EXHIBIT 1
$125,000,000
WESTPORT RESOURCES CORPORATION
8 1/4% SENIOR SUBORDINATED NOTES DUE 2011
PURCHASE AGREEMENT
March 27, 2003
LEHMAN BROTHERS INC.
745 Seventh Avenue
New York, NY 10019
Dear Sirs:
1. Introductory. Westport Resources Corporation, a Nevada corporation
(the "COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and sell to Lehman Brothers Inc. (the "PURCHASER") $125,000,000 principal
amount of its 8 1/4% Senior Subordinated Notes Due 2011 ("OFFERED SECURITIES")
to be issued as additional securities under the indenture dated as of November
5, 2001, by and among the Company, the subsidiary guarantors from time to time
parties thereto (the "SUBSIDIARY GUARANTORS") and The Bank of New York, as
Trustee (the "TRUSTEE") ("the "ORIGINAL INDENTURE"), as supplemented by the
First Supplemental Indenture thereto, dated as of December 31, 2001 (the "FIRST
SUPPLEMENTAL INDENTURE"), the Second Supplemental Indenture thereto, dated as of
December 17, 2002 (the "SECOND SUPPLEMENTAL INDENTURE") and the Third
Supplemental Indenture thereto, to be dated as of April 3, 2003 (the "Third
Supplemental Indenture"). The Original Indenture, as supplemented by the First
Supplemental Indenture, the Second Supplemental Indenture and the Third
Supplemental Indenture, is referred to herein as the "INDENTURE." The Offered
Securities will be guaranteed (the "SUBSIDIARY GUARANTIES") by the Subsidiary
Guarantors. The Securities Act of 1933 is herein referred to as the "SECURITIES
ACT."
Holders (including subsequent transferees) of the Offered Securities
will have the registration rights set forth in the registration rights agreement
(the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date (as defined
below), for so long as such Offered Securities constitute "TRANSFER RESTRICTED
SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company and the Subsidiary Guarantors will
agree to file with the Securities and Exchange Commission (the "COMMISSION")
under the circumstances and upon the terms and subject to the conditions set
forth therein, (i) a registration statement under the Securities Act (the
"EXCHANGE OFFER REGISTRATION STATEMENT") relating to the
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Company's 8 1/4% Senior Subordinated Notes in a like aggregate principal amount
as the Offered Securities, identical in all material respects to the Offered
Securities and registered under the Securities Act (the "EXCHANGE SECURITIES"),
to be offered in exchange for the Offered Securities (such offer to exchange
being referred to as the "EXCHANGE OFFER") and the Subsidiary Guaranties thereof
and, if applicable, (ii) a shelf registration statement pursuant to Rule 415
under the Securities Act (the "SHELF REGISTRATION STATEMENT" and, together with
the Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS")
relating to the resale by certain holders of the Offered Securities and to use
its reasonable best efforts to cause such Registration Statements to be declared
and remain effective and usable for the periods specified in the Registration
Rights Agreement and to consummate the Exchange Offer. The Offered Securities
and the Exchange Securities are referred to collectively as the "SECURITIES."
The Company and the Subsidiary Guarantors hereby agree with the
Purchaser as follows:
2. Representations and Warranties of the Company. The Company and the
Subsidiary Guarantors represent and warrant to, and agree with, the Purchaser
that:
(a) An offering memorandum relating to the Offered Securities
to be offered by the Purchaser has been prepared by the Company. Such
offering memorandum (the "OFFERING MEMORANDUM"), as supplemented as of
the date of this Agreement, together with any document incorporated by
reference therein and any other document approved by the Company for
use in connection with the contemplated resale of the Offered
Securities are hereinafter collectively referred to as the "OFFERING
DOCUMENT." On the date of this Agreement the Offering Document does
not, and on the Closing Date (as defined below) the Offering Document
will not, include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The preceding sentence does
not apply to statements in or omissions from the Offering Document
based upon written information furnished to the Company by the
Purchaser specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section
7(b) hereof. Except as disclosed in the Offering Document, on the date
of this Agreement, (i) the Company's Annual Report on Form 10-K most
recently filed with the Securities and Exchange Commission (the
"COMMISSION") and (ii) all subsequent reports (items (i) and (ii)
collectively, the "EXCHANGE ACT REPORTS") which have been filed by the
Company with the Commission or sent to stockholders pursuant to the
Securities Exchange Act of 1934 (the "EXCHANGE ACT") do not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such
documents, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
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(b) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Nevada,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
business condition (financial or otherwise), properties or results of
operations of the Company and its subsidiaries taken as a whole
("MATERIAL ADVERSE EFFECT").
(c) Each subsidiary of the Company has been duly incorporated
or organized and, except Westport Argentina LLC and Westport Overriding
Royalty LLC, is an existing corporation, limited partnership,
partnership or limited liability company in good standing, and the
Company expects that each of Westport Argentina LLC and Westport
Overriding Royalty LLC will be an existing limited liability company in
good standing on the Closing Date (as defined below), in each case
under the laws of the jurisdiction of its incorporation or
organization, with power and authority (corporate or other) to own its
properties and conduct its business as described in the Offering
Document; and each subsidiary of the Company is duly qualified to do
business as a foreign corporation, limited partnership, partnership or
limited liability company in good standing in all other jurisdictions
in which its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified would not, individually or in the aggregate, have a Material
Adverse Effect; all of the issued and outstanding capital stock or
similar ownership interest of each subsidiary of the Company has been
duly authorized and validly issued and is fully paid and nonassessable;
and the capital stock of each subsidiary that is a corporation owned by
the Company, directly or through subsidiaries, is owned free from
liens, encumbrances and defects other than those liens listed in
Schedule A hereto.
(d) For purposes of this agreement, a "subsidiary" of the
Company shall mean any corporation, partnership, limited liability
company or other business entity in which the Company owns, directly or
indirectly, 50% or more of the voting or economic equity interest. A
list of all subsidiaries of the Company, indicating their respective
jurisdictions of formation or organization, the Company's direct or
indirect ownership therein and whether they are Subsidiary Guarantors
is attached as Schedule B.
