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Exhibit 10.35
LYONDELL PETROCHEMICAL COMPANY
$400,000,000
CREDIT AGREEMENT
DATED AS OF DECEMBER 6, 1993
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
AND
CONTINENTAL BANK N.A.
AS CO-AGENT
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TABLE OF CONTENTS*
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ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions............................ 1
1.02 Accounting Terms and Determinations.... 14
1.03 Types of Loans and Borrowings.......... 14
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend.................... 14
2.02 Notice of Borrowings................... 15
2.03 Letters of Credit...................... 15
2.04 Notice to Banks; Funding of Loans...... 21
2.05 Notes.................................. 22
2.06 Maturity of Loans...................... 22
2.07 Interest Rates......................... 22
2.08 Conversions and Continuances........... 25
2.09 Pro Rata Borrowings.................... 25
2.10 Optional Termination or Reduction of
Commitments............................ 26
2.11 Mandatory Termination of Commitments... 26
2.12 Optional Prepayments................... 26
2.13 General Provisions as to Payments...... 27
2.14 Funding Losses......................... 27
2.15 Fees................................... 28
2.16 Computation of Interest and Fees....... 28
2.17 Maximum Interest Rate.................. 29
2.18 Withholding Tax Exemption.............. 31
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* The Table of Contents is not a part of this Agreement.
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ARTICLE III
CONDITIONS
SECTION 3.01 Effectiveness.......................... 32
3.02 Credit Events.......................... 34
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Representations and Warranties of
the Borrower........................... 35
ARTICLE V
COVENANTS
SECTION 5.01 Certain Information to be Furnished
by the Borrower........................ 39
5.02 Maintenance of Property; Insurance..... 42
5.03 Limitation on Liens.................... 42
5.04 Consolidation, Merger, Disposition of
Assets................................. 44
5.05 Use of Proceeds........................ 45
5.06 Payment of Taxes....................... 45
5.07 LCR Matters............................ 46
5.08 Financial and Other Covenants.......... 47
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01 Defaults............................... 49
6.02 Other Remedies......................... 52
6.03 Rights of Setoff....................... 52
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ARTICLE VII
THE AGENTS
SECTION 7.01 Appointment and Authorization.......... 52
7.02 Agents and Affiliates.................. 53
7.03 Action by Agents....................... 53
7.04 Consultation with Experts.............. 53
7.05 Liability of Agents.................... 53
7.06 Indemnification........................ 53
7.07 Credit Decision........................ 54
7.08 Successor Agents....................... 54
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest Rate
Inadequate or Unfair................... 55
8.02 Illegality............................. 55
8.03 Increased Cost and Reduced Return...... 56
8.04 Substitute Loans....................... 58
8.05 Regulation D Compensation.............. 58
8.06 Substitution of Bank................... 59
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices................................ 59
9.02 No Waiver.............................. 60
9.03 Governing Law.......................... 60
9.04 Expenses; Documentary Taxes;
Indemnification........................ 60
9.05 Amendments, Etc........................ 61
9.06 Counterparts; Integration.............. 62
9.07 Successors and Assigns................. 62
9.08 Survival............................... 63
9.09 Acknowledgment......................... 63
9.10 Headings............................... 63
9.11 Sharing of Setoffs..................... 64
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9.12 Collateral............................. 64
9.13 Consent to Jurisdiction................ 64
SCHEDULE 2.07 -Rate Adjustments
SCHEDULE 2.15 -Commitment Fees
SCHEDULE 5.03(c)-Existing and Contemplated Liens
EXHIBIT 2.02 -Form of Notice of Borrowing
EXHIBIT 2.03(b) -Form of Letter of Credit Request
EXHIBIT 2.05 -Form of Note
EXHIBIT 2.08 -Form of Notice of Conversion
EXHIBIT 3.01(ii)-Form of Certificate of Incumbency
EXHIBIT 3.01(iv)-Form of Opinion of Counsel for the Borrower
EXHIBIT 3.01(v) -Form of Opinion of Special Counsel for the Agents
iv
CREDIT AGREEMENT dated as of December 6, 1993 among LYONDELL
PETROCHEMICAL COMPANY, the BANKS listed on the signature pages hereof and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, as Administrative Agent AND CONTINENTAL BANK
N.A., as Co-Agent (the Agreement").
The Borrower desires to borrow from time to time amounts not exceeding
in the aggregate $400,000,000 outstanding at any one time from the Banks for
general business 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
Administrative Agent and submitted to the Administrative Agent (with a copy to
the Borrower) duly completed by such Bank.
"Administrative Agent" means Texas Commerce Bank National Association in
its capacity as administrative and syndication agent for the Banks hereunder and
its successors in such capacity.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person.
"Agents" means the Administrative Agent and the Co-Agent in their capacity
as agents for the Banks hereunder, and their successors in such capacity.
"Agreement" has the meaning specified in the introduction to this
Agreement, including all amendments, extensions and modifications thereto.
1
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Domestic Loans, its Domestic Lending Office, (ii) in the case of its
Euro-Dollar Loans, its Euro-Dollar Lending Office, and, (iii) with respect to
the Issuing Bank, its Domestic 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. The Agents and the Banks shall be
conclusively entitled to rely on the latest such Certificate of Incumbency of
the Borrower delivered to the Administrative Agent.
"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) and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the lesser of (i)
the higher of (x) the Prime Rate for such day plus the Base Rate Margin or (y)
the Federal Funds Rate for such day plus 1/2 of 1 percent plus the Base Rate
Margin, or (ii) the Highest Lawful Rate.
"Base Rate Loan" means a Loan to be made by a Bank as a Base Rate Loan in
accordance with the applicable Notice of Borrowing or pursuant to Article VIII.
"Base Rate Margin" means the highest applicable basis points set forth in
Schedule 2.07(a) hereto.
"Borrower" means Lyondell Petrochemical Company, a Delaware corporation,
and its successors.
"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 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).
2
"CD Reference Banks" means Texas Commerce Bank National Association and
Continental Bank N.A. and each such other bank as may be appointed pursuant to
Section 9.07(e).
"Certificate of Incumbency" shall mean a Certificate of Incumbency
described in clause (ii) of Section 3.01 and any successor or replacement
Certificate of Incumbency delivered hereunder.
"CITGO" means CITGO Petroleum Corporation, a Delaware corporation, and its
successors and assigns.
"CITGO Refining", means CITGO Refining Investment Company, an Oklahoma
corporation, and its successors (including, without limitation, any entity that
assumes Citgo Refining's obligations under the Company Regulations).
"Co-Agent" means Continental Bank N.A. in its capacity as co-agent for the
Banks hereunder and its successors in such capacity.
"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" or as set forth in
an instrument signed by all appropriate parties in accordance with Section
9.07(c) (as such amount may be reduced from time to time as provided in Section
2.10).
"Commitment Percentage" of any Bank means, at any time, the ratio which its
Commitment bears to the aggregate of all the Banks' Commitments or, if the
Commitments have been terminated, the ratio which the aggregate outstanding
principal amount of the Loans made by such Bank bears to the aggregate
outstanding principal amount of all Loans made by the Banks.
"Company Regulations" means the amended and restated limited liability
company regulations of LCR dated as of July 1, 1993.
"Consolidated Capital Expenditures" means, for any period, the gross
additions to fixed assets attributable to cash flows from investing activities
as reflected on the consolidated statement of cash flows of the Borrower and its
Consolidated Subsidiaries for such period.
"Consolidated Debt" means, as of the date of any determination thereof, a
consolidated computation of all Debt of the Borrower and its Consolidated
Subsidiaries.
3
"Consolidated Interest Expense" means, for any period, the Interest Expense
reflected on the consolidated statement of income of the Borrower and its
Consolidated Subsidiaries for such period.
"Consolidated Net Income or Loss" means, for any period, the net income
(loss) reflected on the consolidated statement of income of the Borrower and its
Consolidated Subsidiaries for such period.
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (excluding any liabilities that are by
their terms extendible or renewable at the option of the obligor thereon to a
time more than 12 months after the time as of which the amount thereof is being
computed), and (ii) all goodwill, trade names, trademarks, patents, purchased
technology, unamortized debt discount and other like intangible assets, all as
set forth on the most recent quarterly consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary or other entity
(including, without limitation, LCR) the accounts of which would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date.
"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.
"Credit Event" means the making of a Loan or the occasion of any Borrowing
hereunder or the issuance, renewal or extension of any Letter of Credit
hereunder.
"Debt" of any Person means without duplication, as of the date of any
determination thereof (i) the aggregate outstanding principal amounts of all
indebtedness for borrowed money of such Person, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments
(including letters of credit), (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.
4
"Dividend" means any cash dividend paid or declared by the board of
directors of the Borrower in respect of the Borrower's stock now or hereafter
outstanding.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in Houston, Texas are authorized by law to close.
"Domestic Lending Office" means, as to each Bank including the Issuing
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 Administrative Agent and the
Borrower as its Domestic Lending Office; provided, however, that any Bank may
from time to time by notice to the Borrower and the Administrative Agent
designate separate Domestic Lending Offices for its Base 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 Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section 2.07(b).
"Drawing" means any drawing under a Letter of Credit.
"EBITDA" means, for any period, the Borrower's Consolidated Net Income or
Loss for such period, minus interest income, plus Consolidated Interest Expense,
plus depreciation, amortization and provisions for taxes and plus or minus any
Non-Operating Special Items; provided, however, that for any fiscal quarter in
which the Borrower or any of its Consolidated Subsidiaries shall incur downtime
at or with respect to any plant or manufacturing or processing unit (as
determined by the Borrower in its sole discretion), the Borrower shall have the
right to add up to the lesser of (i) the estimated amount by which EBITDA is
impacted by such downtime or (ii) $20,000,000 to the amount of EBITDA calculated
for such fiscal quarter; provided further, that such addition of up to
$20,000,000 may only be made in the calculation of EBITDA for each of two fiscal
quarters during the term of this Agreement and that any such addition may only
be made for one fiscal quarter during any four consecutive fiscal quarters.
"Effective Date" means the date on which this Agreement becomes effective
in accordance with Section 3.01.
"Environmental Laws" means federal, state or local laws, rules or
regulations, including any administrative order, permit or approval pertaining
to health, safety or the environment in effect in the applicable jurisdiction at
the time in question, including
5
the Clean Air Act, as amended, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended ("CERCLA"), the Federal Water
Pollution Control Act, as amended, the Occupational Safety and Health Act, as
amended, the Resource Conservation and Recovery Act, as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Superfund Amendment and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, comparable state and local
laws, and other environmental conservation and protection laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"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 Administrative Agent and the Borrower as its Euro-
Dollar Lending Office.
"Euro-Dollar Loan" means a 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 Rate" has the meaning set forth in Section 2.07(c).
"Euro-Dollar Reference Banks" means Texas Commerce Bank National
Association and Continental Bank N.A. and each such other bank as may be
appointed pursuant to Section 9.07(e).
"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).
6
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/1OOth of 1 percent) 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 Dallas on the Domestic Business
Day next succeeding such day; provided, however, 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 Texas Commerce Bank National
Association on such day for such transactions as determined by the
Administrative Agent.
"Financial Letter of Credit" means a Letter of Credit on which the
beneficiary thereof can draw due to the failure of a party to perform a payment
obligation for the benefit of the beneficiary.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or any combination
of the foregoing.
"Guarantee", in respect of any Person, 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 binding
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, however, that
the term "Guarantee" shall not include to endorse for collection or deposit in
the ordinary course of business.
"Hazardous Materials" means any pollutant, contaminant, solid waste,
asbestos, petroleum product, crude oil or a fraction thereof, any toxic or
hazardous substance, material or waste, any flammable, explosive or radioactive
material or any other material or substance not mentioned above which is
regulated under any Environmental Law.
"Highest Lawful Rate" has the meaning set forth in Section 2.17.
7
"Interest Expense" means, for any period and for any Person, without
duplication, the total interest expense of such Person as reflected on an income
statement of such Person for such period.
