Exhibit 10.34
LYONDELL-CITGO REFINING COMPANY LTD.
$100,000,000
CREDIT AGREEMENT
Dated as of July 1, 1993
CONTINENTAL BANK N.A.
As Agent
TABLE OF CONTENTS*
ARTICLE I
DEFINITIONS
PAGE
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SECTION 1.01 Definitions............................... 1
1.02 Accounting Terms and Determinations....... 9
1.03 Types of Borrowings....................... 9
ARTICLE II
THE CREDIT
SECTION 2.01 Commitments to Lend....................... 10
2.02 Notice of Committed Borrowings............ 10
2.03 Letters of Credit......................... 11
2.04 Notice to Banks; Funding of Loans......... 14
2.05 Notes..................................... 14
2.06 Maturity of Loans......................... 15
2.07 Interest Rates............................ 15
2.08 Fees...................................... 18
2.09 Optional Termination or Reduction of
Commitments............................... 18
2.10 Mandatory Termination of Commitments...... 19
2.11 Optional Prepayments...................... 19
2.12 General Provisions as to Payments......... 19
2.13 Computation of Interest and Fees.......... 20
2.14 Maximum Interest Rate..................... 20
2.15 Extension of Termination Date............. 22
2.16 Withholding Tax Exemption................. 23
ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness.............................. 24
3.02 Borrowings................................. 25
* The Table of Contents is not a part of this Agreement.
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PAGE
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of the
Borrower..................................... 26
ARTICLE V
COVENANTS
SECTION 5.01 Certain Information to be Furnished by the
Borrower..................................... 29
5.02 Maintenance of Property; Insurance........... 31
5.03 Limitation on Liens.......................... 31
5.04 Consolidation, Merger........................ 33
5.05 Use of Proceeds.............................. 34
5.06 Compliance with Laws......................... 34
5.07 No Material Change........................... 34
ARTICLE VI
DEFAULTS
SECTION 6.01 Defaults..................................... 34
6.02 Notice of Default............................ 37
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization................ 37
7.02 Agent and Affiliates......................... 37
7.03 Action by Agent.............................. 37
7.04 Consultation with Experts.................... 37
7.05 Liability of Agent........................... 38
7.06 Indemnification.............................. 38
7.07 Credit Decision.............................. 38
7.08 Successor Agent.............................. 39
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PAGE
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ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Illegality.................................. 39
8.02 Increased Cost and Reduced Return........... 40
8.03 Substitute Loans............................ 42
8.04 Regulation D Compensation................... 42
8.05 Substitution of Bank........................ 43
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices..................................... 43
9.02 No Waiver................................... 44
9.03 Governing Law............................... 44
9.04 Expenses; Documentary Taxes; Indemnification 44
9.05 Amendments, Etc............................. 45
9.06 Counterparts; Integration................... 46
9.07 Successors and Assigns...................... 46
9.08 Survival.................................... 47
9.09 Acknowledgment.............................. 48
9.10 Headings.................................... 48
9.11 Sharing of Setoffs.......................... 48
9.12 Collateral.................................. 49
9.13 Consent to Jurisdiction..................... 49
9.14 Waiver of Jury Trial........................ 50
EXHIBIT A - Note
EXHIBIT B - Loans and Principal Payments
EXHIBIT C - Form of Assignment and Acceptance
EXHIBIT D - Secretary's Certificate
EXHIBIT E - Certificate of Incumbency
EXHIBIT F - Opinion of General Counsel
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CREDIT AGREEMENT dated as of July 1, 1993 among LYONDELL-CITGO
REFINING COMPANY LTD, the BANKS listed on the signature pages hereof and
CONTINENTAL BANK N.A., as Agent.
The Borrower desires to borrow from time to time amounts not exceeding
in the aggregate $100,000,000 outstanding at any one time from the Banks for its
general corporate purposes, and the Banks are prepared to make loans on the
terms hereof. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.
In addition to terms defined elsewhere in this Agreement, as used in this
Agreement, the following terms have the following meanings (all terms defined in
this Agreement in the singular to have the same meanings when used in the plural
and vice versa):
"ADJUSTED CD RATE" has the meaning set forth in Section 2.07(b).
"ADMINISTRATIVE QUESTIONNAIRE" means, with respect to each Bank, the
administrative questionnaire in the form submitted to such Bank by the Agent and
submitted to the Agent (with a copy to the Borrower) duly completed by such
Bank.
"AGENT" means Continental Bank N.A. its capacity as agent for the Banks
hereunder, and its successors in such capacity.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the case of
its Domestic Loans, its Domestic Lending Office and (ii) in the case of its
Euro-Dollar Loans, its Euro-Dollar Lending Office.
"ASSESSMENT RATE" has the meaning set forth in Section 2.07(b).
"ASSIGNEE" has the meaning set forth in Section 9.07(c).
"AUTHORIZED OFFICER" and "AUTHORIZED REPRESENTATIVE" of the Borrower shall mean
an officer or other representative of the Borrower designated in the latest
Certificate of Incumbency of the Borrower or Lyondell or Lyondell Refining
Company. The Agent and the Banks shall be conclusively entitled to rely on the
latest such Certificate of Incumbency of the Borrower delivered to the Agent.
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"BANK" means each bank which is listed on the signature pages hereof as having a
Commitment and which has executed and delivered this Agreement, each Assignee
which becomes a Bank pursuant to Section 9.07(c), each substitute bank which
becomes a Bank pursuant to Section 8.05, and their respective successors.
"BASE RATE" means, for any day, a rate per annum equal to the higher of (i) the
Reference Rate for such day and (ii) the Federal Funds Rate for such day plus
1/4 of 1%.
"BASE RATE LOAN" means a Committed Loan to be made by a Bank as a Base Rate Loan
in accordance with the applicable Notice of Committed Borrowing or pursuant to
Article VIII.
"BORROWER" means LYONDELL-CITGO REFINING COMPANY LTD., a Texas limited liability
company.
"BORROWING" has the meaning set forth in Section 1.03.
"CD BASE RATE" has the meaning set forth in Section 2.07(b).
"CD LOAN" means a Committed Loan to be made by a Bank as a CD Loan in accordance
with the applicable Notice of Borrowing.
"CD MARGIN" has the meaning set forth in Section 2.07(b).
"CERTIFICATE OF INCUMBENCY" shall mean a Certificate of Incumbency described in
Section 3.01 (ii) and any successor or replacement Certificate of Incumbency
delivered hereunder.
"CITGO" means CITGO Petroleum Corporation.
"CODE" means the Internal Revenue Code of 1986, as amended, or any successor
statute.
"COMMITMENT" means, as to each Bank, the amount set forth opposite its name on
the signature pages hereof under the heading "Commitment" which includes the
Maximum Drawing Amount (as such amount may be reduced from time to time as
provided in Sections 2.09 and 2.10).
"COMMITMENT PERCENTAGE" means, with respect to each Bank, the percentage set
forth on the signature pages hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
"COMMITTED LOAN" means a loan made by a Bank pursuant to Section 2.01.
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"COMPANY REGULATIONS" means the limited liability company regulations dated as
of July 1, 1993 between Lyondell Refining Company and CITGO Refining Investment
Company.
"CONTROLLED GROUP" means all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414(b) or 414(c) of the Code.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement dated as of July 1,
1993 between Borrower and Lyondell.
"CRUDE SUPPLY AGREEMENT" means the Crude Supply Agreement dated as of May 5,
1993 between Borrower and Lagoven, S. A., including any supplemental agreements.
"DEBT" of any Person means at any date, without duplication, (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business, (iv)
all obligations of such Person as lessee under capital leases, (v) all Debt of
others to the extent secured by a Lien on any asset of such Person, whether or
not such Debt is assumed by such Person, and (vi) all Debt of others to the
extent Guaranteed by such Person.
"DEFAULT" means any condition or event which constitutes an Event of Default or
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois or Houston, Texas are authorized by
law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Domestic Lending
Office) or such other office, branch or affiliate as such Bank may from time to
time specify to the Agent and the Borrower as its Domestic Lending Office;
provided that any Bank may from time to time by notice to the Borrower and the
Agent designate separate Domestic Lending Offices for its Reference Rate Loans,
on the one hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such Bank shall be deemed to
refer to either or both of such offices, as the context may require.
"DOMESTIC LOANS" means CD Loans or Reference Rate Loans or both.
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"DOMESTIC RESERVE PERCENTAGE" has the meaning set forth in Section 2.07(b).
"EFFECTIVE DATE" means the date on which this Agreement becomes effective in
accordance with Section 3.01.
"ENVIRONMENTAL MATTERS" means matters relating to pollution or protection of the
environment, including without limitation emissions, discharges, releases or
threatened releases of pollutants, contaminants or chemicals or industrial,
toxic or hazardous substances or wastes into the environment (including without
limitation ambient air, surface or ground water, land surface or subsurface
strata), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants or toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute.
"EURO-DOLLAR BUSINESS DAY" means any Domestic Business Day on which commercial
banks are open for international business (including dealings in dollar
deposits) in New York.
"EURO-DOLLAR LENDING OFFICE" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may from
time to time specify to the Agent and the Borrower as its Euro-Dollar Lending
Office.
"EURO-DOLLAR LOAN" means a Committed Loan to be made by a Bank as a Euro-Dollar
Loan in accordance with the applicable Notice of Borrowing.
"EURO-DOLLAR MARGIN" has the meaning set forth in Section 2.07(c).
"EURO-DOLLAR RESERVE PERCENTAGE" means with respect to any Bank for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirement (including without limitation
any basic, supplemental or emergency reserves) imposed on such Bank in respect
of "Euro-currency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or in respect of any category of extensions of
credit or other assets which includes loans by a non-United States office of
such Bank to United States residents).
"EVENT OF DEFAULT" has the meaning assigned to that term in Section 6.01.
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"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100th of one percent (1%)) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Continental Bank National Association on
such day for such transactions as determined by the Agent.
"GRADE 1 PERIOD" means any time during which the sum of the Maximum Drawing
Amount and the Loans is less than 50% of the aggregate amount of the
Commitments.
"GRADE 2 PERIOD" means any time during which the sum of the Maximum Drawing
Amount and the Loans is equal to and greater than 50% of the aggregate amount of
the Commitments and less than the aggregate amount of the Commitments.
"GUARANTEE" means to guarantee or act, directly or indirectly, as a surety for
any Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, to incur or assume any obligation, direct or
indirect, contingent or otherwise, (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "Guarantee" shall
not include to endorse for collection or deposit in the ordinary course of
business.
