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EXHIBIT 10.2
GUARANTY AGREEMENT
(Subsidiaries)
GUARANTY AGREEMENT, dated as of April 20, 1994 (this "Guaranty
Agreement"), among TESORO ALASKA PETROLEUM COMPANY, a Delaware corporation,
TESORO EXPLORATION AND PRODUCTION COMPANY, a Delaware corporation, and TESORO
PETROLEUM COMPANIES, INC., a Delaware corporation, DIGICOMP, INC., a Delaware
corporation, TESORO TECHNOLOGY PARTNERS COMPANY, a Delaware corporation,
INTERIOR FUELS COMPANY, an Alaskan corporation, TESORO ALASKA PIPELINE COMPANY,
a Delaware corporation, TESORO NORTHSTORE COMPANY, an Alaskan corporation,
TESORO REFINING, MARKETING & SUPPLY COMPANY, a Delaware corporation, TESORO
NATURAL GAS COMPANY, a Delaware corporation, TESORO BOLIVIA PETROLEUM COMPANY,
a Texas corporation, TESORO PETROLEUM DISTRIBUTING COMPANY, a Louisiana
corporation, TESORO LOUISIANA DISTRIBUTING CORPORATION, a Louisiana
corporation, TESORO ENVIRONMENTAL RESOURCES COMPANY, a Delaware corporation,
TESORO GAS RESOURCES COMPANY, INC., a Delaware corporation and TESORO E&P
COMPANY, L.P., a Delaware limited partnership, (the "Guarantors"), in favor of
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, individually, as an Issuing Bank and
as Agent, BANQUE PARIBAS, individually, as Co-Agent and as an Issuing Bank, and
the other financial institutions now or hereafter parties to the Credit
Agreement (as such term is hereinafter defined).
RECITALS
A. On even date herewith, Tesoro Petroleum Corporation, a Delaware
corporation (the "Company"), Texas Commerce Bank National Association,
individually, as Agent and as an Issuing Bank and the other financial
institutions now or hereafter parties thereto entered into a Credit Agreement
(as amended from time to time, the "Credit Agreement").
B. The conditions precedent to the effectiveness of the Credit Agreement
and the obligations of the Lenders (as defined in the Credit Agreement) to make
the initial Loans thereunder, include the execution and delivery of this
Guaranty Agreement by each Subsidiary of the Company.
C. Therefore, in consideration of the premises contained herein, the
Guarantors agree, with and for the benefit of the Agent, the Issuing Banks and
the Lenders, as follows:
AGREEMENT
1. Defined Terms. As used in this Guaranty Agreement, capitalized terms
defined in the Credit Agreement are used herein as defined therein unless
otherwise noted herein, and the following additional capitalized terms shall
have the following meanings:
"Collateral" shall mean any Property in which the Agent is granted a
Lien from time to time as security for the Lender Indebtedness.
"Maximum Guaranteed Amount" shall mean, for each Guarantor, the
greater of (i) the "reasonably equivalent value" or "fair consideration"
(or equivalent concept) received by such Guarantor in exchange for the
obligation incurred hereunder by such Guarantor, within the
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meaning of any state or federal fraudulent conveyance or transfer laws
applicable to such Guarantor; or (ii) the lesser of (A) the maximum amount
that will not render such Guarantor insolvent, or (B) the maximum amount
that will not leave such Guarantor (after giving effect to this Guaranty
Agreement) with Property deemed an unreasonably small capital. Clauses
(A) and (B) are and shall be determined pursuant to and as of the
appropriate date mandated by such applicable state or federal fraudulent
conveyance or transfer laws.
"Obligations" shall mean (i) all Lender Indebtedness now or hereafter
owing, including, but not limited to, (A) the unpaid principal of and
accrued interest on (including interest accruing on or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) (1) the Term Notes and (2) the Revolving Credit Notes, and (B)
the obligation of the Company to otherwise reimburse the Lender, whether
on account of fees, indemnities, costs, taxes, expenses (including all
fees and disbursements set forth in Sections 2.21 or 8.04 of the Credit
Agreement) or otherwise, and (ii) any and all other sums payable by the
Company or any of its Subsidiaries under or in respect of any Financing
Document.
"Subrogation and Contribution Agreement" shall mean that certain
Subrogation and Contribution Agreement of even date herewith among each of
the Guarantors and the Company.
