EXHIBIT 4.5
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FRONTIER ESCROW CORPORATION
FRONTIER OIL CORPORATION
$220,000,000
8.000% Series A Senior Notes due 2013
Purchase Agreement
April 4, 2003
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
BNP PARIBAS SECURITIES CORP.
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Frontier Escrow Corporation
Frontier Oil Corporation
$220,000,000
8.000% Series A Senior Notes due 2013
PURCHASE AGREEMENT
April 4, 2003
New York, New York
BEAR, STEARNS & CO. INC.
LEHMAN BROTHERS INC.
BNP PARIBAS SECURITIES CORP.
c/o Bear, Stearns & Co. Inc.
383 Madison Avenue
New York, New York 10179
Ladies & Gentlemen:
Frontier Escrow Corporation, a Delaware corporation (the "Issuer") and
a wholly-owned Subsidiary (as defined in the Indenture) of Frontier Oil
Corporation (the "Company"), proposes to issue and sell to Bear, Stearns & Co.
Inc., Lehman Brothers Inc. and BNP Paribas Securities Corp. (each, an "Initial
Purchaser" and, collectively, the "Initial Purchasers") $220,000,000 in
aggregate principal amount of 8.000% Series A Senior Notes due 2013 (the "Series
A Notes"), subject to the terms and conditions set forth herein. The Series A
Notes will be issued pursuant to an indenture (the "Indenture"), to be dated the
Closing Date (as defined), among the Issuer, the Guarantors (from and after the
consummation of the Escrow Corp. Merger (as defined below)) and Wells Fargo
Bank, N.A., as trustee (the "Trustee"). The Issuer is expected to merge with and
into the Company with the Company as the surviving entity (the "Escrow Corp.
Merger") immediately prior to the mergers contemplated by the Agreement and Plan
of Merger, dated as of March 30, 2003, among the Company, Holly Corporation
("Holly"), Front Range Himalaya Corporation ("Parent"), Front Range Merger
Corporation and Himalaya Merger Corporation (the "Merger Agreement"), pursuant
to which (i) Front Range Merger Corporation will merge with and into the Company
with the Company as the surviving corporation (the "Frontier Merger"), (ii)
Himalaya Merger Corporation will merge with and into Holly with Holly as the
surviving corporation (the "Holly Merger") and (iii) upon consummation of the
Frontier Merger and the Holly Merger, each of the Company and Holly will become
a wholly-owned subsidiary of Parent and Parent will be renamed Frontier Oil
Corporation and immediately thereafter Holly and its subsidiaries will become
wholly-owned subsidiaries of the Company, which shall have been renamed
(together with the Holly Merger, the Frontier Merger and the Escrow Corp.
Merger, the "Mergers"). Upon consummation of the Escrow Corp. Merger, the
Company will succeed to the obligations of the Issuer hereunder and under the
Indenture and the Series A Notes, will execute a supplemental indenture to the
Indenture or an assumption agreement to the Indenture in connection therewith,
and the Company's obligations under the Registration Rights Agreement (as
defined) will become operative. In addition, upon
consummation of the Mergers, the Series A Notes will become fully and
unconditionally guaranteed (the "Guarantees") as to payment of principal,
interest, premium and liquidated damages, if any, on an unsecured senior basis,
jointly and severally by Parent and all domestic entities that are Subsidiaries
of Frontier Oil Corporation upon consummation of the Mergers (collectively, the
"Guarantors"). Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Indenture.
Pending the consummation of the Mergers, the Issuer will deposit 101%
of the aggregate principal amount of the Series A Notes, plus accrued and unpaid
interest on the Series A Notes, to but not including, October 31, 2003, in an
escrow account (the "Escrow Account") pursuant to an Escrow Agreement between
the Issuer and Wells Fargo Bank, N.A., as Trustee and as escrow agent, to be
dated the Closing Date (as defined) (the "Escrow Agreement"). The funds in the
Escrow Account will be released on or before October 31, 2003 either to finance
the Mergers on the terms described in the Offering Memorandum (as defined) or,
in the event of a Special Mandatory Redemption (as defined in the Indenture), to
finance the purchase price in connection therewith.
1. Issuance of Securities. The Issuer proposes, upon the terms
and subject to the conditions set forth herein, to issue and sell to the Initial
Purchasers an aggregate of $220,000,000 in principal amount of Series A Notes.
The Series A Notes and the Series B Notes (as defined) issuable in exchange
therefor are collectively referred to herein as the "Notes."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Series A Notes (and all securities issued in
exchange therefor or in substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (c) IN A TRANSACTION MEETING THE
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REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501
(a) (1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR")) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS
IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
2. Offering. The Series A Notes will be offered and sold to the
Initial Purchasers pursuant to an exemption from the registration requirements
under the Act. The Issuer and the Company will prepare an offering memorandum,
to be dated April 4, 2003 (the "Offering Memorandum"), relating to the Issuer,
the Company and its Subsidiaries, Parent, Holly and its Subsidiaries, and the
Series A Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Series A Notes only on
the terms set forth in the Offering Memorandum, as amended or supplemented,
solely to (i) persons whom the Initial Purchasers reasonably believe to be
"qualified institutional buyers," as defined in Rule 144A under the Act ("QIBs")
and (ii) non-U.S. persons outside the United States in reliance upon Regulation
S ("Regulation S") under the Act (each, a "Reg S Investor"). The QIBs and the
Reg S Investors are collectively referred to herein as the "Eligible
Purchasers." The Initial Purchasers will offer the Series A Notes to such
Eligible Purchasers initially at a price equal to 99.156% of the principal
amount thereof. Such price may be changed at any time without notice.
Upon consummation of the Mergers, holders (including subsequent
transferees) of the Series A Notes will have the registration rights set forth
in the registration rights agreement relating to such Series A Notes (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined), for
so long as such Series A Notes constitute "Transfer Restricted Securities" (as
defined in the Registration Rights Agreement). Pursuant to the Registration
Rights Agreement, the Company and Parent, following the consummation of the
Mergers, will agree to file with the Securities and Exchange Commission (the
"Commission"), under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the Company's 8.000% Series B Senior Notes due 2013 (the "Series B
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Notes") and Guarantees thereof to be offered in exchange for the Series A Notes
and Guarantees thereof (the "Exchange Offer") and (ii) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the Act
(the "Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, the "Registration Statements") relating to the resale by
certain holders of the Series A Notes, and to use their best efforts to cause
such Registration Statements to be declared effective and to consummate the
Exchange Offer. This Agreement, the Notes, the Indenture, the Registration
Rights Agreement and the Escrow Agreement are hereinafter referred to
collectively as the "Operative Documents."
3. Purchase, Sale and Delivery. (a) (a) (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Issuer agrees to issue and sell to the
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Issuer, the principal amounts of Series A Notes
set forth opposite the name of such Initial Purchaser on Exhibit A. The purchase
price for the Series A Notes will be $966.56 per $1,000 principal amount Series
A Note.
(b) Delivery of the Series A Notes shall be made,
against payment of the purchase price therefor, at the offices of
Latham & Watkins LLP, New York, New York or such other location as may
be mutually acceptable. Such delivery and payment shall be made at
9:00 a.m., New York City time, on April 17, 2003 or at such other time
as shall be agreed upon by the Initial Purchasers and the Issuer. The
time and date of such delivery and payment are herein called the
"Closing Date."
(c) On the Closing Date, one or more Series A Notes in
definitive global form, registered in the name of Cede & Co., as
nominee of The Depository Trust Company ("DTC"), having an aggregate
amount corresponding to the aggregate principal amount of the Series A
Notes (the "Global Note") sold pursuant to Exempt Resales to Eligible
Purchasers shall be delivered by the Issuer to the Initial Purchasers
(or as the Initial Purchasers direct), against payment by the Initial
Purchasers of the purchase price therefor, by wire transfer of same
day funds, to an account designated by the Issuer, provided that the
Issuer shall give at least two business days' prior written notice to
the Initial Purchasers of the information required to effect such wire
transfer. The Global Note shall be made available to the Initial
Purchasers for inspection not later than 9:30 a.m. on the business day
immediately preceding the Closing Date.
4. Agreements of the Issuer and the Company. Each of the Issuer
and the Company covenants and agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing,
(i) of the issuance by any state securities commission of any stop
order suspending the qualification or exemption from qualification of
any Notes or the related Guarantees for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by
any state securities commission or other regulatory authority and (ii)
of the happening of any event that makes any statement of a material
fact made in the Offering Memorandum untrue or that requires the
making of any additions to or changes in the Offering Memorandum in
order to make the statements therein, in the light of the
circumstances under which they are
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made, not misleading. The Issuer and the Company shall use their
respective reasonable efforts to prevent the issuance of any stop
order or order suspending the qualification or exemption of any Notes
or the related Guarantees under any state securities or Blue Sky laws
and, if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption of any Notes or the related Guarantees under any state
securities or Blue Sky laws, the Issuer and the Company shall promptly
use their respective reasonable efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those
persons identified by the Initial Purchasers to the Company and the
Issuer, without charge, as many copies of the Offering Memorandum, and
any amendments or supplements thereto, as the Initial Purchasers may
reasonably request. The Issuer and the Company consent to the use of
the Offering Memorandum, and any amendments and supplements thereto
required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) Not to amend or supplement the Offering Memorandum
without the consent of the Initial Purchasers, which consent shall be
provided in a reasonable period of time (which shall not in any case
be longer than three full business days after receipt of such proposed
amendment or supplement) and shall not be unreasonably withheld,
during such period as in the opinion of counsel for the Initial
Purchasers the Offering Memorandum is required by law to be delivered
in connection with Exempt Resales and in connection with market-making
activities of the Initial Purchasers for so long as any Series A Notes
are outstanding. The Issuer and the Company shall promptly prepare,
upon the Initial Purchasers' request, any amendment or supplement to
the Offering Memorandum that may be necessary or advisable in
connection with such Exempt Resales or such market making activities.
(d) If, during the period referred to in 4(c) above,
any event shall occur as a result of which, in the judgment of the
Issuer, the Company or the Initial Purchasers, or in the reasonable
opinion of counsel for the Issuer, the Company or the Initial
Purchasers, it becomes necessary or advisable to amend or supplement
the Offering Memorandum so that it does not include an 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 when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of the
Issuer, the Company, the Initial Purchasers or counsel for the
Company, the Issuer or the Initial Purchasers, it is necessary or
advisable to amend or supplement the Offering Memorandum to comply
with applicable law, (i) to notify the Initial Purchasers promptly and
(ii) forthwith to prepare an appropriate amendment or supplement to
such Offering Memorandum (in form and substance reasonably
satisfactory to the Initial Purchasers) so that the statements therein
as so amended or supplemented will not include an untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances when it is so
delivered, not misleading, or so that such Offering Memorandum will
comply with applicable law.
