EXHIBIT 1.1
$215,000,000
TESORO PETROLEUM CORPORATION
9 5/8% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
NOVEMBER 1, 2001
▇▇▇▇▇▇ BROTHERS INC.
ABN AMRO, INCORPORATED
BANK OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
CREDIT LYONNAIS SECURITIES (USA), INC.
SCOTIA CAPITAL (USA) INC.
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
33RD FLOOR, HIGH YIELD CAPITAL MARKETS
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Tesoro Petroleum Corporation, a Delaware corporation (the
"Company"), proposes to sell to you (the "Initial Purchasers") $215,000,000
aggregate principal amount of 9 5/8% Senior Subordinated Notes due 2008 (the
"Notes"). The Initial Purchasers, acting severally and not jointly, propose to
purchase the respective principal amounts of Notes set forth on Schedule I
hereto. The Notes will be issued pursuant to an Indenture to be dated as of
November 6, 2001 (the "Indenture"), between the Company and U.S. Bank Trust
National Association, as trustee (the "Trustee"). This is to confirm the
agreement concerning the purchase of the Notes from the Company by the Initial
Purchasers.
As used herein, the term "Subsidiary" shall include each
entity listed on Schedule III hereto. The Notes will be guaranteed (the
"Subsidiary Guarantees") by each of the entities listed on Schedule II hereto
(each as "Guarantor" and collectively the "Guarantors").
The Notes will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on one or more exemptions therefrom. The Company
and the Guarantors have prepared a preliminary offering memorandum, dated
October 19, 2001 (the "Preliminary Offering Memorandum"), and will prepare a
final offering memorandum (the "Offering Memorandum"), relating to the Notes and
the Subsidiary Guarantees. Any references herein to the Preliminary Offering
Memorandum and the Offering Memorandum shall be deemed to include all documents
incorporated therein by reference. Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this Agreement. The
Company hereby confirms that it has authorized the use of the
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Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Notes by the Initial Purchasers in accordance
with Section 3 hereof.
On the Closing Date (as defined herein), and as a condition to
the obligations of the Initial Purchasers hereunder, the Company and each of the
Initial Purchasers will enter into a Registration Rights Agreement (the
"Registration Rights Agreement"), substantially in the form attached hereto as
Exhibit A. Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will agree, among other things, to file with, and use its reasonable
best efforts to cause to be declared effective by, the Securities and Exchange
Commission (the "Commission") a registration statement with respect to a
registered exchange offer under the Securities Act, relating to the offer to
exchange the Notes for a like principal amount of debt securities of the Company
(the "Exchange Notes") identical in all material respects to the Notes except
that the Exchange Notes will have been registered under the Securities Act (the
"Exchange Offer").
This Agreement, the Indenture, the Notes, the Subsidiary
Guarantees and the Registration Rights Agreement are hereinafter sometimes
referred to collectively as the "Operative Documents."
SECTION 1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY
AND THE GUARANTORS
The Company and each of the Guarantors represents and warrants
to, and agrees with, the Initial Purchasers that as of the date hereof:
(a) The Preliminary Offering Memorandum, as of its date did not, and
the Offering Memorandum as of the date hereof does not and at the Closing Date
will not, contain any 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 the representations and warranties set forth
in this Section 1(a) do not apply to statements or omissions in the Preliminary
Offering Memorandum or the Offering Memorandum made in reliance on and in
conformity with information furnished to the Company in writing by or on behalf
of the Initial Purchasers expressly for use therein.
(b) Assuming the Notes are issued, sold and delivered under the
circumstances contemplated by the Offering Memorandum and in this Agreement, (i)
the registration under the Securities Act of the Notes or the Subsidiary
Guarantees or the qualification of the Indenture in respect of the Notes under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), is not
required in connection with the offer and sale of the Notes to the Initial
Purchasers in the manner contemplated by the Offering Memorandum or this
Agreement and (ii) the initial resales of the Notes by the Initial Purchasers on
the terms and in the manner set forth in the Offering Memorandum and Section 3
hereof are exempt from the registration requirements of the Securities Act.
(c) The documents incorporated by reference in the Preliminary Offering
Memorandum and the Offering Memorandum conformed, when such documents became
effective or were filed with the Commission, in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission
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thereunder, and none of such documents, when read together with the other
information in the Offering Memorandum, 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, in the light of the circumstances
under which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Offering Memorandum when such documents
became effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and none of such documents,
when read together with the other information in the Offering Memorandum, will
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.
(d) The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware with full corporate power
and authority to own, lease and operate its properties and conduct its business
as described in the Offering Memorandum, and is duly qualified and registered as
a foreign corporation for the transaction of business and is in good standing in
each jurisdiction in which the character of the business conducted by it or the
location of the properties owned or leased by it make such qualification or
registration necessary (except where the failure to so qualify or register would
not have a Material Adverse Effect (as defined below)). The Company has an
authorized capitalization as set forth under the caption "Capitalization" in the
Offering Memorandum. On the date hereof, all of the issued and outstanding
shares of capital stock of the Company have been, and on the Closing Date will
be, duly authorized and validly issued and are, and on the Closing Date will be,
fully paid and nonassessable. On the date hereof, all of the issued and
outstanding shares of capital stock of the Company have been, and on the Closing
Date will have been, duly authorized and are, and on the Closing Date will be,
validly issued and fully paid and nonassessable. As used herein, "Material
Adverse Effect" means a material adverse effect on the condition (financial or
otherwise), results of operations, business, earnings or prospects of the
Company and the Subsidiaries (as defined below), taken as a whole.
(e) Schedule III hereto is a complete and accurate schedule of the
names of all corporations, partnerships and joint ventures (the "Subsidiaries")
which constitute "subsidiaries," as such term is defined in Rule 405 of the
rules and regulations of the Commission under the Securities Act (collectively
with the rules and regulations of the Commission under the Exchange Act, the
"Rules and Regulations"). Other than the Subsidiaries listed on Schedule III, no
corporation, partnership or other entity in which the Company has an equity
interest constitutes a "subsidiary" as defined in Rule 405 of the Rules and
Regulations. Each Guarantor and each Subsidiary is duly organized, validly
existing and in good standing in the jurisdiction of its incorporation or
formation, as the case may be, with full corporate or other power and authority
to own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum. Each Subsidiary is duly qualified and
registered as a foreign corporation or limited partnership, as the case may be,
for the transaction of business and is in good standing in each jurisdiction in
which the character of the business conducted by it or the location of the
properties owned or leased by it make such qualification or registration
unnecessary, save where the failure to so qualify or be in good standing as a
foreign corporation or limited partnership, as the case may be, would not have a
Material Adverse Effect.
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(f) All of the issued and outstanding shares of capital stock of each
of the Guarantors and each of the Subsidiaries that is a corporation have been
duly authorized and validly issued, are fully paid and nonassessable, and are
owned by the Company (except for one share of Tesoro Petroleum (Singapore) Pte
Ltd.) directly or indirectly, free and clear of any lien, adverse claim,
security interest or other encumbrance (a "Lien"), except for Liens arising from
the senior secured credit facility described in the Offering Memorandum. All
outstanding equity interests in each Subsidiary that is not a corporation have
been duly authorized and validly issued and are owned by the Company directly or
indirectly, free and clear of any Lien, except for Liens arising from the senior
secured credit facility described in the Offering Memorandum. Except as
disclosed in the Offering Memorandum and as outstanding under employee benefit
plans of the Company, there are no outstanding subscriptions, rights (preemptive
or other), warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, nor any restriction on the
voting or transfer of, any capital stock or other equity interest of the Company
or any Subsidiary.
(g) The Company and the Guarantors have all requisite power and
authority to execute, deliver and perform their respective obligations under
this Agreement, each of the other Operative Documents to which they may be a
party and to consummate the transactions contemplated hereby and thereby,
including, without limitation, the power and authority to issue, sell and
deliver the Notes and the Subsidiary Guarantees as provided herein and therein.
(h) This Agreement has been duly and validly authorized, executed and
delivered by the Company and each of the Guarantors and constitutes a valid and
binding agreement of the Company and each of the Guarantors, enforceable against
the Company and each of the Guarantors in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
subject to the applicability of general principles of equity, and except as
rights to indemnity and contribution hereunder and thereunder may be limited by
Federal or state securities laws or principles of public policy.