(e) The Indenture has been duly authorized; the Offered
Securities have been duly authorized; and when the Offered Securities
are delivered and paid for pursuant to this Agreement on the Closing
Date (as defined below), the Indenture will have been duly executed and
delivered by the Company and the Subsidiary Guarantors, such Offered
Securities will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the
Offering Document and the Indenture and such Offered Securities will
constitute
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valid and legally binding obligations of the Company and the Subsidiary
Guarantors, 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.
(f) The Indenture is duly qualified under the Trust Indenture
Act of 1939, as amended (the "TIA" or "TRUST INDENTURE ACT").
(g) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or the
Purchaser for a brokerage commission, finder's fee or other like
payment in connection with this offering.
(h) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
under any of the "INCLUDED LAWS" (as defined in the opinion of Akin,
Gump, Strauss, Hauer & Feld, L.L.P. delivered pursuant to Section 6(d)
of this Agreement) for the consummation of the transactions
contemplated by this Agreement and the Registration Rights Agreement in
connection with the issuance and sale of the Offered Securities by the
Company and the Subsidiary Guarantors, except such as have been
obtained or made under the Securities Act or the Trust Indenture Act
and such as may be required under state securities laws and except for
the orders of the Commission declaring the Exchange Offer Registration
Statement or the Shelf Registration Statement effective.
(i) The execution, delivery and performance by the Company and
the Subsidiary Guarantors of the Indenture, this Agreement and the
Registration Rights Agreement, and the issuance and sale of the Offered
Securities and compliance with the terms and provisions thereof do not
and will not, (i) result in a violation of any law, rule or regulation
of any Included Law, (ii) result in a violation of any order, writ,
judgment or decree known to the Company and applicable to the Company
or any subsidiary of the Company or any of their properties, (iii)
result in a violation of the Articles of Incorporation or by-laws or
similar charter documents of the Company or of any subsidiary of the
Company, or (iv) breach or result in a default or result in the
acceleration of, or entitle any party to accelerate under any agreement
or instrument to which the Company or any subsidiary of the Company is
a party or by which the Company or any such subsidiary is bound or to
which any of the properties of the Company or any such subsidiary is
subject, except in the case of clauses (i), (ii) and (iv) for such
breaches, violations or defaults under as would not, individually or in
the aggregate, have a Material Adverse Effect.
(j) This Agreement has been duly authorized, executed and
delivered by the Company and the Subsidiary Guarantors.
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(k) Except as disclosed in the Offering Document, the Company
and its subsidiaries have good and valid title to all real properties
and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Offering Document, the
Company and its subsidiaries hold any leased real or personal property
under valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by them.
(l) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them in any material respect and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(m) Except as disclosed in the Offering Document, no labor
dispute with the employees of the Company or any subsidiary exists or,
to the knowledge of the Company, is imminent that is reasonably likely
to have a Material Adverse Effect.
(n) The Company and its subsidiaries own or possess licenses
or other enforceable legal rights to use or can acquire on reasonable
terms, adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")
necessary to conduct the business now operated by them in any material
respect, or presently employed by them, and have not received any
notice of infringement of or conflict with asserted rights of others
with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would individually
or in the aggregate have a Material Adverse Effect.
(o) Except as disclosed in the Offering Document, neither the
Company nor any of its subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates
any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware
of any pending investigation which might lead to such a claim.
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(p) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company or the
Subsidiary Guarantors to perform their respective obligations under the
Indenture, this Agreement or the Registration Rights Agreement, or
which are otherwise material in the context of the sale of the Offered
Securities; and no such actions, suits or proceedings are, to the
Company's knowledge, threatened or contemplated.
(q) The financial statements incorporated by reference in the
Offering Document present fairly, in all material respects, the
financial position of the Company and its consolidated subsidiaries as
of the dates shown and their results of operations and cash flows for
the periods shown, and, except as otherwise disclosed in the Offering
Document, such financial statements have been prepared in conformity
with the generally accepted accounting principles in the United States
applied on a consistent basis; and the assumptions used in preparing
the pro forma financial statements included in the Offering Document
provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein,
the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(r) Except as disclosed in the Offering Document, since the
date of the latest audited financial statements incorporated by
reference in the Offering Document there has been no material adverse
change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries
taken as a whole, and, except as disclosed in or contemplated by the
Offering Document, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(s) Neither the Company nor any Subsidiary Guarantor is an
open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under
Section 8 of the United States Investment Company Act of 1940 (the
"INVESTMENT COMPANY ACT"); and neither the Company nor any Subsidiary
Guarantor is, and after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as
described in the Offering Document neither will be, an "investment
company" as defined in the Investment Company Act.
(t) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Offered Securities are
listed on any national securities exchange registered under Section 6
of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
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(u) Assuming the accuracy of the representations and
warranties of the Purchaser set forth in Section 4 hereof, and the
performance by the Purchaser of the agreements made herein, the offer
and sale of the Offered Securities and the Subsidiary Guaranties and
the initial resale of the Offered Securities by the Purchaser in the
manner contemplated by this Agreement and the Offering Document will be
exempt from the registration requirements of the Securities Act by
reason of Section 4(2) thereof and Regulation S thereunder ("REGULATION
S"); and it is not necessary to qualify an indenture in respect of the
Offered Securities under the Trust Indenture Act.
(v) Neither the Company, nor any of its affiliates (as such
term is defined in Rule 144 under the Securities Act, an "AFFILIATE"),
nor any person acting on its or their behalf (other than the Purchaser,
as to whom the Company and the Subsidiary Guarantors make no
representation) (i) has, within the six-month period prior to the date
hereof, offered or sold in the United States or to any U.S. person (as
such terms are defined in Regulation S under the Securities Act) the
Offered Securities or any security of the same class or series as the
Offered Securities or (ii) has offered or will offer or sell the
Offered Securities (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S under the
Securities Act, by means of any directed selling efforts within the
meaning of Rule 902(c) of Regulation S. The Company, its Affiliates and
any person acting on its or their behalf (other than the Purchaser, as
to whom the Company and the Subsidiary Guarantors make no
representation) have complied and will comply with the offering
restrictions requirement of Regulation S. The Company has not entered
and will not enter into any contractual arrangement with respect to the
distribution of the Offered Securities except for this Agreement.
