EXHIBIT 1.1
DEALER-MANAGER AGREEMENT
July 1, 1998
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
This agreement (the "Agreement") will confirm the understanding between
Pennzoil Company, a Delaware corporation, and its subsidiaries (collectively,
the "Company") and PaineWebber Incorporated ("PaineWebber") pursuant to which
the Company has retained PaineWebber to act as its exclusive dealer manager,
on the terms and subject to the conditions set forth herein, in connection
with the proposed offer by the Company to acquire, a portion of the Company's
4 3/4% Exchangeable Senior Debentures due 2003 and 6 1/2% Exchangeable Senior
Debentures due 2003 (together being the "Securities") and the issuance by the
Company of newly issued 4.95% Exchangeable Senior Debentures due 2008 and
4.90% Exchangeable Senior Debentures due 2008 (the "New Debentures"), with
principal amounts to be determined as set forth in the Prospectus referred to
below. The New Debentures will be two series of the Company's debt securities
and will be issued under the Indenture dated as of December 15, 1992 and the
Third Supplemental Indenture and Fourth Supplemental Indenture thereto (the
"Supplemental Indentures"), both between the Company and Chase Bank of Texas,
N.A (formerly known as Texas Commerce Bank, N.A.) (the "Trustee"). The
transactions, which are intended to result in the partial acquisition of the
Securities by or on behalf of the Company as proposed to be accomplished
through an exchange of Securities by the Company, are referred to herein as
the "Exchange Offers." The making of the Exchange Offers, the exchange of
Securities pursuant thereto, and all related incidental acts and transactions
are hereinafter referred to collectively as the "Exchange Offers
Transactions." The following sets forth the agreement between the Company and
PaineWebber:
Section 1. Appointment as Dealer Manager.
The Company hereby appoints PaineWebber on an exclusive basis to act as
financial advisor with respect to the Exchange Offers Transactions and as sole
dealer manager for the Exchange Offers, and hereby authorizes PaineWebber to
act as such in connection therewith. PaineWebber agrees to perform those
services as dealer manager with respect to the Exchange Offers as are
customarily performed by PaineWebber in connection with tender offers of a
like nature, including (but not limited to) providing certain advice to the
Company regarding the terms and timing of the Exchange Offers and using its
best efforts to solicit tenders of Securities pursuant to the Exchange Offers
and in communicating with other brokers, dealers, commercial banks and trust
companies (collectively, "Dealers"). In soliciting or obtaining tenders, (i)
PaineWebber, as dealer manager, shall act as an independent contractor with
duties solely to the Company and shall not be deemed to be acting as the agent
of the Company other than pursuant to this Agreement or as the agent of any
Dealer, (ii) the Company will not pay any person any commission or other
remuneration, directly or indirectly, for the solicitation of the Exchange
Offers (other than PaineWebber) and (iii) no Dealer shall be deemed to be
acting as the agent of PaineWebber; provided, however, that the Company hereby
authorizes PaineWebber, and/or one or more registered brokers or dealers
chosen by PaineWebber, to act as the Company's agent in making the Exchange
Offers to residents of any jurisdiction in which such agent designation may be
necessary to comply with applicable law. Nothing in this Agreement shall
constitute PaineWebber as a partner or joint venturer with the Company or any
of its subsidiaries. It is understood that PaineWebber is being engaged
hereunder solely to provide the services described above on behalf of the
Company, and that PaineWebber is not acting as an agent or fiduciary of, and
shall have no duties or liability to, the equity holders of the Company or any
other third party in connection with its engagement hereunder, all of which
are hereby expressly waived. On the basis of the representations and
warranties and agreements of the Company contained herein and subject to and
in accordance with the terms and conditions hereof and of the Exchange Offers,
PaineWebber agrees to act in such capacity.
Section 2. Exchange Offer Materials.
