EXHIBIT 4.3
[EXECUTION COPY]
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of August 24, 2001
among
EQUISTAR CHEMICALS, LP, as Borrower,
THE LENDERS PARTY HERETO,
CITICORP USA, INC.
and
CREDIT SUISSE FIRST BOSTON,
as Co-Syndication Agents,
BANK OF AMERICA, N.A.,
as Servicing Agent and
Administrative Agent,
and
THE CHASE MANHATTAN BANK,
as Collateral Agent and
Administrative Agent
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JP MORGAN SECURITIES INC.
and
BANC OF AMERICA SECURITIES LLC,
Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS................................................................... 1
Section 1.01. Definitions.............................................................. 1
Section 1.02. Accounting Terms......................................................... 28
Section 1.03. Terms Generally.......................................................... 29
Section 1.04. Classification of Loans and Borrowings................................... 29
ARTICLE II THE LOANS.................................................................... 29
Section 2.01. Commitments.............................................................. 29
Section 2.02. Loans.................................................................... 30
Section 2.03. Competitive Bid Procedure................................................ 32
Section 2.04. Notice of Borrowings..................................................... 34
Section 2.05. Conversions and Continuations............................................ 34
Section 2.06. Swingline Loans.......................................................... 36
Section 2.07. Letters of Credit........................................................ 37
Section 2.08. Fees..................................................................... 42
Section 2.09. Maturity of Loans; Mandatory Prepayments................................. 44
Section 2.10. Evidence of Debt......................................................... 46
Section 2.11. Interest on Loans........................................................ 47
Section 2.12. Interest on Overdue Amounts; Alternative Rate of Interest................ 48
Section 2.13. Termination and Reduction of Commitments and Swingline Facility.......... 49
Section 2.14. Optional Prepayment of Loans............................................. 50
Section 2.15. Reserve Requirements; Change in Circumstances............................ 51
Section 2.16. Change in Legality....................................................... 53
Section 2.17. Indemnity................................................................ 54
Section 2.18. Pro Rata Treatment....................................................... 55
Section 2.19. Sharing of Setoffs....................................................... 55
Section 2.20. Taxes.................................................................... 56
Section 2.21. Duty to Mitigate; Assignment of Commitments under Certain Circumstances.. 57
Section 2.22. Stop Issuance Notice..................................................... 58
ARTICLE III REPRESENTATIONS AND WARRANTIES.............................................. 58
Section 3.01. Organization............................................................. 59
Section 3.02. Authorization............................................................ 59
Section 3.03. Absence of Conflicts..................................................... 59
Section 3.04. Governmental Approvals................................................... 59
Section 3.05. Enforceability........................................................... 59
Section 3.06. Financial Statements..................................................... 60
Section 3.07. Material Adverse Effect.................................................. 61
Section 3.08. Litigation............................................................... 61
Section 3.09. Compliance with Laws and Agreements...................................... 61
Section 3.10. Federal Reserve Regulations.............................................. 61
Section 3.11. Tax Returns.............................................................. 61
Section 3.12. Employee Benefit Plans................................................... 62
Section 3.13. Accuracy of Information.................................................. 62
Section 3.14. Investment Company Act; Public Utility Holding Company Act............... 62
Section 3.15. Environmental and Safety Matters......................................... 63
Section 3.16. Title to Properties...................................................... 63
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Section 3.17. Collateral............................................................... 63
Section 3.18. Subsidiaries............................................................. 63
Section 3.19. Insurance................................................................ 63
Section 3.20. Labor Matters............................................................ 64
Section 3.21. Solvency................................................................. 64
ARTICLE IV CONDITIONS OF LENDING........................................................ 64
Section 4.01. All Borrowings........................................................... 64
Section 4.02. Effective Date........................................................... 65
Section 4.03. Effect of Amendment and Restatement...................................... 66
ARTICLE V AFFIRMATIVE COVENANTS......................................................... 67
Section 5.01. Existence................................................................ 67
Section 5.02. Businesses and Properties................................................ 67
Section 5.03. Insurance................................................................ 67
Section 5.04. Taxes.................................................................... 67
Section 5.05. Financial Statements, Reports, Etc....................................... 68
Section 5.06. Litigation and Other Notices............................................. 70
Section 5.07. ERISA.................................................................... 71
Section 5.08. Access to Premises and Records........................................... 71
Section 5.09. Compliance with Laws..................................................... 72
Section 5.10. Environmental Compliance................................................. 72
Section 5.11. Information Regarding Collateral......................................... 72
Section 5.12. Further Assurances; Appraisal Reports.................................... 72
ARTICLE VI NEGATIVE COVENANTS........................................................... 74
Section 6.01. Liens.................................................................... 75
Section 6.02. Sale and Leaseback Transactions.......................................... 78
Section 6.03. Subsidiary Indebtedness and Preferred Stock.............................. 79
Section 6.04. Total Leverage Ratio..................................................... 80
Section 6.05. Interest Coverage Ratio.................................................. 81
Section 6.06. Consolidations, Mergers, Sales of Assets................................. 81
Section 6.07. Change of Business....................................................... 82
Section 6.08. Use of Proceeds.......................................................... 82
Section 6.09. Restrictive Agreements................................................... 83
Section 6.10. Business Acquisitions.................................................... 83
Section 6.11. Transactions with Affiliates............................................. 84
Section 6.12. Hedging Agreements....................................................... 84
Section 6.13. Certain Payments of Indebtedness......................................... 85
Section 6.14. Borrower Indebtedness.................................................... 85
Section 6.15. Senior Secured Leverage Ratio............................................ 86
Section 6.16. Restricted Payments; Restricted Investments.............................. 87
ARTICLE VII EVENTS OF DEFAULT........................................................... 88
Section 7.01. Events of Default........................................................ 88
ARTICLE VIII ADMINISTRATIVE AGENTS...................................................... 92
ARTICLE IX MISCELLANEOUS................................................................ 94
Section 9.01. Notices.................................................................. 94
Section 9.02. No Waivers; Amendments................................................... 95
Section 9.03. Payments................................................................. 96
Section 9.04. Governing Law; Submission to Jurisdiction................................ 97
Section 9.05. Expenses; Documentary Taxes; Indemnity................................... 98
Section 9.06. Survival of Agreements, Representations and Warranties, Etc.............. 99
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Section 9.07. Successors and Assigns................................................... 99
Section 9.08. Right of Setoff.......................................................... 103
Section 9.09. Severability............................................................. 104
Section 9.10. Cover Page, Table of Contents and Section Headings....................... 104
Section 9.11. Counterparts; Effectiveness.............................................. 104
Section 9.12. WAIVER OF JURY TRIAL..................................................... 104
Section 9.13. Entire Agreement......................................................... 105
Section 9.14. Confidentiality.......................................................... 105
Section 9.15. Limitation on Recourse to General Partners............................... 106
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Schedules
Pricing Schedule
Schedule 1.01-A Mortgaged Properties
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Schedule 1.01-B Existing Letters of Credit
Schedule 2.01 Lenders' Commitments
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Schedule 3.18 Subsidiaries
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Schedule 3.19 Insurance
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Schedule 5.12 PP&E Value
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Schedule 6.09 Restrictive Agreements
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Schedule 6.14 Outstanding Indebtedness (as of the Effective Date)
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Exhibits
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Syndicated Borrowing Request
Exhibit C-1 Form of Competitive Bid Request
Exhibit C-2 Form of Notice of Competitive Bid Request
Exhibit C-3 Form of Competitive Bid
Exhibit C-4 Form of Competitive Bid Accept/Reject Letter
Exhibit D Form of Letter of Credit Application
Exhibit E-1 Opinion of Baker Botts L.L.P.,
Special Counsel for the Borrower
Exhibit E-2 Opinion of Gerald A. O'Brien, Esq.,
General Counsel of the Borrower
Exhibit F Form of Mortgage
Exhibit G Form of Security Agreement
Exhibit H Form of Subsidiary Guarantee
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of August 24, 2001, among
EQUISTAR CHEMICALS, LP, a Delaware limited partnership; the lenders from time to
time party hereto, initially consisting of those listed on Schedule 2.01 hereto;
CITICORP USA, INC. and CREDIT SUISSE FIRST BOSTON, as Co-Syndication Agents;
BANK OF AMERICA, N.A. ("BofA"), as Servicing Agent; THE CHASE MANHATTAN BANK
("Chase"), as Collateral Agent; and BofA and Chase as administrative agents (in
such capacity, the "Administrative Agents").
The Borrower (such term and each other capitalized term used but not
otherwise defined herein having the meaning assigned to it in Article I) has
heretofore entered into a Credit Agreement dated as of November 25, 1997 with,
among others, the lenders party thereto, BofA as Servicing Agent and Chase and
BofA as Administrative Agents (as amended and/or restated prior to the Effective
Date, the "Original Credit Agreement"). The Borrower desires to enter into this
Amended Agreement to amend and restate the Original Credit Agreement in order
to, among other things, enable it to borrow on a term basis $300,000,000 and on
a revolving basis an aggregate principal amount not in excess of $500,000,000.
The proceeds of Borrowings on the Effective Date are to be used to prepay
outstanding loans under the Original Credit Agreement, to refinance certain
other Indebtedness of the Borrower and to pay related fees and expenses. The
proceeds of Borrowings subsequent to the Effective Date are to be used for
general partnership purposes, including non-hostile acquisitions and capital
expenditures. The Lenders are willing to amend and restate the Original Credit
Agreement and to extend such credit to the Borrower on the terms and subject to
the conditions set forth herein.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. As used in this Agreement, the following terms
shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with Article II.
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"Acceptable Subordinated Loan" shall mean any loan to any Loan Party from a
Partner or an Affiliate of a Partner, but only to the extent that (a) such loan
does not mature, and no payment, prepayment, redemption or repurchase of the
principal amount thereof is required by the terms thereof, prior to the Term
Loan
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Maturity Date and (b) such loan is subordinated to the Obligations on terms
reasonably acceptable to the Administrative Agents.
"Additional Assets" shall mean a controlling interest or, to the extent
permitted by Section 6.16, a joint venture interest, in each case in a business
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that is a Permitted Business or in long-term property or assets that are used or
useful in a Permitted Business.
"Additional Letter of Credit" shall mean a letter of credit issued
hereunder by the Fronting Bank on or after the Effective Date.
"Administrative Fees" shall have the meaning assigned to such term in
Section 2.08(c).
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"Administrative Questionnaire" shall mean, with respect to each Lender,
an administrative questionnaire in the form prepared by the Servicing Agent,
completed by such Lender and returned to the Servicing Agent.
"Affiliate" shall mean, with respect to any person, any other person
which directly or indirectly controls, is under common control with or is
controlled by such person. As used in this definition, "control" (including,
with correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise). As used
with reference to the Borrower and its Subsidiaries, "Affiliate" shall include
any Partner and any Affiliate of any Partner.
"Agent" shall mean any of the Administrative Agents, the Collateral Agent,
the Co-Syndication Agents and the Servicing Agent, and "Agents" shall mean any
two or more of the foregoing.
"this Agreement" shall mean the Original Credit Agreement, as amended and
restated by this Amended Agreement, and as the same may be further amended from
time to time hereafter.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards to the next higher 1/16th of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate will be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively. If for any reason the Servicing Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate for any reason,
including, without limitation, the inability of the Servicing Agent to obtain
sufficient bids in accordance with the terms hereof, the Alternate Base Rate
shall
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be determined without regard to clause (b) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist.
"Amended Agreement" means this Amended and Restated Credit Agreement dated
as of August 24, 2001, as executed and delivered by the parties listed on the
signature pages hereof.
"Amortization Date" shall mean with respect to the Term Loans, (i) prior to
the Term Loan Maturity Date, each March 31, June 30, September 30 and December
31, commencing December 31, 2001, and (ii) the Term Loan Maturity Date.
"Applicable Lending Office" shall mean, with respect to each Lender, (i)
such Lender's domestic lending office in the case of an ABR Loan or a Fixed Rate
Loan or (ii) such Lender's LIBOR Lending Office in the case of a LIBOR Loan.
"Applicable Margin" shall mean (i) with respect to the Term Loans, a rate
per annum equal to 2.00% in the case of ABR Loans and 3.00% in the case of LIBOR
Loans and (ii) with respect to Revolving Loans of any Type outstanding at any
time, the percentage rate per annum set forth in the Pricing Schedule as the
margin with respect to Loans of such Type which is applicable at such time;
provided that the Applicable Margin on any date with respect to Committed Loans
of any Type and any Class shall be the sum of the percentage determined in
accordance with clause (i) or clause (ii) above, as applicable, plus 2.00%, if
on such date (x) an Event of Default exists and (y) except in the case of an
Event of Default under Sections 7.01(b), 7.01(c), 7.01(e) or 7.01(f), the
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Administrative Agents shall have notified the Borrower at the request of the
Required Lenders that this proviso shall be applicable.
"Appraisal Report" shall mean any appraisal report, in form and substance
reasonably satisfactory to the Administrative Agents and the Borrower and
prepared by independent consultants selected by the Administrative Agents and
reasonably satisfactory to the Borrower, which report sets forth PP&E Value as
of the date of such report.
"Arranger" shall mean each of J.P. Morgan Securities Inc. and Banc of
America Securities LLC, in its capacity as a joint lead arranger and joint
bookrunner in respect of this Agreement.
"Asset Sale" shall mean any sale, lease or other disposition (including
any such transaction effected by way of merger or consolidation) by the Borrower
or any of its Subsidiaries of any asset, including without limitation any
Sale/Leaseback Transaction, whether or not involving a capital lease, but
excluding (a) dispositions of inventory or equipment in the ordinary course of
business, (b) dispositions of Temporary Cash Investments and cash payments
otherwise permitted under this Agreement (including Permitted Dividends
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permitted by Section 6.16), (c) dispositions to the Borrower or a Subsidiary of
the Borrower, (d) dispositions constituting mergers or consolidations permitted
by Section 6.06(a), (e) dispositions constituting Investments permitted by
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Section 6.16 (except as provided below), (f) dispositions of any fixed or
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capital asset pursuant to a Sale/Leaseback Transaction permitted by Section
6.02(a)(i) or 6.02(a)(ii) and (g) dispositions constituting Liens permitted by
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Section 6.01. For avoidance of doubt, a Securitization Transaction constitutes
an Asset Sale and does not, in itself, give rise to an obligation secured by a
Lien on an asset of the Borrower or a Subsidiary. To the extent that, in
connection with (x) an Investment by the Borrower or a Subsidiary in a joint
venture or (y) a reduction in the proportionate interest of the Borrower or a
Subsidiary in a joint venture, the Borrower or a Subsidiary receives Net Cash
Proceeds (determined as if such transaction were an Asset Sale), then such
transaction shall be treated as an Asset Sale to the extent of such Net Cash
Proceeds.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, substantially in the form of Exhibit
A.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower" shall mean Equistar Chemicals, LP, a Delaware limited
partnership.
"Borrowing" shall mean (a) a Loan or group of Loans of a single Class and
Type made by the Lenders having Commitments of such Class on a single date and
as to which a single Interest Period is in effect, (b) a Competitive Loan or
group of Competitive Loans made by the Lender or Lenders whose Competitive Bids
have been accepted pursuant to Section 2.03 and made on a single date and as to
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which a single Interest Period is in effect or (c) a Swingline Loan.
"Borrowing Request" shall mean a request made pursuant to Section 2.04
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in the form of Exhibit B.
"Business Acquisition" shall mean (i) an Investment by the Borrower or any
of its Subsidiaries in any other person (including an Investment by way of
acquisition of securities of any other person) pursuant to which such person
shall become a Subsidiary or shall be merged into or consolidated with the
Borrower or any of its Subsidiaries or (ii) an acquisition by the Borrower or
any of its Subsidiaries of the property and assets of any person (other than the
Borrower or any of its Subsidiaries) that constitute substantially all the
assets of such person or any division or other business unit of such person.
"Business Day" shall mean any day which is not a Saturday, Sunday or legal
holiday in the State of New York or the State of Texas on which banks are open
for business in New York City and Houston; provided, however, that when
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used in connection with a LIBOR Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in deposits in Dollars in the
London interbank market.
"Capitalized Lease Obligations" of any person shall mean obligations of
such person and its consolidated subsidiaries to pay rent or other amounts under
any lease of (or other arrangement conveying the right to use) real and/or
personal property, which obligations are accounted for as a capital lease on the
consolidated balance sheet of such person, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"Cash Management Subsidiary" shall mean a Subsidiary engaged solely in
borrowing, lending and investing in the Borrower and its Subsidiaries and
short-term investment activities in connection with the Borrower and its
Subsidiaries and that holds no material assets other than cash, Temporary Cash
Investments and intercompany receivables.
A "Change in Control" shall occur if at any time:
(a) members of the Existing Control Group shall cease to own in the
aggregate, through ownership by one or more of them, partnership interests
representing at least 50% of the total equity interest and voting power of the
Borrower; or
(b) partnership interests representing in aggregate more than 25% of the
total equity interests or voting power of the Borrower are transferred to
persons other than the members of the Existing Control Group which transferees
do not have (and are not subsidiaries of parents that have) senior unsecured
credit ratings from S&P and Moody's (or if the senior unsecured debt of such
transferees or parents is not rated by such agencies, such transferees do not
provide opinions from such rating agencies that such transferees or parents
could reasonably be expected to obtain senior unsecured credit ratings from such
agencies) of at least the lower of (x) BBB- and Baa3 or (y) the senior unsecured
debt ratings of the transferor (or its parent); or
(c) any person other than a member of the Existing Control Group shall
acquire (i) the right directly or indirectly to exercise a substantial portion
of the powers of Lyondell to act on behalf of the Partnership Governance
Committee and of the representatives of Lyondell on the Partnership Governance
Committee, in each case, as in effect on the Effective Date or (ii) the right
directly or indirectly to exercise a substantial portion of the rights and
powers of the Partnership Governance Committee with respect to matters that
require unanimous consent under the Limited Partnership Agreement as in effect
on the date hereof without the need for the consent of a member of the Existing
Control Group.
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"Class", when used in respect of any Loan, Borrowing or Commitment, shall
refer to whether such Loan, or the Loans comprising such Borrowing, or the Loans
to be made pursuant to such Commitment, are Revolving Loans, Term Loans or
Swingline Loans (or Syndicated Loans or Committed Loans).
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collateral" shall mean any and all "Collateral", as defined in any
applicable Collateral Document.
"Collateral Agent" shall mean Chase, in its capacity as collateral agent
under the Collateral Documents, and its successors in such capacity.
"Collateral and Guarantee Requirement" shall mean the requirement that:
(a) the Collateral Agent shall have received from each Loan Party a
counterpart of a Security Agreement duly executed and delivered on behalf of
such Loan Party; provided that if such Loan Party is a JV Owner Subsidiary, the
Collateral covered by such Security Agreement shall be limited to the rights of
such JV Owner Subsidiary to receive distributions from the related Joint Venture
and proceeds thereof;
(b) the Collateral Agent shall have "control" (within the meaning of
Section 8-106 of the Uniform Commercial Code) of all outstanding Equity
Interests of each Material Subsidiary owned by or on behalf of any Loan Party
(except (i) that the Loan Parties shall not be required to pledge more than 65%
of the outstanding voting Equity Interests of any Foreign Subsidiary and (ii) as
provided in Section 5.12(a) with respect to Joint Venture Subsidiaries and JV
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Owner Subsidiaries);
(c) each Loan Party (other than the Borrower or a JV Owner Subsidiary)
shall have executed and delivered a Subsidiary Guarantee;
(d) all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the Collateral
Agent to be filed, registered or recorded to create the Liens intended to be
created by the Collateral Documents and perfect such Liens to the extent
required by, and with the priority required by, the Loan Documents, shall have
been filed, registered or recorded or delivered to the Collateral Agent for
filing, registration or recording;
(e) the Collateral Agent shall have received (i) counterparts of a Mortgage
with respect to each Mortgaged Property duly executed and delivered by the
record owner of such Mortgaged Property and (ii) such surveys, abstracts, title
reports, legal opinions and other documents (other than title insurance) as the
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Collateral Agent or the Required Lenders may reasonably request with respect to
any such Mortgage or Mortgaged Property; and
(f) each Loan Party shall have obtained all consents and approvals required
to be obtained by it in connection with the execution and delivery of all
Collateral Documents to which it is a party, the performance of its obligations
thereunder and the granting by it of the Liens thereunder.
"Collateral Coverage Test" shall mean, at any date, the requirement that
the Collateral Value at such date equal or exceed the aggregate amount of the
Credit Exposures at such date.
"Collateral Documents" shall mean the Mortgages, the Security Agreements,
the Subsidiary Guarantees and any additional security or control documentation
delivered or required to be delivered pursuant to the Loan Documents to secure
the Obligations or the "Secured Obligations" as defined in any such Loan
Document.
"Collateral Value" shall mean, at any date, an amount equal to the sum of
(a) the lesser of (x) the Maximum Secured Amount and (y) 30% of PP&E Value at
such date, (b) 60% of the aggregate book value of Inventory (as defined in the
Security Agreement) included in the Collateral at such date and (c) 80% of the
aggregate book value of Accounts (as defined in the Security Agreement) included
in the Collateral at such date; provided the amount determined pursuant to
clause (a) above may not exceed 50% of Collateral Value as determined at any
date. Book values shall be based on the then most recent consolidated balance
sheet of the Borrower delivered to the Lenders pursuant to Section 3.06 or 5.05.
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"Committed Loan" shall mean a Revolving Loan, a Swingline Loan or a Term
Loan.
