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ITEM 14(a)3, EXHIBIT 4.2
SECOND AMENDED AND RESTATED GUARANTY AGREEMENT
(Subsidiaries)
SECOND AMENDED AND RESTATED GUARANTY AGREEMENT, dated as of January
28, 1997 (this "Guaranty Agreement"), among TESORO ALASKA PETROLEUM COMPANY, a
Delaware corporation, TESORO EXPLORATION AND PRODUCTION COMPANY, a Delaware
corporation, and TESORO PETROLEUM COMPANIES, INC., a Delaware corporation,
DIGICOMP, INC., a Delaware corporation, TESORO TECHNOLOGY PARTNERS COMPANY, a
Delaware corporation, INTERIOR FUELS COMPANY, an Alaskan corporation, TESORO
ALASKA PIPELINE COMPANY, a Delaware corporation, TESORO NORTHSTORE COMPANY, an
Alaskan corporation, TESORO REFINING, MARKETING & SUPPLY COMPANY, a Delaware
corporation, TESORO NATURAL GAS COMPANY, a Delaware corporation, TESORO BOLIVIA
PETROLEUM COMPANY, a Texas corporation, TESORO GAS RESOURCES COMPANY, INC., a
Delaware corporation, TESORO E&P COMPANY, L.P., a Delaware limited partnership,
TESORO VOSTOK COMPANY, a Delaware corporation, TESORO COASTWIDE SERVICES
COMPANY, a Delaware corporation, COASTWIDE MARINE SERVICES, INC., a Texas
corporation, KENAI PIPE LINE COMPANY, a Delaware corporation TESORO FINANCIAL
SERVICES HOLDING COMPANY, a Delaware corporation, VICTORY FINANCE COMPANY, a
Delaware corporation, and TESORO MARINE SERVICES COMPANY, a Delaware
corporation (the "Guarantors"), in favor of BANQUE PARIBAS, individually, as
Administrative Agent and as an Issuing Bank, and the other financial
institutions now or hereafter parties to the Credit Agreement (as such term is
hereinafter defined).
RECITALS
A. Tesoro Petroleum Corporation, Banque Paribas, as
Administrative Agent, The Bank of Nova Scotia, as Documentation Agent and
various lenders (the "Lenders") entered into that certain Amended and Restated
Credit Agreement dated as of June 7, 1996 (the "Credit Agreement").
B. The conditions precedent to the effectiveness of the Credit
Agreement included the execution and delivery of that certain Amended and
Restated Guaranty Agreement dated of even date therewith by certain
Subsidiaries of the Company (the "1996 Guaranty Agreement") which by Amended
and Restated Guaranty Agreement dated as of September 12, 1996 (the "Prior
Guaranty Agreement"), such 1996 Guaranty Agreement was amended and restated to
include additional entities as Guarantors to obtain the benefits thereof under
the Credit Agreement.
C. The Company desires to include an additional entity as a
Guarantor to obtain the benefits thereof under the Credit Agreement.
D. Therefore, in consideration of the premises contained herein,
the Guarantors and the Administrative Agent agree to amend and restate the
Prior Guaranty Agreement as follows:
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AGREEMENT
1. Defined Terms. As used in this Guaranty Agreement, capitalized
terms defined in the Credit Agreement are used herein as defined therein unless
otherwise noted herein, and the following additional capitalized terms shall
have the following meanings:
"Collateral" shall mean any Property in which the Agent is
granted a Lien from time to time as security for the Lender
Indebtedness.
"Contribution Obligation" shall mean an amount equal, at any
time and from time to time and for each respective Guarantor, to the
product of (i) its Contribution Percentage times (ii) the sum of all
payments made previous to or at the time of calculation by all
Guarantors in respect of the Obligations, as a Guarantor or debtor
under any Loan Document (less the amount of any such payments
previously returned to any Guarantor by operation of law or otherwise,
but not including payments received by any Guarantor by way of its
rights of subrogation and contribution under this Guaranty Agreement),
provided, however, such Contribution Obligation for any Guarantor
shall in no event exceed such Guarantor's Maximum Guaranteed Amount.
"Contribution Percentage" shall mean for any Guarantor for any
applicable date as of which such percentage is being determined, an
amount equal to the quotient of (i) the Net Worth of such Guarantor as
of such date, divided by (ii) the sum of the Net Worth of all the
Guarantors as of such date.