"INTEREST PERIOD" means:
(1) with respect to each Euro-Dollar Borrowing, the period commencing on the
date of such Borrowing and ending one or seven (1 or 7) days, or one, two,
three or six (1, 2, 3 or 6) months thereafter, as the Borrower may elect in
the applicable Notice of Borrowing; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding
EuroDollar Business Day unless such Euro-Dollar Business Day falls in
another
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calendar month, in which case such Interest Period shall end on the
next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the last Euro-
Dollar Business Day of a calendar month; and
(c) any Interest Period applicable to any Euro-Dollar Loan of any Bank
which begins before such Bank's Termination Date and would otherwise
end after such Termination Date shall end on such Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the date of
such Borrowing and ending thirty (30), sixty (60), ninety (90) or one
hundred eighty (180) days thereafter, as the Borrower may elect in the
applicable Notice of Borrowing; provided that:
(a) any Interest Period (other than an Interest Period determined pursuant
to clause (b) below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next succeeding
Domestic Business Day; and
(b) any Interest Period applicable to any CD Loan of any Bank which begins
before such Bank's Termination Date and would otherwise end after such
Termination Date shall end on such Termination Date;
(3) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 90 days thereafter; provided that:
(a) any Interest Period (other than an Interest Period determined pursuant
to clause (b) below) which would otherwise end on a day which is not a
Domestic Business Day shall be extended to the next succeeding
Domestic Business Day; and
(b) any Interest Period applicable to any Base Rate Loan of any Bank which
begins before such Bank's Termination Date and would otherwise end
after such Termination Date shall end on such Termination Date;
"INTERBANK OFFERED RATE" has the meaning set forth in Section 2.07(c).
"ISSUING BANK" means the Agent, or such other Bank as the Borrower may have
requested and the Required Banks shall have approved, issuing a Letter of
Credit.
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"LETTER OF CREDIT" See Section 2.03.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"LOAN" means a Domestic Loan or a Euro-Dollar Loan and "Loans" means Domestic
Loans or Euro-Dollar Loans or any combination of the foregoing.
"LYONDELL" means Lyondell Petrochemical Company.
"LRC" means Lyondell Refining Company.
"MAXIMUM DRAWING AMOUNT" means the maximum aggregate amount from time to time
that the beneficiaries may draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
"NOTES" means promissory notes of the Borrower, substantially in the form of
Exhibit A hereto, evidencing the obligation of the Borrower to repay the Loans,
and "Note" means any one of such promissory notes issued hereunder.
"NOTICE OF BORROWING" means a Notice of Committed Borrowing (as defined in
Section 2.02).
"PARENT" means, with respect to any Bank, any Person controlling such Bank.
"PARTICIPANT" has the meaning set forth in Section 9.07(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
"PERSON" means an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PLAN" means at any time an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) maintained by a member of the Controlled Group for
employees of a member of the Controlled Group or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer
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makes contributions and to which a member of the Controlled Group is then
making or accruing an obligation to make contributions or has within the
preceding five (5) plan years made contributions.
"REFERENCE RATE" shall mean the rate of interest then most recently announced by
Continental Bank N.A. in Chicago from time to time as its "reference rate" for
calculating interest on certain loans (which may not be the lowest rate charged
by Continental Bank N.A. at that time): the "Reference Rate" hereunder will
change simultaneously with any change in Continental Bank N.A.'s "reference
rate".
"REFERENCE BANK" means Continental Bank N.A. or its successor.
"REFUNDING BORROWING" means a Committed Borrowing which, after application of
the proceeds thereof, results in no net increase in the outstanding principal
amount of Committed Loans made by any Bank.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time (including any successor
provision thereto or any other United States law or regulation imposing reserves
on deposits or loans).
"REGULATION G" shall mean Regulation G of the Board of Governors of the Federal
Reserve System, as in effect from time to time (including any successor
provision thereto).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time (including any successor
provision thereto).
"REGULATION X" shall mean Regulation X of the Board of Governors of the Federal
Reserve System, as in effect from time to time (including any successor
provision thereto).
"REQUIRED BANKS" means at any date Banks having at least sixty-six and two-
thirds (66 2/3%) percent of the aggregate amount of the Commitments or, if the
Commitments have been terminated, holding Notes evidencing at least sixty-six
and two-thirds (66 2/3%) percent of the aggregate unpaid principal amount of the
Loans.
"SUBSIDIARY" means any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other Persons performing similar functions (whether or not
any other class of securities has or might have voting power, by reason of the
happening of a contingency) are at the time owned or controlled directly or
indirectly by the Borrower.
"TERMINATION DATE" means, for each Bank, June 30, 1994, or such later date to
which the Termination Date of such Bank shall have been extended pursuant to
Section
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2.15, or, if such day is not a Euro-Dollar Business Day, the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the Termination Date for such Bank shall be the
next preceding Euro-Dollar Business Day.
"UNFUNDED VESTED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all vested nonforfeitable
benefits under such Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial Statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
financial statements of the Borrower delivered to the Banks.
SECTION 1.03. TYPES OF BORROWINGS.
The term "Borrowing" denotes the aggregation of Loans of one or more Banks to be
made to the Borrower pursuant to Article II on a single date and for a single
Interest Period. Borrowings are classified for purposes of this Agreement
either by reference to the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which participation therein is
determined (i.e., a "Committed Borrowing" is a Borrowing under Section 2.01 in
which all Banks participate in proportion to their Commitments).
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ARTICLE II
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND.
Each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Borrower pursuant to this Section 2.01 from time
to time in amounts such that the aggregate principal amount of Committed Loans
by such Bank at any one time outstanding shall not exceed the amount of its
Commitment. Each Borrowing under this Section 2.01 shall be in an aggregate
principal amount of $5,000,000 or any larger multiple of $1,000,000 (except that
any such Borrowing may be in an aggregate amount such that, immediately after
giving effect to such Borrowing, the aggregate outstanding principal amount of
the Loans will equal the aggregate amount of the Commitments) and shall be made
from the several Banks ratably in proportion to their respective Commitments.
Within the foregoing limits, the Borrower may borrow under this Section 2.01,
repay, or to the extent permitted by Section 2.11, prepay Loans and re-borrow at
any time.
SECTION 2.02. NOTICE OF COMMITTED BORROWINGS.
The Borrower shall give the Agent notice (a "Notice of Committed Borrowing") not
later than 10:00 A.M. (Chicago time) (9:00 A.M. Chicago time in the event of one
day Euro-Dollar Borrowing) on (x) the date of each Reference Rate Borrowing, (y)
the second Domestic Business Day before each CD Borrowing and (z) the third
Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:
(a) the date of such Borrowing, which shall be a Domestic Business Day in the
case of a Domestic Borrowing or a Euro-Dollar Business Day in the case of a
Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing are to be CD Loans, Base Rate
Loans or EuroDollar Loans, and
(d) in the case of a CD Borrowing or a Euro-Dollar Borrowing, the requested
Interest Period; provided, however, that the Borrower shall not be
permitted to request Euro-Dollar Borrowings with one (1) day Interest
Period longer than 5 consecutive Domestic Business Days.
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SECTION 2.03. LETTERS OF CREDIT.
(a) Subject to the terms and conditions hereof and the execution and delivery
by the Borrower of a letter of credit application on the Issuing Bank's
customary form (a "Letter of Credit Application"), each of the Banks, in
its sole discretion, and the Agent in reliance upon the representations and
warranties of the Borrower contained in this Agreement, agrees to issue,
extend and renew between the Effective Date and Termination Date for the
account of the Borrower one or more standby letters of credit or
documentary letters of credit (individually, a "Letter of Credit"), in such
form as may be requested from time to time by the Borrower and agreed to by
such Bank; provided, however, that, after giving effect to such request the
sum of (A) the aggregate Maximum Drawing Amount of all Letters of Credit
and (B) the amount of all Loans outstanding shall not exceed the aggregate
amount of the Commitments.
(b) Each new Letter of Credit Application shall be completed to the
satisfaction of the Issuing Bank. In the event that any provision of any
Letter of Credit Application shall be inconsistent with any provision of
this Agreement, then the provisions of this Agreement shall, to the extent
of any such inconsistency, govern.
(c) Each Letter of Credit issued, extended or renewed hereunder shall, among
other things, (i) provide for the payment of sight drafts for honor
thereunder when presented in accordance with the terms thereof and when
accompanied by the documents described therein, and (ii) have an expiry
date no later than fourteen (14) days or, if the beneficiary is located
outside of the United States, forty-five (45) days prior to the Termination
Date. Each Letter of Credit so issued, extended or renewed shall be
subject to the Uniform Customs and Practice for Documentary Credits (1983
Revision), International Chamber of Commerce Publication No. 400 or any
successor version thereto.
(d) Upon the reduction of the total Commitments to an amount less than the
maximum Drawing Amount, the Borrower shall immediately pay to the Agent an
amount equal to such difference.
(e) The amount of each drawing under any Letter of Credit issued by an Issuing
Bank pursuant to this Agreement shall be deemed to be a Loan made by the
Banks to the Borrower on the date of such drawing and shall be funded by
the Banks in accordance with Sections 2.02 and 2.04.
(f) Each Bank (other than the Issuing Bank) and the Borrower hereby acknowledge
that each Letter of Credit issued by the Issuing Bank pursuant to this
Agreement is issued by the Issuing Bank on behalf of all of the Banks.
Each Bank absolutely and irrevocably agrees, regardless of the existence or
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continuance of an Event of Default or any other condition whatsoever, to
reimburse the Issuing Bank in an amount equal to such Bank's Commitment
Percentage of each drawing under any Letter of Credit made in accordance
with paragraph (e) above and to be responsible for its Commitment
Percentage of all liabilities incurred by the Issuing Bank in respect of
each Letter of Credit opened or extended by the Issuing Bank for the
account of the Borrower pursuant to this Agreement. The obligations of the
Banks hereunder are several and the failure of any Bank to fulfill its
obligations shall not result in any Bank becoming obligated to advance more
than its Commitment percentage of the Loans hereunder.
(g) The Issuing Bank, upon receipt of any draft drawn under a Letter of Credit,
shall promptly examine such draft and any accompanying certificate or other
document in accordance with its customary procedures for conformity to the
requirements of such Letter of Credit. In the event the Issuing Bank
determines to pay such draft in accordance with the foregoing, the Issuing
Bank shall promptly notify the Banks and the Agent and each Bank shall, as
contemplated by paragraph (f) of this Section 2.03, provide to the Agent
for the account of the Issuing Bank in funds immediately available to the
Issuing Bank, such Bank's Commitment Percentage of the funds necessary to
pay such draft.
(h) The Borrower's obligations under this Section 2.03 to repay Loans in
respect of drawings under the Letters of Credit as provided hereunder shall
rank pari passu with the obligations of the Borrower to repay all other
Loans, shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Event of Default or any condition
precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, the Issuing
Bank, any other Bank or any beneficiary of a Letter of Credit. The
Borrower further agrees with the Agent and the Banks that the Agent and the
Banks shall not be responsible for, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financial institution or other
party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of the Borrower against the beneficiary of any Letter
of Credit of any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission,
dispatch or delivery or any message or advice, however transmitted, in
connection with any Letter of Credit absent the Agent's and the Banks'
gross negligence and willful misconduct. The Borrower agrees that any
action taken or omitted by the Agent or any Issuing Bank under or in
connection with each Letter of Credit and the related drafts and documents,
absent the Agent's and the Banks' gross negligence and willful misconduct,
shall be binding upon the Borrower and shall
12
not result in any liability on the part of the Agent or any Issuing Bank to
the Borrower.