(i) The Indenture has been duly authorized by the Company and each of
the Guarantors and, on the Closing Date, will have been validly executed and
delivered by the Company and each of the Guarantors. When the Indenture has been
validly executed and delivered by the Company and each of the Guarantors,
assuming due authorization, delivery and performance by the Trustee, the
Indenture will constitute a valid and binding agreement of the Company and each
of the Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and general equity principles. On the
Closing Date, 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. The
Offering Memorandum contains an accurate summary, in all material respects, of
the terms of the Indenture.
(j) The Notes have been duly authorized for issuance and sale to the
Initial Purchasers by the Company pursuant to this Agreement and, on the Closing
Date, will have been validly executed and delivered by the Company. When the
Notes have been issued, executed and
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authenticated in accordance with the terms of the Indenture and delivered
against payment therefor in accordance with the terms hereof and thereof, the
Notes will constitute valid and binding obligations of the Company, enforceable
against it in accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and general equity
principles, and entitled to the benefits of the Indenture. The Offering
Memorandum contains an accurate summary, in all material respects, of the terms
of the Notes.
(k) The Subsidiary Guarantees to be endorsed on the Notes and the
Exchange Notes by each Guarantor have been duly authorized by each Guarantor
and, on the Closing Date, the Subsidiary Guarantees endorsed on the Notes will
have been validly executed and delivered by each such Guarantor. When the Notes
have been issued, executed and authenticated in accordance with the Indenture
and delivered against payment therefor in accordance with the terms hereof and
thereof, the Subsidiary Guarantees of each Guarantor endorsed thereon will
constitute valid and binding obligations of such Guarantor, enforceable against
such Guarantor in accordance with their terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and general equity
principles, and entitled to the benefits of the Indenture. The Offering
Memorandum contains an accurate summary, in all material respects, of the terms
of the Subsidiary Guarantees to be endorsed on the Notes and the Exchange Notes.
(l) The Registration Rights Agreement has been duly authorized by the
Company and each of the Guarantors and, on the Closing Date, will have been
validly executed and delivered by the Company and each of the Guarantors. When
the Registration Rights Agreement has been duly executed and delivered by the
Company and each of the Guarantors, the Registration Rights Agreement will
constitute a valid and binding agreement of the Company and each of the
Guarantors, enforceable against the Company and each Guarantor in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and general equity principles and except as rights
to indemnity and contribution may be limited by Federal or state securities laws
or principles of public policy. The Offering Memorandum contains an accurate
summary, in all material respects, of the terms of the Registration Rights
Agreement.
(m) The execution, delivery and performance of this Agreement and the
other Operative Documents by the Company and each of the Guarantors, compliance
by the Company and each of the Guarantors with all the provisions hereof and
thereof, the issuance and sale of the Notes by the Company, the issuance of the
Subsidiary Guarantees by the Guarantors and the consummation by the Company and
the Guarantors of the transactions contemplated hereby and thereby (i) 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 Subsidiary is a party or by which the Company or any Subsidiary is bound or
to which any of the properties or assets of the Company or any Subsidiary is
subject, (ii) will not result in any violation of the provisions of the charter,
by-laws or other organizational documents of the Company or any Subsidiary,
(iii) will not result in any violation of the provisions of any law or statute
or any order, rule, regulation, judgment or decree of any court or governmental
agency or body having jurisdiction over the Company or any Subsidiary or any of
their respective properties or assets, or (iv) result
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in the imposition or creation of (or the obligation to create or impose) a Lien
under any agreement or instrument to which the Company or any Subsidiary is a
party or by which the Company or any Subsidiary or their respective properties
or assets is bound, except in the case of clauses (i), (iii) and (iv) for such
conflicts, breaches, defaults, violations or Liens which individually or in the
aggregate would not result in a Material Adverse Effect. Except for such
consents, approvals, authorizations, other orders, filings, qualifications or
registrations (i) as have been obtained, (ii) as may be required under
applicable state securities or Blue Sky laws of various jurisdictions in
connection with the purchase and distribution of the Notes by the Initial
Purchasers, (iii) as set forth in the Registration Rights Agreement, and (iv)
which the failure to obtain would not result in a Material Adverse Effect, no
consent, approval, authorization, or order of or filing, qualification or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement or the other Operative
Documents by the Company and each of the Guarantors, compliance by the Company
and each of the Guarantors with all the provisions hereof and thereof, the
issuance and sale of the Notes by the Company, the issuance of the Subsidiary
Guarantees by the Guarantors and the consummation of the transactions
contemplated hereby and thereby.
(n) Neither the Company nor any Subsidiary has sustained, since the
date of the latest quarterly financial statements included in the Offering
Memorandum, 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 in the Offering Memorandum, except losses or interferences
which do not, individually or in the aggregate, have a Material Adverse Effect;
since such date, there has not been any material change in the capital stock or
other equity interest or long-term debt or short-term debt of the Company or any
Subsidiaries or any change having a Material Adverse Effect, or any development
involving a prospective material adverse change, in or affecting the general
affairs, management, consolidated financial position, stockholders' equity or
results of operations of the Company and the Subsidiaries, otherwise than as set
forth or contemplated in the Offering Memorandum; and since such date, except as
otherwise disclosed in the Offering Memorandum, the Company has not (i) issued
or granted any securities, other than pursuant to Company employee benefit
plans, or (ii) declared or paid any dividend on its capital stock.
(o) The historical consolidated financial statements (including the
related notes) of the Company which appear in and are incorporated in the
Preliminary Offering Memorandum and the Offering Memorandum comply as to form in
all material respects with the applicable accounting requirements of the
Securities Act, the Exchange Act, and the Rules and Regulations, present fairly
in all material respects the consolidated financial position and results of
operations of the entities purported to be shown thereby, at the dates and for
the periods indicated, and have been prepared in conformity with accounting
principles generally accepted in the United States of America applied on a
consistent basis throughout the periods involved except as noted therein. The
pro forma financial statements included in the Preliminary Offering Memorandum
and the Offering Memorandum present fairly in all material respects the
historical and proposed transactions contemplated by this Agreement and the
Offering Memorandum; and such pro forma financial statements comply as to form
in all material respects with the applicable accounting requirements of the
Securities Act, the Exchange Act and the Rules and Regulations and have been
prepared on a basis consistent with the historical consolidated financial
statements of the Company. The other historical financial and statistical
information and operating data of
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the Company included in the Preliminary Offering Memorandum and the Offering
Memorandum, historical and pro forma, are in all material respects accurately
presented and prepared on a basis consistent with the financial statements
included in the Preliminary Offering Memorandum and the Offering Memorandum and
the books and records of the Company. The Company is not aware of any facts or
circumstances that would lead it to believe that (i) the combined historical
financial statements of The North Dakota and Utah Refining and Marketing
Business of BP Corporation North America Inc., do not give effect to assumptions
used in the preparation thereof on a reasonable basis under the circumstances
and (ii) the other historical financial and statistical information and
operating data of The North Dakota and Utah Refining and Marketing Business of
BP Corporation North America Inc. included in the Preliminary Offering
Memorandum and the Offering Memorandum are not accurately presented and prepared
on a basis consistent with the financial statements included in the Preliminary
Offering Memorandum and the Offering Memorandum.
(p) Except for the Registration Rights Agreement, there are no
contracts, agreements or understandings between the Company or any Guarantor and
any person granting such person the right to require the Company or such
Guarantor to file a registration statement under the Securities Act with respect
to any securities of the Company or of such Guarantor, owned or to be owned by
such person or to require the Company or such Guarantor to include such
securities with any securities being registered pursuant to any registration
statement filed by the Company under the Securities Act.
(q) Deloitte & Touche LLP, who has audited the consolidated financial
statements of the Company and, to the Company's knowledge, Ernst & Young LLP,
who has audited the combined financial statements of The North Dakota and Utah
Refining and Marketing Business of BP Corporation North America Inc., each of
whose reports is included or incorporated by reference in the Offering
Memorandum and who have delivered the initial letters referred to in Section
7(f) hereof, are independent public accountants under Rule 101 of the AICPA'S
Code of Professional Conduct, and its interpretations and rulings.
(r) Other than as set forth in the Offering Memorandum, there are no
legal or governmental proceedings pending to which the Company or any Subsidiary
is a party or to which any of their respective properties or assets is subject
which (i) could reasonably be expected to have a Material Adverse Effect or (ii)
could materially and adversely affect the consummation by the Company and each
of the Guarantors of their obligations pursuant to this Agreement or, the other
Operative Documents; and to the Company's and each of the Guarantors' knowledge,
no such proceedings are threatened or contemplated by government authorities or
threatened by others.