2. Guarantee. (a) Each of the Guarantors hereby unconditionally and
irrevocably and jointly and severally guarantees to the Agent, the Issuing
Banks and each Lender the prompt and complete payment when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations, and each of
the Guarantors further agrees, jointly and severally, to pay any and all
expenses which may be paid or incurred by the Agent, either Issuing Bank or any
Lender in enforcing any rights with respect to, or collecting, any or all of
the Obligations and/or enforcing any rights with respect to, or collecting
against, any Guarantor under this Guaranty Agreement; provided, however, that,
notwithstanding anything herein or in any other Financing Document to the
contrary, the maximum liability of each Guarantor hereunder and under the other
Financing Documents shall in no event exceed the Maximum Guaranteed Amount for
such Guarantor; provided, further, that to the extent that applicable state or
federal fraudulent conveyance or transfer laws would so permit or require, the
Maximum Guaranteed Amount for such Guarantor (to the extent not previously
adjusted for such amounts) shall be (a) increased by the aggregate fair value
of such Guarantor's rights to contribution, reimbursement or subrogation
pursuant to the Subrogation and Contribution Agreement or applicable laws
relating to contribution, reimbursement or subrogation rights and (b) decreased
by the aggregate amount of such Guarantor's liabilities with respect to
contribution rights pursuant to the Subrogation and Contribution Agreement or
applicable laws relating to contribution rights, and (c) multiplied by the
Probability Factor (as defined in subsection (d) below) to reflect the
likelihood of a demand being made hereunder or against such Collateral.
(b) Each Guarantor agrees that the Obligations may at any time and from
time to time exceed the Maximum Guaranteed Amount for such Guarantor without
impairing this Guaranty Agreement or affecting the rights and remedies of the
Agent, either Issuing Bank or any Lender.
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(c) No payment or payments made by the Company, any Guarantor, any other
guarantor or any other Person or received or collected by the Agent, either
Issuing Bank or any Lender from the Company, any Guarantor, any other guarantor
or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of
or in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of each Guarantor hereunder, which shall,
notwithstanding any such payment or payments, other than payments made by such
Guarantor in respect of the Obligations or payments received or collected from
such Guarantor in respect of the Obligations, remain liable for the Obligations
up to the Maximum Guaranteed Amount for such Guarantor until the Obligations
are paid in full.
(d) It is the intention of the parties hereto that the obligations and
transfers of each Guarantor under this Guaranty Agreement and the other
Financing Documents are not obligations or transfers that violate the
provisions of applicable federal and state fraudulent conveyance or transfer
laws resulting in such obligations or transfers being subject to avoidance
under any such laws. In that regard the parties hereto intend that such
obligations and transfers be in an amount that results in the Guarantors
guaranteeing the Obligations and securing such guaranty in an amount that is
equal to the maximum amount that is below the amount that such applicable
fraudulent conveyance or transfer laws establish as the threshold amount for
such Guarantor and for such obligations and transfers that would not be subject
to avoidance under such laws. Accordingly, due to uncertainties in calculation
and in the status of various judicial decisions and interpretations of such
laws, each Guarantor, the Agent, the Issuing Banks and each Lender have agreed
upon the limitation of each Guarantor's liability hereunder with the good faith
intention of complying with such laws. Under many interpretations of such
laws, contingent claims are deemed to be properly valued at the time of each
relevant determination based on a percentage (the "Probability Factor") that is
reasonably reflective of the probability at the time of determination that a
demand or call on or against a guaranty obligation or collateral will be made
in light of the financial conditions of the Company and other liable parties
and other relevant facts that were available at such time, all as subsequently
decided by the appropriate judicial authority enforcing the rights under this
Guaranty Agreement or the other Financing Documents. For purposes of the
limitations on the maximum liability of each Guarantor in Subparagraph (a)
above, if a court in enforcing the rights of the Agent, the Issuing Banks and
any Lender shall determine that the use of such a Probability Factor is
appropriate, then the Probability Factor determined by such court shall be used
to calculate the Maximum Guaranteed Amount, unless the Majority Lenders elect
to waive such benefit in writing. In light of the expense and difficulty in
determining the Maximum Guaranteed Amount at any particular time, the amount
equal to the product of the Obligations multiplied by each Guarantor's
Contribution Percentage as set forth on Annex I to the Subrogation and
Contribution Agreement shall be presumed to be the Maximum Guaranteed Amount
for such Guarantor for all purposes, including the filing of a proof of claim
in any bankruptcy proceeding with respect to such Guarantor, or any foreclosure
sale or any similar proceeding with respect to Property of such Guarantor,
unless and until either such Guarantor or the Agent shall have demonstrated to
the satisfaction of the relevant judicial authority the fact that the actual
calculation of the Maximum Guaranteed Amount for such Guarantor results in a
different amount.