Prior to the commencement of the Exchange Offers, the Company agrees to
furnish PaineWebber, at the Company's expense, with as many copies as
PaineWebber may reasonably request of (i) each of the documents that is filed
with the Securities and Exchange Commission (the "Commission"), including each
registration statement, preliminary and final prospectus filed with the
Commission (such final prospectus included in such registration statement as
amended at the time it becomes effective is herein called the "Prospectus,"
except that, if the prospectus first filed by the Company pursuant to Rule
424(b) of the rules and regulations of the Commission shall differ from the
Prospectus, the term "Prospectus" shall also include the prospectus first
filed pursuant to Rule 424(b)), in connection with the Exchange Offers, (ii)
each offering circular, sales memorandum, term sheet, proposed agreement,
invitation to negotiate, private placement memorandum, solicitation statement,
disclosure document, or other explanatory statement, or other report, filing,
document, release or communication mailed, delivered, published, or filed by
or on behalf of the Company in connection with the Exchange Offers, (iii) each
document required to be filed with the Commission pursuant to the provisions
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
pertaining to the Company during the term of this Agreement and (iv) each
appendix, attachment, modification, amendment or supplement to any of the
foregoing and all related documents, including but not limited to each related
letter of transmittal (each of (i), (ii), (iii) and (iv), an "Exchange Offer
Document" and, collectively, the "Exchange Offer Documents"). At the
commencement of the Exchange Offers, the Company shall cause timely to be
delivered to each registered holder of any Securities legally or contractually
entitled thereto, each Exchange Offer Document and any other offering
materials prepared expressly for use by holders of Securities tendering,
voting, or otherwise participating in the Exchange Offers, together with a
return envelope. Thereafter, to the extent practicable, until the expiration
of the Exchange Offers, the Company shall use its best efforts to cause copies
of such materials and a return envelope to be mailed to each person who
becomes a holder of any Securities.
The Company agrees that, at a reasonable time prior to using any material in
connection with the Exchange Offers or filing any such material with the
Commission or any other federal or state agency, commission or
instrumentality, the Company will submit copies of such material to
PaineWebber and will consult with PaineWebber and give reasonable
consideration to its comments, if any, with respect thereto. In connection
with the Exchange Offers, if the Company (a) uses or permits the use of, or
files with the Commission or any other governmental or regulatory agency,
authority or instrumentality, any Exchange Offer Document that (i) has not
been submitted to PaineWebber on a timely basis for PaineWebber's comments or
(ii) has been so submitted and with respect to which PaineWebber reasonably
objects or (b) shall have breached any of its representations, warranties,
agreements, or covenants herein, then PaineWebber shall be entitled to
withdraw as a dealer manager in connection with the Exchange Offers, without
any liability or penalty to PaineWebber or any other Indemnified Person (as
defined in paragraph 6 hereof) for such withdrawal and without loss of any
right to indemnification or contribution provided in this Agreement or to the
payment of all fees and expenses payable hereunder that have accrued to the
date of such withdrawal. In the event of any such withdrawal, for the purpose
of determining the fees payable to PaineWebber pursuant to this Agreement,
PaineWebber shall remain entitled to receive the payment of all fees and
expenses payable under this Agreement that have accrued to the date of any
such withdrawal. The Company recognizes and confirms that, in connection with
the Exchange Offers, PaineWebber will be using and relying upon (i)
information (both written and oral), documents (including the Exchange Offer
Documents) and data furnished by the Company to PaineWebber, and (ii)
information available from filings made by the Company pursuant to the
Exchange Act which have been approved for such use by the Company
(collectively the "Information"). The Company further recognizes that
PaineWebber does not assume responsibility for the accuracy or completeness of
the Information and will not undertake to independently verify its accuracy or
completeness.
The Company agrees that any reference to PaineWebber or any affiliate of
PaineWebber in any Exchange Offer Document, or any release or written
communication, is subject to PaineWebber's prior approval. If PaineWebber
resigns prior to the dissemination of any Exchange Offer Document or any
release or communication, no reference shall be made therein to PaineWebber.
2
Section 3. Compensation.
The Company will pay PaineWebber for services to be rendered by PaineWebber
hereunder as set forth in the compensation provisions of the agreement dated
August 1, 1997, between Pennzoil Company and PaineWebber (the "Prior
Agreement"), the first amendment thereto dated December 19, 1997 (the "First
Amendment") and the second amendment thereto dated June 24, 1998 (the "Second
Amendment"), which compensation provisions are incorporated as if restated
herein in full and shall remain as a part of this Agreement notwithstanding
any termination, amendment or purported invalidity of the Prior Agreement,
First Amendment or Second Amendment.
Section 4. Expenses; Reimbursement Thereof.
