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Exhibit 10.5
PLEDGE AGREEMENT
BY
TESORO PETROLEUM CORPORATION
IN FAVOR OF
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS AGENT,
APRIL 20, 1994
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PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made as of April 20, 1994, by TESORO
PETROLEUM CORPORATION, a Delaware corporation, with principal offices at 8700
Tesoro Drive, San Antonio, Texas 78217 ("Pledgor"); in favor of TEXAS COMMERCE
BANK NATIONAL ASSOCIATION, a national banking association, with offices at 712
Main Street, Houston, Texas 77002, as Agent ("Secured Party") for itself, the
Issuing Banks and the Lenders parties to the Credit Agreement referred to
below.
RECITALS
A. On even date herewith, the Pledgor, Texas Commerce Bank
National Association, individually, as Agent and as an Issuing Bank, Banque
Paribas, individually, as Co-Agent and as an Issuing Bank, and the other
financial institutions 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 to make the initial Loans and the
Issuing Bank to issue Letters of Credit thereunder, include the execution and
delivery by Pledgor of this Security Agreement, and Debtor has agreed to enter
into this Security Agreement.
C. Therefore, in order to comply with the terms and conditions of
the Credit Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Pledgor hereby agrees with
Secured Party as follows:
ARTICLE I
Definitions
Section 1.01 Terms Defined Above or in the Credit Agreement. As
used in this Security Agreement, the terms defined above shall have the
meanings respectively assigned to them. Other capitalized terms which are
defined in the Credit Agreement, but which are not defined herein shall have
the same meanings as defined in the Credit Agreement.
Section 1.02 Certain Definitions. As used in this Security
Agreement, the following terms shall have the following meanings, unless the
context otherwise requires:
"Code" shall mean the Uniform Commercial Code as presently in
effect in the State of Texas. Unless otherwise indicated by the
context herein, all uncapitalized terms which are defined in the Code
shall have their respective meanings as used in Articles 8 and 9 of
the Code.
"Collateral" shall mean the following types or items of
property:
(a) The securities described or referred to in Exhibit A
attached hereto and made a part hereof; and
(b) (i) all shares of, all securities convertible or
exchangeable into, and all warrants, options or other rights to
purchase shares of, stock of any of the Issuers; (ii) all certificates
or instruments representing such additional shares, convertible or
exchangeable securities, warrants, and other rights and all proceeds,
income and profits thereon, and all interest, dividends and other
payments, property and distributions with respect thereto; (iii) all
proceeds received or receivable by the Pledgor in cash, stock or
otherwise, from any sale of substantially all the assets
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of any Issuer; (iv) all proceeds received or receivable by the
Pledgor, in cash, stock or otherwise, from any recapitalization,
reclassification, merger, dissolution, liquidation or other
termination of the existence of any Issuer; (v) all other proceeds
or assets received or receivable by the Pledgor in respect of its
status as a shareholder of any Issuer; and (vi) any proceeds of any of
the foregoing. The inclusion of proceeds in this Agreement does not
authorize the Pledgor to sell, dispose of or otherwise use the
Collateral in any manner not specifically authorized hereby.
Contemporaneously with the execution and delivery hereof, the Pledgor
is delivering to Secured Party in pledge hereunder the certificates
and other instruments evidencing all Pledged Securities owned by the
Pledgor as of the date hereof.
(c) It is expressly contemplated that additional
securities or other property may from time to time be pledged,
assigned or granted to Secured Party as additional security for the
Obligations, and the term "Collateral" as used herein shall be deemed
for all purposes hereof to include all such additional securities and
property, together with all other property of the types described
above related thereto.
"Event of Default" shall mean any event specified in Section
6.01.
"Issuer" shall mean those entities listed on Schedule 1.02
hereto and any other direct Subsidiary of Pledgor whether now owned or
hereafter acquired by Pledgor which is an issuer of Pledged Securities
pursuant to this Security Agreement.