"Commitment" shall mean a Revolving Commitment or a Term Commitment. The
amount of each Lender's Commitment as of the Effective Date is set forth on
Schedule 2.01, or thereafter in the Assignment and Acceptance pursuant to which
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such Lender shall have assumed its Commitment, as applicable. The aggregate
amount of the Lenders' Commitments on the Effective Date is $800,000,000.
"Competitive Bid" shall mean an offer by a Lender to make a Competitive
Loan pursuant to Section 2.03.
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"Competitive Bid Accept/Reject Letter" shall mean a notification made
by the Borrower pursuant to Section 2.03(d) in the form of Exhibit C-4.
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"Competitive Bid Rate" shall mean, as to any Competitive Bid made by a
Lender pursuant to Section 2.03(b), (i) in the case of a LIBOR Loan, the Margin
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and (ii) in the case of a Fixed Rate Loan, the fixed rate of interest offered by
the
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Lender making such Competitive Bid. The Competitive Bid Rate submitted by any
Lender shall include any and all reserve requirement costs of such Lender of the
type referred to in Section 2.15(a) which shall be in effect on the date of the
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submission of such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to Section
2.03 in the form of Exhibit C-1.
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"Competitive Loan" shall mean a loan from a Lender to the Borrower
pursuant to the bidding procedure described in Section 2.03. Each Competitive
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Loan shall be a LIBOR Competitive Loan or a Fixed Rate Loan.
"Competitive Loan Exposure" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Competitive
Loans made by such Lender.
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum dated August 2001 relating to the Borrower and the
transactions contemplated herein.
"Consolidated Net Tangible Assets" shall mean the total amount of assets of
the Borrower and its Consolidated Subsidiaries (less applicable reserves and
other properly deductible items) after deducting therefrom (a) all current
liabilities (excluding any thereof which 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 (b) all
goodwill, trade names, trademarks, patents, purchased technology, unamortized
debt discount and other like intangible assets, all as set forth on the most
recent consolidated financial statements of the Borrower delivered to the
Lenders pursuant to Section 3.06 or 5.05 and computed in accordance with GAAP.
"Consolidated Subsidiary" shall mean at any date any Subsidiary the
accounts of which would in accordance with GAAP be consolidated with those of
the Borrower in its consolidated financial statements if such statements were
prepared as of such date.
"Co-Syndication Agents" shall mean Citicorp USA, Inc. and Credit Suisse
First Boston, in their capacity as Co-Syndication Agents in respect of this
Agreement.
"Credit Event" shall mean any Borrowing (including a Borrowing
resulting from a conversion or continuation of Loans pursuant to Section 2.05)
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or any issuance, amendment, renewal or extension of a Letter of Credit.
"Credit Exposure" shall mean, with respect to any Lender at any time,
the sum of (i) such Lender's Revolving Commitment at such time or, if the
Revolving Commitments shall have been terminated, the sum of such Lender's
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Revolving Committed Outstandings at such time plus its Competitive Loan Exposure
at such time plus (ii) the aggregate outstanding principal amount of such
Lender's Term Loans at such time or, if no Term Loans are then outstanding, the
amount of such Lender's Term Commitment at such time.
"Debt Incurrence" shall mean the issuance after the Effective Date for cash
proceeds by the Borrower or any of its Subsidiaries of any debt security having
a maturity in excess of one year, other than any such issuance to the Borrower
or a Subsidiary.
"Default" shall mean any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would
constitute an Event of Default.
"Deferred Amount" shall have the meaning assigned to such term in
Section 6.16(c).
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"Dividend Payment Date", in relation to any Permitted Dividend, shall
mean the date on which the Borrower or a Subsidiary makes such Permitted
Dividend.
"Dollars" or "$" shall mean lawful currency of the United States of
America.
"EBITDA" shall mean, with respect to the Borrower and its Consolidated
Subsidiaries for any period, the sum, without duplication, of (a) Operating
Income, (b) amortization, depreciation and depletion and (c) non-cash
compensation expense (including deferred compensation expense), determined on a
consolidated basis; provided, that for any fiscal quarter in which the Borrower
or any Consolidated Subsidiary shall incur downtime at or with respect to any
plant or manufacturing or processing unit (as determined in good faith by the
Borrower), the Borrower shall have the right, commencing with the fiscal quarter
ending March 31, 2002 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 any such
addition may only be made in the calculation of EBITDA for any two fiscal
quarters ending after the Effective Date and that any such addition may only be
made for one fiscal quarter during any four consecutive fiscal quarters.
"Effective Date" shall mean the date on which all the conditions
specified in Section 4.02 shall have been satisfied (or waived in accordance
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with Section 9.02).
"Effective Date Fees" shall have the meaning assigned to such term in
Section 2.08(d).
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9
"Environmental and Safety Laws" shall have the meaning assigned to such
term in Section 3.15.
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"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly which arise under or relate to matters covered by
Environmental and Safety Laws.
"Equistar Funding" shall mean Equistar Funding Corporation, a Delaware
corporation, and its successors.
"Equistar GP" shall mean any general partner of the Borrower.
"Equity Interests" shall mean (a) any shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a person
or (b) any warrants, options or other rights to acquire such shares or
interests.
"Equity Issuance" shall mean any issuance of equity securities
(including any preferred equity securities) by the Borrower, other than (i)
equity securities issued to a Subsidiary, (ii) equity securities issued pursuant
to employee benefit and/or dividend reinvestment plans in the ordinary course of
business and (iii) equity securities issued as consideration for a Business
Acquisition.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414 of the Code.
"Event of Default" shall have the meaning specified in Article VII.
---
"Excluded Taxes" shall mean, with respect to any Agent, any Lender, the
Fronting Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income, franchise or doing
business taxes imposed on (or measured by) its net income, or bank share taxes,
imposed by the United States of America, or by the jurisdiction under the laws
of which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.21(b)), any withholding tax that is
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imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office) or
is attributable to such
10
Foreign Lender's failure to comply with Section 2.20(e), except to the extent
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that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 2.20(a).
"Existing Control Group" shall mean Lyondell, Millennium and
Occidental, the successor of any member of the Existing Control Group (including
any entity that is a party to any merger or business combination transaction to
which such member shall be a party; provided that immediately after such
transaction Equity Interests having a majority of the voting power of such
entity's outstanding Equity Interests shall be held by holders of the Equity
Interests of such member immediately prior to such transaction), and their
respective subsidiaries.
"Existing Letters of Credit" shall mean the letters of credit issued by
BofA before the Effective Date and listed in Schedule 1.01-B hereto.
"Existing Securitization Facility" shall mean the Receivables Sale
Agreement between the Borrower, as Seller, and Equistar Funding, as Buyer, dated
as of December 17, 1998 and the Receivables Purchase Agreement among Equistar
Funding, LLC, as Seller, the Borrower, as Collection Agent, Asset Securitization
Cooperative Corporation, as Purchaser, and Canadian Imperial Bank of Commerce,
as Administrative Agent, dated as of December 17, 1998.
"Facility Fee" shall have the meaning assigned to such term in Section
2.08(a).
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"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum 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, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Servicing Agent from three Federal funds brokers of recognized
standing selected by it.
"Fees" shall mean the Facility Fee, the Letter of Credit Fees, the
Administrative Fees and the Effective Date Fees.
"Fixed Rate Loan" shall mean any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
11
"Foreign Lender" shall mean any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary organized under the laws of a
jurisdiction, and conducting substantially all its operations, outside the
United States of America.
"Fronting Bank" shall mean (a) BofA, in its capacity as the issuer of
the Existing Letters of Credit and (b) Chase, in its capacity as the issuer of
Additional Letters of Credit hereunder, with their respective successors in such
capacity as provided in Section 2.07(j). In respect of Additional Letters of
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Credit, the Fronting Bank may, in its discretion, arrange for one or more
Letters of Credit to be issued by Affiliates of the Fronting Bank, in which case
the term "Fronting Bank" shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, department, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided that the obligation of any JV Owner
Subsidiary which is a general partner in a Joint Venture which arises by
operation of law in respect of any Indebtedness of such Joint Venture shall not
be deemed a Guarantee by such JV Owner Subsidiary of such Indebtedness.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas and infectious or
medical wastes and including all substances or wastes of any nature regulated
pursuant to any Environmental and Safety Laws.
12
"Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest rate, currency exchange rate or commodity price hedging
arrangement.
"Illegality" shall have the meaning assigned to such term in Section
2.16(a).
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"Indebtedness" of any person shall mean, without duplication, (a) the
outstanding principal amounts of all obligations of such person for borrowed
money (including repurchase obligations), (b) the outstanding principal amounts
of all obligations of such person evidenced by bonds, debentures, notes or
similar instruments or letters of credit in support of bonds, notes, debentures
or similar instruments, (c) all obligations of such person upon which interest
charges are customarily paid, (d) all obligations of such person to pay the
deferred purchase price of property or services under any conditional sale or
other title retention agreement, (e) all obligations of such person issued or
assumed as the deferred purchase price of property or services (other than
accounts payable to suppliers and accrued liabilities (i) that are incurred in
the ordinary course of business and paid within 60 days after the date due or
(ii) that are being contested in good faith by appropriate proceedings and for
which appropriate reserves have been established in accordance with GAAP), (f)
all Capitalized Lease Obligations of such person, (g) all non-contingent
obligations (and, solely for purposes of Section 6.01, all contingent
obligations, which contingent obligations shall for such purposes be deemed to
be in an outstanding principal amount equal to the maximum contingent amount
thereof) of such person to reimburse any bank or other person in respect of
amounts paid under a letter of credit or similar instrument, (h) all capital
stock of such person which is subject to redemption otherwise than at the sole
option of such person at any time prior to the date 12 months after the Term
Loan Maturity Date to the extent not held by the Borrower or any other Loan
Party; provided that any capital stock of such person which is included as
Indebtedness solely as a result of provisions thereof which give the holders
thereof the right to require such person to repurchase or redeem such capital
stock upon the occurrence of a "change of control" occurring prior to the Term
Loan Maturity Date shall not be considered Indebtedness of such person if the
"change of control" provisions applicable to such capital stock are no more
favorable to the holders of such capital stock than those contained in this
Agreement, (i) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property or assets owned or acquired by such person, whether or
not the obligations secured thereby have been assumed and (j) all Guarantees of
such person. For avoidance of doubt, Indebtedness does not include (i) a
Securitization Transaction or (ii) any obligation of a JV Owner Subsidiary which
is a general partner in a Joint Venture which arises by operation of law in
respect of any Indebtedness of such Joint Venture.
13
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indentures" shall mean the indentures governing the Indebtedness of
the Borrower listed in Part A of Schedule 6.14.
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"Interest Coverage Ratio" shall mean the ratio of EBITDA to Net
Interest Expense for the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis and calculated to exclude interest expense (x) on
Acceptable Subordinated Loans and (y) in the form of additional pay-in-kind
interest required to be paid to holders of New Senior Notes and the Lenders in
connection with the making of a Permitted Dividend, in each case, to the extent
such interest expense is not paid or required to be paid in cash during the
relevant period.
"Interest Payment Date" shall mean (a) with respect to any Loan, the
last day of each Interest Period applicable to the Borrowing of which such Loan
is a part and (b) in the case of a LIBOR Loan or a Fixed Rate Loan with an
Interest Period of more than three months' duration (unless otherwise specified
in the applicable Competitive Bid Request), each day that would have been an
Interest Payment Date had successive Interest Periods of three months' duration
been applicable to such Loan and, in addition, the date of any continuation or
conversion of such Loan with or to a Loan of a different Type.
"Interest Period" shall mean (a) as to any LIBOR Borrowing, the period
commencing on the date of such Borrowing or on the last day of the immediately
preceding Interest Period applicable to such Borrowing, as the case may be, and
ending on the seventh day thereafter (if at the time of such Borrowing all
Lenders participating therein agree to make a seven day interest period
available) or on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect, (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing,
as the case may be, and ending on the next succeeding March 31, June 30,
September 30 or December 31 or, if earlier, the date of prepayment or conversion
of such Borrowing, (c) as to any Fixed Rate Borrowing, the period commencing on
the date of such Borrowing and ending on the date specified in the Competitive
Bids in which the offers to make the Fixed Rate Loans comprising such Borrowing
were extended, which shall not be earlier than 7 days after the date of such
Borrowing or later than 360 days after the date of such Borrowing, and (d) as to
any Swingline Loan, the period commencing on the date of such Loan and ending on
the date specified by the Borrower as provided in Section 2.06(b), which shall
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not be later than 7 Business Days after the date of such Loan; provided,
however, that (i) if any Interest Period would end on a day that shall not be a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of LIBOR Loans only, such next succeeding
Business Day would fall in the next calendar month, in
14
which case such Interest Period shall end on the next preceding Business Day,
(ii) no Interest Period with respect to any Revolving Loan or Competitive Loan
shall end later than the Revolving Maturity Date, (iii) no Interest Period with
respect to any Term Loan shall end later than the next succeeding Amortization
Date unless the sum of the aggregate principal amount of ABR Term Loans plus the
aggregate principal amount of LIBOR Term Loans having Interest Periods ending on
or prior to such Amortization Date equals or exceeds the payment of principal
due with respect to the Term Loans pursuant to Section 2.09 on such Amortization
----
Date and (iv) interest shall accrue from and including the first day of an
Interest Period to but excluding the last day of such Interest Period.
"Investment" shall mean with respect to any person, all investments by
such person in another person (including an Affiliate of such person) in the
form of direct or indirect loans, advances or extensions of credit to such other
person (including any Guarantee by such person of Indebtedness or capital stock
(which capital stock is subject to redemption otherwise than at the sole option
of the issuer thereof at any time prior to the date 12 months after the Term
Loan Maturity Date) of such other person) or capital contributions or purchases
or other acquisitions for consideration of Indebtedness, Equity Interests or
other securities of such other person, together with all items that are or would
be classified as investments of such investing person on a balance sheet
prepared in accordance with GAAP; provided that (a) trade credit and accounts
receivable in the ordinary course of business, (b) commissions, loans, advances,
fees and compensation paid in the ordinary course of business to officers,
directors and employees and (c) reimbursement obligations in respect of letters
of credit and tender, bid, performance, government contract, surety and appeal
bonds, in each case solely with respect to obligations of the Borrower or any
Subsidiary (other than a Joint Venture Subsidiary and, in each case, subject to
the provisions of Sections 6.03 and 6.14) shall not be considered Investments.
---- ----
"Investment Grade Status" shall mean that the senior unsecured long-
term debt of the Borrower is rated BBB- or better by S&P and Baa3 or better by
Moody's.
"Joint Venture" shall mean any joint venture (a) in which the Borrower
has a direct or indirect economic interest of at least 20% and not more than 80%
and (b) which is accounted for by the Borrower on the equity method in
accordance with GAAP.
"Joint Venture Subsidiary" shall mean any Subsidiary which is a Joint
Venture.
"JV Owner Subsidiary" shall mean each Subsidiary of the Borrower (a)
that, at any time, directly holds an equity interest in any Joint Venture and
(b) that has no other material assets.
15
"LC Disbursement" shall mean a payment made by the Fronting Bank
pursuant to a Letter of Credit.
"LC Exposure" shall mean, at any time, the sum of (a) the aggregate
amount available for drawing (assuming satisfaction of applicable drawing
conditions) under all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Lender
at any time shall be its Revolving Percentage of the total LC Exposure at such
time.
"Lenders" shall mean the persons listed on Schedule 2.01 and any other
----
person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such person that ceases to be party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" shall mean any Existing Letter of Credit or
Additional Letter of Credit.
"Letter of Credit Fees" shall mean the fees payable under Section
2.08(b).
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"LIBO Rate" shall mean, with respect to any Borrowing comprised of
LIBOR Loans for any Interest Period, the rate appearing on Page 3750 of the
Telerate Service (or on any successor or substitute page of such Service), or,
if no such page of the Telerate Service shall be available, on the Bloomberg
Screen British Banker's LIBOR fixing, at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period, as the rate
for Dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such Borrowing for such Interest Period shall be the
rate at which Dollar deposits of approximately $5,000,000 and for a maturity
comparable to such Interest Period are offered to the principal London office of
the Servicing Agent in immediately available funds by major banks in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"LIBOR Competitive Loan" shall mean any Competitive Loan bearing
interest at a rate determined by reference to the LIBO Rate in accordance with
the provisions of Article II.
--
"LIBOR Lending Office" shall mean, with respect to each Lender, the
branches or Affiliates of such Lender which such Lender has designated as its
"LIBOR Lending Office" in its Administrative Questionnaire or, as to any person
who becomes a Lender after the Effective Date, in the Assignment and Acceptance
executed by such person or such other office of such Lender as such
16
Lender may hereafter designate from time to time as its "LIBOR Lending Office"
by notice to the Borrower and the Servicing Agent.
"LIBOR Loan" shall mean any LIBOR Revolving Loan, any LIBOR Term Loan
or any LIBOR Competitive Loan.
"LIBOR Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the LIBO Rate in accordance with the
provisions of Article II.
--
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset or
(c) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.
"Limited Partnership Agreement" shall mean the Amended and Restated
Limited Partnership Agreement of the Borrower dated as of May 15, 1998, as
amended, supplemented or otherwise modified from time to time, by and among the
respective Partners.
"Loan" shall mean a Competitive Loan, a Revolving Loan or a Term Loan,
whether made as a LIBOR Loan, an ABR Loan or (in the case of Competitive Loans)
a Fixed Rate Loan, or a Swingline Loan.
"Loan Documents" shall mean this Agreement, the Notes and the
Collateral Documents.
"Loan Party" shall mean (a) the Borrower and (b) each Subsidiary that
is required under Section 5.12(a) to satisfy the Collateral and Guarantee
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Requirement (for avoidance of doubt, including any JV Owner Subsidiary which is
a Material Subsidiary but not including any Foreign Subsidiary or any Joint
Venture Subsidiary).
"Lyondell" shall mean Lyondell Chemical Company, a Delaware
corporation, and its successors.
"MAI" shall mean Millennium America Inc., a Delaware corporation, and
its successors.
"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received in connection with one or more related events by the Borrower or any of
its Subsidiaries under any Property Insurance Policy or (ii) any award or other
cash compensation with respect to any one or more related condemnations of
property (or any transfer or disposition of property in lieu of condemnation)
received by the Borrower or any of its Subsidiaries if the amount of such
17
aggregate insurance proceeds or award or other cash compensation exceeds
$10,000,000.
"Margin" shall mean, as to any LIBOR Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal to no more
than four decimal places) to be added to or subtracted from the LIBO Rate in
order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
the business, assets, operations or financial condition of the Borrower and its
Subsidiaries taken as a whole, (b) material impairment of the ability of the
Borrower to perform any of its obligations under the Loan Documents or (c)
material impairment of the rights of or benefits available to the Lenders, the
Administrative Agents, the Servicing Agent or the Collateral Agent under the
Loan Documents; provided, however, that the term "Material Adverse Effect" shall
exclude any changes that both (i) affect the petrochemicals industry as a whole
and (ii) would not reasonably be expected to impair materially the ability of
the Borrower to perform its obligations under the Loan Documents.
"Material Subsidiary" shall mean (a) any Subsidiary that accounts for
more than 5% of the assets, or more than 5% of the revenues for the four fiscal
quarters most recently ended, of the Borrower and its Subsidiaries on a
consolidated basis, (b) any Subsidiary designated by the Borrower as a Material
Subsidiary for purposes of the Loan Documents by notice to the Administrative
Agents, (c) any Subsidiary that owns any Equity Interest in a Material
Subsidiary described in clause (a) or (b), and (d) at any time when Subsidiaries
(other than Material Subsidiaries described in clauses (a), (b) and (c)) in the
aggregate account for more than 10% of the assets, or more than 10% of the
revenues for the four fiscal quarters most recently ended, of the Borrower and
its Subsidiaries on a consolidated basis, all Subsidiaries; provided that the
term "Material Subsidiary" shall exclude (i) any Cash Management Subsidiary,
(ii) any Subsidiary engaged solely in the business of purchasing and owning
accounts receivable generated by the Borrower and its other Subsidiaries in
connection with any Securitization Transaction and (iii) Equistar Funding.
"Maximum Secured Amount" shall have the meaning specified in Section
5.12(d).
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"Millennium" shall mean Millennium Chemicals Inc., a Delaware
corporation, and its successors.
"Moody's" shall mean Moody's Investors Service, Inc., and its
successors.
18
"Mortgage" shall mean a mortgage or deed of trust substantially in the
form of Exhibit F hereto, with such changes therein as the Collateral Agent may
approve based on advice of local counsel (which changes shall also be approved
by the Borrower), executed and delivered or to be executed and delivered by a
Loan Party.
"Mortgaged Properties" shall mean (i) the properties listed in Schedule
1.01-A hereto and (ii) any other properties subjected or required pursuant to
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Section 5.12 to be subjected to the Lien of a Mortgage.
