EXHIBIT 1.1
$167,500,000
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
CALPETRO TANKERS (BAHAMAS I) LIMITED
CALPETRO TANKERS (BAHAMAS II) LIMITED
CALPETRO TANKERS (BAHAMAS III) LIMITED
CALPETRO TANKERS (IOM) LIMITED
PAYABLE FROM CHARTERHIRE PAYMENTS BY
CHEVRON TRANSPORT CORPORATION
WHOSE OBLIGATIONS ARE GUARANTEED
BY CHEVRON CORPORATION
$17,160,000 __ % Serial First Preferred Mortgage Notes Due 1996
$18,160,000 __ % Serial First Preferred Mortgage Notes Due 1997
$18,160,000 __ % Serial First Preferred Mortgage Notes Due 1998
$18,160,000 __ % Serial First Preferred Mortgage Notes Due 1999
$18,160,000 __ % Serial First Preferred Mortgage Notes Due 2000
$18,160,000 __ % Serial First Preferred Mortgage Notes Due 2001
$18,160,000 __ % Serial First Preferred Mortgage Notes Due 2002
$18,160,000 __ % Serial First Preferred Mortgage Notes Due 2003
$12,950,000 __ % Serial First Preferred Mortgage Notes Due 2004
$ 7,740,000 __ % Serial First Preferred Mortgage Notes Due 2005
$ 2,530,000 __ % Serial First Preferred Mortgage Notes Due 2006
UNDERWRITING AGREEMENT
----------------------
___________ __, 1995
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
140 Broadway
New York, New York 10005
Dear Sirs:
California Petroleum Transport Corporation, a Delaware corporation
("California Petroleum"), proposes to issue and sell $167,500,000 principal
amount of its Serial First Preferred Mortgage Notes Maturing Serially from 1996
to 2006 (the "Serial Mortgage Notes") to Donaldson, Lufkin & Jenrette Securities
Corporation (the "Underwriter"). The Serial Mortgage Notes are to be issued
pursuant to the
provisions of an Indenture to be dated as of __________ __, 1995 (the "Serial
Indenture") among California Petroleum, Chemical Trust Company of California, as
Serial Indenture Trustee (the "Serial Indenture Trustee") and, solely for
purposes of the Trust Indenture Act of 1939, as amended, Chevron Corporation
("Chevron"). Concurrent with this offering, California Petroleum proposes to
issue and sell $117,900,000 principal amount of its __% First Preferred Mortgage
Notes Due 2015 (the "Term Mortgage Notes") to the Underwriter pursuant to an
Underwriting Agreement dated the date hereof relating to the Term Mortgage Notes
(the "Term Mortgage Notes Underwriting Agreement).
The proceeds from the sale of the Serial Mortgage Notes, together with
the proceeds from the sale of the Term Mortgage Notes, will be loaned by
California Petroleum to CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers
(Bahamas II) Limited, CalPetro Tankers (Bahamas III) Limited and CalPetro
Tankers (IOM) Limited (each, an "Owner") (California Petroleum, and the Owners
each, a "Company", and collectively, the "Companies") on a joint and several
basis to fund, after paying certain fees and expenses, the acquisition by each
Owner of a recently constructed oil tanker from Chevron Transport Corporation
("Chevron Transport"). Initially, each Owner will enter into a bareboat charter
(each, an "Initial Charter") with Chevron Transport with a term expiring on
_______, 2015, subject to earlier termination at the option of Chevron
Transport. The obligations of Chevron Transport under each Initial Charter will
be guaranteed by Chevron.
The terms "Chevron Registration Statement" and "Chevron Prospectus"
have the meanings specified in the Term Mortgage Notes Underwriting Agreement.
Unless otherwise defined in this Agreement, capitalized terms have the meanings
specified or referred to in the Collateral Trust Agreement to be dated as of
_________, 1995 (the "Collateral Trust Agreement") among California Petroleum,
Chemical Trust Company of California, as Collateral Trustee, the Serial
Indenture Trustee as Serial Indenture Trustee and Chemical Trust Company of
California, as Term Indenture Trustee.
1. Registration Statement and Prospectus. California Petroleum, the
Owners, Chevron and Chevron Transport have prepared and filed with the
Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively called the "Act"), a
joint registration statement on Forms S-3, S-1 and F-1 including a prospectus
relating to the Serial Mortgage Notes, which may be amended. The registration
statement with respect to the Serial Mortgage Notes as amended at the time when
it becomes effective, including information (if any) deemed to be part of such
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is hereinafter referred to as the Registration Statement; and the
prospectus in the form first used to confirm sales of Serial Mortgage Notes is
hereinafter referred as the Prospectus (including, in the case
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of all references to the Registration Statement and the Prospectus, documents
incorporated therein by reference). The terms "supplement" and "amendment" or
"amend" as used in this Agreement shall include all documents filed after the
date of this Agreement pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), that are deemed to be incorporated by reference in
the Prospectus.
2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, California Petroleum agrees to issue and sell, and the
Underwriter agrees to purchase from California Petroleum, the entire principal
amount of Serial Mortgage Notes, at percentages of the principal amount thereof
set forth below (the "Purchase Price") plus accrued interest thereon, if any,
from ________ __, 1995 to the date of payment and delivery.
Percentage of
Principal Amount
----------------
Serial Mortgage Notes due 1996 _____%
Serial Mortgage Notes due 1997 _____%
Serial Mortgage Notes due 1998 _____%
Serial Mortgage Notes due 1999 _____%
Serial Mortgage Notes due 2000 _____%
Serial Mortgage Notes due 2001 _____%
Serial Mortgage Notes due 2002 _____%
Serial Mortgage Notes due 2003 _____%
Serial Mortgage Notes due 2004 _____%
Serial Mortgage Notes due 2005 _____%
Serial Mortgage Notes due 2006 _____%
3. Terms of Public Offering. California Petroleum, the Owners,
Chevron and Chevron Transport are advised by the Underwriter that the
Underwriter proposes (i) to make a public offering of the Serial Mortgage Notes
as soon after the effective date of the Registration Statement as in the
Underwriter's judgment is advisable and (ii) initially to offer the Serial
Mortgage Notes for sale to the public upon the terms and conditions set forth in
the Prospectus.
4. Delivery and Payment. Delivery to the Underwriter of and payment
for the Serial Mortgage Notes shall be made at 9:30 A.M., New York City time, on
the fifth business day (the "Closing Date") following the date of the initial
public offering, at such place as the Underwriter shall designate. The Closing
Date may be varied by agreement among the Underwriter, California Petroleum and
Chevron, and the location of delivery of and the form of payment for the Serial
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Mortgage Notes may be varied by agreement between the Underwriter and California
Petroleum.
Certificates for the Serial Mortgage Notes shall be registered in the
name of Cede & Co., as nominee of The Depository Trust Company, or in such names
and issued in such denominations as the Underwriter shall request in writing not
later than two full business days prior to the Closing Date. Such certificates
shall be made available to you for inspection not later than 9:30 A.M., New York
City time, on the business day next preceding the Closing Date. Certificates in
definitive form evidencing the Serial Mortgage Notes shall be delivered to the
Underwriter on the Closing Date with any transfer taxes thereon duly paid by
California Petroleum, for the account of the Underwriter, against payment of the
Purchase Price therefor by wire transfer of immediately available funds to an
account designated by California Petroleum.
5. Agreements of California Petroleum and each Owner. California
Petroleum and each Owner agree with the Underwriter, Chevron and Chevron
Transport:
(a) To use their best efforts to cause the Registration Statement to
become effective at the earliest possible time.
(b) To advise the Underwriter and Chevron promptly and, if requested
by the Underwriter or Chevron, to confirm such advice in writing, (i) when
the Registration Statement has become effective and when any post-effective
amendment to it becomes effective, (ii) of any request by the Commission
for amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (iii) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Serial
Mortgage Notes for offering or sale in any jurisdiction, or the initiation
of any proceeding for such purposes, and (iv) of the happening of any event
during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, California Petroleum and each Owner will make every reasonable
effort to obtain the withdrawal or lifting of such order at the earliest
possible time.
(c) To furnish to the Underwriter and Chevron, without charge, two
signed copies of the Registration Statement as first filed with the
Commission and of each amendment to it, including all exhibits and
documents
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incorporated by reference, and to furnish to the Underwriter and Chevron
such number of conformed copies of the Registration Statement as so filed
and of each amendment to it, without exhibits but including documents
incorporated by reference, as the Underwriter and Chevron may reasonably
request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus of which the
Underwriter and Chevron shall not previously have been advised or to which
the Underwriter or Chevron shall reasonably object; and to prepare and file
with the Commission, promptly upon the Underwriter's reasonable request,
any amendment to the Registration Statement or supplement to the Prospectus
which may be necessary or advisable in connection with the distribution of
the Serial Mortgage Notes by the Underwriter, and to use its best efforts
to cause the same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective, and
from time to time thereafter for such period as in the opinion of counsel
for the Underwriter a prospectus is required by law to be delivered in
connection with sales by the Underwriter or a dealer, to furnish to the
Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as the Underwriter or dealer may
reasonably request.
(f) If during the period specified in paragraph (e) above any event
shall occur as a result of which, in the opinion of counsel for the
Underwriter or Chevron, it becomes necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with any law, forthwith to prepare and file with the Commission an
appropriate amendment or supplement to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will not in
the light of the circumstances when it is so delivered, be misleading, or
so that the Prospectus will comply with law, and to furnish to the
Underwriter and to such dealers as the Underwriter shall specify, such
number of copies thereof as the Underwriter or dealers may reasonably
request.
(g) Prior to any public offering of the Serial Mortgage Notes, to
cooperate with the Underwriter and counsel for the Underwriter in
connection with the registration or qualification of the Serial Mortgage
Notes for offer and sale by the Underwriter and by dealers under the state
securities or Blue Sky laws of such jurisdictions as the Underwriter may
request, to continue such qualification in effect so long as required for
distribution of the Serial Mortgage Notes; provided, however, that
California Petroleum and each
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Owner shall not be required to qualify to do business in any jurisdiction
where they are not now qualified or to take any action which would subject
them to general or unlimited service of process in any jurisdiction where
they are not now so subject.
(h) To mail and make generally available to its security holders as
soon as reasonably practicable an earnings statement of California
Petroleum and each Owner covering a period of at least twelve months after
the effective date of the Registration Statement (but in no event
commencing later than 90 days after such date) which shall satisfy the
provisions of Section 11(a) of the Act, and to advise the Underwriter in
writing when such statement has been so made available.
(i) During the period of five years after the date of this Agreement,
(i) to mail as soon as reasonably practicable after the end of each fiscal
year to the record holders of its Serial Mortgage Notes a separate
financial report of California Petroleum and each Owner and their
respective subsidiaries on a consolidated basis (and a similar financial
report of all unconsolidated subsidiaries, if any), all such financial
reports to include a consolidated balance sheet, a consolidated statement
of operations, a consolidated statement of cash flows and a consolidated
statement of shareholders' equity as of the end of and for such fiscal
year, together with comparable information as of the end of and for the
preceding year, certified by independent certified public accountants, and
(ii) to mail and make generally available as soon as practicable after the
end of each quarterly period (except for the last quarterly period of each
fiscal year) to such holders, a consolidated balance sheet, a consolidated
statement of operations and a consolidated statement of cash flows (and
similar financial reports of all unconsolidated subsidiaries, if any) as of
the end of and for such period, and for the period from the beginning of
such year to the close of such quarterly period, together with comparable
information for the corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i) above, to furnish
to the Underwriter as soon as available a copy of each report or other
publicly available information of California Petroleum and each Owner
mailed to the security holders of California Petroleum or filed with the
Commission and such other publicly available information concerning
California Petroleum and each Owner and their respective subsidiaries as
the Underwriter may reasonably request.
(k) To use the proceeds from the sale of the Serial Mortgage Notes in
the manner described in the Prospectus under the caption "Sources and Uses
of Funds."
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(l) California Petroleum will pay all costs, expenses, disbursements,
fees and taxes incident to the registration of the Serial Mortgage Notes
and the sale of the Serial Mortgage Notes, including but not limited to
costs, expenses, disbursements, fees and taxes (i) incident to the
registration or qualification of the Term Mortgage Notes and the Serial
Mortgage Notes for offer and sale under the securities or Blue Sky laws of
the several states (including in each case the fees and disbursements of
counsel for the Underwriter relating to such registration or qualification
and memoranda relating thereto), (ii) incident to the filing under the Act
of the Chevron Registration Statement, the Registration Statement and the
registration statement with respect to the Term Mortgage Notes, (iii) paid
to rating agencies in connection with the rating of the Term Mortgage
Notes and the Serial Mortgage Notes, or (iv) paid to the Term Indenture
Trustee, the Serial Indenture Trustee and the Collateral Trustee, except
that California Petroleum shall have no obligation to pay any of the costs,
expenses, disbursements and fees of Pillsbury Madison & Sutro or Price
Waterhouse LLP (San Francisco), accountants for Chevron and Chevron
Transport, which Chevron has agreed to pay pursuant to Section 6(g) of this
Agreement.
