EXHIBIT 10.37
U.S.$200,000,000
GIANT INDUSTRIES, INC.
11% Senior Subordinated Notes due 2012
PURCHASE AGREEMENT
May 9, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
FLEET SECURITIES, INC.
As Purchasers
c/o BANC OF AMERICA SECURITIES LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Giant Industries, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the several Purchasers named in Schedule A (the "Purchasers"), acting
severally and not jointly, the respective amounts set forth in such Schedule A
of U.S.$200,000,000 aggregate principal amount of the Company's 11% Senior
Subordinated Notes due 2012 (the "Notes"). Banc of America Securities LLC, BNP
Paribas Securities Corp. and Fleet Securities, Inc. have agreed to act as the
several Purchasers in connection with the offering and sale of the Notes.
The Notes are to be issued pursuant to an Indenture, to be dated as of
May 14, 2002 (the "Indenture"), among the Company, the Subsidiary Guarantors (as
defined below), and The Bank of New York, as indenture trustee (the "Trustee").
Notes issued in book-entry form will be issued in the name of Cede & Co., as
nominee of The Depository Trust Company ("DTC") pursuant to a letter of
representations, to be dated as of the Delivery Date (as defined in Section 3)
(the "DTC Letter of Representations"), among the Company, the Subsidiary
Guarantors party thereto, the Trustee and DTC.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Registration Rights Agreement to be dated
as of May 14, 2002 (the "Registration Rights Agreement") among the Company, the
Subsidiary Guarantors and the Purchasers. Pursuant to the Registration Rights
Agreement, the Company and the Subsidiary Guarantors will agree to file with the
Securities and Exchange Commission (the "Commission") (i) a registration
statement under the United States Securities Act of 1933, as amended (the
"Securities Act", which term, as used herein, includes the rules and regulations
of the Commission promulgated thereunder), relating to the senior subordinated
notes of the Company (the "Exchange Notes") identical in all material respects
to the Notes (except that the Exchange Notes will not contain terms with respect
to transfer restrictions) to be offered in exchange for the Notes (the "Exchange
Offer") and (ii) under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Securities Act.
The payment of principal of, premium and Liquidated Damages (as defined
in the Registration Rights Agreement), if any, and interest on the Notes and the
Exchange Notes will be fully and unconditionally guaranteed on a senior
subordinated basis, jointly and severally, by all the Subsidiary Guarantors as
defined in the Offering Memorandum (as defined below) (collectively, the
"Subsidiary Guarantors", and together with the Company, the "Sellers"), pursuant
to their guarantees (the "Guarantees"). Each of the Subsidiary Guarantors as of
the date of this Agreement is listed in Schedule B. The Notes and the Guarantees
thereof are herein collectively referred to as the "Securities"; and the
Exchange Notes and the Guarantees thereof are herein collectively referred to as
the "Exchange Securities".
As described in the Offering Memorandum, the proceeds from the offering
of the Securities, together with cash in hand and borrowings under (i) a new
three-year $100 million senior secured revolving credit agreement (the "New
Revolving Credit Facility Agreement") and (ii) a new three-year $40 million
senior secured mortgage loan agreement (the "New Mortgage Loan Agreement"), will
be used to (a) fund the acquisition (the "Yorktown Acquisition") of a refinery
located in Yorktown, Virginia (the "Yorktown Refinery"), and the associated
inventory, pursuant to the Asset Purchase Agreement, dated as of February 8,
2002 (the "Yorktown Asset Purchase Agreement"), between the Company, on the one
hand, and BP Corporation North America Inc. and BP Products North America Inc.
(collectively, "BP"), on the other hand, (b) redeem all $100 million aggregate
principal amount of the Company's 9-3/4% senior subordinated notes due 2003 (the
"9-3/4% Notes") in accordance with the terms and conditions under the Indenture,
dated as of November 29, 1993 (as amended and supplemented, the "1993
Indenture"), among the Company, the guarantors party thereto and The Bank of New
York, as trustee, and (c) pay related transaction fees and expenses. The New
Revolving Credit Facility Agreement, the New Mortgage Loan Agreement, the
Yorktown Acquisition and the redemption of the 9-3/4% Notes are herein
collectively referred to as the "Related Transactions".
It is understood that (a) the Purchasers will offer and resell some or
all of the Securities in the United States to "qualified institutional buyers"
in reliance on Rule 144A under the Securities Act and (b) the Purchasers or
affiliates thereof may resell a portion of the Securities outside the United
States to certain persons in reliance on Regulation S under the Securities Act.
Such "qualified institutional buyers" and persons who purchase the Securities in
reliance on Regulation S are herein collectively referred to as the "Subsequent
Purchasers".
This is to confirm the agreement among the Company, the Subsidiary
Guarantors and the Purchasers concerning the issue and purchase of the
Securities.
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1. Representations and Warranties. The Company and each
Subsidiary Guarantor jointly and severally represent, warrant and agree that:
(a) The Company has prepared a preliminary confidential
offering memorandum dated April 26, 2002 and a confidential offering
memorandum dated the date hereof relating to the Securities. Copies of
such preliminary confidential offering memorandum and such confidential
offering memorandum have been delivered by the Company to the
Purchasers. As used in this Agreement, "Offering Memorandum" means such
preliminary confidential offering memorandum and such confidential
offering memorandum, as amended or supplemented, including all
information incorporated by reference therein. The preliminary
confidential offering memorandum, as of its date, and the Offering
Memorandum does not, as of the date hereof, and will not, as of the
date of any amendment or supplement thereto or as of the Delivery Date,
contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided that the Sellers make no representation or warranty as to
information contained in the Offering Memorandum in reliance upon and
in conformity with written information furnished to the Sellers by or
on behalf of any Purchaser expressly for inclusion therein and
identified in Section 6(b) hereof. The Company has not distributed and
will not distribute, prior to the later of the Delivery Date and the
completion of the Purchasers' distribution of the Securities, any
offering material in connection with the offering and sale of the
Securities other than the Offering Memorandum.
(b) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own, lease and
operate its properties and conduct its business as presently conducted
and as described in the Offering Memorandum and to enter into and
perform its obligations under each of this Agreement, the Registration
Rights Agreement, the DTC Letter of Representations, the Securities,
the Exchange Securities, the Indenture, the Yorktown Asset Purchase
Agreement, the New Revolving Credit Facility Agreement and the New
Mortgage Loan Agreement and to redeem the 9-3/4% Notes in accordance
with the terms and conditions of the 1993 Indenture. The Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify would
not, singly or in the aggregate, have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole. As used herein,
"Material Adverse Effect," with respect to any person (which, for
purposes of this Agreement, includes the Yorktown Refinery), means a
material adverse effect on the assets, liabilities, results of
operations, condition (financial or otherwise), earnings, business
affairs or prospects, whether or not arising from transactions in the
ordinary course of business, of such person and its subsidiaries, taken
as a whole.
(c) The Subsidiary Guarantors are the only direct or indirect
subsidiaries, whether wholly or partially owned, of the Company. Each
of the Subsidiary Guarantors
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has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its
properties and conduct its business as presently conducted and as
described in the Offering Memorandum and to enter into and perform its
obligations under each of this Agreement, the Registration Rights
Agreement, the Securities, the Exchange Securities, the Indenture, the
New Revolving Credit Facility Agreement and the New Mortgage Loan
Agreement. Each of the Subsidiary Guarantors is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not, singly or
in the aggregate, have a Material Adverse Effect on the Company. All
the issued and outstanding capital stock of each such Subsidiary
Guarantor has been duly authorized and validly issued, is fully paid
and nonassessable and is owned by the Company or another Subsidiary
Guarantor, free and clear of any security interest, mortgage, pledge,
lien, charge or other encumbrance (each, a "Lien").
(d) The execution, delivery and performance by the Sellers of
this Agreement, the Registration Rights Agreement, the DTC Letter of
Representations and the Indenture, and the issuance and delivery of the
Securities and the Exchange Securities and the consummation of the
transactions contemplated herein and therein and in the Offering
Memorandum have been duly authorized by all necessary corporate action
and will not conflict with or constitute a breach of, or a default (or,
with the giving of notice or lapse of time, would be a default)
("Default") or a Debt Repayment Triggering Event (as defined below)
under, or the loss of any material benefit under, or the termination
of, or result in the creation or imposition of any Lien upon any
property or assets of any Seller pursuant to any contract, indenture,
mortgage, loan agreement, note, lease, license or other instrument to
which any Seller is a party or by which any of them may be bound
(including, without limitation, the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and the Indenture,
dated as of August 26, 1997, for the Company's $150,000,000 of 9%
Senior Subordinated Notes due 2007, as amended and supplemented) or to
which any of the property or assets of any of them is subject (each, a
"Contract"), except for such conflicts, breaches, Defaults, losses or
Liens as would not, singly or in the aggregate, have a Material Adverse
Effect on the Company, nor will such action result in any violation of
the provisions of the charter or bylaws of any Seller or, subject to
compliance by the Purchasers with Section 11, any applicable law,
administrative regulation or administrative or court order or decree
applicable to any Seller. Except such as have been obtained by the
Sellers and are in full force and effect and such as may be required
under applicable state securities or blue sky laws and except such as
may be required by federal and state securities laws (including the
Trust Indenture Act) with respect to the Sellers' obligations under the
Registration Rights Agreement, no consent, approval, authorization or
order of, or notice to or filing with, any United States federal or
state governmental or regulatory agency or body or any court of the
United States or of any state thereof is required for each Seller's
execution, delivery and performance of this Agreement, the Registration
Rights Agreement, the DTC Letter of Representations or the Indenture,
or the issuance and delivery of the Securities or the Exchange
Securities, or consummation of the transactions contemplated herein and
4
therein and in the Offering Memorandum. As used herein, a "Debt
Repayment Triggering Event" means any event or condition which gives,
or with the giving of notice or lapse of time would give, the holder of
any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by any
Seller.
