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EXHIBIT 3.1
GULF CANADA RESOURCES LIMITED
8.375% SENIOR NOTES DUE 2005
UNDERWRITING AGREEMENT
November 6, 1998
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Gulf Canada Resources Limited, a corporation incorporated under the
Canada Business Corporations Act (the "Company"), proposes, subject to the terms
and conditions stated herein, to issue and sell to Goldman, Sachs & Co. (the
"Underwriter") an aggregate of $200,000,000 principal amount of the Notes
specified above (the "Securities").
1. (a) The Company represents and warrants to, and agrees with,
the Underwriter that:
(i) The Company has (A) prepared and filed (I) with the
Alberta Securities Commission (the "ASC"), which has been notified that
it has been selected as the principal jurisdiction regulating the
offering of the Securities, a preliminary short form shelf prospectus
relating to the Securities (the "Canadian Preliminary Shelf
Prospectus") omitting the Shelf Information (as hereinafter defined),
and (II) with the United States Securities and Exchange Commission (the
"Commission") a registration statement on Form F-10 (File No. 333-7802)
for the registration of the Securities under the United States
Securities Act of 1933, as amended (the "Act"), including the Canadian
Preliminary Shelf Prospectus (with such deletions therefrom and
additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the Commission, such modified
document being referred to herein as the "U.S. Preliminary Shelf
Prospectus"), having elected to rely upon the rules and procedures
established pursuant to National Policy No. 44 of the Canadian
Securities Administrators for the distribution of securities on a
continuous or delayed basis (the "Shelf Procedures"); (B) prepared and
filed (I) with the ASC, and has obtained from the ASC a receipt for, a
final short form shelf prospectus relating to the Securities (the
"Canadian Shelf Prospectus") omitting the Shelf Information (as
hereinafter defined) and (II) with the Commission, an amendment to such
registration statement, including the Canadian Shelf Prospectus (with
such deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the applicable rules and regulations of the
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Commission, such modified document being referred to herein as the
"U.S. Shelf Prospectus") omitting the Shelf Information, which most
recent such amendment has been declared effective by the Commission on
October 22, 1997 (the "Effective Date"); and (C) will prepare and file,
as soon as possible and in any event within two business days after the
execution and delivery (the "Execution Time") of this Agreement, (I)
with the ASC, in accordance with the Shelf Procedures, a prospectus
supplement (the "Prospectus Supplement") setting forth the Shelf
Information and (II) with the Commission, in accordance with General
Instruction II.L. of Form F-10, the Prospectus Supplement; and the
information, if any, included in the Prospectus Supplement that is
omitted from the Canadian Shelf Prospectus for which a final receipt
has been obtained from the ASC but that is deemed under the Shelf
Procedures to be incorporated by reference into the Canadian Shelf
Prospectus as of the date of the Prospectus Supplement is referred to
herein as the "Shelf Information;" and no other document with respect
to the Canadian Shelf Prospectus or such registration statement, other
than the documents subsequently deemed to be incorporated by reference
therein, has heretofore been filed with the ASC or the Commission;
(ii) (A) The U.S. Preliminary Shelf Prospectus and the U.S.
Shelf Prospectus, including the documents incorporated by reference
therein, are collectively referred to herein as the "Shelf Prospectus;"
(B) the registration statement on Form F-10, including the exhibits
thereto and the documents incorporated by reference therein, as amended
at the Effective Date, is herein called the "Registration Statement;"
(C) the U.S. Shelf Prospectus and the Prospectus Supplement, including
the documents incorporated by reference therein, are collectively
referred to herein as the "Prospectus;" (D) the Canadian Shelf
Prospectus and the Prospectus Supplement, including the documents
incorporated by reference therein, are collectively referred to herein
as the "Canadian Prospectus;" and (E) any amendment to the Canadian
Prospectus, any amended or supplemental prospectus or any auxiliary
material, information, evidence, return, report, application, statement
or document that may be filed by or on behalf of the Company under the
securities laws of the Province of Alberta prior to the Closing Date
(as hereinafter defined) or, where such document is deemed to be
incorporated by reference into the Canadian Prospectus, prior to
completion of distribution of the Securities is referred to herein
collectively as the "Canadian Supplementary Material;"
(iii) The Company has also prepared and filed with the
Commission an appointment of agent for service of process upon the
Company on Form F-X in conjunction with the filing of the Registration
Statement (the "Form F-X");
(iv) On the Effective Date, the Company met the general
eligibility requirements for the use of Form F-10 under the Act and is
and will be eligible to use the Shelf Procedures on the Effective Date
and at all times subsequent thereto up to the Time of Delivery (as
defined in Section 4 hereof); (A) the Canadian Prospectus complied with
or will comply with in all material respects the securities laws
applicable in the Province of Alberta as interpreted and applied by the
ASC (including the Shelf Procedures, if applicable) and the ASC has
issued a receipt for the Canadian Shelf Prospectus; (B) the Prospectus
conformed with or will
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conform to the Canadian Prospectus except for such deletions therefrom
and additions thereto as are permitted or required by Form F-10 and the
applicable rules and regulations of the Commission; (C) each of the
Prospectus, the Canadian Prospectus, any Canadian Supplementary
Material or any amendment or supplement thereto constituted or will
constitute true and complete disclosure of all material facts relating
to the Company and its subsidiaries, considered as one enterprise, and
the Securities, and did not or 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, in the light of
the circumstances under which they were made, not misleading; except
that the representations and warranties contained in (C) above shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriter expressly for use therein or to statements or omissions
from that part of the Registration Statement which shall constitute the
Statement of Eligibility under the Trust Indenture Act (Form T-1) of
the Trustee;
(v) Neither the Company nor any of its affiliates has taken or
will take, directly or indirectly, any action which is designed to or
which has constituted or which might reasonably be expected to cause or
result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities;
(vi) No stop order or cease trade order suspending the
effectiveness of the Registration Statement or revoking the receipt for
the Canadian Prospectus has been issued and no proceeding for that
purpose has been initiated or, to the Company's knowledge, threatened
by the Commission or the ASC;
(vii) No order preventing or suspending the use of any
Prospectus has been issued by the Commission, and each Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act and the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission thereunder, and did 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, in the light of
the circumstances under which they were made, 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 the Underwriter
expressly for use therein;
(viii) The documents incorporated by reference in the
Prospectus, when they became effective or when filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or the applicable securities laws of the