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(e) To cooperate with the Initial Purchasers and
counsel for the Initial Purchasers in connection with the
qualification or registration of the Series A Notes and the Guarantees
thereof under the securities or Blue Sky laws of such jurisdictions of
the United States as the Initial Purchasers may reasonably request and
to continue such qualification in effect so long as required for the
Exempt Resales; provided, however, that none of the Issuer, the
Company or any of the Guarantors shall be required in connection
therewith to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to
service of process in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement becomes effective or
is terminated, to pay all costs, expenses, fees and taxes incident to
the performance of the obligations of the Issuer and the Company
hereunder, including in connection with: (i) the preparation,
printing, filing and distribution of the Offering Memorandum
(including, without limitation, financial statements) and all
amendments and supplements thereto required pursuant hereto, (ii) the
preparation (including, without limitation, duplication costs) and
delivery of all agreements, correspondence and all other documents
prepared and delivered in connection herewith and with the Exempt
Resales, (iii) the issuance, transfer and delivery by the Issuer of
the Series A Notes and the Guarantees endorsed thereon to the Initial
Purchasers, (iv) the qualification or registration of the Notes and
the related Guarantees for offer and sale under the securities or Blue
Sky laws of the several states (including, without limitation, the
cost of printing and mailing a Blue Sky Memorandum and the reasonable
fees and disbursements of counsel for the Initial Purchasers relating
thereto), (v) furnishing such copies of the Offering Memorandum, and
all amendments and supplements thereto, as may be requested for use in
connection with Exempt Resales, (vi) the preparation of certificates
for the Notes (including, without limitation, printing and engraving
thereof), (vii) the fees, disbursements and expenses of the Issuer's,
the Company's and the Guarantors' counsel and accountants, (viii) all
fees and expenses (including fees and expenses of counsel) of the
Issuer, the Company and the Guarantors in connection with the approval
of the Notes by DTC for "book-entry" transfer, (ix) rating the Notes
by rating agencies, (x) the reasonable fees and expenses of the
Trustee and its counsel, (xi) the performance by the Issuer and the
Company of their respective other obligations under this Agreement and
the other Operative Documents and (xii) "roadshow" travel and other
expenses incurred by the Issuer or the Company in connection with the
marketing and sale of the Notes; provided, however, except as provided
in this Section 4(f) and in Section 11(d), the Initial Purchasers
shall pay their own costs and expenses (including the costs and
expenses of their counsel).
(g) To use the proceeds from the sale of the Series A
Notes in the manner described in the Offering Memorandum under the
caption "Use of Proceeds," unless the Issuer is required to redeem the
Series A Notes pursuant to a Special Mandatory Redemption.
(h) Not to voluntarily claim, and to resist actively
any attempts to claim, the benefit of any usury laws against the
holders of any Notes.
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(i) To use its best efforts to do and perform in all
material respects all things required or necessary to be done and
performed under this Agreement by it prior to or after the Closing
Date and to satisfy all conditions precedent on its part to the
delivery of the Series A Notes except to the extent any such condition
has been waived in writing by the Initial Purchasers.
(j) Not to sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in
the Act) that would be integrated with the sale of the Series A Notes
in a manner that would require the registration under the Act of the
sale to the Initial Purchasers or the Eligible Purchasers of the
Series A Notes or to take any other action that would result in the
Exempt Resales not being exempt from registration under the Act.
(k) For so long as any of the Series A Notes remain
outstanding and during any period in which the Company and the
Guarantors are not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to make
available upon request to any holder or beneficial owner of Series A
Notes in connection with any sale thereof and any prospective
purchaser of such Series A Notes from such holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Act.
(l) So long as permitted under applicable law, to use
its reasonable efforts to cause the Exchange Offer to be made in the
appropriate form to permit registered Series B Notes and the
Guarantees thereof to be offered in exchange for the Series A Notes
and the Guarantees thereof and to comply with all applicable federal
and state securities laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in
the Registration Rights Agreement and all of its agreements set forth
in the representation letter of the Issuer and the Company to DTC
relating to the approval of the Notes by DTC for "book-entry"
transfer.
(n) To use reasonable best efforts to effect the
inclusion of the Notes in PORTAL and to obtain approval of the Series
A Notes by DTC for "book-entry" transfer.
(o) During a period of five years following the
Closing Date, to deliver without charge to the Initial Purchasers, as
they may reasonably request, promptly upon their becoming available,
copies of (i) all reports or other publicly available information that
the Company and the Guarantors shall mail or otherwise make available
to their securityholders and (ii) all reports, financial statements
and proxy or information statements filed by the Company with the
Commission or any national securities exchange and such other publicly
available information concerning the Company, Parent or any of the
Company's Subsidiaries, including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to the
Initial Purchasers, as soon as they have been prepared in the ordinary
course by the Company, copies of any unaudited interim financial
statements for any period subsequent to the periods covered by the
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financial statements appearing in the Offering Memorandum, unless such
financial statements are then publicly available.
(q) Not to take, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result
in stabilization or manipulation of the price of any security of the
Company or Parent to facilitate the sale or resale of the Notes.
Except as permitted by the Act, neither the Issuer nor the Company
will distribute any (i) preliminary offering memorandum, (ii) offering
memorandum, including, without limitation, the Offering Memorandum, or
(iii) other offering material in connection with the offering and sale
of the Notes.
(r) During the period from the date hereof until 90
days after the Closing Date, not to offer, sell, contract to sell or
cause to be offered, sold or contracted to sell, or otherwise dispose
of any debt securities of the Issuer, the Company or any of the
Guarantors substantially similar to the Notes without the prior
written consent of Bear, Stearns & Co. Inc., on behalf of the Initial
Purchasers.
(s) To deposit 101% of the aggregate principal amount
of the Series A Notes, plus accrued and unpaid interest on the Series
A Notes, to but not including, October 31, 2003, in the Escrow Account
and to abide by the terms of the Escrow Agreement.
(t) Upon consummation of the Escrow Corp. Merger, that
the Company will assume all of Issuer's obligations under this
Agreement, including but not limited to Sections 6 and 7 hereof.
(u) In the event that the Frontier Merger and the
Holly Merger are consummated, to immediately thereafter cause Holly
and its subsidiaries to become wholly-owned subsidiaries of the
Company.
5. Representations and Warranties. (a) (a) Each of the Issuer
and the Company, jointly and severally, represents and warrants to the Initial
Purchasers that:
(i) The Offering Memorandum as of its date and as of
the Closing Date will not, and any supplement or amendment to it will
not, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that
the Issuer and the Company make no warranty or representation with
respect to any statement contained in, or any matter omitted from, the
Offering Memorandum (or any supplement or amendment thereto) made in
reliance upon and in conformity with information relating to the
Initial Purchasers furnished in writing by or on behalf of any Initial
Purchasers through Bear, Stearns & Co. Inc. to the Issuer or the
Company, or both, expressly for use with reference to such Initial
Purchaser in the Offering Memorandum (or any supplement or amendment
thereto). No stop order preventing the use of the Offering Memorandum,
or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued.
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(ii) The Issuer (A) has been duly organized and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation and (B) as of the date hereof does
not have, and as of the Closing Date will not have, any operations,
Subsidiaries, assets, indebtedness, liabilities or obligations, other
than the Series A Notes and any obligations pursuant to this Agreement
or the other Operative Documents.
(iii) Each of the Company, Parent and the Company's
Subsidiaries (A) has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, (B) has, and after giving effect to the Mergers will
have, all requisite corporate power and authority to carry on its
business as it is currently being conducted and as described in the
Offering Memorandum and to own, lease and operate its properties, and
(C) is, and after giving effect to the Mergers will be, duly qualified
and 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 could not reasonably be
expected to (x) result, individually or in the aggregate, in a
material adverse effect on the properties, business, proposed business
(including after giving effect to the Mergers) of the Company, Parent
and the Company's Subsidiaries, taken as a whole, (y) interfere with
or adversely affect the issuance or marketability of the Notes or (z)
in any material manner draw into question the validity of this
Agreement or any other Operative Document or the transactions
described in the Offering Memorandum under the caption "Use of
Proceeds" (any of the events set forth in clauses (x), (y) or (z), a
"Material Adverse Effect").
(iv) As of the date hereof and without giving effect to
the Mergers, the Company has no Subsidiaries other than the entities
listed on Exhibit B attached hereto, other than Parent. Upon
consummation of the Mergers, Holly and its Subsidiaries will become
Subsidiaries of the Company.
(v) All of the outstanding shares of capital stock or
other securities evidencing equity securities of each of the Company
and Parent have been duly authorized, validly issued and are, and
after giving effect to the Mergers will be, fully paid and
nonassessable, were issued in compliance with all applicable federal
and state securities laws and were not issued in violation of any
preemptive or similar rights.
(vi) All of the outstanding shares of capital stock of
each of the Company's Subsidiaries is owned, and after giving effect
to the Mergers will be owned, directly or indirectly, by the Company,
free and clear of any security interest, claim, lien, encumbrance,
restriction on transfer, limitation on voting rights or other defect
of title whatsoever, except Permitted Liens; and all such securities
have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or
similar rights. Except for (i) the shares of stock of each of the
Company's Subsidiaries owned by the Company, and after giving effect
to the Mergers to be owned by the Company, (ii) the 334 shares of
stock of 8901 Hangar, Inc. owned by the Company, (iii) the Company's
interest in FGI, LLC and (iv) the Company's 50% interest in Parent,
neither the Company nor any of its Subsidiaries owns, directly or
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indirectly, any shares of capital stock of any corporation or has any
equity interest in any firm, partnership, joint venture or other
entity.
(vii) Except as disclosed in the Offering Memorandum,
there are not currently, and after giving effect to the Mergers will
not be, any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible
into or exchangeable for, any capital stock or other equity interest
of the Issuer, the Company, Parent or any of the Company's
Subsidiaries.
(viii) When the Series A Notes are issued and delivered
pursuant to this Agreement, no Series A Note will be of the same class
(within the meaning of Rule 144A under the Act) as securities of the
Issuer, the Company or Parent that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are
quoted in a United States automated inter-dealer quotation system.
(ix) Each of the Issuer and the Company has all
requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement and each of the other
Operative Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby, including, without
limitation, the corporate power and authority to issue, sell and
deliver the Notes.
(x) This Agreement has been duly and validly
authorized, executed and delivered by the Issuer and the Company.