"Maximum Guaranteed Amount" shall mean, for each Guarantor,
the greater of (i) the "reasonably equivalent value" or "fair
consideration" (or equivalent concept) received by such Guarantor in
exchange for the obligation incurred hereunder by such Guarantor,
within the meaning of any state or federal fraudulent conveyance or
transfer laws applicable to such Guarantor; or (ii) the lesser of (A)
the maximum amount that will not render such Guarantor insolvent, or
(B) the maximum amount that will not leave such Guarantor (after
giving effect to this Guaranty Agreement) with Property deemed an
unreasonably small capital. Clauses (A) and (B) are and shall be
determined pursuant to and as of the appropriate date mandated by such
applicable state or federal fraudulent conveyance or transfer laws and
to the extent allowed by law take into account the rights to
contribution and subrogation under this Guaranty Agreement so as to
provide for the largest Maximum Guaranteed Amount possible.
"Net Payments" shall mean an amount equal, at any time and
from time to time and for each respective Guarantor, to the difference
of (i) the sum of all payments made previous to or at the time of
calculation by such Guarantor in respect to the Obligations, as a
Guarantor, and in respect of its obligations contained in this
Guaranty Agreement or any other Financing Document, less (ii) the sum
of all such payments previously returned to such Guarantor by
operation of law or otherwise and including payments received by such
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Guarantor by way of its rights of subrogation and contribution under
this Guaranty Agreements.
"Net Worth" shall mean for any Guarantor, calculated on and as
of any applicable date on which such amount is being determined, the
greater of (i) zero or (ii) the difference between (A) the sum of all
such Guarantor's property, at a fair valuation and as of such date,
minus (B) the sum of all such Guarantor's debts, at a fair valuation
and as of such date, excluding the Obligations.
"Obligations" shall mean (i) all Lender Indebtedness now or
hereafter owing, including, but not limited to, (A) the unpaid
principal of and accrued interest on (including interest accruing on
or after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to the
Company, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Notes, and (B) the
obligation of the Company to otherwise reimburse the Lender, whether
on account of fees, indemnities, costs, taxes, expenses (including all
fees and disbursements set forth in Sections 2.21 or 9.04 of the
Credit Agreement) or otherwise, (ii) payment of and performance of any
and all present or future obligations of the Company according to the
terms of any present or future interest or currency rate swap, rate
cap, rate floor, rate collar, exchange transaction, forward rate
agreement or other exchange or rate protection agreements or any
option with respect to any such transaction now existing or hereafter
entered into between the Company and the Administrative Agent or any
of the Lenders (or any of their Affiliates) and authorized pursuant to
the terms of the Credit Agreement; (iii) payment of and performance of
any and all present or future obligations of the Company according to
the terms of any present or future swap agreements, cap, floor,
collar, exchange transaction, forward agreement or other exchange or
protection agreements relating to crude oil, natural gas or other
hydrocarbons or any option with respect to any such transaction now
existing or hereafter entered into between the Company and the
Administrative Agent or any of the Lenders (or any of their
Affiliates) and authorized pursuant to the terms of the Credit
Agreement; and (iv) any and all other sums payable by the Company or
any of its Subsidiaries under or in respect of any Financing Document.
2. Guarantee. (a) Each of the Guarantors hereby unconditionally and
irrevocably and jointly and severally guarantees to the Agent, the Issuing
Banks and each Lender the prompt and complete payment when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations, and each of
the Guarantors further agrees, jointly and severally, to pay any and all
expenses which may be paid or incurred by the Agent, either Issuing Bank or any
Lender in enforcing any rights with respect to, or collecting, any or all of
the Obligations and/or enforcing any rights with respect to, or collecting
against, any Guarantor under this Guaranty Agreement; provided, however, that,
notwithstanding anything herein or in any other Financing Document to the
contrary, the maximum liability of each Guarantor hereunder and under the other
Financing Documents shall in no event exceed the Maximum Guaranteed Amount for
such Guarantor.
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(b) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the Maximum Guaranteed Amount for such Guarantor
without impairing this Guaranty Agreement or affecting the rights and remedies
of the Agent, either Issuing Bank or any Lender.
(c) No payment or payments made by the Company, any Guarantor, any
other guarantor or any other Person or received or collected by the Agent,
either Issuing Bank or any Lender from the Company, any Guarantor, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of each Guarantor hereunder,
which shall, notwithstanding any such payment or payments, other than payments
made by such Guarantor in respect of the Obligations or payments received or
collected from such Guarantor in respect of the Obligations, remain liable for
the Obligations up to the Maximum Guaranteed Amount for such Guarantor until
the Obligations are paid in full.
