any,
hereon shall be payable. Any such interest not so punctually paid or duly
provided for ("Defaulted Interest") will forthwith cease to be payable to the
Holder on any Regular Record Date, and shall be paid to the person in whose
name this MAPS is registered at the close of business on a special record date
(the "Special Record Date") for the payment of such Defaulted Interest to be
fixed by the Trustee hereinafter referred to, of which notice shall be mailed,
first-class postage prepaid, to the Holder of this MAPS by the Trustee not less
than 10 days prior to such Special Record Date or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which this MAPS may be listed, and upon such notice as
may be required by such exchange, all as more fully provided for in the
Indenture.
Payment of principal, premium, if any, and interest in respect of this
MAPS due on the Maturity Date will be made in immediately available funds upon
presentation and surrender of this MAPS at the corporate trust office of the
Trustee maintained for that purpose in the Borough of Manhattan, The City of
New York, currently located c/o First Chicago Trust Company of New York, 14
Wall Street, Eighth Floor - Window 2, New York, New York, 10005, or at such
other paying agency in The City of New York, State of New York, as the Company
may determine. Payment of interest due on any Interest Payment Date other than
the Maturity Date will be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register kept for
the MAPS pursuant to Section 305 of the Indenture.
If any Interest Payment Date or the Maturity Date falls on a day that
is not a Business Day, the required payment of principal, premium, if any,
and/or interest shall be made on the next succeeding Business Day with the same
force and effect as if made on the date such payment was due, and no interest
shall accrue with respect to such payment for the period from and after such
Interest Payment Date or the Maturity Date, as the case may be.
As used herein, "Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in The
City of New York are authorized or required by law, regulation, executive
2
<PAGE> 4
order or governmental decree to be closed.
The Company is obligated to make payment of principal, premium, if
any, and interest in respect of this MAPS in U.S. Dollars.
Reference is hereby made to the further provisions of this MAPS set
forth on the reverse hereof.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature, this MAPS shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
3
<PAGE> 5
IN WITNESS WHEREOF, Union Texas Petroleum Holdings, Inc., has caused
this MAPS to be duly executed this day of April, 1998.
UNION TEXAS PETROLEUM HOLDINGS, INC.
By:
----------------------------------------
Attest: [Chairman/Vice President]
By:
----------------------------------------
[Secretary/Assistant Secretary]
[SEAL]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This % MAndatory Putable/remarketable Securities due 2038 (MAPS(SM)) is one
of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
Dated: April , 1998 THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By:
----------------------------------------
Authorized Signatory
4
<PAGE> 6
(Form of Reverse of Security)
UNION TEXAS PETROLEUM HOLDINGS, INC.
% MANDATORY PUTABLE/REMARKETABLE SECURITIES DUE 2038 (MAPS(SM))
1. Indenture. (a) This MAPS is one of a duly authorized issue of
debt securities of the Company (the "Securities") issued under an Indenture
dated as of March 15, 1995 as supplemented by a supplemental indenture dated as
of November 17, 1995 (the "Indenture"), among the Company, subsidiaries of the
Company named therein and The First National Bank of Chicago, as Trustee (herein
called the "Trustee," which term includes any successor Trustee under the
Indenture with respect to the MAPS), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, and the Holders of the MAPS, and of the terms upon which the MAPS
are authenticated and delivered. This Security is designated as " % MAndatory
Putable/remarketable Securities Due 2038 (MAPS(SM))" which MAPS are limited to
$150,000,000 aggregate principal amount, subject to the provisions of the
Indenture. All terms used but not defined in this MAPS shall have the meanings
assigned to such terms in the Indenture. Except where the context otherwise
requires, all references in this MAPS to "herein" or "hereof" or similar terms
shall include the Indenture.
(b) The MAPS will be senior unsecured obligations of the Company.
(c) This MAPS is issuable only in registered form without coupons
in minimum denominations of U.S. $1,000 and integral multiples thereof.
(d) This MAPS will not be subject to any sinking fund.