(xi) The Indenture has been duly and validly authorized
by the Issuer and, when duly executed and delivered by the Issuer,
will be the legal, valid and binding agreement of the Issuer,
enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity (whether
considered in a proceeding in equity or at law) and provided that
rights to indemnification and arbitration thereunder may be limited by
federal or state securities laws or public policy relating thereto. On
the Closing Date, the Indenture will conform in all material respects
to the requirements of the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"), and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder.
The Indenture conforms in all material respects to the description
thereof in the Offering Memorandum.
(xii) The Registration Rights Agreement has been duly
and validly authorized by each of Parent and the Company and, when
duly executed and delivered by each of Parent and the Company, will be
the legal, valid and binding obligation of each of Parent and the
Company, enforceable against each of them in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity
(whether considered in a proceeding in equity or at law) and provided
that rights to indemnification and arbitration thereunder may be
limited by federal or state securities laws or public policy relating
thereto. The Registration Rights Agreement conforms in all material
respects to the description thereof in the Offering Memorandum.
10
(xiii) The Escrow Agreement has been duly and validly
authorized by the Issuer and, when duly executed and delivered by the
Issuer, will be the legal, valid and binding agreement of the Issuer,
enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and subject to general principles of equity
(whether considered in a proceeding in equity or at law) and provided
that rights to indemnification and arbitration thereunder may be
limited by federal or state securities laws or public policy relating
thereto. The Escrow Agreement conforms in all material respects to the
description thereof in the Offering Memorandum.
(xiv) The Merger Agreement has been duly and validly
authorized, executed and delivered by each of the Company and Parent
and is a valid and binding agreement of each of the Company and
Parent, enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of
creditors generally and subject to general principles of equity
(whether considered in a proceeding in equity or at law). The Merger
Agreement conforms in all material respects to the description thereof
in the Offering Memorandum.
(xv) The Agreement of Merger of the Issuer into and
with the Company, dated as of the Closing Date (the "Escrow Corp.
Merger Agreement"), will be, as of the Closing Date, duly and validly
authorized, executed and delivered by each of the Issuer and the
Company and will be, as of the Closing Date, a valid and binding
agreement of each of the Issuer and the Company, enforceable against
each of them in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the rights of creditors generally
and subject to general principles of equity (whether considered in a
proceeding in equity or at law).
(xvi) The Series A Notes have been duly and validly
authorized by the Issuer for issuance and sale to the Initial
Purchasers pursuant to this Agreement and, when issued and
authenticated in accordance with the terms of the Indenture and
delivered against payment therefor in accordance with the terms hereof
and thereof, will be the legal, valid and binding obligations of the
Issuer, enforceable against it in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the rights of creditors generally
and subject to general principles of equity (whether considered in a
proceeding in equity or at law). Upon consummation of the Escrow Corp.
Merger, the Indenture will constitute a valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the
rights of creditors generally and subject to general principles of
equity (whether considered in a proceeding in equity or at law) and
provided that rights to indemnification and arbitration thereunder may
be limited by federal or state securities laws or public policy
relating thereto. The Series A Notes, when issued, authenticated and
delivered, will conform in all material respects to the description
thereof in the Offering Memorandum.
11
(xvii) The Guarantees of the Series A Notes have been
duly and validly authorized by Parent and each of the entities set
forth on Exhibit B hereto and, when executed and delivered in
accordance with the terms of the Indenture and when the Series A Notes
have been issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with
the terms hereof and thereof, will be the legal, valid and binding
obligations of Parent and each of the entities set forth on Exhibit B
hereto, enforceable against each of them in accordance with their
terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity (whether
considered in a proceeding in equity or at law). The Guarantees, when
executed and delivered, will conform in all material respects to the
description thereof in the Offering Memorandum.
(xviii) The Series B Notes have been duly and validly
authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Exchange Offer and
the Indenture, will be the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject
to general principles of equity (whether considered in a proceeding in
equity or at law).
(xix) The Guarantees of the Series B Notes have been
duly and validly authorized by Parent and each of the entities set
forth on Exhibit B hereto and, when executed and delivered in
accordance with the terms of the Indenture and when the Series B Notes
have been issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with
the terms hereof and thereof, will be the legal, valid and binding
obligations of Parent and each of the entities set forth on Exhibit B
hereto, enforceable against each of them in accordance with their
terms and entitled to the benefits of the Indenture, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity (whether
considered in a proceeding in equity or at law).
(xx) None of the Issuer, the Company, Parent or any of
the Company's Subsidiaries is, or after giving effect to the Mergers
and the Offering will be, (A) in violation of its charter or bylaws,
(B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties is subject or (C) except as described in the Offering
Memorandum, in violation of any local, state, federal or foreign law,
statute, ordinance, rule, regulation, requirement, judgment or court
decree (including, without limitation, environmental laws, statutes,
ordinances, rules, regulations, judgments or court decrees) applicable
to it or any of its assets or properties (whether owned or leased),
except, in the case of clause (B) or (C), where such event could not
reasonably be expected to have a Material Adverse Effect. To the best
knowledge of the Issuer and the Company, there exists no condition
that, and after giving effect to the Mergers will exist no condition
that, with notice, the passage of time or
12
otherwise, would constitute a default under any such document or
instrument, which default could reasonably be expected to have a
Material Adverse Effect.
(xxi) Except as set forth in the Offering Memorandum,
none of (A) the execution, delivery or performance by the Issuer or
the Company of this Agreement or the execution, delivery or
performance by the Issuer, the Company or Parent of any of the other
Operative Documents to which the Issuer, the Company or Parent is a
party, (B) the issuance and sale of the Notes, and upon consummation
of the Mergers, the issuance of the Guarantees or (C) the consummation
by the Issuer or the Company of the transactions described in the
Offering Memorandum under the caption "Use of Proceeds," violates,
conflicts with or constitutes a breach of, or after giving effect to
the Mergers will violate, conflict with or constitute a breach of, any
of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a default
under), or require consent under (including after giving effect to the
Mergers), or result in (including after giving effect to the Mergers),
the imposition of a lien or encumbrance on any properties of the
Issuer, the Company, Parent, or any of the Company's Subsidiaries or
an acceleration of any indebtedness of the Issuer, the Company, Parent
or any of the Company's Subsidiaries pursuant to (1) the charter or
bylaws of the Issuer, the Company, Parent or any of the Company's
Subsidiaries, (2) any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument to which the Issuer, the
Company, Parent or any of the Company's Subsidiaries is a party or by
which any of them or their property is or may be bound, (3) any
statute, rule or regulation applicable to the Issuer, the Company,
Parent or any of the Company's Subsidiaries or any of their assets or
properties or (4) any judgment, order or decree of any court or
governmental agency or authority having jurisdiction over the Issuer,
the Company, Parent or any of the Company's Subsidiaries or any of
their assets or properties, except, in the case of clause (2), (3) or
(4), where such event could not reasonably be expected to have a
Material Adverse Effect. Except as disclosed in the Offering
Memorandum, no consent, approval, authorization or order of, or
filing, registration, qualification, license or permit of or with, (A)
any court or governmental agency, body or administrative agency or (B)
any other person is required for, or after giving effect to the
Mergers will be required for, (1) the execution, delivery and
performance by each of the Issuer and the Company of this Agreement or
the execution, delivery and performance by the Issuer, the Company and
Parent of any of the other Operative Documents to which the Issuer,
the Company or Parent is a party, (2) the issuance and sale of the
Notes, and upon consummation of the Mergers, the issuance of the
Guarantees or (3) the consummation of the transactions described in
the Offering Memorandum under the heading "Use of Proceeds," except
such as have been or will be obtained and made on or prior to the
Closing Date (or, in the case of the Registration Rights Agreement,
will be obtained and made under the Act), the Trust Indenture Act, and
state securities or Blue Sky laws and regulations or such as may be
required by the NASD.
(xxii) There is (A) no action, suit, investigation or
proceeding before or by any court, arbitrator or governmental agency,
body or official, domestic or foreign, now, or after giving effect to
the Mergers, pending or, to the best knowledge of the Issuer and the
Company, threatened or contemplated, or to which the Issuer, the
Company, Parent or any of the Company's Subsidiaries is a party or to
which the business or property of the
13
Issuer, the Company, Parent or any of the Company's Subsidiaries is
subject, (B) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been
proposed by any governmental body and (C) no injunction, restraining
order or order of any nature by a federal or state court or foreign
court of competent jurisdiction to which the Issuer, the Company,
Parent or any of the Company's Subsidiaries is or may be subject, or
after giving effect to the Mergers will or may be subject, or to which
the business, assets or property of any of the Issuer, the Company,
Parent or any of the Company's Subsidiaries is subject, or after
giving effect to the Mergers will be subject, that, in the case of
clauses (A), (B) and (C) above, (1) is required to be disclosed in the
Offering Memorandum and that is not so disclosed or (2) could
reasonably be expected to have a Material Adverse Effect.
(xxiii) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any
governmental agency that prevents the issuance of the Notes or the
Guarantees or prevents or suspends the use of the Offering Memorandum;
no injunction, restraining order or order of any nature by a federal
or state court of competent jurisdiction has been issued that prevents
the issuance of the Notes or the Guarantees or prevents or suspends
the sale of the Notes or the Guarantees in any jurisdiction referred
to in Section 4(e) hereof; and every request of any securities
authority or agency of any jurisdiction for additional information has
been complied with in all material respects.
(xxiv) Except as disclosed in the Offering Memorandum,
none of the Issuer, the Company, Parent any of the Company's
Subsidiaries is, or after giving effect to the Mergers will be, a
party to any union or collective bargaining agreement, and there is,
and after giving effect to the Mergers will be, no significant strike,
labor dispute, slowdown or stoppage pending against the Issuer, the
Company, Parent or any of the Company's Subsidiaries nor, to the best
knowledge of the Issuer and the Company, threatened against the
Issuer, the Company, Parent or any of the Company's Subsidiaries,
including as a result of the Mergers, except, in each case, as could
not reasonably be expected to have a Material Adverse Effect.
(xxv) Except as disclosed in the Offering Memorandum,
none of the Issuer, the Company, Parent or any of the Company's
Subsidiaries has, or after giving effect to the Mergers will have,
violated any foreign, federal, state or local law or regulation, or
any judicial or administrative order, consent, decree or judgment,
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"), which violation (a) could,
either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or (b) is required to be disclosed in
the Offering Memorandum and is not so disclosed; and, except as
described in the Offering Memorandum, none of the Issuer, the Company,
Parent and the Company's Subsidiaries is, and after giving effect to
the Mergers, will be, responsible for any known contamination or
pollution that may require remediation that (a) could, either singly
or in the aggregate, reasonably be expected to have a Material Adverse
Effect or (b) is required to be disclosed in the Offering Memorandum
and is not so disclosed.