(s) When the Notes are issued and delivered pursuant to this Agreement,
the Notes will not be of the same class (within the meaning of Rule 144A(d)(3)
under the Securities Act) as any security of the Company listed on any national
securities exchange registered under Section 6 of the Exchange Act or quoted on
an automated inter-dealer quotation system.
(t) Neither the Company nor any of the Subsidiaries or any of its or
their respective affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act, an "Affiliate") has directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise
8
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes or (ii) engaged
in any form of general solicitation or general advertising in connection with
the offering of the Notes (as those terms are used in Regulation D under the
Securities Act), or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act; provided, however, no representation is
made as to the Initial Purchasers or any person acting on their behalf. No
securities of the same class as the Notes have been issued and sold by the
Company within the six-month period immediately prior to the date hereof.
(u) Neither the Company nor any of the Subsidiaries or any of its or
their respective affiliates or any person acting on its or their behalf has
engaged or will engage in any "directed selling efforts" within the meaning of
Regulation S under the Securities Act with respect to the Notes. The Company and
each of the Subsidiaries, each of their affiliates and any person acting on its
or their behalf (other than the Initial Purchasers, as to whom the Company makes
no representation) has complied and will comply with the offering restriction
requirements of Regulation S. To the Company's knowledge, the sale of the Notes
pursuant to Regulation S is not part of a plan or scheme to evade the
registration provisions of the Securities Act.
(v) The Company and each of the Subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and to
conduct its business in the manner described in the Offering Memorandum, subject
in each case to such qualifications as may be set forth in the Offering
Memorandum and except where the failure to have such permits would not have a
Material Adverse Effect; the Company and each of the Subsidiaries has fulfilled
and performed in all material respects all of its current obligations with
respect to such permits and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or results in
any other material impairment of the rights of the holder of any such permits,
subject in each case to such qualifications as may be set forth in the Offering
Memorandum and except where the failure so to fulfill or perform or the
occurrence of such an event would not have a Material Adverse Effect; and,
except as described in the Offering Memorandum, none of such permits contains
any restriction that is materially burdensome to the Company and the
Subsidiaries, taken as a whole.
(w) The Company and each of the Subsidiaries owns or possesses adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights and licenses necessary for the conduct of their respective
businesses, except where the failure to have such permits would not have a
Material Adverse Effect, and have no reason to believe that the conduct of their
respective businesses will conflict with, and have not received any notice of
any claim of conflict with, any such rights of others which, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(x) The Company and each of the Subsidiaries has good and indefeasible
title in fee simple to all real property and good and defensible title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Offering Memorandum
or such as do not materially adversely affect the value of such
9
property or interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries; and all real property, buildings and
vessels held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property, buildings and vessels by the Company and the Subsidiaries.
(y) No labor disturbance by the employees of the Company or any of the
Subsidiaries exists or, to the knowledge of the Company, is imminent which might
be expected to have a Material Adverse Effect; except as disclosed in the
Offering Memorandum, neither the Company nor any of the Subsidiaries is party to
a collective bargaining agreement; and there are no significant unfair labor
practice complaints pending against the Company or any of the Subsidiaries or,
to the best of the Company's knowledge, threatened against any of them which, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(z) The Company and each of the Subsidiaries is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Subsidiaries would have any
liability; neither the Company nor any of the Subsidiaries has incurred and
neither do any of them expect to incur liability under (i) title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including
the regulations and published interpretations thereunder (the "Code"); and each
"pension plan" for which the Company or any Subsidiary would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.
(aa) The Company and each of the Subsidiaries has filed, and as of the
Closing Date will have filed, all federal, state, local and foreign income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined adversely to
the Company or any of the Subsidiaries which has had (nor does the Company have
any knowledge of any tax deficiency which, if determined adversely to the
Company or any of the Subsidiaries, might have) a Material Adverse Effect.
(bb) The Company and each of the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any difference.
(cc) Except as described in the Offering Memorandum and except such
matters as would not, singly or in the aggregate, result in a Material Adverse
Effect, (A) neither the
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Company nor any of the Subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule of
common law or any judicial or administrative order, consent, decree or judgment
thereof, including any judicial or administrative order, consent, decree or
judgment relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and each of the Subsidiaries has all permits,
authorizations and approvals required under any applicable Environmental Laws
and are each in compliance with their requirements, (C) there are no pending or,
to the knowledge of the Company, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of the Subsidiaries and (D) there
are no events or circumstances that might reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or affecting the
Company or any of the Subsidiaries relating to Hazardous Materials or
Environmental Laws.
(dd) The Company is not, and upon the issuance and sale of the Notes as
herein contemplated and the application of the net proceeds therefrom as
described under the caption "Use of Proceeds" in the Offering Memorandum 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, and the rules and regulations thereunder.
(ee) The statements set forth in the Offering Memorandum under the
captions "The Acquisitions," "Business--Government Regulation and Legislation,"
"Description of Other Indebtedness," "Description of the Notes" and "Certain
Federal Income Tax Considerations" insofar as such statements purport to
summarize the provisions of the documents or agreements referred to therein,
matters of law or legal conclusions or federal statutes, laws or regulations,
are accurate and fairly present the information required to be shown.
(ff) None of the Company or the Subsidiaries has taken, nor will any of
them take, directly or indirectly, any action prohibited by Regulation M under
the Securities Act.
(gg) 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 Guarantor that it is considering
imposing) any condition (financial or otherwise) on the Company's or any
Guarantor's retaining any rating assigned as of the date hereof to the Company,
any Guarantor or any securities of the Company or any Guarantor or (ii) has
indicated to the Company or any 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 or any
Guarantor.
11
(hh) None of the Company or the 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 Notes to violate
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System.
(ii) The Company and each of the Subsidiaries has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder or is exempt
therefrom.
The Company acknowledges that the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 7 hereof, counsel to the Company and the Guarantors and counsel to the
Initial Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance. Each certificate signed by
any officer of the Company or any Guarantor and delivered to the Initial
Purchasers or counsel for the Initial Purchasers shall be deemed to be a
representation and warranty by the Company or such Guarantor to the Initial
Purchasers as to the matters covered thereby.
SECTION 2. PURCHASE OF THE NOTES BY THE INITIAL PURCHASERS
(a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees to
purchase from the Company the aggregate principal amount of the Notes set forth
on Schedule I opposite the name of such Initial Purchaser, plus any additional
principal amount of Notes which such Initial Purchaser may become obligated to
purchase pursuant to the provisions of Section 9 hereof, at a purchase price
equal to 97.75% of the principal amount of the Notes.
(b) The Company shall not be obligated to deliver any of the Notes,
except upon payment for all of the Notes to be purchased as hereinafter
provided.
SECTION 3. SALE AND RESALE OF THE NOTES BY THE INITIAL PURCHASERS
(a) You have advised the Company that you propose to offer the Notes
for resale upon the terms and conditions set forth in this Agreement and in the
Offering Memorandum. You hereby represent and warrant to, and agree with, the
Company that you (i) are purchasing the Notes pursuant to a private sale exempt
from registration under the Securities Act, (ii) will not solicit offers for, or
offer or sell, the Notes by means of any form of general solicitation or general
advertising or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act, and (iii) will solicit offers for the Notes
only from, and will offer, sell or deliver the Notes, as part of their initial
offering, only to (A) in the case of offers inside the United States, persons
whom you reasonably believe to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, as such
rule may be amended from time to time ("Rule 144A") or, if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to you that each such
account is a Qualified Institutional
12
Buyer, to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A and (B) in the case of offers outside the United States,
persons other than U.S. persons (as defined in Regulation S) in accordance with
Rule 903 of Regulation S.