(m) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by California
Petroleum and each Owner prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Serial Mortgage Notes.
6. Agreements of Chevron Transport and Chevron. Chevron
Transportation and Chevron agree with the Underwriter:
(a) Chevron Transport and Chevron will use their best efforts to
cause the Registration Statement to become effective at the earliest
possible time.
(b) Chevron Transport and Chevron will promptly advise the
Underwriter (i) when the Registration Statement has become effective and
when any amendment to it becomes effective, (ii) of any request by the
Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution of any proceeding for that
purpose, and (iv) of the receipt by Chevron Transport or Chevron of any
notification with respect to the suspension of the qualification of the
Term Mortgage Notes for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Chevron Transport and
Chevron will use their best efforts to prevent the issuance of any such
stop order and, if issued, to obtain as soon as possible the withdrawal
thereof. Chevron Transport and Chevron will not file any amendment or
supplement to the Chevron Registration Statement or Chevron
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Prospectus unless they have furnished the Underwriter a copy prior to
filing and will not file any such proposed amendment to which the
Underwriter reasonably objects.
(c) If, at any time when a prospectus relating to the Serial Mortgage
Notes is required to be delivered under the Act or any other applicable
securities law, any event shall occur as a result of which the Prospectus
as then amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to amend or supplement the
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, Chevron Transport and Chevron will promptly prepare and
file with the Commission, subject to paragraph (b) of this Section 6, an
amendment or supplement to the Prospectus which will correct such statement
or omission or an amendment which will effect such compliance.
(d) Chevron Transport and Chevron will, if requested, furnish to the
Underwriter copies of the Registration Statement as first filed with the
Commission and of each amendment to it (including, if requested, the
exhibits and documents incorporated by reference in the Prospectus) and
each amendment or supplement thereto which is thereafter filed pursuant to
paragraph (b) or (c) of this Section 6 and, so long as delivery of a
prospectus by the Underwriter or a dealer may, in the opinion of counsel
for the Underwriter, be required by the Act or other applicable securities
laws, as many copies of the Prospectus and any amendments thereof and
supplements thereto, as the Underwriter may reasonably request.
(e) Chevron Transport and Chevron will cooperate with the Underwriter
and counsel for the Underwriter in connection with the registration or
qualification of the Serial Mortgage Notes for offer and sale by the
Underwriter and by dealers under the state securities or Blue Sky laws of
such jurisdictions as the Underwriter may request, and will cooperate with
the Underwriter and counsel for the Underwriter to continue such
qualification in effect so long as required for the distribution of the
Serial Mortgage Notes; provided, however, that Chevron Transport and
Chevron shall not be required to qualify to do business in any jurisdiction
where they are not now qualified or to take any action which would subject
them to general or unlimited service of process in any jurisdiction where
they are not now so subject.
(f) Chevron will make generally available to its security holders as
soon as reasonably practicable, but not later than 45 days after the end of
the twelve-month period beginning at the end of the fiscal quarter of
Chevron during which the filing of the Registration Statement (or
Prospectus pursuant
8
to Rule 424 under the Act, if later) first occurs (except not later than 90
days if such filing date is in the last fiscal quarter), an earnings
statement (which need not be audited) of Chevron and its subsidiaries
covering such twelve-month period which shall satisfy the provisions of
Section 11(a) of the Act.
(g) Chevron will pay all costs, expenses, disbursements and fees of
(i) Pillsbury Madison & Sutro, counsel for Chevron and Chevron Transport,
in connection with the issuance of the Term Mortgage Notes and the Serial
Mortgage Notes and (ii) Price Waterhouse LLP (San Francisco), accountants
for Chevron and Chevron Transport, in connection with the delivery of the
comfort letter required by Section 11(l)(ii) hereof. Other than the
foregoing, Chevron and Chevron Transport shall have no obligation to pay
any costs, expenses, disbursements, fees or taxes incident to the
registration of the Serial Mortgage Notes and the sale of the Serial
Mortgage Notes, including but not limited to costs, expenses,
disbursements, fees or taxes (i) incident to the registration or
qualification of the Serial Mortgage Notes and the Term Mortgage Notes for
offer and sale under the securities or Blue Sky laws of the several states
(including in each case the fees and disbursements of counsel for the
Underwriter relating to such registration or qualification and memoranda
relating thereto), (ii) incident to the filing under the Act of the Chevron
Registration Statement, the Registration Statement and the registration
statement with respect to the Term Mortgage Notes, (iii) paid to rating
agencies in connection with the rating of the Serial Mortgage Notes and the
Term Mortgage Notes, or (iv) paid to the Serial Indenture Trustee, the Term
Indenture Trustee and the Collateral Trustee.
The Underwriter agrees with Chevron Transport and Chevron that if a
letter delivered to the Underwriter pursuant to paragraph (l) of Section 11 of
this Agreement has attached thereto a copy of unaudited interim financial
statements for a period ending after the latest financial statements included in
the Registration Statement, and if such financial statements have not been
publicly disclosed, the Underwriter shall keep such attachment in strict
confidence and not furnish such attachment to any other person.
7. Representations and Warranties. (i) Chevron and Chevron
Transport represent and warrant that the Registration Statement and the
Prospectus conform, and any amendments thereof and supplements thereto relating
to the Serial Mortgage Notes will conform, in all material respects to the
requirements of the Act, each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus complied when so filed as to form
with the Exchange Act and the rules and regulations thereunder, the Serial
Indenture conforms in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended and the rules and regulations of the
Commission thereunder and none of the above listed documents included or will
include any untrue statement of a material fact or omitted or will
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omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that Chevron and
Chevron Transport make no representations and warranties as to (i) that part of
the Registration Statement which shall constitute the Trustee's Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of 1939,
as amended, or (ii) any statements or omissions made in reliance upon and in
conformity with information furnished to Chevron or Chevron Transport by or on
behalf the Underwriter, California Petroleum or any of the Owners for use in
connection with the preparation of such documents.
(ii) California Petroleum and each Owner represent and warrant to the
Underwriter, Chevron and Chevron Transport that:
(a) (i) the Registration Statement and any amendments thereto will
comply in all material respects with the provisions of the Act and will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and (ii) the Prospectus and any
supplements thereto will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph (a) shall not apply to statements or omissions
in the Registration Statement or the Prospectus (or any supplement or
amendment to them) based upon information relating to the Underwriter,
Chevron or Chevron Transport furnished to California Petroleum in writing
by the Underwriter, Chevron or Chevron Transport, respectively, expressly
for use therein or to that part of the Registration Statement that
constitutes the Statement of Eligibility and Qualification (Form T-1) under
the Trust Indenture Act of 1939, as amended, of the Serial Indenture
Trustee.
(b) Each preliminary prospectus filed as part of the registration
statement with respect to the Serial Mortgage Notes as originally filed or
as part of any amendment thereto, or filed pursuant to Rule 424 under the
Act, complied when so filed in all material respects with the Act.
(c) California Petroleum and each Owner has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority to
carry on its business as it is currently being conducted and to own, lease
and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to be so qualified would not have a material adverse effect on such
Company.
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(d) Any taxes, fees and other governmental charges which are due and
payable on the Closing Date in connection with the execution, delivery and
performance of this Agreement, the Serial Indenture, the Mortgages and
other Security Documents being executed on or before the Closing Date and
the execution, delivery and sale of the Serial Mortgage Notes shall have
been paid by California Petroleum or the Owners, at or prior to the Closing
Date.
(e) The Serial Mortgage Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Serial
Indenture and delivered to the Underwriter against payment therefor as
provided by this Agreement, will be entitled to the benefits of the Serial
Indenture, and will be valid and binding obligations of California
Petroleum, enforceable in accordance with their terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability.
(f) This Agreement has been duly authorized, executed and delivered
by California Petroleum and each Owner and is a valid and binding agreement
of California Petroleum and each Owner enforceable in accordance with its
terms (except as rights to indemnity and contribution hereunder may be
limited by applicable law).
(g) The Serial Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and has been duly authorized, executed
and delivered by California Petroleum and is a valid and binding agreement
of California Petroleum, enforceable in accordance with its terms except as
(i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(h) The Serial Mortgage Notes conform in all material respects to the
description thereof contained in the Prospectus.
(i) Neither California Petroleum nor any Owner is in violation of its
respective organizational documents or by-laws or in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of the business
of such Company, to which such Company is a party or by which such Company
or its property is bound.
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(j) The execution, delivery and performance of this Agreement, the
Serial Indenture and the Serial Mortgage Notes and compliance by California
Petroleum with all the provisions hereof and thereof and the consummation
of the transactions contemplated hereby and thereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may
be required under the securities or Blue Sky laws of the various states)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the organizational documents or by-laws
of California Petroleum or any agreement, indenture or other instrument to
which it is a party or by which it or its property is bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to California Petroleum or its property.
(k) The execution, delivery and performance of this Agreement and
compliance by the Owners with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body (except as such may
be required under the securities or Blue Sky laws of the various states)
and will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of any of the
Owners or any agreement, indenture or other instrument to which such Owner
is a party or by which such Owner or its property is bound, or violate or
conflict with any laws, administrative regulations or rulings or court
decrees applicable to such Owner or its property.
(l) Except as otherwise set forth in the Prospectus, there are no
material legal or governmental proceedings pending to which California
Petroleum or any Owner is a party or of which any of their respective
property is the subject, and, to the best of such Company's knowledge, no
such proceedings are threatened or contemplated. No contract or document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
is not so described or filed as required.
(m) To such Company's knowledge, neither California Petroleum nor any
Owner has violated any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), which in each case might result in any material
adverse change in the business, prospects, financial condition or results
of operation of such Company.
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(n) Except as otherwise set forth in the Prospectus or such as are
not material to the business, prospects, financial condition or results of
operation of such Company, California Petroleum and each Owner has good and
marketable title, free and clear of all liens, claims, encumbrances and
restrictions except liens for taxes not yet due and payable, to all
property and assets described in the Registration Statement as being owned
by such Company.
(o) California Petroleum and each of the Owners maintains the various
insurance required of it under the financing documents to which it is a
party.
(p) Neither California Petroleum nor any Owner is an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(q) All tax returns required to be filed by California Petroleum or
any of the Owners, in all jurisdictions, have been so filed, except insofar
as the failure to file such returns would not have a material adverse
effect on such Company. All taxes, including withholding taxes, penalties
and interest, assessments, fees and other charges due or claimed to be due
from such entities or that are due and payable have been paid, other than
those being contested in good faith and for which adequate reserves have
been provided or those currently payable without penalty or interest,
except insofar as the failure to pay such taxes would not have a material
adverse effect on such Company.
(r) The laws, governmental rules, regulations and decrees of the
Bahamas and the Isle of Man and any political sub-division thereof permit
the transfer of United States Dollars as required by this Agreement.
(s) Except for the fees payable as provided in the Prospectus,
neither California Petroleum nor the Owners has become obligated to pay any
fee or commission to or any expenses of any broker, finder or investment
banker or anyone else acting in the capacity of a broker, finder or
investment banker in connection with the transactions contemplated hereby.
(t) California Petroleum and the Owners shall pay amounts payable
hereunder in United States dollars in New York City as may be necessary in
order that every net payment by such Company of any fees or expenses
payable or reimbursable hereunder, after deduction or withholding for or on
account of any present or future tax, assessment or other governmental
charge (including, without limitation, value added tax) imposed upon or as
a result of such payment by any political subdivision or taxing authority
thereof or any non-U.S. jurisdiction from which such payment or
reimbursement may be
13
made, will not be less than the amount provided for herein to be paid or
reimbursed by such Company.
(u) California Petroleum and each Owner have complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws of
Florida).
(v) All of the representations and warranties by (i) California
Petroleum contained in each Security Document to which it is a party and
(ii) the Owners contained in the Vessel Purchase Agreement to which such
Owner is a party and each Security Document to which such Owner is a party
are incorporated by reference in this Agreement as if set forth herein, and
California Petroleum and the Owners represent and warrant that such
representations and warranties are true and correct as of the date of this
Agreement, except to the extent that such representations and warranties
relate solely to an earlier date or later date (in which case such
representations and warranties are correct on and as of such earlier date
or will be correct on and as of such later date, as the case may be).
8. Indemnification Among California Petroleum, the Owners and the
Underwriter. (a) California Petroleum and each Owner agree to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages, liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Companies shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon (i) information
relating to the Underwriter furnished in writing to California Petroleum by the
Underwriter expressly for use therein or (ii) information furnished in writing
to the Underwriter by Chevron or Chevron Transport expressly for use therein.
This indemnity agreement will be in addition to any liability which California
Petroleum or any Owner may otherwise have.
(b) In case any action shall be brought against the Underwriter
or any person controlling the Underwriter, based upon any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment or
supplement thereto and with respect to which indemnity may be sought against any
of the Companies, the Underwriter shall promptly notify the Companies in writing
and the Companies shall assume the defense thereof, including the employment of
counsel reasonably
14
satisfactory to such indemnified party and payment of all fees and expenses.