The Company will pay or cause to be paid (i) all fees and expenses relating
to the preparation, printing, filing, mailing and publishing of all documents
pertaining to the Exchange Offers; (ii) all fees and expenses of any
depositary, information agent or other agents, attorneys and other persons
retained by the Company in connection with the Exchange Offers; (iii) all
fees, if any, payable to Dealers (including PaineWebber) as reimbursement for
their customary mailing and handling expenses in forwarding materials related
to the Exchange Offers to their customers; (iv) all advertising charges; and
(v) all other fees and expenses incurred in connection with or relating to the
Exchange Offers. In addition, the Company agrees to reimburse PaineWebber and
its affiliates, promptly upon request, for all out-of-pocket expenses,
including (without limiting the foregoing) the fees, costs and expenses of
PaineWebber's legal counsel, incurred in connection with the Exchange Offers
Transactions.
Section 5. Limitation on Liability.
Neither PaineWebber nor any affiliate thereof shall have any liability to
the Company or any affiliate thereof for any losses, claims, damages,
liabilities or expenses ("Liabilities") arising from any act or omission on
the part of any Dealer, or from PaineWebber's acts or omissions in performing
its obligations hereunder or otherwise in connection with the Exchange Offers
Transactions, except to the extent that such Liabilities are finally and
judicially determined by a court of competent jurisdiction to have resulted
primarily from PaineWebber's willful misconduct or gross negligence.
Section 6. Indemnification and Contribution.
The Company hereby agrees (i) to indemnify and hold harmless PaineWebber,
its affiliated companies, and each of PaineWebber's and such affiliated
companies' respective officers, directors, agents, employees and controlling
persons (within the meaning of Section 20 of the Exchange Act and Section 15
of the Securities Act of 1933, as amended (the "Securities Act")) (each of the
foregoing, including PaineWebber, being hereafter sometimes called an
"Indemnified Person"), to the fullest extent permitted by law from and against
any and all Liabilities, actions (including shareholder derivative actions),
proceedings, investigations (whether formal or informal) or inquiries, or
threats thereof, based on or arising out of (1) any untrue statement or
alleged untrue statement of any material fact in any Exchange Offer Document,
(2) any omission or alleged omission of any material fact required to be
stated in any Exchange Offer Document or necessary to make the statement made
in any Exchange Offer Document, in light of the circumstances under which it
was made, not misleading, (3) any withdrawal, termination or cancellation of
any one or more of the Exchange Offers Transactions for any reason whatsoever,
(4) any tender, purchase, exchange or other acquisition by the Company or any
affiliate thereof of Securities (including, without limiting the foregoing,
any purchase prior to the date hereof as to which PaineWebber acted as broker
or dealer), (5) any violation by or conflict of the Exchange Offers or any of
the Exchange Offers Transactions of or with any law, rule, regulation, order,
award, judgment, determination, writ, injunction or decree of any United
States federal, state, local or foreign court or governmental authority, (6)
any breach by the Company of any representation or warranty or any failure to
comply with any of the agreements contained herein or any agreement relating
to the Exchange Offers or the Exchange Offers Transactions, or (7) the
Exchange Offers, the Exchange Offers Transactions or PaineWebber's engagement
hereunder, and (ii) in connection with the foregoing obligations, to reimburse
each Indemnified Person for all expenses (including fees, disbursements and
other charges of counsel) as they are incurred by such Indemnified Person in
connection with investigating, preparing to defend or defending any such
action (including actions brought by the Company or
3
the Company's equity holders or derivative actions brought by any person
claiming through the Company or in the Company's name), proceeding,
investigation or inquiry, or threat thereof, whether or not any such action,
proceeding, investigation or inquiry is actually or formally commenced or any
such Indemnified Person is a party thereto or subject thereof. Notwithstanding
the foregoing, the Company shall not be obligated to indemnify any such
Indemnified Person under this Section 6 with respect to any Liability, and
amounts paid in reimbursement of expenses under this Section 6 shall be
refunded, to the extent, but only to the extent, that is finally and
judicially determined (i) that such Liability resulted primarily from an
untrue statement of any material fact in any Exchange Offer Document or any
omission to state any material fact required to be stated in any Exchange
Offer Documents, or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading, if, in any such
case, such statement or omission was made in such Exchange Offer Documents in
reliance upon and in conformity with written information prepared by and
relating to PaineWebber and furnished to the Company in writing by PaineWebber
or (ii) in the case of Liabilities against which Indemnified Persons are
indemnified solely under clause (i)(7) of the preceding sentence, that such
Liability resulted primarily from the willful misconduct or gross negligence
of such Indemnified Person. If multiple claims are brought against any
Indemnified Person in an arbitration or other proceeding and at least one such
claim is based upon, relates to or arises out of PaineWebber's services
hereunder or any Indemnified Person's role thereunder, the Company agrees that
any award, judgment and other liabilities resulting therefrom shall be deemed
conclusively to be based on, relate to or arise out of PaineWebber's services
hereunder or any Indemnified Person's role thereunder, except to the extent
that such award or judgment expressly states that the award or judgment, or
any portion thereof, is based solely upon, relates to or arises out of other
matters for which indemnification is not available hereunder.