(b) In connection with the transactions described in subsection
(a)(iii)(B) of this Section 3, you have offered and sold the Notes, and will
offer and sell the Notes, (i) as part of your distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date (as defined herein) (the "Distribution Compliance Period"),
only in accordance with Rule 903 of Regulation S. Accordingly, the Initial
Purchasers represent and agree that, with respect to the transactions described
in subsection (a)(iii)(B) of this Section 3, neither they, nor any of their
Affiliates, nor any person acting on their behalf has engaged or will engage in
any directed selling efforts with respect to the Notes, and that they have
complied and will comply with the offering restrictions requirements of
Regulation S. The Initial Purchasers agree that, at or prior to the confirmation
of sale of the Notes pursuant to subsection (a)(iii)(B) of this Section 3, they
shall have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Notes from the Initial
Purchasers during the Distribution Compliance 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 commencement of the offering and the time of
delivery of the Securities, except in either case in accordance with Regulation
S or Rule 144A under the Securities Act. The terms used above have the meaning
given to them by Regulation S."
SECTION 4. DELIVERY OF AND PAYMENT FOR THE NOTES
(a) Payment of the purchase price for, and delivery of, the Notes shall
be made at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other place as shall be agreed upon by the
Company and you, at 9:30 a.m. (New York time), on November 6, 2001 or at such
other time or date as you and the Company shall determine (such date and time of
payment and delivery being herein called the "Closing Date").
(b) On the Closing Date, payment shall be made to the Company in
immediately available funds by wire transfer to such account or accounts as the
Company shall specify prior to the Closing Date or by such means as the parties
hereto shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Notes. Upon delivery, the Notes shall be registered
in such names and in such denominations as the Initial Purchasers shall request
in writing not less than two full business days prior to the Closing Date. For
the purpose of expediting the checking and packaging of certificates evidencing
the Notes, the Company agrees to make such certificates available for inspection
not later than 2:00 P.M. on the business day at least 24 hours prior to the
Closing Date.
13
SECTION 5. FURTHER AGREEMENTS OF THE COMPANY AND THE GUARANTORS
The Company and each of the Guarantors further agrees:
(a) To furnish to you, without charge, during the period referred to in
paragraph (c) below, as many copies of the the Offering Memorandum and any
supplements and amendments thereto as you may reasonably request.
(b) Prior to making any amendment or supplement to the Offering
Memorandum, the Company shall furnish a copy thereof to the Initial Purchasers
and counsel to the Initial Purchasers and will not effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by notice to
the Company after a reasonable period to review, which shall not in any case be
longer than three business days after receipt of such copy.
(c) If, at any time prior to completion of the distribution of the
Notes by you to purchasers, any event shall occur or condition exist as a result
of which it is necessary, in the opinion of counsel for you or counsel for the
Company, to amend or supplement the Offering Memorandum in order that the
Offering Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue statement or
omission or so that the Offering Memorandum, as so amended or supplemented, will
comply with applicable law and to furnish you without charge such number of
copies as you may reasonably request.
(d) So long as the Notes are outstanding and are "Restricted
Securities" within the meaning of Rule 144(a)(3) under the Securities Act during
any period in which it is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, to furnish to holders of the Notes and prospective
purchasers of Notes designated by such holders, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(e) For a period of five years following the date of the Offering
Memorandum, to furnish to the Initial Purchasers copies of all materials
furnished by the Company to its stockholders and all public reports and all
reports and financial statements furnished by the Company to the principal
national securities exchange upon which the Notes may be listed pursuant to
requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder.
(f) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Notes for offering and sale (or
obtain an exemption from registration) under the securities laws of such
jurisdictions as the Initial Purchasers may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Notes; provided, however, that the Company shall not be required to qualify
as a foreign corporation or a dealer in securities or to execute a general
consent to service of process in any jurisdiction in any action other than one
arising out of the offering or sale of the Notes.
14
(g) For a period of 90 days from the Closing Date, not to, directly of
indirectly, (A) offer, sell, contract to sell or otherwise dispose of any
additional securities of the Company substantially similar to the Notes or any
securities convertible into or exchangeable for or that represent the right to
receive any such similar securities, other than offering and exchanging the
Exchange Notes to holders of the Notes in the Exchange Offer, or (B) enter into
any swap or derivatives transaction that transfers to another, in whole or in
part, any of the economic benefits or risks of ownership of such securities,
whether any such transaction described in clause (A) or (B) above is to be
settled by delivery of Notes, or other securities, in cash or otherwise, in each
case, without the prior written consent of ▇▇▇▇▇▇ Brothers Inc.
(h) To use its best efforts to permit the Notes to be designated
Private Offerings, Resales and Trading through Automated Linkages Market
("PORTAL") securities in accordance with the rules and regulations adopted by
the National Association of Securities Dealers, Inc. relating to trading in the
PORTAL Market and to permit the Notes to be eligible for clearance and
settlement through The Depository Trust Company (the "DTC").
(i) Except following the effectiveness of the Registration Statement
(as defined in the Registration Rights Agreement), not to, and to cause its
affiliates (as defined in Rule 501(b) under the Act) not to, solicit any offer
to buy or offer to sell the Notes by means of any form of general solicitation
or general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act.
(j) Not to, and to cause its affiliates not to, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) in a transaction that could be integrated with
the sale of the Notes in a manner that would require the registration under the
Securities Act of the Notes.
(k) To take such steps as shall be necessary to ensure that neither the
Company nor any Subsidiary of the Company shall become an "investment company"
within the meaning of such term under the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission thereunder.
(l) To comply with the agreements in the Indenture, the Registration
Rights Agreement and the other Operative Documents.
(m) To apply the net proceeds from the sale of the Notes as set forth
under the caption "Use of Proceeds" in the Offering Memorandum.
(n) To do all things required or necessary to be done or performed
under this Agreement prior to the Closing Date by such date and to satisfy the
closing conditions set forth in Section 7 hereof.
SECTION 6. EXPENSES
Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company and the Guarantors
agree to pay or cause to be paid all reasonable expenses incident to the
performance of the obligations of the Company and
15
the Guarantors under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and the Guarantors and accountants of the
Company and the Guarantors in connection with the sale and delivery of the Notes
to the Initial Purchasers and pursuant to the resales thereof by the Initial
Purchasers, and all other fees or expenses in connection with the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum and all amendments and supplements to any of the foregoing
(including financial statements), including the mailing and delivering of copies
thereof to the Initial Purchasers and persons designated by them in the
quantities specified; (ii) all costs and expenses related to the delivery of the
Notes to the Initial Purchasers and pursuant to the resales thereof by the
Initial Purchasers; (iii) all expenses in connection with the registration or
qualification of the Notes and the Subsidiary Guarantees for offer and sale
under the securities or Blue Sky laws of the several states and all costs of
producing any Blue Sky memorandum in connection therewith (including the filing
fees and reasonable fees and disbursements of counsel for the Initial Purchasers
in connection with such registration or qualification and memorandum relating
thereto); (iv) the cost of printing certificates representing the Notes and the
Subsidiary Guarantees, (v) all expenses and listing fees in connection with the
application for quotation of the Notes on PORTAL; (vi) the fees and expenses of
the Trustee and the Trustee's counsel in connection with the Indenture, the
Notes and the Subsidiary Guarantees; (vii) the costs and expenses of any
transfer agent, registrar and/or depositary (including DTC); (viii) any fees
charged by rating agencies for the rating of the Notes; (ix) all costs and
expenses of the Exchange Offer and any Registration Statement, as set forth in
the Registration Rights Agreement; and (x) all other costs and expenses incident
to the performance of the obligations of the Company and the Guarantors
hereunder for which provision is not otherwise made in this Section; provided,
however, that except as provided in this Section 6 and in Section 11, the
Initial Purchasers shall pay their own costs and expenses, including the costs
and expenses of their own counsel, any transfer taxes or other taxes payable
thereon, and the expenses of advertising any offering of the Notes made by the
Initial Purchasers.
SECTION 7. CONDITIONS TO THE INITIAL PURCHASERS' OBLIGATIONS
The obligations of the Initial Purchasers hereunder are
subject to the accuracy, when made and on the Closing Date, of the
representations and warranties of the Company and the Guarantors contained
herein, to the performance by the Company and the Guarantors of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Initial Purchasers shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Offering Memorandum or any
amendment or supplement thereto contains any untrue statement of a fact which,
in the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Initial
Purchasers, is material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Company and the Initial Purchasers may agree.
16
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of the Operative Documents, and all other legal
matters relating to this Agreement and the transactions contemplated hereby
shall be reasonable satisfactory in all material respects to counsel for the
Initial Purchasers, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them to
pass upon such matters.
(d) The Initial Purchasers shall have received from Fulbright &
▇▇▇▇▇▇▇▇ L.L.P. their written opinion, as counsel to the Company, addressed to
the Initial Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, to the effect set forth in
Exhibit B hereto.