"Interest Period" means: (1) with respect to each Euro-Dollar Borrowing,
the period commencing on the date of such Borrowing and ending one through seven
days (subject to market availability), or one, two, three or six months
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided, however, 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
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in
another 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 the Termination Date and would otherwise end after
the Termination Date shall end on the Termination Date;
(2) with respect to each CD Borrowing, the period commencing on the date
of such Borrowing and ending 30, 60, 90 or 180 days thereafter, as the Borrower
may elect in the applicable Notice of Borrowing; provided, however, 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 the Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date; and
(3) with respect to each Base Rate Borrowing, the period commencing on the
date of such Borrowing and ending 90 days thereafter; provided, however, that:
(a) any Interest Period (other than an Interest Period determined
pursuant to clause (b) below) which would otherwise end on a day which
8
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 the Termination Date and would otherwise end after the
Termination Date shall end on the Termination Date.
"Investment" means any capital contribution or loan made by the Borrower or
any of its Subsidiaries to LCR in accordance with the Company Regulations.
"Issuing Bank" means Texas Commerce Bank National Association, or such
other Bank as the Borrower may have requested and which has consented to serve
as Issuing Bank that issues a Letter of Credit.
"LCR" means LYONDELL-CITGO Refining Company Ltd., a Texas limited liability
company and its successors.
"LRC" means Lyondell Refining Company, a Delaware corporation and a wholly-
owned subsidiary of the Borrower, and its successors (including, without
limitation any entity that assumes LRC's obligations under the Company
Regulations).
"Letter of Credit" has the meaning set forth in Section 2.03(a).
"Letter of Credit Application" has the meaning set forth in Section
2.03(a).
"Letter of Credit Fee" has the meaning set forth in Section 2.03(n).
"Letter of Credit Limit" means $75,000,000.
"Letter of Credit Margin" means the highest applicable basis points set
forth in Schedule 2.07(b).
"Letter of Credit Outstandings" means, at any time, the sum of (a) the
aggregate Stated Amount of all outstanding Letters of Credit and (b) the amount
of all Unpaid Drawings in respect of all Letters of Credit.
"Letter of Credit Request" has the meaning set forth in Section 2.03(a).
"Letter of Credit Termination Date" means December 3, 1998 or the earlier
date of acceleration of the Obligations of the Borrower hereunder and under the
Notes pursuant to Section 6.01.
9
"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.
"Loan Documents" means this Agreement (including all exhibits), the Notes
and the Letter of Credit Applications.
"Material Adverse Effect" means relative to the occurrence of any event and
after taking into account existing or reasonably anticipated insurance coverage
and indemnification rights with respect to such occurrence, a material adverse
effect (i) on the business, operations, affairs, assets, condition (financial or
otherwise) or results of operations of the Borrower and its Consolidated
Subsidiaries, considered as a whole or (ii) on the ability of the Borrower to
perform its obligations hereunder and under the Notes.
"Net Interest" means the sum of (i) interest on Replacement Debt minus any
interest earned on the proceeds from Replacement Debt plus (ii) interest on
Replaced Debt.
"Non-Operating Special Item" means (i) any item resulting from a change in
one or more accounting principles, (ii) any extraordinary or non-recurring item
or (iii) any material operating item which is unusual in nature or infrequent in
occurrence; provided, however, that with respect to the designation of any item
(other than non-cash items) described in clause (iii), Borrower must obtain the
agreement of the Administrative Agent and the Co-Agent that such designation is
appropriate, which agreement shall not be unreasonably withheld.
"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit 2.05 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 Borrowing (as defined in Section
2.02).
"Notice of Conversion" has the meaning set forth in Section 2.08.
10
"Obligations" means all of the obligations of the Borrower now or hereafter
existing under the Loan Documents, whether for principal, Unpaid Drawings,
interest, fees, expenses, indemnification or otherwise.
"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.
"Performance Letter of Credit" means a Letter of Credit on which the
beneficiary thereof can draw due to the failure of a party to perform any
contractual duty or obligation, other than a payment obligation, for the benefit
of the beneficiary.
"Person" means an individual, a corporation, a limited liability company, 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 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 plan years made contributions.
"Prime Rate" means the prime rate of interest most recently determined by
Texas Commerce Bank National Association and thereafter entered in the minutes
of its Loan and Discount Committee, automatically fluctuating upward and
downward with and at the time specified in each such announcement without notice
to the Borrower or any other Person which prime rate may not necessarily
represent the lowest or best rate actually charged to a customer.
"Rating Agencies" shall mean Standard & Poor's Corporation and its
successors ("S&P"), and Moody's Investors Service, Inc. and its successors
("Moody's"), or, if S&P or Moody's or both shall not make a rating on the
Borrower's long-term senior unsecured Debt publicly available, a nationally
recognized securities rating agency or agencies that provide comparable ratings,
selected by the Borrower with the consent of the Administrative Agent, which
consent shall not be unreasonably withheld, which shall be substituted for S&P
or Moody's or both, as the case may be.
11
"Reference Banks" means the CD Reference Banks or the Euro-Dollar Reference
Banks, as the context may require, and "Reference Bank" means any one of such
Reference Banks.
"Refunding Borrowing" means a Borrowing which, after application of the
proceeds thereof, results in no net increase in the outstanding principal amount
of 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).
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles).
"Required Banks" means at any date Banks having at least 66 2/3 percent of
the aggregate amount of the Commitments or, if the Commitments have been
terminated, holding (i) Notes evidencing at least 66 2/3 percent of the
aggregate unpaid principal amount of the Loans and (ii) participations in at
least 66 2/3 percent of the Letter of Credit Outstandings.
"Requirements of Environmental Laws" means, as to any Person, the
requirements of any Environmental Laws applicable to such Person or the
condition or operation of such Person's business or its properties, both real
and personal.
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"Restricted Property" means:
(a) any plant (including fixtures and equipment) for the refining of
petroleum or the production of petrochemicals owned by the Borrower, or a
Subsidiary, except (i) related facilities which in the opinion of the Board
of Directors of the Borrower are transportation or marketing facilities and
(ii) any plant for the refining of petroleum or the production of
petrochemicals which in the reasonable opinion of the Board of Directors of
the Borrower is not a principal plant of the Borrower and its Subsidiaries;
(b) any inventory of the Borrower or a Subsidiary;
(c) any trade accounts receivable of the Borrower or a Subsidiary;
and
(d) any shares of capital stock or indebtedness of a Restricted
Subsidiary owned by the Borrower or a Subsidiary (excluding any of such
shares that constitute "margin stock" as defined in Regulation U).
"Restricted Subsidiary" shall mean any Subsidiary of the Borrower which
owns any Restricted Property.
"Stated Amount" means, with respect to each Letter of Credit, at any time,
the maximum amount then available to be drawn thereunder.
"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. Without in any other way limiting the foregoing, LCR
shall not be deemed to be a Subsidiary.
"Termination Date" means December 6, 1998, or such earlier date of
acceleration if the Obligations of the Borrower hereunder and under the Notes
are accelerated pursuant to Section 6.01 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 shall be the next preceding Euro-Dollar Business Day.
"34 Act Report" has the meaning set forth in Section 4.01(d).
13
"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.
"Unpaid Drawing" has the meaning specified in Section 2.03(g).
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 consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Administrative Agent.
SECTION 1.03. Types of Loans and 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. Loans
and Borrowings are classified for purposes of this Agreement by reference to the
pricing of Loans comprising such Borrowings (e.g., a "Euro-Dollar Borrowing" is
a Borrowing comprised of Euro-Dollar Loans).
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank severally agrees, on the
terms and conditions set forth in this Agreement, from time to time to make
loans to the Borrower pursuant to this Section 2.01 in amounts such that the
aggregate principal amount of Loans by such Bank plus its Commitment Percentage
of the Letter of Credit Outstandings at any one time outstanding shall not
exceed the amount of its Commitment. Without in any way limiting the foregoing,
at no time will the sum of (A) the Letter of Credit Outstandings plus (B) the
aggregate
14
outstanding principal amount of the Loans exceed the aggregate amount
of the Commitments. Each Borrowing under this Section 2.01 shall be in an
aggregate principal amount of $10,000,000 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 sum of (A) the Letter of
Credit Outstandings plus (B) 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 2.12, prepay Loans and re-borrow at any time.
SECTION 2.02. Notice of Borrowings. The Borrower shall give the
Administrative Agent notice (a "Notice of Borrowing") substantially in the form
of Exhibit 2.02 hereto not later than 10:00 A.M. (Houston time) on (i) the date
of each Base Rate Borrowing or each Euro-Dollar Borrowing with an Interest
Period of seven days or less (ii) the second Domestic Business Day before each
CD Borrowing and (iii) the third Euro-Dollar Business Day before each Euro-
Dollar Borrowing with an Interest Period greater than seven days, 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 Euro-Dollar Loans or a combination thereof;
(d) in the case of a Fixed Rate Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period; and
(e) the aggregate outstanding principal amount of Debt of the
Borrower and its Subsidiaries incurred after the Effective Date and, if
required, a calculation as of the date of such Notice of Borrowing pursuant
to Section 5.08(a).
SECTION 2.03. Letters of Credit.
(a) Subject to and upon the terms and conditions hereof and the execution
and delivery of a letter of credit application ("Letter of Credit Application"),
and a letter of credit request ("Letter of Credit Request") substantially in the
form of Exhibit 2.03(b) hereto, the Issuing Bank agrees that it will, at any
time and from time to time on or after the Effective Date and prior to the
Letter of Credit Termination Date, renew, extend and issue for the account of
the Borrower (in support of its obligations and the obligations of its
Consolidated Subsidiaries) one or more irrevocable standby letters of credit
(all such letters of credit collectively, the "Letters of Credit"); provided,
15
however, that the Issuing Bank shall not extend, renew or issue any Letter of
Credit if at the time of such issuance, extension or renewal:
(i) the Stated Amount of such Letter of Credit shall be greater than
an amount which when added to the Letter of Credit Outstandings at such
time and the aggregate principal amount of all Loans then outstanding or
requested would exceed the aggregate amount of the Banks' Commitments; or
(ii) the Stated Amount of such Letter of Credit shall be greater than
an amount which when added to the Letter of Credit Outstandings at such
time, would exceed the Letter of Credit Limit; or
(iii) the expiry date or, in the case of any Letter of Credit
containing an expiry date that is extendible at the option of the Issuing
Bank, the initial expiry date of such Letter of Credit, is a date that is
later than the Letter of Credit Termination Date; or
(iv) such issuance, renewal or extension shall be prohibited by
applicable law.
(b) The Issuing Bank shall neither renew nor permit the renewal of any
Letter of Credit if any of the conditions precedent to such renewal set forth in
Section 3.02 are not satisfied or, after giving effect to such renewal, the
expiry date of such Letter of Credit would be a date that is later than the
Letter of Credit Termination Date.
(c) Whenever the Borrower requests that a Letter of Credit be issued or
renewed for its account or an existing expiry date be extended, it shall forward
an executed Letter of Credit Request and Letter of Credit Application to the
Issuing Bank (with copies to be sent to the Administrative Agent (if different
from the Issuing Bank)) (i) in the case of a Letter of Credit to be issued or
renewed at least four Domestic Business Days' prior to the proposed date of
issuance or renewal and (ii) in the case of the extension of the existing expiry
date of any Letter of Credit, at least five Domestic Business Days prior to the
date on which the Issuing Bank must notify the beneficiary thereof that the
Issuing Bank does not intend to extend such existing expiry date. Each Letter
of Credit shall be denominated in U.S. dollars, shall expire no later than the
date specified in paragraph (a) above, shall not be in an amount greater than is
permitted under this Section 2.03 and shall be in such form as may be approved
from time to time by the Issuing Bank and the Borrower. At the time of
issuance, the Issuing Bank shall designate the Letter of Credit as either a
Financial Letter of Credit or a Performance Letter of Credit, which designation
shall be final.
(d) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
16
renewed, extended or issued in accordance with, and will not violate the
requirements of this Agreement. Unless the Issuing Bank has received notice
from the Administrative Agent (if different from the Issuing Bank) before it
issues or renews the respective Letter of Credit or extends the existing expiry
date of a Letter of Credit that one or more of the conditions specified in
Article III are not then satisfied, or that the renewal, extension or issuance
of such Letter of Credit would violate any of the terms of this Agreement, then
the Issuing Bank may renew, extend or issue the requested Letter of Credit for
the account of the Borrower (in support of its obligations and the obligations
of its Consolidated Subsidiaries) in accordance with the Issuing Bank's usual
and customary practices. Upon its issuance or renewal of any Letter of Credit
or the extension of the existing expiry date of any Letter of Credit, as the
case may be, the Issuing Bank shall promptly notify the Borrower, the
Administrative Agent and each Bank of such issuance, renewal or extension, which
notice shall be accompanied by a copy of the Letter of Credit actually issued or
renewed or a copy of any amendment extending the existing expiry date of any
Letter of Credit, as the case may be.