(e) It is the intention of the parties hereto that all intercompany
indebtedness either owed to or by any Guarantor not be included as either an
asset or a liability, respectively, in determining the solvency or capital of
any Guarantor. Accordingly, each Guarantor agrees that in connection with any
determination of the Maximum Guaranteed Amount, such intercompany indebtedness
may be treated in the manner that would achieve the result intended by the
first sentence of this Subsection (e).
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(f) Right to Collect on the Notes. The Company and the Guarantors are
personally obligated and fully liable for the amounts due under the Notes. The
Lenders have the right to sue on the Notes and obtain a personal judgment
against the Company and the Guarantors for satisfaction of the amounts due
under the Notes either before or after a judicial foreclosure of the Alaska
Deed of Trust under Alaska Statute 09.45.170 - 09.45.220.
(g) Senior Debt. Tesoro Alaska's guarantee of the payment of the
Obligations constitutes Senior Debt as such term is defined in that certain
Subordination Agreement dated December 15, 1993, among the Company, Tesoro
Alaska, and the State of Alaska, attached as Exhibit 7 to the Settlement
Agreement dated December 15, 1992, among the Company, Tesoro Alaska, and the
State of Alaska.
3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that any Guarantor shall have paid more than its proportionate share of
any payments made under any of the Guaranty Agreements, such Guarantor shall be
entitled to seek and receive contribution from and against any other Guarantor
who has not paid its proportionate share of any such payments. Each
Guarantor's right of contribution shall be subject to the terms and conditions
of the Subrogation and Contribution Agreement and Paragraph 5 hereof. The
provisions of this Paragraph 3 shall in no respect limit the obligations and
liabilities of any Guarantor to the Agent, the Issuing Banks or any Lender, and
each Guarantor shall remain liable to the Agent, the Issuing Banks and each
Lender for the full amount guaranteed by such Guarantor hereunder.
4. Right of Set-off. The Agent, the Issuing Bank and each Lender is
hereby irrevocably authorized upon the occurrence of an Event of Default
without notice to the Guarantors, any such notice being expressly waived by
each Guarantor, to set-off and credit against any credits, indebtedness or
claims, in any currency, in each case whether direct or indirect or contingent
or matured or unmatured, at any time held or owing by the Agent, either Issuing
Bank or any Lender to or for the credit or the account of any Guarantor, or any
part thereof in such amounts as the Agent, such Issuing Bank or such Lender may
elect, against and on account of the obligations and liabilities of the
applicable Guarantor to the Agent, the Issuing Banks and the Lenders hereunder
and claims of every nature and description of the Agent, the Issuing Banks and
the Lenders against such Guarantor, in any currency, whether arising hereunder,
under the Credit Agreement, any other Financing Document or otherwise, as the
Agent, either Issuing Bank or any Lender may elect, whether or not the Agent,
such Issuing Bank or such Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The
Agent agrees to notify (promptly after receipt of notice by the Agent) the
Company and the applicable Guarantor of any such set-off and the application
made by the Agent, such Issuing Bank or any such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent, either Issuing Bank and each Lender
under this paragraph are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which any such Person may have.
If foreign currency is exchanged for U.S. Dollars by the Agent, either Issuing
Bank or any Lender, such Person shall use the rate of exchange prevailing at
the time for customers exchanging a similar amount of currency.
5. No Subrogation. Notwithstanding any payment or payments made by any
Guarantor hereunder or any set-off or application of funds of any Guarantors by
the Agent, either Issuing Bank or any Lender, any such Guarantor shall not be
entitled to be subrogated to any of the rights of the Agent, either Issuing
Bank or any Lender against the Company or any collateral security or guaranty
or right
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of offset held by any such Person for the payment of the Obligations, nor shall
any Guarantor seek or be entitled to seek any contribution or reimbursement
from the Company in respect of payments made by any such Guarantor hereunder,
until all Obligations are paid in full. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Agent, the Issuing Banks and the Lenders, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Agent, if required), to be
applied against the Obligations, whether matured or unmatured in such order as
the Agent may determine.