(i) To the extent not inconsistent with paragraph (h) above, the Issuing Bank
shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Issuing Bank.
The Issuing Bank shall be fully indemnified by the Banks (exclusive of the
Issuing Bank's pro rata share of such indemnification obligation) against
any and all liability and expense (including any expense for which the
Issuing Bank has not been reimbursed by the Borrower as required by Section
9.04) which may be incurred by it by reason of taking or failing to take
any action absent the Issuing Bank's gross negligence or willful
misconduct. The Issuing Bank shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement in accordance
with a request of the Required Banks, and such request and any action taken
or failure to act pursuant thereto shall be binding upon the Banks.
(j) The Borrower shall, on the date of issuance or any extension or renewal of
any Letters of Credit and at such other time or times as such charges are
customarily made by the Issuing Bank, pay an upfront fee (in each case, a
"Letters of Credit Fee") to the Agent in respect of each Letter of Credit
so issued equal to 0.25% per annum for commercial letters of credit and
0.375% per annum during any Grade 1 Period (.625% per annum for any Grade 2
Period for the face amount of such Letters of Credit in excess of 50% of
the aggregate amount of Commitment) for standby Letters of Credit of the
face amount of such Letter of Credit, plus the Issuing Bank's issuance,
amendment and other administrative fees and charges customarily charged to
its customers similarly situated. Such Letter of Credit Fee (but not such
customary issuance, amendment fee or other administrative fees and charges
which shall be solely for the account of the Issuing bank) shall be for the
accounts of the Banks in accordance with their respective Commitment
Percentages. Such upfront fees shall be based on a 360 day year.
(k) Upon the occurrence of an Event of Default, the Borrower shall pay to the
Agent on demand an amount equal to the Maximum Drawing Amount on all
Letters of Credit, which amount shall be held in an interest bearing
account by the Agent for the benefit of all the Banks and the Agent as cash
collateral for all obligations related to such Letters of Credit.
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SECTION 2.04. NOTICE TO BANKS; FUNDING OF LOANS.
(a) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify each
Bank of the contents thereof and of such Bank's share (if any) of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by
the Borrower.
(b) Not later than 2:00 P.M. (Chicago time) on the date of each Borrowing, each
Bank participating therein shall (except as provided in subsection (c) of
this Section) make available its share of such Borrowing, in Federal or
other funds immediately available in Chicago to the Agent at its address
specified in or pursuant to Section 9.01. Unless the Agent determines that
any applicable condition specified in Article III has not been satisfied,
the Agent will make the funds so received from the Banks available to the
Borrower at an account to be designated by Borrower.
(c) Unless the Agent shall have received notice from a Bank prior to the date
of any Borrowing that such Bank will not make available to the Agent such
Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent
may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Bank
shall not have so made such share available to the Agent, such Bank and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such
amount is repaid to the Agent, at (i) in the case of the Borrower, a rate
per annum equal to the higher of the Federal Funds Rate and the interest
rate applicable thereto pursuant to Section 2.07 and (ii) in the case of
such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent
such corresponding amount, such amount so repaid shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement. In
no event shall any payment by the Agent, or repayment by the Borrower, of
any amount pursuant to this subsection (d) relieve the Bank that failed to
make available its share of the related Borrowing of its obligations
hereunder.
SECTION 2.05. NOTES.
(a) The Loans of each Bank shall be evidenced by a single Note payable to the
order of such Bank for the account of its Applicable Lending Office in an
amount equal to the aggregate unpaid principal amount of such Bank's Loans.
14
(b) Upon receipt of each Bank's Note pursuant to Section 3.01(vi), the Agent
shall mail such Note to such Bank. Each Bank shall record the date, amount
and maturity of each Loan made by it and the date and amount of each
payment of principal made by the Borrower with respect thereto, and prior
to any transfer of its Note shall endorse on the schedule forming a part
thereof appropriate notations to evidence the foregoing information with
respect to each such Loan then outstanding; provided that the failure of
any Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Bank is
hereby irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such schedule
as and when required.
SECTION 2.06. MATURITY OF LOANS.
Each Loan included in any Borrowing shall mature, and the principal amount
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
SECTION 2.07. INTEREST RATES.
(a) Each Base Rate Loan shall bear interest on the outstanding principal amount
thereof, for each day from the date such Loan is made until it becomes due,
at a rate per annum equal to the Base Rate for such day. Such interest
shall be payable for each Interest Period on the last day thereof. Any
overdue principal of and, to the extent permitted by law, overdue interest
on any Reference Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate (the "Default Rate") per annum equal to 2% above
the Reference Rate.
(b) Each CD Loan shall bear interest on the outstanding principal amount
thereof, for the Interest Period applicable thereto, at a rate per annum
equal to the sum of the CD Margin (as in effect on the first day of such-
Interest Period) plus the applicable Adjusted CD Rate. Such interest shall
be payable for each Interest Period on the last day thereof and if such
Interest Period is longer than 90 days, at intervals of 90 days after the
first day thereof. Any overdue principal of and, to the extent permitted
by law, overdue interest on any CD Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default
Rate.
"CD MARGIN" means 0.5% per annum during any Grade 1 Period and 0.75% per
annum during any Grade 2 Period, provided, however, that such increased
rate is applicable only on the incremental borrowings.
15
The "ADJUSTED CD RATE" means for any Interest Period for any CD Loan, an
interest rate per annum equal at all times during such Interest Period to
the sum of:
(1) the rate per annum obtained by dividing (x) the rate of
interest determined by the Reference Bank to be the average (rounded
upward, if necessary, to the nearest whole multiple of 1/16 of 1% per
annum) of the bid rates per annum quoted to the Reference Bank in the
secondary market at approximately 10:00 A.M. (Chicago, Illinois time),
or as soon thereafter as practicable, on the first day of such
Interest Period, by two Chicago certificate of deposit dealers of
recognized standing selected by the Reference Bank for the purchase at
face value of certificates of deposit issued by the Reference Bank in
an amount approximately equal or comparable to such Loan and with a
maturity approximately equal to such Interest Period, by (y) a
percentage equal to 100% minus the Domestic Reserve Percentage (as
defined below) for such Interest Period,
plus
(2) the CD Assessment Rate (as defined below) for such Interest
Period.
The "CD BASE RATE" applicable to any Interest Period is the rate of
interest determined by the Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of one percent (1%)) of the prevailing
rates per annum bid at 10:00 A.M. (Chicago time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two or more
Chicago certificate of deposit dealers of recognized standing for the
purchase at face value from the Reference Bank of its certificates of
deposit in an amount comparable to the unpaid principal amount of the CD
Loan of the Reference Bank to which such Interest Period applies and having
a maturity comparable to such Interest Period.
"DOMESTIC RESERVE PERCENTAGE" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) for a member bank of the Federal
Reserve System in Chicago, Illinois with deposits exceeding five billion
dollars in respect of new non-personal time deposits in dollars in Chicago,
Illinois having a maturity comparable to the related Interest Period and in
an amount of $100,000 or more. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Domestic
Reserve Percentage.
16
"CD ASSESSMENT RATE" means for any Interest Period the net annual
assessment rate (rounded upwards, if necessary, to the next higher 1/100 of
one percent (1%)) actually incurred by Continental Bank N.A. to the Federal
Deposit Insurance Corporation (or any successor) for such Corporation's (or
such successor's) insuring time deposits at offices of Continental Bank
N.A. in the United States during the most recent period for which such rate
has been determined prior to the commencement of such Interest Period.
(c) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto, at a rate per
annum equal to the sum of the Euro-Dollar Margin (as in effect on the first
day of such Interest Period) plus the applicable Interbank Offered Rate.
Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three (3) months, at
intervals of three (3) months after the first day thereof.
"EURO-DOLLAR MARGIN" means 0.375% per annum during any Grade 1 Period and
0.625% per annum during any Grade 2 Period, provided however, that such
increased rate is applicable only on the incremental borrowings.
The "INTERBANK OFFERED RATE" applicable to any Interest Period means the
average (rounded upward, if necessary, to the next higher 1/16 of one
percent (1%)) of the respective rates per annum at which deposits in
dollars are offered by prime banks to the Reference Bank in the interbank
Eurodollar market at approximately 10:00 A.M. (Chicago time) two Euro-
Dollar Business Days before the first day of such Interest Period in an
amount approximately equal to the principal amount of the Euro-Dollar Loan
of the Reference Bank to which such Interest Period is to apply and for a
period of time comparable to such Interest Period.
(d) Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Dollar Loan shall bear interest, payable on demand,
for each day from and including the date payment thereof was due to but
excluding the date of actual payment, at a rate per annum equal to the sum
of one percent (1%) plus the average (rounded upward, if necessary, to the
next higher 1/16 of one percent (1%)) of the respective rates per annum at
which one day (or, if such amount due remains unpaid more than three (3)
Euro-Dollar Business Days, then for such other period of time not longer
than three (3) months as the Agent may select) deposits in dollars in an
amount approximately equal to such overdue payment due to the Reference
Bank are offered to the Reference Bank in the interbank Eurodollar market
for the applicable period determined as provided above (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall exist,
at a rate per annum equal to the sum of one percent (1%) plus the rate
applicable to Base Rate Loans for such day).
17
(e) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks by fax or cable of each rate of interest so determined,
and its determination thereof shall be conclusive in the absence of
manifest error.
SECTION 2.08. FEES.
(a) Commitment Fee.
The Borrower shall pay to the Agent for the account of the Banks ratably in
proportion to their Commitments a commitment fee at the rate of 0.15% per
annum on the daily average amount by which the aggregate amount of the
Commitments exceeds the aggregate outstanding principal amount of the
Loans. Such commitment fee shall accrue for the account of each Bank and
including the Effective Date to but excluding the Termination Date of such
Bank.
(b) Participation Fee.
Upon the execution and delivery hereof, the Borrower shall pay to the Agent
for the account of each Bank a one time participation fee at the rate of
0.06% of such Bank's commitment.
(c) Payments.
Accrued fees under this Section for the account of any Bank shall be
payable quarterly in arrears on each September 30, December 31, March 31
and June 30 and upon the date of termination of such Bank's Commitments in
their entirety (and, if later, the date the Loans of such Bank shall be
repaid in their entirety).
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS.
The Borrower may, upon at least three Domestic Business Day's notice to the
Agent, (i) terminate the Commitments at any time, if no Loans are outstanding at
such time or (ii) ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple of $1,000,000, the aggregate amount of the
Commitments in excess of the aggregate outstanding principal amount of the
Loans.