Province of Alberta, as applicable, and the rules and regulations of
the Commission or the ASC 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
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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 or the ASC, as the case may be, will conform in all material
respects to the requirements of the Act, the Exchange Act or the
applicable securities laws of the Province of Alberta, as applicable,
and the rules and regulations of the Commission or the ASC 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; 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 the Underwriter expressly for
use therein;
(ix) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and the Registration Statement
as of the Effective Date did not, and any amendments or supplements
thereto will not, as of the applicable effective date, 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 the Underwriter expressly for use therein or to
statements or omissions from that part of the Registration Statement
which shall constitute the Statement of Eligibility under the Trust
Indenture Act (Form T-1) of the Trustee;
(x) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
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; 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 as a result of the exercise of any warrants
or options in existence as of such dates) or any increase in short-term
or long-term debt of the Company or any of its subsidiaries (in an
aggregate amount in excess of Cdn. $75,000,000) or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus;
(xi) To the best of the Company's knowledge and belief, the
Company is unaware of any defects in title to its core oil and gas
properties or its material assets and facilities which are used in the
production and marketing of oil and gas that, in the aggregate, would
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have a material adverse effect on the Company and its subsidiaries
taken as a whole, except as is customary in the oil and gas business;
(xii) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, 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;
(xiii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued shares of capital
stock of each Material Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
are owned directly or indirectly by the Company (other than Gulf
Indonesia Resources Limited of which the Company owns 72% of the
outstanding capital stock), free and clear of all liens, encumbrances,
equities or claims;
(xiv) The Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the Indenture dated as of October 17, 1997 as supplemented
by a supplemental indenture (the "Indenture") between the Company and
The Bank of New York, as Trustee (the "Trustee"), under which they are
to be issued, which will be substantially in the form filed as an
exhibit to the Registration Statement; the Indenture has been duly
authorized and duly qualified under the Trust Indenture Act and, when
executed and delivered by the Company and the Trustee, will constitute
a valid and legally binding instrument, enforceable 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
Securities and the Indenture will conform to the descriptions thereof
in the Prospectus;
(xv) The issue and sale of the Securities by the Company and
the compliance by the Company with all of the provisions of the
Securities, the Indenture and this Agreement and the consummation of
the transactions herein and therein contemplated (including, without
limitation, the use of proceeds from the sale of the Securities for the
uses described in the Prospectus) 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 is a party or by which the Company or any of its
subsidiaries is bound or to which any of the
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property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions
of the Articles of Amalgamation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture, except
the registration of the Securities under the Act and the applicable
securities laws of the Province of Alberta and other applicable
securities and corporate laws of Canada, such as have been obtained
under 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 Securities by the Underwriter;
(xvi) Neither the Company nor any of its subsidiaries is in
violation of its respective Articles of Amalgamation or By-laws or in
default in the performance or observance of any material obligation,
agreement, covenant or condition contained in any indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be
bound;
(xvii) The statements to be set forth in the Prospectus under
the captions "Description of the Notes" and "Description of Debt
Securities," insofar as they purport to constitute a summary of the
terms of the Securities, and under the caption "Certain Income Tax
Considerations," insofar as they purport to describe the provisions of
the laws and documents referred to therein, will be accurate, complete
and fair;
(xviii) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial
position, shareholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xix) Other than as described in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any law,
ordinance, administrative or governmental rule or regulation or court
decree applicable to it, or is not in compliance with any term or
condition of, or has failed to obtain, any license, permit, franchise
or other administrative or governmental authorization necessary to the
ownership of its property or to the conduct of its business, which
violation, non-compliance or failure to obtain would individually or in
the aggregate have a materially adverse effect on the consolidated
financial position,
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shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole;
(xx) All consents, approvals, authorizations and orders
necessary for the execution and delivery by the Company of this
Agreement and the Indenture, and for the sale and delivery of the
Securities, have been obtained;
(xxi) This Agreement has been duly authorized, executed and
delivered by the Company and, assuming it has been duly authorized,
executed and delivered by the Underwriter, will constitute a valid and
legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws relating to or
affecting creditors' rights and to general equity principles, and the
rights to indemnity and contribution under this Agreement may be
limited by applicable law;
(xxii) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended
(the "Investment Company Act"); and
(xxiii) Ernst & Young, Chartered Accountants, 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.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Underwriter, and the Underwriter agrees to
purchase from the Company, at a purchase price of 99.557% (less an underwriting
discount of 2.375%) of the principal amount thereof, the Securities.
3. Upon the authorization by the Underwriter of the release of the
Securities, the Underwriter proposes to offer the Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by the Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to the Underwriter against payment by or on behalf of the Underwriter
of the purchase price therefor by certified or official bank check or checks,
payable to the order of the Company in Federal (same day) funds, by causing DTC
to credit the Securities to the account of the Underwriter at DTC. The Company
will cause the certificates representing the Securities to be made available to
the Underwriter for checking at least twenty-four hours prior to the Time of
Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be
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9:30 a.m., New York City time, on November 16, 1998 or such other time and date
as the Underwriter and the Company may agree upon in writing. Such time and date
are herein called the "Time of Delivery."