PaineWebber agrees to indemnify and hold harmless the Company, its director,
trustees and officers who sign the Registration Statement (as defined in
Section 7(v) below), and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity from the Company to
PaineWebber contained herein, but only with reference to information relating
to PaineWebber furnished to the Company in writing by PaineWebber expressly
for use in the Registration Statement, any preliminary prospectus, the
Prospectus, any other Exchange Offer Document or any amendment or supplement
thereto. The Company acknowledges that the only information relating to
PaineWebber furnished to the Company in writing by PaineWebber expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus,
any other Exchange Offers Documents or any amendment or supplement thereto is
PaineWebber's name and information provided under the caption "Dealer
Manager".
If any litigation, proceeding or investigation is instituted or threatened
against any Indemnified Person in respect of which indemnity may be sought
against the Company pursuant to this Section 6, such indemnified person shall
promptly notify the Company thereof, in writing, but the omission to so notify
the Company shall not relieve the Company from any obligation or liability
under this Section 6, unless, and only to the extent that, such omission to so
notify results in the loss of substantive rights or defenses. If any such
litigation or proceeding shall be brought against any Indemnified Person, the
Company shall be entitled to participate in such litigation or proceeding,
and, after written notice from the Company to such Indemnified Person, to
assume the defense of such litigation or proceeding with counsel of the
Company's choice at its expense; provided, however, that such counsel shall be
satisfactory to the Indemnified Person. Notwithstanding the election of the
Company to assume the defense of such litigation or proceeding, such
Indemnified Person shall have the right to employ separate counsel at the
expense of such Indemnified Person and to control its own defense of such
litigation or proceeding.
The Company shall bear the fees and disbursements of separate counsel only
if (i) the Company and such Indemnified Person shall have mutually agreed to
the retention of such counsel, (ii) there may be legal defenses available to
such Indemnified Person or to other Indemnified Persons that are different
from or additional to those available to the Company or (iii) a conflict or
potential conflict otherwise exists between such Indemnified Person and the
Company that would make such separate representation advisable; provided,
however, that the Company shall not under any circumstances be liable
hereunder for the expenses of more than one firm of attorneys in any
jurisdiction in any one legal action or group of related legal actions. In the
case of any such separate firm for PaineWebber and such partners, directors,
officers and control persons of PaineWebber or its affiliates, such firm
4
shall be designated in writing by PaineWebber. In the case of any such
separate firm for the Company, and such directors, officers, trustees and
control persons of the Company, such firm shall be designated in writing by
the Company. The Company agrees that it will not, without the prior written
consent of PaineWebber, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the Exchange Offers Transactions or PaineWebber's engagement hereunder
(whether or not any Indemnified Person is a party thereto) unless such
settlement, compromise or consent includes an unconditional release of
PaineWebber and each other Indemnified Person from all liability arising or
that may arise out of such claim, action or proceeding. The Company shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Company agrees to indemnify the Indemnified Person from and
against any Liabilities by reason of such settlement or judgment.