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SECTION 2.10. MANDATORY TERMINATION OF COMMITMENTS.
(a) The Commitment of each Bank shall terminate on the Termination Date of such
Bank, and any Loans of such Bank then outstanding (together with accrued
interest thereon) shall be due and payable on such date.
SECTION 2.11. OPTIONAL PREPAYMENTS.
(a) The Borrower may, upon at least one Domestic Business Day's notice to the
Agent, prepay any Reference Rate Borrowing or, upon at least two Domestic
Business Days notice to the Agent, prepay any CD Borrowing or, upon at
least three (3) Euro-Dollar Business Days' notice to the Agent, prepay any
Euro-Dollar Borrowing in whole at any time, or from time to time in part in
amounts aggregating $5,000,000 or any larger multiple of $1,000,000, by
paying the principal amount to be prepaid together with accrued interest
thereon to but excluding the date of prepayment. Each such optional
prepayment shall be applied to prepay ratably the Loans of the several
Banks included in such Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the Agent
shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. GENERAL PROVISIONS AS TO PAYMENTS.
(a) The Borrower shall make each payment of principal of, and interest on, the
Loans and of fees hereunder, not later than 12:00 Noon (Chicago time) on
the date when due, in Federal or other funds immediately available in
Chicago, to the Agent at its address referred to in Section 9.01. The
Agent will promptly distribute to each Bank its ratable share, if any, of
each such payment received by the Agent for the account of the Banks.
Whenever any payment of principal of, or interest on, the Domestic Loans or
of fees shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day. Whenever any payment of principal of, or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar
Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
19
(b) Unless the Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Banks hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date and the Agent may,
in reliance upon such assumption, cause to be distributed to each Bank on
such due date an amount equal to the amount then due such Bank. If and to
the extent that the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to
such Bank together with interest thereon, for each day from the date such
amount is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate.
SECTION 2.13. COMPUTATION OF INTEREST AND FEES.
All interest and fees shall be computed on the basis of a year of three hundred
sixty (360) days and paid for the actual number of days elapsed (including the
first day but excluding the last day).
SECTION 2.14. MAXIMUM INTEREST RATE.
(a) It is the intention of the parties hereto to comply strictly with all
applicable usury laws regarding the contracting for, and the charging,
payment and receipt of, interest (which shall, for purposes of this Section
2.15, be deemed to include, without limitation, any compensation received
by any Bank for the use, forbearance or detention (as such terms are used
in Tex. Rev. Civ. Stat. Ann. Art. 5069-1.01(a)) of the indebtedness
incurred under this Agreement and evidenced by the Notes) whether such laws
are now or hereafter in effect, including the laws of the United States of
America or any other jurisdiction whose laws are applicable, and including
any subsequent revisions to or judicial interpretations of those laws, in
each case to the extent they are applicable to this Agreement and the Notes
(the "Applicable Usury Laws").
(b) If any payment by the Borrower to any Bank hereunder (including any payment
upon acceleration of the maturity of any Notes of such Bank) results or
would result in the Borrower paying to any Bank any interest in excess of
the Maximum Amount, as defined in subsection (e) below, or if any
transaction contemplated by or any provision of this Agreement, such Bank's
Note or Notes or any other agreement or instrument (collectively, such
Bank's "Loan Documents") would otherwise be usurious under any Applicable
Usury Laws, then, notwithstanding anything to the contrary in such Bank's
Loan Documents, the Borrower and such Bank agree as follows:
20
(i) the provisions of this Section 2.14 shall govern and control;
(ii) the aggregate amount of all interest that is contracted for, charged
or received pursuant to such Bank's Loan Documents or otherwise shall
under no circumstances exceed the Maximum Amount;
(iii) neither the Borrower nor any other Person shall be obligated to pay
the amount of such interest to the extent that it would exceed the
Maximum Amount; and
(iv) the provisions of such Bank's Loan Documents immediately shall be
deemed reformed, without the necessity of the execution of any new
document or instrument, so as to comply with all Applicable Usury
Laws.
(c) If any payment by the Borrower under any Bank's Loan Documents (including
any payment upon acceleration of the maturity of any Note) results in the
Borrower actually having paid to such Bank any interest in excess of the
Maximum Amount, then such excess amount shall be applied to the reduction
of the principal balance of such Bank's Loans or to other amounts (other
than interest) payable hereunder, and if no such principal is then
outstanding, and no such other amount is then payable, such excess or part
thereof remaining, shall be repaid to the Borrower.
(d) All interest paid, or agreed to be paid, pursuant to any Bank's Loan
Documents shall, to the fullest extent permitted by Applicable Usury Laws,
be amortized, prorated, allocated and spread throughout the full term of
any indebtedness incurred under or evidenced by such Bank's Loan Documents
so that the rate of interest paid under such Bank's Loan Documents does
not exceed the Highest Lawful Rate in effect at any particular time during
the full term thereof.
(e) As used herein, the term "Maximum Amount" means, with respect to any Bank,
the maximum nonusurious amount of interest that may be lawfully contracted
for, charged or received by such Bank in connection with the indebtedness
incurred under or evidenced by such Bank's Loan Documents under all
Applicable Usury Laws, and the term "Highest Lawful Rate" means, with
respect to any Bank, the maximum rate of interest, if any, that may be
charged the Borrower under all Applicable Usury Laws on the principal
balance of the indebtedness incurred under or evidenced by such Bank's Loan
Documents from time to time outstanding.
(f) In the event that the rate of interest set forth in Section 2.07 on any
Loan of any Bank (the "Stated Rate"), together with any fees or other
amounts payable to such Bank deemed to constitute interest under Applicable
Usury Laws ("Additional Interest"), exceeds the Highest Lawful Rate, then
the amount of
21
interest payable to such Bank to accrue pursuant to such Bank's Loan
Documents shall be limited, notwithstanding anything to the contrary in
such Bank's Loan Documents, to the amount of interest that would accrue at
the Highest Lawful Rate; provided that, to the fullest extent permitted by
Applicable Usury Laws, any subsequent reductions in the Stated Rate shall
not reduce the interest payable to such Bank to accrue pursuant to such
Bank's Loan Documents below the Highest Lawful Rate until the aggregate
amount of interest payable to such Bank actually accrued pursuant to such
Bank's Loan Documents, together with all Additional Interest payable to
such Bank, equals the amount of interest which would have accrued if the
Stated Rate had at all times been in effect and such Additional Interest,
if any, had been paid in full.
(g) In the event that, at maturity or upon payment in full of all amounts
payable under any Bank's Loan Documents, the total amount of interest paid
to any Bank or payable to such Bank and accrued under the terms of or
evidenced by such Bank's Loan Documents is less than the total amount of
interest which would have been paid to such Bank or accrued on the
indebtedness incurred under or evidenced by such Bank's Loan Documents if
the Stated Rate had, at all times, been in effect and all Additional
Interest had been paid in full, then the Borrower shall, to the extent
permitted by Applicable Usury Laws, pay to the Agent for the account of
such Bank an amount equal to the difference between (a) the lesser of (i)
the amount of interest payable to such Bank which would have accrued if the
Highest Lawful Rate for such Bank had at all times been in effect or (ii)
the amount of interest which would have accrued on the indebtedness
incurred under or evidenced by such Bank's Loan Documents if the Stated
Rate had at all times been in effect and all Additional Interest had been
paid in full and (b) the amount of interest actually paid to such Bank or
payable to such Bank and accrued under or evidenced by such Bank's Loan
Documents.
SECTION 2.15. EXTENSION OF TERMINATION DATE.
(a) The Termination Date of each Bank may be extended, in the manner set forth
in this Section 2.15, on June 30, 1994 and on the day following such date
(an "Extension Date") for a period of 364 days after the date on which such
Termination Date would otherwise have occurred. If the Borrower wishes to
request an extension of the Termination Date of the Banks on any Extension
Date it shall give notice to that effect to the Agent not less than forty-
five (45) nor more than sixty (60) days prior to such Extension Date,
whereupon the Agent shall promptly notify each of the Banks of such
request.
(b) Each Bank which desires to extend its Termination Date as requested by the
Borrower may, at its option, so elect by notice to the Borrower and the
Agent
22
within fifteen (15) days after receipt of such notice. Such notice shall
be irrevocable. Any Bank which does not give such notice to the Borrower
and the Agent shall be deemed to have elected not to extend its Termination
Date as requested, and such Bank's Commitment shall terminate in accordance
with Section 2.10 on its then Termination Date.
(c) The Borrower shall have the right, with the assistance of the Agent, to
seek a mutually satisfactory substitute bank or banks (which may be one or
more of the Banks) to purchase the Note at par and assume the Commitment of
any Bank electing not to extend its Termination Date, all in accordance
with Section 9.07(c).
SECTION 2.16. WITHHOLDING TAX EXEMPTION.
At least five (5) Domestic Business Days prior to the first date on which
interest or fees are payable hereunder for the account of any Bank, each Bank
that is not incorporated under the laws of the United States of America or a
state thereof agrees that it will deliver to each of the Borrower and the Agent
two duly completed copies of United States Internal Revenue Service Form 1001 or
4224, certifying in either case that such Bank is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of any
United States federal income taxes. Each Bank which so delivers a Form 1001 or
4224 further undertakes to deliver to each of the Borrower and the Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Agent, in each case certifying that such Bank
is entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States federal income taxes, unless an
event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank advises the Borrower and the Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax. If any Bank notifies the Borrower that it is not capable of receiving
payments without any deduction or withholding of United States federal income
tax, the Borrower shall commence making any deductions and withholding any
amounts with respect to payments for the account of such Bank that are required
by applicable law.
23
ARTICLE III
CONDITIONS
SECTION 3.01. EFFECTIVENESS.
This Agreement shall become effective on the date that each of the following
conditions shall have been satisfied (or waived in accordance with Section
9.05):
(i) receipt by the Agent of certified copies of the Certificate of
Organization and Regulations of the Borrower and the resolutions of
the Owners Committee of the Borrower authorizing the transactions
contemplated hereby and such other documents as the Agent or the
Required Banks may reasonably request relating to the existence of
the Borrower, the corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant hereto, all
in form and substance satisfactory to the Agent;
(ii) receipt by the Agent of a Certificate of Incumbency dated the
Effective Date executed by the Secretary or an Assistant Secretary of
the Borrower in substantially the form of Exhibit E hereto setting
forth the name, title and specimen signature of each Authorized
Officer or Authorized Representative of the Borrower (l) who has
signed this Agreement on behalf of the Borrower, (2) who will sign
the Notes on behalf of the Borrower or (3) who will, until replaced
by another officer or representative duly authorized for that
purpose, act as the representative of the Borrower for the purposes
of signing documents and giving notices and other communications by
the Borrower in connection with this Agreement and the transactions
contemplated hereby;
(iii) receipt by the Agent of counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in
form satisfactory to it of telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by
such party);
(iv) receipt by the Agent of an opinion of the General Counsel of the
Borrower in substantially the form of Exhibit F hereto and covering
such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(v) receipt by the Agent of a certificate signed by the Chief Executive
Officer or Controller of the Borrower dated the Effective Date to the
effect set forth in clauses (iii) and (iv) of Section 3.02; and
24
(vi) receipt by the Agent for the account of each Bank of a duly executed
Note dated on or before the Effective Date, complying with the
provisions of Section 2.05.