(b) The documents to be delivered at the Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriter pursuant to Section 7 hereof, will be delivered at the offices of
the Company at One Norwest Center, 1700 Lincoln, Suite 5000, Denver, Colorado
80203-4524 (the "Closing Location"), and the Securities will be delivered at the
Designated Office, all at the Time of Delivery. A meeting will be held at the
Closing Location at 2:00 p.m., Denver time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New York
Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with the Underwriter:
(a) To use its best efforts to prepare the Canadian Prospectus and the
Prospectus in a form approved by you and to comply with the requirements of the
Shelf Procedures and General Instruction II.L. of Form F-10; prior to the Time
of Delivery, to make no further amendment or any supplement to the Registration
Statement or Prospectus or Canadian Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or Canadian Prospectus or any amended Prospectus or amended Canadian
Prospectus has been filed and to furnish you with 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 Securities; to advise you, promptly after it receives
notice thereof, (i) when the Prospectus or any post-effective amendment to the
Registration Statement shall have been filed with the Commission or shall have
become effective and when any supplement to the Prospectus or any amended
Prospectus or amended Canadian Prospectus or any Prospectus Supplement or
Canadian Supplemental Material shall have been filed, (ii) of the receipt of any
comments or other communications from the ASC or from the Commission, (iii) of
any request by the ASC to amend or supplement the Canadian Prospectus or for
additional information or of any request by the Commission to amend the
Registration Statement or to amend or supplement the Prospectus or for
additional information, (iv) of the issuance by the Commission of any stop order
or of any order preventing or suspending the use of any Prospectus or
prospectus, of the suspension of the qualification of the Securities 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 (v) of the issuance by the ASC of any order having
the effect of ceasing
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or suspending the distribution of the Securities, or of the institution or, to
the knowledge of the Company, threatening of any proceedings for any such
purpose; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Prospectus or prospectus or suspending
any such qualification or ceasing or suspending the distribution of the
Securities, promptly to use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities 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 Securities, 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;
(c) To furnish the Underwriter 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 at any time prior to the expiration of nine months
after the time of issue of the Prospectus in connection with the offering or
sale of the Securities and if at such time any event shall have occurred as a
result of which the Prospectus or Canadian Prospectus as then amended or
supplemented 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
or Canadian Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the Prospectus
or Canadian Prospectus or to file under the Exchange Act or the applicable
securities laws of the Province of Alberta any document incorporated by
reference in the Prospectus in order to comply with the Act or the Exchange Act
or the applicable securities laws of the Province of Alberta, to notify you and
upon your request to file such document and to prepare and furnish without
charge to the 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 the Underwriter is required to deliver a
prospectus in connection with sales of any of the Securities at any time nine
months or more after the time of issue of the Prospectus, upon your request but
at the expense of the Underwriter, to prepare and deliver to the 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 date of
the Prospectus, 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 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 date 90 days after the date of the Prospectus Supplement, not
to offer, sell, contract to sell or otherwise dispose of any debt securities of
the Company denominated in United States dollars in an offering to the public in
the United States (or in a private offering where holders of the debt
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securities are granted rights to have such debt securities registered under the
Act or to exchange such debt securities for other debt securities that are so
registered) without the prior written consent of the Underwriter, which will not
be unreasonably withheld;
(f) To furnish to the record holders of the Securities, in accordance
with the requirements under Canadian law, an annual report (including a balance
sheet and statements of income, shareholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent public
accountants) and, in accordance with the requirements under Canadian law
(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 each quarter of each fiscal year in reasonable
detail; and to furnish to the record holders of the Securities all other
documents specified in Section 1010 of the Indenture;
(g) During a period of five 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 shareholders, and to deliver to
you (i)(A) as soon as they are publicly 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 (B) as soon as they are available, the documents specified in Section 1010
of the Indenture as in effect at the Time of Delivery; 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 shareholders generally
or to the Commission); and
(h) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Prospectus
under the caption "Use of Proceeds."
6. (a) The Company covenants and agrees with the Underwriter that the
Company will pay or cause to be paid the following: (A) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and the applicable securities laws
of the Province of Alberta and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Shelf Prospectus and the Prospectus and amendments and supplements thereto and
the mailing and delivery of copies thereof to the Underwriter and dealers; (B)
the cost of printing or producing this Agreement, the Indenture, the Blue Sky
and Legal Investment Memoranda, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale
and delivery of the Securities; (C) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriter in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (D) any fees charged
by securities rating services for rating the Securities; (E) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriter in
connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities; (F) all
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expenses of or incidental to any institutional or retail roadshows, including,
without limitation, the printing of blue sheets and any other materials used or
distributed in connection with such roadshows and tours of the Company's
properties, if any, and similar events; (G) 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 Securities; (H) the cost of
preparing the Securities; (I) the cost and charges of any transfer agent or
registrar; and (J) 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
6(a), and Sections 8 and 10 hereof, the Underwriter will pay all of its own
costs and expenses, including the fees of its counsel, transfer taxes on resale
of any of the Securities by it, and any advertising expenses connected with any
offers it may make.
(b) The Underwriter covenants and agrees with the Company that, during
the period of distribution of the Securities, it will not, directly or
indirectly, offer, sell or deliver any of the Securities in Canada or any
province or territory thereof, or to anyone it has reason to believe is a
resident of Canada, other than in accordance with applicable Canadian law or the
applicable law of any province or territory thereof, and further agrees that it
will insert a comparable restriction in any sub-underwriting, banking group or
selling group agreement that may be entered into with the Underwriter in
connection with the distribution of the Securities.