(e) This Agreement has been duly authorized, executed and
delivered by each Seller. The Indenture has been duly authorized by
each Seller and, at the Delivery Date, will have been duly executed and
delivered by each Seller and, assuming due execution and delivery by
the Trustee, will constitute a valid and legally binding agreement of
each Seller, enforceable against each Seller in accordance with its
terms, except to the extent that the enforceability thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws relating to creditors" rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing. Each of the
Registration Rights Agreement and the DTC Letter of Representations has
been duly authorized by each Seller and, at the Delivery Date, will
have been duly executed and delivered by each Seller and will
constitute a valid and legally binding agreement of each Seller,
enforceable against each Seller in accordance with its terms, except to
the extent that the enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to creditors" rights generally and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing and except as rights to indemnification
under the Registration Rights Agreement may be limited by applicable
law.
(f) The Notes are in the form contemplated by the Indenture,
have been duly authorized for issuance and sale as contemplated by this
Agreement, the Indenture and the Offering Memorandum and, on the
Delivery Date, will have been duly executed by the Company and, when
issued and authenticated in accordance with the terms of the Indenture,
and delivered in the manner provided for in this Agreement against
payment of the consideration therefor specified in the Offering
Memorandum, will constitute valid and legally binding obligations of
the Company, enforceable against the Company in accordance with their
terms, and will be entitled to the benefits of the Indenture, except to
the extent that the enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws relating to creditors' rights generally and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing. The Exchange Notes have been duly and
validly authorized for issuance by the Company, and when issued and
authenticated in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Exchange Offer, will constitute
valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their terms, and will be
entitled to the benefits of the
5
Indenture, except to the extent that the enforceability thereof may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing.
(g) The Guarantees of the Notes and the Exchange Notes are in
the respective forms contemplated by the Indenture, have been duly
authorized for issuance as contemplated by this Agreement, the
Indenture and the Offering Memorandum and, on the Delivery Date, will
have been duly executed by each of the Subsidiary Guarantors and, when
the Notes have been issued and authenticated in accordance with the
terms of the Indenture and delivered against payment therefor, will
constitute valid and legally binding obligations of the Subsidiary
Guarantors, enforceable against each of the Subsidiary Guarantors in
accordance with their terms, and will be entitled to the benefits of
the Indenture, except to the extent that the enforceability thereof may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing.
(h) No Seller is in violation of its charter or bylaws and no
Seller is in Default in the performance or observance of any
obligation, agreement, covenant or condition contained in any Contract
or any applicable law, administrative regulation or administrative or
court order or decree, except for such defaults as would not, singly or
in the aggregate, have a Material Adverse Effect on the Company.
(i) The Sellers possess such certificates, authorizations or
permits issued by the appropriate regulatory or other governmental
agencies or bodies as are necessary to conduct the business as now
conducted by the Sellers and as described in the Offering Memorandum,
each such certificate, authorization and permit being in full force and
effect and each Seller is in compliance with the terms of each such
certificate, authorization and permit, except where the failure to
possess or comply with any such certificate, authorization or permit
would not, singly or in the aggregate, have a Material Adverse Effect
on the Company; and neither the Company nor any Subsidiary Guarantor
has received any notice of proceedings relating to the revocation or
modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect on the Company. The Company will, upon
completion of the Yorktown Acquisition, possess such certificates,
authorizations or permits issued by the appropriate regulatory or other
governmental agencies or bodies as are necessary to conduct the
business of the Yorktown Refinery as described in the Offering
Memorandum, except where the failure to possess or comply with any such
certificate, authorization or permit would not, singly or in the
aggregate, have a Material Adverse Effect on the Yorktown Refinery.
6
(j) Deloitte & Touche LLP, the accountants who have audited
and reported upon the financial statements of the Company and its
subsidiaries and the related notes thereto, together with the
supporting schedules, included in the Offering Memorandum, are
independent public accountants with respect to the Company and its
subsidiaries within the meaning of the Securities Act and the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act",
which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder).
(k) To the best of the Sellers' knowledge, Ernst & Young, LLP,
the accountants who have audited and reported upon the financial
statements of the business of the Yorktown Refinery and the related
notes thereto included in the Offering Memorandum, are independent
public accountants with respect to the Yorktown Refinery within the
meaning of the Securities Act and the Exchange Act.
(l) The financial statements of the Company and its
consolidated subsidiaries and the related notes thereto included in the
Offering Memorandum present fairly the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates
indicated and the results of their operations for the periods
specified; such financial statements have been prepared in conformity
with generally accepted accounting principles applied on a consistent
basis throughout the periods involved. The financial statements of the
business of the Yorktown Refinery and the related notes thereto
included in the Offering Memorandum present fairly the financial
position of the business of the Yorktown Refinery as of the dates
indicated and the results of its operations for the periods specified;
such financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved. The historical financial data set
forth in the Offering Memorandum under the captions "Offering
Memorandum Summary - Summary Historical and Unaudited Pro Forma
Financial and Other Data" and "Selected Historical and Unaudited Pro
Forma Financial and Other Data" fairly present the information set
forth therein on a basis consistent with that of the audited financial
statements contained in the Offering Memorandum. The pro forma
financial statements of the Company and its subsidiaries and the
related notes thereto included under the caption "Offering Memorandum
Summary - Summary Historical and Unaudited Pro Forma Financial and
Other Data", "Pro Forma Financial Statements" and elsewhere in the
Offering Memorandum present fairly the information contained therein,
have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly presented on the bases described therein, and the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(m) Since the respective dates as of which information is
given in the Offering Memorandum, and except as otherwise stated
therein, (i) there has been no material adverse change in the assets,
liabilities, results of operations, condition (financial or otherwise),
earnings, business affairs or prospects, whether or not arising from
transactions in the ordinary course of business, of the Company and its
subsidiaries, taken as a whole, and no material adverse change in the
assets, liabilities, results of operations,
7
condition (financial or otherwise), earnings, business affairs or
prospects, whether or not arising from transactions in the ordinary
course of business, of the Yorktown Refinery (any such change is called
a "Material Adverse Change"), (ii) there has been no transaction
entered into or material liability or obligation, direct, indirect or
contingent, incurred by the Company or any subsidiary that is material
to the Company and its subsidiaries, taken as a whole, and (iii) there
has been no dividend declared, paid or made by the Company or, except
for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of its capital stock or repurchase or
redemption by the Company or any of its subsidiaries of any class of
capital stock.
(n) No registration of the Securities under the Securities Act
and no qualification of an indenture under the United States Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), is
required in connection with the offer, sale and delivery of the
Securities to each Purchaser and to each Subsequent Purchaser in the
manner contemplated by the Offering Memorandum and this Agreement
(other than pursuant to the terms of the Registration Rights
Agreement).
(o) No strike, work stoppage or other similar labor dispute
with the employees of any Seller or at the Yorktown Refinery, or with
the employees of any principal supplier of any Seller or the Yorktown
Refinery, exists or, to the knowledge of any Seller, is threatened,
which would have a Material Adverse Effect on the Company or the
Yorktown Refinery, as the case may be.
(p) There is no action, suit or proceeding before or by any
court or governmental agency or body now pending or, to the knowledge
of any Seller, threatened against or affecting any Seller which is not
disclosed in the Offering Memorandum, and which, if adversely
determined, would result in a Material Adverse Effect on the Company,
or would prevent or hinder the consummation of all the transactions
contemplated by this Agreement.
(q) Except as otherwise disclosed in the Offering Memorandum
or as would not, singly or in the aggregate, result in a Material
Adverse Effect on the Company or the Yorktown Refinery, as the case may
be, (i) none of the Sellers or the Yorktown Refinery is in violation of
any federal, state, local or foreign law or regulation relating to
pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum and petroleum
products (collectively, "Materials of Environmental Concern"), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which
violation includes, but is not limited to, noncompliance with any
permits or other governmental authorizations required for the operation
of the business of any Seller or the Yorktown Refinery under applicable
Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has any Seller received any written communication, whether
from
8
a governmental authority, citizens group, employee or otherwise, that
alleges that such Seller or the Yorktown Refinery is in violation of
any Environmental Law; (ii) there is no claim, action or cause of
action filed with a court or governmental authority, nor investigation
with respect to which any Seller has received written notice or
involving the Yorktown Refinery, and no written notice by any person or
entity alleging potential liability for investigatory costs, cleanup
costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties
arising out of, based on or resulting from the presence, or release
into the environment, of any Material of Environmental Concern at any
location owned, leased or operated by such Seller or at the Yorktown
Refinery, now or in the past (collectively, "Environmental Claims"),
pending, or, to the best of such Seller's knowledge, threatened or
contemplated against such Seller or any person or entity whose
liability for any Environmental Claim such Seller has retained or
assumed either contractually or by operation of law; and (iii) to the
best of each Seller's knowledge, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or
disposal of any Material of Environmental Concern, that reasonably
could result in a violation of any Environmental Law or form the basis
of a potential Environmental Claim against such Seller or against any
person or entity whose liability for any Environmental Claim such
Seller has retained or assumed either contractually or by operation of
law.