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later
than July 1 , 1993. The Agent shall promptly notify the Borrower and the
Banks of the Effective Date, and such notice shall be conclusive and binding on
all parties hereto.
SECTION 3.02. BORROWINGS.
The obligation of any Bank to make a Loan, including, without limitation, a
Letter of Credit, on the occasion of any Borrowing hereunder is subject to the
satisfaction of the following conditions:
(i) receipt by the Agent of a Notice of Borrowing as required by Section
2.02;
(ii) the fact that, immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the
aggregate amount of the Commitments. For purposes of calculating the
available amount of a Loan as at any date, all Loans requested but
not yet advanced and the aggregate face amount of all Letters of
Credit requested but not yet issued will be treated as advanced
unless the Borrower has directed that the requested advance be
disbursed to repay the Loans;
(iii) the fact that, immediately after such Borrowing, no Default shall
have occurred and be continuing;
(iv) the fact that the representations and warranties of the Borrower
contained in this Agreement shall be true on and as of the date of
such Borrowing as if made on and as of such date (except in the case
of a Refunding Borrowing, the representations and warranties set
forth in clauses (c) and (d) of Section 4.01 as to any material-
adverse change or litigation which has theretofore been disclosed in
writing by the Borrower to the Banks);
Each Borrowing hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Borrowing as to the facts specified in
clauses (ii), (iii) and (iv) of this Section.
25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
The Borrower represents and warrants to the Banks as follows:
(a) (1) The Borrower is
(i) a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Texas and
(ii) The Borrower is registered, qualified or licensed (or has applied
for such registration, qualification or licensing) to do business
and in good standing in each of the jurisdictions within the
United States where ownership of its properties or the conduct of
its business requires such registration, qualification or
licensing and which currently permit registration, qualification
or licensing of limited liability companies and has or will apply
for registration, qualification or licensing to do business in
each other jurisdiction within the United States where the
ownership of its properties or the conduct of its business
requires such registration, qualification or licensing as soon as
such jurisdiction permits registration, qualification of or
licensing for limited liability companies, except in all cases
where the failure to be so registered, qualified or licensed
would not have a material adverse effect on the business,
operations, affairs, assets, condition (financial or otherwise)
or results of operation of the Borrower considered as a whole.
(2) The Borrower has all power and authority, governmental permits,
licenses, consents, authorizations, orders and approvals and other
authorizations as are necessary to carry on its business substantially
as presently conducted except for such governmental permits, licenses,
consents, authorizations, orders and approvals and other
authorizations as are held by Lyondell or any of Lyondell's
subsidiaries or predecessors in interest, are non-transferable in
accordance with their respective terms or require the consent of third
parties (including governmental entities) to their transfer and as to
which the Borrower and Lyondell believe that such third-party consents
can be obtained or substitute permits, licenses, consents,
authorizations, orders and approvals may be obtained by the Borrower
in due course and without materially affecting the ability of the
Borrower to carry on its business substantially as presently
conducted in
26
the meantime. The Borrower is diligently seeking to obtain such
third-party consents and such substitute permits, licenses, consents,
authorizations, orders and approvals.
(3) The execution, delivery and performance by the Borrower of this
Agreement and of the Notes, and Borrowings hereunder, are within its
power and authority and have been duly authorized by all necessary
proceedings.
(4) Neither such authorization nor the execution, delivery and performance
by the Borrower of this Agreement or of the Notes, nor any Borrowing
hereunder when made, will conflict with, result in a breach of or
constitute a default under any of the terms, conditions or provisions
of any law or any regulation, order, writ, injunction or decree of any
court or governmental authority or of the Certificate of Organization
or Regulations of the Borrower or result in the violation or
contravention of, or the acceleration of any obligation under, or
cause the creation of any Lien on any of the assets of the Borrower
pursuant to the provisions of, any indenture, agreement or other
instrument to which it is a party or by which it is bound.
(5) Assuming its due execution by the Banks and the Agent, this Agreement
constitutes a legal, valid and binding agreement of the Borrower and
the Notes, when duly executed on behalf of the Borrower and delivered
in accordance with this Agreement, will constitute legal, valid and
binding obligations of the Borrower.
(b) The pro forma balance sheet of the Borrower as of March 31, 1993 a copy of
which has been delivered to each of the Banks, fairly present, in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in paragraph (b) of
this Section, the financial position of the Borrower as of such date
(subject to normal year-end adjustments and not including footnotes or
schedules required by generally accepted accounting principles).
(c) Except as disclosed in writing to the Banks, there has been no material
adverse change since March 31, 1993 in the business, operations, assets or
condition (financial or otherwise) of the Borrower, considered as a whole.
(d) Except as disclosed in writing to the Banks, there is no action, suit or
proceeding pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower in any court or before or by any
arbitrator, governmental department, agency or instrumentality, an adverse
decision in which might materially and adversely affect the business,
operations, affairs,
27
assets, condition (financial or otherwise) or results of operations of the
Borrower considered as a whole or the ability of the Borrower to perform
its obligations hereunder and under the Notes or which in any manner draws
into question the validity of this Agreement or the Notes.
(e) No Default has occurred and is continuing.
(f) No consent, authorization, order or approval of (or filing or registration
with) any governmental commission, board or other regulatory authority
(other than routine reporting requirements) is required for the execution,
delivery and performance by the Borrower of this Agreement or of the Notes.
(g) Each member of the Controlled Group has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan
and is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA.
(h) Each of the Contribution Agreement and the Company Regulations is in full
force and effect in accordance with its respective terms as originally
executed except for any amendments, modifications or waivers which do not
affect the Borrower in any material fashion, including without limitation
(1) any amendments, modifications or waivers which do not, in the
aggregate, materially reduce the rights of the Borrower thereunder against
Lyondell or CITGO or materially increase the obligations of the Borrower
thereunder to Lyondell or CITGO and (2) any other amendments, modifications
or waivers to which the Required Banks have consented in writing. True and
complete copies of all amendments, modifications and waivers referred to
above have been delivered to the Agent for each of the Banks.
(i) The Borrower is not an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public-utility company"
or a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935 or a "public utility" under the laws of the State of
Texas.
(j) The Borrower has good and indefeasible fee simple title to or valid and
enforceable leasehold interests in all of its real property, and good title
to all of its other property and assets (which property, real or otherwise,
is material to the businesses, operations, properties, assets or condition,
financial or otherwise, of the Borrower, considered as a whole), and none
of such property or assets is subject to any Lien, except as permitted by
Section 5.03. Except as permitted in Section 5.03, there is not on file in
any public office, and the Borrower has not signed any financing statement
naming it as debtor. The
28
Borrower has not subordinated any of its rights under any obligation owing
to it the rights of any other Person. The Borrower has no subsidiary.
(k) All information heretofore furnished by or on behalf of the Borrower to the
Agent or any Bank for purposes of or in connection with this Agreement or
any transaction contemplated hereby is, and all such information hereafter
furnished by the Borrower to the Agent or any Bank will be, true, accurate
and complete in every material respect or based on reasonable estimates on
the date as of which such information is stated or certified.
(l) Except as set forth in Lyondell's Annual Report on Form 10-K for the year
ended 1992 and any subsequent documents filed by Lyondell pursuant to the
Securities Exchange Act of 1934, there does not exist any violation by the
Borrower of any law, rule, regulation or order of any government or
government agency relating to the Environmental Matters which will or
threatens to impose a liability on the Borrower or which will require an
expenditure by the Borrower to cure such violation, which liability or
expenditure would be material to the Borrower.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder or
any amount payable under any Note remains unpaid:
SECTION 5.01. CERTAIN INFORMATION TO BE FURNISHED BY THE BORROWER. The Borrower
will deliver to each Bank:
(a) as soon as available and in any event within one hundred twenty (120) days
after the end of each of its fiscal years, the balance sheet of the
Borrower as of the end of such fiscal year and the related statements of
income, stockholder's equity and cash flows for such year, setting forth in
each case in comparative form the figures for the previous fiscal year,
prepared in accordance with generally accepted accounting principles
consistently applied and so certified by a nationally recognized firm of
independent certified public accountants;
(b) as soon as available and in any event within sixty (60) days after the end
of each of the first three quarters of each of its fiscal years, the
balance sheet of the Borrower as of the end of such fiscal quarter, the
related statement of income for such fiscal quarter and for the portion of
the fiscal year ended with such quarter and the related statement of cash
flows for the portion of the
29
fiscal year ended with such quarter, setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of the Borrower's previous fiscal year, all
certified (subject to normal year-end adjustments and not including
footnotes or schedules required by generally accepted accounting
principles) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of the financial statements referred to in
clause (a) and (b) above, a certificate of the Borrower signed by an
Authorized Officer of the Borrower stating whether there exists on the date
of such certificate any Default, and, if any such Default then exists,
specifying the nature and period of existence thereof and the action the
Borrower is taking and proposes to take with respect thereto;
(d) forthwith, if at any time any officer of the Borrower shall obtain
knowledge of any Default, a certificate of an Authorized Officer specifying
the nature and period of existence thereof and the action the Borrower is
taking and proposes to take with respect thereto;
(e) if and when any member of the Controlled Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) with respect to any Plan which might constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any
such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or
partial withdrawal liability under Title IV of ERISA, a copy of such
notice; or (iii) receives notice from the PBGC under Title IV of ERISA of
an intent to terminate or appoint a trustee to administer any Plan, a copy
of such notice;
(f) in the event of any damage, loss or casualty to or destruction of any
portion of any facility of the Borrower, the Borrower shall give prompt
notice thereof to the Banks, specifying the nature and extent of such
damage, loss, casualty or destruction and whether such damage, loss,
casualty or destruction, in the reasonable judgment of the Borrower,
materially adversely affects the production capacity of such facility or
the economic value of such facility; provided that the Borrower shall have
no obligation to deliver such notice if the damage to the facility in the
good faith judgment of the Borrower will not cost in excess of $25,000,000
to rebuild, replace or restore or if such damage does not materially
adversely affect such production capacity or the economic value of the
facility;
30
(g) in the event of any total or partial shutdown of any production or storage
facility of the Borrower or any Subsidiary in connection with any
Environmental Matter, the Borrower shall give prompt notice thereof to the
Banks, specifying the reason for such shutdown; provided that the Borrower
shall have no obligation to deliver such notice if in the good faith
judgment of the Borrower such shutdown will not result in a reduction of
consolidated net income of $25,000,000 or more over the remaining period of
this Agreement; and
(h) from time to time such further information regarding compliance with this
Agreement or the business, operations, assets, condition (financial or
otherwise), material change or results of operations of the Borrower as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. MAINTENANCE OF PROPERTY; INSURANCE.