7. The obligations of the Underwriter hereunder shall be subject, in
its discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the 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 General Instruction II.L. of Form F-10 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 or cease trade order
suspending the effectiveness of the Registration Statement or any part thereof
or revoking the receipt for the Canadian Prospectus shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by the
ASC or the Commission; and all requests for additional information on the part
of the ASC or the Commission shall have been complied with to your reasonable
satisfaction;
(b) Vinson & Elkins L.L.P., United States counsel for the Underwriter,
shall have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to 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;
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(c) Bennett Jones Verchere, Canadian counsel for the Company, shall
have furnished to you their written opinion, dated such Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company is a corporation duly incorporated and validly
subsisting under the laws of Canada, being the jurisdiction of its
incorporation, with corporate power and capacity to own its properties
and conduct its business as described in the Prospectus;
(ii) (A) The authorized share capital of the Company consists
of an unlimited number of ordinary shares, an unlimited number of
Senior Preference Shares, issuable in series, and an unlimited number
of Junior Preference Shares, issuable in series; and (B) all of the
issued shares in the capital of the Company have been validly
authorized and issued and are outstanding as fully paid and
non-assessable (such counsel being entitled to rely in respect of
issued capital upon certificates of officers of the Company);
(iii) The Company (A) is duly registered as an
extra-provincial corporation and is in good standing with respect to
the filing of annual returns with the appropriate authorities in the
Province of Alberta; and (B) has been duly registered as an
extra-provincial company in the Province of British Columbia for the
transaction of business and is in good standing with respect to the
filing of returns with the Registrar of Companies for the Province,
being all the jurisdictions in which it owns or leases material
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 the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iv) Each Material Subsidiary of the Company is a corporation
duly incorporated and validly subsisting under the laws of its
jurisdiction of incorporation; and all of the issued shares in the
capital of each such Material Subsidiary have been validly authorized
and issued, are outstanding as fully paid and non-assessable, and are
owned directly or indirectly by the Company (other than Gulf Indonesia
Resources Limited of which the Company owns 72% of the outstanding
capital stock), free and clear of all liens, encumbrances, equities or
claims (such counsel being entitled to rely in respect of the opinion
in this clause upon opinions of local counsel and in respect to matters
of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall only be required to
opine on these matters to the extent that local counsel can opine and
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(v) To the best of such counsel's knowledge and 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 is
a party or of which any property of the Company or any of its
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subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement has been duly and validly authorized,
executed and delivered by the Company;
(vii) The Indenture has been duly and validly authorized,
executed and delivered by the Company and, assuming that it constitutes
a valid and binding obligation of the Company under New York law,
constitutes a valid and binding instrument of the Company, enforceable
against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(viii) The Securities have been duly authorized, executed,
issued and delivered by the Company and, assuming that they have been
duly authenticated by the Trustee under New York law and constitute
valid and binding obligations of the Company under New York law,
constitute valid and legally binding obligations of the Company; and
the holders of Securities are entitled to the benefits of the
Indenture;
(ix) The issue and sale of the Securities and the compliance
by the Company with all of the provisions of this Agreement and the
Indenture and the consummation of the transactions herein and therein
contemplated (including, without limitation; the use of proceeds from
the sale of Securities for the uses described in the Prospectus) 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 known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Articles of
Amalgamation or By-laws of the Company 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 or any of its
subsidiaries or any of their properties;
(x) No consent, approval, authorization or order of or
qualification with any governmental body or agency in Canada is
required to be obtained by the Company for the offer and sale of the
Securities in the manner contemplated by this Agreement or the
consummation by the Company of the transactions contemplated by this
Agreement and the Indenture, except such as have been obtained;
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(xi) Neither the Company nor any of its Material Subsidiaries
is in violation of its Articles of Amalgamation or By-laws (such
counsel being entitled to rely in respect of the opinion in this clause
upon certificates of officers of the Company);
(xii) The statements set forth in the Prospectus under the
captions "Description of the Notes" and "Description of Debt
Securities," insofar as they purport to constitute a summary of the
terms of the Securities, and subject to the qualifications set out
therein, the statements set forth in the Prospectus under the caption
"Certain Income Tax Considerations" insofar as they purport to describe
the provisions of the laws of Canada and documents referred to therein,
are accurate, complete and fair in all material respects;
(xiii) There are no documents required to be filed with the
ASC in connection with the Canadian Prospectus that have not been filed
as required;
(xiv) A receipt has been obtained in respect of the Canadian
Prospectus from the ASC and to the best of such counsel's knowledge the
ASC has not revoked such receipt;
(xv) The Company is eligible to file a short form prospectus
with the ASC and use the Shelf Procedures in respect of the Securities;
(xvi) A court of competent jurisdiction in the Province of
Alberta would give effect to the choice of New York law as the proper
law governing the Indenture, the Securities and this Agreement,
provided that such choice of law is bona fide (in the sense that it was
not made with a view to avoiding the consequences of the laws of any
other jurisdiction) and provided that such choice of law is not
contrary to public policy, as that term is understood under the laws of
the Province of Alberta and the federal laws of Canada applicable
therein; to such counsel's knowledge, there are no reasons under