"Obligations" shall mean: (i) the Lender Indebtedness
described in the Credit Agreement, including without limitation, the
Letter of Credit Liabilities and the Notes, and any and all renewals,
extensions for any period, rearrangements or enlargements thereof and
any interest accrued thereon, whether prepetition or post-petition;
(ii) the performance of all obligations and agreements under the
Financing Documents, including this Security Agreement; and (iii) all
interest accrued and earned, charges, expenses, attorneys' or other
fees and any other sums payable to or incurred by Secured Party, any
Issuing Bank or any Lender in connection with the execution,
administration or enforcement of their rights and remedies hereunder
or any other Financing Document.
"Obligor" shall mean any Person, other than Pledgor, liable
(whether directly or indirectly, primarily or secondarily) for the
payment or performance of any of the Obligations whether as maker,
co-maker, endorser, guarantor, accommodation party, general partner or
otherwise.
"Pledged Securities" shall mean all of the securities and
other property (whether or not the same constitutes a "security" under
the Code) referred to in Section 1.02 and all additional securities
(as that term is defined in the Code), if any, constituting Collateral
under this Security Agreement.
"Security Agreement" shall mean this Pledge Agreement, as the
same may from time to time be amended or supplemented.
ARTICLE II
Security Interest
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Section 2.01 Pledge. Pledgor hereby pledges, assigns and grants
to Secured Party, for its benefit and the benefit of the Lenders and the
Issuing Banks, a security interest in the Collateral to secure the prompt
payment and performance of the Obligations. This security interest is granted
as security only and shall not subject Secured Party, any Issuing Bank or any
Lender to, or transfer or in any way affect or modify, any obligation or
liability of the Pledgor or any Obligor with respect to any of the Collateral,
the Obligations or any transaction in connection therewith.
Section 2.02 Transfer of Collateral. All certificates or
instruments representing or evidencing the Pledged Securities shall be
delivered to and held pursuant hereto by Secured Party or a Person designated
by Secured Party and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, and accompanied by any required transfer tax stamps, or (in the case of
either certificated or uncertificated securities) Secured Party shall have been
provided with (i) evidence that entries have been made on the books of a
clearing corporation (as defined in Section 8-102 of the Code) to effect the
pledge of the Pledged Securities to Secured Party, as provided in, and in
accordance with, Section 8-320 of the Code, or (ii) evidence that a financial
intermediary has identified the Pledged Securities as having been pledged to
Secured Party, as provided in, and in accordance with, Section 8-313(1)(4) of
the Code, or (iii) evidence that the Pledged Securities have been otherwise
transferred to Secured Party in accordance with Section 8-313(1) of the Code,
all in form and substance satisfactory to Secured Party. Notwithstanding the
preceding sentence, at Secured Party's discretion, all Pledged Securities must
be delivered or transferred in such manner as to permit Secured Party to be a
"bona fide purchaser" to the extent of its security interest as provided in
Sections 8-302(1) and 8-320(3) of the Code (if Secured Party otherwise
qualifies as a bona fide purchaser). Upon the occurrence and continuance of an
Event of Default and after any notice and cure periods provided for in the
Credit Agreement, Secured Party shall have the right, at any time in its
discretion and without notice to Pledgor, to transfer to or to register in the
name of Secured Party or any of its nominees any or all of the Pledged
Securities, subject only to the revocable rights specified in Section 6.06. In
addition, upon the occurrence and continuance of an Event of Default and after
any notice and cure periods provided for in the Credit Agreement, Secured Party
shall have the right at any time to exchange certificates or instruments
representing or evidencing Pledged Securities for certificates or instruments
of smaller or larger denominations.
ARTICLE III
Representations and Warranties
In order to induce Secured Party, the Issuing Banks and the Lenders to
accept this Security Agreement, Pledgor represents and warrants to Secured
Party, the Issuing Banks and the Lenders (which representations and warranties
will survive the creation and payment of the Obligations) that:
Section 3.01 Ownership of Collateral; Encumbrances. Pledgor is
the legal and beneficial owner of the Collateral free and clear of any adverse
claim, lien, security interest, option or other charge or encumbrance except
for the security interest created by this Security Agreement, and Pledgor has
full right, power and authority to pledge, assign and grant a security interest
in the Collateral to Secured Party.