(e) Upon the renewal, extension or issuance by the Issuing Bank of each
Letter of Credit, the Issuing Bank shall be deemed to have sold and transferred
to each Bank, and each Bank shall be deemed irrevocably and unconditionally to
have purchased and received from the Issuing Bank, without recourse or warranty,
an undivided interest and participation, to the extent of such Bank's Commitment
Percentage in each such Letter of Credit (including extensions of the expiry
date thereof), each substitute letter of credit, each drawing made thereunder
and the Obligations of the Borrower under this Agreement and the other Loan
Documents with respect thereto and any security, if any, therefor.
(f) In determining whether to pay under any Letter of Credit, the Issuing
Bank shall have no obligation relative to the Banks other than to confirm that
any documents required to be delivered under such Letter of Credit appear to
have been delivered and that they appear to comply on their face with the
requirements of such Letter of Credit.
(g) Upon the receipt by the Issuing Bank of any documentation presented
for a drawing from a beneficiary under a Letter of Credit, the Issuing Bank
promptly will provide the Administrative Agent (if different from the Issuing
Bank), the Banks and the Borrower with telecopy notice thereof and the Issuing
Bank will promptly examine the documentation presented for such drawing in
accordance with its customary procedures for conformity to the requirements of
such Letter of Credit. The Borrower hereby agrees to reimburse the Issuing Bank
by making payment to the Administrative Agent in immediately available funds
(which payment may be made by application of the proceeds of Loans made to the
Borrower in accordance with this Agreement) for any payment so made by the
Issuing Bank under any Letter of Credit issued by it
17
(each such amount so paid until reimbursed by the Borrower, including by
application of the proceeds of Loans to the Borrower in accordance with this
Agreement, an "Unpaid Drawing") upon demand on or after the date of such
payment, with interest on the amount so paid by the Issuing Bank, to the extent
not reimbursed prior to 2:00 p.m. (Houston time) on the date of such payment,
from and including the date paid to but excluding the date reimbursement is made
as provided above, at a rate per annum equal to the lesser of (i) the sum of 2
percent plus the Base Rate or (ii) the Highest Lawful Rate.
(h) In the event that the Issuing Bank makes any payment under any Letter
of Credit and the Borrower shall not have reimbursed such amount in full to the
Issuing Bank (including by any application of the proceeds of Loans) pursuant to
paragraph (g) above, the Issuing Bank shall promptly notify the Administrative
Agent (if different from the Issuing Bank) and the Administrative Agent, shall
promptly notify each Bank of such failure, and each Bank shall promptly and
unconditionally pay the Administrative Agent for the account of the Issuing Bank
the amount of such Bank's Commitment Percentage of such unreimbursed payment in
dollars and in funds immediately available in Houston. If the Administrative
Agent so notifies, prior to 11:00 a.m. (Houston time) on any Domestic Business
Day, any Bank required to fund a payment under a Letter of Credit, such Bank
shall make available to the Administrative Agent for the account of the Issuing
Bank such Bank's Commitment Percentage of the amount of such payment on such
Domestic Business Day in funds immediately available in Houston. If and to the
extent such Bank shall not have so made its Commitment Percentage of the amount
of such payment available to the Administrative Agent for the account of the
Issuing Bank, such Bank agrees to pay to the Administrative Agent for the
account of the Issuing Bank, forthwith on demand such amount, together with the
interest thereon, for each day from such date until the date such amount is paid
to the Administrative Agent for the account of the Issuing Bank at the Federal
Funds Rate. The failure of any Bank to make available to the Administrative
Agent for the account of the Issuing Bank, its Commitment Percentage of any
payment under any Letter of Credit shall not relieve any other Bank of its
obligation hereunder to make available to the Administrative Agent for the
account of the Issuing Bank its Commitment Percentage of any payment under any
Letter of Credit on the date required, as specified above, but no Bank shall be
responsible for the failure of any other Bank to make available to the
Administrative Agent for the account of the Issuing Bank such other Bank's
Commitment Percentage of any such payment.
(i) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
the Issuing Bank any payments from a Bank pursuant to paragraph (h) above, the
Issuing Bank shall pay to the Administrative Agent (if different from the
Issuing Bank) and the Administrative Agent shall promptly pay to each Bank which
has paid its
18
Commitment Percentage thereof, in dollars and in same day funds, an
amount equal to such Bank's Commitment Percentage thereof together with any
interest on such reimbursement obligation allocable to such Bank's Commitment
Percentage paid by the Borrower to the Issuing Bank and received by the
Administrative Agent pursuant to paragraph (g) above.
(j) The obligations of the Banks to make payments to the Administrative
Agent for the account of the Issuing Bank with respect to Letters of Credit
shall be irrevocable and not subject to any qualification or exception
whatsoever (except for the gross negligence or willful misconduct of the Issuing
Bank) and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including any of the following circumstances:
(1) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(2) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of Letter of Credit, any Agent, the Issuing Bank,
any other Bank, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions;
(3) any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(4) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents; or
(5) the occurrence of any Default or Event of Default.
(k) The Borrower also agrees with the Issuing Bank and the Banks that the
Issuing Bank shall not be responsible for, and the Borrower's reimbursement
obligations under paragraph (g) above are absolute and unconditional and shall
not be affected by any of the following (absent any gross negligence, willful
misconduct or violation of law on the part of any of the Issuing Bank, the
Agents and the other Banks): the validity or genuineness of documents or any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
the beneficiary of any letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any
19
such transferee or any other matter or event similar to any of the foregoing or
any setoff, counterclaim or defense to payment which the Borrower may have.
(l) The Issuing Bank, its officers, directors, agents and employees, shall
not be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors, omissions,
interruptions or delays caused by the Issuing Bank's gross negligence or willful
misconduct or violation of law. IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT THE ISSUING BANK SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY
AND ALL LOSSES, LIABILITIES, CLAIMS, DEFICIENCIES, JUDGMENTS OR REASONABLE
EXPENSES ARISING OUT OF OR RESULTING FROM THE ORDINARY NEGLIGENCE (WHETHER SOLE
OR CONTRIBUTORY) OF THE ISSUING BANK IN CONNECTION WITH ANY SUCH ERROR,
OMISSION, INTERRUPTION OR DELAY AS AFORESAID. The Borrower agrees that any
action taken or omitted by the Issuing Bank under or in connection with any
Letter of Credit or the related drafts or documents if done in accordance with
the standards of care specified in the Uniform Customs and Practice for
Documentary Credits (1983 Revision), International Chamber of Commerce,
Publication No. 400 (and any subsequent revisions thereof approved by a Congress
of the International Chamber of Commerce and adhered to by the Issuing Bank)
and, to the extent not inconsistent therewith, the Uniform Commercial Code of
the State of Texas, shall not result in any liability of the Issuing Bank to the
Borrower.
(m) To the extent that any provision of any Letter of Credit Application
related to any Letter of Credit is inconsistent with the provisions of this
Agreement, the provisions of this Agreement shall control and no Letter of
Credit Application or any other document relating to any Letter of Credit shall
give the Agents or the Banks any additional rights than they would otherwise
have under this Agreement.
(n) The Borrower shall, on the date of issuance or any extension or
renewal of any Letter 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
"Letter of Credit Fee") to the Administrative Agent in respect of each
Performance Letter of Credit or Financial Letter of Credit so issued equal to
the Letter of Credit Margin for such Performance Letter of Credit or Financial
Letter of Credit, as the case may be, (the applicable basis points set forth on
Schedule 2.07(b) computed on an annualized basis) plus a fronting fee for the
benefit of the Issuing Bank equal to 12.5 basis points (computed on an
annualized basis) 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, or the fronting fee, all of 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 and fronting fees shall be based on a 360-day year, except that if
the use of a 360-day
20
year would cause any such fees constituting interest
(within the meaning of all applicable laws) to exceed the Highest Lawful Rate,
then such interest and fees will be computed on the basis of a year of 365 days
(or 366 in a leap year).
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Administrative 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 12:00 Noon (Houston 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
funds immediately available in Houston, to the Administrative Agent at its
address specified in or pursuant to Section 9.01. Unless the Administrative
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Administrative Agent will make the funds so received from
the Banks available to the Borrower at the Administrative Agent's aforesaid
address.
(c) If any Bank makes a new Loan hereunder on a day on which the Borrower
is to repay all or any part of an outstanding Loan from such Bank, such Bank
shall apply the proceeds of its new Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being borrowed and
the principal amount being repaid shall be made available by such Bank to the
Administrative Agent as provided in subsection (b), or remitted by the Borrower
to the Administrative Agent as provided in Section 2.13, as the case may be.
(d) Unless the Administrative Agent shall have received notice from a Bank
prior to or on the date of any Borrowing that such Bank will not make available
to the Administrative Agent such Bank's share of such Borrowing, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Borrowing in accordance with
subsections (b) and (c) of this Section 2.04 and the Administrative 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 Administrative Agent, such Bank and the Borrower
severally agree to repay to the Administrative 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 Administrative 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 Administrative
21
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 Administrative 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 such Bank's Commitment.
(b) Upon receipt of each Bank's Note pursuant to Section 3.01(viii), the
Administrative Agent shall send by overnight 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, however,
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. Subject to any rights of the Borrower
under Section 2.08, 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 (as described on Schedule 2.07(a)). 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 Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the lesser of (i) the sum of 2 percent plus the rate otherwise
applicable to Base Rate Loans for such day or (ii) the Highest Lawful 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 lesser of (i) the sum of the CD Margin (as in effect on the first day of
such Interest Period) plus the applicable Adjusted CD Rate or (ii) the Highest
Lawful 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
22
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 lesser of (i) the sum of 2 percent
plus the rate applicable to Base Rate Loans for such day or (ii) the Highest
Lawful Rate.
"CD Margin" means the applicable basis points set forth in Schedule 2.07(c)
hereto.
The "Adjusted CD Rate" applicable to any Interest Period means a rate per
annum determined pursuant to the following formula:
[CDBR ]*
ACDR = [-----------] + AR
[1.00 - DRP]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
- --------------------
* The amount in brackets being rounded upwards, if necessary, to the next higher
1/100 of 1 percent.
The "CD Base Rate" applicable to any Interest Period is the rate of interest
determined by the Administrative Agent to be the average (rounded upward, if
necessary, to the next higher 1/100 of 1 percent) of the prevailing rates per
annum (as determined by the CD Reference Banks as of approximately 9:00 a.m. on
the preceding day) on the first day of such Interest Period paid by the CD
Reference Banks on their respective certificates of deposit in an amount
comparable to the unpaid principal amount of the CD Loan 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 Dallas with deposits exceeding five billion dollars in respect of new
non-personal time deposits in dollars in Dallas 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.
23
"Assessment Rate" means for any day the annual assessment rate in effect on
such day which is payable by a member of the Bank Insurance Fund classified as
well capitalized and within supervisory subgroup "B" (or a comparable successor
assessment risk classification) within the meaning of 12 C.F.R. Section 327.3(d)
(or any successor provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's) insuring time
deposits at offices of such institution in the United States. The Adjusted CD
Rate shall be adjusted automatically on and as of the effective date of any
change in the Assessment Rate.
(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 lesser of (i) the sum of the Euro-Dollar Margin (as in
effect on the first day of such Interest Period) plus the Euro-Dollar Rate or
(ii) the Highest Lawful Rate. Such interest shall be payable for each Interest
Period on the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
"Euro-Dollar Margin" means the applicable basis points set forth in Schedule
2.07(d) hereto.
"Euro-Dollar Rate" means, as to any Interest Period, the average (rounded
upward, if necessary, to the next higher 1/16 of 1 percent) of the respective
rates per annum at which deposits in dollars are offered to each of the Euro-
Dollar Reference Banks by prime banks in whatever Euro-Dollar interbank market
(or, in the case of 1-7 day Euro-Dollar Loans, the appropriate money markets)
may be selected by the Euro-Dollar Reference Banks in their sole and absolute
discretion, acting in good faith, at the time of determination and in accordance
with the then usual practice in such market, at approximately 9:00 A.M. (Houston
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 such 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 lesser of (i) the
sum of 2 percent plus the rate applicable to Base Rate Loans for such day or
(ii) the Highest Lawful Rate.