(r) In the ordinary course of their business, the Sellers
conduct a periodic review of the effect of Environmental Laws on their
business, operations and properties, in the course of which they
identify and evaluate associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties).
On the basis of such review and the amount of their established
reserves, the Sellers have reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, result in
a Material Adverse Effect on the Company, except as otherwise disclosed
in the Offering Memorandum.
(s) All necessary federal, state and foreign income and
franchise tax returns required to be filed by any Seller have been
filed, other than those filings being contested in good faith, and all
material taxes, including withholding taxes, penalties and interest,
assessments, fees and other charges due or claimed to be due from such
entities have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest. The Company has made adequate
charges, accruals and reserves in the applicable financial statements
referred to in Section 1(l) above in respect of all federal, state and
foreign income and franchise taxes for all periods as to which the tax
liability of any Seller has not been finally determined.
(t) At December 31, 2001, on a consolidated basis, after
giving pro forma effect to the issuance and sale of the Securities
pursuant hereto and the Related Transactions, the Company would have an
authorized and outstanding capitalization as
9
set forth in the Offering Memorandum under the caption
"Capitalization". All the issued and outstanding shares of the capital
stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable.
(u) The Notes, the Exchange Notes, the Guarantees of the Notes
and the Exchange Notes and the Indenture will conform in all material
respects to the respective statements relating thereto contained in the
Offering Memorandum.
(v) No holder of any security of the Company has the right to
have any security owned by such holder registered under the Securities
Act by reason of the issue or sale of the Securities.
(w) Neither the Company nor any of its affiliates nor any
person acting on their behalf has, within the six months prior to the
date of this Agreement, offered or sold (regardless of whether such
offers or sales constitute a distribution within the meaning of
Regulation M under the Exchange Act) any Securities, any securities of
the same class and/or series as the Securities, or any immediately
convertible into or exchangeable for the Securities, nor will any such
offers or sales be made without the prior written consent of the
Purchasers at any time prior to the date that is 90 days after the
completion of the offering of the Securities contemplated hereby. The
Company has not taken and will not take, directly or indirectly, any
action prohibited by Regulation M. The Company has not entered into any
contractual arrangement which provides for the distribution of the
Securities other than this Agreement.
(x) Neither the Company nor any of its affiliates nor any
persons authorized to act on behalf of the Company or any such
affiliates (other than the Purchasers or any person acting on their
behalf as to whom the Sellers do not warrant or covenant) have engaged
or will engage in any directed selling efforts (within the meaning of
Regulation S) with respect to the Securities and the Company, each such
affiliate and each person authorized by the Company to act on behalf of
any of them has complied and will comply with any applicable offering
restrictions requirement of Regulation S in connection with the
offering of the Securities outside the United States and, in connection
therewith, the Offering Memorandum will contain the disclosure required
by Rule 902.
(y) Neither the Company nor any of its affiliates nor any
person authorized by the Company to act on behalf of the Company or any
such affiliates (other than the Purchasers or any person acting on
their behalf as to whom the Sellers do not warrant or covenant) has
offered or sold, or will offer or sell, the Securities by means of any
form of general solicitation or general advertising (within the meaning
of Rule 502(c) of Regulation D under the Securities Act), including,
but not limited to, (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.
10
(z) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Securities are listed
on any national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. "automated inter-dealer quotation
system" (as such term is used in Rule 144A(d)(3)).
(aa) The Company is not and will not after receipt of payment
for the Securities be (i) an "investment company" or a company
"controlled" by an investment company within the meaning of the United
States Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" of a holding company or an
"affiliate" thereof within the meaning of the United States Public
Utility Holding Company Act of 1935, as amended, or (iii) subject to
regulation under the United States Federal Power Act or any federal or
state statute or regulation limiting its ability to incur indebtedness
for borrowed money.
(bb) The Company is not actively considering any plan or
transaction that, if consummated, would result in any mandatory
requirement to redeem, or make an offer to purchase, the Securities
pursuant to the terms thereof.
(cc) The Company is a reporting issuer (within the meaning of
Regulation S under the Securities Act).
(dd) The Sellers own or possess sufficient trademarks, trade
names, copyrights, licenses, approvals, trade secrets and other similar
rights (collectively, "Intellectual Property Rights") reasonably
necessary to conduct their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights would
not result in a Material Adverse Effect on the Company. None of the
Sellers has received any notice of infringement or conflict with
asserted Intellectual Property Rights of others, which infringement or
conflict, if the subject of an unfavorable decision, would result in a
Material Adverse Effect on the Company.
(ee) Each Seller has good and marketable title to all the
properties and assets reflected as owned in the financial statements of
the Company and its consolidated subsidiaries referred to in Section
1(l) above (or elsewhere in the Offering Memorandum) and the Company or
a subsidiary of the Company will, upon completion of the Yorktown
Acquisition, obtain good and marketable title to all the properties and
assets reflected as part of the business of the Yorktown Refinery in
the financial statements of the business of the Yorktown Refinery
referred to in Section 1(l) above (or elsewhere in the Offering
Memorandum), in each case free and clear of any Liens, except for the
Liens under the New Revolving Credit Facility Agreement and the New
Mortgage Loan Agreement and such as do not materially and adversely
affect the value of such property and do not materially interfere with
the use made or proposed to be made of such property by such Seller.
The real property, improvements, equipment and personal property held
under lease by any Seller are held under valid and enforceable leases,
with such exceptions as are not material and do not materially
interfere with the use made or proposed to be made of such real
property, improvements, equipment or personal property by such Seller.
11
(ff) Except as disclosed in the Offering Memorandum, each of
the Sellers and the Yorktown Refinery is insured by recognized,
financially sound institutions with policies in such amounts and with
such deductibles and covering such risks as are generally deemed
adequate and customary for its business including, but not limited to,
policies covering real and personal property owned or leased by such
Seller and the Yorktown Refinery against theft, damage, destruction,
acts of vandalism and earthquakes. Except as disclosed in the Offering
Memorandum, none of the Sellers has any reason to believe that it will
not be able (i) to renew its existing insurance coverage as and when
such policies expire or (ii) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business
as now conducted and at a cost that would not result in a Material
Adverse Effect on the Company or the Yorktown Refinery, as the case may
be. None of the Sellers has been denied any insurance coverage which it
has sought or for which it has applied.
(gg) Each of the Sellers is, and immediately after the
Delivery Date (after giving effect to the sale of the Securities and
the application of the proceeds therefrom and the Related Transactions)
will be, Solvent. As used herein, the term "Solvent" means, with
respect to any Seller on a particular date, that on such date the fair
market value of the assets of such Seller is greater than the total
amount of liabilities (including contingent liabilities) of such
Seller, (ii) the present fair salable value of the assets of such
Seller is greater than the amount that will be required to pay the
probable liabilities of such Seller on its debts as they become
absolute and matured, (iii) such Seller is able to realize upon its
assets and pay its debts and other liabilities, including contingent
obligations, as they mature and (iv) such Seller does not have
unreasonably small capital.
(hh) The Company maintains a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(ii) The Sellers and any "employee benefit plan" (as defined
under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained (or, to the best of
the Sellers' knowledge, required to be established or maintained in
connection with the Yorktown Acquisition) by any Seller or their "ERISA
Affiliates" (as defined below) are and will be in compliance in all
material respects with ERISA. "ERISA Affiliate" means, with respect to
any Seller, any member of any group of organizations described in
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986,
as amended, and the regulations and published interpretations
thereunder (the "Code") of which such Seller is a member. No
"reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee
12
benefit plan" established or maintained (or, to the best of the
Sellers' knowledge, required to be established or maintained in
connection with the Yorktown Acquisition) by any Seller or any of their
ERISA Affiliates. No "employee benefit plan" established or maintained
(or, to the best of the Sellers' knowledge, required to be established
or maintained in connection with the Yorktown Acquisition) by any
Seller or any of their ERISA Affiliates, if such "employee benefit
plan" were terminated, would have any "amount of unfunded benefit
liabilities" (as defined in Title IV of ERISA), except for the amount
of unfunded benefit liabilities, if any, as would not, singly or in the
aggregate, have a Material Adverse Effect on the Company. None of the
Sellers or any of their ERISA Affiliates has incurred or reasonably
expects to incur any liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "employee benefit plan"
(including, to the best of the Sellers' knowledge, any such plan
required to be established or maintained in connection with the
Yorktown Acquisition) or (ii) Sections 412, 4971, 4975 or 4980B of the
Code. Each "employee benefit plan" established or maintained (or, to
the best of the Sellers' knowledge, required to be established or
maintained in connection with the Yorktown Acquisition) by any Seller
or any of their ERISA Affiliates that is intended to be qualified under
Section 401 of the Code is and will be so qualified and, to the best of
the Sellers' knowledge, nothing has occurred, whether by action or
failure to act, which would cause the loss of such qualification.