(d) It is the intention of the parties hereto that all
intercompany indebtedness either owed to or by any Guarantor not be included as
either an asset or a liability, respectively, in determining the solvency or
capital of any Guarantor. Accordingly, each Guarantor agrees that in
connection with any determination of the Maximum Guaranteed Amount, such
intercompany indebtedness may be treated in the manner that would achieve the
result intended by the first sentence of this subsection (d).
(e) Right to Collect on the Notes. The Company and the Guarantors
are personally obligated and fully liable for the amounts due under the Notes.
The Lenders have the right to sue on the Notes and obtain a personal judgment
against the Company and the Guarantors for satisfaction of the amounts due
under the Notes either before or after a judicial foreclosure of the Alaska
Deed of Trust under Alaska Statute 09.45.170 - 09.45.220.
(f) Senior Debt. Tesoro Alaska's guarantee of the payment of the
Obligations constitutes Senior Debt as such term is defined in that certain
Subordination Agreement dated December 15, 1993, among the Company, Tesoro
Alaska, and the State of Alaska, attached as Exhibit 7 to the Settlement
Agreement dated December 15, 1992, among the Company, Tesoro Alaska, and the
State of Alaska.
3. Right of Contribution. Each Guarantor agrees that after all the
Obligations have been paid in full that if its then current Net Payments are
less than the amount of its then current Contribution Obligation, such
Guarantor shall pay to the other Guarantors an amount (together with any
payments required of the other Guarantors by this Section 3) such that the Net
Payments made by all Guarantors in respect of the Obligations shall be shared
among all of the Guarantors in proportion to their respective Contribution
Percentage. The provisions of this Paragraph 3 shall in no respect limit the
obligations and liabilities of any Guarantor to the Agent, the Issuing Banks or
any Lender, and each Guarantor shall remain liable to the Agent, the Issuing
Banks and each Lender for the full amount guaranteed by such Guarantor
hereunder.
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4. Right of Set-off. The Agent, the Issuing Bank and each Lender is
hereby irrevocably authorized upon the occurrence of an Event of Default
without notice to the Guarantors, any such notice being expressly waived by
each Guarantor, to set-off and credit against any credits, indebtedness or
claims, in any currency, in each case whether direct or indirect or contingent
or matured or unmatured, at any time held or owing by the Agent, either Issuing
Bank or any Lender to or for the credit or the account of any Guarantor, or any
part thereof in such amounts as the Agent, such Issuing Bank or such Lender may
elect, against and on account of the obligations and liabilities of the
applicable Guarantor to the Agent, the Issuing Banks and the Lenders hereunder
and claims of every nature and description of the Agent, the Issuing Banks and
the Lenders against such Guarantor, in any currency, whether arising hereunder,
under the Credit Agreement, any other Financing Document or otherwise, as the
Agent, either Issuing Bank or any Lender may elect, whether or not the Agent,
such Issuing Bank or such Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured. The
Agent agrees to notify (promptly after receipt of notice by the Agent) the
Company and the applicable Guarantor of any such set-off and the application
made by the Agent, such Issuing Bank or any such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent, either Issuing Bank and each Lender
under this paragraph are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which any such Person may have.
If foreign currency is exchanged for U.S. Dollars by the Agent, either Issuing
Bank or any Lender, such Person shall use the rate of exchange prevailing at
the time for customers exchanging a similar amount of currency.
5. No Subrogation. Notwithstanding any payment or payments made by
any Guarantor hereunder or any set-off or application of funds of any
Guarantors by the Agent, either Issuing Bank or any Lender, any such Guarantor
shall not be entitled to be subrogated to any of the rights of the Agent,
either Issuing Bank or any Lender against the Company or any collateral
security or guaranty or right of offset held by any such Person for the payment
of the Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company in respect of payments made by
any such Guarantor hereunder, until all Obligations are paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Agent, the Issuing
Banks and the Lenders, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Agent, if required), to be applied against the Obligations, whether matured
or unmatured in such order as the Agent may determine.