(e) The Administrative Agent shall determine each interest rate
applicable to the Loans hereunder. The Administrative Agent shall give prompt
notice to the Borrower and the participating Banks by telecopy, telex or cable
of each rate of
24
interest so determined, and its determination thereof shall be
conclusive in the absence of manifest error.
(f) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
SECTION 2.08. Conversions and Continuances. At the end of any Interest
Period, the Borrower shall have the option to convert or continue all or a
portion, equal to not less than $5,000,000 ($1,000,000 in the case of
conversions or continuations into Base Rate Loans), of the outstanding principal
amount of one Type of its Loans made pursuant to one or more Borrowings into a
Borrowing or Borrowings of the other Type or Types of Loans; provided, however,
that except as otherwise provided in Section 8.03, no partial conversion or
continuation of Euro-Dollar Loans shall reduce the outstanding principal amount
of Euro-Dollar Loans made pursuant to any single Borrowing to less than
$5,000,000 and (ii) Base Rate Loans may be converted into CD Loans or Euro-
Dollar Loans or continued as Base Rate Loans, and CD Loans and Euro-Dollar Loans
may be continued as CD Loans or as Euro-Dollar Loans (as applicable) or
converted into Base Rate Loans for additional Interest Periods if and only if,
in either case no Default or Event of Default is in existence on the date of the
conversion or continuation. Each such conversion or continuation shall be
effected by the Borrower giving the Administrative Agent notice substantially in
the form of Exhibit 2.08 (each a "Notice of Conversion") prior to 11:00 a.m.
(Houston, Texas time) at least (a) three Euro-Dollar Business Days prior to the
date of such conversion or continuation in the case of a conversion or
continuation into Euro-Dollar Loans, (b) two Domestic Business Days in the case
of a continuation or conversion into CD Loans and (c) one Domestic Business Day
in the case of a conversion or continuation into Base Rate Loans, specifying
each Type of Borrowing (or portions thereof) to be so converted or continued
and, if to be converted or continued into CD Loans or Euro-Dollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall promptly give the Banks written or telephonic notice (promptly confirmed
in writing) of any such proposed conversion or continuation affecting any of its
Loans.
SECTION 2.09. Pro Rata Borrowings. All Borrowings under this Agreement
shall be incurred from the Banks ratably in proportion to their respective
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to fulfill its Commitment hereunder.
25
SECTION 2.10. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least three Domestic Business Days' notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no Loans or
Letters of Credit 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 sum of the
aggregate outstanding principal amount of the Loans plus the Letter of Credit
Outstandings; provided, however, that if no Loans are then outstanding, the
Borrower may terminate the Commitments at any time when there are outstanding
Letters of Credit by depositing with the Administrative Agent such amount of
cash as is equal to the aggregate Stated Amount of the Letters of Credit then
outstanding to be held in an interest bearing account with the Administrative
Agent, all such cash and interest to be held by the Administrative Agent as
security for the obligations of the Borrower in respect of such Letters of
Credit; provided further, that the Borrower shall remain liable for any expenses
and other liabilities in respect of such Letters of Credit on terms consistent
with Section 9.04, but for all other purposes of this Agreement and the other
Loan Documents the Obligations will be deemed paid in full and not outstanding.
Any reduction of the Commitments shall apply proportionately to the Commitment
of each Bank in accordance with its Commitment Percentage and any such reduction
shall be permanent.
SECTION 2.11. Mandatory Termination of Commitments. The Commitment of each
Bank shall terminate on the Termination Date, and all Loans then outstanding
(together with accrued interest thereon) shall be due and payable on such date;
provided, however, if there are any Letter of Credit Outstandings or unpaid
Loans on the Termination Date, all obligations of the Borrower and all rights
and remedies of the Banks hereunder shall continue, subject to the provisos of
Section 2.10, until the full and final repayment thereof.
SECTION 2.12. Optional Prepayments. (a) The Borrower may, upon at least
one Domestic Business Day's notice to the Administrative Agent, prepay any Base
Rate Borrowing (or any other Borrowing bearing interest at the Base Rate
pursuant to Article VIII) or, subject to Section 2.14 and upon at least three
Euro-Dollar Business Days' notice to the Administrative Agent, prepay any Fixed
Rate Borrowing, in whole at any time, or from time to time in part in amounts
aggregating $10,000,000 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
Administrative Agent shall promptly notify each Bank of the contents thereof and
of
26
such Bank's ratable share (if any) of such prepayment and such notice shall
not thereafter be revocable by the Borrower.
SECTION 2.13. 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 (Houston time) on
the date when due, in Federal or other funds immediately available in Houston,
Texas, to the Administrative Agent at its address referred to in Section 9.01.
The Administrative Agent will promptly distribute to each Bank its ratable
share, if any, of each such payment received by the Administrative 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.
(b) Unless the Administrative 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 Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative 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 Administrative
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 Administrative Agent, at
the Federal Funds Rate.
SECTION 2.14. Funding Losses. The Borrower shall pay to the Administrative
Agent for the account of each Bank, upon the request of such Bank through the
Administrative Agent, such amount or amounts as shall compensate such Bank for
any reasonable loss, cost or expense actually incurred by such Bank (or, subject
to Section 9.07(b), by any existing Participant in the related Loan) as a result
of:
(a) any payment or prepayment of a Fixed Rate Loan (pursuant to
Section 2.12 or Article VI or VIII or otherwise) held by such Bank (or
27
such Participant) on a date other than the last day of the Interest Period
applicable thereto, or
(b) any failure by the Borrower to borrow a Fixed Rate Loan held or
to be held by such Bank (or such Participant) on the date for such
Borrowing specified in the relevant Notice of Borrowing,
such compensation to include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
paid or prepaid, or not converted or borrowed, for the period from the date of
such payment or prepayment or failure to borrow or convert to the last day of
such Interest Period (or, in the case of a failure to borrow, the Interest
Period for such Fixed Rate Loan which would have commenced on the date of such
failure to convert or borrow) in each case at the applicable rate of interest
for such Fixed Rate Loan provided for herein (excluding, however, the CD Margin
or the Euro-Dollar Margin included therein) over (ii) the amount of interest (as
reasonably determined by such Bank or Participant) which would have accrued to
such Bank or Participant on such amount by placing such amount on deposit for a
comparable period with leading banks in the relevant interbank market; provided,
however, that such Bank shall have delivered to the Borrower, within 60 days
after the date of such payment or prepayment or failure to borrow, a certificate
as to the amount of such actual loss or expense, which certificate shall set
forth in reasonable detail the basis for such loss or expense and shall be
conclusive in the absence of manifest error. Any payment required to be made
pursuant to this Section 2.14 shall be made within 5 days after receipt of the
certificate referred to above.
SECTION 2.15. Fees.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent
for the account of the Banks ratably in proportion to their Commitments a
commitment fee equal to the highest applicable basis points set forth in
Schedule 2.15 calculated on the daily average amount by which the aggregate
amount of the Commitments exceeds the sum of (i) the Letter of Credit
Outstandings and (ii) the aggregate outstanding principal amount of the Loans.
Such commitment fee shall accrue for the account of each Bank from and including
the Effective Date to but excluding the Termination Date.
(b) Payments. Accrued fees under this Section and Section 2.03 for the
account of any Bank shall be payable quarterly in arrears on each March 31, June
30, September 30 and December 31 and upon the Termination Date.
SECTION 2.16. Computation of Interest and Fees. Interest based on the
Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in
a leap year)
28
and paid for the actual number of days elapsed (including the first day but
excluding the last day). All other interest and all fees shall be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed
(including the first day but excluding the last day) except that if use of a
360-day year would cause any interest or fees constituting interest (within the
meaning of all applicable laws) to exceed the Highest Lawful Rate, then such
interest and fees will be computed on the basis of a year of 365 days (or 366 in
a leap year).
SECTION 2.17. 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 taking, reserving, charging, collection, payment and
receipt of, interest (which shall, for purposes of this Section 2.17, be deemed
to include, without limitation, any compensation received by any Agent or 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 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 or any other Person to any Agent or any
Bank hereunder (including any payment upon acceleration of the maturity of any
Notes of such Bank) would produce a rate of interest in excess of the Highest
Lawful Rate, as defined in paragraph (e) below, with respect to any Bank, or
otherwise result in the Borrower or any other Person paying or being deemed to
have paid to any Agent or any Bank any interest in excess of the Maximum Amount,
as defined in subsection (e) below, with respect to any Bank, or if any Agent or
any Bank shall for any reason receive any unearned interest in violation of any
Applicable Usury Law, or if any transaction contemplated by or any provision of
this Agreement, any Bank's Note or Notes, any Letter of Credit Application 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 any Bank's Loan Documents, the
parties hereto agree as follows: (i) the provisions of this Section 2.17 shall
govern and control; (ii) the aggregate amount of all interest under Applicable
Usury Laws that is contracted for, taken, reserved, charged, collected or
received pursuant to each 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 exceeds the Maximum Amount; and (iv) the provisions of each 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, it being the intention of the parties, to the fullest extent
permitted by law, to render
29
inapplicable any and all penalties of any kind provided by any Applicable Usury
Law as a result of any such excess interest.
(c) If any payment by the Borrower or any other Person 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 or any Agent 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 or such other Person.
(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.
(e) As used herein, the term "Maximum Amount" means, with respect to any
Bank, in any of such Bank's capacities hereunder, the maximum nonusurious amount
of interest that may be lawfully contracted for, reserved, charged, collected or
received (in each case as determined by the Applicable Usury Laws) 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, on any day, the maximum rate of interest,
if any, that may be contracted for, taken, reserved, charged, collected or
received 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. In this connection, for purposes of Tex. Rev. Civ. Stat.
Ann. Art. 5069-1.04, as it may from time to time be amended, the Highest Lawful
Rate, to the extent it is determined with reference thereto, shall be the
"indicated rate ceiling" from time to time in effect, referred to in, and
determined pursuant to Section (a)(1) of such Art. 5069-1.04, as amended, as
modified by Section (b) of such Art. 5069-1.04; provided, however, that to the
fullest extent permitted by all Applicable Usury Laws, each Agent and each Bank
reserves the right to change, from time to time, in accordance with such Art.
5069-1.04, by written notice to the Borrower, the ceiling upon which the Highest
Lawful Rate is based under such Art. 5069-1.04 to the extent it is based
thereon; provided further, that the Highest Lawful Rate shall not be limited to
the applicable rate ceiling under such Art. 5069-1.04 if applicable federal laws
or state laws now or hereafter in effect shall permit a higher rate of interest
to be contracted for, taken, reserved, charged, collected and received under any
Bank's Loan Documents.
(f) In the event that any rate of interest set forth in Sections 2.07 and
8.01 on any Loan of any Bank (a "Stated Rate"), together with any fees or other
amounts
30
payable under such Bank's Loan Documents to any Agent or such Bank, in any of
such Bank's capacities hereunder, deemed to constitute interest under Applicable
Usury Laws ("Additional Interest"), exceeds the Highest Lawful Rate, then the
amount of 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, however, that, to the fullest extent permitted by
Applicable Usury Laws, any subsequent reductions in any 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 Rates 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 or
payable to any Agent or any Bank, in any of such Bank's capacities hereunder,
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 or accrued on
the indebtedness incurred under or evidenced by such Bank's Loan Documents if
the Stated Rates 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 Administrative Agent for the account of such
Bank an amount equal to the difference between (1) 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 Rates had at all times
been in effect and all Additional Interest had been paid in full and (2) 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.
(h) The Borrower, the Agents and the Banks agree that, except for Article
15.10(b) thereof, the provisions of Chapter 15, Subtitle 79, Revised Civil
Statutes of Texas, 1925, as amended (which regulates certain revolving credit
loan accounts and revolving tri-party accounts), do not apply to this Agreement
or any of the Notes or any of the Obligations.