Section 3.02 No Required Consent. No authorization, consent,
approval or other action by, and no notice to or registration, recordation or
filing with, any governmental authority or regulatory body is required for (i)
the due execution, delivery and performance by Pledgor of this Security
Agreement,
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(ii) the grant by Pledgor of the security interest granted by this Security
Agreement, (iii) the perfection of such security interest or (iv) the exercise
by Secured Party of its rights and remedies under this Security Agreement.
Neither the Pledgor nor any of its Subsidiaries has performed or will perform
any acts which might prevent Secured Party from enforcing any of the terms and
conditions of this Security Agreement or which would limit Secured Party in any
such enforcement.
Section 3.03 Pledged Securities. The Pledged Securities have been
duly authorized and validly issued, are fully paid and non-assessable and
constitute 100% of the issued and outstanding shares of capital stock of the
Issuer thereof.
Section 3.04 First Priority Security Interest. The pledge of
Pledged Securities pursuant to this Security Agreement creates a valid and
perfected first priority security interest in the Collateral, enforceable
against Pledgor and all third parties and securing payment of the Obligations.
ARTICLE IV
Covenants and Agreements
Pledgor will at all times comply with the covenants and agreements
contained in this Article IV, from the date hereof and for so long as any part
of the Obligations are outstanding.
Section 4.01 Sale, Disposition or Encumbrance of Collateral.
Pledgor will not in any way encumber any of the Collateral (or permit or suffer
any of the Collateral to be encumbered) or sell, pledge, assign, lend or
otherwise dispose of or transfer any of the Collateral to or in favor of any
Person other than Secured Party. The Pledgor is not and will not become a
party to or otherwise be bound by any agreement, other than this Agreement,
which restricts in any manner the rights of any present or future holder of any
of the Pledged Securities with respect thereto.
Section 4.02 Dividends or Distributions. So long as no Event of
Default shall have occurred and be continuing, Pledgor shall be entitled to
receive and retain any and all dividends and interest paid in respect of the
Collateral, provided, however, that any and all:
(a) dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for
(including, without limitation, any certificate or share purchased or
exchanged in connection with a tender offer or merger agreement), any
Collateral,
(b) dividends and other distributions paid or payable in
cash in respect of any Collateral in connection with a partial or
total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in surplus, or reclassification, and
(c) cash paid, payable or otherwise distributed in
respect of principal of, or in redemption of, or in exchange for, any
Collateral,
shall be, and shall be forthwith delivered to Secured Party to hold
as, Collateral and shall, if received by Pledgor, be received in trust
for the benefit of Secured Party, be segregated from the other
property or funds of Pledgor, and be forthwith delivered to Secured
Party as Collateral in the same form as so received (with any
necessary indorsement).
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Section 4.03 Records and Information. Pledgor shall keep accurate
and complete records of the Collateral (including proceeds, payments,
distributions, income and profits). Upon reasonable notice and without undue
interference with the Pledgor's business, Secured Party may at any time during
normal business hours have access to, examine, audit, make extracts from and
inspect without hindrance or delay Pledgor's records, files and the Collateral.
Section 4.04 Further Assurances. Upon the request of Secured
Party, Pledgor shall (at Pledgor's expense) execute and deliver all such
assignments, certificates, instruments, securities, financing statements,
notifications to financial intermediaries, clearing corporations, Issuers of
securities or other third parties or other documents and give further
assurances and do all other acts and things as Secured Party may reasonably
request to perfect Secured Party's interest in the Collateral or which is
necessary to protect, enforce or otherwise effect Secured Party's rights and
remedies hereunder.
Section 4.05 Stock Powers. Pledgor shall furnish to Secured Party
such stock powers and other instruments as may be required by Secured Party to
assure the transferability of the Collateral when and as often as may be
requested by Secured Party.
Section 4.06 Rights to Sell.