(jj) The Yorktown Asset Purchase Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company, enforceable in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws now or hereafter
in effect relating to creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing. Each of the New Revolving Credit
Facility Agreement and the New Mortgage Loan Agreement has been duly
authorized by each Seller and, when duly executed and delivered by each
Seller, will constitute valid and legally binding obligation of each
Seller, enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing.
(kk) No event of default exists under any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument
constituting Senior Indebtedness (as defined in the Indenture).
Any certificate signed by an officer of a Seller and delivered
to the Purchasers or to counsel for the Purchasers shall be deemed to be a
representation and warranty by such Seller to each Purchaser as to the matters
set forth therein.
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2. Purchase and Offering of the Securities. On the basis of
the representations and warranties contained in, and upon the terms and subject
to conditions of, this Agreement, the Sellers agree to issue and sell to the
Purchasers and the Purchasers agree, severally and not jointly, to purchase and
pay for the respective principal amounts of Securities set forth opposite the
name of the several Purchasers in Schedule A hereto at a purchase price of
94.1971% of the principal amount of the Securities. The sale of the Securities
to the Purchasers will be made without registration of the Securities under the
Securities Act, in reliance on the exemption therefrom provided by Section 4(2)
of the Securities Act.
3. Delivery and Payment. Payment of the purchase price for the
Securities shall be made by the Purchasers to the Sellers or their order in U.S.
dollars in same-day funds by 9:00 A.M., New York City time, on May 14, 2002 or
at such later date and time as may be determined by agreement between the
Sellers and the Purchasers. This date and time are sometimes referred to as the
"Delivery Date". Such payment shall be made against delivery of one or more
certificates in global or definitive form for the Securities in such
denominations and registered in such names as the Purchasers request upon notice
to the Company at least one business day prior to the Delivery Date.
4. Covenants. The Company and each Subsidiary Guarantor
jointly and severally agree as follows:
(a) The Company shall furnish promptly to each of the
Purchasers a copy of the Offering Memorandum and each amendment and
supplement thereto and shall deliver promptly to the Purchasers such
number of copies of the Offering Memorandum and each amendment and
supplement thereto as the Purchasers may reasonably request.
(b) If at any time prior to the completion, as determined by
the Purchasers, of the distribution of the Securities, any event occurs
as a result of which the Offering Memorandum would contain any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, the Company
will promptly so notify the Purchasers and will prepare and furnish at
its own expense to the Purchasers, subject to Section 4(c), copies of
such amendments or supplements to the Offering Memorandum as may be
necessary so that the statements in the Offering Memorandum as so
amended or supplemented will not contain any such untrue statement or
omit to state any such material fact or be misleading and so that the
Offering Memorandum, as so amended or supplemented, will comply with
applicable law.
(c) Within a reasonable amount of time prior to any proposed
publication of any amendment or supplement to the Offering Memorandum,
the Company shall furnish a copy thereof to the Purchasers and shall
not publish or use any such amendment or supplement to which the
Purchasers or their counsel shall reasonably object.
(d) The Sellers shall comply with the terms of the Indenture
and the Offering Memorandum and shall promptly notify the Purchasers if
any of the Sellers discovers that any of its representations contained
in this Agreement is not, at any time prior to the
14
completion of the distribution of the Securities, true and correct, or
if any of the Sellers has at any such time breached any of its
obligations hereunder.
(e) If, at any time prior to two years after the Delivery Date
when the Company is neither subject to Section 13 or 15(d) of the
Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, the Sellers shall furnish, as soon as available, to
the Purchasers, and, upon request of a holder of the Securities, to
such holder and any prospective purchaser designated by such holder,
copies of the information required to be delivered to holders and
prospective purchasers of any Securities which constitute "restricted
securities" under Rule 144 under the Securities Act in order to permit
compliance with Rule 144A under the Securities Act.
(f) Neither the Company nor any of its affiliates will take,
directly or indirectly, any action designed to or which constitutes or
which might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Securities at any time prior to the
Purchasers notifying the Company of the completion of the distribution
of the Securities.
(g) The Sellers will endeavor to qualify the Securities for
offer and sale under (or obtain exemptions from the application of) the
securities or Blue Sky laws of such jurisdictions as the Purchasers
shall reasonably request and to continue such qualification in effect
so long as reasonably required for resale by the Purchasers of the
Securities; provided that the Sellers shall not be required to (i)
qualify generally to do business in any jurisdiction where it is not
then so qualified or (ii) take any action that would subject it to
general service of process or to taxation in any jurisdiction where it
is not then so subject. The Sellers will advise the Purchasers promptly
of the suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading in
any jurisdiction or any initiation or threat of any proceeding for any
such purpose, and in the event of the issuance of any order suspending
such qualification, registration or exemption, the Sellers shall use
their best efforts to obtain the withdrawal thereof at the earliest
possible moment.
(h) So long as any Securities or Exchange Securities are
outstanding, the Company will promptly furnish to Banc of America
Securities LLC copies of all reports or other communications (financial
or other) furnished by the Company or the Trustee to holders of
Securities, and copies of filings including financial statements
furnished to or filed with the Commission or any national securities
exchange by the Company.
(i) The Sellers will take all action that is appropriate or
necessary to assure that its offerings of other securities will not be
integrated, for purposes of the registration requirements of the
Securities Act, with the offerings contemplated hereby.
(j) The Sellers shall use their best efforts to assist the
Purchasers in arranging to cause the Securities to be eligible for
settlement through the facilities of DTC.
15
(k) The Sellers shall, if requested by the Purchasers, use
their best efforts to cause the Securities to be eligible for
settlement through the facilities of Clearstream, societe anonyme
("Clearstream"), and the Euroclear System ("Euroclear").
(l) The Sellers shall apply the net proceeds from the sale of
the Securities and the initial borrowings under the New Revolving
Credit Facility Agreement and the New Mortgage Loan Agreement
substantially in the manner described under the caption "Use of
Proceeds" in the Offering Memorandum.
(m) Each certificate for a Security will bear the legend
contained in "Notice to Investors" in the Offering Memorandum for the
time period and upon the other terms stated in the Offering Memorandum.
(n) During the period of 180 days following the date of the
Offering Memorandum, the Company will not, without the prior written
consent of Banc of America Securities LLC (which consent may be
withheld at the sole discretion of Banc of America Securities LLC),
directly or indirectly, sell, offer, contract or grant any option to
sell, pledge, transfer or establish an open "put equivalent position"
within the meaning of Rule 16a-1 under the Exchange Act, or otherwise
dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any debt
securities of the Company similar to the Securities or securities
exchangeable for or convertible into debt securities of the Company
similar to the securities (other than as contemplated by this Agreement
and to register the Exchange Securities).
5. Payment of Expenses. The Sellers jointly and severally
agree to pay all costs, fees and expenses incurred in connection with the
performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limitation (i) all expenses
incident to the issuance and delivery of the Securities (including all printing
and engraving costs), (ii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Securities to the Purchasers,
(iii) all fees and expenses of the Sellers' respective counsel, independent
public or certified public accountants and other advisors, (iv) all costs and
expenses incurred in connection with the preparation, printing, filing, shipping
and distribution of the Offering Memorandum (including financial statements and
exhibits), and all amendments and supplements thereto, this Agreement, the
Registration Rights Agreement, the Indenture, the DTC Letter of Representations,
and the Notes and the Guarantees, (v) all filing fees, attorneys' fees and
expenses incurred by the Sellers or the Purchasers in connection with qualifying
or registering (or obtaining exemptions from the qualification or registration
of) all or any part of the Securities for offer and sale under the Blue Sky laws
and, if requested by the Purchasers, preparing and printing a "Blue Sky Survey"
or memorandum, and any supplements thereto, advising the Purchasers of such
qualifications, registrations and exemptions, (vi) the fees and expenses of the
Trustee, including the fees and disbursements of counsel for the Trustee in
connection with the Indenture, the Securities and the Exchange Securities, (vii)
any fees payable in connection with the rating of the Securities or the Exchange
Securities with the ratings agencies, (viii) any filing fees incident to, and
any reasonable fees and disbursements of counsel to the Purchasers in connection
with the review by the National Association of Securities Dealers, Inc., if any,
of the terms of the sale of the
16
Securities or the Exchange Securities, and (ix) all fees and expenses (including
reasonable fees and expenses of counsel) of the Sellers in connection with
approval of the Securities by DTC for "book-entry" transfer, and the performance
by the Sellers of their respective other obligations under this Agreement.