2. Mandatory Tender. Provided that on a Business Day not later
than 10 Business Days prior to the Remarketing Date the Remarketing Dealer
notifies the Company and the Trustee of its election to purchase the MAPS on
the Remarketing Date (the "Notification Date"), the MAPS shall be subject to
mandatory tender to the Remarketing Dealer, and the Remarketing Dealer shall be
obligated to purchase the MAPS, for remarketing on the Remarketing Date,
subject in each case to the conditions described herein and set forth in the
Remarketing Agreement.
3. Determination of Interest Rate to Maturity. Subject to the
Remarketing Dealer's election to remarket the MAPS as provided in Section 2
hereof and the Remarketing Agreement, the Interest Rate to Maturity shall be
determined by the Remarketing Dealer by 3:30 p.m., New York City time, on and
as of the third Business Day immediately preceding the Remarketing Date (the
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum, and will be equal to the sum of % (the "Base
Rate") plus the Applicable Spread, which will be based on the Dollar Price of
the MAPS.
The "Applicable Spread" will be the lowest firm commitment, expressed
as a spread (in the form of a percentage or in basis points) above the Base
Rate, obtained by the Remarketing Dealer on the Determination Date from the
bids quoted by five Reference Corporate Dealers for the full aggregate
principal amount of the MAPS at the Dollar Price, but assuming (i) an issue
date equal to the Remarketing Date, with settlement on such date without
accrued interest, (ii) a maturity date equal to the Stated Maturity Date of
the MAPS, and (iii) a stated annual interest rate, payable semi-annually on
each Interest Payment Date, equal to the Base Rate plus the spread bid by the
applicable Reference Corporate Dealer. If fewer than five Reference Corporate
Dealers bid as described above, then the Applicable Spread shall be the lowest
of such firm commitments obtained as described above. The Interest Rate to
Maturity announced by the Remarketing Dealer, absent manifest error, shall be
binding and conclusive upon the beneficial owners and Holders of the MAPS, the
Company and the Trustee.
"Dollar Price" means the present value, as of the Remarketing Date, of
the Remaining Scheduled Payments discounted to the Remarketing Date, on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day
5
<PAGE> 7
months), at the Treasury Rate.
"Reference Corporate Dealers" means each of Salomon Brothers Inc,
Chase Securities Inc., NationsBanc Montgomery Securities LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J. P. Morgan Securities Inc. and their
respective successors; provided, however, that if any of the foregoing or their
affiliates shall cease to be a leading dealer of publicly traded debt
securities of the Company in The City of New York (a "Primary Corporate
Dealer"), the Remarketing Dealer shall substitute therefor another Primary
Corporate Dealer.
"Remaining Scheduled Payments" means, with respect to the MAPS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to but excluding the Stated Maturity Date; provided, however, that if the
Remarketing Date is not an Interest Payment Date with respect to the MAPS, the
amount of the next succeeding scheduled interest payment thereon, calculated at
the Base Rate only, will be reduced by the amount of interest accrued thereon,
calculated at the Base Rate only, to the Remarketing Date.
"Treasury Rate" means, with respect to the Remarketing Date, the rate
per annum equal to the semi-annual equivalent yield to maturity or interpolated
(on a day count basis) yield to maturity of the Comparable Treasury Issues,
assuming a price for the Comparable Treasury Issues (expressed as a percentage
of its principal amount), equal to the Comparable Treasury Price for the
Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security
or securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MAPS being remarketed.
"Comparable Treasury Price" means, with respect to the Remarketing
Date, (a) the offer prices for the Comparable Treasury Issues (expressed in
each case as a percentage of its principal amount) on the Determination Date,
as set forth on "Telerate Page 500" (or such other page as may replace Telerate
Page 500), or (b) if such page (or any successor page) is not displayed or does
not contain such offer prices on the Determination Date, (i) the average of the
Reference Treasury Dealer Quotations for the Remarketing Date, after excluding
the highest and lowest of such Reference Treasury Dealer Quotations, or (ii) if
the Remarketing Dealer obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Telerate Page 500" means the display designated as "Telerate Page 500" on Dow
Jones Markets Limited (or such other page as may replace Telerate Page 500 on
such service) or such other service displaying the offer prices specified in
(a) above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted to the Remarketing Dealer by such Reference Treasury
Dealer by 3:30 p.m., New York City time, on the Determination Date.