6. Amendments, etc. with respect to the Obligations; Waiver of
Rights. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantors and without notice to
or further assent by the Guarantors, any demand for payment of any of the
Obligations made by the Agent, either Issuing Bank or any Lender may be
rescinded and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any collateral
security or guaranty therefor or right of offset with respect thereto, may,
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from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Agent, the
Issuing Banks or the Lenders and the Credit Agreement, the Notes and any
collateral security document or other guaranty or document in connection
therewith (including, without limitation, the other Financing Documents) may be
amended, modified, supplemented or terminated, in whole or in part, as the
Agent, the Issuing Banks or the Lenders may deem advisable from time to time,
and any collateral security or guaranty or right of offset at any time held by
the Agent, the Issuing Banks or the Lenders for the payment of the Obligations
may be sold, exchanged, waived, surrendered or released, all without the
necessity of any reservation of rights against the Guarantors and without notice
to or further assent by the Guarantors which will remain bound hereunder,
notwithstanding any such renewal, extension, modification, acceleration,
compromise, amendment, supplement, termination, sale, exchange, waiver,
surrender or release. Neither the Agent, either Issuing Bank nor any Lender
shall have an obligation to protect, secure, perfect or insure any Lien at any
time held as security for the Obligations or this Guaranty Agreement or any
Property subject thereto. When making any demand hereunder against any
Guarantor, the Agent may, but shall be under no obligation to, make a similar
demand on the Company or any other guarantor, and any failure by the Agent to
make any such demand or to collect any payments from the Company or any such
other guarantor, or any release of the Company or other guarantor, shall not
relieve any such Guarantor of its obligations or liabilities hereunder, and
shall not impair or affect the rights and remedies, express or implied, or as a
matter of law, of the Agent, the Issuing Banks of the Lenders against each
Guarantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
7. Guaranty Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Agent, either Issuing
Bank or any Lender upon this Guaranty Agreement or acceptance of this Guaranty
Agreement, and the Obligations (and any of them) shall conclusively be deemed
to have been created, contracted or incurred and extended, amended and waived
in reliance upon this Guaranty Agreement, and all dealings between the Company
or the Guarantors and the Agent, either Issuing Bank or any Lender shall
likewise be conclusively presumed to have been had or consummated in reliance
upon this Guaranty Agreement. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment, notice of
intention to accelerate maturity and notice of acceleration of maturity to or
upon the Company or the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guaranty Agreement shall be
construed as a continuing, absolute, completed, unconditional (except as
expressly conditioned pursuant to the terms hereof) and irrevocable guarantee
of payment and not of collection without regard to (a) the validity, regularity
or enforceability of the Credit Agreement, the other Financing Documents, any
of the Obligations or any collateral security or guaranty therefor or right of
offset with respect thereto at any time or from time to time held by the Agent,
either Issuing Bank or any Lender, (b) any defense, set-off or counterclaim
which may at any time be available to or be asserted by the Company or any
other Person liable for the Obligations against the Agent, either Issuing Bank
or any Lender, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the Company or any Guarantor) which constitutes, or might be
construed
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to constitute, an equitable or legal discharge of the Company or any other
Person liable for the Obligations, or of any Guarantor under this Guaranty
Agreement, in bankruptcy or in any other instance. When pursuing its rights
and remedies hereunder against any Guarantor, the Agent, the Issuing Banks and
the Lenders may, but shall be under no obligation to, pursue such rights and
remedies as they may have against the Company or any other Person or against
any collateral security or guaranty for the Obligations or any right of offset
with respect thereto, and any failure by the Agent, the Issuing Banks or the
Lenders to pursue such other rights or remedies or to collect any payments from
the Company or any such other Person or to realize upon any such collateral
security or guaranty or to exercise any such right of offset, or any release of
the Company or any such other Person or any such collateral security, guaranty
or right of offset, shall not relieve any Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express,
implied or available as a matter of law, of the Agent, either Issuing Bank or
any Lender against any Guarantor. This Guaranty Agreement shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon each Guarantor and the respective successors and assigns thereof,
and shall inure to the benefit of the Agent, Issuing Banks and the Lenders, and
the respective successors, indorsees, transferees and assigns thereof, until
all the Obligations and the obligations of the Guarantors under this Guaranty
Agreement shall have been satisfied by payment in full.
8. Reinstatement. This Guaranty Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Agent, either Issuing Bank or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Company or any Guarantor or any substantial part of such Person's property, or
otherwise, all as though such payments had not been made.
9. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid, without set-off or counterclaim and in immediately
available funds and in lawful currency of the United States of America, to
Agent in Houston, Texas, at the Agent's Payment Office, not later than 11:00
A.M., Houston time.
10. Representations and Warranties. Each Guarantor hereby represents
and warrants that:
(a) Corporate Existence. Each Guarantor (other than
Tesoro E&P Company, L.P.) is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of
its incorporation and has the corporate power and authority and the
legal right to own and lease its property and to conduct its business.