The Underwriter or any such controlling person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the Underwriter
or such controlling person unless (i) the employment of such counsel shall have
been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense and employ counsel
within 30 days after notice of commencement of such action or (iii) the named
parties to any such action (including any impleaded parties) include both the
Underwriter or such controlling person and Chevron, Chevron Transport or one or
more of the Companies and the Underwriter or such controlling person shall have
been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
other party or parties named in such action (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of
the Underwriter or such controlling person, it being understood, however, that
the indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) for the Underwriter and all controlling persons, which firm
shall be designated in writing by the Underwriter and that all such fees and
expenses shall be reimbursed as they are incurred). The indemnifying party
shall not be liable for any settlement of any such action effected without its
written consent but if settled with the written consent of the indemnifying
party, the indemnifying party agrees to indemnify and hold harmless the
Underwriter and any such controlling person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second sentence of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 10
business days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed the indemnified party
in accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) The Underwriter agrees to indemnify and hold harmless California
Petroleum and each Owner, their directors, their officers who sign the
Registration Statement and any person controlling such Companies within the
meaning of Section
15
15 of the Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Companies to the Underwriter but only with
reference to information relating to the Underwriter furnished in writing by the
Underwriter expressly for use in the Registration Statement, the Prospectus or
any preliminary prospectus. In case any action shall be brought against any
Company, any of its directors, any such officer or any person controlling any
Company based on the Registration Statement, the Prospectus or any preliminary
prospectus and in respect of which indemnity may be sought against the
Underwriter, the Underwriter shall have the rights and duties given to the
Companies (except that if the Companies shall have assumed the defense thereof,
the Underwriter shall not be required to do so, but may employ separate counsel
therein and participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of the Underwriter), and the Companies, their
directors, any such officers and any person controlling the Companies shall have
the rights and duties given to the Underwriter, by Section 8(b) hereof. This
indemnity agreement will be in addition to any liability which the Underwriter
may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Companies, on the one hand and the
Underwriter on the other hand from the offering of the Serial Mortgage Notes or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Companies, and the Underwriter in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Companies on the one hand and the Underwriter on the
other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by California
Petroleum, and the total underwriting discounts and commissions received by the
Underwriter, bear to the total price to the public of the Serial Mortgage Notes,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Companies on the one hand and the Underwriter on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Companies or the
Underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
16
The Companies and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or judgments referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, 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, the
Underwriter shall not be required to contribute any amount in excess of the
amount of underwriting discount of the Serial Mortgage Notes underwritten by it
and distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
9. Indemnification Among Chevron, Chevron Transport and the
Underwriter. (a) Chevron and Chevron Transport agree to indemnify and hold
harmless the Underwriter and each person, if any, who controls the Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus, or in
any amendment thereof or supplement thereto relating to the Serial Mortgage
Notes, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agree to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by them,
as so incurred, in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that Chevron and Chevron
Transport will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information furnished to Chevron
or Chevron Transport in writing by or on behalf of the Underwriter for use in
connection with the preparation thereof. This indemnity agreement will be in
addition to any liability which Chevron or Chevron Transport may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless Chevron
and Chevron Transport, each of their directors, each of their officers who signs
the Registration Statement, and each person who controls Chevron or Chevron
Transport within the meaning of either the Act or the Exchange Act, to the same
17
extent as the foregoing indemnity from Chevron and Chevron Transport to the
Underwriter, but only with reference to information furnished to Chevron or
Chevron Transport in writing by or on behalf of the Underwriter for use in
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which the Underwriter
may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 9, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 9. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided that, if the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel, to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 9 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
representatives representing the indemnified parties who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 9 is due
in accordance with its terms but is for any reason held by a court to be
unavailable from
18
Chevron, Chevron Transport or the Underwriter on grounds of policy or otherwise,
Chevron, Chevron Transport and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending same)
to which Chevron, Chevron Transport or the Underwriter may be subject in such
proportion so that the Underwriter is responsible for that portion represented
by the percentage that the underwriting discount appearing on the cover page of
the Prospectus bears to the public offering price appearing thereon and Chevron
or Chevron Transport is responsible for the balance; provided that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 9, each person
who controls the Underwriter within the meaning of either the Act or the
Exchange Act shall have the same rights to contribution as the Underwriter, and
each person who controls Chevron or Chevron Transport within the meaning of
either the Act or the Exchange Act, each officer of Chevron or Chevron Transport
who shall have signed the Registration Statement and each director of Chevron or
Chevron Transport shall have the same rights to contribution as Chevron and
Chevron Transport. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this paragraph (d), notify such party from whom
contribution may be sought, but the omission to so notify in writing such party
or parties shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or otherwise than
under this paragraph (d).
10. Indemnification Among Chevron, Chevron Transport, California
Petroleum and the Owners. (a) California Petroleum and each Owner jointly and
severally agree to indemnify and hold harmless Chevron and Chevron Transport,
each of their directors, each of their officers who signs the Registration
Statement and each person controlling Chevron or Chevron Transport within the
meaning of the Act or of the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agree to reimburse each such indemnified party for any legal or other expenses
reasonably incurred by them, as so incurred, in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that California Petroleum and each of the Owners will not be liable in any such
case to the extent
19
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with information
furnished by Chevron or Chevron Transport to California Petroleum or the Owners
in writing for use in connection with the preparation thereof. This indemnity
agreement will be in addition to any liability which California Petroleum or
each Owner may otherwise have.
(b) Chevron and Chevron Transport agree to indemnify and hold harmless
California Petroleum and each Owner, each of their directors, each of their
officers who signs the Registration Statement, and any person controlling such
Companies within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from California Petroleum and each Owner to
Chevron and Chevron Transport, but only with reference to information furnished
to California Petroleum or an Owner by Chevron or Chevron Transport in writing
for use in preparation of the documents referred to in the foregoing indemnity.
This indemnity agreement will be in addition to any liability which Chevron or
Chevron Transport may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 10, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than under this Section 10. In case any such action is brought
against any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided that, if the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel, to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 10 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable
20
for the expenses of more than one separate counsel, approved by the
representatives representing the indemnified parties who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 10 is
due in accordance with its terms but is for any reason held by a court to be
unavailable from Chevron, Chevron Transport, California Petroleum or each Owner
on grounds of policy or otherwise, Chevron, Chevron Transport, California
Petroleum and each Owner shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which Chevron, Chevron
Transport, California Petroleum and each Owner may be subject in such proportion
so that Chevron or Chevron Transport is responsible for that portion represented
by (A)(i) the principal amount of the Serial Mortgage Notes over (ii) the
principal amount of the Notes, multiplied by (B) purchase price of the Vessels,
and California Petroleum and each Owner is responsible for the balance; provided
that no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 10, each person who controls Chevron, Chevron Transport, California
Petroleum or each Owner within the meaning of either the Act or the Exchange
Act, each officer of Chevron, Chevron Transport, California Petroleum or each
Owner who shall have signed the Registration Statement and each director of
Chevron, Chevron Transport, California Petroleum or each Owner shall have the
same rights to contribution as Chevron, Chevron Transport, California Petroleum
or each Owner. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this paragraph (d), notify such party from whom contribution
may be sought, but the omission to so notify in writing such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
paragraph (d).
11. Conditions of Underwriter's Obligation. The obligation of the
Underwriter to purchase the Serial Mortgage Notes under this Agreement is
subject to the satisfaction of each of the following conditions:
21
(a) All the representations and warranties of the Companies contained
in this Agreement and the Term Mortgage Notes Underwriting Agreement shall
be true and correct on the Closing Date with the same force and effect as
if made on and as of the Closing Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M., New York City time, on the date of this Agreement or at
such later date and time as you may approve in writing, and at the Closing
Date no stop order suspending the effectiveness of the Registration
Statement or the Chevron Registration Statement shall have been issued and
no proceedings for that purpose shall have been commenced or shall be
pending before or threatened by the Commission.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading, nor
shall any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of California
Petroleum's securities by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Act.
(d)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in
the earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of any of the Companies, (ii) since the date
of the latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or in
the long-term debt of any of the Companies from that set forth in the
Registration Statement and Prospectus, (iii) the Companies and any of their
respective subsidiaries shall have no liability or obligation, direct or
contingent, which is material to such company and its respective
subsidiaries, taken as a whole, other than those reflected in the
Registration Statement and the Prospectus and (iv) on the Closing Date the
Underwriter shall have received certificates dated the Closing Date, signed
by an authorized representative of each of the Companies, confirming the
matters set forth in paragraphs (a), (b), (c) and (d) of this Section 11.
(e) Chevron Transport and Chevron shall have furnished to the
Underwriter a certificate, dated the Closing Date, of Chevron Transport and
Chevron, signed by one or more executive officers of Chevron Transport and
Chevron, to the effect that the signers of such certificate have carefully
22
examined the Registration Statement, the Prospectus and this Agreement and
that:
(i) The representations and warranties of Chevron Transport and
Chevron in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as if made
on the Closing Date, and Chevron Transport and Chevron have complied
with all the agreements and satisfied all the conditions on their part
to be performed or satisfied at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted and are pending or, to their knowledge,
threatened as of such date; and
(iii) Since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse change
in the condition (financial or otherwise) of Chevron and its
consolidated subsidiaries, taken as a whole, nor any material increase
in the debt of Chevron and its consolidated subsidiaries, except as
set forth in or contemplated by the Prospectus or as described in the
certificate.
(f) Pillsbury Madison & Sutro, counsel for Chevron and Chevron
Transport, shall have furnished to the Underwriter their opinion, dated the
Closing Date, substantially in the form attached hereto as Exhibit A.
(g) The Underwriter shall have received on the Closing Date an
opinion (satisfactory to the Underwriter and its counsel), dated the
Closing Date, of Thacher Proffitt & Wood, special counsel for California
Petroleum and the Owners, to the effect set forth in Exhibit B.
(h) The Underwriter shall have received on the Closing Date an
opinion (satisfactory to the Underwriter and its counsel), dated the
Closing Date, of McKinney, Bancroft & Hughes, special Bahamian counsel for
CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II)
Limited, and CalPetro Tankers (Bahamas III) Limited, to the effect set
forth in Exhibit C.
(i) The Underwriter shall have received on the Closing Date an
opinion (satisfactory to the Underwriter and its counsel), dated the
Closing Date, of Cains, special Isle of Man counsel for CalPetro Tankers
(IOM) Limited, to the effect set forth in Exhibit D.
23
(j) The Underwriter shall have received on the Closing Date an
opinion (satisfactory to the Underwriter and its counsel), dated the
Closing Date, of The Henries Law Firm, special Liberian counsel for Chevron
Transport, to the effect set forth in Exhibit E.
(k) The Underwriter shall have received on the Closing Date an
opinion, dated the Closing Date, of Davis Polk & Wardwell, special counsel
for the Underwriter, to the effect set forth in Exhibit F.
(l) The Underwriter shall have received on and as of the Closing
Date, in form and substance satisfactory to you, (i) a letter from Price
Waterhouse LLP, independent public accountants, with respect to the
financial statements and certain financial information of California
Petroleum and the Owners relating to California Petroleum and the Owners
contained in the Registration Statement and the Prospectus and
substantially in the form and substance of the letter delivered to you by
Price Waterhouse on the date of this Agreement and (ii) a letter from Price
Waterhouse LLP, independent public accountants for Chevron and Chevron
Transport, dated the Closing Date, with respect to the financial statements
and certain financial information of Chevron and Chevron Transport
contained in the Registration Statement and the Prospectus, which letter
shall be in such form as may be agreed upon among the Underwriter and Price
Waterhouse LLP, and shall cover such matters as may be reasonably requested
by the Underwriter.
(m) The Companies shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by such company at or prior to
the Closing Date.
(n) All of the conditions specified in the Term Mortgage Notes
Underwriting Agreement shall have been satisfied or waived in writing on
the Closing Date.
12. Conditions to Obligations of Chevron and Chevron Transport. The
obligations of Chevron and Chevron Transport under this Agreement, and the
obligations of Chevron and Chevron Transport to consummate the sale and
chartering of the Vessels pursuant to the Vessel Purchase Agreements and the
Initial Charters and the guarantee of the Initial Charters pursuant to the
Initial Charter Guarantee (all as described in the Prospectus and the Chevron
Prospectus), are subject to the satisfaction of each of the following
conditions:
24
(a) All the representations and warranties of the Companies
contained in this Agreement and the Term Mortgage Notes Underwriting Agreement
shall be true and correct on the Closing Date with the same force and effect as
if made on and as of the Closing Date.
(b) The Registration Statement and the Chevron Registration Statement
shall have become effective not later than 5:00 P.M., New York City time, on the
date of this Agreement or at such later date and time as the Underwriter may
approve in writing, and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement or the Chevron Registration
Statement shall have been issued and no proceedings for that purpose shall have
been commenced or shall be pending before or threatened by the Commission.