(e) The Initial Purchasers shall have received from ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.,
general counsel of the Company, his written opinion, as counsel to the Company,
addressed to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the effect set
forth in Exhibit C hereto.
(f) At the time of execution of this Agreement, the Initial Purchasers
shall have received from each of Deloitte & Touche LLP and Ernst & Young LLP,
letters, in form and substance satisfactory to the Initial Purchasers, addressed
to the Initial Purchasers and dated the date hereof, (i) 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,
(ii) stating, as of the date hereof (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Offering Memorandum, as of a date not more
than five business days prior to the date hereof), the conclusions and findings
of such firm with respect to the financial information, operating data and other
matters ordinarily covered by accountants' "comfort letters" to underwriters,
including the financial information contained or incorporated by reference in
the Offering Memorandum as identified by you.
(g) With respect to the letters of Deloitte & Touche LLP and Ernst &
Young LLP referred to in the preceding paragraph and delivered to the Initial
Purchasers concurrently with the execution of this Agreement (the "initial
letters"), the Company shall have furnished to the Initial Purchasers letters
(the "bring-down letters") of such accountants, addressed to the Initial
Purchasers and dated the Closing Date, (i) 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, (ii) stating,
as of the date of the bring-down letters (or, with respect to matters involving
changes or developments since the respective dates as of which specified
financial information is given in the Offering Memorandum, as of a date not more
than five business days prior to the date of the bring-down letters), the
conclusions and findings of such firm with respect to the financial information,
operating data and other matters covered by the respective initial letters and
(iii) confirming in all material respects the conclusions and findings set forth
in the initial letters.
(h) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of (i) the Senior Vice President and Chief
Financial Officer of the Company and (ii) the Vice President and Treasurer of
the Company stating that:
17
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of the Closing Date and
the Company has complied with all its agreements contained herein;
(ii) (A) Neither the Company nor any of the Subsidiaries has
sustained since the date of the latest quarterly financial statements
included in or incorporated by reference into the Offering Memorandum
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
Offering Memorandum and (B) since such date there has not been any
material change in the capital stock, long-term debt or short-term debt
of the Company or any of the Subsidiaries or any material change, or
any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position,
stockholders' equity, results of operations or prospects of the Company
and the Subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Offering Memorandum; and
(iii) They have carefully examined the Preliminary Offering
Memorandum and the Offering Memorandum and, in their opinion (A) the
Preliminary Offering Memorandum and the Offering Memorandum, as of
their respective dates did not include any untrue statement of a
material fact and did not 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, and (B) since the date of the
Offering Memorandum, no event has occurred which should have been set
forth in a supplement or amendment to the Offering Memorandum.
(i) (i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements included in
or incorporated by reference into the Offering Memorandum 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 Offering Memorandum and (ii) since such date there shall not
have been any material change in the capital stock, long-term debt or short-term
debt of the Company or any of its Subsidiaries or any material change, or any
development involving a prospective material change, in or affecting the general
affairs, management, consolidated financial position, stockholders' equity or
results of operations of the Company and its Subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Offering Memorandum, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the delivery of the
Notes on the terms and in the manner contemplated in the Offering Memorandum.
(j) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company or any
Guarantor or the securities of the Company or any Guarantor by any "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of the
Notes.
18
(k) The Company, the Guarantors and the Trustee shall have entered into
the Indenture and the Initial Purchasers shall have received counterparts
thereof.
(l) The Company, the Guarantors and the Initial Purchasers shall have
entered into the Registration Rights Agreement and the Initial Purchasers shall
have received counterparts thereof.
(m) The Initial Purchasers shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers, their opinion, dated the Closing
Date, with respect to such matters as the Initial Purchasers may reasonably
require, and the Company shall have furnished to such counsel such documents and
information as they may reasonably request for the purpose of enabling them to
pass upon such matters.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchaser.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION
(a) The Company and each Guarantor, jointly and severally, shall
indemnify and hold harmless each Initial Purchaser, its officers and employees
and each person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act, from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales
of Notes), to which that Initial Purchaser, officer, employee or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Preliminary Offering Memorandum, the Offering Memorandum or
in any amendment or supplement thereto, or (B) in any Blue Sky application or
other document prepared or executed by the Company (or based upon any written
information furnished by the Company) specifically for the purpose of qualifying
any or all of the Notes under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter
called a "Blue Sky Application"), (ii) the omission or alleged omission to state
in the Preliminary Offering Memorandum, the Offering Memorandum or in any
amendment or supplement thereto, or in any Blue Sky Application, any material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act, or any alleged act or failure
to act, by any Initial Purchaser in connection with, or relating in any manner
to, the Notes or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon matters covered by clause (i) or (ii) above (provided that the
Company and the Guarantors shall not be liable in the case of any matter covered
by this clause (iii) to the extent that it is determined in a final judgment by
a court of competent jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such act or failure to act undertaken or
omitted to be taken by such Initial Purchaser through its gross negligence or
willful misconduct), and shall reimburse that Initial Purchaser and each
officer, employee and controlling person promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser, officer, employee
or controlling person in connection with investigating or defending or preparing
to defend against any such loss, claim,
19
damage, liability or action as such expenses are incurred; provided, however,
that the Company and the Guarantors shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in the Preliminary Offering Memorandum or the Offering
Memorandum, as appropriate, or in any such amendment or supplement, or in any
Blue Sky Application in reliance upon and in conformity with the written
information furnished to the Company by or on behalf of any Initial Purchaser
specifically for inclusion therein and described in Section 8(e); provided,
further, that with respect to any such untrue statement or omission made in the
Preliminary Offering Memorandum, the indemnity agreement contained in this
Section 8(a) shall not enure to the benefit of such Initial Purchaser from whom
the person asserting any such losses, claims, damages or liabilities purchased
the Securities concerned if, to the extent that such sale was an initial sale by
such Initial Purchaser and any such loss claim, damage or liability of that
Initial Purchaser is a result of the fact that both (A) a copy of the Offering
Memorandum was not sent or given to such person at or prior to written
confirmation of the sale of such Notes to such person and (B) the untrue
statement or omission in the Preliminary Offering Memorandum was corrected in
the Offering Memorandum unless, in either case, such failure to deliver the
Offering Memorandum was a result of noncompliance by the Company with Section
5(c) hereof. The foregoing indemnity agreement is in addition to any liability
which the Company or any of the Guarantors may otherwise have to any Initial
Purchaser or to any officer, employee or controlling person of any Initial
Purchaser.
(b) Each Initial Purchaser, jointly and not severally, shall indemnify
and hold harmless the Company and the Guarantors, and their respective
directors, officers and employees, and each person, if any, who controls the
Company within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof,
to which the Company, any such director, officer or employee, or any controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in the Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto, or (B) in any Blue Sky Application or
(ii) the omission or alleged omission to state in the Preliminary Offering
Memorandum or the Offering Memorandum or in any amendment or supplement thereto,
or in any Blue Sky Application, any material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
the written information furnished to the Company by or on behalf of such Initial
Purchaser specifically for inclusion therein and described in Section 8(e), and
shall reimburse the Company and the Guarantors and any such director, officer or
employee, or any such controlling person, for any legal or other expenses
reasonably incurred by the Company and the Guarantors or any such director,
officer or employee, or any controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any Initial Purchaser may
otherwise have to the Company and the Guarantors or any such director, officer
or employee, or any controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect
20
thereof is to be made against the indemnifying party under this Section 8,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such failure
and, provided further, that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the indemnified party shall have
the right to employ counsel to represent all indemnified parties who may be
subject to liability arising out of any claim in respect of which indemnity may
be sought by the indemnified parties against the indemnifying party under this
Section 8 if, (i) the employment of such counsel shall have been authorized by
the indemnifying party in connection with the defense of such action, (ii) the
indemnifying party shall not have engaged counsel reasonably promptly to take
charge of the defense of such action or (iii) counsel for any of the indemnified
parties shall have reasonably concluded that there may be defenses available to
the indemnified parties that are in addition to or in conflict with those
available to the indemnifying party, and, in that event, the fees and expenses
of such separate counsel shall be paid by the indemnifying party; provided,
further, that in connection with any proceedings or related proceedings in the
same jurisdiction, the indemnifying party shall not be liable for the legal fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel). No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with its written consent or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
and the Guarantors, on the one hand, and the Initial Purchasers, on the other,
from the offering of the Notes or (ii) if the
21
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 and
the Guarantors, on the one hand, and the Initial Purchasers, on the other, with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand, and the Initial Purchasers on the other, with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Notes purchased under this Agreement
(before deducting expenses) received by the Company and the Guarantors, on the
one hand, and the total underwriting discounts and commissions received by the
Initial Purchasers with respect to the Notes purchased under this Agreement, on
the other hand, bear to the total gross proceeds from the offering of the Notes
under this Agreement. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Guarantors, on the one hand, or the Initial Purchasers, on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, the Guarantors and the Initial Purchasers agree that it would not
be just and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 8(d) shall be deemed to include, for purposes of this Section 8(d), 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 Section 8(d), the Initial Purchasers
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Notes sold and distributed by it was offered to the
purchasers exceeds the amount of any damages which the Initial Purchasers have
otherwise paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The Initial Purchasers severally confirm and the Company and the
Guarantors acknowledge that the statements with respect to the offering and
stabilization of the Notes set forth in the eighth full paragraph on page ii,
the third, seventh, eighth, tenth and eleventh paragraphs and the fourth
sentence of the sixth paragraph in the "Plan of Distribution" section of the
Preliminary Offering Memorandum and the Offering Memorandum are correct and
constitute the only information furnished in writing to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Offering
Memorandum.