If this Agreement is terminated by the Purchasers pursuant to
Section 10(iv) or (v), or if the sale to the Purchasers of the Securities on the
Delivery Date is not consummated because of any refusal, inability or failure on
the part of any Seller to perform any agreement herein or to comply with any
provision hereof, the Sellers jointly and severally agree to reimburse the
Purchasers (or such Purchasers as have terminated this Agreement with respect to
themselves), severally, upon demand for all out-of-pocket expenses that shall
have been reasonably incurred by the Purchasers in connection with the proposed
purchase and the offering and sale of the Securities, including but not limited
to fees and disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges. If this Agreement is terminated by the
Purchasers pursuant to Section 10(i), (ii), (iii) or (vi), the Sellers jointly
and severally agree to reimburse the Purchasers (or such Purchasers as have
terminated this Agreement with respect to themselves), severally, upon demand
for all fees and disbursements of counsel and other advisors and printing
expenses that shall have been reasonably incurred by the Purchasers in
connection with the proposed purchase and the offering and sale of the
Securities. Except as provided in this Section 5, Section 6 and Section 7
hereof, the Purchasers shall pay their own expenses, including the fees and
disbursements of their counsel.
6. Indemnification.
(a) The Sellers jointly and severally agree to indemnify and
hold harmless each Purchaser, its directors, officers and employees, and each
person, if any, who controls any Purchaser within the meaning of the Securities
Act and the Exchange Act against any loss, claim, damage, liability or expense,
as incurred, to which such Purchaser or such controlling person may become
subject, under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of any Seller), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises (i) out of
or is based upon any untrue statement or alleged untrue statement of a material
fact contained in any Offering Memorandum, or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading; or
(ii) in whole or in part upon any inaccuracy in the representations and
warranties of the Sellers contained herein; or (iii) in whole or in part upon
any failure of any Seller to perform its obligations hereunder or under law; or
(iv) any act or failure to act or any alleged act or failure to act by any
Purchaser in connection with, or relating in any manner to, the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any matter
covered by clause (i) above, provided that the Sellers shall not be liable under
this clause (iv) to the extent that a court of competent jurisdiction shall have
determined by a final judgment that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Purchaser through its gross negligence or willful
misconduct; and to reimburse each Purchaser and each such controlling person for
any and all
17
expenses (including the fees and disbursements of counsel chosen by Banc of
America Securities LLC) as such expenses are reasonably incurred by such
Purchaser or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity
agreement shall not apply to any loss, claim, damage, liability or expense to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by the Purchasers expressly for use in any Offering Memorandum. The
indemnity agreement set forth in this Section 6(a) shall be in addition to any
liabilities that each Seller may otherwise have.
(b) Each Purchaser agrees, severally and not jointly, to
indemnify and hold harmless each Seller and each of its directors and each
person, if any, who controls such Seller within the meaning of the Securities
Act or the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which such Seller or any such director, or controlling person
may become subject, under the Securities Act, the Exchange Act, or other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue or alleged untrue statement of a material fact
contained in any Offering Memorandum, or arises out of or is based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Offering Memorandum, in reliance upon and in conformity with written information
furnished to the Company by such Purchaser expressly for use therein; and to
reimburse such Seller or any such director or controlling person for any legal
and other expenses reasonably incurred by such Seller or any such director or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. Each Seller hereby acknowledges that the only information that the
Purchasers have furnished to the Company expressly for use in any Offering
Memorandum are the statements set forth as the fourth paragraph on introductory
page iii of the Offering Memorandum concerning stabilization by the Purchasers
and in the fifth paragraph under the caption "Plan of Distribution" in the
Offering Memorandum; and the Purchasers confirm that such statements are
correct. The indemnity agreement set forth in this Section 6(b) shall be in
addition to any liabilities that each Purchaser may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise under the indemnity agreement contained in this
Section 6 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in and, to the
18
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (Banc of America Securities LLC in the case of Section 6(b) and Section
7), representing the indemnified parties who are parties to such action) or (ii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) The indemnifying party under this Section 6 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
6(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
7. Contribution. (i) If the indemnification provided for in
Section 6 is for any reason held to be unavailable to or otherwise insufficient
to hold harmless an indemnified party in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then each
19
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein in such proportion as is appropriate
to reflect the relative benefits received by the Sellers, on the one hand, and
the Purchasers, on the other hand, from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Sellers, on the one hand, and the Purchasers, on the other hand, in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Sellers, on the one hand,
and the Purchasers, on the other hand, in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Sellers, and the total discount received by the Purchasers bear to the
aggregate initial offering price of the Securities. The relative fault of the
Sellers, on the one hand, and the Purchasers, on the other hand, shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Sellers, on
the one hand, or the Purchasers, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 6(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
Section 6(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 7; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 6(c) for purposes of indemnification.
The Sellers and the 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 Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 7.
Notwithstanding the provisions of this Section 7, no Purchaser
shall be required to contribute any amount in excess of the discount received by
such Purchaser in connection with the Securities distributed by it. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Purchasers' obligations to
contribute pursuant to this Section 7 are several, and not joint, in proportion
to their respective commitments as set forth opposite their names in Schedule A.
For purposes of this Section 7, each director, officer and employee of a
Purchaser and each person, if any, who controls a Purchaser within the meaning
of the Securities Act and the Exchange Act shall have the same
20
rights to contribution as such Purchaser, and each director of a Seller, and
each person, if any, who controls a Seller with the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as such
Seller.
8. Conditions to Obligation of the Purchasers. The obligations
of the several Purchasers to purchase the Securities are subject to the
accuracy, when made and on the Delivery Date, of the representations and
warranties of the Sellers contained herein, to the performance by the Sellers of
their respective obligations hereunder to be performed at or prior to the
Delivery Date and to each of the following additional conditions:
(a) The Purchasers shall not have disclosed to the Company on
or prior to the Delivery Date that the Offering Memorandum contains an
untrue statement of a fact which, in the reasonable opinion of the
Purchasers, is material or omits to state a fact which, in the
reasonable opinion of the Purchasers, is material and is necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; the Company shall not have
prepared and distributed any amendment or supplement to the Offering
Memorandum either without prior review by, or over the reasonable
objection of, the Purchasers; and no change shall have occurred in Rule
144A or Regulation S under the Securities Act which in the reasonable
judgment of the Purchasers makes it impracticable or inadvisable to
proceed with the purchase, sale and delivery of the Securities on the
terms and in the manner contemplated in the Offering Memorandum.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Registration Rights Agreement, the DTC Letter of Representations, the
Indenture, the Notes, the Exchange Notes, the Guarantees of the Notes
and the Exchange Notes, the Offering Memorandum and all other legal
matters relating to this Agreement and the transactions contemplated
hereby and thereby shall be reasonably satisfactory in all respects to
the Purchasers and their counsel, and each Seller shall have furnished
to the Purchasers all documents and information that they may
reasonably request to enable them to pass upon such matters.
(c) Each Seller shall have delivered to the Purchasers a
certified copy of the resolutions of the Board of Directors (or any
authorized committee thereof, together with the resolutions of the
Board of Directors establishing such committee) of each Seller
approving the creation and issue of the Notes, the Exchange Notes, the
Guarantees of the Notes and the Exchange Notes, respectively, on the
terms and conditions of the Indenture and this Agreement and approving
the terms hereof and authorizing the execution and delivery of this
Agreement, the Registration Rights Agreement, the DTC Letter of
Representations, the Indenture, the Notes, the Exchange Notes, the
Guarantees of the Notes and the Exchange Notes, and all other documents
relevant to the issue of the Securities by such Seller.
(d) The Company shall have furnished to the Purchasers the
opinion or opinions of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, P.C., United States counsel to
the Company, addressed to the Purchasers and dated the Delivery Date to
the effect that:
21
(i) Each of this Agreement, the Indenture and the
Registration Rights Agreement has been duly authorized,
executed and delivered by each Seller.
(ii) The DTC Letter of Representations has been duly
authorized, executed and delivered by the Company.
(iii) The Notes are in the form contemplated by the
Indenture and have been duly authorized by all necessary
corporate action on the part of the Company and have been duly
executed by the proper officers of the Company.
(iv) The Exchange Notes have been duly and validly
authorized for issuance by the Company.
(v) The Guarantees of the Notes and the Exchange
Notes are in the respective forms contemplated by the
Indenture and have been duly authorized by all necessary
corporate action on the part of each of the Subsidiary
Guarantors and the Guarantees of the Notes have been duly
executed by the proper officers of each of the Subsidiary
Guarantors and duly delivered as contemplated by this
Agreement and by the Indenture.
(vi) The Securities and the Indenture conform in all
material respects to the respective statements relating
thereto contained in the Offering Memorandum and the forms of
the certificates used to evidence the Securities comply with
the requirements of the Securities Act, the Exchange Act and
the Trust Indenture Act.
(vii) Subject to compliance by the Purchasers with
Section 11 hereof, no authorization, consent or approval of,
or order by any administrative or governmental authority or
agency or, to the best of such counsel's knowledge, any court
is required by or on behalf of any Seller's execution,
delivery and performance of this Agreement, the Registration
Rights Agreement, the DTC Letter of Representations or the
Indenture, or the issuance and delivery of the Securities or
the Exchange Securities, or consummation of the transactions
contemplated herein and therein and in the Offering
Memorandum, except as may have been obtained by the Sellers
and are in full force and effect and such as may be required
under applicable securities or Blue Sky laws of any state of
the United States and except as may be required by federal and
state securities laws (including the Trust Indenture Act) with
respect to the Sellers' obligations under the Registration
Rights Agreement.