If the indemnification provided for in this Section 6 is held by a court of
competent jurisdiction to be unavailable to any Indemnified Person in respect
of any Liabilities referred to herein (other than as a consequence of a final
judicial determination as set forth in the second sentence of the first
paragraph of this Section 6), then the Company in lieu of indemnifying such
Indemnified Person, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such Liabilities in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and by such Indemnified Person on the other from the Exchange Offers
Transactions. If the allocation provided in the preceding sentence is not
permitted by applicable law, or as a consequence of a final judicial
determination as set forth in the second sentence of the first paragraph of
this Section 6, then the Company agrees to contribute to the amount paid or
payable by such Indemnified Person as a result of such Liabilities in such
proportion as is appropriate to reflect not only the relative benefits
referred to in the preceding sentence, but also the relative fault of the
Company on the one hand and of such Indemnified Person on the other in
connection with the statements or omissions or other actions relating to or in
connection with the Exchange Offers Transactions or PaineWebber's engagement
hereunder that resulted in such Liabilities. Notwithstanding the foregoing, in
no event shall the aggregate amount contributed by the Indemnified Persons
taking into account the contribution of Company as described above exceed the
amount of fees actually paid to PaineWebber by Company pursuant to this
Agreement in connection with the Exchange Offers Transactions. The relative
benefits received by the Company on the one hand and PaineWebber on the other
shall be deemed to be in the same proportion as (i) the aggregate value of the
maximum number of Securities offered to be exchanged pursuant to the Exchange
Offers bears to (ii) the fees paid to PaineWebber pursuant to this Agreement.
The relative fault of the Company on the one hand and of PaineWebber on the
other shall be determined by reference to, among other things, whether any
untrue or alleged untrue statement of, or any omission or alleged omission to
state, a material fact relates to information supplied by the Company or by
PaineWebber and by reference to the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The foregoing indemnification and contribution agreement shall be in
addition to any rights that any Indemnified Person may have at common law, by
separate agreement or otherwise.
Section 7. Representations, Warranties and Covenants.
The Company represents and warrants to, and covenants with, PaineWebber
that:
(i) The Company is a corporation duly organized and validly existing in
good standing under the laws of the jurisdiction of its incorporation.
(ii) The Company has taken all necessary corporate action to authorize
the Exchange Offers.
(iii) This Agreement has been duly authorized, executed and delivered by,
and is a legal, valid and binding agreement of, the Company and is
enforceable against Company in accordance with its terms.
(iv) The Exchange Offers Transactions comply and will comply in all
material respects with all applicable requirements of law, the corporate
laws of the state in which the Company is incorporated and any applicable
state "blue sky" laws.
5
(v) When the registration statement filed in connection with the Exchange
Offers (the "Registration Statement") becomes effective and at all times
subsequent thereto up to and including the date on which the Company
commences the Exchange Offers (the "Commencement Date"), the initial
termination dates of each of the respective Exchange Offers (the "Effective
Dates of Exchange"), which shall be July 31, 1998 and, if either or both of
the Exchange Offers are extended in accordance with their terms, such
subsequent expiration dates of the Exchange Offers (the "Further Effective
Dates of Exchange"), (a) the Registration Statement and Prospectus, and any
amendments or supplements thereto, and the other Exchange Offer Documents,
and any supplements thereto, will contain all statements that are required
to be stated in accordance with the Securities Act, the Exchange Act and
the Trust Indenture Act of 1939, as amended (together with the rules and
regulations thereunder, the "Trust Indenture Act") and will in all material
respects conform to the requirements of the Securities Act, the Exchange
Act and the Trust Indenture Act, (b) the Registration Statement and any
amendment or supplement thereto at their respective effective dates will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and (c) the Prospectus and the other
Exchange Offer Documents, together with any supplement thereto, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that this
representation and warranty does not apply to statements or omissions made
in reliance upon and in conformity with information relating to
PaineWebber, furnished in writing to the Company in connection with the
Registration Statement or Prospectus and the other Exchange Offer Documents
or any amendment or supplement thereto by PaineWebber expressly for use in
the Registration Statement or Prospectus or such other Exchange Offer
Documents or to statements or omissions in that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification under the Trust Indenture Act (Form T-1) of the Trustee.
(vi) The consolidated financial statements included and incorporated by
reference in the Registration Statement and Prospectus present fairly the
consolidated financial position of the Company and its consolidated
subsidiaries as at the dates indicated and the consolidated results of
their operations for the periods specified and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved, except as indicated therein,
and the supporting schedules incorporated by reference in the Registration
Statement present fairly the information required to be stated therein.