(w) On the Closing Date (as defined below), the Exchange
Securities and the Subsidiary Guaranty set forth in the Indenture will
have been duly authorized by the Company and the Subsidiary Guarantors;
and when the Exchange Securities are issued, executed and authenticated
in accordance with the terms of the Exchange Offer and the Indenture
(i) the Exchange Securities will be entitled to the benefits of the
Indenture including the Subsidiary Guaranty set forth in the Indenture,
(ii) the Exchange Securities will be the valid and legally binding
obligations of the Company, enforceable in accordance with their terms,
and (iii) the Subsidiary Guaranty set forth in the Indenture will be
the valid and binding obligation of each Subsidiary Guarantor and in
the case of clauses (ii) and (iii) 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.
(x) The Subsidiary Guaranty set forth in the Indenture has
been duly authorized by each Subsidiary Guarantor; and, when issued,
will have been duly executed and delivered by each such Subsidiary
Guarantor and will conform to the description thereof contained in the
Offering Document. When the Offered
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Securities have been issued, executed and authenticated in accordance
with the Indenture and delivered to and paid for by the Purchaser in
accordance with the terms of this Agreement, the Subsidiary Guaranty of
each Subsidiary Guarantor set forth in the Indenture will constitute
valid and legally binding obligations of such Subsidiary Guarantor,
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.
(y) The Registration Rights Agreement has been duly authorized
by the Company and each of the Subsidiary Guarantors and, on the
Closing Date (as defined below), will have been duly executed and
delivered by the Company and each of the Subsidiary Guarantors. When
the Registration Rights Agreement has been duly executed and delivered,
the Registration Rights Agreement will be a valid and binding agreement
of the Company and each of the Subsidiary Guarantors, enforceable
against the Company and each Subsidiary Guarantor 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. On the Closing Date (as defined below), the Registration
Rights Agreement will conform as to legal matters to the description
thereof in the Offering Memorandum.
(z) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or by-laws or similar
organizational documents or (ii) in default in the performance of any
obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
properties are bound, except in the case of item (ii), where such
default would not, individually or in the aggregate, have a Material
Adverse Effect.
(aa) Except as disclosed in the Offering Document, there are
no contracts, agreements or understandings between the Company or any
Subsidiary Guarantor and any person granting such person the right to
require the Company or such Subsidiary Guarantor to file a registration
statement under the Securities Act with respect to any securities of
the Company or such Subsidiary Guarantor or to require the Company or
such Subsidiary Guarantor to include such securities with the
Securities and Subsidiary Guaranties registered pursuant to any
Registration Statement.
(bb) Neither the Company nor any of its subsidiaries nor any
agent thereof acting on the behalf of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance
or sale of the Offered Securities to violate Regulation T, Regulation U
or Regulation X of the Board of Governors of the Federal Reserve
System.
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(cc) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act (i) has imposed (or has informed the Company
or any Subsidiary Guarantor that it is considering imposing) any
condition (financial or otherwise) on the Company's or any Subsidiary
Guarantor's retaining any rating assigned to the Company or any
Subsidiary Guarantor or any securities of the Company or any Subsidiary
Guarantor or (ii) has indicated to the Company or any Subsidiary
Guarantor that it is considering (a) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so
assigned or (b) any change in the outlook for any rating of the
Company, any Subsidiary Guarantor or any securities of the Company or
any Subsidiary Guarantor.
(dd) No form of general solicitation or general advertising
(as defined in Regulation D under the Securities Act) was used by the
Company, the Subsidiary Guarantors or any of their respective
representatives (other than the Purchaser, as to whom the Company and
the Subsidiary Guarantors make no representation) in connection with
the offer and sale of the Offered Securities contemplated hereby,
including, but not limited to, articles, notices or other
communications published in any newspaper, magazine, or similar medium
or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
(ee) The Offered Securities offered by the Company and sold by
the Company in reliance on Regulation S have been offered and will be
offered and sold only in offshore transactions.
(ff) The sale of the Offered Securities by the Company
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(gg) On the Closing Date (as defined below), the Indenture
will conform in all material respects to the requirements of the Trust
Indenture Act, and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder.
(hh) The Company is subject to Section 13 or 15(d) of the
Exchange Act.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Purchaser, and the Purchaser agrees to purchase from the Company, at a purchase
price of 105.5% of the principal amount thereof plus accrued interest from
November 1, 2002 to the Closing Date (as defined below), the aggregate principal
amount of Offered Securities.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global securities in
definitive form (the
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"GLOBAL SECURITIES") deposited with the Trustee as custodian for The Depository
Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for
DTC. Interests in any permanent Global Securities will be held only in
book-entry form through DTC, except in the limited circumstances described in
the Offering Document. Payment for the Offered Securities shall be made by the
Purchaser in Federal (same day) funds by wire transfer to an account specified
by the Company at a bank designated by the Company and reasonably acceptable to
the Purchaser at the office of Cravath, Swaine & Moore at 10 A.M. (New York
time), on April 3, 2003, or at such other time not later than seven full
business days thereafter as the Purchaser and the Company mutually determine,
such time being herein referred to as the "CLOSING DATE," against delivery to
the Trustee as custodian for DTC of the Global Securities representing all of
the Offered Securities. The Global Securities will be made available for
checking at the above office of Cravath, Swaine & Moore at least 24 hours prior
to the Closing Date.
4. Representations by Purchaser; Resale by Purchaser. (a) The Purchaser
represents and warrants to the Company and the Subsidiary Guarantors that it is
an "accredited investor" within the meaning of Regulation D under the Securities
Act and a "qualified institutional buyer" within the meaning of Rule 144A of the
Securities Act.
(b) The Purchaser acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. The Purchaser represents and agrees that it has offered
and sold the Offered Securities, and will offer and sell the Offered
Securities (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 or Rule
144A under the Securities Act ("RULE 144A"). Accordingly, neither the
Purchaser nor its Affiliates, nor any persons acting on its or their
behalf, have engaged or will engage in any directed selling efforts
with respect to the Offered Securities, and the Purchaser, its
Affiliates and all persons acting on its or their behalf have complied
and will comply with the offering restrictions requirement of
Regulation S. The Purchaser agrees that, at or prior to confirmation of
sale of the Offered Securities, other than a sale pursuant to Rule
144A, the Purchaser will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that
purchases the Offered Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the date of the commencement of the offering and
the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available)
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under the Securities Act. Terms used above have the meanings
given to them by Regulation S."