SECTION 9. DEFAULT BY ONE OR MORE OF THE INITIAL PURCHASERS
If one or more of the Initial Purchasers shall fail at the
Closing Date to purchase the Notes which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the remaining Initial
Purchasers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting Initial Purchasers, or any
other Initial Purchasers, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as
22
may be agreed upon and upon the terms herein set forth: if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
aggregate principal amount of the Notes to be purchased hereunder, each of the
non-defaulting Initial Purchasers shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting Initial Purchasers; provided, however, that no non-defaulting
Initial Purchaser shall be obligated by this provision to purchase more than
110% of the principal amount of Notes that it agreed to purchase pursuant to the
terms of Section 2, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate
principal amount of the Notes to be purchased hereunder, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser.
No action taken pursuant to this Section shall relieve any
defaulting Initial Purchaser from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Initial Purchasers or the Company
shall have the right to postpone the Closing Date for a period not exceeding
seven days in order to effect any required changes in the Offering Memorandum or
in any other documents or arrangements. As used herein, the term "Initial
Purchaser" includes any person substituted for an Initial Purchaser under this
Section 9.
SECTION 10. TERMINATION
The obligations of the Initial Purchasers hereunder may be
terminated by them by notice given to and received by the Company prior to
delivery of and payment for the Notes if, prior to that time, (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by Federal or New York State authorities, (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such); provided, however, in
the case of (iii) and (iv), as to make it, in the judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering or
delivery of the Notes on the terms and in the manner contemplated in the
Offering Memorandum.
SECTION 11. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES
If the sale of Notes provided for herein is not consummated
because any condition to the obligations of the Initial Purchasers set forth in
Section 7 hereof is not satisfied, because of any termination pursuant to
Section 10 hereof or because of any refusal, inability or failure on
23
the part of the Company to perform any agreement herein or comply with any
provision hereof other than by reason of a default by the Initial Purchasers,
the Company shall reimburse the Initial Purchasers for the reasonable fees and
expenses of its counsel and for such other out-of-pocket expenses as shall have
been incurred by it in connection with this Agreement and the proposed purchase
of the Notes, and upon demand the Company shall pay the full amount thereof to
the Initial Purchasers.
SECTION 12. NOTICES, ETC.
All statements, requests, notices and agreements hereunder
shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
Floor, High Yield Capital Markets, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b) 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 Offering
Memorandum, Attention: Vice President and Treasurer (Facsimile: 210-283-2080).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
SECTION 13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT
This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers, the Company, the Guarantors and their respective
successors. This Agreement and the terms and provisions hereof are for the sole
benefit of only those persons, except that (x) the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the officers and employees of the Initial
Purchasers and the person or persons, if any, who control the Initial Purchasers
within the meaning of Section 15 of the Securities Act and (y) the indemnity
agreement of the Initial Purchasers contained in Section 8(b) of this Agreement
shall be deemed to be for the benefit of directors, officers and employees of
the Company and any person controlling the Company within the meaning of Section
15 of the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
13, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
SECTION 14. SURVIVAL
The respective indemnities, representations, warranties and
agreements of the Company and the Initial Purchasers contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Notes and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
24
SECTION 15. DEFINITION OF "BUSINESS DAY"
For purposes of this Agreement, "business day" means any day
on which the New York Stock Exchange, Inc. is open for trading.
SECTION 16. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.
SECTION 17. COUNTERPARTS
This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
SECTION 18. HEADINGS
The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement among the
Company, the Guarantors and the Initial Purchasers, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
TESORO PETROLEUM CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
FAR EAST MARITIME COMPANY
GOLD STAR MARITIME COMPANY
TESORO FINANCIAL SERVICES HOLDING COMPANY
VICTORY FINANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Person
DIGICOMP INC.
KENAI PIPE LINE COMPANY
SMILEY'S SUPER SERVICE, INC.
TESORO ALASKA COMPANY
TESORO ALASKA PIPELINE COMPANY
TESORO AVIATION COMPANY
TESORO GAS RESOURCES COMPANY, INC.
TESORO HAWAII CORPORATION
TESORO HIGH PLAINS PIPELINE COMPANY
TESORO MARINE SERVICES HOLDING COMPANY
TESORO MARINE SERVICES, INC.
TESORO MARITIME COMPANY
TESORO NORTHSTORE COMPANY
TESORO PETROLEUM COMPANIES, INC.
TESORO REFINING, MARKETING & SUPPLY COMPANY
TESORO SOUTH PACIFIC PETROLEUM CORPORATION
TESORO TECHNOLOGY COMPANY
TESORO VOSTOK COMPANY
TESORO WEST COAST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
Accepted:
▇▇▇▇▇▇ BROTHERS INC.
ABN AMRO, INCORPORATED
BANK OF AMERICA SECURITIES LLC
BANC ONE CAPITAL MARKETS, INC.
CREDIT LYONNAIS SECURITIES (USA), INC.