6. Amendments, etc. with respect to the Obligations; Waiver of Rights.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against the Guarantors and without notice to or
further assent by the Guarantors, any demand for payment of any of the
Obligations made by the Agent, either Issuing Bank or any Lender may be
rescinded and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guaranty therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by the
Agent, the Issuing Banks or the Lenders and the Credit Agreement, the Term
Notes, the Revolving Credit Notes and any collateral security document or other
guaranty or document in connection therewith (including, without limitation,
the other Financing Documents) may be amended, modified, supplemented or
terminated, in whole or in part, as the Agent, the Issuing Banks or the Lenders
may deem advisable from time to time, and any collateral security or guaranty
or right of offset at any time held by the Agent, the Issuing Banks or the
Lenders for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released, all without the necessity of any reservation of rights
against the Guarantors and without notice to or further assent by the
Guarantors which will remain bound hereunder, notwithstanding any such renewal,
extension, modification, acceleration, compromise, amendment, supplement,
termination, sale, exchange, waiver, surrender or release. Neither the Agent,
either Issuing Bank nor any Lender shall have an obligation to protect, secure,
perfect or insure any Lien at any time held as security for the Obligations or
this Guaranty Agreement or any Property subject thereto. When making any demand
hereunder against any Guarantor, the Agent may, but shall be under no
obligation to, make a similar demand on the Company or any other guarantor, and
any failure by the Agent to make any such demand or to collect any payments
from the Company or any such other guarantor, or any release of the Company or
other guarantor, shall not relieve any such Guarantor of its obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Agent, the Issuing Banks of
the Lenders against each Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
7. Guaranty Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Agent, either Issuing
Bank or any Lender upon this Guaranty Agreement or acceptance of this Guaranty
Agreement, and the Obligations (and any of them) shall conclusively be deemed
to have been created, contracted or incurred and extended, amended and waived
in reliance upon this Guaranty Agreement, and all dealings between the Company
or the Guarantors and the Agent, either Issuing Bank or any Lender shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Guaranty Agreement. Each Guarantor waives diligence, presentment,
protest, demand for payment
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and notice of default or nonpayment, notice of intention to accelerate maturity
and notice of acceleration of maturity to or upon the Company or the Guarantors
with respect to the Obligations. Each Guarantor understands and agrees that
this Guaranty Agreement shall be construed as a continuing, absolute,
completed, unconditional (except as expressly conditioned pursuant to the terms
hereof) and irrevocable guarantee of payment and not of collection without
regard to (a) the validity, regularity or enforceability of the Credit
Agreement, the other Financing Documents, any of the Obligations or any
collateral security or guaranty therefor or right of offset with respect
thereto at any time or from time to time held by the Agent, either Issuing Bank
or any Lender, (b) any defense, set-off or counterclaim which may at any time
be available to or be asserted by the Company or any other Person liable for
the Obligations against the Agent, either Issuing Bank or any Lender, or (c)
any other circumstance whatsoever (with or without notice to or knowledge of
the Company or any Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company or any other Person
liable for the Obligations, or of any Guarantor under this Guaranty Agreement,
in bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against any Guarantor, the Agent, the Issuing Banks and the Lenders
may, but shall be under no obligation to, pursue such rights and remedies as
they may have against the Company or any other Person or against any collateral
security or guaranty for the Obligations or any right of offset with respect
thereto, and any failure by the Agent, the Issuing Banks or the Lenders to
pursue such other rights or remedies or to collect any payments from the
Company or any such other Person or to realize upon any such collateral
security or guaranty or to exercise any such right of offset, or any release of
the Company or any such other Person or any such collateral security, guaranty
or right of offset, shall not relieve any Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express,
implied or available as a matter of law, of the Agent, either Issuing Bank or
any Lender against any Guarantor. This Guaranty Agreement shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon each Guarantor and the respective successors and assigns thereof,
and shall inure to the benefit of the Agent, Issuing Banks and the Lenders, and
the respective successors, indorsees, transferees and assigns thereof, until
all the Obligations and the obligations of the Guarantors under this Guaranty
Agreement shall have been satisfied by payment in full.