14
(xxvi) Each of the Issuer, the Company, Parent and the
Company's Subsidiaries has, and after giving effect to the Mergers
will have, such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("Permits"), including, without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease and operate its respective properties and to conduct its
businesses, except where the failure to have such Permits could,
either individually or in the aggregate, not reasonably be expected to
have a Material Adverse Effect; each of the Issuer, the Company,
Parent and the Company's Subsidiaries has, and after giving effect to
the Mergers will have, fulfilled and performed all of its obligations
with respect to such Permits and no event has, or after giving effect
to the Mergers will have, occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder
of any such Permit, except as could, either individually or in the
aggregate, not reasonably be expected to have a Material Adverse
Effect; and, except as described in the Offering Memorandum, such
Permits contain, and after giving effect to the Mergers will contain,
no restrictions that are materially burdensome to the Issuer, the
Company, Parent or such Subsidiary, as the case may be.
(xxvii) Each of the Issuer, the Company, Parent and the
Company's Subsidiaries has, and after giving effect to the Mergers
will have, (A) good and marketable title to all of the properties and
assets described in the Offering Memorandum as owned by it, free and
clear of all liens, charges, encumbrances and restrictions (except for
Permitted Liens) and (B) peaceful and undisturbed possession under all
material leases to which any of them is a party as lessee and each of
which lease is valid and binding and no default exists thereunder,
except for defaults that could not reasonably be expected to have a
Material Adverse Effect. All material leases to which the Issuer,
Company, Parent or any of the Company's Subsidiaries is a party are,
and after giving effect to the Mergers will be, valid and binding and
no default by the Issuer, the Company, Parent or such Subsidiary, as
the case may be, has occurred and is continuing thereunder, or after
giving effect to the Mergers will have occurred and will be continuing
thereunder, and, to the best knowledge of the Issuer and the Company,
no material defaults by the landlord are existing under any such
lease, or after giving effect to the Mergers will be existing under
any such lease, except those defaults that could not reasonably be
expected to have a Material Adverse Effect.
(xxviii) Except as disclosed in the Offering Memorandum,
each of the Issuer, the Company, Parent and the Company's Subsidiaries
owns, possesses or has the right to employ, and after giving effect to
the Mergers will own, possess or have the right to employ, all
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, software, systems or
procedures), trademarks, service marks and trade names, inventions,
computer programs, technical data and information (collectively, the
"Intellectual Property") presently employed by it in connection with
the businesses now operated by it or that are proposed to be operated
by it, including as a result of the Mergers, free and clear of and
without violating any right, claimed right, charge, encumbrance,
pledge, security interest, restriction or lien of any kind of any
other person (except for Permitted Liens), and none of the Company,
Parent or any of the Company's
15
Subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing,
except those infringements of or conflicts with asserted rights of
others that could not reasonably be expected to have a Material
Adverse Effect. The use of the Intellectual Property in connection
with the business and operations of the Company, Parent or any of the
Company's Subsidiaries does not infringe, and after giving effect to
the Mergers will not infringe, on the rights of any person, except
such infringements as could not reasonably be expected to have a
Material Adverse Effect.
(xxix) The Company, Parent and each of the Company's
Subsidiaries have, and after giving effect to the Mergers will have,
(A) filed all federal, state and local and foreign tax returns that
are required to be filed through the date hereof, and all such tax
returns are true, complete and accurate in all material respects, or
(B) received valid extensions thereof and have paid all taxes shown on
such returns and all assessments received by them except where, in the
case of state and local and foreign tax returns, the failure to file
in clause (A), or extend the due date the of or pay the same in clause
(B), in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; neither the Company nor the Issuer has
knowledge of any tax deficiency that has been or might be asserted
against the Company, Parent or any of the Company's Subsidiaries,
including as a result of the Mergers, that could reasonably be
expected to have a Material Adverse Effect; to the best knowledge of
the Issuer and the Company, all tax liabilities are, and after giving
effect to the Mergers will be, adequately provided for on the
consolidated books of the Company or Parent, as applicable.
(xxx) Each of the Company, Parent and the Company's
Subsidiaries maintains, and after giving effect to the Mergers will
maintain, a system of internal accounting controls sufficient to
provide reasonable assurance that: (A) transactions are executed in
accordance with management's general or specific authorizations; (B)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(xxxi) In accordance with customary industry practices,
the Issuer, the Company, Parent and each of the Company's Subsidiaries
maintains, and after giving effect to the Mergers will maintain,
insurance covering their properties, operations, personnel and
businesses, insuring against such losses and risks as are consistent
with industry practice to protect the Issuer, the Company, Parent and
the Company's Subsidiaries and their respective businesses. None of
the Issuer, the Company, Parent nor any of the Company's Subsidiaries
has received notice from any insurer or agent of such insurer that
substantial capital improvements or other expenditures will have to be
made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be
outstanding and in force on the Closing Date.
16
(xxxii) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among the Company,
Parent or any of the Company's Subsidiaries, on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company, Parent or any of the Company's Subsidiaries, on the other
hand, which would be required by the Act to be described in the
Offering Memorandum if the Offering Memorandum were a prospectus
included in a registration statement on Form S-1 filed with the
Commission.
(xxxiii) Except as disclosed in the Offering Memorandum, no
relationship, direct or indirect, exists between or among Holly or any
of its Subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of Holly or any of its
Subsidiaries, on the other hand, which would be required by the Act to
be described in the Offering Memorandum if the Offering Memorandum
were a prospectus included in a registration statement on Form S-1
filed with the Commission
(xxxiv) None of the Issuer, the Company, Parent or any of
the Company's Subsidiaries is an (i) an "investment company" or (ii) a
company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(xxxv) There are no holders of securities of the Company
or Parent who, by reason of the execution by the Company of this
Agreement or by reason of the execution by the Company or Parent of
any other Operative Document to which the Company or Parent is a party
or the consummation by the Company of the transactions contemplated
hereby and thereby, have the right to request or demand that the
Company or Parent register under the Act or analogous foreign laws and
regulations securities held by them other than pursuant to the
Registration Right Agreement.
(xxxvi) None of the Issuer, the Company, Parent or any of
the Company's Subsidiaries has taken, and none of the Issuer, the
Company, Parent or any of the Company's Subsidiaries will take,
directly or indirectly, any action designed to, or that might
reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Issuer, the Company,
Parent or any of the Company's Subsidiaries or to facilitate the sale
or resale of the Notes.
(xxxvii) The accountants who have certified or will certify
the financial statements included or to be included as part of the
Offering Memorandum are independent accountants as required by the
Act. The historical consolidated financial statements, together with
related schedules and notes thereto, comply as to form in all material
respects with the requirements applicable to registration statements
on Form S-3 under the Act and present fairly in all material respects
the financial condition, results of operations of the Company and its
consolidated Subsidiaries and Holly and its consolidated Subsidiaries,
respectively, at the dates and for the periods indicated. Such
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods presented. The pro forma financial statements
included in the Offering Memorandum have been prepared on a basis
consistent with such historical statements of the Company, except for
17
the pro forma adjustments specified therein, and give effect to
assumptions made on a reasonable basis and present fairly in all
material respects the historical and proposed transactions
contemplated by this Agreement and the other Operative Documents,
including the Mergers; and such pro forma financial statements comply
as to form in all material respects with the applicable accounting
requirements of Rule 11-02 of Regulation S-X of the Act. The other
financial and statistical information and data included in the
Offering Memorandum, derived from the historical and pro forma
financial statements, are accurately presented in all material
respects and prepared on a basis consistent with the financial
statements, historical and pro forma, included in the Offering
Memorandum and the books and records of the Company and its
Subsidiaries. The pro forma financial information and the "Unaudited
Pro Forma Consolidated Financial Information" included in the Offering
Memorandum that gives effect to the issuance of the Notes, the
application of the net proceeds therefrom and the other transactions
and events specified therein have been properly compiled on the basis
of the assumptions set forth with respect thereto.
(xxxviii) No registration under the Act of the Series A
Notes is required for the sale of the Series A Notes to the Initial
Purchasers as contemplated hereby or for the Exempt Resales assuming
(A) that the purchasers who buy the Series A Notes in the Exempt
Resales are Eligible Purchasers and (B) the accuracy of the Initial
Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series A Notes to the
Initial Purchasers and the Exempt Resales contained herein and
compliance with their covenants. No form of general solicitation or
general advertising (as defined in Regulation D under the Act) was
used by the Issuer, the Company, Parent or any of their respective
representatives (other than the Initial Purchasers, as to which the
Issuer and the Company make no representation or warranty) in
connection with the offer and sale of any of the Series A Notes or in
connection with Exempt Resales, including, but not limited to,
articles, notices or other communications published in any newspaper,
magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. No securities of the same
class as the Notes have been issued and sold by the Issuer, the
Company, Parent or any of the entities set forth on Exhibit B attached
hereto within the six-month period immediately prior to the date
hereof.
(xxxix) The Offering Memorandum, as of its date, and each
amendment or supplement thereto, as of its date, contains the
information specified in, and meets the requirements of, Rule
144A(d)(4) under the Act.
(xl) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the
Trust Indenture Act.
(xli) None of the Issuer, the Company, Parent or any of
their respective affiliates or any person acting on their behalf
(other than the Initial Purchasers, as to whom the Issuer and the
Company make no representation) has engaged or will engage in any
directed selling efforts within the meaning of Regulation S with
respect to the Series A Notes.
18
(xlii) The Series A Notes offered and sold in reliance on
Regulation S have been and will be offered and sold only in offshore
transactions.
(xliii) The sale of the Series A Notes pursuant to
Regulation S is not part of a plan or scheme to evade the registration
provisions of the Act.
(xliv) The Issuer, the Company, Parent and their
respective affiliates and all persons acting on their behalf (other
than the Initial Purchasers, as to whom the Issuer and the Company
make no representation) have complied with and will comply with the
offering restrictions requirements of Regulation S in connection with
the offering of the Series A Notes outside the United States and, in
connection therewith, the Offering Memorandum will contain the
disclosure required by Rule 902(g)(2).
(xlv) The Company is a "reporting issuer," as defined in
Rule 902 under the Act.
(xlvi) The Series A Notes sold in reliance on Regulation
S will be represented upon issuance by a temporary global security
that may not be exchanged for definitive securities until the
expiration of the 40-day distribution compliance period referred to in
Rule 903(c)(3) of the Act and only upon certification of beneficial
ownership of such Series A Notes by non-U.S. persons or U.S. persons
who purchased such Series A Notes in transactions that were exempt
from the registration requirements of the Act.