SCOTIA CAPITAL (USA) INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
----------------------------
(Authorized Representative)
▇▇▇ ▇▇▇▇▇▇
Managing Director
SCHEDULE I
PRINCIPAL AMOUNT OF
NAME OF INITIAL PURCHASER SECURITIES
------------------------- -------------------
▇▇▇▇▇▇ Brothers Inc................................ $129,000,000
ABN AMRO, Incorporated............................. 17,200,000
Bank of America Securities LLC..................... 17,200,000
Banc One Capital Markets, Inc. .................... 17,200,000
Credit Lyonnais Securities (USA), Inc. ............ 17,200,000
Scotia Capital (USA) Inc. ......................... 17,200,000
------------
Total..................................... $215,000,000
============
SCHEDULE II
LIST OF GUARANTORS
Digicomp, Inc., a Delaware corporation
Far East Maritime Company, a Delaware corporation
Gold Star Maritime Company, a Delaware corporation
Kenai Pipe Line Company, a Delaware corporation
Smiley's Super Service, Inc., a Hawaii corporation
Tesoro Alaska Company, a Delaware corporation
Tesoro Alaska Pipeline Company, a Delaware corporation
Tesoro Aviation Company, a Delaware corporation
Tesoro Financial Services Holding Company, a Delaware corporation
Tesoro Gas Resources Company, Inc., a Delaware corporation
Tesoro Hawaii Corporation, a Hawaii corporation
Tesoro High Plains Pipeline Company, a Delaware corporation
Tesoro Marine Services Holding Company, a Delaware corporation
Tesoro Marine Services, Inc., a Delaware corporation
Tesoro Maritime Company, a Delaware corporation
Tesoro Northstore Company, an Alaska corporation
Tesoro Petroleum Companies, Inc., a Delaware corporation
Tesoro Refining, Marketing & Supply Company, a Delaware corporation
Tesoro South Pacific Petroleum Company, a California corporation
Tesoro Technology Company, a Delaware corporation
Tesoro Vostok Company, a Delaware corporation
Tesoro West Coast Company, a Delaware corporation
Victory Finance Company, a Delaware corporation
SCHEDULE III
LIST OF SUBSIDIARIES
Coastwide Marine Services, Inc., a Texas corporation
Digicomp, Inc., a Delaware corporation
Far East Maritime Company, a Delaware corporation
Gold Star Maritime Company, a Delaware corporation
Interior Fuels Company, an Alaska corporation
Kenai Pipe Line Company, a Delaware corporation
Smiley's Super Service, Inc., a Hawaii corporation
Tesoro Alaska Company, a Delaware corporation
Tesoro Alaska Pipeline Company, a Delaware corporation
Tesoro Aviation Company, a Delaware corporation
Tesoro Crude Oil Company, a Delaware corporation
Tesoro Environmental Products Company, a Delaware corporation
Tesoro Environmental Resources Company, a Delaware corporation
Tesoro Equipment Company, a Delaware corporation
Tesoro Financial Services Holding Company, a Delaware corporation
Tesoro Gas Resources Company, Inc., a Delaware corporation
Tesoro Gasoline Marketing Company, a Delaware corporation
Tesoro Geotech Company, a Delaware corporation
Tesoro Hawaii Corporation, an Hawaii corporation
Tesoro High Plains Company, a Delaware corporation
Tesoro High Plains Pipeline Company, a Delaware corporation
Tesoro Indonesia Petroleum Company, a Delaware corporation
Tesoro Latin America Company, a Delaware corporation
Tesoro Marine Services Holding Company, a Delaware corporation
Tesoro Marine Services, Inc., a Delaware corporation
Tesoro Maritime Company, a Delaware corporation
Tesoro Northstore Company, an Alaska corporation
Tesoro Petroleum Companies, Inc., a Delaware corporation
Tesoro Petroleum (Singapore) Pte Ltd., a Singapore company
Tesoro Pump & Valve Company, a Delaware corporation
Tesoro Refining, Marketing & Supply Company, a Delaware corporation
Tesoro Rockies Company, a Delaware corporation
Tesoro South Pacific Petroleum Corporation, a California corporation
Tesoro Technology Company, a Delaware corporation
Tesoro Vostok Company, a Delaware corporation
Tesoro Wastach Company, a Delaware corporation
Tesoro West Coast Company, a Delaware corporation
Victory Finance Company, a Delaware corporation
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
EXHIBIT B
OPINION OF FULBRIGHT & ▇▇▇▇▇▇▇▇ L.L.P.
November __, 2001
▇▇▇▇▇▇ Brothers Inc.
ABN AMRO, Incorporated
Bank of America Securities LLC
Banc One Capital Markets, Inc.
Credit Lyonnais Securities (USA), Inc.
Scotia Capital (USA) Inc.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
High Yield Capital Markets
Jersey City, New Jersey 07302
Ladies and Gentlemen:
We have acted as counsel to Tesoro Petroleum Corporation, a
Delaware corporation (the "Company"), in connection with the sale to you of
$215,000,000 aggregate principal amount of the Company's 9 5/8% Senior
Subordinated Notes due 2008 (the "Notes") pursuant to a
Purchase Agreement dated
November 1, 2001 (the "
Purchase Agreement"), among you, the Company and the
Guarantors named therein. Capitalized terms used but not defined herein have the
same meanings herein as such terms have in the
Purchase Agreement. The opinions
expressed herein are being furnished to you at the request of the Company
pursuant to Section 7(d) of the
Purchase Agreement.
We have participated in the preparation of, and have examined,
the Offering Memorandum dated November 1, 2001. We have also examined originals
or copies of such corporate records, as applicable, of the Company and the
Guarantors, certificates and other communications of public officials,
certificates of officers of the Company and the Guarantors and such other
documents as we have deemed necessary for the purpose of rendering the opinions
expressed herein. As to questions of fact material to those opinions, we have,
to the extent we deemed appropriate, relied on certificates of officers of the
Company and the Guarantors, certificates and other communications of public
officials and on the factual representations of the Company and the Guarantors
contained in the
Purchase Agreement. We have assumed the genuineness of all
signatures on, and the authenticity of, all documents submitted to us as
originals, the conformity to authentic original documents of all documents
submitted to us as copies, the due authorization, execution and delivery by the
parties thereto of all documents examined by us, and the legal capacity of each
individual who signed any of those documents.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
(i) The Indenture constitutes, under the laws of
New York, a
valid and binding agreement of the Company and each of the Guarantors,
assuming due authorization, delivery and performance by the Trustee,
enforceable against the Company and each of the Guarantors in
accordance with its terms.
(ii) When the Notes have been issued, executed and
authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms of the
Indenture and the
Purchase Agreement, the Notes will constitute, under
the laws of
New York, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
(iii) When the Notes have been issued, executed and
authenticated in accordance with the Indenture and delivered against
payment therefor in accordance with the terms the Indenture and the
Purchase Agreement, the Subsidiary Guarantees of each Guarantor
endorsed thereon will constitute, under the laws of
New York, valid and
binding obligations of such Guarantor, enforceable against such
Guarantor in accordance with their terms.
(iv) The Registration Rights Agreement constitutes, under the
laws of
New York, a valid and binding agreement of the Company and each
of the Guarantors, enforceable against the Company and each Guarantor
in accordance with its terms.
(v) Except for such consents, approvals, authorizations, other
orders, filings, qualifications or registrations, as have been obtained
under the Securities Act or Exchange Act, and as may be required under
applicable state securities or Blue Sky laws, as to which we express no
opinion, no consent, approval, authorization, or order of or filing,
qualification or registration with, any governmental agency or body is
required by any statutory law or regulation as a condition for the
execution and delivery of the
Purchase Agreement or the other Operative
Documents by the Company or any of the Guarantors, or for the
performance by the Company or any of the Guarantors of their
obligations thereunder.
(vi) The Company is not, and after giving effect to the
issuance and sale of the Notes and the application of the net proceeds
therefrom as described in the Offering Memorandum 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, and the rules and regulations thereunder.
(vii) The statements set forth in the Offering Memorandum
under the caption "Certain Federal Income Tax Considerations," insofar
as they refer to statements of law or legal conclusions, are accurate
in all material respects and presents fairly the information described
therein.
(viii) To our knowledge, there are no contracts or other
documents that are required to be described in the Company's filings
under the Exchange Act or filed as exhibits to the Company's filings
under the Exchange Act that have not been so described or filed.
(ix) The Offering Memorandum (other than financial statements,
schedules and other financial or statistical data included or
incorporated by reference therein or omitted therefrom, as to which we
express no opinion) complies as to form in all material respects with
the requirements of the Securities Act and the rules and regulations of
the Commission under the Securities Act.
(x) Assuming (a) the Notes are not offered to you by means of
any form of general solicitation or general advertising or in any
manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (b) neither the Company nor any affiliate (as
such term is defined in Rule 501(b) of Regulation D under the
Securities Act) of the Company has directly, or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security that is or could be integrated with the
Notes in a manner that would require registration under the Securities
Act, then no registration under the Securities Act of the Notes or
qualification of the Indenture in respect of the Notes under the Trust
Indenture Act is required in connection with the issuance and sale of
the Notes in the manner contemplated by the
Purchase Agreement.
(xi) Assuming the Company uses the proceeds as described in
the "Use of Proceeds" section of the Offering Memorandum, to our
knowledge, neither the Purchase Agreement nor the issuance or sale of
the Notes will violate Regulation T (12 C.F.R. Part 220), Regulation U
(12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board
of Governors of the Federal Reserve System.
We have participated in conferences with certain officers and
representatives of the Company, counsel to the Initial Purchasers,
representatives of the independent public accountants of the Company, and
representatives of the Initial Purchasers at which the contents of the Offering
Memorandum and related matters were discussed and, although we are not passing
upon and do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering Memorandum (except as
stated in paragraph (vii) above), on the basis of the foregoing (relying as to
materiality upon the statements of officers and other representatives of the
Company), no information has come to our attention that has caused us to believe
that the Offering Memorandum as of its date contained any 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; it being understood that we make no comment as to the
financial statements, schedules and other financial or statistical data included
in the Offering Memorandum.
The opinions expressed herein are limited exclusively to the
laws of the State of Texas, the laws of the State of New York, the General
Corporation Law of the State of Delaware and the federal laws of the United
States of America.