Other than the term "Affiliate" terms used in this subsection (b) have
the meanings given to them by Regulation S.
(c) The Purchaser agrees that it and each of its Affiliates
has not entered and will not enter into any contractual arrangement
with respect to the distribution of the Offered Securities except with
the prior written consent of the Company.
(d) The Purchaser agrees that it and each of its Affiliates
will not offer or sell the Offered Securities in the United States by
means of any form of general solicitation or general advertising within
the meaning of Rule 502(c) under the Securities Act, including, but not
limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or
broadcast over television or radio, or (ii) any seminar or meeting
whose attendees have been invited by any general solicitation or
general advertising. The Purchaser agrees, with respect to resales made
in reliance on Rule 144A of any of the Offered Securities, to deliver
either with the confirmation of such resale or otherwise prior to
settlement of such resale a notice to the effect that the resale of
such Offered Securities has been made in reliance upon the exemption
from the registration requirements of the Securities Act provided by
Rule 144A.
(e) The Purchaser represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of
issue of the Offered Securities will not offer or sell any Offered
Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995;
(ii) it has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of the Financial Services and Markets Act 2000 (the "FSMA"))
received by it in connection with the issue or sale of any Offered
Securities in circumstances in which Section 21(1) of the FSMA does not
apply to the Issuer or any Guarantor; and (iii) it has complied and
will comply with all applicable provisions of the FSMA with respect to
anything done by it in relation to the Offered Securities in, from or
otherwise involving the United Kingdom.
5. Certain Agreements of the Company. The Company agrees with the
Purchaser that:
(a) The Company will advise the Purchaser promptly of any
proposal to amend or supplement the Offering Document and will not
effect such amendment or supplementation without the Purchaser's
consent, which shall not be unreasonably withheld or delayed. If, at
any time prior to the completion of the
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resale of the Offered Securities by the Purchaser, any event occurs as
a result of which the Offering Document 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, or if is
necessary at any such time to amend or supplement the Offering Document
to comply with any applicable law, not misleading, the Company promptly
will notify the Purchaser of such event and promptly will prepare, at
its own expense, an amendment or supplement which will correct such
statement or omission or to effect such compliance. Neither the
Purchaser's consent to, nor the Purchaser's delivery to offerees or
investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to the Purchaser copies of the
Offering Document and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the
Purchaser requests, and the Company will furnish to the Purchaser on
the date hereof three copies of the Offering Document signed by a duly
authorized officer of the Company. At any time when the Company is not
subject to Section 13 or 15(d) of the Exchange Act, the Company will
promptly furnish or cause to be furnished to the Purchaser and, upon
request of holders and prospective purchasers of the Offered
Securities, to such holders and purchasers, copies of the information
required to be delivered to holders and prospective purchasers of the
Offered Securities pursuant to Rule 144A(d)(4) under the Securities Act
(or any successor provision thereto) in order to permit compliance with
Rule 144A in connection with resales by such holders of the Offered
Securities. The Company will pay the expenses of printing and
distributing to the Purchaser all such documents.
(c) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions in the United
States and Canada as the Purchaser designates and will continue such
qualifications in effect so long as required for the resale of the
Offered Securities by the Purchaser, provided that the Company will not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any such jurisdiction.
(d) During the period of five years hereafter, the Company
will furnish to the Purchaser, as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year; and the Company will furnish to the Purchaser (i) as soon as
available, a copy of each report and any definitive proxy statement of
the Company filed with the Commission under the Exchange Act or mailed
to stockholders, and (ii) from time to time, such other information
concerning the Company as the Purchaser may reasonably request, which
such other information shall be kept confidential by the Purchaser to
the extent so requested by the Company in writing at the time of
delivery of such information.
13
(e) During the period of two years after the Closing Date, the
Company will, upon request, furnish to the Purchaser and any holder of
Offered Securities a copy of the restrictions on transfer applicable to
the Offered Securities.
(f) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its Affiliates to, resell
any of the Offered Securities that have been reacquired by any of them.
(g) During the period of two years after the Closing Date,
neither the Company nor any Subsidiary Guarantor will be or become, an
open-end investment company, unit investment trust or face-amount
certificate company that is or is required to be registered under
Section 8 of the Investment Company Act.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement, the Indenture, and
the Registration Rights Agreement, including (i) the fees and expenses
of the Trustee and its professional advisers; (ii) all expenses in
connection with the execution, issue, authentication, packaging and
initial delivery of the Offered Securities and, as applicable, the
Exchange Securities, the preparation and printing of this Agreement,
the Registration Rights Agreement, the Offered Securities, the
Indenture, the Offering Document and amendments and supplements
thereto, and any other document relating to the issuance, offer, sale
and delivery of the Offered Securities and as applicable, the Exchange
Securities; (iii) the cost of listing the Offered Securities and
qualifying the Offered Securities for trading in The Portal(SM) Market
("PORTAL") and any expenses incidental thereto; (iv) the cost of any
advertising approved by the Company in connection with the issue of the
Offered Securities; (v) for any expenses (including fees and
disbursements of counsel) incurred in connection with qualification of
the Offered Securities or the Exchange Securities for sale under the
laws of such jurisdictions in the United States and Canada as the
Purchaser designates and the printing of memoranda relating thereto;
(vi) for any fees charged by investment rating agencies for the rating
of the Securities or the Exchange Securities; and (vii) for expenses
incurred in distributing the Offering Document (including any
amendments and supplements thereto) to the Purchaser.
(i) In connection with the offering, until the Purchaser shall
have notified the Company of the completion of the resale of the
Offered Securities, neither the Company nor any of its Affiliates has
or will, either alone or with one or more other persons, bid for or
purchase for any account in which it or any of its Affiliates has a
beneficial interest any Offered Securities or attempt to induce any
person to purchase any Offered Securities; and neither it nor any of
its Affiliates will make bids or purchases for the purpose of creating
actual, or apparent, active trading in, or of raising the price of, the
Offered Securities.
(j) For a period of 90 days after the date of the initial
offering of the Offered Securities by the Purchaser, the Company will
not offer, sell, contract to
14
sell, pledge or otherwise dispose of, directly or indirectly, any
United States dollar-denominated debt securities issued or guaranteed
by the Company and having a maturity of more than one year from the
date of issue. The Company will not at any time offer, sell, contract
to sell, pledge or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, pledge, contract
or disposition would cause the exemption afforded by Section 4(2) of
the Securities Act or the safe harbor of Regulation S thereunder to
cease to be applicable to the offer and sale of the Offered Securities.