(viii) The statements in the Offering Memorandum
under the captions "Description of Other Debt", "Description
of the Notes", "Certain Federal Income Tax Consequences" and
"Notice to Investors", insofar as such statements constitute
summaries of legal matters, documents or legal proceeding
fairly present and summarize, in all material respects, the
matters referred to therein.
22
(ix) No registration of the Notes or the Guarantees
under the Securities Act and no qualification of an indenture
under the Trust Indenture Act is required in connection with
the purchase of the Securities by the Purchasers or the
initial resale of the Securities by the Purchasers to
Subsequent Purchasers in the manner contemplated by this
Agreement and the Offering Memorandum.
(x) The Company is not and will not as a result of
the offer and sale of the Securities be (i) an "investment
company" or a company "controlled" by an investment company
within the meaning of the United States Investment Company Act
of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within
the meaning of the United States Public Utility Holding
Company Act of 1935, as amended, or (iii) subject to
regulation under the United States Federal Power Act or any
federal or state statute or regulation limiting its ability to
incur indebtedness for borrowed money.
In addition, such counsel shall state that such counsel has
participated in the preparation of the Offering Memorandum, including
conferences with officers and other representatives of the Company and
its subsidiaries, representatives of the independent public accountants
of the Company and its subsidiaries and representatives of the
Purchasers, at which conferences the contents of the confidential
offering memorandum dated the date hereof and related matters were
discussed and, although they are not passing upon the accuracy or
completeness of the statements contained in the Offering Memorandum
(except as specified in Section 8(d)(vi) and (viii) above), on the
basis of the foregoing, nothing has come to the attention of such
counsel which gives them reason to believe that such confidential
offering memorandum, as of its date and at the Delivery Date (except as
to the financial statements and financial data contained therein, as to
which such counsel need express no opinion), contained or contains any
untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of circumstances in which made, not
misleading.
The aforementioned opinion shall be limited to the federal
laws of the United States of America, the laws of the State of Arizona
and the general corporate law of the State of Delaware. Such counsel
may state that insofar as the aforementioned opinion is indicated to be
based on the best of such counsel's knowledge, such opinion is based
upon such counsel's actual knowledge which the attorneys in such
counsel's firm have obtained in connection with the representation of
the Sellers. Such counsel may rely, to the extent they deem proper and
specified in such opinion, on opinions (which shall be dated the
Delivery Date and shall be satisfactory in form and substance to the
Purchasers, shall expressly state that the Purchasers may rely on such
opinion as if it were addressed to them and shall be furnished to the
Purchasers) of local counsel reasonably satisfactory to the Purchasers
with respect to matters of law of jurisdictions other than the federal
laws of the United States of America, the laws of the State of Arizona
and the general corporate law of the State of Delaware; provided,
however, that such counsel shall further state that they believe that
they and the Purchasers are justified in relying upon such
23
opinion of other counsel, and as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of any Seller and
public officials.
(e) The Company shall have furnished to the Purchasers the
opinion or opinions of McGuireWoods, LLP, special counsel to the
Company, addressed to the Purchasers and dated the Delivery Date to the
effect that:
(i) The Indenture constitutes the legal, valid and
binding agreement of each Seller, enforceable against each
Seller in accordance with its terms, except to the extent that
the enforceability thereof may be limited by (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium,
fraudulent transfer or other laws relating to creditors'
rights generally and (B) general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(ii) The Registration Rights Agreement constitutes
the legal, valid and binding agreement of each Seller,
enforceable against each Seller in accordance with its terms,
except to the extent that the enforceability thereof may be
limited by (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, fraudulent transfer or other laws
relating to creditors' rights generally and (B) general
principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing and except as
rights to indemnification may be limited by applicable law.
(iii) The DTC Letter of Representations constitutes
the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms,
except to the extent that the enforceability thereof may be
limited by (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, fraudulent transfer or other laws
relating to creditors' rights generally and (B) general
principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(iv) The Notes are in the form contemplated by the
Indenture and, assuming the Notes have been duly authenticated
by the Trustee and delivered as contemplated by this Agreement
and by the Indenture, and delivered in the manner provided for
in this Agreement against payment of the consideration
therefor specified in the Offering Memorandum, constitute
valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, and
entitled to the benefits of the Indenture, except to the
extent that the enforceability thereof may be limited by (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, fraudulent transfer or other laws relating to
creditors' rights generally and (B) general principles of
equity
24
(regardless of whether such enforcement is considered in a
proceeding in equity or at law) and an implied covenant of
good faith and fair dealing.
(v) The Exchange Notes, when issued and authenticated
in accordance with the terms of the Indenture, the
Registration Rights Agreement and the Exchange Offer, will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, and will be entitled to the benefits of the Indenture,
except to the extent that the enforceability thereof may be
limited by (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, fraudulent transfer or other laws
relating to creditors' rights generally and (B) general
principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(vi) The Guarantees of the Notes are in the forms
contemplated by the Indenture. The Guarantees of the Notes
constitute, and the Guarantees of the Exchange Notes will
constitute, valid and legally binding obligations of the
Subsidiary Guarantors, enforceable in accordance with their
terms, and will be entitled to the benefits of the Indenture,
except to the extent that the enforceability thereof may be
limited by (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, fraudulent transfer or other laws
relating to creditors' rights generally and (B) general
principles of equity (regardless of whether such enforcement
is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
The aforementioned opinion shall be limited to the laws of the
State of New York.
(f) The Company shall have furnished to the Purchasers the
opinion or opinions of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., General Counsel of the
Company, addressed to the Purchasers and dated the Delivery Date to the
effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware; has the corporate power and
authority to own, lease and operate its properties and to
conduct its business as presently conducted and as described
in the Offering Memorandum and to enter into and perform its
obligations under each of this Agreement, the Registration
Rights Agreement, the DTC Letter of Representations, the
Securities, the Exchange Securities, the Indenture, the
Yorktown Asset Purchase Agreement, the New Revolving Credit
Facility Agreement and the New Mortgage Loan Agreement and to
redeem the 9-3/4% Notes in accordance with the terms and
conditions of the 1993 Indenture; and is duly qualified as a
foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure
to so qualify would not have a Material Adverse Effect on the
Company.
25
(ii) Each Subsidiary Guarantor has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation; has the corporate power and authority to own,
lease and operate its properties and conduct its business as
presently conducted and as described in the Offering
Memorandum and to enter into and perform its obligations under
each of this Agreement, the Registration Rights Agreement, the
DTC Letter of Representations, the Securities, the Exchange
Securities, the Indenture, the New Revolving Credit Facility
Agreement and the New Mortgage Loan Agreement to which it is a
party; and is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not
have a Material Adverse Effect on the Company. All the issued
and outstanding capital stock of each Subsidiary Guarantor has
been duly authorized and validly issued, is fully paid and
nonassessable and is owned, directly or indirectly, by the
Company, and, to the knowledge of such counsel, free and clear
of any Lien.
(iii) The descriptions in the Offering Memorandum of
statutes, legal and governmental proceedings, contracts and
other documents are accurate and fairly present the
information which, to such counsel's knowledge, is required to
be shown; and such counsel does not know of any statutes or
legal or governmental proceedings required to be described in
the Offering Memorandum that are not described as required, or
of any contracts or documents of a character required to be
described in the Offering Memorandum that are not described as
required.
(iv) To the best of such counsel's knowledge, neither
the Company nor any Subsidiary Guarantor is in violation of
its charter or bylaws, and to the best of such counsel's
knowledge, neither the Company nor any Subsidiary Guarantor is
in Default in the performance or observance of any obligation,
agreement, covenant or condition contained in any Contract or
any applicable law, administrative regulation or
administrative or court order or decree, which violation or
default would, singly or in the aggregate, have a Material
Adverse Effect on the Company.
(v) The issuance and delivery of the Notes, the
Exchange Notes and the Guarantees of the Notes and the
Exchange Notes, the execution and delivery of this Agreement,
the Registration Rights Agreement, the DTC Letter of
Representations, the Indenture, the Yorktown Asset Purchase
Agreement, the New Revolving Credit Facility Agreement and the
New Mortgage Loan Agreement and the consummation of the
transactions contemplated herein and therein will not conflict
with or constitute a breach of, or Default or a Debt Repayment
Triggering Event under, or result in the creation or
imposition of any Lien upon any material property or assets of
the Company or any Subsidiary Guarantor pursuant to any
material Contract, which conflict, breach, Default, Debt
26
Repayment Triggering Event or Lien would, singly or in the
aggregate, have a Material Adverse Effect on the Company.