In rendering the opinions expressed in paragraph (i), we have
assumed that the Trustee has power and authority to enter into and perform its
obligations under the Indenture, that the Indenture has been duly authorized,
executed and delivered by the Trustee, and that the Indenture constitutes the
legal, valid and binding obligation of the Trustee, enforceable against the
Trustee in accordance with the terms of the Indenture.
The opinions expressed in paragraphs (i), (ii), (iii) and (iv)
hereof are subject to the following:
(a) The enforceability of the Indenture, the Notes, the Subsidiary
Guarantees of each Guarantor and the Registration Rights Agreement may be
limited or affected by (i) bankruptcy, insolvency, reorganization, moratorium,
liquidation, rearrangement, fraudulent transfer, fraudulent conveyance and other
similar laws (including court decisions) now or hereafter in effect and
affecting the rights and remedies of creditors generally or providing for the
relief of debtors, (ii) the refusal of a particular court to grant equitable
remedies, including without limitation specific performance and injunctive
relief, and (iii) general principles of equity (regardless of whether such
remedies are sought in a proceeding in equity or at law).
(b) In rendering the foregoing opinions, we express no opinion as to
the legality, validity, enforceability or binding effect of provisions of each
of the referenced agreements relating to indemnities and rights of contribution
to the extent prohibited by public policy or that might require indemnification
for losses or expenses caused by negligence, gross negligence, willful
misconduct, fraud or illegality of an indemnified party.
(c) With respect to Section 7.07 of the Indenture, we express no
opinion with respect to the enforceability of such section should limitations on
the compensation of trustees be enacted in the future.
As used herein, the phrase "to our knowledge" or words of
similar import means conscious awareness of facts or other information by the
lawyers in our firm whom we have identified, in accordance with our customary
procedures, as having regularly devoted substantive attention to legal matters
on behalf of the Company.
The opinions expressed herein are furnished to you for your
sole benefit in connection with the transactions contemplated by the Purchase
Agreement. The opinions expressed herein may not be relied upon by you for any
other purpose and may not be relied upon for any purpose by any other person
without our prior written consent, except that the Trustee may rely upon this
opinion in connection with those transactions.
Very truly yours,
EXHIBIT C
OPINION OF ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
November __, 2001
▇▇▇▇▇▇ Brothers Inc.
ABN AMRO, Incorporated
Bank of America Securities LLC
Banc One Capital Markets, Inc.
Credit Lyonnais Securities (USA), Inc.
Scotia Capital (USA) Inc.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Floor
High Yield Capital Markets
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Re: Purchase Agreement dated November 1, 2001 (the "Purchase
Agreement"), among Tesoro Petroleum Corporation (the "Company"), the Guarantors
named therein, and the Initial Purchasers listed on Schedule I thereto
Ladies and Gentlemen:
I am Executive Vice President, General Counsel and Secretary
of Tesoro Petroleum Corporation, a Delaware corporation (the "Company"). This
opinion is delivered to you pursuant to Section 7(e) of the Purchase Agreement.
Capitalized terms not otherwise defined herein are defined as set forth in the
Purchase Agreement.
In connection with the opinions hereinafter expressed, I have
(i) examined such corporate documents and records and certificates of public
officials and the Offering Memorandum, and (ii) received such information from
officers and representatives of the Company and the Guarantors, as I have deemed
necessary or appropriate for the purposes of this opinion.
In rendering the opinions herein set forth, I have assumed (i)
the due authorization, execution and delivery of each Operative Document by all
parties to such document other than the Company and the Guarantors and that each
such document is valid, binding and enforceable against the parties thereto
other than the Company and the Guarantors, (ii) the legal capacity of natural
persons, (iii) the genuineness of all signatures, (iv) the authenticity of all
documents submitted to me as originals, and (v) the conformity to original
documents of all documents submitted to me as copies. As to various questions of
fact material to my opinion, I have relied upon the representations made in the
Purchase Agreement.
Based upon the following and subject to the qualifications set
forth below, I am of the opinion that:
(i) The Company has been duly incorporated and is validly
existing as a corporation, in good standing under the laws of the State
of Delaware, duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction where it is
required to be so qualified and the failure to do so would have a
Material Adverse Effect and has all corporate power and authority
necessary to own and lease its properties and conduct its business as
described in the Offering Memorandum.
(ii) Each of the Guarantors and the Subsidiaries has been duly
incorporated or formed, as the case may be, and is validly existing as
a corporation in good standing under the laws of the jurisdiction of
its incorporation or formation and is in good standing as a foreign
corporation in each jurisdiction where it is required to be so
qualified and the failure to do so would have a Material Adverse Effect
and has all corporate or other power and authority, as the case may be,
necessary to own and lease its properties and conduct its respective
business as described in the Offering Memorandum.
(iii) All of the outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and
nonassessable.
(iv) All of the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and, to my knowledge, are owned by the
Company directly, or indirectly through one of the other Subsidiaries,
free and clear of any consensual lien, adverse claim, security interest
or other encumbrance (a "Lien"), except as described in the Offering
Memorandum. All outstanding equity interests in each Subsidiary that is
not a corporation have been duly authorized and, to my knowledge, are
owned by the Company directly, or indirectly through one of the other
Subsidiaries, free and clear of any Lien, except as described in the
Offering Memorandum. Except as disclosed in the Offering Memorandum and
pursuant to the Company's employee benefit plans, there are no
outstanding subscriptions, rights, warrants, calls, commitments of sale
or options to acquire, or instruments convertible into or exchangeable
for, nor any restriction on the voting or transfer of, any capital
stock or other equity interest of the Company or any Subsidiary created
or held by the Company or any Subsidiary.
(v) Except for the Registration Rights Agreement, to my
knowledge, there are no contracts, agreements or understandings between
the Company or any Subsidiary and any person granting such person the
right to require the Company or such Subsidiary to file a registration
statement under the Securities Act with respect to any securities of
the Company or of such Subsidiary, owned or to be owned by such person
or to require the Company or such Subsidiary to include such securities
with any securities being registered pursuant to any registration
statement filed by the Company under the Securities Act.
(vi) The Purchase Agreement, the Indenture, the Notes and the
Registration Rights Agreement have been duly authorized, executed and
delivered by the Company;
and the Indenture, the Subsidiary Guarantees and the Registration
Rights Agreement have been duly authorized, executed and delivered by
each of the Guarantors.
(vii) The execution and delivery of the Purchase Agreement by
the Company and each of the Subsidiaries party thereto, and the
performance by each of them of their respective obligations thereunder,
(a) will not result in a breach of, or default under, any agreement or
instrument that was filed as an exhibit to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2000 or any or
other registration statement or report filed by the Company since such
date, and to which the Company or any of the Subsidiaries is a party or
by which the Company or the Subsidiaries is bound or to which any of
the properties of the Company or the Subsidiaries is subject, (b) will
not violate the provisions of the charter, bylaws or other
organizational documents of the Company or any Subsidiary or of any
applicable statutory law or regulation as the case may be, or (c) will
not to my knowledge violate any decree or order of any governmental
body or agency or court having jurisdiction over any of them.
(viii) To my knowledge, there is no action, suit, legal or
governmental proceeding, inquiry or investigation, to which the Company
or any Subsidiary is a party, or to which the property of any of the
Company or any Subsidiary is subject, that is required to be described
in the Offering Memorandum and is not so described or any statutes,
regulations, contracts or other documents that are required to be
described in the Offering Memorandum or to be filed as exhibits to the
Offering Memorandum that are not described or filed as required and no
such action, suit, proceeding, inquiry or investigation is threatened
or contemplated.
(ix) The documents incorporated by reference in the Offering
Memorandum (other than the financial statements, schedules and other
financial or statistical data included or incorporated by reference in
the Offering Memorandum or omitted therefrom, as to which I express no
opinion), when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material respects with
the requirements of the Securities Act or the Exchange Act or the rules
and regulations promulgated by the Commission thereunder, as
applicable.
The opinions expressed herein are subject to the following
qualifications and limitations:
(a) I am licensed to practice law in the State of Texas, and I am not
expert in and express no opinion as to the laws of jurisdictions other than the
State of Texas, the General Corporation Law of the State of Delaware and
applicable federal law of the United States of America.
(b) This opinion is delivered to you solely for your use and benefit
pursuant to the Purchase Agreement and may not be relied upon in any manner by
any other person or entity, except that the Trustee may rely upon this opinion
in connection with those transactions.
Very truly yours,
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