SECTION 2.18. Withholding Tax Exemption. At least five 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 Administrative Agent two duly completed copies of
United States Internal
31
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 Administrative 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
Administrative 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 Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax. Any Bank that is not capable of receiving payments
without any deduction or withholding of United States federal income tax will
promptly notify the Borrower and the Administrative Agent to that effect and
will designate a different Applicable Lending Office if such designation will
render such Bank capable of receiving payments without any such deduction or
withholding and will not, in the reasonable judgment of such Bank, be otherwise
disadvantageous. If the Borrower shall receive a certificate of such Bank
claiming the need for deductions or withholdings under this Section 2.18, the
Borrower shall, subject to Section 8.06 hereof, commence making any deductions
and withholding any amounts with respect to payments for the account of such
Bank that are required by applicable law.
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 Administrative Agent of certified copies of the
Certificate of Incorporation and By-Laws of the Borrower and the
resolutions of the Board of Directors of the Borrower authorizing the
transactions contemplated hereby and such other documents as the
Administrative 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
32
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent;
(ii) receipt by the Administrative 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
3.01(ii) hereto setting forth the name, title and specimen signature of
each Authorized Officer or Authorized Representative of the Borrower (1)
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 Administrative Agent of counterparts of this
Agreement 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 Administrative Agent in form reasonably satisfactory to it
of telecopied, telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party);
(iv) receipt by the Administrative Agent of an opinion of the General
Counsel of the Borrower in substantially the form of Exhibit 3.01(iv)
hereto and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(v) receipt by the Agents of an opinion of Andrews & Kurth L.L.P.,
counsel for the Agents in substantially the form of Exhibit 3.01(v) hereto
and covering such additional matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request;
(vi) receipt by the Administrative Agent of a certificate signed by
the Chief Executive Officer, Chief Financial Officer or Treasurer of the
Borrower dated the Effective Date to the effect set forth in clauses (iii)
and (iv) of Section 3.02;
(vii) receipt by the Administrative Agent of a certificate signed by
the Chief Executive Officer, Chief Operating Officer or Chief Financial
Officer of LRC, dated the Effective Date, to the effect that LRC is not in
default in its material obligations pursuant to the Company Regulations;
and
33
(viii) receipt by the Administrative 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; and
(ix) receipt by the Administrative Agent of evidence that, prior to
or as of the Effective Date, (A) the Credit Agreement dated as of July 3,
1990 among the Borrower, the banks listed therein and Texas Commerce Bank
National Association, as agent, and the "commitments" thereunder, have been
terminated.
provided, however, 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 December 31, 1993. The Administrative 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. The Administrative Agent shall
promptly forward to the Banks copies of the documents delivered pursuant to this
Section 3.01.
SECTION 3.02. Credit Events. The obligation of any Bank to make a Loan
on the occasion of any Borrowing hereunder and the obligation of the Issuing
Bank to issue, renew or extend any Letter of Credit hereunder are subject to the
satisfaction of the following conditions:
(i) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02 or receipt by the Issuing Bank of a Letter of
Credit Request as required by Section 2.03, as the case may be;
(ii) the fact that, immediately after such Credit Event, the
aggregate outstanding principal amount of the Loans plus the Letter of
Credit Outstandings will not exceed the aggregate amount of the
Commitments;
(iii) the fact that, immediately before and after such Credit Event,
no Default or Event of Default shall have occurred and be continuing; and
(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
Credit Event as if made on and as of such date (except in the case of a
Refunding Borrowing, the representations and warranties set forth in
paragraphs (d), (e), (k) and (l) of Section 4.01).
Each Credit Event 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.
34
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 corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
(ii) qualified to do business and in good standing in each jurisdiction
where the ownership of its properties or the conduct of its business
requires such qualification except where the failure to be so qualified
would not have a Material Adverse Effect.
(2) The Borrower has all corporate power and authority, governmental
permits, licenses, consents, authorizations, orders and approvals and other
authorizations and powers as are necessary to carry on its business
substantially as presently conducted except where the failure to have such
power, authority, permits, licenses, consents, authorizations, orders and
approvals would not have a Material Adverse Effect.
(3) The execution, delivery and performance by the Borrower of this
Agreement and of the Notes, and Borrowings and other extensions of credit
hereunder, are within the Borrower's corporate power and authority and have
been duly authorized by all necessary corporate proceedings.
(4) Neither such authorization nor the execution, delivery and
performance by the Borrower of this Agreement or of the Notes, nor any
Borrowing or Letter of Credit when made or issued, as the case may be,
hereunder 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 Incorporation or By-Laws 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, loan or credit
agreement or other material instrument to which it is a party or by which
it is bound.
(5) Assuming its due execution by the Banks and the Agents, 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.
35
(b) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1992 and the related
consolidated statements of income and cash flows for the fiscal year ended
that date, reported on by Coopers & Lybrand, copies of which have been
delivered to the Administrative Agent, present fairly, in all material
respects, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year, in conformity with
generally accepted accounting principles consistently applied.
(c)(1) The unaudited consolidated balance sheet of the Borrower and
its Consolidated Subsidiaries as of September 30, 1993 and the related
unaudited consolidated statements of income and cash flows for the nine-
month period then ended, copies of which have been delivered to the
Administrative Agent, present fairly, in all material respects, 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 consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such nine-month period (subject to normal
year-end adjustments and not including footnotes or schedules required by
generally accepted accounting principles).
(c)(2) The unaudited balance sheet of LCR as of September 30, 1993
and the related statements of income and cash flows for the three-month
period then ended, copies of which have been delivered to the
Administrative Agent, present fairly, in all material respects, in
conformity with generally accepted accounting principles applied on a basis
consistent with the financial statements referred to in paragraph (c)(1) of
this Section, the financial position of LCR as of such date (subject to
normal year-end adjustments and not including footnotes or schedules
required by generally accepted accounting principles).
(d) Except as described in the Company's Annual Report on Form 10-K
for the year ended December 31, 1992 ("1992 Form 10-K") or any document
filed subsequently by the Borrower pursuant to the Securities Exchange Act
of 1934 ("'34 Act Report") or as otherwise disclosed in writing to the
Administrative Agent and delivered to the Banks, there is no action, suit
or proceeding pending or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Consolidated Subsidiaries
in any court or before or by any arbitrator, governmental department,
agency or instrumentality, an adverse decision in which could reasonably be
expected to have a Material Adverse Effect.
36
(e) Except as described in the 1992 Form 10-K or any subsequent '34
Act Report or as otherwise disclosed in writing to the Administrative Agent
and delivered to the Banks, there has been no material adverse change since
December 31, 1992 in the business, operations, affairs, assets, condition
(financial or otherwise) or results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole.
(f) No Default or Event of Default has occurred and is continuing.
(g) No consent, authorization, order or approval of (or filing or
registration with) any governmental commission or board or other
governmental 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.
(h) 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 (other than for routine premiums due to the PBGC) or
a Plan under Title IV of ERISA.
(i)(1) Each corporate Subsidiary is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as
now conducted except for powers, licenses, authorizations, consents or
approvals the absence of which would not have a Material Adverse Effect.
(2) LCR is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Texas and is
registered, qualified or licensed (or has applied for such registration,
qualification or licensing) to do business and is 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 or licensing for limited liability companies,
except in all cases where the failure to be so registered, qualified or
licensed would not reasonably be expected to have a Material Adverse
Effect. LCR also has all
37
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 in all cases where the failure to have any of the foregoing would
not reasonably be expected to have a Material Adverse Effect.
(j) 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.
(k) Except as described in the Borrower's 1992 Form 10-K or any
subsequent '34 Act Report or as otherwise disclosed in writing to the
Administrative Agent and delivered to the Banks, to the best of its
knowledge (i) the Borrower and each of its Consolidated Subsidiaries
possess all environmental, health and safety licenses, permits,
authorizations, registrations, approvals and similar rights necessary for
the Borrower or such Consolidated Subsidiary to conduct its operations as
now being conducted (other than where the failure to possess or maintain
any of the foregoing would not reasonably be expected to have a Material
Adverse Effect) and (ii) the Borrower and each of its Consolidated
Subsidiaries are in compliance with all terms, conditions or other
provisions of such licenses, permits, authorizations, registrations,
approvals and similar rights except for such failure or noncompliance that
would not reasonably be expected to have a Material Adverse Effect.
(l) Except as described in the Borrower's 1992 Form 10-K or any
subsequent '34 Act Report or as otherwise disclosed in writing to the
Administrative Agent and delivered to the Banks, to the best of its
knowledge, there does not exist any Release of a Hazardous Material or any
violation of the Requirements of Environmental Laws that reasonably would
be expected to impose a liability on the Borrower or a Consolidated
Subsidiary, or require an expenditure by the Borrower or a Consolidated
Subsidiary to cure such violation, in any case where such liability or
expenditure would reasonably be expected to have a Material Adverse Effect.
(m) Each of the Borrower and its Consolidated Subsidiaries has filed
all federal income tax returns and other material tax returns, statements
and reports (or obtained extensions with respect thereto) which are
required to be filed and have paid or deposited or made adequate provision
in accordance with generally accepted accounting standards for the payment
of all taxes (including estimated taxes shown on such returns, statements
and reports) which are shown to be due pursuant to such returns.
38
(n) The Company Regulations, as the same may be amended or otherwise
modified from time to time, are in full force and effect in accordance with
their terms.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note or in respect of any Letter of Credit
remains unpaid:
SECTION 5.01. Certain Information to be Furnished by the Borrower. The
Borrower will deliver to the Administrative Agent and the Administrative Agent
shall promptly deliver to the Banks:
(a)(1) as soon as available and in any event within 120 days after
the end of each of its fiscal years, the consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, together with the audit report thereon of a
nationally recognized firm of independent certified public accountants;
(a)(2) as soon as available and in any event within 120 days after
the end of each of its fiscal years, the balance sheet of LCR as of the end
of such fiscal year and the related statements of income and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, together with an audit report thereon of a
nationally recognized firm of independent certified public accountants;
(b)(1) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each of its fiscal years, (i)
the consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of the end of such fiscal quarter, (ii) the related
consolidated statement of income for such fiscal quarter and for the
portion of the fiscal year ended with such quarter and (iii) the related
consolidated statement of cash flows for the portion of the fiscal year
ended with such quarter, setting forth, with respect to (iii), in
comparative form the figures for the corresponding portion of the
Borrower's previous fiscal year, all certified (subject to normal year-end
adjustments and not including
39
footnotes or schedules required by generally accepted accounting
principles) by the chief financial officer or the chief accounting officer
of the Borrower to present fairly, in all material respects, the financial
position, results of operations and cash flows of the Borrower and its
Consolidated Subsidiaries in accordance with generally accepted accounting
principles (except as otherwise stated therein) applied on a basis
consistent with the financial statements referred to in paragraph (a)(1) of
this Section;
(b)(2) as soon as available and in any event within 60 days after the
end of each of the first three quarters of each of its fiscal years, (i)
the balance sheet of LCR as of the end of such fiscal quarter, (ii) the
related statement of income for such fiscal quarter and for the portion of
the fiscal year ended with such quarter and (iii) the related statement of
cash flows for the portion of the fiscal year ended with such quarter,
setting forth, with respect to (iii), in comparative form the figures for
the corresponding portion of LCR's previous fiscal year, all certified
(subject to normal year-end adjustments and not including footnotes or
schedules required by generally accepted accounting principles) by the
chief financial officer or the chief accounting officer of LCR to present
fairly, in all material respects, the financial position, results of
operations and cash flows of LCR in accordance with generally accepted
accounting principles (except as otherwise stated therein) applied on a
basis consistent with the financial statements referred to in paragraph
(a)(2) of this Section;
(c) promptly after the same are sent to shareholders or filed, copies
of all (i) financial statements, notices, reports and proxy materials sent
by the Borrower to shareholders of the Borrower and (ii) registration
statements (other than exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Form 10-K, 10-Q and 8-K (or
their equivalents) filed by the Borrower with the Securities and Exchange
Commission (or any governmental agency succeeding to the functions of such
Commission);
(d) simultaneously with the delivery of the financial statements
referred to in paragraphs (a) and (b) above, (i) a certificate of the
Borrower signed by the Treasurer or any Assistant Treasurer of the Borrower
stating whether there exists to the knowledge of such officer of the
Borrower 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 and (ii) a certificate of the Borrower signed by the Treasurer or
any Assistant Treasurer of the Borrower stating that the Borrower is in
compliance with the provisions of Section 5.08 and setting forth all
computations relating thereto;
40
(e) forthwith, if at any time any officer of the Borrower shall
obtain knowledge of any Default or Event of Default, a certificate of the
Treasurer or any Assistant Treasurer specifying the nature and period of
existence thereof and the action the Borrower is taking and proposes to
take with respect thereto;
(f) promptly upon obtaining knowledge thereof, a copy of each of the
following notices: 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;
(g) in the event of any damage, loss or casualty to or destruction of
any portion of any facility of the Borrower, any Subsidiary or LCR, prompt
notice thereof, specifying the nature and extent of such damage, loss,
casualty or destruction and stating 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, however, 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 $15,000,000 to
rebuild, replace or restore or if such damage does not materially adversely
affect such production capacity or the economic value of the facility;
(h) in the event of any total or partial shutdown of any production
or storage facility of the Borrower or any Consolidated Subsidiary in
connection with any Release, prompt notice thereof to the Administrative
Agent, specifying the reason for such shutdown; provided, however, 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 $10,000,000 or more over a period of five
years beginning with the date of such shutdown;
(i) in addition to its obligations pursuant to Section 2.02, prompt
written notice of any Debt, other than Borrowings, incurred subsequent to
the Effective Date; and
41
(j) from time to time such further information regarding compliance
with this Agreement or the business, operations, affairs, assets, condition
(financial or otherwise) or results of operations of the Borrower and its
Consolidated Subsidiaries as the Administrative Agent, at the request of
any Bank, may reasonably request.