(a) If Secured Party shall determine to exercise its
rights to sell all or any of the Collateral pursuant to its rights
hereunder, Pledgor agrees that, upon request of Secured Party, Pledgor
will, at its own expense:
(i) use its best efforts to qualify the
Collateral under the state securities or "Blue Sky" laws and
to obtain all necessary governmental approvals for the sale of
the Collateral, as requested by Secured Party; and
(ii) use its best efforts to do or cause to be
done all such others acts and things as may be necessary to
make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
(b) Pledgor further acknowledges the impossibility of
ascertaining the amount of damages which would be suffered by Secured
Party, the Issuing Banks and the Lenders by reason of the failure by
Pledgor to perform any of the covenants contained in this Section 4.06
and consequently agrees that if Pledgor shall fail to perform any of
such covenants, it shall pay, as liquidated damages, and not as
penalty, an amount equal to the value of the Collateral on the date
the Secured Party shall demand compliance with this Section 4.06.
Section 4.07 Voting and Other Consensual Rights. Except to the
extent otherwise provided in subsection 6.06(d), Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Security Agreement; provided however, that Pledgor shall not exercise
or refrain from exercising any such right if such action would have a material
adverse effect on the value of the Collateral or any part thereof, and,
provided, further, that upon request of Secured Party at any time or from time
to time, Pledgor shall give Secured Party prompt written notice of the manner
in which Pledgor has exercised, or the reasons for refraining from exercising,
any such right.
Section 4.08 Pledged Securities Percentage. The Pledged
Securities will at all times constitute at least 100% of the issued and
outstanding shares of capital stock of the Issuer thereof. Pledgor will not,
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to the extent it may legally do so, (a) permit any Issuer to issue any
additional or substitute shares of stock of any class, or (b) amend any
Issuer's charter or by-laws or other constitutional documents in any way which
would reasonably be expected to materially and adversely affect the rights of
Secured Party, the Issuing Banks or the Lenders, without the prior written
consent of the Majority Lenders.
ARTICLE V
Rights, Duties, and Powers of Secured Party
The following rights, duties and powers of Secured Party are
applicable irrespective of whether an Event of Default occurs and is
continuing:
Section 5.01 Discharge Encumbrances. Secured Party may, at its
option, after giving Pledgor three (3) days prior notice, discharge any taxes,
liens, security interests or other encumbrances at any time levied or placed on
the Collateral. Pledgor agrees to reimburse Secured Party within 30 days of
demand for any payment so made, plus interest on the portion thereof from time
to time remaining unpaid from the date of Secured Party's demand at the rate
for overdue principal and interest set forth in Section 2.06(c) of the Credit
Agreement.
Section 5.02 Transfer of Collateral. Secured Party may, at its
option, after giving Pledgor three (3) days prior notice, transfer any or all
of the Obligations, and upon any such transfer Secured Party may transfer its
interest in any or all of the Collateral and shall be fully discharged
thereafter from all liability therefor. Any transferee of the Collateral shall
be vested with all rights, powers and remedies of Secured Party hereunder.
Section 5.03 Cumulative and Other Rights. The rights, powers and
remedies of Secured Party hereunder are in addition to all rights, powers and
remedies given by law or in equity. The exercise by Secured Party of any one
or more of the rights, powers and remedies herein shall not be construed as a
waiver of any other rights, powers and remedies, including, without limitation,
any other rights of set-off. If any of the Obligations are given in renewal,
extension for any period or rearrangement, or applied toward the payment of
debt secured by any lien, Secured Party shall be, and is hereby, subrogated to
all the rights, titles, interests and liens securing the debt so renewed,
extended, rearranged or paid.
Section 5.04 Disclaimer of Certain Duties.
(a) The powers conferred upon Secured Party by this
Agreement are to protect its interest in the Collateral and shall not
impose any duty upon Secured Party, any Issuing Bank or any Lender to
exercise any such powers. Pledgor hereby agrees that Secured Party
shall not be liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, Secured Party's delay or failure to
collect upon, foreclose, sell, take possession of or otherwise obtain
value for the Collateral.