(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have been any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of California Petroleum's securities
by any "nationally recognized statistical rating organization", as such term is
defined for purposes of Rule 436(g)(2) under the Act.
(d) (i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective material
adverse change, in the condition, financial or otherwise, or in the earnings,
affairs or business prospects, whether or not arising in the ordinary course of
business, of any of the Companies, (ii) since the date of the latest balance
sheet included in the Registration Statement and the Prospectus there shall not
have been any change, or any development involving a prospective material
adverse change, in the capital stock or in the long-term debt of the Companies
from that set forth in the Registration Statement and Prospectus, (iii) the
Companies and any of their respective subsidiaries shall have no liability or
obligation, direct or contingent, which is material to such company and its
respective subsidiaries, taken as a whole, other than those reflected in the
Registration Statement and the Prospectus; and (iv) on the Closing Date, Chevron
and Chevron Transport shall have received certificates dated the Closing Date,
signed by an authorized representative of each of the Companies, confirming the
matters set forth in paragraphs (a), (b), (c) and (d) of this Section 12;
(e) Chevron and Chevron Transport shall have received on the Closing
Date the opinions (satisfactory to Chevron, Chevron Transport and their counsel)
described in paragraphs (g), (h), (i) and (j) of Section 11 hereof;
25
(f) Chevron and Chevron Transport shall have received on and as of
the Closing Date, in form and substance satisfactory to Chevron and Chevron
Transport, the letter from Price Waterhouse LLP, independent public accountants,
described in Section 11(l)(i) hereof;
(g) The Companies shall not have failed at or prior to the Closing
Date to perform or comply with any of the agreements herein contained and
required to be performed or complied with by such Company at or prior to the
Closing Date; and
(h) Each of the Collateral Trust Agreement, the Vessel Purchase
Agreements, the Initial Charters, the Management Agreements and any Security
Document providing for execution by parties other than Chevron or Chevron
Transport shall have been executed and delivered by all such parties; and
(i) All of the conditions to the obligations of Chevron and Chevron
Transport specified in this Section 12 shall have been satisfied or waived in
writing by Chevron and Chevron Transport.
13. Effective Date of Agreement and Termination. This Agreement
shall become effective upon the latest of (i) execution of this Agreement, (ii)
when notification of the effectiveness of the Registration Statement has been
released by the Commission, (iii) when notification of the effectiveness of the
registration statement with respect to the Chevron Obligations (as defined in
the Term Mortgage Notes Underwriting Agreement) has been released by the
Commission and (iv) when notification of the effectiveness of the registration
statement with respect to the Term Mortgage Notes has been released by the
Commission.
This Agreement may be terminated at any time prior to delivery of and
payment for the Serial Mortgage Notes by you by written notice to Chevron,
Chevron Transport and the Companies if any of the following has occurred: (i)
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, any adverse change or development involving a
prospective adverse change in the condition, financial or otherwise, of any of
the Companies or the earnings, affairs, or business prospects of any of the
Companies, whether or not arising in the ordinary course of business, which
would, in your reasonable judgment, make it impracticable to market the Serial
Mortgage Notes on the terms and in the manner contemplated in the Prospectus,
(ii) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your reasonable
judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Serial Mortgage Notes on the terms and in the manner
contemplated in the Prospectus, (iii) the suspension or material limitation of
trading in securities on the New York Stock Exchange or limitation on prices for
securities on such exchange, (iv) the enactment, publication, decree or other
promulgation of any federal or state
26
statute, regulation, rule or order of any court or other governmental authority
which in your opinion materially and adversely affects, or will materially and
adversely affect, the business or operations of any of the Companies or (v) the
declaration of a general moratorium on commercial banking activities by either
federal or New York State authorities.
14. Consent to Jurisdiction. Any legal suit, action or proceeding
against Chevron Transport or any of the Owners arising out of or relating to
this Agreement, the Serial Indenture or any Security Document, or any
transaction contemplated hereby or thereby, may be instituted in any federal or
state court in The City of New York, State of New York and each of the Owners
and Chevron Transport hereby waives any objection which it may now or hereafter
have to the laying of venue of any such suit, action or proceeding, and each of
the Owners and Chevron Transport hereby irrevocably submits to the jurisdiction
of any such court in any such suit, action or proceeding. Each of the Owners
and Chevron Transport hereby irrevocably appoints and designates CT Corporation
System, having an address at 1633 Broadway, New York, New York, its true and
lawful attorney-in-fact and duly authorized agent for the limited purpose of
accepting service of legal process in connection with any such suit, action or
proceeding and each of the Owners and Chevron Transport agrees that service of
process upon such party shall constitute personal service of such process on it.
Each of the Owners shall maintain the designation and appointment of such
authorized agent until all amounts payable under this Agreement, the Serial
Indenture and the Security Documents shall have been paid in full. Chevron
Transport shall maintain the designation and appointment of such authorized
agent until all amounts payable by Chevron Transport under this Agreement, the
Serial Indenture and the Security Documents shall have been paid in full. If
such agent shall cease to so act, each of the Owners and Chevron Transport shall
immediately designate and appoint another such agent satisfactory to you in the
City of New York, State of New York, and shall promptly deliver to you evidence
in writing of such other agent's acceptance of such appointment.
15. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to California Petroleum, to
California Petroleum Transport Corporation, c/o JH Management Corporation, Room
6/9, One International Place, Boston, M.A. 02110-2624, (b) if to Chevron
Transport, to Chevron Transport Corporation, c/o Chevron House, 11 Church
Street, Hamilton, Bermuda HM11, Attention: Secretary, (c) if to Chevron, to
Chevron Corporation, 225 Bush Street, San Francisco, California 94104,
Attention: Secretary, (d) if to CalPetro Tankers (Bahamas I) Limited, CalPetro
Tankers (Bahamas II) Limited or CalPetro Tankers (Bahamas III) Limited, to such
entity, c/o Mareva House, 4 George Street, Nassau, Bahamas, Attention:
____________, (e) if to CalPetro Tankers (IOM) Limited, to CalPetro Tankers
(IOM) Limited, c/o United House 14-16 Nelson Street, Douglas, Isle of Man,
British Isles, Attention: ____________ and (f) if to the Underwriter, to
Donaldson, Lufkin & Jenrette Securities Corporation, 140 Broadway,
27
New York, New York 10005, Attention: Syndicate Department, or in any case to
such other address as the person to be notified may have requested in writing.
No recourse under or upon any obligation, covenant or agreement
contained in this Underwriting Agreement, shall be had against any past, present
or future stockholder, director, officer or agent of California Petroleum or of
any successor, either directly or through California Petroleum or any successor.
The respective indemnities, contribution agreements, representations,
warranties and other statements of Chevron, Chevron Transport and the Companies,
their officers and directors and of the Underwriter set forth in or made
pursuant to this Agreement shall remain operative and in full force and effect,
and will survive delivery of and payment for the Serial Mortgage Notes,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of the Underwriter or by or on behalf of such company, the
officers or directors of such company or any controlling person of such company,
(ii) acceptance of the Serial Mortgage Notes and payment for them hereunder and
(iii) termination of this Agreement.
If the Underwriter shall refuse to purchase the Term Mortgage Notes
solely because of any failure or refusal by Chevron or Chevron Transport to
perform any of the agreements set forth in Section 6 hereof (except for any
failure so to perform engendered by a failure, refusal or inability on the part
of the Underwriter or any Company to perform any agreement or fulfill any
condition to be performed or fulfilled by such party under the terms of this
Agreement), then Chevron and Chevron Transport agree to reimburse the
Underwriter for all out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) reasonably incurred by it in connection with the
transactions contemplated by this Agreement.
If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of any Company to comply with the terms or to
fulfill any of the conditions of this Agreement, (except for any failure so to
perform on the part of any Company engendered by a failure, refusal or inability
on the part of the Underwriter to perform any agreement on the Underwriter's
part to be performed) each Company agrees to reimburse the Underwriter for all
out-of-pocket expenses (including the reasonable fees and disbursements of
counsel) reasonably incurred by it.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon Chevron, Chevron Transport
and the Companies, the Underwriter, any controlling persons referred to herein
and their respective successors and assigns, all as and to the extent provided
in this Agreement, and no other person shall acquire or have any right under or
by virtue of this
28
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Serial Mortgage Notes from the Underwriter merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
29
Please confirm that the foregoing correctly sets forth the agreement
between California Petroleum, Chevron Transport, Chevron, each of the Owners and
the Underwriter.
Very truly yours,
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
By___________________________________________________
Name:
Title:
CHEVRON TRANSPORT CORPORATION
By___________________________________________________
Name:
Title:
CHEVRON CORPORATION
By___________________________________________________
Name:
Title:
CALPETRO TANKERS (BAHAMAS I) LIMITED
By___________________________________________________
Name:
Title:
30
CALPETRO TANKERS (BAHAMAS II) LIMITED
By___________________________________________________
Name:
Title:
CALPETRO TANKERS (BAHAMAS III) LIMITED
By___________________________________________________
Name:
Title:
CALPETRO TANKERS (IOM) LIMITED
By___________________________________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By ______________________________
Name:
Title:
31
EXHIBIT A
Opinion of Pillsbury Madison & Sutro,
Counsel for Chevron and Chevron Transport
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, NY 10005
Gentlemen and Mesdames:
We have acted as counsel to Chevron Corporation ("Chevron") and
Chevron Transport ("Chevron Transport") in connection with your purchase from
California Petroleum Transport Corporation ("California Petroleum") of
$167,500,000 aggregate principal amount of its Serial First Preferred Mortgage
Notes Maturing Serially from 1996 to 2006 (the "Serial Mortgage Notes") and
$117,900,000 aggregate principal amount of its ____% First Preferred Mortgage
Notes Due 2015 (the "Term Mortgage Notes," and together with the Serial Mortgage
Notes, the "Notes"). Such purchase of Serial Mortgage Notes is made pursuant to
the Underwriting Agreement dated ___________ __, 1995 (the "Serial Underwriting
Agreement") among California Petroleum, Chevron, Chevron Transport, certain
other parties and you, and such purchase of Term Mortgage Notes is made pursuant
to the Underwriting Agreement dated __________ __, 1995 (the "Term Underwriting
Agreement," and together with the Serial Underwriting Agreement, the
"Underwriting Agreements") among California Petroleum, Chevron, Chevron
Transport, certain other parties and you. The Serial Mortgage Notes are being
issued under a Serial Indenture dated as of ___________ __, 1995 (the "Serial
Indenture"), among California Petroleum, as issuer, Chevron, solely for purposes
of compliance with the Trust Indenture Act of 1939, and Chemical Trust Company
of California, as Trustee (the "Indenture Trustee"). This opinion is furnished
pursuant to Section 11(f) of the Serial Underwriting Agreement and Section 11(f)
of the Term Underwriting Agreement. Terms not otherwise defined herein shall
have the meaning set forth in the Serial Indenture.
We have examined executed copies of the Serial Indenture, the Serial
Mortgage Notes, the Underwriting Agreements, the Serial Registration Statement
and the Chevron Registration Statement (as hereinafter defined) and we have also
examined the Serial Prospectus (as hereinafter defined) and the Chevron
Prospectus (as hereinafter defined). We have also examined such other documents
and certificates of public officials and representatives of Chevron and Chevron
Transport
as we have deemed necessary as a basis for the opinions expressed herein. As to
questions of fact material to such opinions, we have, when relevant facts were
not independently established, relied upon certificates of officers or
authorized representatives of Chevron and Chevron Transport.
We have assumed the genuineness of all signatures and documents
submitted to us as originals, that all copies submitted to us conform to the
originals, the legal capacity of all natural persons, and as to documents
executed by entities other than Chevron or Chevron Transport, that each of such
entities has the power to enter into and perform its respective obligations
thereunder, and that such documents have been duly authorized, executed and
delivered by, and are binding upon and enforceable against, each of such
entities.
We express no opinion as to the laws of any jurisdiction other than
California and the general corporate law of Delaware and the Federal laws of the
United States of America.
Based upon the foregoing and subject to the qualifications set forth
below, it is our opinion that:
1. Chevron is validly existing and in good standing under the laws
of the State of Delaware and is duly qualified and in good standing to do
business in each other state in which its ownership or leasing of properties
requires such qualification and in which a consequence of the failure to be so
qualified would be materially adverse to the business or financial condition of
Chevron and its subsidiaries taken as a whole and possesses the requisite
corporate power and authority to own its properties and conduct its businesses
consistent with any description thereof in the prospectus dated _____________,
1995, with respect to the offer and sale of the Serial Mortgage Notes filed with
the Securities and Exchange Commission (the "Commission") pursuant to Rule
424(b)(___) of Regulation C under the Securities Act of 1933, as amended (the
"Act") (such prospectus, including the documents incorporated by reference
therein, is herein referred to as the "Serial Prospectus"), and consistent with
any description thereof in the prospectus dated ____________, 1995, with respect
to the Chevron Obligations (as defined in the Term Underwriting Agreement) filed
with the Commission pursuant to Rule 424(b)(____) of Regulation C under the Act
(such prospectus, including the documents incorporated by reference therein, is
herein referred to as the "Chevron Prospectus").