(xlvii) Subsequent to the dates as of which information is
given in the Offering Memorandum and up to the Closing Date, except as
set forth in the Offering Memorandum, (A) none of the Issuer, the
Company, Parent or any of the Company's Subsidiaries has incurred any
liabilities or obligations, direct or contingent, which are material,
individually or in the aggregate, to the Company, Parent and the
Company's Subsidiaries, taken as a whole, nor entered into any
transaction not in the ordinary course of business, (B) there has not
been any change or development which, singly or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect
and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(xlviii) None of the execution, delivery and performance of
this Agreement, the issuance and sale of the Notes, the application of
the proceeds from the issuance and sale of the Notes and the
consummation of the transactions contemplated thereby as set forth in
the Offering Memorandum, will violate Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve System or
analogous foreign laws and regulations.
(xlix) Neither the Issuer nor the Company, including
after giving effect to the Mergers, intends to, or believes that it
will, incur debts beyond its ability to pay such debts as they mature.
The present fair saleable value of the assets of the Company exceeds,
and following the consummation of the Mergers will exceed, the amount
that will be required to be paid on or in respect of its existing
debts and other liabilities
19
(including contingent liabilities) as they become absolute and
matured. The assets of the Company do not constitute unreasonably
small capital to carry out its business as conducted or as proposed to
be conducted. Upon the issuance of the Notes, the present fair
saleable value of the assets of the Company will exceed the amount
that will be required to be paid on or in respect of its existing
debts and other liabilities (including contingent liabilities) as they
become absolute and matured and the assets of the Company will not
constitute unreasonably small capital to carry out its business as now
conducted, including the capital needs of the Company, taking into
account the projected capital requirements and capital availability
and giving effect to the Mergers.
(l) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Issuer or the
Company (including after giving effect to the Mergers) and any other
person that would give rise to a valid claim against the Issuer, the
Company or the Initial Purchasers for a brokerage commission, finder's
fee or like payment in connection with the issuance, purchase and sale
of the Notes.
(li) There exist no conditions that would constitute a
default (or an event which with notice or the lapse of time, or both,
would constitute a default) under any of the Operative Documents.
(lii) Each certificate signed by any officer of the
Issuer, the Company, Parent or any of the Company's Subsidiaries and
delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the
Issuer, the Company, Parent or such Subsidiary, as the case may be, to
the Initial Purchasers as to the matters covered thereby.
The Issuer and the Company acknowledge that the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel for the Issuer and the Company and counsel
for the Initial Purchasers, will rely upon the accuracy and truth of the
foregoing representations and hereby consent to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Issuer and the Company and agrees
that:
(i) Such Initial Purchaser is a QIB, with such
knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment
in the Series A Notes.
(ii) Such Initial Purchaser (A) is not acquiring the
Series A Notes with a view to any distribution thereof that would
violate the Act or the securities laws of any state of the United
States or any other applicable jurisdiction and (B) will be reoffering
and reselling the Series A Notes only to QIBs in reliance on the
exemption from the registration requirements of the Act provided by
Rule 144A and to Reg S Investors in offshore transactions in reliance
upon Regulation S under the Act.
(iii) No form of general solicitation or general
advertising (within the meaning of Regulation D under the Act) has
been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of any of the
20
Series A Notes, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation
or general advertising.
(iv) Such Initial Purchaser agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the Series A
Notes only from, and will offer to sell the Series A Notes only to,
Eligible Purchasers. Such Initial Purchaser further (A) agrees that it
will offer to sell the Series A Notes only to, and will solicit offers
to buy the Series A Notes only from (1) Eligible Purchasers that the
Initial Purchaser reasonably believes are QIBs and (2) Reg S Investors
and (B) acknowledges and agrees that, in the case of such QIBs and
such Reg S Investors, that such Series A Notes will not have been
registered under the Act and may be resold, pledged or otherwise
transferred only (x)(I) to a person whom the seller reasonably
believes is a QIB purchasing for its own account or for the account of
a QIB in a transaction meeting the requirements of Rule 144A, (II) in
an offshore transaction (as defined in Rule 902 under the Act) meeting
the requirements of Rule 904 under the Act, (III) in a transaction
meeting the requirements of Rule 144 under the Act, (IV) to an
Accredited Investor that, prior to such transfer, furnishes the
Trustee a signed letter containing certain representations and
agreements relating to the registration of transfer of such Series A
Notes (the form of which can be obtained from the Trustee) and, if
such transfer is in respect of an aggregate principal amount of Series
A Notes less than $250,000, an opinion of counsel acceptable to the
Issuer and the Company that such transfer is in compliance with the
Act or (V) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel if the
Issuer and the Company so request), (y) to the Company, (z) pursuant
to an effective registration statement under the Act and, in each
case, in accordance with any applicable securities laws of any state
of the United States or any other applicable jurisdiction and (C)
acknowledges that it will, and each subsequent holder is required to,
notify any purchaser of the security evidenced thereby of the resale
restrictions set forth in (B) above.
(v) Such Initial Purchaser and its affiliates or any
person acting on its or their behalf have not engaged or will not
engage in any directed selling efforts within the meaning of
Regulation S with respect to the Series A Notes.
(vi) The Series A Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S have
been and will be offered and sold only in offshore transactions.
(vii) The sale of Series A Notes offered and sold by
such Initial Purchaser pursuant hereto in reliance on Regulation S is
not part of a plan or scheme to evade the registration provisions of
the Act.
(viii) Such Initial Purchaser agrees that it has not
offered or sold and will not offer or sell the Series A Notes in the
United States or to, or for the benefit or account of, a U.S. Person
(other than a distributor), in each case, as defined in Rule 902 under
the Act (i) as part of its distribution at any time and (ii) otherwise
until 40 days after the later
21
of the commencement of the offering of the Series A Notes pursuant
hereto and the Closing Date, other than in accordance with Regulation
S of the Act or another exemption from the registration requirements
of the Act. Such Initial Purchaser agrees that, during such 40-day
distribution compliance period, it will not cause any advertisement
with respect to the Series A Notes (including any "tombstone"
advertisement) to be published in any newspaper or periodical or
posted in any public place and will not issue any circular relating to
the Series A Notes, except such advertisements as are permitted by and
include the statements required by Regulation S.
(ix) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Series A Notes by it to any distributor,
dealer or person receiving a selling concession, fee or other
remuneration during the 40-day distribution compliance period referred
to in Rule 903(c)(3) under the Act, it will send to such distributor,
dealer or person receiving a selling concession, fee or other
remuneration a confirmation or notice to substantially the following
effect:
"The Series A Notes covered hereby have not been registered
under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered and sold within
the United States or to, or for the account or benefit of,
U.S. persons (i) as part of your distribution at any time or
(ii) otherwise until 40 days after the later of the
commencement of the Offering and the Closing Date, except in
either case in accordance with Regulation S under the
Securities Act (or Rule 144A or to Accredited Institutions
in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with
any subsequent sale by you of the Series A Notes covered
hereby in reliance on Regulation S during the period
referred to above to any distributor, dealer or person
receiving a selling concession, fee or other remuneration,
you must deliver a notice to substantially the foregoing
effect. Terms used above have the meanings assigned to them
in Regulation S."
(x) Such Initial Purchaser agrees that the Series A
Notes offered and sold in reliance on Regulation S will be represented
upon issuance by a global security that may not be exchanged for
definitive securities until the expiration of the 40-day distribution
compliance period referred to in Rule 903(c)(3) of the Act and only
upon certification of beneficial ownership of such Series A Notes by
non-U.S. persons or U.S. persons who purchased such Series A Notes in
transactions that were exempt from the registration requirements of
the Act.
The Initial Purchasers acknowledge that the Issuer and the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel for the Issuer and the Company and counsel
for the Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations and hereby consents to such reliance.
6. Indemnification.
(a) The Issuer and the Company, jointly and severally,
agree to indemnify and hold harmless (i) each Initial Purchaser, (ii)
each person, if any, who controls an Initial
22
Purchaser within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Initial
Purchasers or any controlling person to the fullest extent lawful,
from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to reasonable
attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or
litigation, commenced or threatened, or any claim whatsoever, and any
and all amounts paid in settlement of any claim or litigation), joint
or several, to which they or any of them may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (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 Offering
Memorandum, or in any supplement thereto or amendment thereof, 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, in the light of the
circumstances under which they were made, not misleading; provided,
however, that neither the Issuer nor the Company will be liable in any
such case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense 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
written information relating to the Initial Purchasers furnished to
the Issuer and the Company by or on behalf of the Initial Purchasers
expressly for use therein. This indemnity agreement will be in
addition to any liability that the Issuer and the Company may
otherwise have, including under this Agreement.
(b) Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless (i) the Issuer and the
Company, (ii) each person, if any, who controls the Issuer or the
Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act, and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Issuer and the
Company or any controlling person to the fullest extent lawful, from
and against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to reasonable attorneys' fees
and any and all expenses whatsoever incurred in investigating,
preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the
Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (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 Offering
Memorandum, 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, in the light of the
circumstances under which they were made, not misleading, in each case
to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written
information relating to such Initial Purchaser furnished to the Issuer
and the Company by or on behalf of such Initial Purchaser expressly
for use therein; provided, however, that in no case shall any Initial
Purchaser be liable or
23
responsible for any amount in excess of the discounts and commissions
received by such Initial Purchaser, as set forth in this Agreement.
This indemnity will be in addition to any liability that the Initial
Purchasers may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party
under subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection,
notify each party against whom indemnification is to be sought in
writing of the commencement thereof (but the failure so to notify an
indemnifying party shall not relieve it from any liability that it may
have under this Section 6 or otherwise except to the extent that it
has been prejudiced in any material respect by such failure). In case
any such action is brought against any indemnified party, and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume and control the defense thereof with
counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall
have the right to employ its or their own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of
such indemnified party or parties unless (i) the employment of such
counsel shall have been authorized in writing by the indemnifying
parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of
the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties
shall be advised by such counsel that there may be defenses available
to it or them that are different from or additional to those available
to one or all of the indemnifying parties (in which case the
indemnifying party or parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties),
in any of which events such fees and expenses of counsel shall be
borne by the indemnifying parties; provided, however, that the
indemnifying party under subsection (a) or (b) above shall only be
liable for the legal expenses of one counsel (in addition to any local
counsel) for all indemnified parties in each jurisdiction in which any
claim or action is brought. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable
for any settlement of any claim or action effected without its prior
written consent, provided that such consent was not unreasonably
withheld.
7. Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from an indemnifying party or is insufficient to
hold harmless a party indemnified thereunder, the Issuer and the Company, on the
one hand, and the Initial Purchasers, on the other hand, shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, liabilities, claims, damages and expenses
suffered by the Issuer or the Company, any contribution received by the Issuer
and the Company from persons, other than the Initial Purchasers, who may also be
liable for contribution, including persons who control the Issuer or the Company
within the meaning of
24
Section 15 of the Act or Section 20(a) of the Exchange Act) to which the Issuer,
the Company and the Initial Purchasers may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Issuer and the
Company, on the one hand, and the Initial Purchasers, on the other hand, from
the offering of the Series A Notes or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of the
indemnifying party not having received notice as provided in Section 6, in such
proportion as is appropriate to reflect not only the relative benefits referred
to above but also the relative fault of the Issuer and the Company, on the one
hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions that resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Issuer and the Company, on the one hand, and
the Initial Purchasers, on the other hand, shall be deemed to be in the same
proportion as (i) the total proceeds from the offering of Series A Notes (net of
discounts and commissions but before deducting expenses) received by the Issuer
and the Company and (ii) the discounts and commissions received by the Initial
Purchasers, respectively, in each case as set forth in the Offering Memorandum.
The relative fault of the Issuer and the Company, on the one hand, and of the
Initial Purchasers, 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 or alleged omission to state a material fact relates to
information supplied by the Issuer, the Company or any Initial Purchaser and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Issuer, the Company and the
Initial Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this Section
7, (i) in no case shall any Initial Purchaser be required to contribute any
amount in excess of the amount by which the discounts and commissions applicable
to the Series A Notes purchased by such Initial Purchaser pursuant to this
Agreement exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) 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 7, (A) each person,
if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of any Initial
Purchaser or any controlling person shall have the same rights to contribution
as any Initial Purchaser, and (A) each person, if any, who controls the Issuer
or the Company within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act and (B) the respective officers, directors, partners,
employees, representatives and agents of the Issuer and the Company shall have
the same rights to contribution as the Issuer and the Company, subject in each
case to clauses (i) and (ii) of this Section 7. 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 Section 7,
notify such party or parties from whom contribution may be sought, but the
failure to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or
25
claim settled without its prior written consent, provided that such written
consent was not unreasonably withheld. The Initial Purchasers' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of Series A Notes purchased by each of the Initial
Purchasers hereunder and not joint.
8. Conditions of Initial Purchasers' Obligations. The
obligations of the Initial Purchasers to purchase and pay for the Series A
Notes, as provided herein, shall be subject to the satisfaction of the following
conditions:
(a) All of the representations and warranties of the
Issuer and the Company contained in this Agreement shall be true and
correct on the date hereof and on the Closing Date with the same force
and effect as if made on and as of the date hereof and the Closing
Date, respectively. The Issuer and the Company shall have performed or
complied in all material respects with all of the agreements herein
contained and required to be performed or complied with by it at or
prior to the Closing Date.
(b) The Offering Memorandum shall have been printed
and copies distributed to the Initial Purchasers not later than 10:00
a.m., New York City time, on the seventh day following the date of
this Agreement or at such later date and time as to which the Initial
Purchasers may agree, and no stop order suspending the qualification
or exemption from qualification of the Series A Notes in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued
by any governmental agency which would, as of the Closing Date,
prevent the issuance of the Series A Notes; no action, suit or
proceeding shall have been commenced and be pending against or
affecting or, to the best knowledge of the Issuer and the Company,
threatened against the Issuer, the Company, Parent or any of the
Company's subsidiaries before any court or arbitrator or any
governmental body, agency or official that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
and no stop order shall have been issued preventing the use of the
Offering Memorandum, or any amendment or supplement thereto, or which
could reasonably be expected to have a Material Adverse Effect.
(d) Since the dates as of which information is given
in the Offering Memorandum, (i) there shall not have been any material
change, or any development that is reasonably likely to result in a
material adverse change, in the capital stock or the long-term debt,
or material increase in the short-term debt, of the Issuer, the
Company, Parent or any of the Company's Subsidiaries from that set
forth in the Offering Memorandum, (ii) no dividend or distribution of
any kind shall have been declared, paid or made by the Issuer, the
Company or Parent on any class of its capital stock and (iii) other
than pursuant to this Agreement or the Merger Agreement, none of the
Issuer, the Company, Parent or any of the Company's Subsidiaries shall
have incurred any liabilities or obligations, direct or contingent,
that are material, individually or in the aggregate, to the Company,
Parent and the Company's Subsidiaries, taken as a whole, and that are
required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted
26
accounting principles and are not disclosed on the latest balance
sheet or notes thereto included in the Offering Memorandum. Since the
date hereof and since the dates as of which information is given in
the Offering Memorandum, there shall not have occurred any material
adverse change, or any development that is reasonably likely to result
in a material adverse change, in the business, financial condition or
results of operation of the Company, Parent and the Company's
Subsidiaries, taken as a whole, other than as contemplated by or
pursuant to the Merger Agreement.
(e) The Initial Purchasers shall have received
certificates, dated the Closing Date, signed on behalf of the Issuer
and the Company, in form and substance satisfactory to the Initial
Purchasers, confirming, as of the Closing Date, the matters set forth
in paragraphs (a), (b), (c) and (d) of this Section 8 and that, as of
the Closing Date, the obligations of the Issuer and the Company to be
performed hereunder on or prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers, of Andrews & Kurth L.L.P., counsel for the Issuer
and the Company, substantially to the effect set forth in Exhibit C
hereto.
(g) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers, of Brown, Drew and Massey, LLP.
(h) The Initial Purchasers shall have received on the
Closing Date an opinion, dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers, of Richards, Layton & Finger, P.A.
(i) At the Closing Date, the Initial Purchasers shall
have received from Deloitte & Touche LLP, independent public
accountants, dated as of the Closing Date, a customary comfort letter
addressed to the Initial Purchasers and in form and substance
reasonably satisfactory to the Initial Purchasers and counsel for the
Initial Purchasers with respect to the financial statements and
certain financial information of the Company and its Subsidiaries
contained in the Offering Memorandum.
(j) At the Closing Date, the Initial Purchasers shall
have received from Ernst & Young LLP, independent public accountants,
dated as of the Closing Date, a customary comfort letter addressed to
the Initial Purchasers and in form and substance reasonably
satisfactory to the Initial Purchasers and counsel for the Initial
Purchasers with respect to the financial statements and certain
financial information of Holly and its Subsidiaries contained in the
Offering Memorandum.
(k) The Initial Purchasers shall have received an
opinion, dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, of Latham & Watkins LLP,
counsel for the Initial Purchasers, covering such matters as are
customarily covered in such opinions.
27
(l) Latham & Watkins LLP shall have been furnished
with such documents, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass
upon the matters referred to in this Section 8 and in order to
evidence the accuracy, completeness or satisfaction in all material
respects of any of the representations, warranties or conditions
herein contained.
(m) Prior to the Closing Date, the Issuer and the
Company shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may
reasonably request.
(n) The Issuer and the Trustee shall have entered into
the Indenture, and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(o) The Company, Parent and the Initial Purchasers
shall have entered into the Registration Rights Agreement and the
Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(p) The Issuer and the Trustee, as Trustee and as
escrow agent, shall have entered into the Escrow Agreement and the
Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(q) The Issuer and the Company shall have entered into
the Escrow Corp. Merger Agreement and the Initial Purchasers shall
have received counterparts, conformed as executed, thereof.
(r) On or after the date hereof, (i) there shall not
have occurred any downgrading, suspension or withdrawal of, nor shall
any notice have been given of any potential or intended downgrading,
suspension or withdrawal of, or of any review (or of any potential or
intended review) for a possible change that does not indicate the
direction of the possible change in, any rating of the Company or any
securities of the Company (including, without limitation, the placing
of any of the foregoing ratings on credit watch with negative or
developing implications or under review with an uncertain direction)
by any "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436(g)(2) under the Act, (ii)
there shall not have occurred any change, nor shall any notice have
been given of any potential or intended change, in the outlook for any
rating of the Company or any securities of the Company by any such
rating organization and (iii) no such rating organization shall have
given notice that it has assigned (or is considering assigning) a
lower rating to the Notes than that on which the Notes were marketed.
(s) The Notes shall have been approved for trading on
PORTAL.
(t) There shall not have arisen any event that would
give any party to the Merger Agreement a right to terminate such
Merger Agreement.
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Issuer and the Company will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to the Initial Purchasers. The Issuer and
28
the Company shall furnish the Initial Purchasers with such conformed copies of
such opinions, certificates, letters and other documents as they shall
reasonably request.
9. Initial Purchasers' Information. The Issuer and the Company
acknowledge that, upon the Closing Date, the Initial Purchasers will deliver a
letter addressed to the Issuer and the Company, which letter shall set forth the
only information relating to any of the Initial Purchasers furnished to the
Issuer and the Company in writing by or on behalf of the Initial Purchasers
expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All
representations and warranties, covenants and agreements of the Initial
Purchasers and the Issuer and the Company contained in this Agreement, including
the agreements contained in Sections 4(f) and 11(d), the indemnity agreements
contained in Section 6 and the contribution agreements contained in Section 7,
as applicable, shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of an Initial Purchaser, any controlling
person thereof, or by or on behalf of the Issuer, the Company or any controlling
person thereof, and shall survive delivery of and payment for the Series A Notes
to and by the Initial Purchasers. The representations contained in Section 5 and
the agreements contained in Sections 4(f), 6, 7 and 11(d) shall survive the
termination of this Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon
execution and delivery of a counterpart hereof by each of the parties
hereto.
(b) The Initial Purchasers shall have the right to
terminate this Agreement at any time prior to the Closing Date by
notice to the Issuer and the Company from the Initial Purchasers,
without liability (other than with respect to Sections 6 and 7) on the
Initial Purchasers' part to the Issuer or the Company if, on or prior
to such date, (i) the Company shall have failed, refused or been
unable to perform in any material respect any agreement on its part to
be performed hereunder, (ii) any other condition to the obligations of
the Initial Purchasers hereunder as provided in Section 8 is not
fulfilled when and as required in any material respect, (iii) in the
reasonable judgment of the Initial Purchasers, any material adverse
change shall have occurred since the respective dates as of which
information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities,
prospects, net worth, results of operations or cash flows of the
Issuer, the Company, Parent and the Company's Subsidiaries, taken as a
whole, including after giving effect to the Mergers, other than as set
forth in the Offering Memorandum, or (iv)(A) any domestic or
international event or act or occurrence has materially disrupted, or
in the opinion of the Initial Purchasers will in the immediate future
materially disrupt, the market for the Issuer's or the Company's
securities or for securities in general; or (B) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange,
or the Nasdaq National Market shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have
been required, on such exchange or the Nasdaq National Market, or by
such exchange or other regulatory body or governmental authority
having jurisdiction; or (C) a
29
banking moratorium shall have been declared by federal or state
authorities, or a moratorium in foreign exchange trading by major
international banks or persons shall have been declared; or (D) there
has occurred an outbreak or escalation of hostilities or acts of
terrorism involving the United States, or there is a declaration by
the United States of a national emergency or war, or there shall have
been any other calamity or crisis or any change in political,
financial or economic conditions, the effect of which, in any such
case, shall be, in the Initial Purchasers' judgment, to make it
inadvisable or impracticable to proceed with the offering or delivery
of the Series A Notes on the terms and in the manner contemplated in
the Offering Memorandum; or (E) there shall have been such a material
adverse change in general economic, political or financial conditions
or if the effect of international conditions on the financial markets
in the United States shall be such as, in the Initial Purchasers'
judgment, makes it inadvisable or impracticable to proceed with the
delivery of the Series A Notes as contemplated hereby.