(b) Corporate Power; Authorization. Each Guarantor
(other than Tesoro E&P Company, L.P.) has the corporate power and
authority and the legal right to make, deliver and perform this
Guaranty Agreement. Each Guarantor has taken all necessary corporate
action to authorize the execution, delivery and performance of this
Guaranty Agreement.
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(c) Partnership Existence and Authorization. Tesoro E&P
Company, L.P. is a limited partnership duly formed, validly existing
and in good standing under the laws of the State of Delaware and has
the partnership power and authority and the legal right to own and
lease its property and to conduct its business. Tesoro E&P Company,
L.P. has the partnership power and authority and the legal right to
make, deliver and perform this Guaranty Agreement and has taken all
necessary partnership action to authorize the execution, delivery and
performance of this Guaranty Agreement.
(d) Enforceable Obligations. This Guaranty Agreement has
been duly executed and delivered by each Guarantor and constitutes a
legal, valid and binding obligation of such Guarantor enforceable
against such Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles.
11. No Waiver; Cumulative Remedies. Neither the Agent, either
Issuing Bank nor any of the Lenders shall by any act, delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise and no delay in
exercising, on the part of the Agent, either Issuing Bank or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof, or the exercise of any other power,
privilege or right. A waiver by the Agent, either Issuing Bank or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which any such Person would have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.
12. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telecopy or similar
teletransmission or writing) and, in the case of any Guarantor, shall be given
to such Guarantor at the address or telecopy number of the Company now or
hereafter provided for in the Credit Agreement and in the case of the Agent,
either Issuing Bank or any Lender, at the address or telecopy number for such
Person now or hereafter provided for in the Credit Agreement. Each such
notice, request or other communication shall be effective (i) if given by
telecopier during regular business hours, once such telecopy is transmitted to
the telecopy number specified in the Credit Agreement, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means
(including, without limitation, by air courier), when delivered at the address
specified in the Credit Agreement; provided that notices to the Agent shall not
be effective until received.
13. ENTIRE AGREEMENT. THIS GUARANTY AGREEMENT, THE CREDIT AGREEMENT,
THE NOTES, THE SECURITY INSTRUMENTS, THE OTHER FINANCING DOCUMENTS REFERRED TO
IN SECTIONS 3.02 THE CREDIT AGREEMENT, AND THE FEE LETTER EMBODY THE ENTIRE
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AGREEMENT AND UNDERSTANDING BETWEEN THE AGENT, THE ISSUING BANKS, THE LENDERS
AND THE OTHER RESPECTIVE PARTIES HERETO AND THERETO AND SUPERSEDE ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. ANY CONFLICT OR AMBIGUITY BETWEEN THE TERMS AND PROVISIONS OF THIS
AGREEMENT AND THE TERMS AND PROVISIONS IN ANY OTHER FINANCING DOCUMENT SHALL BE
CONTROLLED BY THE TERMS AND PROVISIONS HEREOF.
14. Governing Law; Submission to Jurisdiction, Etc.
(a) This Guaranty Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and be governed by the
law (without giving effect to the conflict of law principles thereof) of the
State of Texas.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT,
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING BUT NOT LIMITED TO ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) THE COMPANY AND THE AGENT, EACH ISSUING BANK AND EACH LENDER
HEREBY (I) IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS GUARANTY AGREEMENT OR ANY FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (II) CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF
COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS, AND (III) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT, THE FINANCING DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION.
(d) Each Guarantor that is not a Texas corporation hereby
irrevocably designates the General Counsel of the Company (as of the date
hereof, James C. Reed, Jr.) located at 8700 Tesoro Drive, San Antonio, Texas
78217, as the designee, appointee and agent of such Guarantor to receive, for
and on behalf of such Guarantor, service of process in such respective
jurisdictions in any legal action or proceeding with respect to this Agreement,
the Notes, the Security Instruments or the other Financing Documents. It is
understood that a copy of such process served on such agent will be promptly
forwarded by mail to such Guarantor at its address set forth opposite its
signature below,
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but the failure of such Guarantor to receive such copy shall not affect in any
way the service of such process. Each Guarantor further irrevocably consents to
the service of process of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Guarantor at its said address, such service to become
effective 30 days after such mailing.