present law for avoiding the choice of New York law to govern the
Indenture, the Securities and this Agreement under the laws of the
Province of Alberta and the federal laws of Canada applicable therein;
(xvii) If the Indenture, the Securities and this Agreement
were sought to be enforced in the Province of Alberta in accordance
with the laws applicable thereto, as chosen by the parties, namely, New
York law, a court of competent jurisdiction in the Province of Alberta
would and to the extent specifically pleaded and proved as a fact by
expert evidence, recognize the choice of New York law and apply such
law to all issues that, under the conflict of laws rules of the
Province of Alberta, are to be determined in accordance with the proper
or general law of a contract, provided that none of the provisions of
the Indenture, the Securities or this Agreement, or of New York law,
are contrary to public policy as that term is understood under the laws
of the Province of Alberta and the federal laws of Canada applicable
therein; and further provided that, in matters of procedure (as that
term is understood under the laws of the Province of Alberta and the
federal laws of Canada applicable therein), the laws of the Province of
Alberta will be applied, and a court of competent jurisdiction in the
Province of Alberta will retain discretion to decline to hear such
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action and apply such law (A) if it is contrary to public policy (as
that term is understood under the laws of the Province of Alberta and
the federal laws of Canada applicable therein) for such court to do so,
or (B) if it is not the proper forum to hear such an action or (C) if
concurrent proceedings are being brought elsewhere; to such counsel's
knowledge, there are no reasons based on public policy, as that term is
understood under the laws of the Province of Alberta and the laws of
Canada applicable therein, for avoiding enforcement of the Indenture,
the Securities or this Agreement (with the exception of the indemnity
contribution provisions contained therein);
(xviii) The laws of the Province of Alberta permit an action
to be brought in a court of competent jurisdiction in the Province of
Alberta on any final and conclusive judgment in personam for a fixed
sum of money of any federal or state court located in the Borough of
Manhattan in The City of New York ("New York Court") respecting the
enforcement of the Indenture, the Securities and this Agreement that is
not impeachable as void or voidable under the internal laws of the
State of New York for a sum certain if: (A) the court rendering such
judgment had jurisdiction over the judgment debtor, as recognized by
the courts of the Province of Alberta (to such counsel's knowledge,
submission under the provisions of the Indenture, the Securities and
this Agreement to the jurisdiction of the New York Court will be
sufficient for this purpose), and the judgment debtor was properly
served in the action leading to such judgment; (B) such judgment was
not obtained by fraud or in a manner contrary to natural justice and
the enforcement thereof would not be inconsistent with public policy,
as such term is understood under the laws of the Province of Alberta,
or contrary to any order made by the Attorney General of Canada under
the Foreign Extraterritorial Measures Act (Canada) or by the
Competition Tribunal under the Competition Act (Canada); (C) the
enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of foreign revenue, expropriation or penal
laws or other laws of a public law nature; (D) no new admissible
evidence relevant to the action is discovered prior to rendering of
judgment by the court in the Province of Alberta; and (E) the action to
enforce such judgment is commenced within the applicable limitation
period; to such counsel's knowledge, there are no reasons under present
law of the Province of Alberta for avoiding recognition of said
judgments of New York Courts under the Indenture, the Securities and
this Agreement based upon public policy, as that term is understood
under the laws of the Province of Alberta and the federal laws of
Canada applicable therein;
(xix) In an action on a final and conclusive judgment in
personam for a fixed sum of money of a New York court which is not
impeachable as void or voidable under New York law, a court of
competent jurisdiction in the Province of Alberta would not refuse to
recognize the jurisdiction of the court rendering such judgment on the
basis of process having been served on CT Corporation System as the
agent to receive service of process in the United States of America
appointed by the Corporation under the Indenture and this Agreement;
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(xx) The Prospectus and any Supplemental Material in
connection with the offering of the Securities (excluding the financial
statements and related schedules therein and information that pertains
or relates to estimated natural resource reserves, the estimated future
net reserves therefrom, or the discounted present value of such
estimated future net revenues, as to which such counsel need express no
opinion) comply as to form in all material respects with Alberta law,
including the Shelf Procedures, if applicable, as interpreted and
applied by the Alberta Securities Commission in connection with the
offering of the Securities as contemplated by this Agreement;
(xxi) No stamp duty, registration or documentary taxes, duties
or similar charges are payable under the laws of the Province of
Alberta or the federal laws of Canada applicable therein in connection
with the creation, issuance and delivery to the Underwriter of the
Securities or the authorization, execution and delivery of the
Indenture and this Agreement;
(xxii) To the best of such counsel's knowledge without a
specific investigation for the purposes of this opinion, there is no
action, proceeding or investigation pending or threatened against the
Company which questions the validity of the issuance of the Securities
or the offering thereof by the Underwriter;
(xxiii) An exemption has been obtained under Section 82(3) of
the Canada Business Corporations Act (the "CBCA") to exempt the
Indenture from the application of Part VIII of the CBCA, including to
permit a non-Canadian trust company to act as Trustee under the
Indenture; and no other registration, filing or recording of the
Indenture under the laws of Canada or the Province of Alberta is
necessary in order to preserve or protect the validity or
enforceability of the Indenture or the Securities issued thereunder;
and
(xxiv) Such counsel has reviewed the Prospectus, as
supplemented by the Prospectus Supplement, and the Shelf Information,
and has participated in discussions with your representatives and your
counsel and those of the Company, its United States counsel and its
auditors, at which the Prospectus, the Prospectus Supplement and the
Shelf Information were discussed; on the basis of the information
gained by such counsel in the course of the performance of such
services, such counsel confirms that nothing has come to their
attention in the course of their review that has caused them to believe
that any part of the Prospectus, the Prospectus Supplement or the Shelf