(c) Any notice of termination pursuant to this Section
11 shall be by telephone or facsimile and, in either case, confirmed
in writing by letter.
(d) If this Agreement shall be terminated pursuant to
any of the provisions hereof (otherwise than pursuant to clause (iv)
of Section 11(b), in which case each party will be responsible for its
own expenses), or if the sale of the Series A Notes provided for
herein is not consummated because any condition to the obligations of
the Initial Purchasers set forth herein is not satisfied or because of
any refusal, inability or failure on the part of the Issuer or the
Company to perform any agreement herein or comply with any provision
hereof, the Issuer and the Company shall reimburse the Initial
Purchasers for all out-of-pocket expenses (including the reasonable
fees and expenses of the Initial Purchaser's counsel), incurred by the
Initial Purchasers in connection herewith.
(e) If on the Closing Date any one or more of the
Initial Purchasers shall fail or refuse to purchase the Series A Notes
which it or they have agreed to purchase hereunder on such date and
the aggregate principal amount of the Series A Notes which such
defaulting Initial Purchaser or Initial Purchasers, as the case may
be, agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of the Series A Notes to
be purchased on such date by all Initial Purchasers, each
non-defaulting Initial Purchaser shall be obligated severally, in the
proportion which the principal amount of the Series A Notes set forth
opposite its name in Exhibit A bears to the aggregate principal amount
of the Series A Notes which all the non-defaulting Initial
Purchasers, as the case may be, have agreed to purchase, or in such
other proportion as Bear, Stearns & Co. Inc. ("Bear Stearns") may
specify, to purchase the Series A Notes which such defaulting Initial
Purchaser or Initial Purchasers, as the case may be, agreed but failed
or refused to purchase on such date; provided that in no event shall
the aggregate principal amount of the Series A Notes which any Initial
Purchaser has agreed to purchase pursuant to Section 3 hereof be
increased pursuant to this Section 11 by an amount in excess of
one-ninth of such principal amount of the Series A Notes without the
written consent of such Initial Purchaser. If on the Closing Date any
Initial Purchaser or Initial Purchasers shall fail or refuse to
purchase the Series A Notes and the aggregate principal amount of the
Series A Notes with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of the Series A Notes to
be purchased
30
by all Initial Purchasers and arrangements satisfactory to the Initial
Purchasers and the Issuer for purchase of such the Series A Notes are
not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Initial
Purchaser, the Issuer and the Company. In any such case which does not
result in termination of this Agreement, either Bear Stearns or the
Issuer shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes,
if any, in the Offering Memorandum or any other documents or
arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchaser from liability in
respect of any default of any such Initial Purchaser under this
Agreement.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Initial Purchasers shall be mailed, delivered, telecopied and confirmed in
writing or sent by a nationally recognized overnight courier service
guaranteeing delivery on the next business day to Bear, Stearns & Co. Inc., 383
Madison Avenue, New York, New York 10179, Attention: Corporate Finance
Department, telecopy number: (212) 272-3092, with a copy to Latham & Watkins
LLP, 885 Third Avenue, Suite 1000, New York, New York 10022, Attention: Marc D.
Jaffe, telecopy number: (212) 751-4864; and if sent to the Issuer and the
Company, shall be mailed, delivered, telecopied and confirmed in writing or sent
by a nationally recognized overnight courier service guaranteeing delivery on
the next business day to Frontier Escrow Corporation, 10000 Memorial Drive,
Suite 600, Houston, TX 77024, Attention: Chief Financial Officer, telecopy
number: (713) 688-0616, with a copy to Andrews & Kurth L.L.P, 600 Travis, Suite
4200, Houston, TX 77002, Attention: Robert V. Jewell, telecopy number: (713)
238-7135.
13. Parties. This Agreement shall inure solely to the benefit
of, and shall be binding upon, the Initial Purchasers, the Issuer, the Company
and the controlling persons and agents referred to in Sections 6 and 7, and
their respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
14. Governing Law and Construction. The law of the State of New
York shall govern and be used to construe and enforce this Agreement without
giving effect to applicable principles or conflicts of law to the extent that
the application of the laws of another jurisdiction would be required thereby.
TIME IS OF THE ESSENCE IN THIS AGREEMENT.
15. Captions. The captions included in this Agreement are
included solely for convenience of reference and are not to be considered a part
of this Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
17. Partial Invalidity. In case any provisions of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
31
[Signature page to follow]
32
If the foregoing correctly sets forth the understanding among the
Initial Purchasers, the Issuer and the Company please so indicate in the space
provided below for that purpose, whereupon this letter shall constitute a
binding agreement among us.
Very truly yours,
FRONTIER ESCROW CORPORATION
By: /s/ James R. Gibbs
---------------------------------
Name: James R. Gibbs
Title: President
FRONTIER OIL CORPORATION
By: /s/ James R. Gibbs
---------------------------------
Name: James R. Gibbs
Title: Chairman of the Board,
President and Chief
Executive Officer
33
Accepted and agreed to as of
the date first above written:
BEAR, STEARNS & CO. INC.
By: /s/ Mark Bernstein
--------------------------------
Name: Mark Bernstein
Title: Senior Managing Director
LEHMAN BROTHERS INC.
By: /s/ J. Scott Schlossel
--------------------------------
Name: J. Scott Schlossel
Title: Senior Vice President
BNP PARIBAS SECURITIES CORP.
By: /s/ Douglas Cook
--------------------------------
Name: Douglas Cook
Title: Managing Director
34
EXHIBIT A
Principal Amount
Initial Purchaser of Notes
----------------- -----------------
Bear, Stearns & Co. Inc........................... $ 165,000,000
Lehman Brothers Inc............................... 33,000,000
BNP Paribas Securities Corp....................... 22,000,000
Total................................. $ 220,000,000
EXHIBIT B
Subsidiaries
Wainoco Oil & Gas Company (incorporated in Delaware)
Wainoco Resources, Inc. (incorporated in Delaware)
Frontier Holdings Inc. (incorporated in Delaware)
Frontier Refining & Marketing Inc. (incorporated in Delaware)
Frontier Refining Inc. (incorporated in Delaware)
Frontier Oil and Refining Company (incorporated in Delaware)
Frontier Pipeline Inc. (incorporated in Delaware)
Frontier El Dorado Refining Company (incorporated in Delaware)
Frontier Escrow Corporation (incorporated in Delaware)
EXHIBIT C
Form of Opinion of Andrews & Kurth L.L.P.
1. The Company has been duly and validly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Wyoming, and is qualified to do business and is in good standing in each
jurisdiction listed on Annex A/1/; and the Company has all necessary corporate
power required to own, lease and operate its properties and conduct its business
as described in the Offering Memorandum.
2. The Issuer has been duly and validly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware.
3. Each of the Company's subsidiaries listed on Annex B
("Subsidiaries")/2/ and Parent is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, and is
qualified to do business and is in good standing in each jurisdiction listed on
Annex A/3/; and each such Subsidiary or Parent, as applicable, has all necessary
corporate power required to own, lease and operate its properties and to conduct
its business as described in the Offering Memorandum.
4. All the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and are validly issued and outstanding,
are fully paid and nonassessable, and are owned by the Company of record and, to
the best knowledge of such counsel, (A) beneficially and (B) free and clear of
all liens, encumbrances, equities, security interests or claims of any nature
whatsoever, except as specified in the Purchase Agreement; and to the best
knowledge of such counsel, none of the Issuer, the Company, Parent or any of the
Company's Subsidiaries has granted any outstanding options, warrants or
commitments with respect to any shares of its capital stock, whether issued or
unissued, except as otherwise described in the Offering Memorandum.
5. The Company has an authorized capitalization as set forth in the
Offering Memorandum, and to the knowledge of such counsel, except as set forth
in paragraph 4 above, there are no outstanding options, warrants or other rights
calling for the issuance of, and there are no commitments, plans or arrangements
to issue, any shares of capital stock of the Company.
6. Each of the Issuer, the Company and Parent has all requisite
corporate power and authority to execute, deliver and perform its obligations
under the Purchase Agreement and each of the other Operative Documents to which
it is a party and to consummate the transactions
- ----------
/1/ Such jurisdictions where the Company has represented that the Company
conducts business.
/2/ Frontier Holdings Inc., Frontier Refining & Marketing Inc., Frontier Oil
and Refining Company, Frontier Pipeline Inc., Frontier Refining Inc.,
Frontier El Dorado Refining Company, Wainoco Oil & Gas Company and
Wainoco Resources, Inc.
/3/ Such jurisdictions where the Company has represented that the
Subsidiaries conduct business.
C-1
contemplated thereby, including, without limitation, the corporate power and
authority to issue, sell and deliver the Notes as provided therein.
7. To such counsel's knowledge, except as may be required under
applicable state securities and Blue Sky laws, as to which such counsel need
express no opinion, and except for the filing of a registration statement under
the Act and qualification of the Indenture under the Trust Indenture Act, or
otherwise in connection with the Registration Rights Agreement, no consent,
approval, authorization or order of, or filing, registration, qualification,
license or permit of or with, any court or governmental agency, body or
administrative agency or any other person is required for (i) the execution,
delivery and performance by the Issuer, the Company or Parent of the Purchase
Agreement or any of the other Operative Documents to which it is party, or (ii)
the issuance and sale of the Notes, the issuance of the Guarantees and the
transactions contemplated by the Purchase Agreement and thereby, except such as
have been obtained and made or have been disclosed in the Offering Memorandum.
8. The Company is a "reporting issuer," as defined in Rule 902
under the Act.
9. None of the Issuer, the Company, Parent or any of the
Subsidiaries is (i) an "investment company" or (ii) a company "controlled" by an
"investment company" within the meaning of the Investment Company Act.
10. The Purchase Agreement has been duly and validly authorized,
executed and delivered by the Issuer and the Company.