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"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate (other
than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Net Cash Proceeds" means, with respect to any Prepayment Event, an
amount equal to the cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Prepayment Event (including any cash
proceeds received as interest or similar income on, or other cash proceeds of,
any noncash proceeds of any Asset Sale), less (at the option of the Borrower):
(a) any fees, costs and expenses reasonably incurred by such person
in respect of such Prepayment Event;
(b) amounts required to be paid to holders of minority interests in
any Subsidiary as a result of such Prepayment Event;
(c) if such Prepayment Event is an Asset Sale, (i) any taxes actually
paid or to be payable by such person or, if such person is a partnership or a
limited liability company, any such taxes that would be payable assuming the
highest corporate tax rate were applicable to such person, as estimated by a
Principal Financial Officer of the Borrower, giving effect to the overall tax
position of the Borrower, in respect of such Asset Sale, (ii) the amount of all
Indebtedness (other than the Loans) secured by any assets subject to that Asset
Sale and subject to mandatory prepayment as a result of that Asset Sale, (iii)
the amount of any reserves established by the Borrower and its Subsidiaries to
fund purchase price adjustments in respect of such Asset Sale and any reserves
to fund contingent liabilities payable by the Borrower and its Subsidiaries
attributable to such Asset Sale (as estimated by a Principal Financial Officer
of the Borrower), including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Sale, until such time as such amounts are no longer
reserved or such reserve is no longer necessary (at which time any remaining
amounts will become Net Cash Proceeds), and (iv) amounts required to be paid at
the closing of such Asset Sale with respect to liabilities directly associated
with the assets that are the subject of
19
such Asset Sale, including, without limitation, trade payables and other accrued
liabilities (to the extent not already reflected in the amount of cash proceeds
received by the Borrower or any of its Subsidiaries from or in respect of such
Prepayment Event);
(d) if such Prepayment Event is an Asset Sale, the amount of the cash
proceeds applied by the Borrower or any Subsidiary within 360 days of the
receipt thereof to the acquisition of Additional Assets or the making of capital
expenditures in a Permitted Business; provided that, so long as no Event of
Default has occurred and is continuing and the Borrower or such Subsidiary has
commenced making such capital expenditures prior to the end of such 360 day
period and is at the end of such 360 day period diligently proceeding to
complete making such capital expenditures, the 360 day period shall be extended
to the date that is the earliest of (x) the date on which the Borrower or such
Subsidiary completes making such capital expenditures, (y) the date on which the
Borrower or such Subsidiary decides not to further pursue making such capital
expenditures or (z) the date that is 540 days from the date of receipt of such
cash proceeds. The Net Cash Proceeds remaining at such date shall then be
applied in accordance with Section 2.09(c), 2.09(d) and 2.09(e);
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(e) if such Prepayment Event is the receipt of Major Casualty
Proceeds, the amount of the cash proceeds applied by the Borrower or any
Subsidiary within 360 days of the receipt thereof to the acquisition of
Additional Assets or the making of capital expenditures in a Permitted Business;
provided that, so long as no Event of Default has occurred and is continuing and
the Borrower or such Subsidiary is at the end of such 360 day period diligently
proceeding with the restoration or replacement of the asset in respect of which
such Major Casualty Proceeds were received, the 360 day period shall be extended
to the date that is the earlier of the date on which the Borrower or such
Subsidiary (x) completes such restoration or replacement or (y) decides not to
further pursue such restoration or replacement. The Net Cash Proceeds remaining
at such date shall then be applied in accordance with Section 2.09(c), 2.09(d)
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and 2.09(e);
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(f) if such Prepayment Event is a Debt Incurrence, then (x) if such
Debt Incurrence occurs prior to June 30, 2002 and the Total Leverage Ratio
immediately after giving effect thereto (calculated on a pro forma basis) does
not exceed 7.25:1, the amount of the cash proceeds applied by the Borrower or
such Subsidiary within 360 days of the receipt thereof to the acquisition of
Additional Assets or the making of capital expenditures in a Permitted Business
and (y) if such Debt Incurrence occurs on or after June 30, 2002, the amount of
the cash proceeds applied by the Borrower or such Subsidiary within 360 days of
the receipt thereof to the acquisition of Additional Assets or the making of
capital expenditures in a Permitted Business. The Net Cash Proceeds remaining at
the end of any such 360th day shall then be applied in accordance with Section
2.09(c), 2.09(d) and 2.09(e); and
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20
(g) if such Prepayment Event is an Equity Issuance, the amount of the
cash proceeds applied by the Borrower within 360 days of the receipt thereof as
consideration for a Business Acquisition. The Net Cash Proceeds remaining at the
end of such 360/th/ day shall then be applied in accordance with Section
2.09(c), 2.09(d) and 2.09(e).
------- ------- -------
In addition, if such Prepayment Event is an Asset Sale, the receipt of Major
Casualty Proceeds, a Debt Incurrence or an Equity Issuance, the Borrower shall
provide the certifications and notices referred to in Section 5.05(d)(iv) and
-----------
5.05(f) at the times required by such Sections.
-------
"Net Interest Expense" shall mean, with respect to the Borrower and its
Consolidated Subsidiaries for any period, (a) the interest expense of the
Borrower and its Consolidated Subsidiaries, including, without limitation, (i)
the amortization of debt discounts, (ii) the amortization of all fees
(including, without limitation, fees with respect to interest rate protection
agreements) payable in connection with the incurrence of Indebtedness to the
extent included in interest expense and (iii) the portion of any payments due
under any Capitalized Lease Obligation allocable to interest expense, less (b)
the amount of interest income of the Borrower and its Consolidated Subsidiaries
for such period, in each case determined on a consolidated basis. For purposes
of the foregoing, interest expense shall be determined after giving effect to
any net payments made or received by the Borrower and its Consolidated
Subsidiaries with respect to interest rate protection agreements entered into as
a hedge against interest rate exposure.
"New Senior Notes" shall mean senior unsecured notes (including any
pay-in-kind notes) of the Borrower to be issued pursuant to the New Senior Notes
Indenture as part of the refinancing of certain of the Borrower's outstanding
Indebtedness and having substantially the terms and conditions disclosed to the
Lenders prior to the execution and delivery of this Amended Agreement and such
other terms and conditions as may be reasonably satisfactory to the
Administrative Agents.
"New Senior Notes Indenture" shall mean the indenture dated on or about
the date hereof providing for the issuance of the New Senior Notes.
"Notes" shall mean promissory notes of the Borrower, substantially in a
form reasonably satisfactory to the Administrative Agents, evidencing the
Borrower's obligation to repay the Loans, and "Note" shall mean any one of such
promissory notes issued hereunder.
"Obligations" shall mean the obligations of the Loan Parties under the
Loan Documents (as the same may hereafter be amended, restated, extended,
supplemented or otherwise modified from time to time) with respect to the due
and punctual payment, whether at maturity, by acceleration or otherwise, of (a)
the principal amount of the Loans, (b) interest and premium on the Loans,
21
(c) LC Disbursements and interest thereon, (d) Deferred Amounts and interest
thereon and (e) all other monetary obligations of the Borrower, whether for
fees, costs, indemnification or otherwise.
"Occidental" means Occidental Petroleum Corporation, a Delaware
corporation, and its successors.
"Operating Income" shall mean with respect to the Borrower and its
Consolidated Subsidiaries for any period the aggregate income (or deficit) of
the Borrower and its Consolidated Subsidiaries for such period equal to
operating revenues and other proper income less, to the extent included in
operating revenues or income, the aggregate for the Borrower and its
Consolidated Subsidiaries of (i) operating expenses, (ii) selling,
administrative and general expenses and (iii) depreciation, depletion and
amortization of properties.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, the Loan Documents (but
excluding any Excluded Taxes).
"Partners" shall mean the direct or indirect wholly owned subsidiaries
through which Lyondell, Millennium and Occidental hold their interests in the
Borrower.
"Partnership Governance Committee" shall mean the Borrower's
Partnership Governance Committee, together with any successor or substitute
committee exercising similar power and authority.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor thereto.
"Perfection Certificate" has the meaning set forth in the Security
Agreement.
"Permitted Business" shall mean the petrochemical, chemical and
petroleum refining businesses and any business reasonably related, incidental,
complementary or ancillary thereto.
"Permitted Dividend" shall mean any dividend or distribution by the
Borrower on any class of its Equity Interests; provided that a portion of such
class is held by a member of the Existing Control Group.
"Permitted Refinancing" shall mean a Debt Incurrence to the extent the
proceeds thereof are applied to refinance Indebtedness of the Borrower or a
Subsidiary which matures prior to the Term Loan Maturity Date (and to pay
related fees and expenses); provided that (x) the debt securities issued
pursuant to
22
such Debt Incurrence shall mature after the Term Loan Maturity Date and no
payment, prepayment, redemption or repurchase of the principal amount thereof
shall be required by the terms thereof on or prior to the Term Loan Maturity
Date and (y) the terms in the agreements governing the debt securities issued
pursuant to such Debt Incurrence shall be no less favorable to the Borrower or
such Subsidiary than the terms in the agreements governing the Indebtedness
being refinanced.
"person" shall mean any natural person, judicial entity, corporation,
business trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (as defined in
Section 3(2) of ERISA) (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code with respect to which
the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Plant" shall mean (a) any plant for the production of petrochemicals
owned by any Loan Party, except (i) related facilities which in the reasonable
opinion of the Partnership Governance Committee are transportation or marketing
facilities and (ii) any plant which is in the reasonable opinion of the
Partnership Governance Committee not a principal plant of the Borrower and its
Subsidiaries and (b) with respect to any plant described in clause (a), the
related assets and rights described in the form of Mortgage.
"PP&E Value" shall mean, on any date, the fair market value of Plants
included in the Mortgaged Properties, determined in accordance with Section
5.12(c).
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"Preferred Stock" of any person shall mean capital stock or other
ownership interests of or in such person of any class or classes (however
designated) that ranks prior, as to the payment of dividends and/or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such person, to shares of capital stock or other
ownership interests of or in any other class of such person. For purposes of
this Agreement, the "amount" of any Preferred Stock shall be the amount payable
to the holder thereof upon the liquidation or dissolution of the issuer thereof.
"Prepayment Event" shall mean (i) any Asset Sale (other than (x) a
Securitization Transaction or (y) any other Asset Sale, the Net Cash Proceeds of
which, when aggregated with the Net Cash Proceeds of any related Asset Sale, do
not exceed $25,000,000), (ii) any Debt Incurrence (other than any Permitted
Refinancing), (iii) any Equity Issuance (except to the extent such Equity
Issuance is a Subject Equity Transaction), or (iv) the receipt by the Borrower
or any Subsidiary of Major Casualty Proceeds. The description of any transaction
as
23
falling within the above definition does not affect any limitation on such
transaction imposed by Article VI of this Agreement. In no event shall the
--
issuance of the New Senior Notes constitute a Prepayment Event.
"Pricing Schedule" shall mean the Schedule attached hereto and
identified as such.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by BofA as its "prime rate". Such rate is a rate set
by BofA based upon various factors including BofA's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by BofA shall take effect at the opening
of business on the day specified in the public announcement of such change.
"Principal Financial Officer" of any person shall mean the chief
financial officer, the treasurer or the principal accounting officer of such
person (including for this purpose any person designated by the Partnership
Governance Committee as such).
"Property Insurance Policy" means any insurance policy maintained by
the Borrower or any of its Subsidiaries covering losses with respect to tangible
real or personal property or improvements, but excluding coverage for losses
from business interruption.
"Register" shall have the meaning assigned to such term in Section
9.07(f).
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"Regulation U" shall mean Regulation U of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Related Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such Lender.
"Related Parties" shall mean, with respect to any specified person,
such person's Affiliates and the respective directors, trustees, officers,
employees, agents and advisors of such person and such person's Affiliates.
"Reportable Event" shall mean any reportable event as defined in
Section 4043(c) of ERISA or the regulations issued thereunder with respect to a
24
Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Section 414 of the
Code).
"Required Lenders" shall mean, at any time, Lenders having in the
aggregate at least 51% of the aggregate amount of the Credit Exposures at such
time; provided that any Credit Exposure held by the Borrower or any of its
Subsidiaries or any of their respective Affiliates shall be excluded for
purposes of determining such percentage.
"Responsible Officer" of any person shall mean the chief executive
officer, the president, any Principal Financial Officer or any vice president of
such person.
"Revolving Commitment" shall mean, with respect to each Revolving
Lender, the commitment of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum aggregate amount of such Lender's Revolving
Credit Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.13 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.07.
----
"Revolving Committed Outstandings" shall mean, with respect to any
Revolving Lender at any time, the sum of the outstanding principal amount of
such Revolving Lender's Revolving Loans and its LC Exposure and Swingline
Exposure at such time.
"Revolving Lender" shall mean a Lender having a Revolving Commitment,
or if the Revolving Commitments shall have terminated, having Revolving
Committed Outstandings or Competitive Loan Exposure.
"Revolving Loan" shall mean a Loan made pursuant to Section 2.01(a).
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"Revolving Maturity Date" shall mean the fifth anniversary of the
Effective Date.
"Revolving Percentage" shall mean, with respect to any Revolving
Lender, the percentage of the Total Revolving Commitment represented by such
Lender's Revolving Commitment. If the Revolving Commitments shall have been
terminated or shall have expired, the Revolving Percentages shall be determined
based upon the Revolving Commitments most recently in effect, giving effect to
any subsequent assignments pursuant to Section 9.07.
----
"Revolving Period" shall mean the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.
25
"S&P" means Standard & Poor's Ratings Group.
"Sale/Leaseback Transaction" shall have the meaning set forth in
Section 6.02.
----
"SEC" shall mean the Securities and Exchange Commission.
"Securitization Transaction" shall mean any transaction in which the
Borrower or any Subsidiary sells or otherwise transfers accounts receivable (a)
to one or more third party purchasers or (b) to a special purpose entity that
borrows against such accounts receivable or sells such accounts receivable to
one or more third party purchasers, but only to the extent that amounts received
in connection with the sale or other transfer of such accounts receivable would
not under GAAP be accounted for as liabilities on a consolidated balance sheet
of the Borrower.
"Security Agreement" shall mean a security agreement in substantially
the form of Exhibit G executed and delivered or to be executed and delivered by
a Loan Party.
"Senior Secured Leverage Ratio" shall mean at any date the ratio of (i)
Total Indebtedness (plus, to the extent not otherwise reflected therein, any
outstanding Deferred Amounts and minus, to the extent reflected therein, any
outstanding unsecured Indebtedness and Acceptable Subordinated Loans) at such
date to (ii) EBITDA for the period of four consecutive fiscal quarters most
recently ended on or prior to such date, all determined for the Borrower and its
Consolidated Subsidiaries on a consolidated basis.
"Servicing Agent" shall mean BofA, in its capacity as servicing agent
for the Lenders hereunder.
"Subject Equity Transaction" shall mean an Equity Issuance, to the
extent the proceeds thereof are applied to repurchase, directly or indirectly,
partnership interests in the Borrower on a basis that is not pro rata among the
members of the Existing Control Group.
"Subsidiary" shall mean any subsidiary of the Borrower.
"subsidiary" shall mean, with respect to any person (the "parent"), any
corporation, association or other business entity of which securities or other
ownership interests representing 50% or more of the ordinary voting power are,
at the time as of which any determination is being made, beneficially owned by
the parent, by one or more subsidiaries of the parent or by the parent and one
or more subsidiaries of the parent.
"Subsidiary Guarantee" shall mean a guarantee in substantially the form
of Exhibit H hereto executed and delivered or to be executed and delivered by a
Loan Party (other than the Borrower).
26
"Swingline Exposure" shall mean, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Revolving Percentage of the total
Swingline Exposure at such time.
"Swingline Facility" shall mean the swingline facility made available
by the Swingline Lender pursuant to Section 2.06.
----
"Swingline Lender" shall mean BofA, in its capacity as lender of
Swingline Loans hereunder.
"Swingline Loan" shall mean a Loan made pursuant to Section 2.06.
----
"Syndicated Loan" shall mean a Revolving Loan or a Term Loan.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Temporary Cash Investment" shall mean any Investment in (a) securities
issued or directly and fully guaranteed or insured by the United States of
America government or any agency or instrumentality thereof having maturities of
not more than one year from the date of acquisition, (b) demand deposits, time
deposits and certificates of deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year from the date of acquisition and overnight bank deposits, in each case with
any bank or trust company organized or licensed under the laws of the United
States of America or any State thereof having capital, surplus and undivided
profits in excess of $250 million, (c) repurchase obligations with a term of not
more than seven days for underlying securities of the type described in clauses
(a) and (b) above entered into with any financial institution meeting the
qualifications specified in clause (b) above, (d) commercial paper rated at
least P-1 by Moody's and A-1 by S&P or, if such commercial paper is rated by
only one such agency, at least such rating from such agency, (e) investments in
any Dollar denominated money market fund as defined by Rule 2a-7 of the General
Rules and Regulations promulgated under the Investment Company Act of 1940 and
(f) in the case of a Foreign Subsidiary, substantially similar investments
denominated in foreign currencies (including similarly capitalized foreign
banks).
"Term Commitment" shall mean, with respect to each Term Lender, the
commitment of such Term Lender to make a Term Loan to the Borrower on the
Effective Date in the amount of such commitment.
"Term Lender" shall mean (a) on or prior to the Effective Date, each
Lender having a Term Commitment and (b) after the Effective Date, each Lender
having a Term Loan.
27
"Term Loan" shall mean a Loan made pursuant to Section 2.01(b).
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"Term Loan Maturity Date" shall mean the sixth anniversary of the
Effective Date.
"Total Indebtedness" shall mean at any date, without duplication, (a) all
Indebtedness of the Borrower and its Consolidated Subsidiaries as at such date
less (b) all cash and Temporary Cash Investments (other than those described in
clause (f) of the definition thereof) of the Borrower and its Consolidated
Subsidiaries as at such date in excess of $25,000,000, all determined on a
consolidated basis in accordance with GAAP.
"Total Leverage Ratio" shall mean at any date the ratio of (i) Total
Indebtedness (plus, to the extent not otherwise reflected therein, any
outstanding Deferred Amounts and minus, to the extent reflected therein, any
outstanding Acceptable Subordinated Loans) at such date to (ii) EBITDA for the
period of four consecutive fiscal quarters most recently ended on or prior to
such date, all determined for the Borrower and its Consolidated Subsidiaries on
a consolidated basis.
"Total Revolving Commitment" shall mean at any time the aggregate amount of
the Revolving Commitments at such time.
"Total Revolving Outstandings" shall mean at any time the sum of (i) the
aggregate Revolving Committed Outstandings of all Revolving Lenders at such time
plus (ii) the aggregate Competitive Loan Exposure of all Revolving Lenders at
such time.
"Transferee" shall have the meaning assigned to such term in Section
2.20(a).
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"Type", when used in respect of any Loan or Borrowing, shall refer to the
rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, "rate" shall include the LIBO
Rate, the Alternate Base Rate or, in the case of a Competitive Loan or
Borrowing, the LIBO Rate or any fixed rate.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. Accounting Terms. (a) Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that if the
Borrower notifies the Servicing Agent that it requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
28
(or if the Servicing Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), then such
provision shall be interpreted on the basis of GAAP as in effect and applied
immediately before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance herewith.
(b) In the event of any future material acquisition or disposition of
assets by the Borrower and its Subsidiaries, determinations of EBITDA in respect
of any period of four consecutive fiscal quarters shall be made on a pro forma
basis as if such transaction had been consummated on the first day of such
period. Such pro forma calculation shall reflect the benefit of anticipated
expense reductions and similar synergies as such reductions and synergies could
properly be reflected in pro forma financial statements included in a
registration statement filed under the Securities Act of 1933, as amended.
Section 1.03. Terms Generally. Except where the context requires otherwise,
the definitions in Section 1.01 shall apply equally to the singular and plural
----
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". Unless otherwise stated, references to Sections,
Articles, Schedules and Exhibits made herein are to Sections, Articles,
Schedules or Exhibits, as the case may be, of this Agreement. "Writing",
"written" and comparable terms refer to printing, typing and other means of
reproducing words in a visible form. References to any agreement or contract are
to such agreement or contract as amended, modified or supplemented from time to
time in accordance with the terms hereof and thereof. References to any person
include the successors and permitted assigns of such person. References "from"
or "through" any date mean, unless otherwise specified, "from and including" or
"through and including", respectively.
Section 1.04. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "LIBOR Loan") or by Class and Type (e.g., a "LIBOR
Revolving Loan"). Borrowings also may be classified and referred to by Class
(e.g., a "Revolving Borrowing") or by Type (e.g., a "LIBOR Borrowing") or by
Class and Type (e.g., a "LIBOR Revolving Borrowing").
ARTICLE II
The Loans
Section 2.01. Commitments. (a) Revolving Loans. Subject to the terms and
---------------
conditions and relying upon the representations and warranties herein set forth,
each Revolving Lender agrees, severally and not jointly, to make Revolving Loans
to the Borrower from time to time during the Revolving Period in amounts such
that (i) the Revolving Committed Outstandings of such Revolving Lender
29
shall at no time exceed the amount of its Revolving Commitment and (ii) the
Total Revolving Outstandings shall at no time exceed the Total Revolving
Commitment. Within the foregoing limits, the Borrower may borrow, pay or prepay
and reborrow Revolving Loans hereunder during the Revolving Period and subject
to the terms, conditions and limitations set forth herein
(b) Term Loans. Subject to the terms and conditions and relying upon the
----------
representations and warranties herein set forth, each Term Lender agrees,
severally and not jointly, to make a single Term Loan to the Borrower on the
Effective Date in the amount of its Term Commitment. The Term Commitments are
not revolving in nature, and principal amounts of Term Loans repaid or prepaid
may not be reborrowed.
Section 2.02. Loans. (a) Each Loan of any Class shall be made as part of a
Borrowing consisting of Loans made ratably by the Lenders in accordance with
their respective Commitments of such Class; provided, however, that the failure
of any Lender to make any Loan shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to make any Loan to be
made by such other Lender). Each Competitive Loan shall be made in accordance
with the procedures set forth in Section 2.03. The Loans comprising any
----
Competitive Borrowing shall be in an aggregate principal amount which is not
less than $25,000,000. The Loans comprising any Revolving Borrowing shall be (i)
in the case of LIBOR Loans in an aggregate principal amount which is an integral
multiple of $1,000,000 and not less than the lesser of $10,000,000 and the
remaining available balance of the Revolving Commitments and (ii) in the case of
ABR Loans, in an aggregate principal amount which is an integral multiple of
$1,000,000.