2. The Serial Indenture has been duly authorized, executed and
delivered by Chevron.
3. Each Initial Charter Guarantee has been duly authorized, executed
and delivered by Chevron.
2
4. The Underwriting Agreements have been duly authorized, executed
and delivered by Chevron.
5. The Registration Statement on Form S-3 (File No. 33-56373) first
filed by Chevron Transport and Chevron with the Commission on November 9, 1994
(such Registration Statement including the exhibits thereto and the documents
incorporated by reference therein being herein referred to as the "Chevron
Registration Statement") and the Registration Statement on Form S-1/F-1/S-3
(File No. 33-56377) first filed by California Petroleum, Chevron Transport,
Chevron and certain additional registrants with the Commission on November 9,
1994 (such Registration Statement including the exhibits thereto and the
documents incorporated by reference therein being herein collectively referred
to as the "Serial Registration Statement") have become effective under the Act,
and, to the best of our knowledge, no stop order suspending the effectiveness of
the Chevron Registration Statement or the Serial Registration Statement has been
issued and no proceedings for that purpose have been instituted or are pending
or contemplated under the Act, and, except as may be otherwise indicated in the
Chevron Prospectus or the Serial Prospectus or required by the blue sky or
securities laws of jurisdictions in which the Notes are offered or sold, no
further authorization, consent, approval of or filing with any governmental or
regulatory body, Federal or state, is required to be obtained by Chevron or
Chevron Transport in connection with their respective execution, delivery and
performance of the terms of the Underwriting Agreements, the Vessel Purchase
Agreements, the Initial Charters and the Initial Charter Guarantees as described
in the Serial Prospectus and the Chevron Prospectus other than in connection
with the registration and operation of the Vessels, and the execution, delivery
and performance of the terms of the Underwriting Agreements, the Vessel Purchase
Agreements, the Initial Charters and the Initial Charter Guarantees by Chevron
or Chevron Transport, as the case may be, will not contravene any provision of
the Restated Certificate of Incorporation, as amended, or By-Laws of Chevron,
the charter documents of Chevron Transport, any Federal law or regulation or, to
the best of our knowledge, any applicable state law or any material agreement or
instrument binding upon Chevron.
6. The Chevron Registration Statement and the Chevron Prospectus
comply as to form in all material respects with the requirements of the Act and
the rules and regulations of the Commission thereunder; the Serial Registration
Statement and the Serial Prospectus (insofar as they relate to Chevron and
Chevron Transport) comply as to form in all material respects with the
requirements of the Act and the rules and regulations of the Commission
thereunder; each document filed by Chevron under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in the
Chevron Prospectus and the Serial Prospectus complied as to form in all material
respects when so filed with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; the statements in the Chevron
Prospectus with respect to the terms of the Initial Charters
3
and the Chevron Guarantees fairly summarize the terms of such instruments and to
the best of our knowledge there are no other agreements or instruments binding
upon Chevron or Chevron Transport required to be described or referred to in the
Chevron Registration Statement which have not been described or referred to
therein; the statements in the Serial Prospectus with respect to the terms of
the Initial Charters and the Chevron Guarantees fairly summarize the terms of
such instruments; and while we have not ourselves checked the accuracy or
completeness of, or otherwise verified the information furnished by Chevron
Transport and Chevron in the Chevron Registration Statement and the Serial
Registration Statement, we have considered the information required to be
furnished therein by Chevron Transport and Chevron and have generally reviewed
and had discussions with certain officers and employees of Chevron and Chevron
Transport concerning the information so furnished, whether or not subject to our
checking and verification, and on the basis of such consideration, review and
discussions, but without independent checking or verification, we have no reason
to believe that the Chevron Registration Statement, the Chevron Prospectus, the
Serial Registration Statement or the Serial Prospectus as of [pricing date],
1995, contained any untrue statement of a material fact with respect to Chevron
Transport or Chevron or omitted to state any material fact with respect to
Chevron Transport or Chevron required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were
made, not misleading or that the Chevron Registration Statement, the Chevron
Prospectus, the Serial Registration Statement or the Serial Prospectus, as of
[closing date], 1995, contained any untrue statement of a material fact with
respect to Chevron Transport or Chevron or omitted to state any material fact
with respect to Chevron Transport or Chevron required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading; it being understood that with respect to
the matters covered by this paragraph 6, we express no opinion: (i) as to the
financial statements or other financial or numerical data contained in the
Chevron Registration Statement, the Chevron Prospectus, the Serial Registration
Statement or the Serial Prospectus; and (ii) with respect to any registrant
under the Serial Registration Statement other than Chevron Transport or Chevron
or the respective obligations of any such registrant.
The opinions set forth in the foregoing are subject to the following
qualifications:
Whenever a statement herein is qualified by "to the best of our
knowledge" or similar phrase, it indicates that in the course of our
representation of Chevron and Chevron Transport no information that would give
us current actual knowledge of the inaccuracy of such statement has come to the
attention of the attorneys in this firm who have rendered legal services in
connection with this transaction, including the principal partners of this firm
who are familiar with matters relating to Chevron and Chevron Transport. We
have not made any independent investigation to determine the accuracy of such
statement, except as expressly
4
described herein. No inference as to our knowledge of any matters bearing on
the accuracy of such statement should be drawn from the fact of our
representation of Chevron and Chevron Transport in other matters in which such
attorneys are not involved.
This opinion is rendered by us as counsel for Chevron and Chevron
Transport solely for your benefit in connection with the transaction referred to
herein and may not be relied upon by you in connection with any other
transaction and may not be relied upon by any other person without our prior
written consent.
Very truly yours,
5
EXHIBIT B
Opinion of Thacher Proffitt & Wood,
Special Counsel for
California Petroleum and the Owners
___________, 1995
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
California Petroleum Transport Corporation
Serial First Preferred Mortgage Notes
Dear Sirs:
We have acted as counsel to California Petroleum Transport Corporation
("California Petroleum"), CalPetro Tankers (Bahamas I) Limited ("CalPetro I"),
CalPetro Tankers (Bahamas II) Limited ("CalPetro II"), CalPetro Tankers (Bahamas
III) Limited ("CalPetro III") and CalPetro Tankers (IOM) Limited ("CalPetro
IOM"; CalPetro I, CalPetro II, CalPetro III and CalPetro IOM, each, an "Owner",
and collectively, the "Owners"), in connection with the issuance of California
Petroleum Transport Corporation Serial First Preferred Mortgage Notes maturing
serially from 1996 to 2006 (the "Serial Mortgage Notes"). The Serial Mortgage
Notes were issued pursuant to a Serial Indenture, dated as of ________ 1, 1995
(the "Serial Indenture"), among California Petroleum as issuer, Chemical Trust
Company of California as the indenture trustee (the "Trustee") and, solely for
purposes of the Trust Indenture Act of 1939, as amended, Chevron Corporation
("Chevron"). The Serial Mortgage Notes were offered pursuant to a Prospectus,
dated ___________, 1995 (the "Prospectus"), filed pursuant to a Registration
Statement, as amended, on Forms F-1, S-1 and S-3 (No. 33-56377) (the
"Registration Statement") by California Petroleum and the Owners. California
Petroleum will sell the Serial Mortgage Notes to Donaldson, Lufkin & Jenrette
Securities Corporation (the "Underwriter") pursuant to an Underwriting
Agreement, dated ___________, 1995 (the "Underwriting Agreement"; the
Underwriting Agreement and the Serial Indenture, together, "the Agreements"),
among California Petroleum, the Owners, Chevron, Chevron Transport Corporation
("Chevron Transport") and the Underwriter. Contemporaneously with the issuance
of the Serial Mortgage Notes, California Petroleum proposes to issue California
Petroleum Transport Corporation Term First Preferred Mortgage Notes Due 2015
(the "Term Mortgage Notes") pursuant to a Term Indenture, dated the date hereof
(the "Term Indenture").
The proceeds from the sale of the Serial Mortgage Notes, together with the
proceeds from the sale of the Term Mortgage Notes, will be loaned by California
Petroleum to the Owners on a joint and several basis to fund, after paying
certain fees and expenses, the acquisition by each Owner of a recently
constructed oil tanker from Chevron Transport pursuant to a Vessel Purchase
Agreement, dated ___________, 1995 (the "Vessel Purchase Agreements"), between
such Owner and Chevron Transport. Initially, each Owner will enter into a
bareboat charter (each, an "Initial Charter") with Chevron Transport with a term
expiring on ______________, 2015, subject to earlier termination at the option
of Chevron Transport. The obligations of Chevron Transport under each Initial
Charter will be guaranteed by Chevron. Capitalized terms not defined herein
have the meanings set forth in the Agreements. This opinion is rendered
pursuant to Section 10(f) of the Underwriting Agreement.
In connection with rendering this opinion letter, we have examined the
Agreements, the Security Documents, the Initial Charters, the Vessel Purchase
Agreements, the Registration Statement and the Prospectus, the Serial Mortgage
Notes and such other documents as we have deemed necessary. As to matters of
fact, we have examined and relied upon representations of parties to the
Agreements, the Initial Charters, the Vessel Purchase Agreements and the
Security Documents contained in such documents and, where we have deemed
appropriate, representations or certifications of officers or public officials.
We have assumed the authenticity of all documents submitted to us as originals,
the genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents submitted to us as copies. We have
assumed that all parties had the corporate power and authority to enter into and
perform all obligations thereunder. As to such parties, we also have assumed
the due authorization by all requisite corporate action, the due execution and
delivery and the enforceability of such documents. We have further assumed that
there is not and will not be any other agreement that modifies or supplements
the agreements expressed in the Agreements, the Initial Charters, the Vessel
Purchase Agreements and the Security Documents.
In rendering this opinion letter, we do not express any opinion concerning any
law other than the law of the State of New York, the law of the Republic of
Liberia and the federal laws of the United States. We do not express any
opinion concerning the "doing business" laws or the securities laws of any
jurisdiction other than the federal securities laws of the United States. We do
not express any opinion on any subject not expressly addressed herein. With
respect to the law of the Republic of Liberia, we are not admitted to practice
in the courts of the Republic of Liberia. However, we have dealt regularly with
matters relating to the maritime laws of the Republic of Liberia. We are also
familiar with the current compilations of the
2
Liberian Maritime Law as furnished to us by Liberian Services, Inc. in New York
City.
Based upon and subject to the foregoing, it is our opinion that:
1. The Serial Mortgage Notes, when executed and authenticated in accordance
with the provisions of the Serial Indenture and delivered to and paid for by the
Underwriter in accordance with the terms of the Underwriting Agreement, will be
entitled to the benefits of the Serial Indenture and will be valid and binding
obligations of California Petroleum, enforceable against California Petroleum in
accordance with their terms except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or
other similar laws affecting the rights of creditors and (ii) general principles
of equity, whether enforcement is sought in a proceeding in equity or at law.
2. The Underwriting Agreement is a valid and binding agreement of California
Petroleum, enforceable against California Petroleum in accordance with its
terms.
3. The Underwriting Agreement is a valid and binding agreement of each of
CalPetro I, CalPetro II, CalPetro III and CalPetro IOM, enforceable against each
in accordance with its terms.
4. The Serial Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended, has been duly authorized, executed and delivered by
California Petroleum and is a valid and binding agreement of California
Petroleum, enforceable against it in accordance with its terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium, reorganization or other similar laws affecting the
rights of creditors and (ii) general principles of equity, whether enforcement
is sought in a proceeding in equity or at law.
5. Each of the Security Documents to which California Petroleum is a party
is a valid and binding agreement of California Petroleum, enforceable against it
in accordance with its terms, except as enforceability may be limited by (i)
bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or
other similar laws affecting the rights of creditors and (ii) general principles
of equity, whether enforcement is sought in a proceeding in equity or at law.
6. Each of the Vessel Purchase Agreements, the Initial Charters and the
Security Documents governed by New York law, to which CalPetro I, CalPetro II,
CalPetro III or CalPetro IOM is a party, is a valid and binding agreement of
such Owner, enforceable against it in accordance with its terms, except as
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
receivership, moratorium,
3
reorganization or other similar laws affecting the rights of creditors and (ii)
general principles of equity, whether enforcement is sought in a proceeding in
equity or at law.
7. The Registration Statement has become effective under the Securities Act
of 1933, as amended (the "Act"). To the best of our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
not withdrawn, and no proceedings for that purpose have been instituted or
threatened under Section 8(d) of the Act.
8. The statements under the captions "Description of Notes" and "The
Mortgages" in the Prospectus, as amended, insofar as such statements constitute
a summary of legal matters documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters, documents
and proceedings.