(k) As soon as practicable after the Closing Date, the Company
will use its best efforts to provide the Purchaser with evidence
reasonably satisfactory to the Purchaser that each of Westport
Argentina LLC and Westport Overriding Royalty LLC is an existing
limited liability company in good standing under the laws of the State
of Colorado.
6. Conditions of the Obligations of the Purchaser. The obligations of
the Purchaser to purchase and pay for the Offered Securities will be subject to
the accuracy of the representations and warranties on the part of the Company
herein on the date hereof and on the Closing Date, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company and the Subsidiary Guarantors of their respective
obligations hereunder and to the following additional conditions precedent:
(a) The Purchaser shall have received a letter, dated the date
of this Agreement, of KPMG LLP confirming that they are independent
public accountants with respect to the Company under rule 101 of the
AICPA's Code of Professional Conduct, and its interpretations and
rulings, and to the effect that:
(i) on the basis of a reading of the latest available
interim financial statements 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 three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in long-term debt of the Company and its
consolidated subsidiaries or, at the date of the
latest available balance sheet read by such
accountants, there was any decreases in consolidated
net current revenues or in the total or per-share
amounts of income before extraordinary items or of
net income, as compared with amounts shown on the
latest balance sheet incorporated by reference in the
Offering Document; or
(B) for the period from the closing date of
the latest income statement incorporated by reference
in the Offering Document to
15
the closing date of the latest available income
statement read by such accountants there were any
decreases, as compared with the corresponding period
of the previous year, in consolidated net sales, net
operating income, consolidated net income or in the
ratio of earnings to fixed charges;
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Offering Document
discloses have occurred or may occur or which are described in
such letter;
(ii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained and incorporated by reference
in the Offering Document and the Exchange Act Reports (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; and
(iii) on the basis of a reading of the pro forma
consolidated financial statements incorporated by reference in
the Offering Document, carrying out certain specified
procedures, reading of minutes, inquiries of certain officials
of the Company who have responsibility for financial and
accounting matters and proving the arithmetic accuracy of the
application of the pro forma adjustments to the historical
amounts in the pro forma consolidated financial statements,
nothing came to their attention which caused them to believe
that the pro forma consolidated financial statements do not
comply as to form in all material respects with the applicable
accounting requirements of Rule 11-02 of Regulation S-X under
the Securities Act or that the pro forma adjustments have not
been properly applied to the historical amounts in the
compilations of such statements or on the pro forma basis
described in the notes thereto, except that the applicable
accounting requirements of Rule 11-02 of Regulations S-X
preclude the presentation of the pro forma adjustments related
to the offering of the Securities and the application of the
estimated net proceeds from the offering of the Securities.
(b) The Purchaser shall have received a letter, dated the date
of this Agreement, from Lon McCain, the Chief Financial Officer of the
Company, to the effect that:
16
(i) he and members of his staff are responsible for
the Company's financial and accounting matters and have
examined the Company's financial records and schedules
included in the Offering Document;
(ii) on the basis of the review referred to in clause
(i) above, nothing came to his attention that caused him to
believe that the consolidated balance sheets of the Company
and its subsidiaries as of December 31, 2000 and 2001, and the
consolidated statements of operations, stockholders' equity,
and cash flows for each of the two years in the period ended
December 31, 2001, and the related financial statement
schedules all incorporated by reference in the Offering
Document, do not fairly present the financial position of the
Company and its subsidiaries as of December 31, 2000 and 2001
and the results of their operations and cash flows for each of
the two years in the period ended December 31, 2001 in
conformity with generally accepted accounting principles; and
(iii) he has compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained and incorporated by reference
in the Offering Document and the Exchange Act Reports with the
results obtained from a reading of the general accounting
records of the Company and its subsidiaries 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.
(c) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as one enterprise which, in the
reasonable judgment of the Purchaser is material and adverse and makes
it impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities or preferred stock
of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act),
or any public announcement that any such organization has under
surveillance or review its rating of any debt securities or preferred
stock of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating) or any announcement that the Company has
been placed on negative outlook; (iii) any change in U.S. or
international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the reasonable
judgment of the Purchaser, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered
Securities, whether in the primary market or in respect of dealings in
the secondary market; (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum
17
prices for trading on such exchange, or any suspension of trading of
any securities of the Company on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or, New York authorities; (vi) any major disruption of
settlements of securities or (vii) any attack on, outbreak or material
escalation of hostilities or acts of terrorism involving the United
States, any declaration of war by Congress or any other national or
international calamity or emergency if, in the reasonable judgment of
the Purchaser, the effect of any such attack, outbreak, escalation,
act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Offered Securities.