(a) The Borrower will keep all property useful and necessary in its business in
good working order and condition, ordinary wear and tear excepted.
(b) The Borrower will maintain insurance to the extent available to the
Borrower on commercially reasonable terms and will furnish to the Banks,
upon request from the Agent, information presented in reasonable detail as
to the insurance so carried.
SECTION 5.03. LIMITATION ON LIENS.
Nothing in this Agreement shall in any way restrict or prevent the Borrower from
incurring any Debt; provided that neither the Borrower will issue, assume or
guarantee any Debt secured by any Lien or grant any Lien to secure any such Debt
without effectively providing that all of the Notes (together with, if the
Borrower so determines, any other Debt then existing and any other Debt
thereafter created ranking equally with the Notes) shall be secured equally and
ratably with (or prior to) such Debt so long as such Debt shall be so secured.
To the extent the following Liens would otherwise be prohibited by the foregoing
provisions, the foregoing provisions shall not apply to:
(a) Liens on any property of a corporation existing at the time it becomes a
Subsidiary or at the time it is merged into or consolidated with the
Borrower or a Subsidiary and not created in contemplation of such event;
(b) Liens on any property (i) existing at the time of acquisition thereof and
not created in contemplation of such event or (ii) incurred to secure
payment of all or part of the purchase price thereof or (iii) incurred to
secure Debt incurred
31
prior to, at the time of or within ninety (90) days after acquisition
thereof for the purpose of financing all or part of the purchase price
thereof;
(c) Liens on property of the Borrower existing on the date hereof and listed on
Schedule I hereto;
(d) Liens (i) on any improvement in connection with such improvement to be made
on the properties of the Borrower, or (ii) on the real properties of the
Borrower in connection with construction to be done on such real properties
(but only on the real properties upon which such construction occurs), and
in connection with the acquisition of real property by the Borrower (but
only on the real property so acquired), after the date hereof, securing
Debt incurred or assumed either
(i) at the time of or within twenty-four (24) months after commencement of
improvement or construction or
(ii) within ninety (90) days after completion of improvement or
construction of such plant in a principal amount not exceeding the
cost of such improvement or construction and the cost of acquisition
of such plant and such real estate;
(e) Liens which secure only Debt owing by a Subsidiary to the Borrower or
another Subsidiary;
(f) Liens in favor of the United States of America or any state thereof or any
department, agency, instrumentality or political subdivision of any such
jurisdiction to secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any Debt incurred for the
purpose of financing all or any part of the purchase price or cost of
constructing or improving the property subject to such Lien, including,
without limitation, Liens to secure Debt of the pollution control or
industrial revenue bond type;
(g) Liens required by any contract or statute in order to permit the Borrower
or a Subsidiary to perform any contract or subcontract made by it with or
at the request of the United States of America, any state or any
department, agency or instrumentality or political subdivision of either;
or
(h) any extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of any Lien referred to in the
foregoing clauses (a) to (g) inclusive or of any Debt secured thereby,
provided that the principal amount of Debt secured thereby shall not exceed
the principal amount of Debt so secured at the time of such extension,
renewal or replacement, and that such extension, renewal or replacement
Lien shall be limited to all or part
32
of substantially the same property which secured the Lien extended, renewed
or replaced (plus improvements on such property); provided that the
Borrower may issue, assume or guarantee Debt secured by Liens which would
otherwise be subject to the foregoing restrictions or grant any such Lien
to secure any such Debt in an aggregate principal amount which, together
with the aggregate outstanding principal amount of all Debt of the Borrower
which would otherwise be subject to the foregoing restrictions (not
including Debt permitted to be secured under clauses (a) to (h) inclusive
above) does not at any one time exceed the greater of $50,000,000 or ten
percent (10%) of net tangible assets of the Borrower.
SECTION 5.04. CONSOLIDATION, MERGER.
(a) Nothing contained in this Agreement shall prevent any consolidation or
merger of the Borrower with or into any other limited liability company or
other organization (whether or not affiliated with the Borrower), or
successive consolidations or mergers in which the Borrower or its successor
or successors shall be a party or parties, or shall prevent any sale or
conveyance of all or substantially all the property of the Borrower, to any
other Person (whether or not affiliated with the Borrower) authorized to
acquire and operate the same; provided, however, that upon any such
consolidation, merger, sale or conveyance, other than a consolidation or
merger in which the Borrower is the continuing organization, the due and
punctual payment of the principal of and interest on all of the Notes,
according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Agreement, shall
be expressly assumed by instrument satisfactory to the Required Banks and
executed and delivered to the Agent by the organization (if other than the
Borrower) (i) formed by such consolidation or into which the Borrower shall
have been merged or by the Person which shall have acquired such property
and (ii) satisfactory to the Required Banks; and provided further that no
Default shall exist hereunder after giving effect to such consolidation,
merger or sale of assets.
(b) If, upon any consolidation or merger of the Borrower with or into any other
organization, or upon the sale or conveyance of all or substantially all
the property of the Borrower to any other Person, any of the property of
the Borrower would thereupon become subject to any Lien, the Borrower,
prior to or simultaneously with such consolidation, merger, sale or
conveyance, will secure the Notes and all other obligations of the Borrower
under this Agreement equally and ratably with any other obligations of the
Borrower then entitled thereto, by a direct Lien on all such property prior
to all Liens other than any theretofore existing thereon.
33
SECTION 5.05. USE OF PROCEEDS.
The proceeds of the Loans made under this Agreement will be used by the Borrower
for general corporate purposes. None of such proceeds will be used in violation
of Regulation U, Regulation X, Regulation G or of any similar laws or
regulations.
SECTION 5.06. COMPLIANCE WITH LAWS.
The Borrower will comply in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements to governmental authorities
(including, without limitation, ERISA and the rules and regulations thereunder,
and relating to the Environmental Matters) except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.07. NO MATERIAL CHANGE.
The Borrower shall not amend, supplement, waive or modify the Crude Supply
Agreement in any way which would result in a material change of terms set forth
in the Crude Supply Agreement as in effect as of the date hereof, without
written consent of the Required Banks.
ARTICLE VI
DEFAULTS
SECTION 6.01. DEFAULTS.
If one or more of the following events (herein called "Events of Default") shall
occur and be continuing:
(a) the Borrower shall default in the payment when due of any principal of any
Loan or shall default in the payment within five (5) days of the due date
thereof of any interest on any Loan or any other amount payable hereunder;
(b) the Borrower shall fail to perform or observe any covenant or agreement to
be performed by it contained in Sections 5.03 and 5.04;
(c) the Borrower shall fail to perform or observe any covenant or agreement to
be performed by it contained in this Agreement (other than those covered by
34
clause (a) or (b) above) for thirty (30) days after written notice of such
failure is given to the Borrower by the Agent at the request of any Bank;
(d) the Borrower shall have made, or be deemed to have made pursuant to Section
3.02, any representation or warranty in this Agreement, or in any
certificate, financial statement or other document delivered pursuant
hereto, which shall prove to have been incorrect in any material respect
when so made or deemed to have been made;
(e) an amendment or modification to the Company Regulations shall have been
adopted that affects the Borrower in any material fashion, including any
amendment or modification that materially changes the ownership of the
Borrower as in effect as of the date hereof, other than the changes in the
Owners' Participation Percentages (as defined in the Company Regulations)
as contemplated by the Company Regulations. reduces the rights of the
Borrower thereunder against Lyondell or CITGO or materially increases the
obligations of the Borrower thereunder to Lyondell or CITGO and such
amendment or modification shall not have been consented to in writing by
the Required Banks;
(f) the Borrower or any Subsidiary shall fail to pay any indebtedness for
borrowed money (other than the Loans) payable or guaranteed by it, or any
interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such indebtedness or guarantee;
provided that the aggregate amount of such indebtedness or guarantee,
including any interest or premium thereon, shall exceed $20,000,000;
(g) the Borrower shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action to authorize
any of the foregoing, or shall admit in writing its inability to pay its
debts as they become due;
(h) an involuntary case or other proceeding shall be commenced against the
Borrower seeking liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian
35
or other similar official of it or any substantial part of its property,
and such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of sixty (60) days; or an order for relief shall be
entered against the Borrower under the federal bankruptcy laws as now or
hereafter in effect;
(i) any member of the Controlled Group shall fail to pay when due an amount or
amounts aggregating in excess of $25,000,000 which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice
of intent to terminate a Plan or Plans having aggregate Unfunded Vested
Liabilities in excess of $25,000,000 (collectively, a "Material Plan")
shall be filed under Title IV of ERISA by any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or the
PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any Material Plan or a
proceeding shall be instituted by a fiduciary of any Material Plan against
any member of the Controlled Group to enforce Section 515 of ERISA and such
proceeding shall not have been dismissed within thirty (30) days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated;
(j) a final, non-appealable judgment or order for the payment of money in
excess of $25,000,000 shall be rendered against the Borrower and such
judgment or order shall continue unsatisfied for a period of thirty (30)
days; or
(k) A default shall have occurred and shall be continuing under either the
Company Regulations or the Crude Supply Agreement
then, and in every such event, the Agent shall (i) if requested by Banks having
more than fifty percent (50%) in aggregate amount of the Commitments, by notice
to the Borrower terminate the Commitments, and they shall thereupon terminate,
and (ii) if requested by Banks holding Notes evidencing more than fifty percent
(50%) in aggregate principal amount of the Loans, by notice to the Borrower
declare the full unpaid principal of and accrued interest on the Loans and the
Notes and all other amounts payable hereunder to be immediately due and payable,
whereupon the Commitments shall terminate and the Loans and the Notes and such
other amounts shall be immediately due and payable, without further notice,
presentment, demand, protest or other formality of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the case of the
occurrence of an event referred to in clause (f) or (g) above, the Commitments
shall automatically terminate and the full unpaid principal of and accrued
interest on the Loans and the Notes and all other amounts payable hereunder
shall automatically become immediately due and payable, without notice,
presentment, demand, protest or other formality of any kind, all of which are
hereby expressly waived by the Borrower.
36
SECTION 6.02. NOTICE OF DEFAULT.
The Agent shall give notice to the Borrower under Section 6.01(c) promptly upon
being requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. APPOINTMENT AND AUTHORIZATION.
Each Bank irrevocably appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement and the
Notes as are delegated to the Agent by the terms hereof or thereof, together
with all such powers as are reasonably incidental thereto.
SECTION 7.02. AGENT AND AFFILIATES.
Continental Bank National Association shall have the same rights and powers
under this Agreement as any other Bank and may exercise or refrain from
exercising the same as though it were not the Agent, and Continental Bank N. A.
and its affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with the Borrower or any Subsidiary or any affiliate
thereof as if it were not the Agent hereunder.