"Reference Treasury Dealer" means each of Salomon Brothers Inc, Chase
Securities Inc., NationsBanc Montgomery Securities LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and J. P. Morgan Securities Inc. and their
respective successors; provided, however, that if any of the foregoing or their
affiliates shall cease to be a primary U.S. government securities dealer in
The City of New York (a "Primary Treasury Dealer"), the Remarketing Dealer
shall substitute therefor another Primary Treasury Dealer.
4. Repurchase. In the event that (i) the Remarketing Dealer for
any reason does not notify the Company of the Interest Rate to Maturity by 4:00
p.m., New York City time, on the Determination Date, or (ii) prior to the
Remarketing Date, the Remarketing Dealer has resigned and no successor has been
appointed on or before the Determination Date, or (iii) since the Notification
Date, a material adverse change in the condition of the Company and its
subsidiaries, considered as one enterprise, shall have occurred or an Event of
Default, or any event which, with the giving of notice or passage of time, or
both, would constitute an Event of Default, with respect to the MAPS shall have
occurred and be continuing, or any other event constituting a termination event
under the Remarketing Agreement shall have occurred, or (iv) the Remarketing
Dealer elects not to remarket the MAPS, or (v) the Remarketing Dealer for any
6
<PAGE> 8
reason does not purchase all tendered MAPS on the Remarketing Date, the Company
shall repurchase the MAPS as a whole on the Remarketing Date at a price equal
to 100% of the principal amount of the MAPS plus all accrued and unpaid
interest, if any, on the MAPS to the Remarketing Date. In any such case,
payment will be made by the Company through the Trustee to the DTC participant
of each tendering beneficial owner of MAPS, by book-entry through DTC by the
close of business on the Remarketing Date against delivery through DTC of such
beneficial owner's tendered MAPS.
5. Redemption. (a) This MAPS will be subject to redemption at
the option of the Company from the Remarketing Dealer on the Remarketing Date,
in whole but not in part, at the Remarketing Redemption Price. To exercise its
option to redeem the MAPS, the Company must notify the Remarketing Dealer and
the Trustee not later than the Business Day immediately preceding the
Determination Date. The "Remarketing Redemption Price" shall be the greater of
(i) 100% of the principal amount of the MAPS and (ii) the Dollar Price, plus in
either case any accrued and unpaid interest on the principal amount being
redeemed to the Remarketing Date. If the Company elects to redeem the MAPS, it
shall pay the Remarketing Redemption Price therefor in same-day funds by wire
transfer to an account designated by the Remarketing Dealer on the Remarketing
Date.
(b) After the Remarketing Date, this MAPS shall be subject to
redemption at the option of the Company, at any time in whole or from time to
time in part, at the Optional Redemption Price. The "Optional Redemption
Price" shall be equal to the sum of (i) the principal amount of the MAPS being
redeemed, plus accrued and unpaid interest thereon to the applicable date fixed
for redemption (the "Redemption Date"), and (ii) the Make-Whole Premium, if
any.
"Make-Whole Premium" shall mean, in connection with any optional
redemption of any MAPS, the excess, if any, of:
(i) the sum of the present values, calculated as of the
Redemption Date, of:
(A) each interest payment that, but for such
redemption, would have been payable on the MAPS (or portion
thereof) after the Redemption Date (excluding any accrued
interest for the period prior to the Redemption Date); and
(B) the principal amount that, but for such
redemption, would have been payable at the final maturity of
the MAPS (or portion thereof) being redeemed;
over
(ii) the principal amount of the MAPS (or portion thereof)
being redeemed,
plus any accrued and unpaid interest thereon to but excluding the Redemption
Date. The present values of interest and principal payments referred to in
clause (i) above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
Redemption Date at a discount rate equal to the Treasury Yield (as defined below
for purposes of determining the Make-Whole Premium) plus basis points.