(d) The Purchaser shall have received an opinion, dated the
Closing Date, of Akin, Gump Strauss, Hauer & Feld, L.L.P., counsel for
the Company and the Subsidiary Guarantors, and from local counsel in
Nevada, Colorado and Wyoming to the collective effect that:
(i) The Company is a validly existing corporation in
good standing under the laws of the State of Nevada and each
Subsidiary Guarantor is a validly existing corporation,
limited partnership, partnership or limited liability company
in good standing under the laws of the state of its
incorporation or organization, in each case with corporate,
limited partnership, partnership or limited liability company
power and authority to own its properties and conduct its
business as described in the Offering Document and the
Exchange Act Reports, and each is duly qualified to do
business as a foreign entity in good standing in the
jurisdictions identified in a schedule to the opinion;
(ii) Except for those liens listed in Schedule A
hereto, all outstanding shares of capital stock or similar
ownership interest of the Subsidiary Guarantors are owned of
record by the Company either directly or through wholly-owned
subsidiaries;
(iii) Each of this Agreement, the Registration Rights
Agreement and the Indenture has been duly authorized, executed
and delivered by the Company and each Subsidiary Guarantor a
party thereto; and each of the Registration Rights Agreement
and the Indenture constitutes a valid and legally binding
obligation of the Company and the Subsidiary Guarantors,
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;
(iv) The Offered Securities have been duly
authorized, executed, issued and delivered and, assuming due
authentication, in accordance with this Agreement constitute
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, and
entitled to the benefits of the Indenture, subject to
bankruptcy, insolvency,
18
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and the
Offered Securities are in the form contemplated by the
Indenture and conform in all material respects to the
description thereof in the Offering Document;
(v) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required under any of the Included Laws to be obtained or
made by the Company or the Subsidiary Guarantors for the due
execution and delivery of this Agreement, the Indenture or the
Registration Rights Agreement and the performance of their
respective obligations hereunder or thereunder in connection
with the issuance and sale of the Offered Securities by the
Company, except such as have been obtained or made and such as
may be required under state securities laws, the Securities
Act, the Exchange Act, the Trust Indenture Act in connection
with the issuance of the Exchange Securities or the various
rules and regulations under each of the foregoing;
(vi) The execution, delivery and performance by the
Company and the Subsidiary Guarantors of the Indenture, this
Agreement and the Registration Rights Agreement, and the
issuance and sale of the Offered Securities to the Purchaser
in the manner contemplated herein and compliance with the
terms and provisions thereof did not and will not, (1) result
in a violation of any law, rule or regulation of any Included
Law, (2) result in a violation of any order, writ, judgment or
decree known to such counsel and applicable to the Company or
any subsidiary of the Company or any of their properties, (3)
result in a violation of the Articles of Incorporation or
by-laws or similar charter documents of the Company or of any
Subsidiary Guarantor, or (4) breach or result in a default
under or result in the acceleration of or entitle any party to
accelerate under any agreement or instrument filed as an
exhibit to the Exchange Act Reports, except in the case of
clauses (1), (2) and (4) for such violations, breaches,
defaults and accelerations as would not, individually or in
the aggregate, have a Material Adverse Effect;
(vii) The descriptions (A) in the Offering Document
under the captions "Notice to Investors," "Certain
Relationships and Related Transactions," "Description of
Certain Indebtedness," "Description of the Notes" and "Certain
Material United States Federal Income Tax Consequences" and
(B) in the Exchange Act Reports of statutes, legal and
governmental proceedings and contracts and other documents
fairly present, in all material respects, the information
required to be shown; it being understood that such counsel
need express no opinion as to the reserve data, reserve
reports, financial statements and related notes and schedules
and other financial data contained or incorporated by
reference in the Offering Document;
19
(viii) Assuming the accuracy of the representations
and warranties of the parties to this Agreement and the
performance by such parties of their respective agreements
made herein, it is not necessary in connection with (i) the
offer, sale and delivery of the Offered Securities by the
Company and the Subsidiary Guarantors to the Purchaser
pursuant to this Agreement or (ii) the resales of the Offered
Securities by the Purchaser in the manner contemplated hereby
to register the Offered Securities and Subsidiary Guaranties
under the Securities Act;
(ix) The Indenture is duly qualified under the Trust
Indenture Act;
(x) The Subsidiary Guaranty set forth in the
Indenture conforms in all material respects to the description
thereof contained in the Offering Document. When the Offered
Securities have been issued, executed and authenticated in
accordance with the Indenture and delivered to and paid for by
the Purchaser in accordance with the terms of this Agreement,
the Subsidiary Guaranty of each Subsidiary Guarantor set forth
in the Indenture will constitute valid and legally binding
obligations of such Subsidiary Guarantor, 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;
(xi) The Exchange Securities have been duly
authorized by the Company; and if and when the Exchange
Securities are issued, executed and authenticated in
accordance with the terms of the Exchange Offer, the
Registration Rights Agreement and the Indenture, (i) the
Exchange Securities will be entitled to the benefits of the
Indenture including the Subsidiary Guaranty set forth in the
Indenture, (ii) the Exchange Securities will be the valid and
legally binding obligations of the Company, enforceable in
accordance with their terms, and (iii) the Subsidiary Guaranty
set forth in the Indenture will be the valid and binding
obligation of each Subsidiary Guarantor, and in the case of
clauses (ii) and (iii) 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;
(xii) Except as disclosed in the Offering Document,
none of the agreements filed as exhibits to the Exchange Act
Reports include any contracts, agreements or understandings
between the Company or any Subsidiary Guarantor and any person
granting such person the right to require the Company or such
Subsidiary Guarantor to file a registration statement under
the Securities Act with respect to any securities of the
Company or such Subsidiary Guarantor or to require the Company
or such Subsidiary Guarantor to include such securities with
the Securities and Subsidiary Guaranties registered pursuant
to any Registration Statement;
20
In addition to the foregoing, such counsel shall also
provide a statement to the effect that such counsel has
participated in conferences with officers and representatives
of the Company, representatives of the independent public
accountants for the Company, the Purchaser and counsel for the
Purchaser at which the contents of the Offering Document and
related matters were discussed and, although such counsel is
not passing upon and does not assume any responsibility for
the accuracy, completeness or fairness of the statements
contained in the Offering Document, and has not made any
independent check or verification thereof (except as
specifically set forth in Section 6, paragraph d, item (vii)
above), based on such counsel's participation in such
conferences and conversations, their review of such records
and documents as described above, their understanding of the
U.S. federal securities laws and their experience they have
gained in their practice thereunder, they advise you that no
information has come to their attention that causes them to
believe that the Offering Document (except for reserve data,
reserve reports, financial statements and related notes and
schedules and other financial data included therein, as to
which they express no view), as of the date thereof, contained
or contains an untrue statement of a material fact or omitted
or omits 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.
The opinion of Akin, Gump, Strauss, Hauer and Feld,
L.L.P. described in this Section 6(d) shall be rendered to the
Purchaser at the request of the Company and shall so state
therein. Such opinion may, solely as it relates to the
application of laws other than the laws of the United States
and jurisdictions in which they are admitted, to the extent
such counsel deems proper and to the extent specified in such
opinion, be given directly from separate legal counsel
reasonably acceptable to the Purchaser and its legal counsel,
provided that such opinions from separate legal counsel are in
each case addressed directly to the Purchaser. Such counsel
may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and it
subsidiaries and certificated of public officials, provided
that copies of such certificates are provided by such counsel
to the Purchaser;
For the purposes of the forgoing opinions and
statements the phrases "known to such counsel," "to such
counsel's knowledge" and words of similar meaning refer only
to the actual knowledge of the current lawyers of Akin, Gump
Strauss, Hauer & Feld, L.L.P. who have performed legal
services on behalf of the Company and the Subsidiary
Guarantors or the predecessors of such entities since March
19, 2002.