SECTION 7.03. ACTION BY AGENT.
(a) The obligations of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action with respect to any Default, except as
expressly provided in Article VI.
SECTION 7.04. CONSULTATION WITH EXPERTS.
The Agent may consult with legal counsel (who may be counsel for the Borrower),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
37
SECTION 7.05. LIABILITY OF AGENT.
Neither the Agent nor any of its directors, officers, agents or employees shall
be liable to any Bank for any action taken or not taken by it in connection
herewith
(i) with the consent or at the request of the Required Banks or
(ii) in the absence of its own gross negligence or willful misconduct.
Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement or any Borrowing hereunder;
(ii) the performance or observance of any of the covenants or
agreements of any Borrower; (iii) the satisfaction of any condition
specified in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or
writing furnished in connection herewith. The Agent shall not incur
any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire,
telex or similar writing) reasonably believed by it to be genuine or
to be signed by the proper party or parties.
SECTION 7.06. INDEMNIFICATION.
Each Bank shall, ratably in accordance with its Commitment, indemnify the Agent
(to the extent not reimbursed by the Borrower) against any cost, expense
(including counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the Agent's gross negligence or willful
misconduct) that the Agent may suffer or incur in connection with this Agreement
or any action taken or omitted by the Agent hereunder.
SECTION 7.07. CREDIT DECISION.
Each Bank acknowledges that it has, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under this Agreement.
38
SECTION 7.08. SUCCESSOR AGENT.
The Agent may resign at any time by giving written notice thereof to the Banks
and the Borrower, with such resignation to be effective upon the acceptance by a
successor Agent of its appointment as agent hereunder, as set forth below. Upon
any such resignation, the Required Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within (thirty) 30
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a Bank or a commercial bank organized under the laws of the United
States of America or of any state thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of its appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. ILLEGALITY.
If, after the Effective Date, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Borrower whereupon until such Bank notifies
the Borrower and the Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Bank to make Euro-Dollar Loans shall be
suspended. Before giving any notice to the Agent pursuant to this Section, such
Bank shall designate a different Euro-Dollar Lending Office if such designation
will avoid the need for giving such notice and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank. If such Bank shall determine
that it may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
such affected
39
Euro-Dollar Loan, together with accrued interest thereon. Concurrently with
prepaying each such affected Euro-Dollar Loan, the Borrower shall borrow a
Reference Rate Loan (or, if the Borrower so elects by at least one Domestic
Business Day's notice to the Agent and such Bank the Borrower shall borrow a CD
Loan), from such Bank in a principal amount equal to the principal amount of
such affected Euro-Dollar Loan for an Interest Period coincident with the
remaining term of the Interest Period applicable to such affected Euro-Dollar
Loan of the Borrower, and such Bank shall make such a Reference Rate Loan.
SECTION 8.02. INCREASED COST AND REDUCED RETURN.
(a) If on or after the Effective Date, in the case of any Committed Loan or any
obligation to make Committed Loans the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Parent or
Applicable Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:
shall impose, modify or deem applicable any reserve, special deposit,
deposit insurance assessment or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding (A) with
respect to any CD Loan any such requirement included in an applicable
Domestic Reserve Percentage and (B) with respect to any Euro-Dollar
Loan any such requirement with respect to which such Bank is entitled
to compensation during the relevant Interest Period under Section
8.04) against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Applicable Lending Office);
and the result of any of the foregoing is to reduce the amount of any sum
received or receivable by such Bank (or its Applicable Lending Office)
under this Agreement or under its Notes with respect thereto, by an amount
deemed by such Bank to be material, then, within fifteen (15) days after
demand by such Bank (with a copy to the Agent), the Borrower shall pay to
such Bank (without duplication of amounts otherwise payable hereunder) such
additional amount or amounts as will compensate such Bank for such
increased cost or reduction with respect to such affected sum.
(b) If any Bank shall have reasonably determined that the adoption of any
applicable law, rule or regulation regarding capital adequacy or any change
therein, or any change in the interpretation or administration thereof by
any governmental
40
authority, central bank or comparable agency charged with the interpretation
or administration thereof, or compliance by any Bank (or its Parent or
Applicable Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or has had the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a consequence of
such Bank's obligations hereunder to a level below that which such Bank or
its Parent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy) by an amount deemed by such Bank to be material, then from time
to time, within fifteen (15) days after demand by such Bank (with a copy to
the Agent), the Borrower shall pay to such Bank (without duplication of
amounts otherwise payable hereunder) such additional amount or amounts as
will compensate such Bank or its Parent for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any event of
which it has knowledge, occurring after the Effective Date, which will
entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will
not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. A certificate of any Bank claiming compensation under this Section,
setting forth the additional amount or amounts to be paid to it hereunder
and setting forth in reasonable detail the basis for such compensation shall
be conclusive in the absence of manifest error, and the amount set forth
therein shall be payable by Borrower within five (5) days after receipt of
such certificate. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
(d) In the event a Bank shall incur any loss or expense (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to make, continue or maintain any portion
of the principal amount of any Loan as, or to convert any portion of the
principal amount of any Loan into, a CD Loan or Euro-Dollar Loan) as a
result of
(1) any conversion or repayment or prepayment of the principal amount of
any CD Loan or Euro-Dollar Loan on a date other than the scheduled
last day of the Interest Period applicable thereto;
(2) any Loans not being made as CD Loans or Euro-Dollar Loans in
accordance with any request therefor; or
(3) any Loans not being continued as, or converted into, CD Loans or Euro-
Dollar Loans in accordance with the notice therefor,
41
then, upon the written notice of such Bank to the Borrower, the Borrower
shall, within five days of its receipt thereof, pay to such Bank such amount
as will (in its reasonable determination) reimburse such Bank for such loss
or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be conclusive
and binding on the Borrower.
(e) If a Bank shall have determined that
(1) U.S. dollar certificates of deposit or U.S. dollar deposits, as the
case may be, in the relevant amount and for the relevant Interest
Period are not available to such Bank in its relevant market; or
(2) by reason of circumstances affecting such Bank's relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to CD Loans or Euro-Dollar Loans of such type,
then, upon notice from such Bank to the Borrower, such Bank's obligations
under this Agreement to make or continue any Loans as, or to convert any
Loans into, CD Loans or Euro-Dollar Loans of such type shall forthwith be
suspended until such Bank shall notify the Borrower that the circumstances
causing such suspension no longer exist.
SECTION 8.03. SUBSTITUTE LOANS.
If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to Section 8.01 or (ii) any Bank has demanded compensation under
Section 8.02(a) and the Borrower shall, by at least five (5) Euro-Dollar
Business Days' prior notice to such Bank through the Agent, have elected that
the provisions of this Section shall apply to such Bank, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as CD Loans or Euro-
Dollar Loans, as the case may be, shall be made instead as Reference Rate
Loans.
SECTION 8.04. REGULATION D COMPENSATION.
Each Bank may require the Borrower to pay, contemporaneously with each payment
of interest on Euro-Dollar Borrowings, additional interest on the related Euro-
Dollar Loan of such Bank at a rate per annum equal to the excess of (i) (A) the
applicable London Interbank Offered Rate divided by (B) one minus the Euro-
Dollar Reserve
42
Percentage over (ii) the rate specified in clause (i)(A). Any Bank electing to
require payment of such additional interest shall so notify the Borrower and the
Agent, at least five (5) Euro-Dollar Business Days prior to each date on which
interest is payable on the Euro-Dollar Loans of the amount then due it under
this Section.
SECTION 8.05. SUBSTITUTION OF BANK.
If (i) the obligation of any Bank to make Euro-Dollar Loans has been suspended
pursuant to 8.01 or (ii) any Bank has demanded compensation under Section 8.02
or 8.04, the Borrower shall have the right, with the assistance of the Agent, to
seek a mutually satisfactory substitute bank or banks (which may be one or more
of the Banks) to purchase the Notes for cash without recourse to such Bank and
assume the Commitment of such Bank. Any such purchase shall be at par, shall be
without prejudice to the Borrower's obligations under Section 9.04 and shall
release such Bank from all further obligations under this Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES.
(a) All notices and other communications provided for herein shall be in writing
(including bank wire, telecopy, or similar writing) and shall be given to
the intended recipient at the "Address for Notices" specified, if the
intended recipient is the Borrower or the Agent, below its name on the
signature pages hereof or, if the intended recipient is a Bank, in such
Bank's Administrative Questionnaire, or, as to any party, at such other
address as shall be designated by such party in a notice to the Borrower and
the Agent. All notices and other communications shall be effective
(i) if given by mail, 72 hours after such communication is deposited in
the mails with first class postage prepaid, addressed as aforesaid,
(ii) if given by telecopier, upon confirmation that the telecopied document
has been received by the individual to whom it was addressed, or
(iii) if given by any other means, when delivered at the address specified
in this Section; provided that notices to the Agent under Article II
or VIII hereof shall not be effective until received and notices to
the Borrower under Section 6.01 shall not be effective until such
notice is delivered.
43
(b) All notices given to the Borrower shall also be given to LYONDELL at the
address below and to CITGO at the address below:
to LYONDELL:
Lyondell Petrochemical Company
1221 McKinney, Suite 1600
One Houston Center
Houston, Texas 77010
Attention: Treasurer
to CITGO:
CITGO Petroleum Corporation
One Warren Place
6100 S. Yale
Tulsa, Oklahoma 74136
Attention: Treasurer
SECTION 9.02. NO WAIVER.
No failure on the part of the Agent or any Bank to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement or any Note shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, power or privilege under
this Agreement or any Note preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The remedies provided herein
are cumulative and not exclusive of any remedies provided by law.
SECTION 9.03. GOVERNING LAW.
THIS AGREEMENT, THE NOTES AND THE REQUESTS, INVITATIONS AND OFFERS PROVIDED FOR
HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF ILLINOIS.
SECTION 9.04. EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION.
(a) The Borrower shall pay, within thirty (30) days after receipt of a
reasonably detailed statement setting forth the amount and nature thereof,
(i) all out-of-pocket expenses of the Agent, including the reasonable fees
and disbursements of special counsel for the Agent, in connection with the
preparation of this
44
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder and (ii) if an Event of Default occur,
all out-of-pocket expenses incurred by the Agent or any Bank, including
reasonable fees and disbursements of counsel, in connection with such Event
of Default and collection and other enforcement proceedings resulting
therefrom. The Borrower shall indemnify each Bank against any transfer
taxes, documentary taxes, assessments or charges made by any governmental
authority by reason of the execution and delivery of this Agreement or the
Notes.
(b) The Borrower agrees to indemnify each Bank and the Agent and hold each Bank
and the Agent harmless from and against any and all liabilities (including
without limitation, environmental liabilities), losses, damages, costs and
expenses of any kind (including, without limitation, the reasonable fees and
disbursements of counsel for any Bank and the Agent in connection with any
investigative, administrative or judicial proceeding, whether or not such
Bank or the Agent shall be designated a party thereto) which may be incurred
by any Bank, or by the Agent in connection with its actions as Agent
hereunder, relating to or arising out of Article VI or VII of this Agreement
or any actual or proposed use of proceeds of Loans hereunder; provided that
neither any Bank nor the Agent shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined
by a court of competent jurisdiction.