Information (if applicable), (other than the financial statements and
reserve information and related schedules therein, as to which such
counsel need express no opinion) when such part became effective, or
any further amendment to any of the foregoing made by the Company prior
to the Time of Delivery 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 the date of the Prospectus, the Prospectus, the Prospectus
Supplement or the Shelf Information (other than the financial
statements and reserve information and related schedules therein, as to
which such counsel need express no opinion), or any further amendment
or supplement thereto
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made by the Company prior to the Time of Delivery 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
the Time of Delivery, either the Prospectus, the Prospectus Supplement
or the Shelf Information, or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery (other than
the financial statements and reserve information and related schedules
therein, as to which such counsel need express no opinion) 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 (in connection
with the belief expressed in the next preceding clause, such counsel
may assume that the term "material fact" has the same interpretation
under United States law as it has under the Securities Act (Alberta);
and they do not know of any amendment to the Prospectus, the Prospectus
Supplement or the Shelf Information required to be filed or of any
contracts or other documents of a character required to be filed as an
exhibit in connection with the Prospectus, the Shelf Prospectus
Supplement or the Shelf Information or required to be incorporated by
reference into the Prospectus or required to be described in the
Prospectus, the Prospectus Supplement or the Shelf Information, which
are not filed or incorporated by reference or described as required by
Canadian law; given the limitations inherent in the independent
verification of factual matters and the character of determinations
involved in the filing and obtaining of a receipt from the ASC for the
Prospectus and the registration process, such counsel need not pass
upon and need not assume any responsibility for the accuracy,
completeness or genuineness of the statements included in the
Prospectus or the Prospectus Supplement (including the documents
incorporated therein by reference), except for those made under the
captions "Description of the Notes," "Description of Debt Securities"
and "Certain Income Tax Considerations -- Certain Canadian Federal
Income Tax Considerations," insofar as such statements constitute
summaries of the matters, documents or proceedings therein described;
such counsel need not express any opinion or belief as to the financial
statements or other financial data contained in the Prospectus
(including the documents incorporated by reference) and the Prospectus
Supplement, information included in the Prospectus or the Prospectus
Supplement that pertains or relates to estimated natural resource
reserves, the estimated future net revenues therefrom or the discounted
present value of such estimated future net revenues or statements
contained in the Prospectus or the Prospectus Supplement concerning
matters of the United States income tax law.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside Alberta
and in relying on local counsel for opinions relating to the laws of
any jurisdiction outside Alberta, or in relation to Material
Subsidiaries, such counsel is only required to opine on matters to the
extent provided by such local counsel.
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(d) Butler & Binion L.L.P., United States counsel for the Company,
shall have furnished to you their written opinion, dated the Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The statements set forth in the Prospectus under the
caption "Certain Income Tax Considerations -- Certain U.S. Federal
Income Tax Considerations," insofar as such statements relate to U.S.
Federal income tax considerations, fairly summarize the material U.S.
Federal income tax considerations to those U.S. holders of Securities
referred to herein;
(ii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act;
(iii) No authorization, consent or approval of, notice to or
filing with any United States federal or State of New York governmental
authority is required for the execution, delivery or performance by the
Company of this Agreement or the consummation by the Company of the
transactions contemplated hereby or is required to be obtained by the
Company for the offer and sale of the Securities in the United States
by the Underwriter except such as have been obtained under the Act and
the Trust Indenture Act or such as may be required under state blue sky
laws;
(iv) The Registration Statement is effective under the Act
and, to the best of the knowledge, information and belief of such
counsel, no stop order with respect thereto has been issued, or
proceeding for that purpose has been instituted or threatened, by the
Commission;
(v) The Form F-X complies as to form in all material respects
with the requirements of the Act and the rules and regulations of the
Commission thereunder;
(vi) The statements set forth in the Prospectus under the
captions "Description of the Notes" and "Description of Debt
Securities" insofar as they purport to constitute a summary of the
terms of the Securities, fairly summarize the terms of the Securities;
(vii) Assuming the Indenture has been duly authorized,
executed and delivered by the Company under Canadian federal and
Alberta law, the Indenture has been duly executed and delivered by the
Company, and constitutes a valid and legally binding agreement of the
Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(viii) Assuming the Securities have been duly authorized,
executed, issued and delivered by the Company and duly authenticated by
the Trustee in accordance with the terms of the Indenture and under
Canadian federal and Alberta law, the Securities, upon payment for and
delivery of the Securities in accordance with the Indenture and the
Under-
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writing Agreement, have been duly executed, issued and delivered
by the Company and authenticated by the Trustee and constitute valid
and legally binding obligations of the Company entitled to the benefits
of the Indenture and enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(ix) The Securities are direct unsecured obligations of the
Company and rank (A) senior to the Company's 9-1/4% Senior Subordinated
Debentures Due 2004 and the Company's 9-5/8% Senior Subordinated
Debentures Due 2005, the only senior subordinated indebtedness for
borrowed money of the Company known to such counsel, and (B) pari passu
with the Company's 8.25% Senior Notes due 2017, the Company's 9%
Debentures due 1999, the Company's 8.35% Senior Notes due 2006 and the
Company's bank credit facilities, the only other senior indebtedness
for borrowed money of the Company known to such Counsel;
(x) Assuming this Agreement has been duly authorized, executed
and delivered under Canadian federal and Alberta law, this Agreement
has been duly executed and delivered by the Company;
(xi) The Indenture has been duly qualified under the U.S.