21
(e) The Purchaser shall have received an opinion, dated the
Closing Date, of Howard L. Boigon, Vice President and General Counsel
of the Company, to the effect that:
(i) All outstanding shares of capital stock or
similar ownership interest of each Subsidiary Guarantor have
been duly and validly authorized and issued and are fully paid
and non-assessable;
(ii) Neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws or, to
the knowledge of such counsel after due inquiry, in default in
the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or
their respective property is bound;
(iii) Except as disclosed in the Offering Document,
there are no contracts, agreements or understandings between
the Company or any Subsidiary Guarantor and any person
granting such person the right to require the Company or such
Subsidiary Guarantor to file a registration statement under
the Securities Act with respect to any securities of the
Company or such Subsidiary Guarantor or to require the Company
or such Subsidiary Guarantor to include such securities with
the Securities and Subsidiary Guaranties registered pursuant
to any Registration Statement;
(iv) To such counsel's knowledge, after due inquiry,
there are no pending actions, suits or proceedings against or
affecting the Company, any of its subsidiaries or any of their
respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company to
perform its obligations under the Indenture, this Agreement,
or the Registration Rights Agreement, or which are otherwise
material in the context of the sale of the Offered Securities;
and no such actions, suits or proceedings are, to such
counsel's knowledge, threatened or contemplated.
In addition to the foregoing, such counsel shall also
provide a statement to the effect that such counsel has no
reason to believe that the Offering Document, or any amendment
or supplement thereto, or any Exchange Act Report as of the
date hereof and as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary to make the statements therein not misleading,
it being understood that such counsel need express no belief
or opinion as to the reserve information, financial statements
or other financial data contained in the Offering Document and
the Exchange Act Reports.
22
(f) The Purchaser shall have received from Cravath, Swaine &
Moore, counsel for the Purchaser, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities, the Offering Document, the
exemption from registration for the offer and sale of the Offered
Securities by the Company to the Purchaser and the resales by the
Purchaser as contemplated hereby and other related matters as the
Purchaser may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(g) The Purchaser shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers,
to their knowledge, shall state that the representations and warranties
of the Company in this Agreement are true and correct, that the Company
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, and that, subsequent to the respective dates of the most recent
financial statements in the Offering Document there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of the Company
and its subsidiaries taken as a whole except as set forth in or
contemplated by the Offering Document or as described in such
certificate.
(h) The Purchaser shall have received a letter, dated the
Closing Date, of KPMG LLP which meets the requirements of subsection
(a) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to the Closing
Date for the purposes of this subsection.
(i) The Purchaser shall have received an executed copy of the
Registration Rights Agreement.
The Company will furnish the Purchaser with such conformed copies of such
opinions, certificates, letters and documents as the Purchaser reasonably
request. The Purchaser may in its sole discretion waive compliance with any
conditions to its obligations hereunder.
7. Indemnification and Contribution. (a) Each of the Company and the
Subsidiary Guarantors will, jointly and severally, indemnify and hold harmless
the Purchaser, its affiliates, directors and officers and each person, if any,
who controls the Purchaser within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Purchaser may become subject, under the Securities Act or the Exchange
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Offering
Document, or any amendment or supplement thereto, or the Exchange Act Reports,
or arise out of or are based upon the omission or alleged omission to state
23
therein a material fact required to stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, including any losses, claims, damages or liabilities
arising out of or based upon the Company's failure to perform its obligations
under Section 5(a) of this Agreement, and will reimburse the Purchaser for any
legal or other expenses reasonably incurred by the Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Company and the
Subsidiary Guarantors will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by the Purchaser specifically for use
therein, it being understood and agreed that the only such information consists
of the information described as such in subsection (b) below.
(b) The Purchaser will indemnify and hold harmless the Company
and the Subsidiary Guarantors, their directors and officers and each
person, if any, who controls the Company and the Subsidiary Guarantors
within the meaning of Section 15 of the Securities Act, against any
losses, claims, damages or liabilities to which the Company or the
Subsidiary Guarantors may become subject, under the Securities Act or
the Exchange Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the Offering Document, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
the alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, 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 reliance upon and in conformity with
written information furnished to the Company by the Purchaser through
the Purchaser specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by the
Purchaser consists of the following information in the Offering
Document furnished by the Purchaser: the second and third sentences of
the ninth paragraph and the tenth, eleventh and thirteenth paragraphs
under the caption "Plan of Distribution"; provided, however, that the
Purchaser shall not be liable for any losses, claims, damages or
liabilities arising out of or based upon the Company's failure to
perform its obligations under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the failure to
notify the indemnifying party will not relieve it from any liability
24
which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may 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 will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In any such
proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the contrary; (ii)
the indemnifying party has failed within a reasonable time to retain
counsel reasonably satisfactory to the indemnified party; (iii) the
indemnified party shall have reasonably concluded that there may be
legal defenses available to it that are different from or in addition
to those available to the indemnifying party; or (iv) the named parties
in any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood and
agreed that the indemnifying party shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable
for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all indemnified parties, and that all such
fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Purchaser, its affiliates, directors and officers
and any control persons of the Purchaser shall be designated in writing
by the Purchaser and any such separate firm for the Company, any
Subsidiary Guarantor and any control persons of the Company and any
Subsidiary Guarantor shall be designated in writing by the Company. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
action in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes (i) an unconditional
release of such indemnified party from all liability on any claims that
are the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or failure to act
by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages or liabilities referred to in
subsection (a) or (b) above (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one
25
hand and the Purchaser on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and
the Purchaser on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities
as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Subsidiary Guarantors on the
one hand and the Purchaser 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 discounts
and commissions received by the Purchaser from the Company under this
Agreement. 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 and the Subsidiary
Guarantors or the Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of 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 action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), the Purchaser
shall not be required to contribute any amount in excess of the amount
by which the total discounts, fees and commissions received by the
Purchaser exceeds the amount of any damages which the Purchaser has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
(e) The obligations of the Company and the Subsidiary
Guarantors under this Section shall be in addition to any liability
which the Company or the Subsidiary Guarantors may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls the Purchaser within the meaning of the Securities
Act or the Exchange Act; and the obligations of the Purchaser under
this Section shall be in addition to any liability which the Purchaser
may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Company and the
Subsidiary Guarantors within the meaning of the Securities Act or the
Exchange Act.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the Purchaser set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf of
the Purchaser, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If for any reason the purchase of the Offered
Securities by the Purchaser is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to
26
Section 5 and the respective obligations of the Company, the Subsidiary
Guarantors and the Purchaser pursuant to Section 7 shall remain in effect. If
the purchase of the Offered Securities by the Purchaser is not consummated for
any reason other than solely because of the occurrence of any event specified in
clause (iii), (iv), (v), (vi) or (vii) of Section 6(c), the Company and the
Subsidiary Guarantors, jointly and severally, will reimburse the Purchaser for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Purchaser will be mailed, delivered or telegraphed and confirmed to
Lehman Brothers Inc., 399 Park Avenue, Syndicate Registration, New York, NY
10022, Fax: (212) 526-0943, or, if sent to the Company or the Subsidiary
Guarantors, will be mailed, delivered or telegraphed and confirmed to it at
Westport Resources Corporation, 410 Seventeenth Street, Suite 2300, Denver,
Colorado, 80202-4436 Attention Donald D. Wolf.
10. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties hereto.
11. Counterparts. This Agreement may be executed 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 Agreement.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
Each of the Company and the Subsidiary Guarantors hereby submits to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
27
If the foregoing is in accordance with the Purchaser's understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Company, the Subsidiary
Guarantors and the Purchaser in accordance with its terms.
Very truly yours,
WESTPORT RESOURCES CORPORATION
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and
Chief Financial Officer
SUBSIDIARY GUARANTORS:
WESTPORT OIL AND GAS COMPANY, L.P.
by WHG, INC.,
its general partner,
a Delaware corporation
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
WHG, INC.
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
WHL, INC.
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
28
WESTPORT FINANCE CO.
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Treasurer
WESTPORT ARGENTINA LLC
by WESTPORT OIL AND GAS
COMPANY, L.P.,
its member,
a Delaware limited partnership
by WHG, INC.,
its general partner,
a Delaware corporation
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
WESTPORT CANADA LLC
by WESTPORT OIL AND GAS
COMPANY, L.P.,
its member,
a Delaware limited partnership
by WHG, INC.,
its general partner,
a Delaware corporation
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
29
WESTPORT OVERRIDING ROYALTY LLC
by WESTPORT OIL AND GAS
COMPANY, L.P.,
its manager,
a Delaware limited partnership
by WHG, INC.,
its general partner,
a Delaware corporation
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
JERRY CHAMBERS EXPLORATION COMPANY
by WESTPORT OIL AND GAS
COMPANY, L.P.,
its general partner,
a Delaware limited partnership
by WHG, INC.,
its general partner,
a Delaware corporation
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
30
HORSE CREEK TRADING & COMPRESSION COMPANY LLC
by WESTPORT OIL AND GAS
COMPANY, L.P.,
its member,
a Delaware limited partnership
by WHG, INC.,
its general partner,
a Delaware corporation
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
WESTPORT FIELD SERVICES, LLC
by WESTPORT RESOURCES CORPORATION,
its manager,
a Delaware corporation
By: /s/ LON MCCAIN
-----------------------------------------
Name: Lon McCain
Title: Vice President, Treasurer and Chief
Financial Officer
31
The foregoing Purchase Agreement
is hereby confirmed and
accepted as of the date first
above written.
LEHMAN BROTHERS INC.
By /s/ MICHAEL A. GOLDBERG
--------------------------------------
Michael A. Goldberg, Managing Director
32
SCHEDULE A
Liens Affecting the Capital Stock of
Subsidiaries of the Company
1. Liens on the capital stock of subsidiaries owned directly or indirectly by
the Company and pledged pursuant to a pledge agreement in connection with the
Revolving Credit Facility (as defined in the Offering Memorandum).
2. Liens for taxes, assessments, fees and other governmental charges and claims
that are not yet due or which are being contested in good faith in appropriate
proceedings.
33
SCHEDULE B
List of Jurisdictions in Which the Company
or any subsidiary is Qualified
to do Business as a Foreign Corporation
1. THE COMPANY.
<Table>
<Caption>
COMPANY STATE OF DOMESTICATION FOREIGN QUALIFICATION
WESTPORT RESOURCES CORPORATION Nevada Texas, Louisiana, Colorado
</Table>
2. THE SUBSIDIARIES.
<Table>
<Caption>
COMPANY STATE OF FOREIGN QUALIFICATIONS OWNERSHIP
DOMESTICATION
WESTPORT OIL AND GAS COMPANY, L.P.* Delaware Arkansas, Colorado, WHG, Inc. 99% GP
Kansas, Louisiana, WHL, Inc. 1%
Michigan, Montana,
Nebraska, New
Mexico, North
Dakota, Oklahoma,
South Dakota, Texas,
Utah, Wyoming
WESTPORT ARGENTINA LLC* Colorado -- Westport Oil and Gas Company, L.P., 100%
WESTPORT CANADA LLC* Delaware -- Westport Oil and Gas Company, L.P., 100%
WESTPORT OVERRIDING ROYALTY LLC* Colorado -- Westport Oil and Gas Company, L.P., 100%
WESTPORT FINANCE CO. Wyoming -- Westport Resources Corporation, 100%
JERRY CHAMBERS EXPLORATION COMPANY* Colorado -- Westport Oil and Gas Company, L.P., 99% GP
Westport Canada LLC 1% GP
BELCO (CAYMAN ISLANDS) CORP. Cayman Islands -- Westport Resources Corporation, 100%
HORSE CREEK TRADING & COMPRESSION Colorado North Dakota Westport Oil and Gas Company, L.P., 100%
LLC*
WESTPORT FIELD SERVICES, LLC* Delaware Utah Westport Resources Corporation, 100%
WHG, INC.* Delaware Colorado, North Westport Resources Corporation, 100%
Dakota, Texas,
South Dakota
WHL, INC.* Delaware Colorado Westport Resources Corporation, 100%
</Table>
- ----------
* Subsidiary Guarantor