7
<PAGE> 9
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided,
that if the Company fails to make such appointment at least 10 Business Days
prior to the Redemption Date, or if the institution so appointed is unwilling
or unable to make such calculation, such calculation will be made by [Salomon
Smith Barney] or, if such firm is unwilling or unable to make such calculation,
by an independent investment banking institution of national standing appointed
by the Trustee (in any such case, an "Independent Investment Banker").
For purposes of determining the Make-Whole Premium, "Treasury Yield"
means a rate of interest per annum equal to the weekly average yield to
maturity of United States Treasury Notes that have a constant maturity that
corresponds to the remaining term to maturity of the MAPS, calculated to the
nearest 1/12 of a year (the "Remaining Term"). The Treasury Yield will be
determined as of the third Business Day immediately preceding the Redemption
Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by the
Federal Reserve Bank of New York and designated "H.15(519) Selected Interest
Rates" or any successor release (the "H.15 Statistical Release"). If the H.15
Statistical Release sets forth a weekly average yield for United States
Treasury Notes having a constant maturity that is the same as the Remaining
Term, then the Treasury Yield will be equal to such weekly average yield. In
all other cases, the Treasury Yield will be calculated by interpolation, on a
straight-line basis, between the weekly average yields on the United States
Treasury Notes that have a constant maturity closest to and greater than the
Remaining Term and the United States Treasury Notes that have a constant
maturity closest to and less than the Remaining Term (in each case as set forth
in the H.15 Statistical Release). Any weekly average yields so calculated by
interpolation will be rounded to the nearest 1/100 of 1%, with any figure of
1/200 of 1% or above being rounded upward. If weekly average yields for United
States Treasury Notes are not available in the H.15 Statistical Release or
otherwise, then the Treasury Yield will be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.
Notice of any optional redemption of any MAPS shall be given to
Holders at their addresses, as shown in the security register for the MAPS, not
less than 30 nor more than 60 days prior to the date fixed for redemption. The
notice of redemption shall specify, among other items, the Optional Redemption
Price and the principal amount of the MAPS held by such Holder to be redeemed.
If less than all of the MAPS are to be redeemed, the Trustee will select the
MAPS to be redeemed pro rata or by lot. The Trustee may select for redemption
MAPS and portions of MAPS in amounts of $1,000 or whole multiples of $1,000,
provided that if all of the MAPS of a Holder are to be redeemed, the entire
outstanding amount of MAPS held by such Holder, even if not a whole multiple of
$1,000, will be redeemed.
(c) On and after the Redemption Date interest will cease to accrue
on the MAPS or on the portions thereof called for redemption, as the case may
be.
6. Defaults and Remedies. Events of Default include: default in
payment of interest of the MAPS for 30 days; default in payment of principal of
or premium, if any, on the MAPS; failure by the Company for 60 days after
written notice by the Trustee or by the Holders of at least 25% of the
aggregate principal amount of the MAPS then outstanding to it to comply with
any of its other covenants or agreements in the Indenture or the MAPS; the
acceleration of the maturity of any Indebtedness of the Company or any
Restricted Subsidiary (other than the MAPS or any Non-Recourse Indebtedness)
that has an outstanding principal amount of $20 million or more individually or
in the aggregate; a default in the payment of principal or interest in respect
of any Indebtedness of the Company or any Restricted Subsidiary (other than the
MAPS or any Non-Recourse Indebtedness) having an outstanding principal amount
of $20 million or more individually or in the aggregate, and such default shall
be continuing for a period of 30 days without the Company or such Restricted
Subsidiary, as the case may be, effecting a cure of such default; or certain
events involving bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the
then-outstanding MAPS may declare the principal of, and premium, if any, and
interest of all the MAPS to be immediately due and payable, except that in the
case of an Event of Default arising from certain events of bankruptcy,
insolvency or reorganization of the Company or any Restricted Subsidiary, all
outstanding MAPS become due and payable immediately without further action or
notice. The amount due and payable upon the acceleration of any MAPS is equal
to 100% of the principal amount thereof plus accrued interest to the day of
payment. Holders may not enforce the Indenture or the
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<PAGE> 10
MAPS except as provided in the Indenture. The Trustee may require indemnity
reasonably satisfactory to it before it enforces the Indenture or the MAPS.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding MAPS may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders notice of any continuing
default (except a default in payment of principal or interest) if it determines
that withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee.