(b) Each Competitive Borrowing shall be comprised entirely of LIBOR
Competitive Loans or Fixed Rate Loans and each Committed Borrowing shall be
comprised entirely of LIBOR Committed Loans or ABR Loans, as the Borrower may
request pursuant to Section 2.03 or Section 2.04, as applicable. Each Lender may
---- ----
at its option make any LIBOR Loan by causing any branch or Affiliate of such
Lender to make such Loan; provided, however, that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement; provided, further, that if the designation of
any such foreign branch or Affiliate shall result in any costs, reductions or
Taxes which would not otherwise have been applicable and for which such Lender
would, but for this proviso, be entitled to request compensation under Section
2.16, 2.17 or 2.20, such Lender shall not be entitled to request such
---- ---- ----
compensation unless it shall in good faith have determined such designation to
be necessary or advisable to avoid any material disadvantage to it. Borrowings
of more than one Type may be outstanding at the same time; provided, however,
that the Borrower shall not be entitled to request any Borrowing which, if made,
would result in an aggregate of more than 15 separate
30
Borrowings (excluding Competitive Borrowings) being outstanding hereunder at any
one time. For purposes of the foregoing, Borrowings having different Interest
Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
(c) Subject to Section 2.05 and paragraph (d) below, each Lender shall make
----
its Loans on the proposed date or dates thereof (i) in the case of Loans other
than Swingline Loans, by wire transfer of immediately available funds to the
Servicing Agent in New York, New York, not later than 12:00 noon, New York City
time, and (ii) in the case of Swingline Loans, as provided for in Section 2.06.
The Servicing Agent shall credit on such date the amounts so received to the
general deposit account of the Borrower with the Servicing Agent or to another
account specified by the Borrower and acceptable to the Servicing Agent by 3:00
p.m., New York City time; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement shall be remitted by the Servicing Agent to
the Fronting Bank; and provided, further, that if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not have been
met, the Servicing Agent shall return the amounts so received to the respective
Lenders. Committed Loans shall be made by the Lenders ratably in accordance with
their Commitments of the applicable Class as provided in Section 2.18 and
Competitive Loans shall be made by the Lender or Lenders whose Competitive Bids
therefor are accepted pursuant to Section 2.03 in the amounts so accepted.
Unless the Servicing Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the Servicing
Agent such Lender's portion of such Borrowing, the Servicing Agent may assume
that such Lender has made such portion available to the Servicing Agent on the
date of such Borrowing in accordance with this paragraph (c) and the Servicing
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 Lender shall
not have made such portion available to the Servicing Agent, such Lender and the
Borrower severally agree to repay to the Servicing 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 Servicing Agent at (i) in the case of the Borrower, the interest
rate applicable to ABR Loans and (ii) in the case of such Lender, the greater of
the Federal Funds Effective Rate and a rate determined by the Servicing Agent in
accordance with banking industry rules on interbank compensation. If such Lender
shall repay to the Servicing Agent such corresponding amount, such amount shall
be deemed to constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement as if it were made on the date of such Borrowing.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Borrowing if the Interest Period requested
with respect thereto would not comply with the limitations specified in the
definition of Interest Period.
31
Section 2.03. Competitive Bid Procedure. (a) In order to request
Competitive Bids, the Borrower shall hand deliver or telecopy to the Servicing
Agent a duly completed Competitive Bid Request in the form of Exhibit C-1, to be
received by the Servicing Agent (i) in the case of a LIBOR Competitive
Borrowing, not later than 10:00 a.m., New York City time, four Business Days
before a proposed LIBOR Competitive Borrowing and (ii) in the case of a Fixed
Rate Borrowing, not later than 10:00 a.m., New York City time, one Business Day
before a proposed Competitive Borrowing. No ABR Borrowing or LIBOR Revolving
Borrowing shall be requested in, or made pursuant to, a Competitive Bid Request.
A Competitive Bid Request that does not conform substantially to the format of
Exhibit C-1 may be rejected in the Servicing Agent's sole discretion, and the
Servicing Agent shall promptly notify the Borrower of such rejection by
telecopier. Such request shall in each case refer to this Agreement and specify,
(x) whether such Borrowing is to be a LIBOR Competitive Borrowing or a Fixed
Rate Borrowing, (y) the date of such Borrowing (which shall be a Business Day)
and the aggregate principal amount thereof (which shall comply with the third
sentence of Section 2.02(a)) and (z) the Interest Period with respect thereto
--------
(which may not end after the Revolving Maturity Date). Promptly after its
receipt of a Competitive Bid Request that is not rejected as aforesaid, the
Servicing Agent shall invite by telecopier (in the form set forth in Exhibit C-
2) the Revolving Lenders to bid, on the terms and conditions of this Agreement,
to make Competitive Loans pursuant to such Competitive Bid Request.
(b) Each Revolving Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid by a Revolving Lender must be received by the Servicing Agent by
telecopier, in the form of Exhibit C-3, (i) in the case of a LIBOR Competitive
Borrowing, not later than 9:30 a.m., New York City time, three Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 9:30 a.m., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be accepted by the Servicing
Agent. Competitive Bids that do not conform substantially to the format of
Exhibit C-3 may be rejected by the Servicing Agent after conferring with, and
upon the instruction of, the Borrower, and the Servicing Agent shall notify the
Revolving Lender making such nonconforming bid of such rejection as soon as
practicable. Each Competitive Bid shall refer to this Agreement and specify (x)
the principal amount (which shall be in a minimum principal amount of $5,000,000
and which may equal the entire principal amount of the Competitive Borrowing
requested by the Borrower) of the Competitive Loan that the Revolving Lender is
willing to make to the Borrower, (y) the Competitive Bid Rate or Rates at which
such Revolving Lender is prepared to make the Competitive Loan or Loans and (z)
the Interest Period and the last day thereof. A Competitive Bid submitted by a
Revolving Lender pursuant to this paragraph (b) shall be irrevocable.
32
(c) The Servicing Agent shall promptly notify the Borrower by telecopier of
all the Competitive Bids made, the Competitive Bid Rate and the principal amount
of each Competitive Loan in respect of which a Competitive Bid was made and the
identity of the Revolving Lender that made each bid. The Servicing Agent shall
send a copy of all Competitive Bids to the Borrower for its records as soon as
practicable after completion of the bidding process set forth in this Section
2.03.
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(d) The Borrower may in its sole and absolute discretion, subject only to
the provisions of this paragraph (d), accept or reject any Competitive Bid
referred to in paragraph (c) above. The Borrower shall notify the Servicing
Agent by telephone, confirmed by telecopier in the form of a Competitive Bid
Accept/Reject Letter in the form of Exhibit C-4, whether and to what extent it
has decided to accept or reject any of or all the bids referred to in paragraph
(c) above, (x) in the case of a LIBOR Competitive Borrowing, not later than
10:30 a.m., New York City time, three Business Days before a proposed
Competitive Borrowing and (y) in the case of a Fixed Rate Borrowing, not later
than 10:30 a.m., New York City time, on the day of a proposed Competitive
Borrowing; provided, however, that (i) the failure by the Borrower to give such
notice shall be deemed to be a rejection of all the bids referred to in
paragraph (c) above, (ii) the Borrower shall not accept a bid made at a
particular Competitive Bid Rate with respect to any Competitive Bid Request if
the Borrower has decided to reject a bid made at a lower Competitive Bid Rate
with respect to such Competitive Bid Request, (iii) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the principal amount
specified in such Competitive Bid Request, (iv) to the extent necessary to
comply with clause (iii) above, the Borrower may accept Competitive Bids at a
single Competitive Bid Rate in part, which acceptance, in the case of multiple
bids at such Competitive Bid Rate, shall be made pro rata in accordance with the
amount of each such Competitive Bid and (v) no bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $5,000,000; provided further, however, that, if a Competitive Loan must be in
an amount less than $5,000,000 because of the provisions of clause (iv) above,
such Competitive Loan may be for a minimum of $1,000,000 or any integral
multiple thereof, and in calculating the pro rata allocation of acceptances of
portions of multiple bids at a particular Competitive Bid Rate pursuant to
clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in
a manner which shall be in the discretion of the Borrower. A notice given by the
Borrower pursuant to this paragraph (d) shall be irrevocable.
(e) The Servicing Agent shall promptly notify each bidding Lender whether
or not its Competitive Bid has been accepted (and, if so, in what amount and at
what Competitive Bid Rate) by telecopier sent by the Servicing Agent, and each
successful bidder will thereupon become bound, subject to the other applicable
conditions hereof, to make the Competitive Loan in respect of which its bid has
been accepted.
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(f) The Borrower may submit Competitive Bid Requests for more than one Type
of Loan or for more than one Interest Period at the same time on any day, but no
Competitive Bid Request shall be made within five Business Days after any date
on which one or more Competitive Bid Requests have previously been submitted.
(g) If the Servicing Agent shall elect to submit a Competitive Bid in its
capacity as a Revolving Lender, it shall submit such bid directly to the
Borrower one-quarter of an hour earlier than the latest time at which the other
Revolving Lenders are required to submit their bids to the Servicing Agent
pursuant to paragraph (b) above.
(h) All notices required by this Section 2.03 shall be given in accordance
with Section 9.01.
----
Section 2.04. Notice of Borrowings. (a) In order to request a Syndicated
Borrowing, the Borrower shall give written or telecopy notice (or telephone
notice promptly confirmed in writing or by telecopy) to the Servicing Agent in
the form of Exhibit B (i) in the case of a LIBOR Borrowing, not later than 11:00
a.m., New York City time, three Business Days before a proposed Borrowing and
(ii) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City
time, on the day of a proposed Borrowing. No Competitive Loan shall be requested
or made pursuant to a Syndicated Borrowing Request.
(b) The Servicing Agent may waive any prior notice in connection with any
Syndicated Borrowing to be made on the date hereof. Any notice given pursuant to
this Section 2.04 shall be irrevocable and shall in each case refer to this
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Agreement and specify (x) whether such Borrowing is to be a LIBOR Borrowing or
an ABR Borrowing; (y) the date of such Borrowing (which shall be a Business Day)
and the amount thereof; and (z) if such Borrowing is to be a LIBOR Borrowing,
the Interest Period with respect thereto. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall be
an ABR Borrowing. If no Interest Period with respect to any LIBOR Borrowing is
specified in any such notice, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration. The Servicing Agent shall promptly
advise the Lenders having Commitments of the applicable Class of each notice
given pursuant to this Section 2.04 and of each such Lender's portion of the
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requested Borrowing.
Section 2.05. Conversions and Continuations. Each Syndicated Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a LIBOR Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower shall have the
right at any time upon prior irrevocable telephonic notice (which shall be
confirmed promptly in writing or by telecopy) to the Servicing Agent by the time
that a Borrowing Request would be required under Section 2.04 if the Borrower
----
34
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election, to convert such borrowing to a different
Type of Borrowing, or in the case of a LIBOR Borrowing, to continue such
Borrowing as a LIBOR Borrowing for an additional Interest Period, subject in
each case to the following:
(a) if fewer than all the Loans comprising any Borrowing are to be
converted or continued, such conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective Loans of such Lenders that
are part of such Borrowing immediately prior to such conversion or continuation;
(b) in the case of a conversion or continuation of fewer than all the Loans
comprising any Borrowing, the aggregate principal amount of Loans converted or
continued shall be an amount that would be a permitted Borrowing amount for
Loans of the same Type under the fourth sentence of Section 2.02(a);
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(c) accrued interest on a Loan (or portion thereof) being converted or
continued shall be paid by the Borrower at the time of conversion or
continuation;
(d) if any LIBOR Loan is converted at a time other than the end of an
Interest Period applicable thereto, the Borrower shall pay any increased costs
associated therewith pursuant to Section 2.17;
----
(e) the duration of any Interest Period shall comply with the limitations
specified in the definition of Interest Period, and any portion of a LIBOR Loan
for which the shortest available Interest Period would extend beyond such date
shall be automatically converted at the end of the Interest Period at the time
in effect into an ABR Loan; and
(f) the Borrower shall not be entitled to elect to convert any Loans to, or
continue any Loans for an additional Interest Period as, LIBOR Loans if a
Default shall exist when the Borrower delivers notice of such election to the
Servicing Agent.
The Interest Period applicable to any LIBOR Loan resulting from a
conversion of a Loan shall be specified by the Borrower in the irrevocable
notice of conversion delivered pursuant to this Section; provided, however, that
if no such Interest Period shall be specified, the Borrower shall be deemed to
have selected an Interest Period of one month's duration. If the Borrower shall
not have given timely notice to continue any LIBOR Loan into a subsequent
Interest Period (and shall not otherwise have given notice to convert such
Loan), such Loan (unless repaid pursuant to the terms hereof) shall, subject to
clauses (c), (e) and (f) above, automatically be continued into a new Interest
Period of one month's duration. The Servicing Agent shall promptly advise the
applicable Lenders of any notice given pursuant to this Section and of each such
Lender's portion of the continuation or conversion hereunder. This Section shall
not apply
35
to Competitive Borrowings or Swingline Borrowings, which may not be converted or
continued.
Section 2.06. Swingline Loans. (a) Subject to the terms and conditions set
forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Revolving Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $35,000,000
or (ii) the Total Revolving Outstandings exceeding the Total Revolving
Commitment; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Swingline Loans; provided that the Swingline
Lender may terminate or suspend the Swingline Facility at any time in its sole
discretion upon notice to the Borrower.
(b) Unless the Swingline Lender has notified the Borrower that the
Swingline Facility has been terminated or suspended as provided in Section
2.06(a), the Borrower may request a Swingline Loan, by notifying the Swingline
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Lender of such request by telephone (confirmed by telecopy if requested by the
Swingline Lender), not later than 12:00 noon, New York City time, on the day of
a proposed Swingline Loan. Each such notice shall be irrevocable and shall
specify the requested date (which shall be a Business Day) and amount of the
requested Swingline Loan and the Interest Period to be applicable thereto. If so
requested by the Borrower, the Swingline Lender will quote an interest rate
that, if accepted by the Borrower, will be applicable to the requested Swingline
Loan, and the Borrower will promptly notify the Swingline Lender in the event it
accepts such rate. The Swingline Lender will promptly advise the Servicing Agent
of any such notice received from the Borrower. The Swingline Lender shall make
each Swingline Loan available to the Borrower by means of a credit to the
general deposit account of the Borrower with the Swingline Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an LC Disbursement
as provided in Section 2.07(f), by remittance to the Fronting Bank) by 3:00
p.m., New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the Servicing Agent
not later than 10:00 a.m., New York City time, on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Servicing Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Revolving
Lender's Revolving Percentage of such Swingline Loan or Loans. Each Revolving
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Servicing Agent, for the account
36
of the Swingline Lender, such Revolving Lender's Revolving Percentage of such
Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Revolving Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Revolving Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.02 with respect to Loans made by such Revolving Lender
----
(and Section 2.02 shall apply, mutatis mutandis, to the payment obligations of
----
the Revolving Lenders), and the Servicing Agent shall promptly pay to the
Swingline Lender the amounts so received by it from the Revolving Lenders. The
Servicing Agent shall notify the Borrower of any participations in any Swingline
Loan acquired pursuant to this paragraph, and thereafter payments in respect of
such Swingline Loan shall be made to the Servicing Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender from the Borrower
(or other party on behalf of the Borrower) in respect of a Swingline Loan after
receipt by the Swingline Lender of the proceeds of a sale of participations
therein shall be promptly remitted to the Servicing Agent; any such amounts
received by the Servicing Agent shall be promptly remitted by the Servicing
Agent to the Revolving Lenders that shall have made their payments pursuant to
this paragraph and to the Swingline Lender, as their interests may appear. Any
payment by a Revolving Lender pursuant to this paragraph to purchase a
participation in a Swingline Loan shall not constitute a Revolving Loan and
shall not relieve the Borrower of its obligation to repay such Swingline Loan.
Section 2.07. Letters of Credit. (a) Existing Letters of Credit. On the
Effective Date, without further action by any party hereto, each Fronting Bank
that has issued an Existing Letter of Credit shall be deemed to have granted to
each Revolving Lender, and each Revolving Lender shall be deemed to have
acquired from such Fronting Bank, a participation in each Existing Letter of
Credit equal to such Revolving Lender's Revolving Percentage of (i) the
aggregate amount available to be drawn under such Existing Letter of Credit and
(ii) the aggregate amount of any outstanding reimbursement obligations in
respect thereof. Such participations shall be on all the same terms and
conditions as participations granted in Additional Letters of Credit under
Section 2.07(e). With respect to each Existing Letter of Credit (i) if the
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relevant Fronting Bank has heretofore sold a participation therein to a Lender,
such Lender and Fronting Bank agree that such participation shall be
automatically canceled on the Effective Date and (ii) if the relevant Fronting
Bank has heretofore sold a participation therein to any bank or financial
institution that is not a Lender, such participation shall be cancelled upon the
Administrative Agents receiving the written consent of such bank or financial
institution to the effectiveness of this Amended Agreement as contemplated by
Section 4.02(l).
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37
(b) Additional Letters of Credit. Subject to the terms and conditions set
forth herein, the Borrower may request the issuance of Additional Letters of
Credit for its account, in a form reasonably acceptable to the Servicing Agent
and the relevant Fronting Bank, at any time and from time to time during the
period beginning on the Effective Date and ending on the fifth Business Day
prior to the Revolving Maturity Date. In the event of any inconsistency between
the terms and conditions of this Agreement and the terms and conditions of the
letter of credit application submitted by the Borrower to, or entered into by
the Borrower with, the relevant Fronting Bank relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.
(c) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of an Additional Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the relevant Fronting Bank) to
the relevant Fronting Bank and the Servicing Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of an Additional Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (d) of this Section), the amount of such
Additional Letter of Credit, the name and address of the beneficiary thereof and
such other information as shall be necessary to prepare, amend, renew or extend
such Letter of Credit. If requested by the relevant Fronting Bank, the Borrower
also shall submit a letter of credit application in the form of Exhibit D hereto
in connection with any request for an Additional Letter of Credit. An Additional
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$150,000,000 and (ii) the Total Revolving Outstandings shall not exceed the
Total Revolving Commitment. Within the foregoing limits and subject to the terms
and conditions set forth herein, the relevant Fronting Bank agrees to issue such
Additional Letters of Credit (or amend, renew or extend an outstanding Letter of
Credit, as the case may be).
(d) Expiration Date. Each Additional Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Additional Letter of Credit (or, in the case of any
renewal or extension thereof, one year after such renewal or extension) and (ii)
the date that is five Business Days prior to the Revolving Maturity Date.
(e) Participations. By the issuance of an Additional Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and without
any further action on the part of the relevant Fronting Bank or the Revolving
38
Lenders, the relevant Fronting Bank hereby grants to each Revolving Lender, and
each Revolving Lender hereby acquires from such Fronting Bank, a participation
in such Letter of Credit equal to such Revolving Lender's Revolving Percentage
of the aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Servicing Agent, for the
account of the relevant Fronting Bank, such Lender's Revolving Percentage of
each LC Disbursement made by such Fronting Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (f) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Revolving Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever;
provided that such participations by a Revolving Lender shall not be construed
as a waiver of any claims such Lender may have against the relevant Fronting
Bank for gross negligence or wilful misconduct (as finally determined by a court
of competent jurisdiction).
(f) Reimbursement. If any Fronting Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Servicing Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York City time, on the date that such LC Disbursement
is made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or, if such notice has
not been received by the Borrower prior to such time on such date, then not
later than 12:00 noon, New York City time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
New York City time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that the Borrower
may, subject to the conditions to the Borrowing set forth herein, request in
accordance with Section 2.04 or 2.06 that such payment be financed with an ABR
---- ----
Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent
so financed, the Borrower's obligation to make such payment shall be discharged
and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrower fails to make such payment when due, the Servicing Agent shall notify
each Revolving Lender of the applicable LC Disbursement, the payment then due
from the Borrower in respect thereof and such Lender's Revolving Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Servicing Agent its Revolving Percentage of the payment then due from
the Borrower, in the same manner as provided in Section 2.02 with respect to
----
Loans made by such Lender (and Section 2.02 shall
----
39
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Servicing Agent shall promptly pay to the relevant Fronting Bank the
amounts so received by it from the Revolving Lenders. Promptly following receipt
by the Servicing Agent of any payment from the Borrower pursuant to this
paragraph, the Servicing Agent shall distribute such payment to the relevant
Fronting Bank or, to the extent that Revolving Lenders have made payments
pursuant to this paragraph to reimburse such Fronting Bank, then to such
Revolving Lenders and such Fronting Bank as their interests may appear. Any
payment made by a Revolving Lender pursuant to this paragraph to reimburse a
Fronting Bank for any LC Disbursement (other than the funding of ABR Revolving
Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and
shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.
(g) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by any Fronting Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. None of
the Administrative Agents, the Revolving Lenders nor any Fronting Bank, nor any
of their Related Parties shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
relevant Fronting Bank; provided that the foregoing shall not be construed to
excuse the relevant Fronting Bank from liability to the Borrower to the extent
of any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by such Fronting Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or wilful misconduct on
the part of any Fronting Bank (as finally determined by a court of competent
jurisdiction), such Fronting Bank shall be
40
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the relevant
Fronting Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(h) Disbursement Procedures. Each Fronting Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The relevant Fronting Bank shall promptly
notify the Servicing Agent and the Borrower by telephone (confirmed by telecopy)
of such demand for payment and whether such Fronting Bank has made or will make
an LC Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse
such Fronting Bank and the Lenders with respect to any such LC Disbursement.