9. No consent, approval, authorization or order of any federal or State of
New York court or governmental agency or body is required for the consummation
by each Owner of the transactions contemplated by the terms of the Agreements,
the Vessel Purchase Agreements, the Initial Charters and the Security Documents,
except (a) such as have been obtained under the Act and (b) such as may be
required under the blue sky laws of any jurisdiction in connection with the
purchase and the offer and sale of the Serial Mortgage Notes by the Underwriter,
as to which we express no opinion.
10. Neither the sale of the Serial Mortgage Notes to the Underwriter pursuant
to, nor the consummation of any other of the transactions contemplated by or the
fulfillment by each Owner of the terms of, the Agreements will result in a
breach of any federal or State of New York statute or regulation or, to the best
of our knowledge, conflict with, result in a breach, violation or acceleration
of or constitute a default under any order of any federal or State of New York
court, regulatory body, administrative agency or other governmental body having
jurisdiction over any Owner.
11. Neither California Petroleum nor any Owner is an "investment company" or
a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
12. CalPetro III is duly registered as a Foreign Maritime Entity in the
Republic of Liberia and has obtained a waiver, pursuant to Section 51(6) of the
Liberian Maritime Law, of the Liberian ownership requirements set forth in
Section 51(2) of the Liberian Maritime Law.
4
13. Based upon the records of the Deputy Commissioner of Maritime Affairs of
the Republic of Liberia maintained in New York, New York, the Vessel "W.E.
Crain" and the Vessel "Chevron Mariner" are registered under the laws of the
Republic of Liberia in the ownership of CalPetro III and CalPetro IOM,
respectively, free of all mortgages, liens and encumbrances of record other than
the Mortgage recorded against such Vessel.
14. Based upon the records of the Deputy Commission of Maritime Affairs of
the Republic of Liberia maintained in New York, New York, the mortgage on the
Vessel "W.E. Crain" and the mortgage on the Vessel "Chevron Mariner" have been
duly recorded in the Office of Deputy Commissioner of Maritime Affairs of the
Republic of Liberia in New York on the date hereof in Book PM _____ at Page
______, and each such Mortgage constitutes a first preferred mortgage lien on
the Vessel "W.E. Crain" and Vessel "Chevron Mariner", respectively, in favor of
the Collateral Trustee. The Collateral Trustee has all the rights of a holder
of a first preferred ship mortgage on the Vessel "W.E. Crain" and the Vessel
"Chevron Mariner".
This opinion letter is rendered for the sole benefit of the addressee hereof,
and no other person or entity is entitled to rely hereon. Copies of this
opinion letter may not be furnished to any other party or entity, nor may any
portion of this letter be quoted, circulated or referred to in any other
document.
Very truly yours,
Thacher, Proffitt & Wood
By
5
Opinion of Thacher Proffitt & Wood,
Special Counsel for
California Petroleum and the Owners
___________, 1995
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, New York 10005
California Petroleum Transport Corporation
Serial First Preferred Mortgage Notes
-------------------------------------
Dear Sirs:
We have acted as counsel to California Petroleum Transport Corporation
("California Petroleum"), CalPetro Tankers (Bahamas I) Limited ("CalPetro I"),
CalPetro Tankers (Bahamas II) Limited ("CalPetro II"), CalPetro Tankers (Bahamas
III) Limited ("CalPetro III") and CalPetro Tankers (IOM) Limited ("CalPetro
IOM"; CalPetro I, CalPetro II, CalPetro III and CalPetro IOM, each, an "Owner",
and collectively, the "Owners"), in connection with the issuance of California
Petroleum Transport Corporation Serial First Preferred Mortgage Notes maturing
serially from 1996 to 2006 (the "Serial Mortgage Notes"). The Serial Mortgage
Notes were issued pursuant to a Serial Indenture, dated as of _________ 1, 1995
(the "Serial Indenture"), among California Petroleum as issuer, Chemical Trust
Company of California as the indenture trustee (the "Serial Trustee") and,
solely for purposes of the Trust Indenture Act of 1939, as amended, Chevron
Corporation ("Chevron"). The Serial Mortgage Notes are being offered pursuant
to a Prospectus, dated ___________, 1995, filed pursuant to a Registration
Statement, as amended, on Forms F-1, S-1 and S-3 (No. 33-56377) by California
Petroleum and the Owners. California Petroleum will sell the Serial Mortgage
Notes to Donaldson, Lufkin & Jenrette Securities Corporation (the "Underwriter")
pursuant to an Underwriting Agreement, dated ___________, 1995 (the
"Underwriting Agreement"), among California Petroleum, the Owners, Chevron,
Chevron Transport Corporation ("Chevron Transport") and the Underwriter.
Contemporaneously with the issuance of the Serial Mortgage Notes, California
Petroleum proposes to issue California Petroleum Transport Corporation Term
First Preferred Mortgage Notes Due 2015 (the "Term Mortgage Notes") pursuant to
a Term Indenture, dated the date hereof (the "Term Indenture").
The proceeds from the sale of the Serial Mortgage Notes, together with the
proceeds from the sale of the Term Mortgage Notes, will be loaned by California
Petroleum to the Owners on a joint and several basis to fund, after paying
certain fees and expenses, the acquisition by each Owner of a recently
constructed oil tanker from Chevron Transport. Initially, each Owner will enter
into a bareboat charter (each, an "Initial Charter") with Chevron Transport with
a term expiring on ______________, 2015, subject to earlier termination at the
option of Chevron Transport. The obligations of Chevron Transport under each
Initial Charter will be guaranteed by Chevron. Capitalized terms used but not
defined herein have the meanings set forth in the Agreements. This opinion is
rendered pursuant to Section 10(f) of the Underwriting Agreement.
The primary purpose of our professional engagement was not to establish
factual matters. Many wholly or partially non-legal determinations were
involved in the preparation of the Prospectus and the Registration Statement.
Accordingly, we are not advising in this letter with respect to and do not
assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Prospectus and the Registration Statement and make
no representation that we have otherwise independently verified the accuracy,
completeness or fairness of such statements. In particular and without limiting
the foregoing, we have not examined any accounting, financial or statistical
records not included in the Prospectus and the Registration Statement from which
the information and statements included therein are derived. We express no
advice as to any such accounting, financial or statistical information contained
in the Prospectus and the Registration Statement. We also note that we are not
experts with respect to any portion of the Registration Statement, including
without limitation such financial and statistical information, except to the
extent we may be deemed to be "experts" within the meaning of the Securities Act
of 1933 or the rules and regulations of the Securities and Exchange Commission
issued thereunder, with respect to the matters specifically mentioned in our
opinion letter referred to above in this paragraph.
We do not act as general counsel to the Owners or California Petroleum.
However, in the course of our acting as counsel to California Petroleum and the
Owners in connection with its preparation of the Prospectus and the Registration
Statement, we met in conferences and participated in telephone conversations
with representatives of California Petroleum, Ropes & Gray in their capacity as
counsel to California Petroleum, the Owners, the Underwriter, Davis Polk &
Wardwell in their capacity as counsel to the Underwriter, the Indenture Trustee
and White and Case in their capacity as counsel to the Indenture Trustee.
During those conferences and telephone conversations the contents of the
Prospectus and the Registration Statement and related matters were discussed.
In addition, we reviewed certain corporate documents furnished to us by
California Petroleum and the Owners or otherwise in our possession. We have not
otherwise undertaken any procedures, other than the review of documents
delivered to the Underwriter on the date hereof pursuant to the
2
Underwriting Agreement, which were intended or likely to elicit information
concerning the accuracy, completeness or fairness of the statements made in the
Prospectus and the Registration Statement.
Based upon and subject to the foregoing, our understanding of applicable law
and the experience we have gained in our practice thereunder, we hereby advise
you that no information has come to our attention that causes us to believe that
(i) the Registration Statement, as of the effective date of the most recent
amendment thereto, as of the date of the Prospectus or as of the date hereof,
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) the Prospectus as of the
effective date of the most recent amendment to the Registration Statement or as
of the date hereof, contained or contains any untrue statement of a material
fact or omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This letter is provided for the sole benefit of the addressee hereof, and no
other person or entity is entitled to rely hereon. Copies of this letter may
not be furnished to any other party or entity, nor may any portion of this
letter be quoted, circulated or referred to in any other document.
Very truly yours,
THACHER PROFFITT & WOOD
By
3
EXHIBIT C
Opinion of McKinney, Bancroft & Hughes,
Special Bahamian Counsel for
CalPetro Tankers (Bahamas I) Limited,
CalPetro Tankers (Bahamas II) Limited,
CalPetro Tankers (Bahamas III) Limited
The Opinion of McKinney, Bancroft & Hughes,
Special Bahamian Counsel for CalPetro Tankers (Bahamas I) Limited, CalPetro
Tankers (Bahamas II) Limited and CalPetro Tankers (Bahamas III) Limited, to be
delivered pursuant to Section 11(h) of the Underwriting Agreement shall be to
the effect that:
(a) Each of CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers
(Bahamas II) Limited and CalPetro Tankers (Bahamas III) Limited
(collectively, the "Owners") has been duly incorporated, is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and authority
required to carry on its business as it is currently being conducted and to
own, lease and operate its properties;
(b) Each of the Owners is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in which
the nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on such Company;
(c) the Underwriting Agreement has been duly authorized, executed and
delivered by each Owner;
(d) each of the Vessel Purchase Agreements, the Initial Charters and the
Security Documents to which each Owner is a party has been duly authorized,
executed and delivered by each Owner;
(e) none of the Owners is in violation of its respective charter or by-
laws and, to the best of such counsel's knowledge after due inquiry, no
Owner is in default in the performance of any obligation, agreement or
condition contained in any bond, debenture, note, or any other evidence of
indebtedness or in any other agreement, indenture or instrument material to
the conduct of
the business of such Owner, to which such Owner is a party or by which such
Owner or its property is bound;
(f) the execution, delivery and performance of the Underwriting
Agreement, the Vessel Purchase Agreements, the Initial Charters and the
Security Documents to which each Owner is a party and compliance by each
Owner with all the provisions thereof and the consummation of the
transactions contemplated thereby will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body of the Commonwealth of The Bahamas and
will not conflict with or constitute a breach of any of the terms or
provisions of, or a default under, the charter or by-laws of such Owner or
any agreement, indenture or other instrument to which such Owner is a party
or by which such Owner or its properties is bound, or violate or conflict
with any laws, administrative regulations or rulings or court decrees
applicable to such Owner or any of its property;
(g) after due inquiry, such counsel does not know of any legal or
governmental proceeding pending or threatened to which any Owner is a party
or to which any of their respective property is subject which is required
to be described in the Registration Statement or the Prospectus and is not
so described, or of any contract or other document which is required to be
described in the Registration Statement or the Prospectus or is required to
be filed as an exhibit to the Registration Statement which is not described
or filed as required;
(h) The choice of the law of the State of New York to govern the
Underwriting Agreement, the Vessel Purchase Agreements, the Initial
Charters and the Security Documents governed by New York law to which each
Owner is a party is valid under the laws of the Commonwealth of The Bahamas
and a court in the Commonwealth of The Bahamas would uphold such choice of
law in a suit, action or other proceeding on such agreement or document
brought in a court of the Commonwealth of The Bahamas;
(i) Any final and conclusive judgement obtained in the United States,
which is not subject to appeal and is enforceable in the United States,
with respect to the obligations of the Owners under the Underwriting
Agreement, the Vessel Purchase Agreements, the Initial Charters and the
Security Documents would be given effect and would be enforceable by the
competent courts of the Commonwealth of The Bahamas without a review of the
merits;
2
(j) the statements under the caption "CalPetro Bahamas I, CalPetro
Bahamas II and CalPetro Bahamas III" in Item 14 of Part II of the
Registration Statement insofar as such statements constitute a summary of
legal matters documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters, documents
and proceedings;
(k) the Deed of Covenants is a valid and binding agreement of CalPetro
Tankers (Bahamas I) Limited and CalPetro Tankers (Bahamas II) Limited
enforceable in accordance with its terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles
of general applicability;
[(l) the S. Ginn and the C. Rice are registered under the laws of the
Commonwealth of The Bahamas in the ownership of CalPetro Tankers (Bahamas
I) Limited and CalPetro Tankers (Bahamas II) Limited, respectively, free of
all mortgages, liens and encumbrances of record other than the Mortgage
recorded against such Vessel;]
[(m) the S. Ginn Mortgage and the C. Rice Mortgage have been duly
recorded in the [Name of Maritime Affairs Office] of the Commonwealth of
The Bahamas on the date hereof in, in the case of the S. Ginn Mortgage, in
__________ at __________, and in the case of the C. Rice Mortgage, in
_________ at _________, and each such Mortgage constitutes a first
preferred mortgage lien on the applicable Vessel in favor of the Collateral
Trustee and the Collateral Trustee has all the rights of a holder of a
first preferred ship mortgage on the Vessel;]
[(n) We understand that Section 105(a) of the United States Bankruptcy
Code (the "Code") gives the U.S. Courts a general equitable jurisdiction to
treat the assets of a group of companies as a single "pool" for
distribution amongst all the creditors of each separate company within the
group ("substantive consolidation"). The insolvency law of the
Commonwealth of The Bahamas does not have any equivalent of the doctrine of
substantive consolidation. Where several Bahamian companies comprising a
group (whether sharing a common parent or common shareholders) are placed
into liquidation, the Bahamian court does not have jurisdiction to "pool"
the assets of all of the group companies but is bound to treat each company
as a separate legal entity whose assets fall to be distributed amongst that
particular company's creditors (pro for rata amongst the company's
unsecured creditors to the extent that the assets of the company are
insufficient to pay all its unsecured creditors in full).