(b) To the fullest extent permitted by applicable law,
Secured Party shall be under no duty whatsoever (except as may be
required under the Credit Agreement) to make or give any presentment,
notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of
acceleration, or other notice or demand in connection with any
Collateral or the Obligations, or to take any steps necessary to
preserve any rights against any Obligor or other Person. Pledgor
waives any right of marshaling in respect of any and all
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Collateral, and waives any right to require Secured Party, any Issuing
Bank or any Lender to proceed against any Obligor or other Person,
exhaust any Collateral or enforce any other remedy which Secured
Party, any Issuing Bank or any Lender now has or may hereafter have
against any Obligor or other Person.
Section 5.05 Modification of Obligations; Other Security. Pledgor
waives (i) any and all notice of acceptance, creation, modification,
rearrangement, renewal or extension for any period of any instrument executed
by any Obligor in connection with the Obligations and (ii) to the fullest
extent permitted by applicable law, any defense of any Obligor by reason of
disability, lack of authorization, cessation of the liability of any Obligor or
for any other reason. Pledgor authorizes Secured Party, without notice or
demand and without any reservation of rights against Pledgor and without
affecting Pledgor's liability hereunder or on the Obligations, from time to
time to (x) take and hold other property, other than the Collateral, as
security for the Obligations, and exchange, enforce, waive and release any or
all of the Collateral, (y) apply the Collateral in the manner permitted by this
Security Agreement and (z) renew, extend for any period, accelerate, amend or
modify, supplement, enforce, compromise, settle, waive or release the
obligations of any Obligor or any instrument or agreement of such other Person
with respect to any or all of the Obligations or Collateral.
Section 5.06 Custody and Preservation of the Collateral. Secured
Party shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which comparable secured parties accord
comparable collateral, it being understood and agreed, however, that neither
Secured Party, any Issuing Bank nor any Lender shall have responsibility for
(i) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not Secured Party has or is deemed to have knowledge of such
matters, or (ii) taking any necessary steps to preserve rights against Persons
or entities with respect to any Collateral.
ARTICLE VI
Events of Default
Section 6.01 Events. It shall constitute an Event of Default
under this Security Agreement if an Event of Default occurs and is continuing
under the Credit Agreement.
Section 6.02 Remedies. Upon the occurrence and during the
continuance of any Event of Default, Secured Party may take any or all of the
following actions without notice (except where expressly required below or in
the Credit Agreement) or demand to Pledgor:
(a) Declare all or part of the indebtedness pursuant to
the Obligations immediately due and payable and enforce payment of the
same by Pledgor or any Obligor.
(b) Sell, in one or more sales and in one or more
parcels, or otherwise dispose of any or all of the Collateral in any
commercially reasonable manner as Secured Party may elect, in a public
or private transaction, at any location as deemed reasonable by
Secured Party either for cash or credit or for future delivery at such
price as Secured Party may deem fair, and (unless prohibited by the
Code, as adopted in any applicable jurisdiction) Secured Party, any
Issuing Bank or any Lender may be the purchaser of any or all
Collateral so sold and may apply upon the purchase price therefor any
Obligations secured hereby. Any such sale or transfer by Secured
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Party either to itself or to any other Person shall be absolutely free
from any claim of right by Pledgor, including any equity or right of
redemption, stay or appraisal which Pledgor has or may have under any
rule of law, regulation or statute now existing or hereafter adopted.
Upon any such sale or transfer, Secured Party shall have the right to
deliver, assign and transfer to the purchaser or transferee thereof
the Collateral so sold or transferred. If Secured Party deems it
advisable to do so, it may restrict the bidders or purchasers of any
such sale or transfer to Persons or entities who will represent and
agree that they are purchasing the Collateral for their own account
and not with the view to the distribution or resale of any of the
Collateral. Secured Party may, at its discretion, provide for a
public sale, and any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as
Secured Party may fix in the notice of such sale. Secured Party shall
not be obligated to make any sale pursuant to any such notice.