(i) Interim Interest. If any Fronting Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(f) of this Section, then Section 2.11 shall apply. Interest accrued pursuant to
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this paragraph shall be for the account of the relevant Fronting Bank, except
that interest accrued on and after the date of payment by any Lender pursuant to
paragraph (f) of this Section to reimburse such Fronting Bank shall be for the
account of such Lender to the extent of such payment.
(j) Replacement of Fronting Bank. Any Fronting Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agents, the
replaced Fronting Bank and the successor Fronting Bank. The Servicing Agent
shall notify the Revolving Lenders of any such replacement of any Fronting Bank.
At the time any such replacement shall become effective, the Borrower shall pay
all unpaid fees accrued for the account of the replaced Fronting Bank pursuant
to Section 2.08(b). From and after the effective date of any such replacement,
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(i) the successor Fronting Bank shall have all the rights and obligations of the
Fronting Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Fronting Bank" shall
be deemed to refer to such successor or to any previous Fronting Bank, or to
such successor and all previous Fronting Banks, as the context shall require.
After the replacement of a Fronting Bank hereunder, the replaced
41
Fronting Bank shall remain a party hereto and shall continue to have all the
rights and obligations of a Fronting Bank under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(k) Cash Collateralization. If any Event of Default shall occur and be
continuing and the maturity of the Revolving Loans shall be accelerated or the
Revolving Commitments terminated as provided in Article VII, on the Business Day
that the Borrower receives notice from the Administrative Agents or Revolving
Lenders with LC Exposure representing greater than 50% of the total LC Exposure
demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Servicing Agent, in the name of
the Servicing Agent and for the benefit of the Revolving Lenders, an amount in
cash equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in Sections
7.01(e) or 7.01(f). Such deposit shall be held by the Servicing Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Servicing Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Such
deposits shall, pending their application as provided below, be invested by the
Servicing Agent, at the Borrower's risk and expense, in repurchase obligations
with respect to United States of America Treasury securities or other
high-quality overnight or short-term investments (which may include certificates
of deposit of the Servicing Agent), and any interest earned through the
investment of such deposits shall be for the Borrower's account and shall be
added to the deposits held by the Servicing Agent under this Section and applied
as provided herein. Moneys in such account shall be applied by the Servicing
Agent to reimburse the relevant Fronting Bank for LC Disbursements for which it
has not been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure, be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount, together with any interest
earned thereon (to the extent not applied as aforesaid), shall be returned to
the Borrower within three Business Days after all Events of Default have been
cured or waived.
Section 2.08. Fees. (a) The Borrower agrees to pay to each Revolving
Lender, through the Servicing Agent, on each March 31, June 30, September 30 and
December 31, commencing September 30, 2001, and on the date on which the
Revolving Commitment of such Lender shall be terminated as provided herein, a
facility fee (the "Facility Fee") equal to the percentage rate per annum set
forth in
42
the Pricing Schedule as the Facility Fee which is applicable at such time on the
amount of the Revolving Commitment of such Lender, whether used or unused,
during the preceding quarter (or other period commencing on the Effective Date
or ending on the Revolving Maturity Date or any date on which the Revolving
Commitment of such Revolving Lender shall be terminated). The Facility Fee shall
be computed on the basis of the actual number of days elapsed over a year of 360
days (including the first day but excluding the last day). The Facility Fee due
to each Revolving Lender shall commence to accrue on the Effective Date and
shall cease to accrue on the earlier of the Revolving Maturity Date and the
termination of the Revolving Commitment of such Revolving Lender as provided
herein.
(b) The Borrower agrees to pay (i) to the Servicing Agent for the account
of each Revolving Lender a participation fee with respect to its participations
in Letters of Credit, which shall accrue at the same Applicable Margin as shall
be used in determining the interest rate applicable to LIBOR Revolving Loans on
the average daily amount of such Lender's LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to each Fronting Bank, as applicable, a
fronting fee, which shall accrue at a rate per annum mutually agreed between the
Borrower and such Fronting Bank from time to time on the average daily amount of
the LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure. Participation fees and
fronting fees shall be payable on each March 31, June 30, September 30 and
December 31, commencing September 30, 2001; provided that all such fees shall be
payable on the date on which the Revolving Commitments terminate and any such
fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to each of the Administrative Agents, for
their respective accounts, agent and administrative fees (the "Administrative
Fees") at the times and in the amounts heretofore agreed between them.
(d) The Borrower agrees to pay on the Effective Date to the Administrative
Agents, for their own accounts and for the accounts of the Arrangers, the other
Agents and the Lenders, fees in the amounts heretofore mutually agreed (the
"Effective Date Fees").
43
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the Servicing Agent (or to the relevant Fronting Bank, in the case of
fees payable to it) for distribution, if and as appropriate, among the Lenders.
The Administrative Fees of BofA and Chase shall be paid on the dates due, in
immediately available funds, to BofA and Chase directly. Once paid, none of the
Fees shall be refundable under any circumstances.
Section 2.09. Maturity of Loans; Mandatory Prepayments. (a) Maturities. The
Borrower hereby agrees that (i) the outstanding principal balance of each Term
Loan shall be payable on the Term Loan Maturity Date, (ii) the outstanding
principal balance of each Revolving Loan shall be payable on the Revolving
Maturity Date, (iii) the outstanding principal balance of each Competitive Loan
shall be payable on the last day of the Interest Period applicable thereto and
(iv) the outstanding principal balance of each Swingline Loan shall be payable
to the Swingline Lender on the last day of the Interest Period applicable to
such Swingline Loan; provided that on each date that a Revolving Borrowing or
Competitive Borrowing is made, the Borrower shall repay all Swingline Loans then
outstanding.
(b) Scheduled Amortization. In addition, on each Amortization Date prior
to the Term Loan Maturity Date, the Borrower shall repay, and there shall become
due and payable, an aggregate principal amount of the Term Loans equal to 0.25%
of the aggregate principal amount of the Term Loans made on the Effective Date
(as such amount may be reduced pursuant to Sections 2.09(d) or 2.14).
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(c) Mandatory Prepayments. Subject to subsection (e) of this Section, upon
the receipt by the Borrower or any of its Subsidiaries (other than a Joint
Venture Subsidiary) of Net Cash Proceeds in respect of any Prepayment Event, the
Borrower shall prepay the Term Loans in an amount equal to such Net Cash
Proceeds. Each such prepayment shall be required to be made on the last day of
the reinvestment period for the relevant Prepayment Event as set forth in the
definition of "Net Cash Proceeds" or, if earlier, the date on which the Borrower
decides to prepay the Term Loans with the Net Cash Proceeds of such Prepayment
Event; provided that if the Net Cash Proceeds in respect of any Prepayment Event
are less than $25,000,000, no such prepayment shall be required until the amount
of such Net Cash Proceeds, together with the amount of all other Net Cash
Proceeds in respect of which no prepayment under this subsection (c) shall have
theretofore been made, are equal to at least $25,000,000. Pending the final
application of Major Casualty Proceeds or any cash proceeds in respect of an
Asset Sale, a Debt Incurrence or an Equity Issuance in accordance with the terms
of this Agreement, the Borrower may temporarily repay Revolving Loans or
otherwise invest such amounts in any manner that is not prohibited by this
Agreement.
(d) Application of Prepayments.
44
(i) Each payment of principal of the Term Loans shall be applied
ratably to the respective Term Loans of all Term Lenders, subject to
subsection (e) of this Section.
(ii) The amount of any prepayments of Term Loans pursuant to
subsection (c) of this Section and any optional prepayments of the Term
Loans pursuant to Section 2.14 shall be applied to reduce pro rata the
----
amount of the subsequent amortization of the Term Loans required pursuant
to subsection (b) of this Section.
(iii) Each payment of principal of the Term Loans shall be made
together with interest accrued and unpaid on the amount repaid to the date
of payment.
(iv) Each payment of the Term Loans shall be applied to such Term
Borrowings as the Borrower may designate (or, failing such designation, as
determined by the Servicing Agent).
(d) Option of Term Lenders Not to Accept Mandatory Prepayments. (i) At
least five Business Days prior to any date (an "Unscheduled Prepayment Date") on
which any prepayment of the Term Loans (a "Term Loan Unscheduled Prepayment")
would, but for the provisions of this subsection (e), otherwise be required
pursuant to subsection (c) of this Section, the Borrower shall deliver a notice
(a "Borrower Term Loan Prepayment Notice") to the Servicing Agent. Such notice
shall (x) state that the Borrower intends to make a Term Loan Unscheduled
Prepayment, (y) state the amount thereof and (z) contain an offer to prepay on a
specified date (each such date, a "Deferred Term Loan Unscheduled Prepayment
Date"), which shall be the tenth Business Day after the date of such Borrower
Term Loan Prepayment Notice, the Term Loans of each Term Lender by an aggregate
principal amount equal to its ratable share of such Term Loan Unscheduled
Prepayment (determined by reference to the outstanding principal amount of such
Lender's Term Loans as a proportion of the aggregate outstanding principal
amount of all Term Loans). Each Borrower Term Loan Prepayment Notice shall be
given by telecopy, confirmed hand delivery or overnight courier service, in each
case addressed to the Servicing Agent as provided in Section 9.01. Promptly
----
after it receives any Borrower Term Loan Prepayment Notice, the Servicing Agent
shall deliver a notice complying with clause (ii) (a "Term Loan Prepayment
Notice") to each Term Lender. Such Term Loan Unscheduled Prepayment shall not
occur on such Unscheduled Prepayment Date but shall instead be deferred as
hereinafter provided in this subsection (e).
(ii) Each Term Loan Prepayment Notice shall be in writing, shall refer to
this Section and shall (w) notify the relevant Term Lender of the contents and
the date of the Borrower Term Loan Prepayment Notice, (x) set forth the amount
of the Term Loan Unscheduled Prepayment and the prepayment that the applicable
45
Term Lender will be entitled to receive if it accepts prepayment of its Term
Loans in accordance with this subsection, (y) request such Term Lender to notify
the Servicing Agent in writing, no later than the third Business Day prior to
the Deferred Term Loan Unscheduled Prepayment Date, of such Term Lender's
acceptance or rejection (in each case, in whole and not in part) of such offer
of prepayment and (z) inform such Term Lender that the failure by such Term
Lender to reject such offer in writing on or before the third Business Day prior
to such Deferred Term Loan Unscheduled Prepayment Date shall be deemed an
acceptance of such prepayment offer.
(iii) Subject to subsection (f) of this Section, on each Deferred Term
Loan Unscheduled Prepayment Date, the Borrower shall pay to the Servicing Agent
for application to the prepayment of the outstanding Term Loans of each of the
Term Lenders that shall have accepted (or been deemed to have accepted)
prepayment (each, an "Accepting Term Lender"), an amount equal to the aggregate
ratable shares (determined as specified in paragraph (i) above) of the Accepting
Term Lenders of the amount that would have been payable by the Borrower pursuant
to subsection (c) of this Section on the related Unscheduled Prepayment Date but
for the provisions of this subsection (e).
(f) Deferred Payment. If subsection (c) or (e) of this Section would
otherwise require prepayment of LIBOR Loans or portions thereof prior to the
last day of the then current Interest Period therefor, each such prepayment may,
if the Borrower so elects and unless the Servicing Agent otherwise notifies the
Borrower upon the instructions of the Required Lenders, be deferred to such last
day of the related Interest Period. The Borrower shall use reasonable efforts to
minimize any deferrals of payments pursuant to this subsection.
(g) Remaining Net Cash Proceeds. To the extent that the aggregate amount
required to be paid to the Accepting Term Lenders with respect to any Prepayment
Event is less than the Net Cash Proceeds of such Prepayment Event, the Borrower
or relevant Subsidiary may, subject to the other terms of this Agreement, use
any such remaining Net Cash Proceeds for any purpose not prohibited by this
Agreement.
Section 2.10. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness to such Lender resulting from each Loan made by such Lender from
time to time and any Deferred Amounts payable to such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement.
(b) The Servicing Agent shall maintain accounts in which it will record
(i) the amount of each Loan made hereunder, the Class and Type of each Loan and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender
46
hereunder, (iii) the amount of any sum received by the Servicing Agent hereunder
for the account of the Lenders and each Lender's share thereof and (iv) the
amount of any Deferred Amount and interest thereon payable from the Borrower to
each Lender hereunder.
(c) The entries made in the accounts maintained pursuant to paragraphs (a)
and (b) above shall, to the extent permitted by applicable law, be prima facie
evidence of the existence and amounts of the obligations therein recorded;
provided, however, that the failure of any Lender or the Servicing Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans in accordance with their terms.
(d) Notwithstanding any other provision of this Agreement, in the event
any Lender shall request a Note evidencing the Loans made by it hereunder, the
Borrower shall deliver such a Note or Notes payable to such Lender and its
registered assigns, and the interests represented by such Note or Notes shall at
all times (including after any assignment of all or part of such interests
pursuant to Section 9.07) be represented by one or more Notes payable to the
----
payee named therein or its registered assigns.
Section 2.11. Interest on Loans. (a) Subject to the provisions of Section
2.12, each ABR Loan (including any Swingline Loan that is not bearing interest
----
at a rate quoted by the Swingline Lender in accordance with paragraph (d) below)
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be, for periods during which the
Alternate Base Rate is determined by reference to the Prime Rate and 360 days
for other periods) at a rate per annum equal to sum of the Alternate Base Rate
plus the Applicable Margin. Interest on each ABR Loan shall be payable on each
applicable Interest Payment Date. The Alternate Base Rate shall be determined by
the Servicing Agent, and such determination shall be conclusive absent manifest
error.
(b) Subject to the provisions of Section 2.12, (i) each LIBOR Loan (other
----
than a LIBOR Competitive Loan) shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the LIBO Rate for the Interest Period in effect for such Loan plus the
Applicable Margin, and (ii) each LIBOR Competitive Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to the LIBO Rate for the Interest Period in
effect for such Competitive Loan plus (or minus, as applicable) the Margin
offered by the Lender making such Competitive Loan and accepted by the Borrower
pursuant to Section 2.03. Interest on each LIBOR Loan shall be payable on each
applicable Interest Payment Date (and, in the case of Revolving Loans, upon
termination of the Commitments). The LIBO Rate for each Interest Period shall be
determined by the Servicing Agent, and such determination shall
47
be conclusive absent manifest error. The Servicing Agent shall promptly advise
the Borrower and each applicable Lender of such determination.
(c) Subject to the provisions of Section 2.12, each Fixed Rate Loan
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shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Lender making such Loan and accepted by the Borrower
pursuant to Section 2.03. Interest on each Fixed Rate Loan shall be payable on
----
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement.
(d) Subject to the provisions of Section 2.12, each Swingline Loan
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shall bear interest at (i) the rate per annum applicable to ABR Revolving Loans
as provided in paragraph (a) above or (ii) any other rate per annum (computed on
the basis of the actual number of days elapsed over a year of 360 days) which
shall be quoted by the Swingline Lender on the date such Loan is made and
accepted by the Borrower as provided in Section 2.06; provided, that commencing
----
on any date on which the Swingline Lender requires the Lenders to acquire
participations in a Swingline Loan pursuant to Section 2.06(c), such Loan shall
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bear interest at the rate per annum applicable to ABR Revolving Loans as
provided in paragraph (a) above.
(e) Interest on each Loan shall accrue from and including the date on
which such Loan is made and to but excluding the date such Loan is repaid.
Section 2.12. Interest on Overdue Amounts; Alternative Rate of
Interest. (a) If the Borrower shall default in the payment of interest on any
Loan or any Fees or other amount (other than principal) becoming due hereunder,
whether by scheduled maturity, notice of prepayment, acceleration or otherwise,
the Borrower shall on demand pay interest from and including the date of such
default, to the extent permitted by law, on such defaulted amount (other than
principal) up to (but not including) the date of actual payment (after as well
as before judgment) at a rate per annum (computed as provided in Section
2.11(a)) equal to the Alternate Base Rate plus the Applicable Margin for ABR
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Revolving Loans plus (without duplication of the 2.00% increment contemplated by
the proviso to the definition of Applicable Margin) 2.00% per annum.
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(b) In the event, and on each occasion, that on the day two Business
Days prior to the commencement of any Interest Period for a LIBOR Borrowing the
Servicing Agent shall have determined that deposits in the requested principal
amounts of the LIBOR Loans are not generally available in the London interbank
market to the Lenders (or, in the case of a LIBOR Competitive Loan, the Lender
that is required to make such Loan) or that reasonable means do not exist for
ascertaining the LIBO Rate or that the rate at which such deposits are being
offered will not adequately and fairly reflect the cost to the Lenders (or, in
the case of a LIBOR Competitive Loan, the Lender that is required to make such
48
Loan) of making such LIBOR Loan, during such Interest Period, the Servicing
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the Borrower and any request by the Borrower for a
LIBOR Borrowing shall, until the circumstances giving rise to such notice no
longer exist, (i) if such notice relates to a Revolving Borrowing, be deemed a
request for an ABR Borrowing; provided, however, that the Borrower may withdraw
any such request prior to the making of any such ABR Borrowing, (ii) if such
notice relates to the conversion of any outstanding Borrowing to, or
continuation of any outstanding Borrowing as, a LIBOR Borrowing, be deemed
ineffective, as applicable, or (iii) if such notice relates to a LIBOR
Competitive Borrowing, be deemed ineffective; provided that if the circumstances
giving rise to such notice do not affect all the Revolving Lenders, then
requests by the Borrower for LIBOR Competitive Borrowings may be made to
Revolving Lenders that are not affected thereby. Each determination by the
Servicing Agent hereunder shall be conclusive absent manifest error.
Section 2.13. Termination and Reduction of Commitments and Swingline
Facility. (a) Unless previously terminated, the Revolving Commitments and the
Swingline Facility shall be automatically and permanently terminated on the
Revolving Maturity Date. The Term Commitments shall be automatically and
permanently terminated on the Effective Date immediately after the Term Loans
are made. The Commitments are also subject to termination as set forth in
Section 4.02.
(b) If at any time or from time to time after the Effective Date the
Borrower shall consummate a Securitization Transaction, then, unless at the time
of such consummation Investment Grade Status exists, the Total Revolving
Commitment shall be automatically and permanently reduced by an amount equal to
50% of the excess (if any) of (i) the aggregate amount of financing committed to
the Borrower and its Subsidiaries pursuant to such Securitization Transaction,
assuming satisfaction of conditions to utilization specified therein, over (ii)
the aggregate amount of financing committed pursuant to any other Securitization
Transaction which is replaced by such new Securitization Transaction and which
has previously resulted in a reduction of the Total Revolving Commitment
pursuant to this subsection (b).
(c) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Servicing Agent (a copy of which the Servicing Agent
shall promptly provide to each Lender), the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Total Revolving Commitment; provided, however, that (i) each partial reduction
of the Total Revolving Commitment shall be in an integral multiple of $1,000,000
and in a minimum principal amount of $25,000,000 and (ii) no such termination or
reduction shall be made (A) which would reduce the Total Revolving Commitment to
an amount less than the Total Revolving Outstandings or
49
(B) which would reduce any Lender's Revolving Commitment to an amount that is
less than such Lender's Revolving Committed Outstandings.
(d) Each reduction in the Commitments shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class. The
Borrower shall pay to the Servicing Agent for the account of the Revolving
Lenders, on the date of each termination or reduction of the Total Revolving
Commitment, the Facility Fee on the amount of the Total Revolving Commitment so
terminated or reduced accrued through the date of such termination or reduction.
Section 2.14. Optional Prepayment of Loans. (a) The Borrower shall have
the right at any time and from time to time to prepay any Borrowing, in whole or
in part, upon giving telephonic notice (which shall be confirmed promptly in
writing or by telecopy) to the Servicing Agent (which shall promptly provide a
copy to each Lender): (i) before 11:00 a.m., New York City time, three Business
Days prior to prepayment, in the case of LIBOR Loans, (ii) before 11:00 a.m.,
New York City time, one Business Day prior to prepayment, in the case of ABR
Loans and (iii) before 12:00 noon, New York City time, on the date of
prepayment, in the case of Swingline Loans; provided, however, that each such
partial prepayment of principal shall be in a minimum principal amount of
$1,000,000 and an integral multiple of $1,000,000. The Borrower shall not have
the right to prepay any Competitive Loan without the prior consent of the Lender
thereof.
(b) On the date of any termination or reduction of the Total Revolving
Commitment pursuant to Section 2.13, the Borrower shall pay or prepay so much of
----
the Revolving Borrowings as shall be necessary in order that the Total Revolving
Outstandings will not exceed the Total Revolving Commitment after giving effect
to such termination or reduction.
(c) Except to the extent otherwise specified by the Borrower when
making a prepayment, all prepayments under this Section 2.14 of Loans of any
----
Class shall be applied to outstanding ABR Loans of such Class up to the full
amount thereof and then shall be applied to outstanding LIBOR Loans of such
Class up to the full amount thereof.
(d) Any optional prepayment of the Term Loans pursuant to this Section
prior to the second anniversary of the Effective Date shall be made together
with a premium of (i) 2.00% of the aggregate principal amount of Term Loans to
be prepaid, if such prepayment is prior to the first anniversary of the
Effective Date or (ii) 1.00% of the aggregate amount of Term Loans to be
prepaid, if such prepayment is on or after the first anniversary of the
Effective Date and prior to the second anniversary of the Effective Date.
(e) Notwithstanding the foregoing, if the Borrower includes in its
notice to the Servicing Agent pursuant to Section 2.14(a) of its election to
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prepay any
50
Borrowing that the Lenders may reject the prepayment so proposed by the
Borrower, then the provisions of Section 2.09(d) and 2.09(e) shall apply to any
------- -------
such offered prepayment, mutatis mutandis, as though the offered prepayment were
a mandatory prepayment of the Term Loans pursuant to Section 2.09(c); provided
-------
however, to the extent any Lender accepts a prepayment offered pursuant to this
subsection (e), such prepayment shall be made together with any applicable
premium specified in subsection (d).