SECTION 5.02. Maintenance of Property; Insurance.
(a) The Borrower will keep, and will cause each Subsidiary to keep, all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to,
maintain insurance consistent either with the insurance practices of the
Borrower and its Subsidiaries in effect on the date hereof, or with then
existing industry practice, in either case to the extent available to the
Borrower and its Subsidiaries on commercially reasonable terms, and will furnish
to the Administrative Agent, upon request from the Administrative Agent,
information presented in reasonable detail as to the insurance so carried.
SECTION 5.03. Limitation on Liens. Except as otherwise specifically
provided in this Agreement, nothing contained in this Agreement shall in any way
restrict or prevent the Borrower or any Subsidiary from incurring any Debt;
provided, however, that neither the Borrower nor any Restricted Subsidiary will
issue, assume or guarantee any Debt secured by any Lien upon any Restricted
Property or grant any Lien on any such Restricted Property to secure any such
Debt without effectively providing that all of the Notes and the Letter of
Credit Outstandings (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, if any, that 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 or other Person 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 assets (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 prior to, at the time of or within 120 days after acquisition
thereof for the purpose of financing all or part of the purchase price thereof;
42
(c) Liens on property of the Borrower or a Subsidiary existing or
contemplated on the date hereof and listed on Schedule 5.03(c) hereto;
(d) Liens on any new plant (including any processing unit or production or
storage facility) or the real estate on which such plant is situated or is to be
constructed securing Debt incurred or assumed either (i) at the time of or
within 24 months after commencement of improvement or construction or (ii)
within 120 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) Liens securing taxes, assessments, governmental charges or levies,
statutory Liens of landlords and Liens of carriers, warehousemen, materialmen,
mechanics and other like Persons not yet due or the payment of which is not then
required; provided, however, that this paragraph (h) shall not be deemed to
permit any Liens which may be imposed pursuant to Section 4068 of ERISA;
(i) Liens of or resulting from any judgment or award not in excess of
$25,000,000, the time for the appeal or petition for rehearing of which shall
not have expired, or in respect of which the obligor shall at any time in good
faith be prosecuting an appeal or proceeding for a review and in respect of
which a stay of execution pending such appeal or proceeding for review shall
have been secured;
(j) Liens incurred or deposits made in the ordinary course of business (i)
in connection with workers' compensation, unemployment insurance and other types
of social security, or (ii) to secure reimbursement obligations in respect of
documentary letters of credit secured by collateral customarily and normally
provided to banks
43
issuing documentary letters of credit; provided, however, that any obligation
secured by any such Lien shall not be overdue or, if overdue, is being contested
in good faith by appropriate actions or proceedings during which there is no
right to exercise remedies and adequate book reserves have been established;
provided further, that paragraph (j) shall not be deemed to permit any Liens
which may be imposed pursuant to Section 4068 of ERISA;
(k) Minor survey exceptions and minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other similar
purposes, or zoning or other restrictions as to the use of real properties,
which are necessary for the conduct of the activities of Borrower or any
Subsidiary or which customarily exist on properties of corporations or other
Persons engaged in similar activities and similarly situated;
(l) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in the
foregoing paragraphs (a) to (k) 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 of substantially the same property which secured the Lien
extended, renewed or replaced (plus improvements on such property);
provided, however, that the Borrower and any one or more Restricted Subsidiaries
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 and the Restricted
Subsidiaries which would otherwise be subject to the foregoing restrictions (not
including Debt permitted to be secured under paragraphs (a) to (l) inclusive
above), does not at any one time exceed the greater of $50,000,000 or 10 percent
of Consolidated Net Tangible Assets of the Borrower and its Consolidated
Subsidiaries.
SECTION 5.04. Consolidation, Merger, Disposition of Assets. (a) Subject
to the provisions of Section 5.04(b) hereof, nothing contained in this Agreement
shall prevent any consolidation or merger of the Borrower with or into any other
corporation or corporations (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 corporation, the surviving entity must
44
be chartered under the laws of the United States or one of its states and 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 reasonably satisfactory in form to the Required Banks and
executed and delivered to the Administrative Agent by the corporation (if other
than the Borrower) formed by such consolidation or into which the Borrower shall
have been merged or by the Person which shall have acquired such property; and
provided further that no Default or Event of 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 corporation, or upon the sale or conveyance of all or substantially all
the property of the Borrower to any other Person or if any of the remaining
property of the Borrower or of any Restricted Subsidiary would thereupon become
subject to any Lien, the Borrower, prior to or simultaneously with such
consolidation, merger, sale or conveyance, will secure the Notes, the Letter of
Credit Outstandings and all other obligations of the Borrower under this
Agreement equally and ratably with any other obligations of the Borrower (or any
Restricted Subsidiary if applicable) then entitled thereto, by a direct Lien on
all such property prior to all Liens other than any theretofore existing
thereon.
SECTION 5.05. Use of Proceeds. The proceeds of the Loans made and
Letters of Credit issued under this Agreement will be used by the Borrower and
its Subsidiaries for general business 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. Payment of Taxes. The Borrower will, and will cause each
Consolidated Subsidiary to, pay and discharge, or make adequate provision for,
all material taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits, or upon any properties belonging to it;
provided, however, that neither the Borrower nor any Consolidated Subsidiary
shall be required to pay or discharge or cause to be paid or discharged any such
taxes, assessments, charges or levies whose amount, applicability or validity is
being contested in good faith by appropriate actions or proceedings and as to
which reserves have been established if required by generally accepted
accounting principles.
45
SECTION 5.07. LCR Matters.
(a) The Borrower will cause LRC to not permit any amendment or
modification to the Company Regulations, or take any other action, that would in
each case result in LRC's Participation Percentage (as defined in the Company
Regulations) to be less that 50 percent, without the consent of Banks having at
least 70 percent of the aggregate amount of the Commitments.
(b) Unless the Banks having at least 70 percent of the aggregate
Commitments agree otherwise, the Borrower shall cause LRC (within the bounds of
good business judgment and its legal obligations under or in connection with the
Company Regulations), as an Owner of LCR, to withhold its consent, which is
required under Section 3.8 of the Company Regulations, with respect to any
action that would cause or permit LCR (or any Person acting in the name or on
behalf of LCR), directly or indirectly, to undertake any of the following:
(1) to incur Debt; provided, however, that this covenant shall not be
applicable to (i) any Debt for which the Borrower or LRC is the obligee,
(ii) any Debt resulting from the Credit Agreement dated as of July 1, 1993
(as the same may be amended or otherwise modified from time to time)
between LCR and Continental Bank N.A. as Agent, or any renewal or
replacement of such Credit Agreement; provided, however, that such renewal
or replacement does not result in an increase in the aggregate principal
amount of such credit facility, (iii) any Debt which CITGO Refining is
contractually or otherwise liable to pay or to provide reimbursement for
pursuant to the Company Regulations, as the same may be amended or
otherwise modified from time to time, or (iv) any Debt that is non-recourse
to the Borrower and LRC either existing on the In-Service Date (as defined
in the Company Regulations) or incurred by LCR subsequent to the In-Service
Date;
(2) to fail to maintain insurance consistent either with the
insurance practices of the Borrower and its Subsidiaries in effect on the
date hereof or with then existing industry practice, in either case to the
extent available to LCR on commercially reasonable terms; and
(3) to amend, or alter the Company Regulations in any way that would
materially adversely affect (i) the Borrower's access to its share of
distributable cash from LCR or (ii) other material rights and obligations
of the Borrower or LRC under the Company Regulations (including without
limitation materially increasing an obligation of the Borrower or LRC to
make contributions to LCR or materially decreasing an obligation of CITGO
or CITGO Refining to make contributions to LCR), provided, however, that in
any event the Borrower will
46
provide promptly thereafter to the Administrative Agent notice and copies
of all amendments to the Company Regulations.
SECTION 5.08. Financial and Other Covenants. The Borrower will comply
with the covenants described in this Section.
a. Debt Incurrence Test. If the aggregate outstanding principal amount
of all Debt of the Borrower and its Consolidated Subsidiaries incurred
subsequent to the Effective Date exceeds $75,000,000, then the Borrower and its
Subsidiaries will not be permitted to incur any additional Debt unless, after
giving effect thereto, the ratio of EBITDA to Consolidated Interest Expense, for
the four-fiscal-quarter period most recently ended, is greater than or equal to
the ratio set forth below with respect to the period that includes the last
quarter of such four-fiscal-quarter period; provided, however, that each such
determination shall be made by giving effect to all Debt of the Borrower and its
Consolidated Subsidiaries actually outstanding during any portion of such four-
fiscal-quarter period and by assuming that such proposed Debt had been incurred
on the first day of such four-fiscal-quarter period:
Period Ratio
- ---------- ---------
From the Effective Date 1.75 to 1
through December 31, 1994
From January 1, 1995 2.00 to 1
through December 31, 1995
Thereafter 2.25 to 1
b. Fixed Charge Coverage Ratio. The Borrower will not permit, as of the end
of any fiscal quarter, the ratio of (i) EBITDA less Consolidated Capital
Expenditures (provided, however, that in determining Consolidated Capital
Expenditures for purposes of this covenant all items attributable to the
activities or business of LCR shall be excluded), to (ii) Consolidated Interest
Expense, computed in each case for the four-fiscal-quarter period ending during
each of the following periods, to be less than the designated ratio set forth
below with respect to each such period:
Period Ratio
- ------- ---------
From the Effective Date 1.15 to 1
through December 31, 1994
From January 1, 1995 1.30 to 1
through December 31, 1995
Thereafter 2.00 to 1
c. Leverage Ratio. The Borrower will not permit, as of the end of any
fiscal quarter, the ratio of Consolidated Debt to EBITDA, computed in each case
for the four-
47
fiscal-quarter period ending during each of the following periods, to be greater
than the designated ratio set forth below with respect to each such period:
Period Ratio
- ------ ---------
From the Effective Date 6.50 to 1
through December 31, 1994
From January 1, 1995 5.50 to 1
through December 31, 1995
From January 1, 1996 4.50 to 1
through December 31, 1996
Thereafter 4.00 to 1
d. Dividend Payments. The Borrower will not at any time declare, make or
pay, or incur any liability to make or pay, or cause or permit to be declared,
made or paid any Dividend unless at the time of declaring such Dividend, and
after giving effect thereto, the aggregate amount of all such Dividends declared
or paid on or after January 1, 1994 shall not exceed an amount equal to the sum
of $72,000,000 plus 100 percent of Consolidated Net Income or Loss, excluding
non-cash Non-Operating Special Items used in determining Consolidated Net Income
or Loss, for the period commencing October 1, 1993 and ending with the most
recently completed fiscal quarter of the Borrower.
e. Restricted LCR Investments. From and after the Effective Date, the
aggregate of all Investments shall not exceed $200,000,000; provided, however,
that the Borrower or LRC may invest in LCR, in excess of such $200,000,000, all
or a portion of the proceeds from any capital markets offering consisting solely
of equity securities.
f. Methodology for Determining Covenant Compliance. Notwithstanding any
contrary provision of this Agreement, the Borrower's compliance with each of the
covenants described in this Section shall be determined in accordance with the
following methodology:
(1) All calculations shall be made without taking into account any
Debt or Interest Expense of LCR or CITGO Refining, or any Debt or Interest
Expense which CITGO Refining, pursuant to the Company Regulations as the
same may be amended or otherwise modified from time to time, is
contractually or otherwise liable to pay or provide reimbursement for;
(2) In the event the Borrower issues Debt ("Replacement Debt") for
the purpose of refinancing Debt outstanding under any of the Borrower's
public indentures or medium-term note programs ("Replaced Debt"), the
aggregate principal amount of such Replacement Debt shall be substituted in
place of the Replaced Debt for purposes of all determinations and the
calculations, in
48
paragraphs (a) and (c) of this Section; provided, however, that the Net
Interest associated with such Replacement Debt shall be included in
Interest Expense for purposes of the calculation in paragraph (b) of this
Section; and further provided, that the treasurer of the Borrower shall
certify to the Administrative Agent that such Replacement Debt will be used
to refinance Replaced Debt.