SECTION 9.05. AMENDMENTS, ETC.
Any provision of this Agreement or the Notes may be amended or waived if, but
only if, such amendment or waiver is in writing and is signed by the Borrower
and the Required Banks (and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment, waiver or modification
shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank or subject any Bank to
any additional obligation (except for increases to the Commitment of
any Bank pursuant to Section 8.05 to which such Bank has agreed in
writing),
(ii) reduce the principal of or rate of interest on any Loan or any fees
hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on
any Loan or any fees hereunder or for any reduction or termination of
any Commitment,
45
(iv) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this
Section or any other provision of this Agreement or
(v) amend or waive any provision of Section 3.01 or Section 9.05.
SECTION 9.06. COUNTERPARTS; INTEGRATION.
This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement constitutes the entire agreement and understanding among the parties
hereto and supersedes any and all prior agreements and understandings, oral or
written, relating to the subject matter hereof.
SECTION 9.07. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its
rights under this Agreement without the prior written consent of all Banks,
except as set forth in Section 5.04(a).
(b) Any Bank may at any time grant to one or more banks or other institutions
(each a "Participant") participating interests in its Commitment or any or
all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating interest shall
provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement described in clause (i), (ii), (iii) or (iv) of
Section 9.05 without the consent of the Participant. The Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.11 and
9.04 and Article VIII with respect to its participating interest; provided
that all amounts payable to a Bank for the account of a Participant under
Sections 2.11
46
and 9.04 and Article VIII shall be determined as if such Bank had not
granted such participation to the Participant. An assignment or other
transfer which is not permitted by subsection (c) below shall be given
effect for purposes of this Agreement only to the extent of a participating
interest granted in accordance with this subsection (b).
(c) Any Bank may upon 5 days notice by the Agent and the Borrower at any time
assign to one or more banks or other institutions (each an "Assignee") all,
or a part of all(a minimum of $5,000,000, in multiples of $1,000,000) of its
rights and obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an instrument
substantially in the form of Exhibit B attached hereto, executed by such
Assignee and such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent, which consent shall not be
unreasonably withheld; provided that if an Assignee is an affiliate of such
transferor Bank, no such consent shall be required. Upon execution by the
transferor Bank, the Borrower, the Assignee and the Agent, and delivery of,
such an instrument and payment by such Assignee to such transferor Bank of
an amount equal to the purchase price agreed between such transferor Bank
and such Assignee, such Assignee shall be a Bank party to this Agreement and
shall have all the rights and obligations of a Bank with a Commitment as
set forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to the extent of such assignment,
and no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the
transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the Assignee.
Prior to the issuance of any such new Note, the Assignee to which such Note
is issued shall pay to the Agent a fee of $2,500.
(d) No Assignee or other transferee of any Bank's rights shall be entitled to
receive any greater payment under Section 8.02 than such Bank would have
been entitled to receive with respect to the rights transferred, unless such
transfer is made with the Borrower's prior written consent or by reason of
the provisions of Section 8.01 or 8.02 requiring such Bank to designate a
different Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exit.
SECTION 9.08. SURVIVAL.
The obligation of the Borrower under Article VIII and Section 9.04 shall survive
the repayment of the Loans and the termination of the Commitments.
47
SECTION 9.09. ACKNOWLEDGEMENT.
The Borrower acknowledges that the Banks have entered into this Agreement in
reliance on the Borrower's assurance that the Borrower does not intend to use
the proceeds of any Borrowings hereunder in a manner which would violate any
applicable law or governmental rule or regulation.
SECTION 9.10. HEADINGS.
The Table of Contents and Article and Section headings used herein shall not
affect the interpretation of any provision of this Agreement.
SECTION 9.11. SHARING OF SETOFFS.
Each Bank agrees that, if it shall, by exercising any right of setoff or
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of principal and interest due with respect to any Note held by it which
is greater than the proportion received by any other Bank in respect of the
aggregate amount of principal and interest due with respect to any Note held by
such other Bank (other than disproportionate payments to any Bank provided for
by this Agreement), the Bank receiving such proportionately greater payment
shall purchase such participation in the Notes held by the other Banks, and such
other adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes held by the Banks shall be
shared by the Banks pro rata; provided that nothing in this Section shall impair
the right of any Bank to exercise any right of setoff or counterclaim it may
have and to apply the amount recovered thereby to the payment of indebtedness of
the Borrower other than its indebtedness under the Notes. If under any
applicable bankruptcy, insolvency or other similar law, any Bank receives a
secured claim in lieu of a setoff to which this Section applies, such Bank
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Banks entitled under this
Section to share in the benefits of any recovery on such secured claim. The
Borrower agrees, to the fullest extent it may effectively do so under applicable
law, that any Bank which is a holder of a participation in a Note, whether or
not acquired pursuant to the foregoing arrangements, may exercise rights of
setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
48
SECTION 9.12. COLLATERAL.
Each of the Banks represents to the Agent and each of the other Banks that it in
good faith is not relying upon any "margin stock" (as defined in Regulation U)
as collateral in the extension or maintenance of the credit provided for in this
Agreement.
SECTION 9.13. CONSENT TO JURISDICTION.
(A) THE BORROWER IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR
ILLINOIS STATE COURT OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY NOTE. THE BORROWER IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. THE BORROWER AGREES THAT A FINAL, NONAPPEALABLE JUDGMENT IN ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT SHALL BE CONCLUSIVE AND
BINDING UPON THE BORROWER AND MAY BE ENFORCED IN ANY FEDERAL OR ILLINOIS
STATE COURT (OR ANY OTHER COURTS TO THE JURISDICTION OP WHICH THE BORROWER
IS OR MAY BE SUBJECT) BY A SUIT UPON SUCH JUDGMENT, PROVIDED THAT SERVICE OF
PROCESS IS EFFECTED UPON THE BORROWER IN ONE OP THE MANNERS SPECIFIED IN
SUBSECTION (B) OF THIS SECTION OR AS OTHERWISE PERMITTED BY LAW.
(B) IN LIGHT OF THE EXPRESS INTENT OF THE PARTIES TO SUBMIT TO THE JURISDICTION
OF ILLINOIS COURTS FOR THE RESOLUTION OF ANY AND ALL DISPUTES ARISING UNDER
THIS AGREEMENT, THE PARTIES FURTHER HEREBY WAIVE ANY AND ALL AFFIRMATIVE
DEFENSES THEY COULD OR MIGHT OTHERWISE BE ABLE TO ASSERT BASED ON AN ALLEGED
INCAPACITY OF THE BORROWER (SOLELY BASED ON CERTAIN STATUTORY PROVISIONS OF
ILLINOIS LAW) TO ASSERT A CLAIM OR COUNTER-CLAIM IN EITHER THE FEDERAL OR
STATE COURTS OF THE STATE OF ILLINOIS. THE AFFIRMATIVE DEFENSES AND MOTIONS
HEREBY WAIVED INCLUDE BUT ARE NOT LIMITED TO OBJECTIONS TO SUIT PURSUANT TO
THE ILLINOIS BUSINESS CORPORATION ACT SECTION 13.70, AS AMENDED, AND ANY
SIMILAR ILLINOIS PARTNERSHIP LAW STATUTE. THE PARTIES WAIVE ALL AFFIRMATIVE
DEFENSES AND DEFENSIVE MOTIONS PREDICATED ON,, THE FOREGOING STATUTORY
PROVISIONS WITH FULL KNOWLEDGE OF THEIR RIGHTS, IF ANY, UNDER THOSE
PROVISIONS. IT IS THE EXPRESS AND KNOWING INTENTION OF THE PARTIES TO WAIVE
THE RIGHT TO ASSERT AS
49
AN AFFIRMATIVE DEFENSE THE LEGAL INCAPACITY OF THE BORROWER TO MAINTAIN A
CLAIM OR COUNTER-CLAIM ON THE GROUNDS THAT IT FAILED TO COMPLY WITH ANY OR
ALL REGISTRATION, CERTIFICATION, NOTIFICATION, FILING OR DESIGNATION-OF-
AGENT REQUIREMENTS SET FORTH AND ENFORCED BY THE FOREGOING OR ANY SIMILAR
STATUTORY PROVISIONS.
(C) SERVICE OF PROCESS. THE BORROWER HEREBY CONSENTS TO PROCESS BEING SERVED
IN ANY SUIT, ACTION OR PROCEEDING REFERRED TO IN THE FIRST SENTENCE OF
SUBSECTION (A) OF THIS SECTION IN ANY FEDERAL OR ILLINOIS STATE COURT BY
MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED AIR MAIL, POSTAGE PREPAID,
RETURN RECEIPT REQUESTED, TO THE BORROWER AT ITS ADDRESS SPECIFIED IN
SECTION 9.01 OR TO ANY OTHER ADDRESS OF WHICH THE BORROWER SHALL HAVE GIVEN
WRITTEN NOTICE TO THE AGENT. THE BORROWER IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW, ALL CLAIM OF ERROR BY REASON OF ANY SUCH SERVICE IN
ANY SUIT, ACTION OR PROCEEDING BROUGHT BY THE AGENT OR ANY BANK. THE
BORROWER AGREES THAT SUCH SERVICE SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON THE BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING
AND SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, BE TAKEN AND HELD TO BE
VALID AND PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE BORROWER.
(D) NO LIMITATION ON SERVICE OR SUIT. NOTHING IN THIS ARTICLE SHALL AFFECT THE
RIGHT OF THE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR LIMIT THE RIGHT OF THE AGENT OR ANY BANK TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF THE JURISDICTION OF THE
BANK'S LENDING OFFICE OR THE COURTS OP ANY JURISDICTION OR JURISDICTIONS IN
WHICH THE BORROWER HAS ANY ASSETS.
SECTION 9.14. WAIVER OF JURY TRIAL
THE AGENT, THE BANKS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE
BANKS OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A
50
PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE
BANKS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
LYONDELL-CITGO REFINING COMPANY LTD.
By: /s/ William E. Haynes
-----------------------------------------
Title: President and Chief Executive Officer
Address for Notices:
One Houston Center
Suite 1600
1221 McKinney Street
P. O. Box 3646
Houston TX 77253-3646
Attn: Controller
Telephone No.: 713-475-4111
Telecopier No.: 713-951-1505
CONTINENTAL BANK N.A.
As Agent
By: /s/ Ronald E. McKaig
-----------------------------------------
Title: Vice President
Address for Notices:
231 South La Salle Street
Chicago, Illinois 60697
Attn: Robert Ingersoll
Telephone No.: 312-828-6720
Telecopier No.: 312-987-5614
51