(f) All prepayments under this Section shall be subject to subsection
(d) of this Section and Section 2.17 but otherwise without premium or penalty.
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All prepayments other than prepayments of ABR Revolving Loans shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of prepayment.
Section 2.15. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein (but subject to paragraph (d) below
and Section 2.21), if after the date of this Agreement any change in applicable
----
law or regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration thereof
(whether or not having the force of law) shall change the basis of taxation of
payments to any Lender or any Fronting Bank, as applicable, of the principal of
or interest on any LIBOR Loan or Fixed Rate Loan made by such Lender or any
Letter of Credit or participation therein or any fees or other amounts payable
hereunder (other than changes in respect of Taxes referred to in clause (a) or
(b) of the definition of "Excluded Taxes") or by any political subdivision or
taxing authority therein), or shall impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of or credit extended by such Lender or Fronting Bank or
shall impose on such Lender, such Fronting Bank or the London interbank market
any other condition affecting this Agreement or LIBOR Loans or Fixed Rate Loans
made by such Lender or any Letter of Credit or participation therein, and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any such Loan or to increase the cost to such Lender or
such Fronting Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such Lender
or such Fronting Bank hereunder (whether of principal, interest or otherwise) in
respect thereof by an amount deemed by such Lender to be material, then the
Borrower will pay to such Lender or such Fronting Bank, as the case may be, upon
demand such additional amount or amounts as will compensate such Lender or such
Fronting Bank for such additional costs incurred or reduction suffered.
(b) Subject to Section 2.21, if any Lender or any Fronting Bank shall
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have determined that the adoption after the date hereof of any law, rule,
regulation or guideline regarding capital adequacy, or any change after the date
hereof in any of the foregoing or in the interpretation or administration of any
of the foregoing by any Governmental Authority charged with the interpretation
or administration
51
thereof, or compliance by any Lender or any Fronting Bank (or any lending office
of such Lender or Fronting Bank) or any Lender's or any Fronting Bank's holding
company with any request or directive regarding capital adequacy (whether or not
having the force of law) made or promulgated after the date hereof by any such
Governmental Authority, has or would have the effect of reducing the rate of
return on such Lender's or such Fronting Bank's capital or on the capital of
such Lender's or such Fronting Bank's holding company, if any, as a consequence
of its obligations under this Agreement or the Loans made by, or participations
in Letters of Credit held by, such Lender, or the Letters of Credit issued by
any Fronting Bank, pursuant hereto to a level below that which such Lender or
such Fronting Bank or such Lender's or such Fronting Bank's holding company
could have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or such Fronting Bank's guidelines with respect to
capital adequacy) by an amount deemed by such Lender or such Fronting Bank to be
material, then from time to time the Borrower shall pay to such Lender or such
Fronting Bank such additional amount or amounts as will compensate such Lender
or such Fronting Bank or such Lender's or such Fronting Bank's holding company
for any such reduction suffered.
(c) A certificate of each Lender or any Fronting Bank setting forth
such amount or amounts as shall be necessary to compensate such Lender or
Fronting Bank (or its participating banks or other entities pursuant to Section
9.07) as specified in paragraph (a) or (b) above, as the case may be, shall be
----
delivered to the Borrower and shall be conclusive absent manifest error. Except
as provided in paragraph (d) below, the Borrower shall pay each Lender or
Fronting Bank the amount shown as due on any such certificate delivered by such
Lender or Fronting Bank within 30 days after receipt of the same. Each Lender or
Fronting Bank shall submit such a certificate no more often than monthly;
provided, however, that certificates with respect to amounts due with respect to
identifiable Loans may be submitted at the ends of such Loans' Interest Periods.
(d) Failure on the part of any Lender or Fronting Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or Fronting Bank's rights with respect to any period to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to such period or any
other period; provided, however, that neither any Lender nor any Fronting Bank
shall be entitled to compensation under this Section 2.15 for any costs incurred
----
or reductions suffered more than 90 days prior to the date on which it shall
have requested compensation therefor; provided further, that if the change in
law or regulation or in the interpretation or administration thereof that shall
give rise to any such costs or reductions shall be retroactive, then the 90-day
period referred to above shall be extended to include the period of retroactive
effect thereof. Notwithstanding any other provision of this Section 2.15,
neither any Lender nor any Fronting Bank shall demand compensation for any
increased cost or reduction
52
referred to above if it shall not at the time be the general policy or practice
of such Lender or such Fronting Bank to demand such compensation in similar
circumstances under comparable provisions of other credit agreements, if any. If
any Lender or any Fronting Bank shall receive as a refund any moneys from any
source that it has listed on the certificate provided pursuant to (c) above as
an increased cost, to the extent that the Borrower has previously paid such
increased cost to such Lender or such Fronting Bank, such Lender or Fronting
Bank shall promptly forward such refund to the Borrower without interest.
(e) Notwithstanding the foregoing provisions of this Section, no Lender
shall demand compensation pursuant to this Section in respect of any Competitive
Loan for any increased cost or reduction referred to above if the circumstance
that would otherwise entitle it to such compensation shall have been publicly
announced prior to submission of the Competitive Bid pursuant to which such Loan
was made.
Section 2.16. Change in Legality. (a) Notwithstanding anything to the
contrary herein contained (but subject to Section 2.21), if after the date of
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this Agreement any change in any law or regulation or in the interpretation
thereof or any new law, regulation or interpretation by any Governmental
Authority charged with the administration or interpretation thereof or any
judgment, order or directive of any competent court, tribunal or authority shall
make it unlawful for any Lender or its Applicable Lending Office to make or
maintain any LIBOR Loan or to give effect to its obligations as contemplated
hereby with respect to any LIBOR Loan (collectively, an "Illegality"), then, by
written notice to the Borrower and to the Servicing Agent, such Lender, so long
as such Illegality continues to exist:
(i) may declare that LIBOR Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a
LIBOR Borrowing (x) shall, as to such Lender only, be deemed a request
for an ABR Borrowing or (y) at the option of the Borrower, shall be
withdrawn as to the Lender prior to the time for making the Borrowing;
and
(ii) shall promptly enter into negotiations with the Borrower and
negotiate in good faith to agree to a solution to such Illegality;
provided, however, that if such an agreement has not been reached by
the date at which such change in law is given effect with respect to
the outstanding LIBOR Loans of such Lender, the Borrower shall
immediately prepay the affected Loans.
(b) For purposes of this Section 2.16, a notice by a Lender shall be
----
effective as to each Loan, if lawful, on the last day of the then current
Interest Period with respect thereto; provided, however, that such notice shall
be effective on the date of receipt if there are no outstanding LIBOR Loans;
provided further,
53
that if it is not lawful for such Lender to maintain any Loan in its current
form until the end of the Interest Period applicable thereto, then the notice
shall be effective upon receipt.
(c) Each Lender that has delivered a notice of Illegality pursuant to
paragraph (a) above agrees that it will notify the Borrower as soon as
practicable if the conditions giving rise to the Illegality cease to exist.
Section 2.17. Indemnity. The Borrower agrees to indemnify each Lender
against any loss or expense which such Lender may sustain or incur as a
consequence of (a) any payment, prepayment or conversion of a LIBOR Loan or
Fixed Rate Loan made to it required by any provision of this Agreement or
otherwise made, or any transfer of any such Loan pursuant to Section 2.21(b), on
-------
a date other than the last day of the applicable Interest Period, (b) any
default in payment or prepayment of the principal amount of any Loan made to it
or any part thereof or interest accrued thereon, as and when due and payable
(whether at scheduled maturity, by notice of prepayment, acceleration or
otherwise), (c) the occurrence of any Event of Default, including any loss
sustained or incurred or to be sustained or incurred in liquidating or employing
deposits from third parties acquired to effect or maintain such Loan or any part
thereof as a LIBOR Loan or Fixed Rate Loan, (d) any failure by the Borrower to
fulfill on the date of any Borrowing by it hereunder the applicable conditions
set forth in Article IV, (e) any failure of the Borrower to borrow or to convert
--
or continue any Loan made to it hereunder after irrevocable notice of such
Borrowing, conversion or continuation has been given pursuant to Section 2.03,
----
2.04 or 2.05 or (f) any failure of the Borrower to borrow any Competitive Loan
---- ----
after accepting the Competitive Bid to make such Loan. Such loss or expense
shall be the difference as reasonably determined by such Lender between (x) an
amount equal to the principal amount of such LIBOR Loan or Fixed Rate Loan being
paid, prepaid, converted or transferred or not borrowed, converted or continued
multiplied by a percentage per annum (computed on the basis of a 360-day year
and actual days remaining for the balance of the Interest Period applicable, or
which would have been applicable, to such LIBOR Loan or Fixed Rate Loan being
paid, prepaid, converted, transferred or not borrowed, converted or continued)
equal to the greater of (i) the LIBO Rate applicable to such LIBOR Loan being
paid, prepaid, converted or transferred or not borrowed, converted or continued
or, in the case of a Fixed Rate Loan, the fixed rate of interest applicable
thereto or (ii) such Lender's cost of obtaining the funds for such LIBOR Loan or
such Fixed Rate Loan being paid, prepaid, converted, transferred or not
borrowed, converted or continued, but in the case of LIBOR Loans, not in excess
of the LIBO Rate applicable to such Loan plus 1/16th of 1% per annum, and (y)
any lesser amount that would be realized by such Lender in reemploying the funds
received in payment, prepayment, conversion or transfer or as a result of the
failure to borrow, convert or continue during the period from the date of such
payment, prepayment, conversion or transfer or failure to borrow, convert or
continue to the end of the Interest Period applicable to such LIBOR Loan or
Fixed Rate Loan at
54
the interest rate that would apply to an interest period of approximately such
duration. Any such Lender shall provide to the Borrower a statement explaining
the amount of any such loss or expense, which statement shall, in the absence of
manifest error, be conclusive.
Section 2.18. Pro Rata Treatment. The Term Borrowing on the Effective
Date shall be made from each Term Lender in the amount of its Term Commitment.
Each Revolving Borrowing, each payment of the Facility Fee and each reduction of
the Total Revolving Commitment shall be allocated among the Revolving Lenders in
accordance with their respective Revolving Percentages. Except as required under
Section 2.16, each payment or prepayment of principal of any Borrowing and each
----
continuation or conversion of any Borrowing shall be allocated pro rata among
the Lenders in accordance with the respective principal amounts of their
outstanding Loans comprising such Borrowing. Each payment of interest on any
Borrowing shall be allocated pro rata among the Lenders in accordance with the
respective amounts of accrued and unpaid interest on their outstanding Loans
comprising such Borrowing. Each payment of interest on any Swingline Borrowing
or LC Disbursement shall be allocated in accordance with Sections 2.06 and 2.07,
---- ----
respectively.
Section 2.19. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, obtain payment (voluntary or involuntary) in
respect of any Loans or participations in LC Disbursements or Swingline Loans as
a result of which the unpaid principal portion of its Loans or participations in
LC Disbursements or Swingline Loans shall be proportionately less than the
unpaid principal portion of the Loans or participations in LC Disbursements or
Swingline Loans of any other Lender, it shall be deemed simultaneously to have
purchased from such other Lender at face value, and shall promptly pay to such
other Lender the purchase price for, a participation in the Loans or
participations in LC Disbursements or Swingline Loans of such other Lender, so
that the aggregate unpaid principal amount of such Loans or participations in LC
Disbursements or Swingline Loans and participations in the foregoing held by
each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all such Loans or participations in LC Disbursements or Swingline
Loans then outstanding as the principal amount of its Loans or participations in
LC Disbursements or Swingline Loans prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all such
Loans or participations in LC Disbursements or Swingline Loans outstanding prior
to such exercise of such banker's lien, setoff or counterclaim or other event;
provided, however, that (i) if any such purchase or adjustments shall be made
pursuant to this Section 2.19 and the payment giving rise thereto shall
----
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the
55
purchase price or prices or adjustment restored without interest and (ii) the
provisions of this Section shall not be construed to apply to any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements or
Swingline Loans to any assignee or participant other than the Borrower or any
Affiliate thereof. The Borrower expressly consents to the foregoing arrangements
and agrees, to the fullest extent it may effectively do so under applicable law,
that any Lender holding a participation in a Loan made to it or participations
in LC Disbursements or Swingline Loans deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
Section 2.20. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Agent, Lender (which term, as
used in this Section, shall include any assignee or transferee of a Lender,
including any participation holder, subject to Section 9.07 (any such person, a
----
"Transferee")) or Fronting Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify each Agent, each Lender and Fronting
Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by such Agent, such Lender or Fronting
Bank, as the case may be, on or with respect to any payment by or on account of
any obligation of the Borrower hereunder (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Borrower by an Agent, a Lender or a Fronting Bank, or by the Servicing
Agent on its own behalf or on behalf of a Lender or Fronting Bank, shall be
conclusive absent manifest error.
56
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Servicing Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Servicing Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Servicing Agent), at the time or times prescribed by applicable law,
such properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.
(f) If an Agent, a Lender or a Fronting Bank shall become aware that it
is entitled to receive a refund in respect of Indemnified Taxes or Other Taxes
for which it shall have received payment from the Borrower under this Section,
it shall promptly notify the Borrower of the availability of such refund and
shall, within 10 days after receipt of a request by the Borrower, apply for such
refund at the Borrower's expense. If an Agent, any Lender or any Fronting Bank
shall receive a refund in respect of any such Indemnified Taxes or Other Taxes,
it shall promptly repay such refund (including any penalties or interest
received with respect thereto) to the Borrower, net of all out-of-pocket
expenses of such Agent, such Lender or Fronting Bank, provided that the
Borrower, upon the request of such Agent, such Lender or Fronting Bank, agrees
to return such refund (plus penalties, interest or other charges) to such Agent,
such Lender or Fronting Bank in the event such Agent, such Lender or Fronting
Bank shall be required to repay such refund.
Section 2.21. Duty to Mitigate; Assignment of Commitments under Certain
Circumstances. (a) If any Lender (or Transferee) claims any additional amounts
payable pursuant to Section 2.15 or exercises its rights under Section 2.16 or
---- ----
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.20,
----
then such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document, including, without
limitation, any such certificate or document reasonably requested by the
Borrower, or to change the jurisdiction of its Applicable Lending Office or to
take other actions (including the filing of certificates or documents) known to
it to be available if the making of such a filing or change or the taking of
such other action would avoid the need for or reduce the amount of any such
additional amounts which may thereafter accrue or avoid the circumstances giving
rise to such exercise and would not, in the sole determination of such Lender
(or Transferee), be otherwise disadvantageous to such Lender (or Transferee).
57
(b) In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.15 or 2.16, or the Borrower shall be required
---- ----
to make additional payments to any Lender under Section 2.20, the Borrower shall
have the right, at its own expense (which shall include the processing and
recordation fee referred to in Section 9.07(b)), upon notice to such Lender and
the Servicing Agent, to require such Lender to transfer and assign without
recourse (in accordance with and subject to the restrictions contained in
Section 9.07) all its interests, rights and obligations hereunder (other than
any outstanding Competitive Loans held by it) to another financial institution
approved by the Servicing Agent (and, if a Revolving Commitment is being
assigned, each Fronting Bank and the Swingline Lender) (which approval shall not
be unreasonably withheld) which shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided, however,
that (i) no such assignment shall conflict with any law, rule or regulation or
order of any Governmental Authority and (ii) the assignee or the Borrower shall
pay to the affected Lender in immediately available funds on the date of such
assignment the outstanding principal of its Loans (other than Competitive Loans)
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts accrued for its account or owed to
it hereunder (including the additional amounts asserted and payable pursuant to
Section 2.15 or 2.20, if any).
Section 2.22. Stop Issuance Notice. If the Required Lenders determine
at any time that the conditions set forth in Section 4.01 would not be satisfied
----
in respect of a Revolving Borrowing at such time, then the Required Lenders may
request that the Servicing Agent issue a "Stop Issuance Notice", and the
Servicing Agent shall issue such notice to the Swingline Lender and to each
Fronting Bank. Such Stop Issuance Notice shall be withdrawn upon a determination
by the Required Lenders that the circumstances giving rise thereto no longer
exist. No Swingline Loan shall be made and no Letter of Credit shall be issued
while a Stop Issuance Notice is in effect. The Required Lenders may request
issuance of a Stop Issuance Notice only if there is a reasonable basis therefor,
and shall consider reasonably and in good faith a request from the Borrower for
withdrawal of the same on the basis that the conditions in Section 4.01 are
----
satisfied; provided that the Servicing Agent, the Swingline Lender and each
Fronting Bank may and shall conclusively rely on any Stop Issuance Notice while
it remains in effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
58
Section 3.01. Organization. Each of the Borrower and its Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has the requisite power and authority under
its constitutive documents and applicable law to own its property and assets and
to carry on its business as now conducted and is duly qualified and is in good
standing and is authorized to do business in every jurisdiction where such
qualification or authorization is required, except where the failure so to
qualify, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
Section 3.02. Authorization. The Borrower and each other Loan Party has
the power and authority under its constitutive documents and applicable law to
execute, deliver and carry out the provisions of the Loan Documents, to grant
Liens pursuant to the Collateral Documents and, in the case of the Borrower, to
borrow hereunder, and all such actions have been duly and validly authorized by
all necessary proceedings on its part under its constitutive documents and
applicable law.
Section 3.03. Absence of Conflicts. The execution, delivery and
performance by it and each other Loan Party of the Loan Documents, any
Borrowings by it hereunder, the grant of Liens pursuant to the Collateral
Documents and the other transactions contemplated by the Loan Documents will not
(a) violate (i) any provision of the Limited Partnership Agreement or any other
agreement governing its or any such Loan Party's organization and/or scope of
power and authority or (ii) any applicable law, rule, regulation (including
Regulation U or X) or order of any Governmental Authority binding upon it or any
such Loan Party, (b) result in a breach of or constitute (alone or with notice
or lapse of time or both) a material default under any indenture or any material
agreement or other instrument to which it or any such Loan Party is a party, or
by which it or any such Loan Party or any of its or any such Loan Party's
properties or assets are bound, or (c) except for the Liens created by the
Collateral Documents, result in or require the creation or imposition of any
Lien upon any of its or any such Loan Party's material property or assets.
Section 3.04. Governmental Approvals. No registration with or consent
or approval of, or other action by, any Governmental Authority is or will be
required in connection with its or any other Loan Party's execution, delivery or
performance of the Loan Documents, or any Borrowing hereunder, or in connection
with the grant of Liens pursuant to the Collateral Documents or the other
transactions contemplated by the Loan Documents, other than any which have been
made or obtained or the failure to obtain, give, file or take which could not
reasonably be expected to result in a Material Adverse Effect.
Section 3.05. Enforceability. Each Loan Document to which it is a party
will constitute its, and each Loan Document to which any other Loan Party is a
party will constitute such Loan Party's, legal, valid and binding obligation,
59
enforceable in accordance with the terms thereof, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application from time to time affecting the rights of creditors
generally and by general principles of equity, including implied obligations of
good faith and fair dealing.
Section 3.06. Financial Statements. (a) The audited consolidated
balance sheet of the Borrower and its Subsidiaries as of December 31, 2000 and
the related consolidated statements of income, of partners' capital and of cash
flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP,
and set forth in the Borrower's 2000 annual report on Form 10-K filed with the
SEC, a copy of which has been furnished to the Arrangers for distribution to the
Lenders, fairly present, in conformity with GAAP, the consolidated financial
position of the Borrower and its Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal year.
(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of June 30, 2001 and the related unaudited consolidated
statements of income and of cash flows for the six months then ended, set forth
in the Borrower's quarterly report for the fiscal quarter ended June 30, 2001 on
Form 10-Q filed with the SEC, a copy of which has been furnished to the
Arrangers for distribution to the Lenders, fairly present, in conformity with
GAAP applied on a basis consistent with the financial statements referred to in
subsection (a) of this Section, the consolidated financial position of the
Borrower and its Subsidiaries as of such date and their consolidated results of
operations and cash flows for such six month period (subject to normal year-end
adjustments).
(c) The projections contained in the Confidential Information
Memorandum were prepared in good faith on the basis of the assumptions described
in the Confidential Information Memorandum, which assumptions were believed by
the Borrower in good faith to be reasonable in light of the then current and
foreseeable business conditions of the Borrower and its Subsidiaries existing at
the time of preparation thereof, and the Borrower has no knowledge of any event
or circumstance that would cause it to change any such assumptions in any
material respect as of the date hereof (other than any such event or
circumstance described in the Form 8-K filed with or furnished to the SEC by the
Borrower on August 15, 2001), it being understood by the Administrative Agents
and the Lenders that actual results may vary from the projected results set
forth therein.
(d) Each financial statement delivered pursuant to Section 5.05(a) or
-------
5.05(b) will, at the time it is delivered, present fairly, in all material
-------
respects, the financial position, results of operations or cash flows, as the
case may be, of the Borrower as of the date or for the period to which it
relates in accordance with GAAP, subject in the case of quarterly statements to
year-end audit adjustments.
60
Section 3.07. Material Adverse Effect. Since December 31, 2000, there
has not occurred any development or event affecting, or any change in the
business, assets, results of operations, financial condition or prospects of,
the Borrower and its Subsidiaries, taken as a whole, which has had or could
reasonably be expected to have a Material Adverse Effect.