(3)(A) From the Effective Date until the Borrower's public
announcement of its Consolidated Net Income or Loss for the fiscal quarter
ended June 30, 1994, the results of operations for, and all information
pertaining to, the Borrower's most recently completed quarter or four-
fiscal-quarter period, as applicable, shall be determined by converting to
an annualized four-fiscal-quarter period, information publicly announced by
the Borrower as its Consolidated Net Income or Loss for the most recent
three month, six month or nine month period, as available, from and
including the fiscal quarter ended September 30, 1993; and
(3)(B) From the date of the Borrower's public announcement of its
Consolidated Net Income or Loss for the fiscal quarter ended June 30, 1994
and during the remainder of the term of this Agreement, the results of
operations for, and all information pertaining to, the Borrower's most
recently completed quarter or four-fiscal-quarter period, as applicable,
shall be determined based upon the last quarter, or the four-fiscal-quarter
period (the last quarter of which is the most recent quarter), for which
the Borrower has made a public announcement of its Consolidated Net Income
or Loss.
ARTICLE VI
DEFAULTS AND REMEDIES
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 any reimbursement obligation in respect of any
Letter of Credit, or shall default in the payment within five 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 Section 5.01(e), Section
5.02(b) or Sections 5.03 through 5.08;
49
(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 paragraphs (a) or (b) above) for 30 days after written
notice of such failure is given to the Borrower by the Administrative 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) the Borrower or any Subsidiary shall fail to pay any indebtedness
for borrowed money (other than the Loans or any reimbursement obligation in
respect of any Letters of Credit) 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, however, that the aggregate amount of such indebtedness or
guarantee, including any interest or premium thereon, shall exceed
$15,000,000;
(f) LRC shall be determined (upon exhaustion of all appeals and
expiration of all cure periods as provided in the Company Regulations) to
be in default of any of its material obligations pursuant to the Company
Regulations;
(g) the Borrower or any Restricted Subsidiary or LCR 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
take any corporate action to authorize any of the foregoing, or shall fail
generally to pay its debts as they become due, 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 or any Restricted Subsidiary or LCR 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 or other similar
50
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 60 days; or an order for relief shall be entered against
the Borrower or any Restricted Subsidiary or LCR 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 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; or
(j) a final, non-appealable judgment or order for the payment of
money in excess of $15,000,000 shall be rendered against the Borrower or
any Restricted Subsidiary or LCR and such judgment or order shall continue
unsatisfied for a period of 30 days;
then, and without notice upon the occurrence of an Event of Default
specified in Section 6.01(g) or Section 6.01(h), or, by notice to the
Borrower upon the occurrence and during the continuation of any other Event
of Default, the Administrative Agent may and, upon the written request of
the Required Banks shall, take any or all of the following actions: (i)
declare the Banks' Commitments terminated, whereupon the Commitments of the
Banks shall forthwith terminate immediately and any Commitment Fee shall
forthwith become due and payable without any other notice of any kind; (ii)
declare the principal of and any accrued interest in respect of all Loans
and all Obligations owing hereunder, to be, whereupon the same shall
become, forthwith due and payable without further presentment, demand,
notice of demand or of dishonor and non-payment, protest, notice of
protest, notice of intent to accelerate, declaration or notice of
acceleration or any other notice of any kind, all of which are hereby
waived by the Borrower; and (iii) direct the Borrower to pay, and the
Borrower agrees that upon receipt of such notice (or upon the occurrence of
an Event of Default specified in Section 6.01(g) or Section 6.01(h)), it
will pay to the Administrative Agent such additional amount of cash as is
equal to the
51
aggregate Stated Amount of all Letters of Credit then outstanding to be
held in an interest bearing account with the Administrative Agent, all such
cash and interest to be held by the Administrative Agent as security for
the Obligations of the Borrower hereunder and under the Notes and the other
Loan Documents.
SECTION 6.02. Other Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent, acting at the
request of the Required Banks, may proceed to protect and enforce its rights,
either by suit in equity or by action at law or both, or may proceed to enforce
the payment of all amounts owing to the Agents and the Banks under the Loan
Documents and interest thereon in the manner set forth herein or therein; it
being intended that no remedy conferred herein or in any of the other Loan
Documents is to be exclusive of any other remedy, and each and every remedy
contained herein or in any other Loan Document shall be cumulative and shall be
in addition to every other remedy given hereunder and under the other Loan
Documents now or hereafter existing at law or in equity or by a statute or
otherwise.
SECTION 6.03. Rights of Setoff. If any Event of Default shall have
occurred and be continuing, each Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Bank, or any
branch, subsidiary or Affiliate of such Bank, to or for the credit or the
account of the Borrower against any and all the Obligations of the Borrower now
or hereafter existing under this Agreement and the other Loan Documents
irrespective of whether or not such Bank or the Administrative Agent shall have
made any demand under this Agreement, such Note, or the Obligations and although
the Obligations may be unmatured. Each Bank agrees promptly to notify the
Borrower after any such setoff and application made by such Bank, but the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Bank under this Section are in addition to
other rights and remedies (including other rights of setoff) which such Bank may
have.
ARTICLE VII
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes each of the Administrative Agent and the Co-Agent to
take such action as Administrative Agent or Co-Agent, as the case may be, on its
behalf and to exercise such powers under this Agreement and the Notes as are
delegated to the Administrative Agent or the Co-Agent, as the case may be, by
the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.
52
SECTION 7.02. Agents and Affiliates. Each of the Administrative Agent
and the Co-Agent 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
they were not the Agents, 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 LCR or any Affiliate thereof as if they were not the Agents
hereunder.
SECTION 7.03. Action by Agents. The obligations of the Agents hereunder
are only those expressly set forth herein. Without limiting the generality of
the foregoing, the Agents 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 Agents may consult with
legal counsel, 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.
SECTION 7.05. Liability of Agents. NEITHER THE AGENTS NOR ANY OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES SHALL BE LIABLE TO ANY BANK
FOR ANY ACTION TAKEN OR NOT TAKEN BY THEM 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. IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT THE AGENTS, THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS OR
EMPLOYEES SHALL BE INDEMNIFIED AND HELD HARMLESS BY THE BANKS FROM ALL COSTS,
EXPENSES (INCLUDING COUNSEL FEES AND DISBURSEMENTS) CLAIMS, DEMANDS, ACTIONS,
LOSSES OR LIABILITIES ARISING OUT OF THE NEGLIGENCE (WHETHER SOLE OR
CONTRIBUTORY) OF SUCH PERSONS. Neither the Agents nor any of their 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 Credit Event hereunder; (ii) the
performance or observance of any of the covenants or agreements of the Borrower;
(iii) the satisfaction of any condition specified in Article III, except receipt
of items required to be delivered to the Administrative Agent; or (iv) the
validity, effectiveness or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The Agents shall not
incur any liability to any Bank 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 EACH OF THE AGENTS (TO THE EXTENT NOT REIMBURSED
BY THE BORROWER) AGAINST ANY COST, EXPENSE (INCLUDING COUNSEL FEES AND
DISBURSEMENTS), CLAIM, DEMAND, ACTION, LOSS OR LIABILITY INCLUDING ANY LIABILITY
FOR EITHER OF THE AGENTS' OWN NEGLIGENCE (EXCEPT SUCH AS RESULT FROM SUCH
AGENT'S GROSS NEGLIGENCE OR WILLFUL
53
MISCONDUCT) THAT SUCH AGENT MAY SUFFER OR INCUR IN CONNECTION WITH THIS
AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY SUCH AGENT HEREUNDER. IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT THE AGENTS, THEIR RESPECTIVE
DIRECTORS, OFFICERS, AGENTS OR EMPLOYEES SHALL BE INDEMNIFIED AND HELD HARMLESS
BY THE BANKS FROM ALL COSTS, EXPENSES (INCLUDING COUNSEL FEES AND DISBURSEMENTS)
CLAIMS, DEMANDS, ACTIONS, LOSSES OR LIABILITIES ARISING OUT OF OR RESULTING FROM
THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OF SUCH PERSONS.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agents 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 Agents 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.
SECTION 7.08. Successor Agents. Either of the Agents 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. Further, upon vote of the
Required Banks, either of the Agents may be replaced by any other Bank consented
to by the Borrower (which consent shall not be unreasonably withheld) and which
Bank consents to assume the duties of the Agent being replaced; provided,
however, that upon any such resignation or removal, the remaining Agent may
assume the role and responsibilities of the resigning Agent, with the consent of
the Borrower, which consent shall not be unreasonably withheld. If the
remaining Agent chooses not accept to such appointment following a resignation,
the Required Banks shall have the right to appoint a successor Agent, with the
consent of the Borrower, which consent shall not be reasonably withheld. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within 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.