7. Amendment and Modification. The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the MAPS at any time by the Company and the Trustee with the consent
of the Holders of not less than a majority of the aggregate principal amount of
all MAPS at the time outstanding and affected thereby. The Indenture also
contains provisions permitting the Holders of not less than a majority of the
aggregate principal amount of the MAPS at the time outstanding, on behalf of
the Holders of all MAPS, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this MAPS
shall be conclusive and binding upon such Holder and upon all future Holders of
this MAPS and other MAPS issued upon the registration or transfer hereof or in
exchange heretofore or in lieu hereof, whether or not notation of such consent
or waiver is made upon this MAPS.
8. Obligation to Pay Principal, Premium, If Any, and Interest.
No reference herein to the Indenture and no provision of this MAPS or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this MAPS at the times, places and rate or formula herein
prescribed.
9. Transfer and Exchange. As provided in the Indenture and
subject to certain limitations therein and herein set forth, the transfer of
this MAPS is registrable in the Security Register of the Company upon surrender
of this MAPS for registration of transfer at the office or agency of the
Company in any place where the principal hereof and any premium or interest
hereon are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or by his attorney duly authorized in writing,
and thereupon one or more new MAPS, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations
therein and herein set forth, this MAPS is exchangeable for a like aggregate
principal amount of MAPS of different authorized denominations but otherwise
having the same terms and conditions, as requested by the Holder hereof
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith as
provided in the Indenture.
Prior to due presentment of this MAPS for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder in whose name this MAPS is registered as the owner thereof for all
purposes, whether or not this MAPS be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
10. Trustee Dealings with Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
11. No Recourse against Others. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the MAPS or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation.
Each Holder by accepting the MAPS waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the MAPS.
12. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of
9
<PAGE> 11
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
13. Governing Law. The Indenture and this MAPS shall be governed
by and construed in accordance with the laws of the State of New York.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Request may be made to:
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77056
Attention: General Counsel
10
<PAGE> 12
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
- ----------------------------------------------------------------------------
(Please Print or Typewrite Name and Address, including Zip Code, of Assignee)
the within MAPS of Union Texas Petroleum Holdings, Inc., and the undersigned
hereby does irrevocably constitute and appoint
_________________________________________ as agent to transfer said MAPS on the
books of the within-named Company with full power of substitution in the
premises.
Dated:
--------------
Signature:
----------------------------
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within MAPS in every particular, without
alteration or enlargement or any change whatever.
Signature Guaranteed:
---------------------------------
NOTICE: Signature(s) must be guaranteed by an "eligible guarantor institution"
that is a member or participant in a "signature guarantee program" (e.g., the
Securities Transfer Agents Medallion Program, the Stock Exchange Medallion
Program or the New York Stock Exchange, Inc., Medallion Signature Program).
11
<PAGE> 1
EXHIBIT 5.1
OPINION OF KING & SPALDING
REGARDING LEGALITY
<PAGE> 2
KING & SPALDING
1100 Louisiana, Suite 3300
Houston, Texas 77002
April 1, 1998
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77056
Re: Union Texas Petroleum Holdings, Inc.