Section 3.08. Litigation. There are no actions, suits or proceedings at
law or in equity or by or before any Governmental Authority now pending or, to
its knowledge, threatened against or affecting it or any of its Subsidiaries or
the businesses, assets or rights of it or any of its Subsidiaries as to which
there is a reasonable possibility of an adverse determination and which, if
adversely determined, could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
Section 3.09. Compliance with Laws and Agreements. (a) Neither it nor
any of its Subsidiaries is in violation of any law, or in default with respect
to any judgment, writ, injunction, decree, rule or regulation of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
(b) Neither it nor any of its Subsidiaries is in default under any
provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other material agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound,
where such default could reasonably be expected to result in a Material Adverse
Effect.
(c) No Default has occurred and is continuing.
Section 3.10. Federal Reserve Regulations. (a) Neither it nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
Margin Stock.
(b) No part of the proceeds of the Loans has been or will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of the provisions of the
Regulations of the Board, including, without limitation, Regulation U or X
thereof. After giving effect to each Credit Event and the application of the
proceeds thereof, not more than 25% of the value, determined in accordance with
Regulation U, of the assets subject to Section 6.01 will consist of Margin
----
Stock.
Section 3.11. Tax Returns. All Federal, state, local and foreign tax
returns which to its knowledge are required to have been filed by or on behalf
of the Borrower and its Subsidiaries with respect to the assets or operations of
the Borrower and its Subsidiaries, have been filed, and all taxes shown to be
due and payable on such returns or on any assessments received by the Borrower
and its
61
Subsidiaries have been paid, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
Section 3.12. Employee Benefit Plans. (a) It and its ERISA Affiliates
are in compliance in all material respects with those provisions of ERISA and
the regulations and published interpretations thereunder which are applicable to
it, except where noncompliance could not reasonably be expected to result in a
Material Adverse Effect. No Reportable Event has occurred with respect to any
Plan that could reasonably be expected to result in a Material Adverse Effect,
and no unfunded liabilities exist under all of the Plans in the aggregate that
could reasonably be expected to result in a Material Adverse Effect.
(b) Neither it nor any ERISA Affiliate has incurred any Withdrawal
Liability that materially and adversely affects the financial condition of it
and its Subsidiaries taken as a whole or that materially and adversely impairs
its ability to perform its obligations under this Agreement or any other Loan
Document. Neither it nor any ERISA Affiliate has received any notification that
any Multiemployer Plan is in reorganization or has been terminated within the
meaning of Title IV of ERISA, and no Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, where such reorganization or
termination has resulted or is likely to result in an increase in the
contributions required to be made to such Multiemployer Plan that could
reasonably be expected to result in a Material Adverse Effect.
Section 3.13. Accuracy of Information. No information, report, exhibit
or schedule furnished by or on behalf of it to the Agents or any Lender in
connection with the negotiation of any Loan Document or included therein when
viewed together with (and, in the case of any inconsistencies, subject to) the
Borrower's filings with the SEC (including without limitation (i) the Borrower's
Annual Report on Form 10-K for the year ended December 31, 2000, (ii) the
Borrower's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001,
(iii) the Borrower's Quarterly Report on Form 10-Q for the quarter ended June
30, 2001 and (iv) the Borrower's Current Report on Form 8-K filed with or
furnished to the SEC by the Borrower on August 15, 2001) contained or contains
any material misstatement of fact or omitted or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that no representation or
warranty with respect to any projections referred to in Section 3.06(c) or with
-------
respect to any financial statements referred to in Sections 3.06(a) or 3.06(b)
------- -------
shall be made pursuant to this Section 3.13.
----
Section 3.14. Investment Company Act; Public Utility Holding Company
Act. Neither it nor any of its Subsidiaries is an "investment company" as
defined in, or is otherwise subject to regulation under, the Investment Company
Act of 1940. Neither it nor any of its Subsidiaries is subject to regulation as
a "holding company" under the Public Utility Holding Company Act of 1935.
62
Section 3.15. Environmental and Safety Matters. It and each of its
Subsidiaries and the businesses conducted by them have complied in all respects
with all Federal, state, local and other statutes, ordinances, orders,
judgments, rulings, regulations and agreements and governmental restrictions
relating to the environment or to protection of the environment or to employee
health and safety ("Environmental and Safety Laws") except for violations that
either alone or in the aggregate could not reasonably be expected to result in a
Material Adverse Effect. Neither it nor any of its Subsidiaries manages or
handles any hazardous wastes, hazardous substances, hazardous materials, toxic
substances or toxic pollutants regulated by Environmental and Safety Laws in
violation of such Environmental and Safety Laws where such violation could
reasonably be expected to result, individually or together with other
violations, in a Material Adverse Effect. To the best of its knowledge, neither
it nor any of its Subsidiaries has any liabilities or contingent liabilities
relating to environmental or employee health and safety matters which,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
Section 3.16. Title to Properties. It and each Material Subsidiary has
good and, in the case of real property, marketable title to, or valid leasehold
interests in or other rights to use, all its material assets and properties,
except for such assets and properties as are no longer being used or useful in
the conduct of its businesses or have been disposed of in the ordinary course of
business and except for defects in title and exceptions to leasehold interests
that either alone or in the aggregate could not reasonably be expected to result
in a Material Adverse Effect. All such material assets and properties are free
and clear of all mortgages, pledges, liens, charges, security interests and
other encumbrances other than those permitted by Section 6.01.
----
Section 3.17. Collateral. The Collateral Documents create valid
security interests or mortgage liens in the Collateral purported to be covered
thereby, which security interests or mortgage liens are and will remain
perfected security interests or mortgage liens prior to all other Liens other
than Liens permitted by Section 6.01. Each of the representations and warranties
----
made by each Loan Party in each Collateral Document to which it is a party is
true and correct in all material respects as of each date made or deemed made.
Section 3.18. Subsidiaries. Schedule 3.18 sets forth the name of, and
----
the ownership interest of the Borrower in, each Subsidiary of the Borrower as of
the Effective Date. As of the Effective Date the Borrower has no Material
Subsidiaries.
Section 3.19. Insurance. Schedule 3.19 sets forth a description of all
----
insurance maintained by or on behalf of the Borrower and its Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance currently due have been paid.
63
Section 3.20. Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened.
Section 3.21. Solvency. Immediately after the consummation of the
transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
ARTICLE IV
CONDITIONS OF LENDING
Section 4.01. All Borrowings. On the date of each Credit Event, the
obligations of the Lenders to make Loans and the obligation of the Fronting
Banks to issue, amend, renew or extend any Letter of Credit hereunder shall be
subject to the satisfaction of the following conditions:
(a) The Servicing Agent or the relevant Fronting Bank shall have
received a notice of such Credit Event as required by Section 2.03, Section 2.04
---- ----
or Section 2.07, as applicable.
----
(b) Except in the case of Borrowings that do not increase the aggregate
principal amount of the Loans of any Lender outstanding, the representations and
warranties of the Loan Parties set forth in the Loan Documents shall be true and
correct in all material respects on and as of the date of such Credit Event with
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Credit Event, no Default
shall have occurred and be continuing.
(d) The Collateral Coverage Test is satisfied as of such date if
required by reason of Section 6.06(d).
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Each Credit Event shall be deemed to constitute a representation and warranty on
the date of such Credit Event as to the matters specified in paragraphs (b), (c)
and (d) of this Section.
Section 4.02. Effective Date. The obligations of the Lenders and the
Fronting Banks to make the initial Loans and issue the initial Letters of Credit
under this Amended Agreement shall not become effective until the date on which
each of the following conditions has been satisfied (or waived in accordance
with Section 9.02):
----
(a) The Administrative Agents shall have received a certificate dated
the Effective Date and signed by a Principal Financial Officer of the Borrower,
confirming compliance with the conditions precedent set forth in paragraphs (b)
and (c) of Section 4.01 and paragraphs (f) and (g) of this Section (with
----
compliance with the conditions set forth in such paragraphs (b) and (c) being
determined after giving effect to the transactions referred to in such
paragraphs (f) and (g)).
(b) The Administrative Agents shall have received for the benefit of
each Lender a signed copy of the favorable written opinion, dated the Effective
Date and addressed to the Lenders, of (i) Baker Botts L.L.P., counsel for the
Borrower, substantially in the form set forth in Exhibit E-1, and (ii) Gerald A.
O'Brien, Esq., General Counsel of the Borrower, substantially in the form set
forth in Exhibit E-2, in each case reasonably satisfactory to Davis Polk &
Wardwell, special counsel for the Agents.
(c) The Administrative Agents shall have received such documents and
certificates as the Administrative Agents or their counsel may reasonably
request relating to the organization, existence and good standing of the
Borrower, the authorization of the Loan Documents and the transactions
contemplated thereby and any other legal matters relating to the foregoing, all
in form and substance reasonably satisfactory to the Administrative Agents and
their counsel.
(d) The Administrative Agents shall have received counterparts of this
Agreement which, when taken together, bear the signatures of all the parties
hereto.
(e) The Administrative Agents shall have received, for each Lender, a
copy certified by a Principal Financial Officer of the Borrower of the Limited
Partnership Agreement which shall be in full force and effect; provided that
this condition shall be deemed satisfied to the extent that the Limited
Partnership Agreement shall have been delivered prior to the Effective Date to
the Administrative Agents in their capacity as administrative agents under the
Original Credit Agreement.
(f) The Borrower shall have issued not less than $400,000,000 aggregate
principal amount of New Senior Notes.
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(g) The Existing Securitization Facility shall have been terminated,
and all accounts receivable or interests therein and related assets subject to
the Existing Securitization Facility shall have been reassigned to the Borrower.
(h) The Collateral and Guarantee Requirement shall have been satisfied
as of the Effective Date.
(i) The Administrative Agents shall have received all Fees and other
amounts due and payable on or prior to the Effective Date, including to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.
(j) All legal matters incidental to this Agreement and the Borrowings
hereunder shall be satisfactory to the Lenders and to Davis Polk & Wardwell,
special counsel for the Agents.
(k) The Borrower shall have prepaid all Loans outstanding under the
Original Credit Agreement, together with accrued interest thereon and accrued
Facility Fees thereunder.
(l) The Administrative Agents shall have received written consent in
form satisfactory to them to the effectiveness of this Amended Agreement from
each party to the Original Credit Agreement which is not a party to this Amended
Agreement whose consent is required pursuant to Section 10.02 of the Original
Credit Agreement.
(m) The Administrative Agents shall have received evidence satisfactory
to them that each participation in an Existing Letter of Credit granted by the
relevant Fronting Bank to a bank or financial institution that is not a Lender
has been cancelled on or before the Effective Date as contemplated by Section
2.07(a).
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Notwithstanding the foregoing, the obligations of the Lenders to make
Loans and of the Fronting Banks to issue Letters of Credit hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
----
September 30, 2001 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
Section 4.03. Effect of Amendment and Restatement. On the Effective
Date, (i) the Original Credit Agreement shall be automatically amended and
restated in its entirety to read as set forth in this Amended Agreement, (ii)
the Guarantee of MAI pursuant to the Original Credit Agreement shall terminate,
(iii) the Commitment of each Lender party to this Amended Agreement shall be as
set forth in Schedule 2.01, (iv) the Commitment of each Lender under the
----
Original Credit Agreement which is not a party to this Amended Agreement (a
"Departing Lender") shall terminate and (v) each party to the Original Credit
Agreement
66
which is not a party to this Amended Agreement shall cease to be a party to this
Agreement; provided that the provisions of Sections 10.05 and 10.06 of the
Original Credit Agreement shall continue to inure to the benefit of each
Departing Lender. On and after the Effective Date, the rights and obligations of
the parties hereto shall be governed by this Amended Agreement; provided that
the rights and obligations of the parties hereto with respect to the period
prior to the Effective Date shall continue to be governed by the provisions of
the Original Credit Agreement. The Administrative Agents shall promptly notify
the Borrower, each Lender and each Departing Lender of the Effective Date, and
such notice shall be conclusive and binding on all parties hereto.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated, the principal of
and interest on each Loan and all Fees payable hereunder shall have been paid in
full, all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that it will, and will cause each of its Material Subsidiaries to:
Section 5.01. Existence. Do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence, except
as otherwise permitted by Section 6.06.
----
Section 5.02. Businesses and Properties. Except as otherwise permitted
by Section 6.06 or to the extent the failure to do so, individually or in the
----
aggregate, could not reasonably be expected to have a Material Adverse Effect,
at all times (a) do or cause to be done all things reasonably necessary to
preserve, renew and keep in full force and effect the rights, licenses, permits,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its business; and (b) maintain, preserve and protect all property
material to the conduct of such business.
Section 5.03. Insurance. Maintain insurance consistent with the
insurance maintained on the date hereof or otherwise consistent with general
practices in effect from time to time in the Borrower's industry, in either case
to the extent available to the Borrower and its Material Subsidiaries on
commercially reasonable terms, and furnish to the Administrative Agents upon
request information in reasonable detail as to the insurance so carried.
Section 5.04. Taxes. Pay and discharge all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or in respect of its property before the same shall become delinquent or in
default, as well as all lawful material claims for labor, materials and supplies
or otherwise, which, if unpaid, might give rise to liens or charges upon such
properties or any
67
part thereof, unless and to the extent that any such tax, assessment, charge,
levy or claim is being contested in good faith by appropriate proceedings and
adequate reserves are being maintained on its books with respect thereto to the
extent required by GAAP.
Section 5.05. Financial Statements, Reports, Etc.. Furnish to each
Administrative Agent and to the Servicing Agent with a copy for each of the
Lenders:
(a) Subject to the last paragraph of this Section 5.05, within 105
----
days after the end of each fiscal year of the Borrower, financial statements
(which shall include a balance sheet and income statement, as well as statements
of partners' equity and cash flows) showing the financial condition and results
of operations of the Borrower and its Consolidated Subsidiaries as of the end of
and for such fiscal year prepared on a consolidated basis. The financial
statements of the Borrower and its Consolidated Subsidiaries delivered pursuant
to this paragraph will be audited and reported on by independent public
accountants of recognized standing.
(b) Subject to the last paragraph of this Section 5.05, within 60
----
days after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower, unaudited financial statements (which shall include a
balance sheet and income statement, as well as statements of partners' equity
and cash flow) showing the financial condition and results of operations of the
Borrower and its Consolidated Subsidiaries as of the end of and for such fiscal
quarter prepared on a consolidated basis, in each case certified by a Principal
Financial Officer of the Borrower as presenting fairly the financial position
and results of operations of the Borrower and its Consolidated Subsidiaries and
as having been prepared in accordance with GAAP, subject to year-end
adjustments.
(c) Subject to the last paragraph of this Section 5.05, promptly
after the same shall have been filed or furnished as described below, copies of
such registration statements, annual, periodic and other reports, and such proxy
statements and other information, if any, as shall be filed by the Borrower or
any Subsidiary with the SEC pursuant to the requirements of the Securities Act
of 1933 or the Securities Exchange Act of 1934 or the rules promulgated
thereunder.
(d) Concurrently with (a) and (b) above, a certificate of a Principal
Financial Officer of the Borrower,
(i) certifying compliance, as of the dates of the financial
statements being furnished at such time and for the periods then ended,
with the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.14, and
---- ---- ---- ----
demonstrating compliance with the covenants set forth in Sections 6.04,
----
6.05 and 6.15;
---- ----
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(ii) certifying that to the best knowledge of such Principal
Financial Officer no Default has occurred and is continuing or, if a
Default has occurred and is continuing, specifying the nature and
extent thereof and any corrective action taken or proposed to be taken
with respect thereto;
(iii) solely if the Borrower was required to satisfy the
Collateral Coverage Test at the date of such financial statements by
reason of Section 6.06(d), certifying compliance with the Collateral
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Coverage Test at such date and setting forth in reasonable detail the
calculation to determine such compliance;
(iv) setting forth in reasonable detail (x) the amount of Major
Casualty Proceeds or cash proceeds in respect of any other Prepayment
Event received by the Borrower and its Subsidiaries prior to the date
of such certificate and not applied as of such date to the repayment of
the Term Loans to the extent required by Section 2.09, (y) the manner
----
in which the Borrower and its Subsidiaries propose to invest such Major
Casualty Proceeds or other cash proceeds (or, if the Borrower and its
Subsidiaries do not intend to so invest all or any portion of such
amount, stating so and setting forth the portion of such amount not
intended to be so invested) and (z) the current status and then
expected completion date of all such proposed investments; and
(v) solely in the case of (a) above, certifying that except as
previously notified to the Collateral Agent pursuant to Section 5.11,
----
there has been no change in any Loan Party's name, form of
organization, jurisdiction of organization and organizational number or
Federal Taxpayer Identification Number.
(e) Concurrently with (a) above, a statement of the firm of
independent public accountants which audited the Borrower's financial statements
(i) stating whether during the course of their examination of such financial
statements they obtained knowledge of any Default existing on the date of such
statements and (ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to (d) above (which
statement may be limited to the extent required by accounting rules or
guidelines).
(f) Within five Business Days of the date of receipt of cash proceeds
in respect of any Debt Incurrence or Equity Issuance, or the receipt of cash
proceeds in excess of $5,000,000 in respect of any Asset Sale or a series of
related Asset Sales, or the receipt of Major Casualty Proceeds, a certificate of
a Principal Financial Officer of the Borrower setting forth in reasonable detail
the amount of such cash proceeds or Major Casualty Proceeds and whether the
Borrower or any of its Subsidiaries intends to invest such cash proceeds or
Major Casualty Proceeds as contemplated in the definition of "Net Cash
Proceeds".
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(g) On the date of each consummation of an Asset Sale (other than a
Securitization Transaction) involving Collateral with a fair market value in
excess of $5,000,000, a certificate of a Principal Financial Officer of the
Borrower certifying compliance with the Collateral Coverage Test at such date
and setting forth in reasonable detail the calculation used to determine such
compliance.
(h) No later than the times specified in Sections 5.11 and 5.12(a),
---- -------
the notices required to be delivered pursuant to those sections.
(i) Promptly, from time to time, such other information regarding
this Agreement or the affairs, operations or condition (financial or otherwise)
of the Borrower or any Subsidiary as the Servicing Agent may reasonably request
at the request of any Lender and which is susceptible to being obtained,
produced or generated by any of them or of which any of them has knowledge.
Information required to be delivered pursuant to Sections 5.05(a), 5.05(b) or
------- -------
5.05(c) shall be deemed to have been delivered on the date on which the Borrower
-------
provides notice to each Administrative Agent and the Servicing Agent that such
information has been posted on the Borrower's website on the Internet at
www.equistarchem.com, at sec.gov/edaux/searches.htm or at another website
identified in such notice and accessible by the Lenders without charge; provided
that (i) such notice may be included in a certificate delivered pursuant to
Section 5.05(d), (ii) the certification referred to in 5.05(b) shall be deemed
------- -------
made on the date on which the Borrower provides notice to each Administrative
Agent and the Servicing Agent (as contemplated above) that the information
referred to in such paragraph has been posted as described above and (iii) the
Borrower shall deliver paper copies of the information referred to in Sections
5.05(a), 5.05(b) and 5.05(c) to each Administrative Agent and to the Servicing
------- ------- -------
Agent for distribution to (x) any Lender to which the above referenced websites
are for any reason not available if such Lender has so notified the Borrower and
(y) any Lender that has notified the Borrower that it desires paper copies of
all such information.
Section 5.06. Litigation and Other Notices. Give the Servicing Agent
prompt written notice (which the Servicing Agent shall promptly deliver to the
Lenders) after any Responsible Officer learns of the following:
(i) the issuance by any Governmental Authority of any
injunction, order, decision or other restraint prohibiting, or having
the effect of prohibiting, the making of the Loans, or having the
effect of invalidating any provision of this Agreement or the
initiation of any litigation or similar proceeding seeking any such
injunction, order, decision or other restraint;
(ii) the filing or commencement of any action, suit or proceeding
against the Borrower or any Subsidiary, whether at law or in equity or
by or before any Governmental Authority or any arbitrator, as to which
70
action, suit or proceeding there is a reasonable possibility of an
adverse determination and which, if determined adversely to the
Borrower or any Subsidiary, could reasonably be expected to result in a
Material Adverse Effect;
(iii) the occurrence of any development or event or any change in
the business, assets, results of operations or financial condition of
the Borrower and its Subsidiaries, taken as a whole, which could
reasonably be expected to result in a Material Adverse Effect; and
(iv) the existence of any Default, specifying the nature and
extent thereof and the action (if any) which is proposed to be taken
with respect thereto.
Section 5.07. ERISA. (a) Comply in all material respects with the
applicable provisions of ERISA, except where noncompliance could not reasonably
be expected to result in a Material Adverse Effect, and (b) furnish to the
Administrative Agents (i) as soon as possible, and in any event within 30 days
after any Responsible Officer of the Borrower or any ERISA Affiliate knows that
any Reportable Event has occurred that alone or together with any other
Reportable Event could reasonably be expected to result in liability of the
Borrower or any Subsidiary to the PBGC that could reasonably be expected to
result in a Material Adverse Effect, a statement of a Principal Financial
Officer setting forth details as to such Reportable Event and the action
proposed to be taken with respect thereto, together with a copy of the notice,
if any, of such Reportable Event given to the PBGC, (ii) promptly after receipt
thereof, a copy of any notice that the Borrower or any Subsidiary may receive
from the PBGC of an intent to terminate any Plan or Plans (other than a Plan
maintained by an ERISA Affiliate that is considered an ERISA Affiliate only
pursuant to subsection (m) or (o) of Section 414 of the Code) or to appoint a
trustee to administer any Plan or Plans and (iii) promptly and in any event
within 30 days after receipt thereof by the Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice concerning (A) the
imposition of any Withdrawal Liability in an amount that could reasonably be
expected to result in a Material Adverse Effect or (B) a determination that a
Multiemployer Plan is, or is expected to be, terminated or in reorganization,
both within the meaning of Title IV of ERISA, which, in each case, is expected
to result in an increase in annual contributions of the Borrower or any
Subsidiary to such Multiemployer Plan in an amount that could reasonably be
expected to result in a Material Adverse Effect.