54
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Fixed Rate
Borrowing:
(1) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to
the Reference Banks in the relevant market for such Interest Period, or
(2) the Required Banks advise the Administrative Agent that the
Adjusted CD Rate or the Euro-Dollar Rate, as the case may, as determined by
the Administrative Agent will not adequately and fairly reflect the cost to
such Banks of funding their Fixed Rate Loans for such Interest Period,
the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such notice no longer exist: (A)(i) if such
circumstances relate to CD Loans, the obligations of the Banks to make CD Loans
shall be suspended or (ii) if such circumstances relate to the Euro-Dollar
Loans, the obligations of the Banks to make Euro-Dollar Loans shall be suspended
and (B) unless the Borrower notifies the Administrative Agent at least one
Domestic Business Day before the date of any Fixed Rate Borrowing for which a
Notice of Borrowing has previously been given that it elects not to borrow on
such date,
(i) if such Fixed Rate Borrowing is a CD Borrowing, such CD Borrowing
shall instead be made (x) as a Euro-Dollar Borrowing if the Borrower so
elects by notice to the Administrative Agent and all of the procedures set
forth herein for a Euro-Dollar Borrowing can be complied with at such time
or (y) if a Euro-Dollar Borrowing is not possible, then such CD Borrowing
shall instead be made as a Base Rate Borrowing, and
(ii) if such Fixed Rate Borrowing is a Euro-Dollar Borrowing, such
Euro-Dollar Borrowing shall be made (x) as a CD Borrowing if the Borrower
so elects by notice to the Administrative Agent and all of the procedures
set forth herein for a CD Borrowing can be complied with at such time or
(y) if a CD Borrowing is not elected or is not possible, then such Euro-
Dollar Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the Effective Date, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the
55
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 Administrative
Agent, the Administrative Agent shall forthwith give notice thereof to the other
Banks and the Borrower whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist (which such Bank shall do forthwith) the obligation of such Bank to
make Euro-Dollar Loans shall be suspended. Before giving any notice to the
Administrative 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 reasonable 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 Euro-Dollar Loan, together with accrued interest thereon. Concurrently
with prepaying each such affected Euro-Dollar Loan, the Borrower shall borrow a
Base Rate Loan (or, if the Borrower so elects by at least one Domestic Business
Day's notice to the Administrative 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 Base Rate (or
other) Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after the
Effective Date, in the case of any Loan or any obligation to make Loans or any
obligations to issue or participate in any Letters of Credit, 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:
(i) shall subject any Bank (or its Applicable Lending Office) to any
tax, duty or other charge with respect to its Fixed Rate Loans or
participation in Letters of Credit, its Notes or its obligation to make
Fixed Rate Loans or issue Letters of Credit, or shall change the basis of
taxation of payments to any Bank (or its Applicable Lending Office) of the
principal of or interest on its Fixed Rate Loans or Letters of Credit or
any other amounts due under this Agreement in
56
respect of its Fixed Rate Loans or Letters of Credit or its obligation to
make Fixed Rate Loans or issue or participate in Letters of Credit (except
for changes in the rate of tax on the income of such Bank or its Applicable
Lending Office or changes in franchise taxes imposed on it under applicable
law); or
(ii) 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 8.05) against assets of,
deposits with or for the account of, or credit extended by, any Bank (or
its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for certificates
of deposit or the London interbank market any other condition affecting its
Fixed Rate Loans, its Notes or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the actual cost to such
Bank (or its Applicable Lending Office) of making or maintaining any Fixed Rate
Loan or issuing or participating in any Letter of Credit, or 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 reasonably deemed by such Bank to be material, then, within 15 days after
demand by such Bank (with a copy to the Administrative 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 Fixed Rate Loan
or Letter of Credit or 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 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 15
days after demand by such Bank (with a copy to the Administrative Agent), the
57
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 Administrative
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 reasonable 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 the Borrower within five days after receipt of such certificate. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
SECTION 8.04. Substitute Loans. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.01 or 8.02 or
(ii) any Bank has demanded compensation under Section 8.03(a) and the Borrower
shall, by at least five Euro-Dollar Business Days' prior notice to such Bank
through the Administrative 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 (which such Bank shall do forthwith):
(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 Base
Rate Loans or, if the Borrower shall so elect in its Notice of Borrowing,
CD Loans or Euro-Dollar Loans (whichever type is not affected by such
circumstances) for an Interest Period coincident with the related Fixed
Rate Borrowing, and
(b) after each of its CD Loans or Euro-Dollar Loans, as the case may
be, has been repaid, all payments of principal which would otherwise be
applied to repay such Fixed Rate Loans shall instead be applied to repay
its Loans made pursuant to Section 8.02 or clause (a) above.
SECTION 8.05. 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 Euro-Dollar Rate
divided by (B) one minus the Euro-Dollar Reserve Percentage over (ii) the rate
specified in clause (i)(A). Any Bank electing to require payment of such
additional interest (x) shall so
58
notify the Borrower and the Administrative Agent, in which case such additional
interest on the Euro-Dollar Loans of such Bank shall be payable to such Bank at
the place indicated in such notice with respect to each Interest Period
commencing at least five Euro-Dollar Business Days after the giving of such
notice and (y) shall notify the Borrower at least five 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 8.06. Substitution of Bank. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.01 or 8.02 or
(ii) any Bank has demanded compensation under Section 8.03 or 8.05, or if any
Bank has notified the Borrower that it is not capable of receiving payments
without deduction or withholding pursuant to Section 2.18 the Borrower shall
have the right, with the assistance of the Administrative Agent and the Co-
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 and participation in any Letters of Credit
of such Bank. Any such purchase shall be at par, shall be subject to the
provisions of Section 2.14, 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. All notices and other communications provided for
herein shall be in writing (including bank wire, telex, telegraph, telecopy,
cable 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
any of the Agents, 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 Administrative Agent. All notices and other
communications shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section and the appropriate
answerback is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, (iii) if given by telecopier, upon telephone confirmation that the
telecopied document has been received by the individual to whom it was
addressed, or (iv) if given by any other means, when delivered at the address
specified in this Section; provided, however, that notices to the Administrative
Agent under
59
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
received.
SECTION 9.02. No Waiver. No failure on the part of any of the Agents 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 AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES.
SECTION 9.04. Expenses; Documentary Taxes; Indemnification. (a) The
Borrower shall pay, within 30 days after receipt of a reasonably detailed
statement setting forth the amount and nature thereof, (i) all out-of-pocket
expenses of the Agents, including the reasonable fees and disbursements of one
firm serving as special counsel for both Agents, in connection with the
preparation of this Agreement, any waiver or consent hereunder or any amendment
hereof or any Default or alleged Default hereunder and (ii) if an Event of
Default occurs, all out-of-pocket expenses incurred by the Agents or any Bank,
including reasonable fees and disbursements of counsel (either outside counsel
or in-house counsel, as the case may be), 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 THEIR RESPECTIVE
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES) AND EACH AGENT (AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES) AND HOLD EACH BANK AND EACH AGENT
HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, COSTS AND
EXPENSES OF ANY KIND (INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL (EITHER OUTSIDE COUNSEL OR IN-HOUSE COUNSEL, AS THE
CASE MAY BE) FOR ANY BANK AND THE AGENTS 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
ANY 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.
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(C) EACH AGENT AND EACH BANK ENTITLED TO INDEMNITY FROM THE BORROWER UNDER
ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE INDEMNIFIED
AND HELD HARMLESS TO THE EXTENT PROVIDED THEREUNDER AGAINST ANY AND ALL LOSSES,
LIABILITIES, DAMAGES, CLAIMS, DEFICIENCIES, JUDGMENTS, COSTS OR REASONABLE
EXPENSES RELATING TO ENVIRONMENTAL LAWS OR RELEASES IF ANY OF SUCH LOSSES,
LIABILITIES, DAMAGES, CLAIMS, DEFICIENCIES, JUDGMENTS, COSTS OR EXPENSES RELATE
TO VIOLATIONS OF REQUIREMENTS OF ENVIRONMENTAL LAWS RESULTING FROM ANY OF THE
BORROWER'S AND ITS CONSOLIDATED SUBSIDIARIES' OPERATIONS (OTHER THAN AS A RESULT
OF AN INDEMNIFIED PERSON'S ACTS OR OMISSIONS IF SUCH INDEMNIFIED PERSON IS
DEEMED TO BE A "PERSON IN CONTROL" UNDER ANY STATE OR FEDERAL STATUTE OR
REGULATION).
(D) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS BUT IN ALL EVENTS SUBJECT TO PARAGRAPH (E) OF THIS SECTION 9.04,
IT IS THE EXPRESS INTENTION OF THE BORROWER AND THE OTHER PARTIES HERETO THAT
EACH INDEMNIFIED PERSON ENTITLED TO INDEMNITY UNDER ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE INDEMNIFIED AND HELD HARMLESS TO
THE EXTENT PROVIDED THEREUNDER AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DEFICIENCIES, JUDGMENTS OR REASONABLE EXPENSES ARISING OUT OF OR RESULTING FROM
THE ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OF SUCH INDEMNIFIED
PERSON.
(E) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT, IN NO EVENT SHALL THE
BORROWER BE LIABLE IN ANY MANNER WITH RESPECT TO ANY LIABILITIES DAMAGES,
LOSSES, CLAIMS, DEFICIENCIES, JUDGMENTS, COSTS OR EXPENSES OF ANY KIND FOR ANY
ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR
VIOLATION OF LAW ON THE PART OF ANY INDEMNIFIED PERSON.
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 any Agent are affected thereby, by such Agent); provided, however,
that no such amendment, waiver or modification shall, unless signed by all the
Banks, (i) increase or decrease the Commitment of any Bank (except for increases
to the Commitment of any Bank pursuant to Section 8.06 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
termination of any Commitment, (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 this Section 9.05.
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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.
(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 or any or all of its Commitment Percentage of Letter of
Credit Outstandings. 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
Agents, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrower and the Agents 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, however,
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 2.14 and 9.04 and Article VIII with respect to its participating
interest; provided, however, that all amounts payable to a Bank for the account
of a Participant under Sections 2.14 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 to the Administrative Agent and the
Borrower, assign to one or more banks or other institutions (each an "Assignee")
all, or a proportionate part of all (in minimum amounts of $10,000,000 and 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 executed by such Assignee and such transferor Bank, with (and
subject to) the written
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consent of the Borrower and the Administrative Agent; which shall not be
unreasonably withheld; provided, however, that if an Assignee is the local
Federal Reserve Bank branch for the region in which such Bank is located and is
receiving a collateral assignment or 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 Agents, 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 Agents 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 Administrative Agent a fee of $2,000.00.
(d) No Assignee or other transferee of any Bank's rights shall be entitled
to receive any greater payment under Section 8.03 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 8.02 or 8.03 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 exist.
(e) If any Reference Bank assigns its Notes to an unaffiliated
institution, the Administrative Agent shall, in consultation with the Borrower
and with the consent of the Required Banks, appoint another bank to act as a
Reference Bank hereunder.
SECTION 9.08. Survival. The obligations of the Borrower under Article
VIII and Section 9.04 shall survive the repayment of the Loans and the
satisfaction of the Letter of Credit Outstandings and the termination of the
Commitments.
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.
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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 or any Letter of Credit Outstandings 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 or any Letter of Credit Outstandings (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, or the rights in respect of Letter of Credit Outstandings of, 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 and Letter of
Credit Outstandings held by the Banks shall be shared by the Banks pro rata;
provided, however, 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, or in respect of Letter of Credit
Outstandings. 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.
SECTION 9.12. Collateral. Each of the Banks represents to the Agents 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 STATE COURT SITTING IN HARRIS
COUNTY, TEXAS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY NOTE OR ANY LETTER OF CREDIT. 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 ANY SUCH COURT AND ANY CLAIM THAT ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY 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 ANY SUCH A COURT SHALL BE CONCLUSIVE AND
BINDING UPON THE BORROWER AND MAY BE ENFORCED IN ANY FEDERAL OF STATE COURT
SITTING IN THE STATE OF TEXAS (OR ANY OTHER COURTS TO THE JURISDICTION OF WHICH
THE BORROWER IS OR MAY BE SUBJECT) BY A SUIT UPON SUCH JUDGMENT; PROVIDED,
HOWEVER, THAT SERVICE OF PROCESS IS EFFECTED
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UPON THE BORROWER IN ONE OF THE MANNERS SPECIFIED IN SUBSECTION (b) OF THIS
SECTION OR AS OTHERWISE PERMITTED BY LAW.
(b) 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 STATE COURT SITTING IN HARRIS
COUNTY, TEXAS 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 ADMINISTRATIVE 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 ANY AGENT OR ANY
BANK. THE BORROWER AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT PERMITTED BY
LAW, SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE
BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING AND SHALL BE TAKEN AND HELD TO
BE VALID AND PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE BORROWER.
(c) NO LIMITATION ON SERVICE OR SUIT. NOTHING IN THIS ARTICLE SHALL
AFFECT THE RIGHT OF ANY AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR LIMIT THE RIGHT OF ANY AGENT OR ANY BANK TO BRING
PROCEEDINGS OTHERWISE PERMITTED BY LAW AGAINST THE BORROWER IN THE COURTS OF THE
JURISDICTION OF ANY BANK'S LENDING OFFICE OR THE COURTS OF ANY JURISDICTION OR
JURISDICTIONS IN WHICH THE BORROWER HAS ANY ASSETS.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
LYONDELL PETROCHEMICAL COMPANY
By:
Title: Russell S. Young
Senior Vice President, Chief Financial Officer
and Treasurer
Address for Notices:
One Houston Center
Suite 1600
1221 McKinney Street
P.O. Box 3646
Houston, Texas 77253-3646
Attn: Treasurer
Telephone No.: (713) 652-7200
Telecopier No.: (713) 652-7430
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as
Administrative Agent
By:
Title: D. G. Mills
Vice President
Address for Notices:
712 Main Street
Houston, Texas 77002
Attn: Syndications Department
Telephone No.: (713) 216-4037
Telecopier No.: (713) 216-2339
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CONTINENTAL BANK N.A., as Co-Agent
By:
Title: R. R. Ingersoll
Managing Director
Address for Notices:
231 South LaSalle Street, 10th Floor
Chicago, IL 60697
Attn: Kathryn Rayford
Telephone No.: (312) 828-3488
Telecopier No.: (312) 984-5614
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