Shelf Registration Statement on Form S-3 (333-31039)
Ladies and Gentlemen:
We have acted as counsel for Union Texas Petroleum Holdings, Inc., a
Delaware corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-3 No. 333-31039 (the "Registration Statement")
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act"), relating to the offering from time to time, as set
forth in the prospectus contained in the Registration Statement of the Company's
securities in an aggregate amount not to exceed $500,000,000 (the "Prospectus")
and as set forth in a supplement to the Prospectus (the "Prospectus
Supplement"), of MAndatory Putable/remarketable Securities (MAPS(SM)) of the
Company, to be issued by the Company.
In connection with this opinion, we have examined and relied upon such
records, documents, certificates and other instruments as in our judgment are
necessary or appropriate to form the basis for the opinions hereinafter set
forth. In all such examinations, we have assumed the genuineness of signatures
on original documents and the conformity to such original documents of all
copies submitted to us as certified, conformed or photographic copies, and as
to certificates of public officials, we have assumed the same to have been
properly given and to be accurate. As to matters of fact material to this
opinion, we have relied upon statements and representations of representatives
of the Company and of public officials.
This opinion is limited in all respects to the federal laws of the
United States of America, the laws of the States of Texas and New York and the
General Corporation Law of Delaware, and no
<PAGE> 3
Union Texas Petroleum Holdings, Inc.
Page 2
opinion is expressed with respect to the laws of any other jurisdiction or any
effect which such laws may have on the opinions expressed herein. This opinion
is limited to the matters stated herein, and no opinion is implied or may be
inferred beyond the matters expressly stated herein.
Based upon the foregoing, and the other limitations and qualifications
set forth herein, we are of the opinion that:
(i) The Company is a validly existing corporation under
the laws of the State of Delaware; and
(ii) The Indenture has been duly authorized, executed and
delivered by the Company and assuming due authorization, execution and
delivery thereof by the Trustee, constitutes a valid and legally
binding instrument of the Company enforceable against the Company in
accordance with its terms; and upon the due authorization of the
issuance of the MAPS and when duly executed by the Company and
authenticated by the Trustee in accordance with the Indenture and
delivered to and paid for by the purchasers thereof in accordance with
the underwriting agreement approved by the Company and as described in
the Prospectus Supplement, the MAPS will be legally issued and will
constitute valid and binding obligations of the Company enforceable
against the Company in accordance with their terms.
With respect to the opinion set forth in paragraph (i) above
concerning the good standing of the Company, we have relied exclusively upon
certificates of officers of the Company and a certificate of the Secretary of
State of Delaware.
The opinions set forth above are subject to the qualifications that
(i) enforcement may be subject the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally and to
general equitable principles and any implied covenant of good faith and fair
dealing (whether considered in a proceeding at law or in equity), (ii) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought and (iii) with respect to
the enforceability of the Indenture, no opinion is expressed with respect to
Section 615 thereof.
This opinion is given as of the date hereof, and we assume no
obligation to advise you after the date hereof of facts or circumstances that
come to our attention or changes in law that occur which could affect the
opinions contained herein. This letter is being rendered solely for the
benefit of the Company in connection with the matters addressed herein. This
opinion may not be furnished to or relied upon by any person or entity for any
purpose without our prior written consent.
<PAGE> 4
Union Texas Petroleum Holdings, Inc.
Page 3
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the captions "Legal
Matters" in the Prospectus that is included in the Registration Statement and
in the Prospectus Supplement.
Very truly yours,
/s/ KING & SPALDING
King & Spalding
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1993 1994 1995 1996 1997
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Pretax income.......................... $26,983 $211,983 $253,327 $379,039 $269,302
Fixed charges:
Interest expense..................... 30,506 28,721 50,379 49,858 46,850
Preferred stock dividends of a
subsidiary........................ 1,681
Capitalized debt cost................ 1,536 1,452 1,486 1,332 1,226
Interest portion of rent expense..... 2,777 3,170 3,126 2,928 3,270
------- -------- -------- -------- --------
Total fixed charges.......... 36,500 33,343 54,991 54,118 51,346
Less: Capitalized interest, net........ 4,623 1,464 4,845 8,690 27,270
------- -------- -------- -------- --------
31,877 31,879 50,146 45,428 24,076
Earnings before fixed charges.......... $58,860 $243,862 $303,473 $424,467 $293,378
======= ======== ======== ======== ========
Ratio of earnings to fixed charges..... 1.61(1) 7.31 5.52 7.84 5.71(2)
</TABLE>
- ---------------
(1) During 1993, the Company recorded a non-cash charge to depreciation,
depletion and amortization of $103 million pretax ($48 million after-tax)
for the write-down of its investment in the U.K. North Sea's Piper field.