8. Reinstatement. This Guaranty Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Agent, either Issuing Bank or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Company or any Guarantor or any substantial part of such Person's property, or
otherwise, all as though such payments had not been made.
9. Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid, without set-off or counterclaim and in immediately available
funds and in lawful currency of the United States of America, to Agent in
Houston, Texas, at the Agent's Payment Office, not later than 11:00 A.M.,
Houston time.
10. Representations and Warranties. Each Guarantor hereby represents and
warrants that:
(a) Corporate Existence. Each Guarantor (other than Tesoro E&P
Company, L.P.) is a corporation duly organized, validly existing, and in
good standing under the laws of the
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jurisdiction of its incorporation and has the corporate power and
authority and the legal right to own and lease its property and to conduct
its business.
(b) Corporate Power; Authorization. Each Guarantor (other than
Tesoro E&P Company, L.P.) has the corporate power and authority and the
legal right to make, deliver and perform this Guaranty Agreement. Each
Guarantor has taken all necessary corporate action to authorize the
execution, delivery and performance of this Guaranty Agreement.
(c) Partnership Existence and Authorization. Tesoro E&P Company,
L.P. is a limited partnership duly formed, validly existing and in good
standing under the laws of the State of Delaware and has the partnership
power and authority and the legal right to own and lease its property and
to conduct its business. Tesoro E&P Company, L.P. has the partnership
power and authority and the legal right to make, deliver and perform this
Guaranty Agreement and has taken all necessary partnership action to
authorize the execution, delivery and performance of this Guaranty
Agreement.
(d) Enforceable Obligations. This Guaranty Agreement has been duly
executed and delivered by each Guarantor and constitutes a legal, valid
and binding obligation of such Guarantor enforceable against such
Guarantor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
11. No Waiver: Cumulative Remedies. Neither the Agent, either Issuing
Bank nor any of the Lenders shall by any act, delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise and no delay in
exercising, on the part of the Agent, either Issuing Bank or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof, or the exercise of any other power,
privilege or right. A waiver by the Agent, either Issuing Bank or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which any such Person would have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
12. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including bank wire, telecopy or similar
teletransmission or writing) and, in the case of any Guarantor, shall be given
to such Guarantor at the address or telecopy number of the Company now or
hereafter provided for in the Credit Agreement and in the case of the Agent,
either Issuing Bank or any Lender, at the address or telecopy number for such
Person now or hereafter provided for in the Credit Agreement. Each such
notice, request or other communication shall be effective (i) if given by
telecopier during regular business hours, once such telecopy is transmitted to
the telecopy number specified in the Credit Agreement, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means
(including, without limitation, by air courier), when delivered at the address
specified in the Credit Agreement; provided that notices to the Agent shall not
be effective until received.
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13. Entire Agreement. THIS GUARANTY AGREEMENT, THE CREDIT AGREEMENT, THE
NOTES, THE SECURITY INSTRUMENTS, THE OTHER FINANCING DOCUMENTS REFERRED TO IN
SECTIONS 3.02 THE CREDIT AGREEMENT, AND THE FEE LETTER EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE AGENT, THE ISSUING BANKS, THE LENDERS
AND THE OTHER RESPECTIVE PARTIES HERETO AND THERETO AND SUPERSEDE ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. ANY CONFLICT OR AMBIGUITY BETWEEN THE TERMS AND PROVISIONS OF THIS
AGREEMENT AND THE TERMS AND PROVISIONS IN ANY OTHER FINANCING DOCUMENT SHALL BE
CONTROLLED BY THE TERMS AND PROVISIONS HEREOF.
14. Governing Law; Submission to Jurisdiction, Etc.
(a) This Guaranty Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the law
(without giving effect to the conflict of law principles thereof) of the State
of Texas.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING BUT NOT LIMITED TO ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) Each Guarantor that is not a Texas corporation hereby irrevocably
designates the General Counsel of the Company (as of the Closing Date, James C.
Reed, Jr.) located at 8700 Tesoro Drive, San Antonio, Texas 78217, as the
designee, appointee and agent of such Guarantor to receive, for and on behalf
of such Guarantor, service of process in such respective jurisdictions in any
legal action or proceeding with respect to this Agreement, the Notes, the
Security Instruments or the other Financing Documents. It is understood that a
copy of such process served on such agent will be promptly forwarded by mail to
such Guarantor at its address set forth opposite its signature below, but the
failure of such Guarantor to receive such copy shall not affect in any way the
service of such process. Each Guarantor further irrevocably consents to the
service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Guarantor at its said address, such service to become
effective 30 days after such mailing.