3
The common law doctrine of separate corporate personality enshrined in
the old case of Salomon v. Salomon & Co. [1897] AC 22 under which the
English courts refuse to "lift the veil" of separate corporate entities in
order to allow creditors of a company to recover from the person(s) who
control the company in question is followed by the courts of the
Commonwealth of The Bahamas. Attempts to "pierce the corporate veil" in
the courts of The United Kingdom under the common law are also followed by
the courts of the Commonwealth of The Bahamas.
Until relatively recently there was considerable debate as to the extent
to which the English courts, hence the Bahamian courts, would be prepared
to "pierce the veil" to overturn the doctrine of Salomon v. Salomon & Co.
The position was clarified by the English Court of Appeals in the case of
Adams v Cape Industries Inc. [1990] 2 WLR 657. As a result of that ruling,
the English courts are only prepared to look behind the corporate "veil" in
exceptional circumstances and this decision mirrors the legal position of
the Bahamian courts. The exceptional circumstances include where the
corporate vehicle is used in an attempt to avoid the consequences of a
fraud or breach of contract or other legal obligation. However, the
English Court of Appeal clearly rejected the argument that the English
courts should look at the commercial realities of a group of companies and,
where appropriate, treat the group as a single unit for legal purposes.
This position is reinforced by a number of recent cases where the English
courts have been unwilling to permit creditors of a subsidiary company to
recover against the company's parent: Re Southard [1979] 1 WLR 1988 and
Kleinwort Benson Ltd. v Malaysia Mining Corporation Berhad [1989] 1 WLR
379. The position adopted by the English courts is equally applicable
within the Bahamas although there have been no recent decisions of the
courts of the Commonwealth of The Bahamas with regard to that issue.
Accordingly, absent the exceptional circumstances referred to above, the
common law position is now relatively settled such that the Bahamian courts
will not treat a group of companies as a single unit.
Based on the facts set forth above it is our opinion that the courts of
the Commonwealth of The Bahamas would not order substantive consolidation
of the assets of the Companies with those of the other Companies or with
those of its shareholders as it is a concept which is foreign to Bahamian
law.]
The opinion of McKinney, Bancroft & Hughes described above shall be
limited to the laws of the Bahamas and rendered to you at the request of
CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited and
CalPetro Tankers (Bahamas III) Limited and shall so state therein.
4
EXHIBIT D
Opinion of Cains,
Special Isle of Man Counsel for
CalPetro Tankers (IOM) Limited,
CalPetro Tankers (IOM) Limited
c/o Thacher Proffit & Wood
2 World Trade Centre
New York, New York 10048 [ ] March, 1995
Dear Sirs:
Re: Chevron Tanker Financing
------------------------
We have acted as your legal advisors in the Isle of Man in connection with the
above. The following documents ("the Documents") have been considered by us:
1. Vessel purchase agreement dated [ ] March, 1995 between CalPetro Tankers
(IOM) Limited ("Calpetro" or "the Owner") and Chevron Transport Corporation
("CTC") ("the Vessel Purchase Agreement");
2. bareboat charter dated [ ] March, 1995 between CalPetro and CTC (the
"Initial Charter");
3. aerial loan agreement dated [ ] March, 1995 between Calpetro and
California Petroleum Transport Corporation ("CPTC");
4. term loan agreement dated [ ] March, 1995 between CalPetro and CPTC;
5. first preferred ship mortgage dated [ ] March, 1995 between CalPetro and
CPTC;
6. assignment of earnings dated [ ] March, 1995 and insurances from CalPetro
to CPTC;
7. assignment of charter dated [ ] March, 1995 between CalPetro and CPTC;
8. assignment of purchase agreement dated [ ] March, 1995 between CalPetro
and CPTC;
9. assignment of guaranty dated [ ] March, 1995 by CalPetro in favour of
CPTC;
10. issue of one debenture dated [ ] March, 1995 to which CalPetro and CPTC
are parties ("the Issue of One Debenture");
11. a management and re-marketing agreement dated [ ] March, 1995 between P.D.
Gram & Co. ANS, Barber Ship Management Group and CalPetro;
12. assignment of management agreement dated [ ] March, 1995 between CPTC and
CalPetro;
13. an underwriting agreement for value US$117,900,000 dated [ ] March, 1995
to which, inter alia, Donaldson, Lufkin & Jenrette Securities Corporation
and CalPetro are parties;
14. an underwriting agreement for value US$168,500,000 dated [ ] March, 1995
to which, inter alia, Donaldson, Lufkin & Jenrette Securities Corporation
and CalPetro are parties (together with document 13 "the Underwriting
Agreement"); and
15. board minutes of a meeting ("the Meeting") of the board of directors of
CalPetro dated [ ] March, 1995.
Documents numbered 5, 6, 7, 8, 9, 10 and 12 are together hereinafter referred to
as "the Security Documents".
In arriving at the opinion expressed below, in addition to examining the
Documents, we have examined such other documents as have been revealed by
searches of the Isle of Man Companies and General Registries ("the Registries")
undertaken on [ ] March, 1995 in respect of CalPetro.
In arriving at our opinion we have assumed:
(a) the genuineness of all signatures on original documents; the correctness of
all facts stated in and representations made in the documents which we have
examined (except as otherwise opined upon herein) and the conformity to
original documents of all copy documents;
(b) that each of the parties to the Documents (other than CalPetro) is duly
incorporated, validly existing and fully authorised, qualified and
empowered under their respective constitutions and any applicable laws to
carry on business and to enter into and perform their respective
obligations and exercise their respective rights under each of the
Documents;
2
(c) that each of the parties to the Documents (other than CalPetro) has taken
all corporate and other action required to authorise the execution of the
Documents and the performance of their respective obligations thereunder;
(d) that there are no provisions of the laws of any jurisdiction outside the
Isle of Man or any agreement to which any of the parties to the Documents
ar a party which would be contravened by such execution or delivery and
that, insofar as any obligation under the Documents falls to be performed
in any jurisdiction outside the Isle of Man, its performance will not be
unlawful by virtue of the laws of that jurisdiction;
(e) that the Documents are valid and legally binding under the laws by which
they are expressed to be governed;
(f) the accuracy and currency of the records and filing systems maintained at
the public offices where we have searched or inquired or have caused
searches or inquiries to be conducted;
(g) that all necessary consents or approvals of, and all necessary
registrations or other action by or with, any regulatory authority or any
other person or entity outside the Isle of Man have been or will be
obtained, performed or taken in relation to the execution, delivery and
performance of each of the Documents by each of the parties thereto;
(h) that the Meeting was duly convened and held with proper notice being given
to each of the Directors of CalPetro;
(i) that all appropriate notices of and consents to assignment required to be
given or which it is desirable are given in connection with any of the
Documents are, in fact, given in timely fashion; and
(j) that entering into the Documents and performing the obligations which
CalPetro undertakes is to its commercial benefit.
Based on and subject to the foregoing and subject to the further qualifications
set out below, we are of the opinion that:
(a) the Owner has been duly incorporated in the Isle of Man, is validly
existing as a corporation in good standing under the laws of the Isle of
Man and has the corporate power and authority required to carry on its
business and to own, lease and operate its properties;
(b) pursuant to the Meeting, entry into the Underwriting Agreement has been
duly authorised and executed by the Owner;
3
(c) pursuant to the Meeting, entry into each of the Vessel Purchase Agreement,
the Initial Charter and the Security Documents has been duly authorised and
executed by the Owner;
(d) to the best of our knowledge and belief (having made enquiry only of the
Company Secretary of the Owner upon whom we have relied), the Owner is not
in violation of its memorandum and articles of association and the Owner is
not in default in the performance of any obligation, agreement or condition
contained in any bond, debenture, note, or any other evidence of
indebtedness or in any other agreement, indenture or instrument material to
the conduct of the business of the Owner, to which it is a party or by
which it or its property is bound;
(e) the execution, delivery and performance of each of the Underwriting
Agreement, the Vessel Purchase Agreement, the Initial Charter and the
Security Documents by the Owner and compliance by the Owner with all the
provisions thereof and the consummation of the transactions contemplated
thereby will not require any consent, approval, authorisation or other
order of any court, regulatory body, administrative agency or other
governmental body of the Isle of Man and will not conflict with or
constitute a breach of any of the terms or provisions of, or a default
under, the memorandum and articles of association of the Owner or, we are
informed by the Company Secretary of the Owner: (i) any agreement,
indenture or other instrument to which the Owner is a party or to which any
of its properties is bound; or (ii) violate or conflict with any laws,
administrative regulations or rulings or court decrees applicable to the
Owner or any of its property;
(f) after enquiry of the Company Secretary of the Owner upon whom we have
relied, there are no legal or governmental proceedings pending or
threatened to which the Owner is a party or to which any of its property is
subject which is material for inclusion in the Registration Statement or
the Prospectus (as the same are defined in the Underwriting Agreement) and
is not so described, or of any contract or other document which is material
for inclusion in the Registration Statement or the Prospectus or is
required to be filed as an exhibit to the Registration Statement which is
not described or filed as required;
(g) the choice of the law of the State of New York to govern the Underwriting
agreement and the Security Documents governed by New York law to which the
Owner is a party is valid under the laws of the Isle of Man and a court in
the Isle of Man would uphold such choice of law in a suit, action or other
proceeding on such agreement or document in a court of the Isle of Man;
4
(h) the Issue of One Debenture to which the Owner is a party creates, for the
benefit of the Collateral Trustee, as secured party on behalf of the
holders from time to time of the Secured Obligations (as therein defined),
a valid, perfected security interest in the assets of the Owner and the
proceeds thereof, which security interest is prior to all liens arising by,
through or under the Owner of which we are aware, except for those other
liens that by operation of law take priority over a previously perfected
security interest or lien; and
(i) on the principle laid down in Saloman v A Saloman and Co. Limited [1897]
AC 22 it is our opinion that the courts of the Isle of Man are unlikely to
order substantive consolidation of the assets of the Owner with those of
third parties or with those of its shareholders, save in the case of fraud.
The opinions expressed above are given subject to the following reservations:
(a) enforcement of any of the Documents may be limited by bankruptcy,
insolvency, liquidation, reorganization, court schemes, moratoriums, the
doctrine of frustration and laws relating to or affecting the rights of
creditors generally;
(b) enforcement of any of the Documents may be limited by general principles of
equity, and, in particular, equitable remedies are available only at the
discretion of the Court and are not available where damages are considered
to be an adequate remedy;
(c) claims may be or become barred in the Isle of Man under the Limitation Acts
1984 and 1988 (Acts of Tynwald) or become subject to a defence of set-off
or counterclaim;
(d) under Isle of Man law the terms of an agreement under hand may be varied by
oral or written agreement of the parties;
(e) a foreign judgment would not be enforced by an Isle of Man Court; however
an action brought in the Isle of Man based upon a foreign judgment may be
brought without a re-trial or re-examination of the matters thereby
adjudicated upon (provided that the foreign judgment is not obtained by or
contrary to Isle of Man public policy. Effective enforcement of the
foreign judgment may also be withheld if the relevant judgment is not a
final and conclusive money judgment being both unrelated to taxation and
free of conflict with any other judgment in the same cause of action;
5
(f) provisions relating to set-off contained in any of the Documents will only
be enforceable in a liquidation of the Company insofar as they do not
purport to contract out of the mandatory set-off rules imposed by the
Bankruptcy Code 1892;
(g) if proceedings are commenced in the Isle of Man Courts any provision in any
of the Documents to the effect that calculations and/or certifications will
be conclusive and binding will not be effective in Manx law if such
calculations and/or certifications are fraudulent or erroneous on their
face and will not necessarily prevent judicial enquiry into the merits of
any claim respecting any such calculation or certification;
(h) if proceedings are commenced in the Isle of Man Courts, where in any of the
Documents a party is vested with a discretion or may determine a matter in
its opinion, the law of the Isle of Man may require that such discretion is
exercised reasonably or that such opinion is based on reasonable grounds;
(i) if the Security Documents have been registered at Companies Registry in the
Isle of Man pursuant to Section 79 of the Companies Act 1931 (an Act of
Tynwald) within one month from their respective dates of creation therefore
they will not be void against a liquidator or creditor of CalPetro and
priority over other creditors will not be lost;
(j) provisions as to severability in any of the Documents may not be binding
and the question of whether or not provisions relating to invalidity may be
severed from other provisions in order to save such other provisions would
be determined by the Manx Courts at their discretion;
(k) no opinion is expressed: (i) as to whether the Manx Courts would construe
any of the Documents without giving effect to principles of conflict of
laws; or (ii) as to whether the obligations of CalPetro under the Issue of
One Debenture may be discharged, released, prejudiced or otherwise affected
by any act, omission or circumstance which, but for Section 4.2 of the
Issue of One Debenture might so operate or otherwise release or discharge
the Owner from the Term Obligations or the Serial Obligations as therein
defined; and
(l) this opinion addresses matters of law not fact and is confined entirely to
Isle of Man law.