Secured Party may, without notice or publication, adjourn any public
or private sale by announcement at any time and place fixed for such
sale, and such sale may be made at any time or place to which the same
may be so adjourned. In the event any sale or transfer hereunder is
not completed or is defective in the opinion of Secured Party, such
sale or transfer shall not exhaust the rights of Secured Party
hereunder, and Secured Party shall have the right to cause one or more
subsequent sales or transfers to be made hereunder. If only part of
the Collateral is sold or transferred such that the Obligations remain
outstanding (in whole or in part), Secured Party's rights and remedies
hereunder shall not be exhausted, waived or modified, and Secured
Party is specifically empowered to make one or more successive sales
or transfers until all the Collateral shall be sold or transferred and
all the Obligations are paid. In the event that Secured Party elects
not to sell the Collateral, Secured Party retains its rights to
dispose of or utilize the Collateral or any part or parts thereof in
any manner authorized or permitted by law or in equity, and to apply
the proceeds of the same towards payment of the Obligations. Each and
every method of disposition of the Collateral described in this
subsection or in subsection (d) shall constitute disposition in a
commercially reasonable manner.
(c) Apply proceeds of the disposition of the Collateral
to the Obligations in any manner elected by Secured Party and
permitted by the Code or otherwise permitted by law or in equity.
Such application may include, without limitation, the reasonable
attorneys' fees and legal expenses incurred by Secured Party, the
Issuing Banks and the Lenders.
(d) Appoint any Person as agent to perform any act or
acts necessary or incident to any sale or transfer by Secured Party of
the Collateral.
(e) Execute, assign and endorse negotiable and other
instruments for the payment of money, documents of title or other
evidences of payment, shipment or storage for any form of Collateral
on behalf of and in the name of Pledgor.
Section 6.03 Attorney-in-Fact. Pledgor hereby irrevocably
appoints Secured Party as Pledgor's attorney-in-fact, with full authority in
the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time in Secured Party's reasonable discretion upon the occurrence and
during the continuance of an Event of Default and after any applicable notice
and cure period provided for in the Credit Agreement, but at Pledgor's cost and
expense, to take any action and to execute any assignment, certificate,
financing statement, stock power, notification, document or instrument which
Secured Party may deem necessary or advisable to accomplish the purposes of
this Security Agreement, including, without limitation, to receive, endorse and
collect all instruments made payable to Pledgor representing any dividend,
interest payment or other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same.
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Section 6.04 Liability for Deficiency. If any sale or other
disposition of Collateral by Secured Party or any other action of Secured
Party, any Issuing Bank or any Lender hereunder results in reduction of the
Obligations, such action will not release Pledgor from its liability to Secured
Party, the Issuing Banks and the Lenders for any unpaid Obligations, including
reasonable costs, charges and expenses incurred in the liquidation of
Collateral, together with interest thereon, and the same shall be immediately
due and payable to Secured Party at Secured Party's address set forth in the
opening paragraph hereof.
Section 6.05 Reasonable Notice. If any applicable provision of
any law requires Secured Party, any Issuing Bank or any Lender to give
reasonable notice of any sale or disposition or other action, Pledgor hereby
agrees that fifteen (15) days' prior written notice shall constitute reasonable
notice thereof. Such notice, in the case of public sale, shall state the time
and place fixed for such sale and, in the case of private sale, the time after
which such sale is to be made.
Section 6.06 Pledged Securities. Upon the occurrence and during
the continuance of an Event of Default and after any applicable notice and cure
period provided for in the Credit Agreement:
(a) All rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to receive
and retain pursuant to Section 4.02 shall cease, and all such rights
shall thereupon become vested in Secured Party who shall thereupon
have the sole right to receive and hold as Collateral such dividends
and interest payments, but Secured Party shall have no duty to receive
and hold such dividends and interest payments and shall not be
responsible for any failure to do so or delay in so doing.
(b) All dividends and interest payments which are
received by Pledgor contrary to the provisions of this Section 6.06
shall be received in trust for the benefit of Secured Party, shall be
segregated from other funds of Pledgor and shall be forthwith paid
over to Secured Party as Collateral in the same form as so received
(with any necessary indorsement).