Trust Indenture Act of 1939, as amended;
(xii) Each part of the Registration Statement, when such part
became effective, and the Prospectus, as supplemented by the Prospectus
Supplement, as of the date of the Prospectus Supplement, appeared on
their face to be appropriately responsive in all material respects
relevant to the offering of the Securities, to the requirements of the
Act, the Trust Indenture Act and the applicable rules and regulations
of the Commission thereunder;
(xiii) As United States counsel to the Company, they reviewed
the Registration Statement and the Prospectus, participated in
discussions with representatives of the Under writer and those of the
Company, their accountants and the Company's Canadian counsel, and
advised the Company as to the requirements of the Act and the
applicable rules and regulations thereunder; on the basis of the
information that such counsel gained in the course of the performance
of such services, considered in the light of their understanding of the
applicable law (including the requirements of Form F-10 and the
character of the prospectus contemplated thereby) and the experience
they have gained through their practice under the Act, they confirm to
the Underwriter that nothing that came to such counsel's attention in
the course of such review has caused such counsel to believe that
insofar as relevant to the offering of the Securities, any part of the
Registration Statement, when such part became effective, contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as supplemented by the
Prospectus Supplement, as of the date of the
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Prospectus Supplement or as of the Time of Delivery, contained or
contains any untrue statement of a material fact or omitted or omits to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and such counsel do 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 an exhibit to
the Registration Statement or required to be incorporated by reference
into the Prospectus or required to be described in the Registration
Statement or the Prospectus which are not filed or incorporated by
reference or described as required. Such counsel may state that the
limitations inherent in the independent verification of factual matters
and the character of determinations involved in the registration
process are such that they do not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Prospectus Supplement
except for those made under the captions "Description of Debt
Securities" and "Certain Income Tax Considerations" in the Prospectus
and "Description of the Notes" and "Certain Income Tax Considerations
-- Certain U.S. Federal Income Tax Considerations" in the Prospectus
Supplement insofar as they relate to provisions of documents or legal
matters; that such counsel do not express any opinion or belief as to
the financial statements or other financial data or as to the operating
and statistical data regarding oil and gas reserves and production
contained in the Registration Statement, the Prospectus or the
Prospectus Supplement, or as to any statement of the eligibility of the
Trustee; and that their letter is furnished, as United States counsel
to the Company, to the Underwriter and the Company and is solely for
the benefit of the Underwriter and the Company.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction outside the
United States.
(e) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at the Time of Delivery, Ernst & Young,
Chartered Accountants, shall have furnished to you a letter or letters, dated
the respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto;
(f) (i) Neither the Company nor any of its subsidiaries 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, 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
as a result of the exercise of any warrants or options in existence as of such
dates) or any increase in short-term debt or long-term debt of the Company (in
an aggregate amount in excess of Cdn. $75,000,000) or any of its subsidiaries or
any change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position,
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shareholders' equity or results of operations of the Company and its
subsidiaries, 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 the
judgment of the Underwriter so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Securities being delivered at the Time of Delivery on the terms and in the
manner contemplated in the Prospectus;
(g) 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;
(h) 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 or The Toronto Stock Exchange; (ii) a
suspension or material limitation in trading in the Company's securities on the
New York Stock Exchange or The Toronto Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either Federal or New
York State authorities or authorities of Canada or a province thereof; or (iv)
the outbreak or escalation of hostilities involving the United States or Canada
or the declaration by the United States or Canada of a national emergency or
war, if the effect of any such event specified in this clause (iv) in the
judgment of the Underwriter makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the terms and in
the manner contemplated in the Prospectus;
(i) The Company shall have furnished or caused to be furnished to you
at the Time of Delivery certificates of officers of the Company satisfactory to
you as to 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 their respective obligations hereunder to be performed at or prior to
the Time of Delivery, and as to such other matters as you may reasonably
request, and the Company shall have furnished certificates as to matters set
forth in subsections (a) and (f) of this Section and as to such other matters as
you may reasonably request.
8. (a) The Company will indemnify and hold harmless the Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
the 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 (i) an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or the Shelf Information, (ii) 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, or (iii) the
non-compliance or alleged non-compliance by the Company with any requirement of
the ASC, Canadian securities laws, U.S. securities laws or the bylaws, rules or
regulations of any stock exchange, and will reimburse the Underwriter for any
legal or other
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expenses reasonably incurred by the 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 any Preliminary Shelf Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement, or the Shelf Information, in
reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use therein. The rights of indemnity
contained in this Section 8(a) in respect of a claim based on a
misrepresentation or omission or alleged misrepresentation or omission in any
Preliminary Shelf Prospectus shall not apply if the Prospectus or any
Supplementary Material corrects in all material respects such misrepresentation
or omission or alleged misrepresentation or omission, the Underwriter was
required by the Act to deliver the Prospectus or such Supplementary Material to
the person asserting such claim, and the Underwriter failed to do so.
(b) The 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 any Preliminary Shelf Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or the Shelf Information, 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 any Preliminary Shelf Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement, or the Shelf
Information, in reliance upon and in conformity with written information
furnished to the Company by the 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 an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, 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 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 (who 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
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reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(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 Underwriter on
the other from the offering of the Securities. 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 Underwriter 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 Underwriter on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriter, in each case as set forth
in the table on the cover page of the Prospectus. 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 Underwriter 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 Underwriter agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation 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), the Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which the 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
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Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(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 the
Underwriter within the meaning of the Act; and the obligations of the
Underwriter under this Section 8 shall be in addition to any liability which the
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the Act.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the Underwriter, as set forth in this
Agreement or made by or on behalf of them, respectively, 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 the Underwriter or any controlling person of the Underwriter, the Company or
any officer or director or controlling person of the Company and shall survive
delivery of and payment for the Securities.
10. If for any reason any Securities are not delivered by or on behalf
of the Company as provided herein, the Company will reimburse the Underwriter
for all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriter in making
preparations for the purchase, sale and delivery of the Securities not so
delivered, but the Company shall then be under no further liability to the
Underwriter in respect of the Securities not so delivered except as provided in
Sections 6 and 8 hereof.
11. All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriter shall be delivered or sent by mail, telex
or facsimile transmission to Goldman, Sachs & Co., 85 Broad Street, New York,
New York 10004, Attention: Registration Department; 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 at the time
of receipt thereof.