(vii) The issuance and delivery of the New Debentures, the execution and
delivery of this Agreement and the Supplemental Indentures, the
consummation of the transactions herein and therein contemplated, and
compliance with the terms hereof and thereof do not and will not conflict
with, or result in a breach of, any of the terms or provisions of, or
constitute a default under, (a) the Certificate of Incorporation or By-
Laws, as amended, of the Company or any of its subsidiaries; (b) any
material indenture, mortgage, or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which any of their
respective properties are bound; or (c) any applicable law, rule,
regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties
other than, in the case of clauses (b) and (c) any such contravention,
violation, conflict, breach, or default that individually or in the
aggregate would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the ability of the Company to perform
its obligations hereunder or thereunder and commence and consummate the
Exchange Offers; and no consent, approval, authorization or order of any
government, governmental instrumentality or court, domestic or foreign, is
required for the valid authorization, issuance and delivery of the New
Debentures, the valid authorization, execution, delivery and performance by
the Company of this Agreement and the Supplemental Indentures or the
consummation by the Company of the transactions contemplated by this
Agreement and the Supplemental Indentures, except such as are required
under the Securities Act, the Exchange Act, the Trust Indenture Act and the
securities or Blue Sky laws of the various states.
6
(viii) The Supplemental Indentures have been duly authorized by the
Company and, when duly executed and delivered by the Company, will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting enforcement
of creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity) and will have been duly qualified under the Trust Indenture
Act.
(ix) The New Debentures to be issued pursuant to the Supplemental
Indentures have been duly authorized, and when duly executed by the Company
and authenticated by the Trustee pursuant to the provisions of the
Supplemental Indentures and delivered in accordance with the terms of the
Exchange Offers, will be duly issued and will constitute valid and binding
obligations of the Company, the holders thereof will be entitled to the
benefits of the Supplemental Indentures, except as the enforcement thereof
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws affecting enforcement of
creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law
or in equity).
(x) The New Debentures and the Supplemental Indentures conform in all
material respects to the descriptions thereof in the Prospectus.
(xi) The Exchange Offer Documents have been or will be prepared and
approved by, and are the sole responsibility of, the Company, and the
Company authorizes PaineWebber to use the Exchange Offer Documents in
connection with Exchange Offers Transactions. PaineWebber agrees that it
shall not use any materials in connection with the exchange for New
Debentures other than the Exchange Offer Documents and such other
materials, if any, as the Company may approve (except for materials only
for PaineWebber's own internal use that are derived by PaineWebber only
from the Exchange Offer Documents or from filings made by the Company
pursuant to the Exchange Act), and will provide no oral information that is
not contained in, or consistent with, the Exchange Offer Documents or the
Information.
(xii) The Company has no knowledge of any legal or governmental
proceeding that has been instituted or threatened against the Company which
is required to be described in the Registration Statement or the Prospectus
and is not so described and which seek to enjoin the Exchange Offers or
that otherwise would affect the making of the Exchange Offers or the
consummation of the transactions contemplated thereby.
(xiii) Except as described in or contemplated by the Prospectus, there
has not been any material adverse change in, or any adverse development
that materially affects, the business, properties, financial condition or
results of operations of the Company taken as a whole from the dates of
which information is given in the Prospectus.
(xiv) Neither the Company nor any affiliate thereof shall publicly
disclose or refer to any opinion or advice rendered by PaineWebber to the
Company without PaineWebber's prior written consent.
(xv) The Company is the beneficial owner of 17,798,547 shares of common
stock of Chevron Corporation free and clear of all liens, security
interests, pledges, charges, encumbrances, defects, shareholders'
agreements, voting trusts, equities or claims of any nature whatsoever.
Section 8. Certain Events.
The Company will advise PaineWebber promptly of (i) the occurrence of any
event that might reasonably cause the Company to withdraw, rescind or
terminate the Exchange Offers, or that might reasonably permit the Company to
exercise any right not to purchase Securities tendered pursuant to the
Exchange Offers or to consummate the transactions contemplated in the
Prospectus, (ii) any material information relating to the Exchange Offers,
including, without limitation, any proposal or requirement to make, amend or
supplement any filing required by the Exchange Act, (iii) the issuance of any
comment or order or the taking of any other action
7
by the Commission or any Other Agency concerning the Exchange Offers, and (iv)
any other information relating to the Exchange Offers or the transactions
contemplated in the Prospectus that PaineWebber may from time to time
reasonably request.