Excluding the effect of the piper write-down, the ratio of earnings to fixed
charges for 1993 would have been 4.45.
(2) The 1997 pro forma ratio of earnings to fixed charges would be 4.99 as
calculated below:
<TABLE>
<S> <C>
1997 fixed charges per above................................ $51,346
Pro forma adjustments
Bond interest requirements............................. 10,650
Estimated decrease in interest expense due to
refinancing........................................... (3,200)
-------
Total pro forma fixed charges............................. $58,796
=======
Pro forma ratio of earnings to fixed charges.............. 4.99
=======
</TABLE>
The pro forma adjustments give effect to the issuance of bonds at an
assumed annual interest rate of 7.10% and the application of a portion of
the proceeds to the reduction of debt under the uncommitted and unsecured
lines of credit, as if such transaction had taken place January 1, 1997.
<PAGE> 2
COMPUTATION OF
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------
1993 1994 1995 1996 1997
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Pretax income............................ $26,983 $211,983 $253,327 $379,039 $269,302
Fixed charges
Interest expense....................... 30,506 28,721 50,379 49,858 46,850
Preferred stock dividends of
subsidiary.......................... 1,681
Capitalized debt cost.................. 1,536 1,452 1,486 1,332 1,226
Interest portion of rent expense....... 2,777 3,170 3,126 2,928 3,270
------- -------- -------- -------- --------
Total fixed charges............ 36,500 33,343 54,991 54,118 51,346
Less: Capitalized interest, net........ 4,623 1,464 4,845 8,690 27,270
------- -------- -------- -------- --------
31,877 31,879 50,146 45,428 24,076
Earnings before fixed charges............ $58,860 $243,862 $303,473 $424,467 $293,378
======= ======== ======== ======== ========
Ratio of earnings to fixed charges....... 1.61(1) 7.31 5.52 7.84 5.71(2)
</TABLE>
- ---------------
(1) During 1993, the Company recorded a non-cash charge to depreciation,
depletion and amortization of $103 million pretax ($48 million after-tax)
for the write-down of its investment in the U.K. North Sea's Piper Field.
Excluding the effect of the piper write-down, the ratio of earnings to fixed
charges for 1993 would have been 4.45.
(2) The 1997 pro form a ratio of earnings to combined fixed charges and
preferred stock dividends would be 3.50 as calculated below:
<TABLE>
<S> <C> <C>
1997 fixed charges per above................................ $51,346
Pro forma adjustments
Preferred stock dividend requirements.................. 12,495
Ratio of 1997 pretax income to net income.............. 2.0
------
Preferred stock dividend factor........................ 24,990
Bond interest requirements............................. 10,650
Estimated decrease in interest expense due to
refinancing........................................... (3,200)
-------
Total pro forma combined fixed charges and preferred stock
dividends.............................................. $83,786
=======
Pro forma ratio of earnings to combined fixed charges and
preferred stock dividends.............................. 3.50
=======
</TABLE>
The pro forma adjustments give effect to preferred stock dividends as a
result of the issuance of $175 million of the preferred stock at an annual
dividend rate of 7.14% and the issuance of bonds at an assumed annual
interest rate of 7.10% and the application of a portion of the proceeds to
the reduction of debt under the revolving credit facility and the
uncommitted and unsecured lines of credit, as if such transactions had
taken place January 1, 1997.