(c) Secured Party may exercise any and all rights of
conversion, exchange, subscription or any other rights, privileges or
options pertaining to any of the Pledged Securities as if it were the
absolute owner thereof, including without limitation, the right to
exchange at its discretion, any and all of the Pledged Securities upon
the merger, consolidation, reorganization, recapitalization or other
readjustment of any Issuer of such Pledged Securities or upon the
exercise by any such Issuer or Secured Party of any right, privilege
or option pertaining to any of the Pledged Securities, and in
connection therewith, to deposit and deliver any and all of the
Pledged Securities with any committee, depository, transfer agent,
registrar or other designated agency upon such terms and conditions as
it may determine, all without liability except to account for property
actually received by it, but Secured Party shall have no duty to
exercise any of the aforesaid rights, privileges or options and shall
not be responsible for any failure to do so or delay in so doing.
(d) All rights of Pledgor to exercise the voting and
other consensual rights which Pledgor would otherwise be entitled to
exercise pursuant to Section 4.07 with respect to the Pledged
Securities issued by such Issuer shall cease, and all such rights
shall thereupon become vested in Secured Party who shall thereupon
have the sole right to exercise such voting and other consensual
rights, but Secured Party shall have no duty to exercise any such
voting or other consensual rights and shall not be responsible for any
failure to do so or delay in so doing.
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Section 6.07 Non-judicial Enforcement. Secured Party may enforce
its rights hereunder without prior judicial process or judicial hearing, and to
the extent permitted by law Pledgor expressly waives any and all legal rights
which might otherwise require Secured Party to enforce its rights by judicial
process.
ARTICLE VII
Miscellaneous
Section 7.01 Notices. Any notice required or permitted to be
given under or in connection with this Security Agreement shall be given in
accordance with the notice provisions of the Credit Agreement.
Section 7.02 Amendments and Waivers. Secured Party's, any Issuing
Bank's or any Lender's acceptance of partial or delinquent payments or any
forbearance, failure or delay by Secured Party in exercising any right, power
or remedy hereunder shall not be deemed a waiver of any obligation of Pledgor
or any Obligor, or of any right, power or remedy of Secured Party; and no
partial exercise of any right, power or remedy shall preclude any other or
further exercise thereof. Secured Party may remedy any Event of Default
hereunder or in connection with the Obligations without waiving the Event of
Default so remedied. Pledgor hereby agrees that if Secured Party agrees to a
waiver of any provision hereunder, or an exchange of or release of the
Collateral, or the addition or release of any Obligor or other Person, any such
action shall not constitute a waiver of any of Secured Party's other rights or
of Pledgor's obligations hereunder. This Security Agreement may be amended
only by an instrument in writing in the manner set forth in the Credit
Agreement and may be supplemented only by documents delivered or to be
delivered in accordance with the express terms hereof.
Section 7.03 Copy as Financing Statement. A photocopy or other
reproduction of this Security Agreement may be delivered by Pledgor or Secured
Party to any financial intermediary or other third party for the purpose of
transferring or perfecting any or all of the Pledged Securities to Secured
Party or its designee or assignee.
Section 7.04 Possession of Collateral. Secured Party shall be
deemed to have possession of any Collateral in transit to it or set apart for
it (or, in either case, any of its agents, affiliates or correspondents).
Section 7.05 Redelivery of Collateral. If any sale or transfer of
Collateral by Secured Party results in full satisfaction of the Obligations,
and after such sale or transfer and discharge there remains a surplus of
proceeds, Secured Party will deliver to Pledgor or such other Person as may be
required by a court of competent jurisdiction such excess proceeds in a
commercially reasonable time; provided, however, that neither Secured Party,
any Issuing Bank nor any Lender shall have any liability for any interest, cost
or expense in connection with any reasonable delay in delivering such proceeds
to Pledgor.