(vi) The issuance and delivery of the Notes, the
Exchange Notes and the Guarantees of the Notes and the
Exchange Notes, the execution and delivery of this Agreement,
the Registration Rights Agreement, the DTC Letter of
Representations, the Indenture, the Yorktown Asset Purchase
Agreement, the New Revolving Credit Facility Agreement and the
New Mortgage Loan Agreement and the consummation of the
transactions contemplated herein and therein will not result
in a violation of the provisions of the charter or bylaws of
the Company or any Subsidiary Guarantor or, to the best of
such counsel's knowledge, any material applicable law,
administrative regulation, administrative or court order or
decree.
In addition, such counsel shall state that such counsel has
reviewed the sections of the Offering Memorandum under the captions
"Risk Factors", "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources -
Environmental and Other", "Business - Legal Proceedings" and "Related
Party Transactions", and, on the basis of such review, to the best of
such counsel's knowledge, such sections of the Offering Memorandum, as
of the date of the Offering Memorandum and at the Delivery Date, did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which made,
not misleading. The aforementioned opinion shall be limited to the
federal laws of the United States of America, the laws of the State of
Arizona and the corporate law of the State of Delaware. Such counsel
may state that insofar as the aforementioned opinion is indicated to be
based on the best of such counsel's knowledge, such opinion is based
upon such counsel's actual knowledge. Such counsel may rely, to the
extent he deems proper and specified in such opinion, on opinions
(which shall be dated the Delivery Date and shall be satisfactory in
form and substance to the Purchasers, shall expressly state that the
Purchasers may rely on such opinion as if it were addressed to them and
shall be furnished to the Purchasers) of local counsel satisfactory to
the Purchasers with respect to matters of law of jurisdictions other
than the federal laws of the United States of America, the laws of the
State of New York, the laws of the State of Arizona and the general
corporate law of the State of Delaware; provided, however, that such
counsel shall further state that he believes that he and the Purchasers
are justified in relying upon such opinion of other counsel, and as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of any Seller and public officials. Such counsel
may rely on certificates of good standing and foreign qualification
from appropriate state officials with respect to opinions regarding
good standing and foreign qualification.
(g) Each Seller shall have furnished to the Purchasers on the
Delivery Date a certificate, dated the Delivery Date, of the President
or a Vice President and the principal financial or accounting officer
of the Company stating that (i) for the period from and after the date
of this Agreement and prior to the Delivery Date there has not occurred
any Material Adverse Change; (ii) the representations and warranties of
the Sellers in Section
27
1 are true and correct as of the Delivery Date; (iii) the Sellers have
complied with all the agreements and satisfied all the conditions on
their part to be performed or satisfied at or prior to the Delivery
Date; (iv) all the agreements and conditions for the closing of the
Yorktown Acquisition have been performed or satisfied at or prior to
the Delivery Date; and (v) there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the rating
accorded any securities of the Company or any of its subsidiaries by
any "nationally recognized statistical rating organization" as such
term is defined for purposes of Rule 436 under the Securities Act.
(h) The Company shall have furnished to the Purchasers on the
Delivery Date a certificate, dated the Delivery Date, of the principal
financial or accounting officer of the Company stating that the Total
Leverage Ratio and the Senior Leverage Ratio (each as defined in the
New Revolving Credit Facility Agreement), based on the pro forma
financial statements of the Company giving effect to the offering of
the Securities and the Related Transactions prepared in accordance with
the requirements of Regulation S-X under the Securities Act and all
other accounting rules and regulations of the Commission promulgated
thereunder, was not greater than the respective ratios set forth in the
New Revolving Credit Facility Agreement.
(i) The Company shall have furnished to the Purchasers on the
date hereof a letter of Deloitte & Touche LLP, independent public
accountants for the Company, addressed to the Purchasers and dated the
date hereof, in form and substance reasonably satisfactory to the
Purchasers, containing statements and information of the type
ordinarily included in accountant's "comfort letters" to initial
purchasers, delivered according to Statement of Auditing Standards Nos.
72 and 76 (or any successor bulletins), with respect to the Company's
audited financial statements and unaudited pro forma financial
statements and certain financial information contained in the Offering
Memorandum.
(j) The Company shall have furnished to the Purchasers on the
Delivery Date, a letter of Deloitte & Touche LLP, independent public
accountants for the Company, addressed to the Purchasers and dated the
Delivery Date, in form and substance reasonably satisfactory to the
Purchasers, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to Section 8(i), except that the
specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the Delivery Date.
(k) The Company shall have furnished to the Purchasers on the
date hereof, a letter of Ernst & Young LLP, independent public
accountants for the Yorktown Refinery, addressed to the Purchasers and
dated the date hereof, in form and substance reasonably satisfactory to
the Purchasers, containing statements and information of the type
ordinarily included in accountant's "comfort letters" to initial
purchasers, delivered according to Statement of Auditing Standards Nos.
72 and 76 (or any successor bulletins),
28
with respect to the audited financial statements related to the
Yorktown refinery and certain financial information contained in the
Offering Memorandum.
(l) The Company shall have furnished to the Purchasers on the
Delivery Date, a letter of Ernst & Young LLP, independent public
accountants for the Yorktown Refinery, addressed to the Purchasers and
dated the Delivery Date, in form and substance reasonably satisfactory
to the Purchasers, to the effect that they reaffirm the statements made
in the letter furnished by them pursuant to Section 8(k), except that
the specified date referred to therein for the carrying out of
procedures shall be no more than three business days prior to the
Delivery Date.
(m) The Purchasers shall have received the opinion of Shearman
& Sterling, their counsel, dated as of the Delivery Date, with respect
to such matters as the Purchasers may reasonably request.
(n) The Securities shall have been accepted for (i) settlement
through the facilities of DTC, and (ii) if applicable, settlement
through the facilities of Clearstream and Euroclear.
(o) The Sellers shall have furnished to the Purchasers such
further certificates and documents, including certificates of officers
of the Subsidiary Guarantors, as the Purchasers shall have reasonably
requested.
(p) The Sellers shall have executed and delivered the
Registration Rights Agreement.
(q) Each of the New Revolving Credit Facility Agreement and
the New Mortgage Loan Agreement shall have been executed and delivered
by the Company and each lender thereunder, and shall be in full force
and effect and all conditions to the initial borrowings thereunder
shall have been satisfied other than the closing of the offering and
sale of the Securities and the Yorktown Acquisition.
(r) Concurrently with the closing of this offering, the
Company shall have given the requisite notices for the redemption of
the 9-3/4% Notes in accordance with the terms and conditions of the
1993 Indenture.
(s) Concurrently with the closing of this offering, the
Related Transactions shall have been consummated on terms and
conditions reasonably acceptable to the Purchasers.
All opinions (other than the opinion set forth in Section 8(m)
above), letters, evidences and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if
they are in form and substance reasonably satisfactory to Shearman & Sterling,
counsel to the Purchasers.
9. Stabilization. The Purchasers may, at their discretion, to
the extent permitted by applicable law, make purchases and sales of the
Securities for their own accounts in
29
the open market or otherwise for long or short account, on such terms as they
deem advisable in connection with the distribution of the Securities, with a
view to stabilizing or maintaining the market price of the Securities at a level
other than that which might otherwise prevail on the open market. Such
transactions, if commenced, may be discontinued at any time. In such
circumstances, as between the Sellers, on the one hand, and the Purchasers, on
the other hand, the Purchasers shall act as principal, and any loss resulting
from stabilization shall be borne, and any profit arising therefrom and any sum
received by it shall be beneficially retained, by the Purchasers for their own
account.
10. Termination. Prior to the Delivery Date, this Agreement
may be terminated by the Purchasers by notice given to the Company if at any
time after the date of this Agreement (i) trading or quotation in any of the
Company's securities shall have been suspended or limited by the Commission or
by the NYSE, or trading in securities generally on either the Nasdaq Stock
Market or the NYSE shall have been suspended or limited, or minimum or maximum
prices shall have been generally established on any of such stock exchanges by
the Commission or the National Association of Securities Dealers, Inc.; (ii) a
general banking moratorium shall have been declared by any of federal, New York,
Washington or California authorities; (iii) there shall have occurred any
outbreak or escalation of national or international hostilities or any crisis or
calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial
change in United States' or international political, financial or economic
conditions, as in the judgment of the Purchasers is material and adverse and
makes it impracticable to market the Securities in the manner and on the terms
described in the Offering Memorandum or to enforce contracts for the sale of
securities; (iv) in the judgment of the Purchasers there shall have occurred any
Material Adverse Change; (v) the Company or any of its subsidiaries shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as in the judgment of the Purchasers may interfere materially
with the conduct of the business and operations of the Company and its
subsidiaries regardless of whether or not such loss shall have been insured; or
(vi) there shall have occurred a material disruption in commercial banking or
securities settlement or clearance services in the United States. Any
termination pursuant to this Section 10 shall be without liability on the part
of (a) any Seller to any Purchaser, except that the Sellers shall be obligated
to reimburse the expenses of the Purchasers pursuant to Section 5 hereof, (b)
any Purchaser to any Seller, or (c) any party hereto to any other party except
that the provisions of Section 6 and Section 7 shall at all times be effective
and shall survive such termination.