(e) Nothing herein shall affect the right of the Agent or any
Lender or any holder of a Note to serve process in any other manner permitted
by law or to commence legal proceedings or otherwise proceed against any
Guarantor in Texas or any other jurisdiction in which assets of any Guarantor
are located.
15. Severability. Any provision of this Guaranty Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
16. Paragraph Headings. The Paragraph headings used in this Guaranty
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
17. Interest. It is the intention of the parties hereto to conform
strictly to usury laws applicable to each Lender and the Transactions.
Accordingly, if the Transactions would be usurious as to any Lender under
applicable law, then, notwithstanding anything to the contrary in the Notes,
this Agreement or in any Financing Document or agreement entered into in
connection with the Transactions or as security for the Obligations, it is
agreed as follows: (i) the aggregate of all consideration which constitutes
interest as to any Lender under applicable law that is contracted for, taken,
reserved, charged or received by such Lender under the Notes, this Agreement or
under any of the Financing Documents or agreements or otherwise in connection
with the Transactions shall under no circumstances exceed the maximum amount
allowed by such applicable law, (ii) in the event that the maturity of the
Notes is accelerated for any reason, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest as to
any Lender under applicable law may never include more than the maximum amount
allowed by such applicable law, and (iii) excess interest, if any, provided for
in this Agreement or otherwise in connection with the Transactions shall be
cancelled automatically and, if theretofore paid, shall be credited by such
Lender on the principal amount of the Obligations (or, to the extent that the
principal amount of the Obligations shall have been or would thereby be paid in
full, refunded by such Lender to the Company). The right to accelerate the
maturity of the Notes does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the
Lenders do not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to each Lender for the use,
forbearance or detention of sums included in the Obligations shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of the Notes until payment in full so that the
rate or amount of interest on
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account of the Obligations does not exceed the applicable usury ceiling, if any.
As used in this Section, the term "applicable law" shall mean the laws of the
State of Texas (or of any other jurisdiction whose laws may be mandatorily
applicable notwithstanding other provisions of this Agreement) or laws of the
United States of America applicable to any Lender and the Transactions, which
would permit such Lender to contract for, charge, take, reserve or receive a
greater amount of interest than under Texas (or such other jurisdiction's) law.
To the extent that Article 5069-1.04 of the Texas Revised Civil Statutes is
relevant to the Lenders for the purpose of determining the Highest Lawful Rate,
the Lenders hereby elect to determine the applicable rate ceiling under such
Article by the indicated (weekly) rate ceiling from time to time in effect,
subject to the Lenders' right subsequently to change such method in accordance
with applicable law. In no event shall the provisions of Tex. Rev. Civ. Stat.
art. 5069-2.01 through 5069-8.06 or 5069-15.01 through 5069-15.11 be applicable
to the Loans evidenced hereby.
18. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original but all of which
shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned has caused this Guaranty Agreement
to be duly executed and delivered by its duly authorized officer on the day and
year first above written.
TESORO ALASKA PETROLEUM COMPANY
TESORO EXPLORATION AND PRODUCTION COMPANY
TESORO PETROLEUM COMPANIES, INC.
DIGICOMP, INC.
TESORO TECHNOLOGY PARTNERS COMPANY
INTERIOR FUELS COMPANY
TESORO ALASKA PIPELINE COMPANY
TESORO NORTHSTORE COMPANY
TESORO REFINING, MARKETING & SUPPLY COMPANY
TESORO NATURAL GAS COMPANY
TESORO BOLIVIA PETROLEUM COMPANY
TESORO VOSTOK COMPANY
KENAI PIPE LINE COMPANY
TESORO MARINE SERVICES COMPANY
TESORO COASTWIDE SERVICES COMPANY
COASTWIDE MARINE SERVICES, INC.
By:/s/ G. A. WRIGHT
--------------------------------------------
G. A. Wright
Vice President and Treasurer
TESORO GAS RESOURCES COMPANY, INC.
TESORO FINANCIAL SERVICES HOLDING COMPANY
By:/s/ JEFFREY B. FABIAN
--------------------------------------------
Jeffrey B. Fabian
President
VICTORY FINANCE COMPANY
By:/s/ KAREN B. THOMAS
--------------------------------------------
Karen B. Thomas
Assistant Secretary
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BANQUE PARIBAS, AS ADMINISTRATIVE AGENT
By:/s/ BRIAN MALONE
--------------------------------------------
Brian Malone
Vice President
By:/s/ BARTON D. SCHOUEST
--------------------------------------------
Barton D. Schouest
Group Vice President
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