Section 7.06 Governing Law; Jurisdiction. This Security Agreement
and the security interest granted hereby shall be construed in accordance with
and governed by the laws of the State of Texas (except to the extent that the
laws of any other jurisdiction govern the perfection and priority of the
security interests granted hereby).
Section 7.07 Continuing Security Agreement.
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(a) Except as may be expressly applicable pursuant to
Section 9-505 of the Code, no action taken or omission to act by
Secured Party, the Issuing Banks or the Lenders hereunder, including,
without limitation, any exercise of voting or consensual rights
pursuant to Section 4.07 or any other action taken or inaction
pursuant to Section 6.02, shall be deemed to constitute a retention of
the Collateral in satisfaction of the Obligations or otherwise to be
in full satisfaction of the Obligations, and the Obligations shall
remain in full force and effect, until Secured Party, the Issuing
Banks and the Lenders shall have applied payments (including, without
limitation, collections from Collateral) towards the Obligations in
the full amount then outstanding or until such subsequent time as is
hereinafter provided in subsection (b) below.
(b) To the extent that any payments on the Obligations or
proceeds of the Collateral are subsequently invalidated, declared to
be fraudulent or preferential, set aside or required to be repaid to a
trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent the
Obligations so satisfied shall be revived and continue as if such
payment or proceeds had not been received by Secured Party, the
Issuing Banks or the Lenders, and Secured Party's, the Issuing Banks'
and the Lenders' security interests, rights, powers and remedies
hereunder shall continue in full force and effect. In such event,
this Security Agreement shall be automatically reinstated if it shall
theretofore have been terminated pursuant to Section 7.08.
Section 7.08 Termination. The grant of a security interest
hereunder and all of Secured Party's, the Issuing Banks' and the Lenders'
rights, powers and remedies in connection therewith shall remain in full force
and effect until the complete payment of the Obligations and the compliance by
Pledgor with all covenants and agreements hereof and the termination of the
Credit Agreement, at which time Secured Party, at the written request and
expense of Pledgor, will release, reassign and transfer the Collateral to
Pledgor and declare this Security Agreement to be of no further force or
effect. Notwithstanding the foregoing, the provisions of subsection 7.07(b)
shall survive the termination of this Security Agreement.
Section 7.09 Counterparts, Effectiveness. This Security Agreement
may be executed in two or more counterparts. Each counterpart is deemed an
original, but all such counterparts taken together constitute one and the same
instrument. This Security Agreement becomes effective upon the execution
hereof by Pledgor and delivery of the same to Secured Party, and it is not
necessary for Secured Party, any Issuing Bank or any Lender to execute any
acceptance hereof or otherwise signify or express its acceptance hereof.
PLEDGOR: TESORO PETROLEUM CORPORATION
By: /s/ William T. VanKleef
-----------------------
Name: William T. VanKleef
Title: Vice President, Treasurer
SECURED PARTY: TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, AS AGENT
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By: /s/ P. Stan Burge
--------------------
Name: P. Stan Burge
Title: Vice President
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SCHEDULE 1.02
ISSUERS
Tesoro Alaska Petroleum Company, a Delaware corporation
Tesoro Refining, Marketing & Supply Company, a Delaware corporation
Tesoro Alaska Pipeline Company, a Delaware corporation
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EXHIBIT A
PLEDGED SECURITIES
1. 10 shares of the common stock of Tesoro - Alaskan Petroleum
Corporation (now known as Tesoro Alaska Petroleum Company), a
Delaware corporation ("TAPC"), registered in the name of Tesoro
Petroleum Corporation ("Pledgor") on the books of TAPC, as
represented by Certificate No. 1.
2. 1,000 shares of the common stock Nikiski Alaska Pipeline Company (now
known as Tesoro Alaska Pipeline Corporation), a Delaware corporation
("Alaska Pipeline"), registered in the name of Pledgor on the books
of Alaska Pipeline as represented by Certificate No. 2.
3. 1,000 shares of the common stock of Tesoro Refining, Marketing &
Supply Company, a Delaware corporation ("TRMSC"), registered in the
name of Pledgor on the books of TRMSC, as represented by Certificate
No. 1.
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