Section 9. Securityholder Information.
The Company has furnished or shall use its best efforts to furnish to
PaineWebber, or cause the transfer agent or registrars for the Securities to
furnish to PaineWebber, as soon as practicable after the date hereof (if not
previously furnished) to the extent the same is available to the Company, with
any cards or lists showing the names and addresses of, and the number of
Securities held by, the holders of Securities as of a recent date and will
endeavor to cause PaineWebber to be advised from day to day during the period
of the Exchange Offers as to any transfers of record of the Securities known
to the Company. Except as otherwise provided herein, PaineWebber agree to use
such information only in connection with the Exchange Offers.
The Company has appointed Chase Bank of Texas, N.A. to serve as Exchange
Agent and Depositary in connection with the Exchange Offers and has instructed
the Exchange Agent and Depositary to advise PaineWebber daily as to such
matters as PaineWebber may reasonably request.
Section 10. Termination.
This Agreement shall terminate upon the earlier to occur of (i) thirty days
after the latter of the Further Effective Dates of Exchange or (ii) the date
on which the Company terminates or withdraws both of the Exchange Offers or
the last of the Exchange Offers to be pending for any reason (the earlier to
occur of clauses (i) and (ii) being referred to as the "Termination Date").
The agreements contained in Sections 3, 4, 5 and 6 and the representations
and warranties contained in Sections 2 and 7 shall remain operative and in
full force regardless of (i) any failure to commence, or the withdrawal,
termination or consummation of, the Exchange Offers, (ii) any investigation
made by or on behalf of any Indemnified Person, (iii) any withdrawal by
PaineWebber as dealer manager for the Exchange Offers pursuant to Section 2 or
otherwise or (iv) any termination of this Agreement.
Section 11. Miscellaneous.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be
performed entirely in such state.
The Company, by its execution of this Agreement, hereby consents to the
jurisdiction of the courts of, and consents to be sued in any court in, the
County of New York of the State of New York or in the United States District
Court for the Southern District of New York in any action or proceeding
brought by PaineWebber or any other Indemnified Person under this Agreement.
Service of process on the Company may be effected by mailing process, by
registered mail, return receipt requested, to the Company at the address set
forth above, with a copy to David P. Alderson, II.
The Company and PaineWebber each hereby irrevocably waive any right they may
have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
Simultaneously with the execution and delivery of this Agreement, the
Company shall deliver to PaineWebber the opinion of Baker & Botts, L.L.P.,
counsel for the Company, in the form attached hereto as Exhibit A. Upon the
Effective Dates of Exchange, whichever is applicable, the Company shall
deliver to PaineWebber the opinion of Baker & Botts, L.L.P., counsel for the
Company, in the form attached hereto as Exhibit B.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and the respective successors and permitted assigns of each, and shall
inure to the benefit of the parties hereto and the other Indemnified Persons,
and the respective successors and permitted assigns of the foregoing.
If any provision of this Agreement shall be determined to be invalid or
unenforceable in any respect, such determination shall not affect such
provision in any other respect or any other provision of this Agreement, which
shall remain in full force and effect. This Agreement may not be amended or
otherwise modified or waived except by an instrument in writing signed by both
PaineWebber and the Company.
8
This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which together shall be considered a single
instrument.
The Prior Agreement dated August 1, 1997, the First Amendment and the Second
Amendment between PaineWebber and the Company shall remain operative and in
full force. Except as set forth in the preceding sentence, this Agreement sets
forth our entire agreement with PaineWebber with respect to the subject matter
hereof, and supersedes any prior agreements or understandings (whether written
or oral) between PaineWebber and the Company with respect thereto.
Please confirm that the foregoing is in accordance with your understanding
by signing and returning to us the enclosed copy of this letter.
Very truly yours,
PENNZOIL COMPANY
/s/ Bruce K. Misamore
By: _________________________________
Bruce K. Misamore
Vice President and Treasurer
Accepted and Agreed to as of
the date first written above:
PAINEWEBBER INCORPORATED
/s/ Roberts W. Brokaw III
By: _________________________________
Roberts W. Brokaw III
Managing Director
9