6
This opinion may be relied upon by you and may not be disclosed to or relied
upon by any other person without our prior written consent.
Yours faithfully,
CAINS
- -----
7
Opinion of Cains,
Special Isle of Man Counsel for
CalPetro Tankers (IOM) Limited,
[ ] March, 1995
CalPetro Tankers (Bahamas I) Limited
c/o Thacher Proffit & Wood
2 World Trade Centre
New York
New York 10048
Dear Sirs,
Re: Chevron Tanker Financing - Samuel Ginn ("the Financing")
We have acted as your legal advisers in the Isle of Man in connection with the
above.
Pursuant to Isle of Man law, we confirm that, in connection with the Financing,
charges over property in the Isle of Man created by a foreign company which has
established a place of business in the Isle of Man (as has CalPetro Tankers
(Bahamas I) Limited ("CalPetro")) require to be registered within one month from
the date of their creation. Failure to effect such registration will, inter
alia, render the charge void against a liquidator of CalPetro.
We further confirm that WE HAVE FILED the following duly executed and dated
documents with the Registrar of Companies in the Isle of Man:
1. first preferred ship mortgage dated [ ] March, 1995 between CalPetro and
California Petroleum Transport Corporation ("CPTC") (with deed of
covenants) and statutory mortgage;
2. assignment of earnings dated [ ] March, 1995 and insurances from CalPetro
to CPTC;
3. assignment of charter dated [ ] March, 1995 between CalPetro and CPTC;
4. assignment of purchase agreement dated [ ] March, 1995 between CalPetro
and CPTC;
5. assignment of guaranty dated [ ] March, 1995 by CalPetro in favour of
CPTC;
6. issue of one debenture dated [ ] March, 1995 to which CalPetro and CPTC are
parties;
7. assignment of management agreement dated [ ] March, 1995 between CPTC and
CalPetro.
Please note that the documents listed above ("the Documents") WHICH HAVE BEEN
filed at Companies Registry in the Isle of Man MAY ALSO NEED TO BE FILED to
protect the security interests which the Documents create in other
jurisdictions.
Yours faithfully,
CAINS
- -----
2
Opinion of Cains,
Special Isle of Man Counsel for
CalPetro Tankers (IOM) Limited,
[ ] March, 1995
CalPetro Tankers (Bahamas III) Limited
c/o Thacher Proffit & Wood
2 World Trade Centre
New York
New York 10048
Dear Sirs:
Re: Chevron Tanker Financing - William E. Crain (the "Financing")
We have acted as your legal advisers in the Isle of Man in connection with the
above.
Pursuant to Isle of Man law, we confirm that, in connection with the Financing,
charges over property in the Isle of Man created by a foreign company which has
established a place of business in the Isle of Man (as has CalPetro Tankers
(Bahamas III) Limited ("CalPetro")) require to be registered within one month
from the date of their creation. Failure to effect such registration will,
inter alia, render the charge void against a liquidator of CalPetro.
We further confirm that we have filed the following duly executed and dated
documents with the Registrar of Companies in the Isle of Man:
1. first preferred ship mortgage dated [ ] March, 1995 between CalPetro and
California Petroleum Transport Corporation ("CPTC") (with deed of
covenants) and statutory mortgage;
2. assignment of earnings dated [ ] March, 1995 and insurances from CalPetro
to CPTC;
3. assignment of charter dated [ ] March, 1995 between CalPetro and CPTC;
4. assignment of purchase agreement dated [ ] March, 1995 between CalPetro
and CPTC;
5. assignment of guaranty dated [ ] March, 1995 by CalPetro in favour of CPTC;
6. issue of one debenture dated [ ] March, 1995 to which CalPetro and CPTC
are parties;
7. assignment of management agreement dated [ ] March, 1995 between CPTC and
CalPetro.
Please note that the documents listed above (the "Documents") which have been
filed at Companies Registry in the Isle of Man may also need to be filed to
protect the security interests which the Documents create in other
jurisdictions.
Yours faithfully,
CAINS
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Opinion of Cains,
Special Isle of Man Counsel for
CalPetro Tankers (IOM) Limited,
[ ] March, 1995
CalPetro Tankers (Bahamas II) Limited
c/o Thacher Proffit & Wood
2 World Trade Centre
New York
New York 10048
Dear Sirs,
Re: Chevron Tanker Financing - Condoleezza Rice ("the Financing")
We have acted as your legal advisers in the Isle of Man in connection with the
above.
Pursuant to Isle of Man law, we confirm that, in connection with the Financing,
charges over property in the Isle of Man created by a foreign company which has
established a place of business in the Isle of Man (as has CalPetro Tankers
(Bahamas II) Limited ("CalPetro")) require to be registered within one month
from the date of their creation. Failure to effect such registration will,
inter alia, render the charge void against a liquidator of CalPetro.
We further confirm that we have filed the following duly executed and dated
documents with the Registrar of Companies in the Isle of Man:
1. first preferred ship mortgage dated [ ] March, 1995 between CalPetro
and California Petroleum Transport Corporation ("CPTC") (with deed of
covenants) and statutory mortgage;
2. assignment of earnings dated [ ] March, 1995 and insurances from
CalPetro to CPTC;
3. assignment of charter dated [ ] March, 1995 between CalPetro and
CPTC;
4. assignment of purchase agreement dated [ ] March, 1995 between
CalPetro and CPTC;
5. assignment of guaranty dated [ ] March, 1995 by CalPetro in favour of
CPTC;
6. issue of one debenture dated [ ] March, 1995 to which CalPetro and
CPTC are parties;
7. assignment of management agreement dated [ ] March, 1995 between CPTC
and CalPetro.
Please note that the documents listed above ("the Documents") which have been
filed at Companies Registry in the Isle of Man may also need to be filed to
protect the security interests which the Documents create in other
jurisdictions.
Yours faithfully,
CAINS
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EXHIBIT E
Opinion of The Henries Law Firm,
Special Liberian Counsel for Chevron Transport
________ __, 1995
Donaldson, Lufkin & Jenrette
Securities Corporation
140 Broadway
New York, NY 10005
Gentlemen and Mesdames:
We have acted as counsel to Chevron Transport Corporation ("Chevron
Transport") in connection with your purchase from California Petroleum Transport
Corporation ("California Petroleum") of $167,500,000 aggregate principal amount
of its Serial First Preferred Mortgage Notes Maturing Serially from 1996 to 2006
(the "Serial Mortgage Notes") and $117,900,000 aggregate principal amount of its
___% First Preferred Mortgage Notes Due 2015 (the "Term Mortgage Notes," and
together with the Serial Mortgage Notes, the "Notes"). Such purchase of Serial
Mortgage Notes is made pursuant to the Underwriting Agreement dated _____ __,
1995 (the "Serial Underwriting Agreement") among California Petroleum, Chevron
Corporation ("Chevron"), Chevron Transport, certain other parties and you, and
such purchase of Term Mortgage Notes is made pursuant to the Underwriting
Agreement dated as of ________ __, 1995 (the "Term Underwriting Agreement," and
together with the Serial Underwriting Agreement, the "Underwriting Agreements")
among California Petroleum, Chevron, Chevron Transport, certain other parties
and you. The sale of the Notes is being effected in connection with the
execution and delivery of four Vessel Purchase Agreements (the "Vessel Purchase
Agreements") dated as of the date hereof between Chevron Transport and each of
CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited,
CalPetro Tankers (Bahamas III) Limited and CalPetro Tankers (IOM) Limited (the
"Owners"), and four Bareboat Charters (the "Initial Charters") dated as of the
date hereof between Chevron Transport and each of the Owners. This opinion is
furnished pursuant to Section 11(j) of the Serial Underwriting Agreement and
Section 11(j) of the Term Underwriting Agreement.
We have examined executed copies of the Vessel Purchase Agreements, the
Initial Charters and the Underwriting Agreements. We have also examined such
other documents and certificates of public officials and representatives of
Chevron Transport as we have deemed necessary as a basis for the opinions
expressed herein. As to questions of fact material to such opinions, we have,
when relevant facts were not independently established, relied upon certificates
of officers or authorized representatives of Chevron Transport.
We have assumed the genuineness of all signatures and documents submitted
to us as originals, that all copies submitted to us conform to the originals,
the legal capacity of all natural persons, and as to documents executed by
entities other than Chevron Transport, that each of such entities has the power
to enter into and perform its respective obligations thereunder, and that such
documents have been duly authorized, executed and delivered by, and are binding
upon and enforceable against, each of such entities.
We express no opinion as to the laws of any jurisdiction other than
Liberia.
Based upon the foregoing and subject to the qualifications set forth
below, it is our opinion that:
1. Chevron Transport is validly existing as a corporation in good
standing under the laws of Liberia.
2. Each of the Initial Charters and the Vessel Purchase Agreements has
been duly authorized, executed and delivered by Chevron Transport and
constitutes a valid and binding obligation of Chevron Transport, enforceable in
accordance with its terms.
3. The Underwriting Agreements have been duly authorized, executed and
delivered by Chevron Transport.
4. The execution, delivery and performance of the terms of the
Underwriting Agreements, the Vessel Purchase Agreements and the Initial Charters
by Chevron Transport will not contravene any provision of the charter documents
of Chevron Transport.
5. The statements under the caption "Chevron Transport" in Item 15 of
Part II of the Registration Statement on Form S-3 (File No. 33-56373) filed by
Chevron Transport and Chevron with the Securities and Exchange Commission,
insofar as such statements constitute a summary of legal matters, documents or
proceedings referred to therein, fairly present the information called for with
respect to such legal matters, documents an proceedings.
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Our opinion in paragraph 2 is subject to and limited by: (i) the effect
of bankruptcy, insolvency, reorganization, receivership, conservatorship,
arrangement, moratorium or other laws affecting or relating to the rights of
creditors generally; and (ii) the rules governing the availability of specific
performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
This opinion is rendered by us as counsel for Chevron Transport solely
for your benefit in connection with the transaction referred to herein and may
not be relied upon by you in connection with any other transaction and may not
be relied upon by any other person without our prior written consent.
Very truly yours,
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EXHIBIT F
Opinion of Davis Polk & Wardwell,
Special Counsel for the Underwriter
The Opinion of Davis Polk & Wardwell, Special Counsel for the
Underwriter, to be delivered pursuant to Section 11(k) of the Underwriting
Agreement shall be to the effect that:
(a) the Serial Mortgage Notes have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Serial
Indenture and delivered to and paid for by the Underwriter in accordance
with the terms of the Underwriting Agreement, will be entitled to the
benefits of the Serial Indenture and will be valid and binding obligations
of California Petroleum enforceable in accordance with their terms except
as (a) the enforceability thereof may be limited by bankruptcy, insolvency
or similar laws affecting creditors' rights generally and (b) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability;
(b) Assuming that the execution, delivery and performance by Chevron,
Chevron Transport and each Company of the Underwriting Agreement are within
such company's corporate powers and have been duly authorized by all
necessary corporate action then the Underwriting Agreement is a valid and
binding agreement of Chevron, Chevron Transport and each Company
enforceable in accordance with its terms (except as rights to indemnity and
contribution hereunder may be limited by applicable law);
(c) the Serial Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, and has been duly authorized, executed
and delivered by California Petroleum and Chevron and is a valid and
binding agreement of California Petroleum and Chevron, enforceable in
accordance with its terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(d) the statements under the captions "Description of Notes" and
"Underwriting" in the Prospectus, as amended or supplemented, insofar as
such statements constitute a summary of legal matters documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents and proceedings; and
(e) (1) the Registration Statement and the Prospectus and any supplement
or amendment thereto (except for financial statements as to which no
opinion need be expressed) comply as to form in all material respects with
the Act, and (2) such counsel believes that (except for financial
statements, as aforesaid and except for that part of the Registration
Statement that constitutes the Form T-1) the Registration Statement and the
Prospectus included therein at the time the Registration Statement became
effective did 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 not misleading, and that the Prospectus, as amended
or supplemented, if applicable (except for financial statements, as
aforesaid) does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
In giving such opinion with respect to the matters covered by clause (e)
such counsel may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto (but not including documents
incorporated therein by reference) and review and discussion of the contents
thereof (including documents incorporated therein by reference), but are without
independent check or verification except as specified.
Insofar as the foregoing opinion involves matters governed by the laws of
the Bahamas, the Isle of Man or Liberia such counsel may rely, without
independent investigation, upon the opinions of McKinney, Bancroft & Hughes,
Cains and The Henries Law Firm, respectively.
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