(d) Nothing herein shall affect the right of the Agent or any Lender or
any holder of a Note to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against any Guarantor in
Texas or any other jurisdiction in which assets of any Guarantor are located.
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15. Severability. Any provision of this Guaranty Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Paragraph Headings. The Paragraph headings used in this Guaranty
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
17. Interest. It is the intention of the parties hereto to conform
strictly to usury laws applicable to each Lender and the Transactions.
Accordingly, if the Transactions would be usurious as to any Lender under
applicable law, then, notwithstanding anything to the contrary in the Notes,
this Agreement or in any Financing Document or agreement entered into in
connection with the Transactions or as security for the Obligations, it is
agreed as follows: (i) the aggregate of all consideration which constitutes
interest as to any Lender under applicable law that is contracted for, taken,
reserved, charged or received by such Lender under the Notes, this Agreement or
under any of the Financing Documents or agreements or otherwise in connection
with the Transactions shall under no circumstances exceed the maximum amount
allowed by such applicable law, (ii) in the event that the maturity of the
Notes is accelerated for any reason, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest as to
any Lender under applicable law may never include more than the maximum amount
allowed by such applicable law, and (iii) excess interest, if any, provided for
in this Agreement or otherwise in connection with the Transactions shall be
cancelled automatically and, if theretofore paid, shall be credited by such
Lender on the principal amount of the Obligations (or, to the extent that the
principal amount of the Obligations shall have been or would thereby be paid in
full, refunded by such Lender to the Company). The right to accelerate the
maturity of the Notes does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the
Lenders do not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to each Lender for the use,
forbearance or detention of sums included in the Obligations shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of the Notes until payment in full so that the
rate or amount of interest on account of the Obligations does not exceed the
applicable usury ceiling, if any. As used in this Section, the term
"applicable law" shall mean the laws of the State of Texas (or of any other
jurisdiction whose laws may be mandatorily applicable notwithstanding other
provisions of this Agreement) or laws of the United States of America
applicable to any Lender and the Transactions, which would permit such Lender
to contract for, charge, take, reserve or receive a greater amount of interest
than under Texas (or such other jurisdiction's) law. To the extent that
Article 5069-1.04 of the Texas Revised Civil Statutes is relevant to the
Lenders for the purpose of determining the Highest Lawful Rate, the Lenders
hereby elect to determine the applicable rate ceiling under such Article by the
indicated (weekly) rate ceiling from time to time in effect, subject to the
Lenders' right subsequently to change such method in accordance with applicable
law. In no event shall the provisions of Tex. Rev. Civ. Stat. art. 5069-2.01
through 5069-8.06 or 5069-15.01 through 5069-15.11 be applicable to the Loans
evidenced hereby.
18. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original but all of which
shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned has caused this Guaranty Agreement to
be duly executed and delivered by its duly authorized officer on the day and
year first above written.
TESORO ALASKA PETROLEUM COMPANY
TESORO EXPLORATION AND PRODUCTION COMPANY
TESORO PETROLEUM COMPANIES, INC.
DIGICOMP, INC.
TESORO TECHNOLOGY PARTNERS COMPANY
INTERIOR FUELS COMPANY
TESORO ALASKA PIPELINE COMPANY
TESORO NORTHSTORE COMPANY
TESORO REFINING, MARKETING & SUPPLY COMPANY
TESORO NATURAL GAS COMPANY
TESORO BOLIVIA PETROLEUM COMPANY
TESORO PETROLEUM DISTRIBUTING COMPANY
TESORO LOUISIANA DISTRIBUTING COMPANY
TESORO ENVIRONMENTAL RESOURCES COMPANY
By:/s/William T. VanKleef
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William T. VanKleef
Vice President and Treasurer
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TESORO E&P COMPANY, L.P.
By: TESORO EXPLORATION AND PRODUCTION
COMPANY,
as its general partner
By: /s/William T. VanKleef
-----------------------------------
TESORO GAS RESOURCES COMPANY, INC
By:/s/Mark S. Necessary
------------------------------------------
Name:
Title:
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