11. Representations, Warranties and Agreements of the
Purchasers. Each Purchaser severally represents, warrants and agrees that:
(a) The Purchasers understand that the Securities have not
been and will not be registered under the Securities Act, and the
Securities have not been and will not be offered or sold by a Purchaser
or its affiliates or persons acting on its behalf except in accordance
with Regulation S under the Securities Act or pursuant to an exemption
from the registration requirements of the Securities Act. The
Purchasers have offered and sold the Securities and will offer and sell
the Securities, (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering of the Securities and the Delivery Date (the "restricted
period"), only in accordance with
30
the provisions of Regulation S or Rule 144A under the Securities Act.
Accordingly, no Purchaser, nor their affiliates nor any persons acting
on their behalf has engaged or will engage in any directed selling
efforts with respect to the Securities, and they have complied and will
comply with any applicable offering restrictions requirement of
Regulation S with respect to the Securities. Each Purchaser will have
sent, at or prior to confirmation of sale of Securities pursuant to
Regulation S, to each distributor, dealer or person receiving a selling
concession, fee or other remuneration in respect of the Securities from
it during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been
registered under the United States Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered or sold
within the United States or to, or for the account or benefit
of, United States persons (i) as part of their 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 or Rule 144A
under the Securities Act. Terms used in this paragraph have
the meanings given to them by Regulation S."
Terms used in this paragraph (a) have the meanings given to them by
Regulation S.
(b) No Purchaser will offer or sell the Securities in the
United States by means of any form of general solicitation or general
advertising within the meaning of Section 502(c) under the Securities
Act; provided, however, that such limitation shall not preclude the
placing of any customary tombstone advertisement with respect to the
resale of the Securities following the expiration of the restricted
period. With respect to resales made in reliance on Rule 144A of any of
the Securities, each Purchaser will deliver either with the
confirmation of such resale or otherwise prior to settlement of such
resale a notice to the effect that the resale of such Securities has
been made in reliance upon the exemption from the registration
requirements of the Securities Act provided by Rule 144A.
(c) Each Purchaser represents, warrants and agrees that:
(i) it has not offered or sold and, prior to the
expiry of the period of six months from the issue date of the
Securities, will not offer or sell any Securities in the
United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 (as amended);
(ii) it has only communicated or caused to be
communicated and will only communicate or cause to be
communicated an invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the
Financial
31
Services and Markets Act 2000 (the "FSMA") received by it in
connection with the issue or sale of any Securities in
circumstances in which Section 21(1) of the FSMA does not
apply to the Issuer; and
(iii) it has complied and will comply with all
applicable provisions of the FSMA with respect to anything
done by it in relation to the Securities in, from or otherwise
involving the United Kingdom.
Following the sale of the Securities by the Purchasers to
Subsequent Purchasers pursuant to the terms hereof, the Purchasers shall not be
liable or responsible to any Seller for any losses, damages or liabilities
suffered or incurred by any Seller, including any losses, damages or liabilities
under the Securities Act, arising from or relating to any resale or transfer of
any Security.
The Sellers acknowledge and agree that the Purchasers may,
subject to the provisions of this Section 11, offer Securities to other brokers
and dealers for resale by such brokers and dealers.
12. Survival of Representations, Warranties and Agreements.
The representations, warranties and agreements and other statements of any
person set forth in or made pursuant to this Agreement shall survive the
delivery of and payment for the Securities and shall remain in full force and
effect as made on the Delivery Date regardless of any investigation made by or
on behalf of any person referred to in Section 6. The provisions of Section 5,
Section 6 and Section 7 shall survive the termination or cancellation of this
Agreement.
13. Notices. Any notice or notification in any form to be
given hereunder shall be in writing and shall be delivered in person or sent by
telephone or facsimile transmission (but in the case of a notification by
telephone, with subsequent confirmation by letter or facsimile transmission).
Any notice or notification to the Company or any Subsidiary Guarantor shall be
addressed to or in care of the Company at:
Giant Industries, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or notification to the Purchasers shall be addressed to it or them
at:
c/o Banc of America Securities LLC
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Capital Markets Transaction Management
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or notification shall take effect at the time of receipt.
32
14. Benefit. This Agreement shall be binding upon the
Purchasers, the Sellers and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and agreements of
the Sellers contained in this Agreement shall also be deemed to be for the
benefit of each person referred to in Section 6(a) hereof, and (b) the
representations, warranties, indemnities and agreements of the Purchasers
contained in Section 11 hereof shall be deemed to be for the benefit of each
person referred to in Section 6(b) hereof. Nothing in this Agreement is intended
or shall be construed to give any person, other than the persons referred to in
this Section 14, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein. This Agreement
shall not be assigned by any party hereto without the prior written consent of
the other parties hereto.
15. Default of One or More of the Several Purchasers. If any
one or more of the several Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on the Delivery
Date, and the aggregate number of Securities which such defaulting Purchaser or
Purchasers agreed but failed or refused to purchase does not exceed 10% of the
aggregate number of the Securities to be purchased on such date, the other
Purchasers shall be obligated, severally, in the proportions that the number of
Securities set forth opposite their respective names on Schedule A bears to the
aggregate number of Securities set forth opposite the names of all such
non-defaulting Purchasers, or in such other proportions as may be specified by
the Purchasers with the consent of the non-defaulting Purchasers, to purchase
the Securities which such defaulting Purchaser or Purchasers agreed but failed
or refused to purchase on such date. If any one or more of the Purchasers shall
fail or refuse to purchase Securities and the aggregate number of Securities
with respect to which such default occurs exceeds 10% of the aggregate number of
Securities to be purchased on the Delivery Date, and arrangements satisfactory
to the Purchasers and the Sellers for the purchase of such Securities are not
made within 48 hours after such default, this Agreement shall terminate without
liability of any party to any other party except that the provisions of Section
5, Section 6 and Section 7 shall at all times be effective and shall survive
such termination. In any such case either the Purchasers or the Sellers shall
have the right to postpone the Delivery Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Offering Memorandum or any other documents or arrangements may be effected.
As used in this Agreement, the term "Purchaser" shall be
deemed to include any person substituted for a defaulting Purchaser under this
Section 15. Any action taken under this Section 15 shall not relieve any
defaulting Purchaser from liability in respect of any default of such Purchaser
under this Agreement.
16. Governing Law; Consent to Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) Any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby ("Related
Proceedings") may be instituted in the federal courts of the United States of
America located in the City and County of New York or
33
the courts of the State of New York in each case located in the City and County
of New York (collectively, the "Specified Courts"), and each party irrevocably
submits to the non-exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum.
17. Miscellaneous. This Agreement may be executed in one or
more counterparts, and if executed in more than one counterpart, the executed
counterparts shall together constitute a single instrument. The descriptive
headings in this Agreement are for convenience of reference only and shall not
define or limit the provisions hereof. Time shall be of the essence of this
Agreement.
34
If the foregoing is in accordance with the Purchasers'
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Sellers and the Purchasers in accordance with its terms.
Very truly yours,
THE COMPANY:
GIANT INDUSTRIES, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer
THE SUBSIDIARY GUARANTORS:
GIANT INDUSTRIES ARIZONA, INC.,
an Arizona corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
CINIZA PRODUCTION COMPANY,
a New Mexico corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
GIANT STOP-N-GO OF NEW MEXICO, INC.,
a New Mexico corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
35
GIANT FOUR CORNERS, INC.,
an Arizona corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
PHOENIX FUEL CO., INC.,
an Arizona corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
SAN ▇▇▇▇ REFINING COMPANY,
a New Mexico corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
GIANT MID-CONTINENT, INC.,
an Arizona corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
GIANT PIPELINE COMPANY,
a New Mexico corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
36
DEGUELLE OIL COMPANY,
a Colorado corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
GIANT YORKTOWN, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
GIANT YORKTOWN HOLDING COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
Title: Chief Financial Officer and Director
37
THE PURCHASERS:
The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.
BANC OF AMERICA SECURITIES LLC
BNP PARIBAS SECURITIES CORP.
FLEET SECURITIES, INC.
By: Bank of America Securities LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Principal
38
SCHEDULE A
PRINCIPAL
PURCHASERS AMOUNT OF SECURITIES
---------- --------------------
Banc of America Securities LLC................................................... $150,000,000
BNP Paribas Securities Corp...................................................... $ 30,000,000
Fleet Securities, Inc. .......................................................... $ 20,000000
------------
$200,000,000
============
SCHEDULE B
SUBSIDIARY GUARANTORS
GIANT INDUSTRIES ARIZONA, INC., an Arizona corporation
CINIZA PRODUCTION COMPANY, a New Mexico corporation
GIANT STOP-N-GO OF NEW MEXICO, INC., a New Mexico corporation
GIANT FOUR CORNERS, INC., an Arizona corporation
PHOENIX FUEL CO., INC., an Arizona corporation
SAN ▇▇▇▇ REFINING COMPANY, a New Mexico corporation
GIANT MID-CONTINENT, INC., an Arizona corporation
GIANT PIPELINE COMPANY, a New Mexico corporation
DEGUELLE OIL COMPANY, a Colorado corporation
GIANT YORKTOWN, INC., a Delaware corporation
GIANT YORKTOWN HOLDING COMPANY, a Delaware corporation