11. The Indenture has been duly and validly authorized, executed and
delivered by the Issuer and, assuming due authorization, execution and delivery
thereof by the Trustee, is the legal, valid and binding obligation of the
Issuer, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
12. The Escrow Agreement has been duly and validly authorized,
executed and delivered by the Issuer and, assuming due authorization, execution
and delivery thereof by the Trustee, is the legal, valid and binding obligation
of the Issuer, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
13. The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by each of Parent and the Company and,
assuming due authorization, execution and delivery thereof by the Trustee, is
the legal, valid and binding obligation of each of Parent and the Company,
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
14. The Escrow Corp. Merger Agreement has been duly and validly
authorized, executed and delivered by each of the Issuer and the Company and is
the legal, valid and binding obligation of each of the Issuer and the Company,
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
C-2
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity.
15. The Series A Notes have been duly and validly authorized for
issuance by the Issuer and sale to the Initial Purchasers pursuant to the
Purchase Agreement and, when issued and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor in accordance with
the terms thereof, will be the legal, valid and binding obligations of the
Issuer, enforceable against the Issuer in accordance with their terms and
entitled to the benefits of the Indenture.
16. Upon consummation of the Escrow Corp. Merger, the Indenture will
constitute a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency and other laws affecting creditors' rights generally, and
to general principles of equity.
17. The Guarantees of the Series A Notes have been duly and validly
authorized by Parent and each of the Subsidiaries and, when executed and
delivered in accordance with the terms of the Indenture and when the Series A
Notes have been issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the terms of
the Purchase Agreement and thereof, will be the legal, valid and binding
obligations of Parent and each of the Subsidiaries, enforceable against each of
them in accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and other laws affecting
creditors' rights generally, and to general principles of equity.
18. The Series B Notes have been duly and validly authorized for
issuance by the Company, and, when issued and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, the Series B Notes will be
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and other laws affecting
creditors' rights generally, and to general principles of equity.
19. The Guarantees of the Series B Notes have been duly and validly
authorized by Parent and each of the Subsidiaries and, when executed and
delivered in accordance with the terms of the Indenture and when the Series B
Notes have been issued and authenticated in accordance with the terms of the
Exchange Offer and the Indenture, will be the legal, valid and binding
obligations of Parent and each of the Subsidiaries, enforceable against each of
them in accordance with their terms and entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and other laws affecting
creditors' rights generally, and to general principles of equity.
20. The Merger Agreement has been duly and validly authorized,
executed and delivered by each of the Company and Parent and is a valid and
binding agreement of each of the Company and Parent, enforceable against each of
them in accordance with its terms, subject to applicable bankruptcy, insolvency
and other laws affecting creditors' rights generally, and to general principles
of equity.
C-3
21. No registration under the Act of the Series A Notes is required
for the sale of the Series A Notes to the Initial Purchasers as contemplated by
the Purchase Agreement or for the Exempt Resales assuming (a) that the Initial
Purchasers are QIBs, (b) that the purchasers who buy the Series A Notes in the
Exempt Resales are either QIBs or Reg S Investors, (c) the accuracy of the
Initial Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series A Notes to the Initial
Purchasers and the Exempt Resales contained in the Purchase Agreement, and (d)
the accuracy of the Issuer's and the Company's representations in Sections
5(a)(viii) and (xxxvii) (other than with respect to the first sentence) of the
Purchase Agreement.
22. The Offering Memorandum, as of its date (except for the
financial statements and related notes, the financial statement schedules,
statistical data related to or derived from the financial statements and other
financial data included therein or omitted therefrom, as to which such counsel
need express no opinion), contains the information specified in, and meets the
requirements of, Rule 144A(d)(4) under the Act.
23. When the Series A Notes are issued and delivered pursuant to the
Purchase Agreement, no Series A Notes will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Issuer, the Company,
Parent or any of the Subsidiaries that are listed on a national securities
exchange registered under Section 6 of the Exchange Act or that are quoted in a
United States automated inter-dealer quotation system.
24. To the best of such counsel's knowledge, no stop order
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by the
Purchase Agreement are subject to the registration requirements of the Act, has
been issued.
25. The Indenture complies as to form in all material respects with
the requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder. Prior to
the Exchange Offer or the effectiveness of the Shelf Registration Statement, the
Indenture is not required to be qualified under the Trust Indenture Act.
26. None of (A) the execution, delivery or performance by the Issuer
or the Company of the Purchase Agreement or the execution, delivery or
performance by the Issuer, the Company or Parent of any of the other Operative
Documents to which the Issuer, the Company or Parent is a party (B) the issuance
and sale of the Notes and, upon consummation of the Mergers, the issuance of the
Guarantees, or (C) the consummation by the Issuer or the Company of the
transactions described in the Offering Memorandum under the caption "Use of
Proceeds," violates, conflicts with or constitutes a breach of, or after giving
effect to the Mergers will violate, conflict with or constitute a breach of, any
of the terms or provisions of, or a default under (or an event that with notice
or the lapse of time, or both, would constitute a default including after giving
effect to the Mergers), or requires consent under (including after giving effect
to the Mergers), or results in (including after giving effect to the Mergers),
the imposition of a lien or encumbrance on any properties of the Issuer, the
Company, Parent or any of the Subsidiaries or an acceleration of any
indebtedness of the Issuer, the Company, Parent or any of the Subsidiaries
pursuant to (1) the charter or bylaws of the Issuer, the Company, Parent or any
C-4
of the Subsidiaries, (2) any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument identified to such counsel by the Issuer
and the Company and listed on Annex C to such counsel's opinion to which the
Issuer, the Company, Parent or any of the Subsidiaries is a party or by which
the Issuer, the Company, Parent or any of the Subsidiaries property is or may be
bound, or (3) any judgment, order or decree known to such counsel of any court
or governmental agency or authority having jurisdiction over the Issuer, the
Company, Parent or any of the Subsidiaries or any of their assets or properties.
27. To the best of such counsel's knowledge, there is (A) no action,
suit, investigation or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now, or after giving
effect to the Mergers, pending or threatened or contemplated to which the
Issuer, the Company, Parent or any of the Subsidiaries is or may be a party or
to which the business or property of the Issuer, the Company, Parent or any of
the Subsidiaries is or may be subject, (B) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that has
been proposed by any governmental body and (C) no injunction, restraining order
or order of any nature by a federal or state court or foreign court of competent
jurisdiction to which the Issuer, the Company, Parent or any of the Subsidiaries
is or may be subject, or after giving effect to the Mergers will be subject, or
to which the business, assets, or property of the Issuer, the Company, Parent or
any of the Subsidiaries is, or may be subject, or after giving effect to the
Mergers will be subject, that, in the case of clauses (A), (B) and (C) above, is
required to be disclosed in the Offering Memorandum and that is not so disclosed
fairly and accurately in all material respects.
28. To the best of such counsel's knowledge, there are no holders of
securities of the Company or Parent who, by reason of the execution by the
Company of the Purchase Agreement or the Company or Parent of any other
Operative Document to which the Company or Parent is a party or the consummation
by the Company and of the transactions contemplated hereby and thereby, have the
right to request or demand that the Company or Parent register under the Act or
analogous foreign laws and regulations securities held by them other than
pursuant to the Registration Rights Agreement.
29. The descriptions of, or references to, material contracts or
agreements of the Issuer, the Company, Parent or the Subsidiaries described in
the Offering Memorandum, to the extent they constitute summaries of legal
matters or legal conclusions, are, to the best of such counsel's knowledge, true
and correct in all material respects.
30. The statements in the Offering Memorandum under the heading "The
Acquisition," insofar as such statements constitute a summary of the Merger
Agreement, are true and correct in all material respects.
31. The statements in the Offering Memorandum under the headings
"Description of the Notes," "Notice to Investors" and "Plan of Distribution,"
insofar as such statements constitute a summary of the legal matters or
documents referred to therein, present fairly, in all material respects, such
legal matters and documents.
32. All descriptions in the Offering Memorandum of statutes,
regulations or legal or governmental proceedings set forth in the section titled
"Business-- Government Regulation" are
C-5
fair summaries thereof and fairly present the information required to be shown
with respect to such matters.
33. Assuming the proceeds from the offering of the Notes are applied
as described in the Offering Memorandum, none of the execution, delivery and
performance of the Purchase Agreement, the issuance and sale of the Notes, the
application of the proceeds from the issuance and sale of the Notes and the
consummation of the transactions contemplated by the Company as set forth in the
Offering Memorandum, will violate Regulations T, U or X promulgated by the Board
of Governors of the Federal Reserve System.
34. The Series A Notes, the Indenture and the Registration Rights
Agreement conform as to legal matters in all material respects to the
descriptions thereof contained in the Offering Memorandum.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Issuer and the
Company, representatives of the independent accountants of the Company and of
Holly Corporation and representatives of the Initial Purchasers at which the
contents of the Offering Memorandum and related matters were discussed and,
although it does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering Memorandum, during the
course of such participation, no facts came to its attention that caused such
counsel to believe that the Offering Memorandum, as of its date or the Closing
Date, contained an untrue statement of a material fact or omitted to state any
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(except as to financial statements and related notes, the financial statement
schedules, statistical data related to or derived from the financial statements
and other financial data included therein).
Opinions with respect to matters of Wyoming law shall be given by Brown,
Drew and Massey, LLP, Casper, Wyoming.
C-6
ANNEX A
CORPORATION (STATE OF INCORPORATION)
STATES OF QUALIFICATION
Corporation (State of Incorporation) State of Qualification
- ---------------------------------------------- -------------------------------------------
Frontier Oil Corporation (Wyoming).....................Colorado, Montana, North Dakota,
Nebraska, Utah,Idaho, Kansas, Oklahoma,
Texas
Frontier Holdings Inc. (Delaware)......................Colorado
Frontier Refining & Marketing Inc. (Delaware)..........Colorado,Wyoming
Frontier Oil and Refining Company (Delaware)...........Colorado, California, Illinois, Iowa,
Missouri, Wisconsin, Minnesota, Idaho,
Kansas, Montana, Nebraska, North Dakota,
Oklahoma, South Dakota, Texas, Utah,
Wyoming
Frontier Pipeline Inc. (Delaware)......................Wyoming
Frontier Refining Inc. (Delaware)......................Wyoming
Frontier El Dorado Refining Company (Delaware).........Kansas
Wainoco Oil & Gas Company (Delaware)...................Colorado, New Mexico, Texas, Wyoming
Wainoco Resources, Inc. (Delaware).....................none
i
ANNEX B
Frontier Holdings Inc., Frontier Refining & Marketing Inc., Frontier Oil and
Refining Company, Frontier Pipeline Inc., Frontier Refining Inc., Frontier El
Dorado Refining Company, Wainoco Resources Inc and Wainoco Oil& Gas Company
ii