12. Other definition in this Agreement: "Material Subsidiaries" means
Gulf Indonesia Resources Limited, Clyde Petroleum Limited and Stampeder
Acquisition (No. 2) Ltd.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriter and the Company and, to the extent provided in
Sections 8 and 9 hereof, the officers and directors of the Company and each
person who controls the Company or the 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 of the Securities from the Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
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14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day of the year, other than a Saturday or a
Sunday, on which banks are open for business in the cities of Calgary, Alberta,
and New York, New York.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. The Company irrevocably submits to the
jurisdiction of any Federal court (or, if such court refuses to take
jurisdiction, any New York State Court) located in the Borough of Manhattan in
The City of New York over any suit, action or proceeding arising out of or
relating to this Agreement, the Calculation Agreement, the Security Agreement or
any Security. The Company irrevocably waives, to the fullest extent permitted by
law, any objection which it may have to the laying of the venue of any such
suit, action or proceeding brought in such a court and any claim that any such
suit, action or proceeding brought in such a court has been brought in any
inconvenient forum. The Company agrees that final judgment in any such suit,
action or proceeding brought in such a court shall be conclusive and binding
upon the Company and may be enforced in the courts of Canada (or any other
courts to the jurisdiction of which the Company is subject) by a suit upon such
judgment, provided that service of process is effected upon the Company in the
manner specified in the following paragraph or as otherwise permitted by law;
provided, however, that the Company does not waive, and the foregoing provisions
of this sentence shall not constitute or be deemed to constitute a waiver of,
(i) any right to appeal any such judgment, to seek any stay or otherwise to seek
reconsideration or review of any such judgment in each case before the trial
court of a U.S. Federal or State court having appellate jurisdiction over such
trial court or (ii) any stay of execution or levy pending an appeal from, or a
suit, action or proceeding for reconsideration or review of, any such judgment.
As long as any of the Securities remain outstanding, the Company will
at all times have an authorized agent in the Borough of Manhattan, The City of
New York upon whom process may be served in any legal action or proceeding
arising out of or relating to this Agreement or any Security. Service of process
upon such agent and written notice of such service mailed or delivered to the
Company shall to the extent permitted by law be deemed in every respect
effective service of process upon the Company in any such legal action or
proceeding. The Company hereby irrevocably appoints CT Corporation System, whose
address is, as of the date hereof, 1633 Broadway, New York, New York 10019, as
its agent for such purpose until November 15, 2006, and covenants and agrees
that service of process in any such legal action or proceeding may be made upon
it at the office of such agent at said address (or at such other address in the
Borough of Manhattan, The City of New York, as the Company may designate by
written notice to the Underwriter.
The Company hereby consents to process being served in any suit, action
or proceeding of the nature referred to in the preceding paragraphs by service
upon such agent together with the mailing of a copy thereof by registered or
certified mail, postage prepaid, return receipt requested, to the address of the
Company set forth in the first paragraph of this instrument or to any other
address of which the Company shall have given written notice to the Underwriter.
The Company irrevocably waives, to the fullest extent permitted by law, all
claim of error by reason of any such service (but does not waive any right to
assert lack of subject matter jurisdiction) and agrees that
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such service and mailing (i) shall be deemed in every respect effective service
of process upon the Company in any such suit, action or proceeding and (ii)
shall, to the fullest extent permitted by law, be taken and held to be valid
personal service.
Nothing in this Section shall affect the right of the Underwriter to
serve process in any manner permitted by law or limit the right of the
Underwriter to bring proceeding against the Company in the courts of any
jurisdiction or jurisdictions.
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.
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If the foregoing is in accordance with your understanding, please sign
and return to us 10 counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Underwriter and the Company.
Very truly yours,
Gulf Canada Resources Limited
By: /s/ Craig S. Glick
----------------------------------------
Name: Craig S. Glick
Title: Senior Vice-President, Corporate and
Corporate Secretary and Chief
Financial Officer
Accepted as of the date hereof:
Goldman, Sachs & Co.
By: /s/ Goldman, Sachs & Co.
----------------------------
(Goldman, Sachs & Co.)
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ANNEX I
Pursuant to Section 7(e) of this Agreement, Ernst & Young,
Chartered Accountants, shall furnish letters to the Underwriter to the effect
that:
(i) they are independent auditors within the meaning of the
Act and the applicable published rules and regulations of the
Commission thereunder;
(ii) in their opinion the financial statements examined by
them and included, or incorporated by reference, in the Registration
Statement and Prospectus comply in form in all material respects with
the applicable accounting requirements of the Securities Act (Alberta),
the Act and the Exchange Act and the related published rules and
regulations thereunder;
(iii) on the basis of a reading of the latest available
interim financial statements of the Company, a reading of the minutes
of the meetings of the Board of Directors and the Audit Committee of
the Board of Directors and of the shareholders of the Company,
inquiries of officials of the Company who have responsibility for
financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than five business days prior to the Time of
Delivery, there was any change in the capital stock or any
increase in short-term debt or long-term debt of the Company
and its consolidated subsidiaries or, at the date of the
latest available balance sheet read by such accountants, any
decrease in consolidated net current assets or shareholders'
equity, as compared with amounts shown on the latest balance
sheet included in the Prospectus; or
(B) for the period from the closing date of the
latest income statement incorporated by reference in the
Prospectus to the closing date of the latest available income
statement read by such accountants, there was any decrease, as
compared with the corresponding period of the previous year,
in consolidated net oil and gas revenues, earnings from
continuing operations, earnings per ordinary share or
consolidated earnings;
except in all cases set forth in clauses (B) and (C) above for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
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ANNEX I-1
29
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained, or incorporated by reference, in the
Registration Statement and Prospectus (in each case to the extent that
such dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
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ANNEX I-2