Section 5.08. Access to Premises and Records. Keep and maintain proper
books of record and account and a system of accounting established and
administered in accordance with sound business practice and adequate to permit
the preparation of the financial statements required to be delivered under
Section 5.05, and upon reasonable notice permit representatives of the Lenders
----
to have access to such books of record and account and the premises of the
Borrower
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or any Subsidiary at reasonable times and to make such excerpts from such books
of record and account as such representatives reasonably deem necessary in
connection with their evaluation of the ability of the Borrower to repay the
Loans.
Section 5.09. Compliance with Laws. Comply with all applicable laws,
rules and regulations, and all orders of any Governmental Authority applicable
to it or any of its property, business, operations or transactions to the extent
noncompliance could reasonably be expected to result in a Material Adverse
Effect.
Section 5.10. Environmental Compliance. Comply with all Environmental
and Safety Laws, except where the failure so to comply could not reasonably be
expected to result in a Material Adverse Effect, and provide prompt written
notice to the Servicing Agent following the receipt of any notice of any
violation of any Environmental and Safety Laws from any Federal, state or local
Governmental Authority or any other complaint or other written claim from any
person with respect to any Environmental Liability, in each case, which could
reasonably be expected to result in liability or expenses in excess of
$20,000,000.
Section 5.11. Information Regarding Collateral. Give the Collateral
Agent at least 20 days' prior written notice of any proposal to change any Loan
Party's (i) name, (ii) form of organization, (iii) jurisdiction of organization,
(iv) organizational number or (v) Federal Taxpayer Identification Number.
Section 5.12. Further Assurances; Appraisal Reports. (a) If (i) any
Material Subsidiary (other than a Foreign Subsidiary or a Joint Venture
Subsidiary) is formed or acquired or any Subsidiary (other than a Foreign
Subsidiary or a Joint Venture Subsidiary) becomes a Material Subsidiary, in each
case, after the Effective Date or (ii) any Subsidiary (other than Equistar
Funding) at any time Guarantees any Indebtedness of the Borrower and such
Subsidiary does not at such time Guarantee the Obligations, within the time
frame specified below, notify the Administrative Agents thereof and cause the
Collateral and Guarantee Requirement to be satisfied with respect to such
Material Subsidiary or Subsidiary, as the case may be, and with respect to any
Equity Interest in or Indebtedness of such Material Subsidiary or Subsidiary, as
the case may be, owned by or on behalf of any Loan Party. If after the Effective
Date the Borrower has any Joint Venture Subsidiary which is a Material
Subsidiary, then within the time frame specified below, the Borrower will cause
the Collateral and Guarantee Requirement to be satisfied with respect to either
(i) any Equity Interests held by the Borrower or any Subsidiary (other than a
Foreign Subsidiary or a Joint Venture Subsidiary) in such Material Subsidiary or
(ii) if all such Equity Interests are held through JV Owner Subsidiaries, with
respect to each such JV Owner Subsidiary. The actions required to be taken
pursuant to this subsection shall be taken (x) if the requirement to take such
action arises by reason of a transaction, as in the case of the formation or
acquisition of a Material Subsidiary, or the Guarantee of Indebtedness of the
Borrower by a Subsidiary, within three Business
72
Days of consummation of such transaction and (y) if the requirement to take such
action arises because of changes in the relevant computations to determine
whether a Subsidiary is a Material Subsidiary as reflected in the most recent
consolidated financial statements of the Borrower made available to the Lenders
hereunder, within 15 days after such financial statements are so made available.
(b) Execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents), which may be required under any applicable law,
or which the Collateral Agent or the Required Lenders may reasonably request, to
cause the Collateral and Guarantee Requirement to be and remain satisfied, all
at the expense of the Loan Parties. The Borrower also agrees to provide to the
Collateral Agent, from time to time upon request, evidence reasonably
satisfactory to the Collateral Agent as to the perfection and priority of the
Liens created or intended to be created by the Collateral Documents.
(c) (i) PP&E Value on any date shall be (A) until the first Appraisal
Report is delivered to the Administrative Agents after the Effective Date
pursuant to clause (ii) of this subsection (c), the amount set forth in Schedule
5.12, and (B) thereafter, the amount set forth on the Appraisal Report most
----
recently delivered to the Administrative Agents on or prior to such date
(adjusted to give effect to the grant of any Liens after the date of such
Appraisal Report pursuant to clause (iii) of this subsection and to any
corresponding release of Liens pursuant to clause (iv) of this subsection).
(ii) If on any date after the Effective Date, the Administrative
Agents or the Required Lenders reasonably believe that 30% of PP&E
Value is less than the Maximum Secured Amount, the Administrative
Agents may (and, at the request of the Required Lenders, shall) notify
the Borrower of such fact and may (and, at the request of the Required
Lenders, shall) request in such notice that the Borrower deliver an
Appraisal Report to the Administrative Agents within 45 days of the
date of such notice. On or prior to 45 days of the date of such
request, the Borrower shall deliver, or cause to be delivered, to the
Administrative Agents an Appraisal Report.
(iii) If on any date 30% of PP&E Value is less than the Maximum
Secured Amount, the Administrative Agents or the Required Lenders shall
notify the Borrower of such determination and, if requested by the
Administrative Agents or the Required Lenders, the Borrower will cause,
within 45 days of the date of such notice, a Plant of the Borrower or
any other Loan Party mutually acceptable to the Borrower and the
Administrative Agents, and not theretofore a Mortgaged Property, to be
subjected to a Mortgage and will take, and cause the other Loan Parties
to take, such actions as shall be necessary or reasonably requested by
the
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Collateral Agent to grant and perfect the Lien created by such
Mortgage, including all actions described in paragraph (b) of this
Section such that, after giving effect to the grant of such Liens and
the release contemplated by paragraph (iv) below, 30% of PP&E Value
will not be less than the Maximum Secured Amount.
(iv) Upon the inclusion of a Plant in the Mortgaged Properties
pursuant to paragraph (iii) above, the Borrower shall be entitled to a
release of the Mortgage covering the less valuable of the two Plants
theretofore included in the Mortgaged Properties, it being understood
that the Mortgaged Properties shall not include more than two Plants on
an ongoing basis.
(d) (i) It is the intention of the parties that the Liens granted
pursuant to the Collateral Documents shall not contravene the limitations on
Liens set forth in the Indentures, and insofar as such Liens are on Restricted
Property (as defined in any of the Indentures) such Liens on Restricted Property
will secure an amount of the Obligations equal to the Maximum Secured Amount.
For this purpose, "Maximum Secured Amount" shall mean, with respect to any
Restricted Property, as defined in any of the Indentures, the maximum amount of
the Obligations that may be secured by a Lien on such Restricted Property
without contravention of the Lien restrictions contained in any Indenture under
which Indebtedness of the Borrower outstanding on the Effective Date remains
outstanding. The Maximum Secured Amount shall, to the extent permitted by the
Indentures, be determined as of the date which results in the greatest amount.
In determining the Maximum Secured Amount, no effect will be given to any Lien
incurred by the Borrower or any Subsidiary subsequent to the Effective Date
other than a Lien created by the Collateral Documents.
(ii) The Borrower represents and warrants that, as of the
Effective Date, the Maximum Secured Amount shall be an amount not less
than $455,000,000. Unless and until the contrary is established to
their satisfaction, the Lenders and the Agents may assume for purposes
of the Loan Documents that the Maximum Secured Amount is $455,000,000,
and shall incur no liability for any action or inaction taken in
reliance on such assumption. The Lenders and the Agents may in any case
rely upon the advice of counsel as to the Maximum Secured Amount, and
shall incur no liability for any action or inaction taken in reliance
on such advice.
(iii) In the event of any inconsistency between the provisions of
any Collateral Document and the provisions of this Section 5.12(d), the
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provisions of this Section 5.12(d) shall prevail.
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ARTICLE VI
Negative Covenants
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Until the Commitments have expired or been terminated, the principal of
and interest on each Loan and all Fees payable hereunder have been paid in full,
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrower covenants and agrees with the Lenders that it
will not, and will not permit any of its Material Subsidiaries, either directly
or indirectly, to:
Section 6.01. Liens. Incur, create, assume or permit to exist any Lien
on any of its property or assets, whether owned at the date hereof or hereafter
acquired, or assign or convey any rights to or security interests in any future
revenues, except:
(a) Liens incurred and pledges and deposits made in the ordinary
course of business in connection with workmen's compensation, disability or
unemployment insurance, old-age pensions, retiree health benefits and other
social security benefits and deposits securing liabilities to insurance carriers
under insurance or self-insurance arrangements;
(b) Liens securing the performance of bids, tenders, leases,
government contracts, other contracts (other than for Indebtedness), statutory
and regulatory obligations, surety, customs bonds and other obligations of a
like nature, incurred as an incident to and in the ordinary course of business;
(c) Liens encumbering pipelines or pipeline facilities that arise by
operation of law, and other Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business and securing obligations which are not
overdue for a period of more than 90 days or which are being contested in good
faith by appropriate proceedings as to which the Borrower or any such
Subsidiary, as the case may be, shall have, to the extent required by GAAP, set
aside on its books adequate reserves;
(d) Liens securing the payment of taxes, assessments and governmental
charges or levies, either (i) not delinquent or (ii) being contested in good
faith by appropriate legal or administrative proceedings and as to the Borrower
or any such Subsidiary, as the case may be, shall have, to the extent required
by GAAP, set aside on its books adequate reserves;
(e) (i) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of property,
minor irregularities of title and similar encumbrances incurred or suffered in
the ordinary course of business (and with respect to leasehold interests, the
interest of the landlord or owner in the leased property and mortgages,
obligations, liens and other encumbrances incurred, created, assumed or
permitted to exist and arising by, through or under a landlord or owner of the
leased property, with or without consent of the lessee) and (ii) licenses or
leases of patents, copyrights, trademarks, tradenames and other intellectual
property, which do not in the aggregate
75
materially detract from the value of its property or assets or materially impair
the use thereof in the operation of its business;
(f) Liens (including the interest of a lessor under a capital lease)
upon any real property or equipment (including general intangibles and proceeds
related thereto) acquired (by merger or otherwise), constructed or improved by
the Borrower or any Material Subsidiary which are created or incurred prior to
or within 180 days after such acquisition, construction or improvement to secure
or provide for the payment of any part of the purchase price of such real
property or equipment or the cost of such construction or improvement (including
any Indebtedness incurred to finance such purchase, improvement or construction
cost), including carrying costs (but no additional amounts); provided that any
such Lien shall not apply to any other property of the Borrower or any
Subsidiary;
(g) Liens on property existing at the time such property is acquired
(by merger or otherwise) by the Borrower or any Material Subsidiary (provided
that such Liens do not apply to any other property of the Borrower or any
Material Subsidiary and such Liens and the obligations secured thereby were not
created in contemplation of the acquisition by the Borrower or such Material
Subsidiary of such property) and Liens on property of any person at the time
such person becomes a Material Subsidiary (provided that such Liens do not apply
to any other property of the Borrower or any Material Subsidiary and such Liens
and the obligations secured thereby (other than any Liens on real property or
equipment and the obligations secured thereby) were not created in contemplation
of such Material Subsidiary's acquisition of such property or of such person
becoming a Material Subsidiary);
(h) Liens on the property or assets of any Material Subsidiary in
favor of the Borrower or any Subsidiary;
(i) Liens on Transferred Receivables (as defined in the Security
Agreement) or any other assets described in Section 3(b)(iii) of the Security
Agreement in connection with any Securitization Transaction with respect to such
Transferred Receivables;
(j) extensions, renewals and replacements of Liens referred to in
clauses (a) through (i) above; provided that any such extension, renewal or
replacement Lien shall be limited to the property or assets covered by the Lien
extended, renewed or replaced and that the obligations secured by any such
extension, renewal or replacement Lien shall be in an amount not greater than
the amount of the obligations secured by the Lien extended, renewed or replaced;
(k) prejudgment Liens which are being contested in good faith by
appropriate proceedings;
(l) judgment Liens which are being contested in good faith by
appropriate proceedings and Liens securing appeal or similar surety bonds
therefor; provided
76
that (i) no Event of Default exists under Section 7.01(k) relating thereto and
-------
(ii) the aggregate amount secured by such Liens does not exceed $20,000,000
(exclusive of Liens securing judgments covered by (x) insurance in respect of
which the carrier has not contested coverage or (y) appeal or similar surety
bonds);
(m) licenses, leases or subleases granted to others (other than those
described in clause (e)) and Liens arising under capacity reservation or similar
agreements, in each case to the extent that any of the foregoing do not
materially interfere with the ordinary course of business of the Borrower and
its Subsidiaries;
(n) customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to any indenture, escrow agreement or similar agreement
establishing a trust or escrow arrangement, and Liens pursuant to merger
agreements, stock purchase agreements, asset sale agreements, option agreements
and similar agreements in respect of the disposition of property or assets of
the Borrower and the Subsidiaries (but in any event not securing Indebtedness),
to the extent such dispositions are permitted hereunder and such Liens relate
only to the assets or properties to be disposed of;
(o) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(p) customary Liens in favor of issuers of documentary letters of
credit;
(q) netting provisions and setoff rights in favor of counterparties
securing Indebtedness under Hedging Agreements;
(r) Liens arising under any Sale/Leaseback Transaction permitted by
Section 6.02(a)(i), 6.02(a)(ii) or 6.02(a)(iii); provided that any such Lien
---------- ---------- ------------
shall be limited to the assets subject to such Sale/Leaseback Transaction;
(s) Liens arising in connection with the pledge of any Equity
Interests in any joint venture (that is not a Material Subsidiary) or any
Subsidiary (other than a Material Subsidiary) to secure Non-Recourse Debt of
such joint venture or Subsidiary, which pledge is made by a Material Subsidiary
the activities of which are limited to making and managing Investments, and
owning Equity Interests, in such joint venture or Subsidiary, but only for so
long as its activities are so limited. For purposes hereof, "Non-Recourse Debt"
shall mean Indebtedness as to which (i) the lenders will not, pursuant to the
terms in the agreements governing such Indebtedness, have any recourse to the
stock or assets of the Borrower or any Material Subsidiary, other than Equity
Interests of a joint venture that is not a Material Subsidiary or a Subsidiary
that is not a Material Subsidiary pledged by the Borrower or any Material
Subsidiary as contemplated in the preceding sentence and (ii) no default
thereunder would, as such, constitute a
77
default under any Indebtedness of the Borrower or any Material Subsidiary or
give any rights to or in other assets of the Borrower or any Material
Subsidiary;
(t) Liens incurred or assumed in connection with the issuance of
revenue bonds the interest on which is exempt from federal income taxation
pursuant to Section 103(b) of the Code;
(u) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Borrower or any Material Subsidiary in the
ordinary course of business in accordance with industry practice;
(v) Liens on assets under construction securing progress or partial
payments not constituting Indebtedness by a customer of the Borrower or any
Material Subsidiary relating to such assets;
(w) the interest of a lessor or licensor under an operating lease or
license under which the Borrower or any Material Subsidiary are lessee,
sublessee or licensee, including protective financing statement filings;
(x) other Liens to secure Indebtedness or other monetary obligations
if, immediately after the incurrence thereof, the sum (without duplication) of
(i) all amounts of Indebtedness and other monetary obligations secured by Liens
which would not be permitted but for this Section 6.01(x), (ii) the obligations
-------
of the Borrower and the Material Subsidiaries in respect of Sale/Leaseback
Transactions referred to in Section 6.02(a)(iv), (iii) all amounts of unsecured
-----------
Indebtedness and Preferred Stock of Material Subsidiaries which would not be
permitted but for Section 6.03(g) and (iv) all Indebtedness of the Borrower
-------
which would not be permitted but for Section 6.14(k), does not exceed
-------
$75,000,000; provided, that for purposes of determining compliance at any time
with this Section 6.01(x), the amounts of any other monetary obligations
-------
referred to in subclause (i) above or of any obligations (other than Capitalized
Lease Obligations) referred to in subclause (ii) above shall be the stated or
determinable amounts of such obligations at such time, unless the amounts of
such obligations shall not be stated or determinable, in which case the amounts
of such obligations shall be deemed to be the maximum reasonably anticipated
liability of the Borrower and the Material Subsidiaries in respect thereof as
determined in good faith by the Borrower; and
(y) Liens created under the Collateral Documents and any "Permitted
Encumbrances" as defined in any Mortgage;
provided that, except for the Liens referred to in Sections 6.01(n) and 6.01(y),
none of the foregoing exceptions shall permit the Borrower or any Material
Subsidiary to incur, create, assume or permit to exist any consensual Lien on
the capital stock owned by it of any Material Subsidiary.
Section 6.02. Sale and Leaseback Transactions. (a) Enter into any
arrangement, directly or indirectly, with any person whereby the Borrower or any
78
Material Subsidiary shall sell or transfer any property, real or personal, and
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which it intends to use
for substantially the same purpose or purposes as the property being sold or
transferred, without the consent of the Required Lenders (any such arrangement,
a "Sale/Leaseback Transaction"). Notwithstanding the foregoing, the Borrower or
any Material Subsidiary may enter into any Sale/Leaseback Transaction, without
seeking the consent of the Required Lenders, if (i) such Sale/Leaseback
Transaction involves the sale of any fixed or capital asset and is consummated
within 180 days of the Borrower or such Material Subsidiary acquiring or
completing the construction of such fixed or capital asset, (ii) the proceeds
thereof are applied, on the date of consummation thereof or within 360 days
thereafter, to the acquisition of Additional Assets or the making of capital
expenditures in a Permitted Business, (iii) the remaining proceeds thereof that
are not applied in accordance with clause (ii) within 360 days of the date of
consummation thereof, are applied in accordance with Sections 2.09(c), 2.09(d)
------- -------
and 2.09(e) or (iv) immediately after the consummation of such transaction, the
-------
sum (without duplication) of (A) all amounts of Indebtedness and other monetary
obligations secured by Liens which would not be permitted but for Section
6.01(x), (B) the obligations of the Borrower and the Material Subsidiaries in
-------
respect of Sale/Leaseback Transactions referred to in this Section 6.02(a)(iv)
-----------
and not covered by clause (i), (ii) or (iii), (C) all amounts of unsecured
Indebtedness and Preferred Stock of Material Subsidiaries which would not be
permitted but for Section 6.03(g), and (D) all Indebtedness of the Borrower
-------
which would not be permitted but for Section 6.14(k), does not exceed
-------
$75,000,000; provided, that for purposes of determining compliance at any time
with this sentence, the amounts of any other monetary obligations referred to in
subclause (A) above or of any obligations (other than Capitalized Lease
Obligations) referred to in subclause (B) above shall be the stated or
determinable amounts of such obligations at such time, unless the amounts of
such obligations shall not be stated or determinable, in which case the amounts
of such obligations shall be deemed to be the maximum reasonably anticipated
liability of the Borrower and the Material Subsidiaries in respect thereof as
determined in good faith by the Borrower; provided, further, that the
consideration received for the sale of such assets shall be at least equal to
the then-current fair market value of such assets. For purposes of the
foregoing, the value of each such Sale/Leaseback Transaction shall (except as
the Borrower and the Required Lenders shall otherwise agree) be deemed to be (x)
the price at which the property pertaining thereto is sold or transferred to the
lessor thereof or (y) (if higher than (x) and if the relevant lease or leases
represent Capitalized Lease Obligations) the balance sheet value of such lease
or leases.
Section 6.03. Subsidiary Indebtedness and Preferred Stock. In the case
of Material Subsidiaries, incur, issue, create, assume or permit to exist any
Indebtedness or Preferred Stock other than (a) Indebtedness or Preferred Stock
of any Material Subsidiary issued to or held by the Borrower or any Loan Party,
(b) Indebtedness consisting of obligations for the purchase price of real
property or
79
equipment or the cost of construction or improvement thereof or under capital
leases referred to in Section 6.01(f) and secured by Liens permitted under such
-------
Section, (c) Indebtedness consisting of obligations referred to in Section
6.01(g) and secured by Liens permitted under such Section, (d) any Guarantee of
-------
the Obligations required to be entered into pursuant to Section 5.12, any
----
Guarantee of Indebtedness of the Borrower under any Indenture (as in effect on
the Effective Date) required to be entered into pursuant to the terms thereof
and any Guarantee of Indebtedness of any other Material Subsidiary which
Indebtedness is permitted to be incurred hereunder, (e) Indebtedness of Equistar
Funding permitted by Section 6.07(b), (f) Indebtedness of a person existing at
-------
the time such person becomes a Material Subsidiary (provided that such
Indebtedness was not created in contemplation of such person becoming a Material
Subsidiary) and (g) any other Indebtedness or Preferred Stock; provided that the
sum (without duplication) of (i) all Indebtedness and Preferred Stock of the
Material Subsidiaries which would not be permitted but for this Section 6.03(g),
-------
(ii) all Indebtedness and other monetary obligations secured by Liens which
would not be permitted but for Section 6.01(x), (iii) all obligations of the
-------
Borrower and the Material Subsidiaries in respect of Sale/Leaseback Transactions
referred to in Section 6.02(a)(iv) and (iv) all Indebtedness of the Borrower
-----------
which would not be permitted but for clause Section 6.14(k), shall not exceed
-------
$75,000,000; provided further, that for purposes of determining compliance at
any time with this Section 6.03(g), the amounts of any other monetary
-------
obligations referred to in subclause (ii) above or of any obligations (other
than Capitalized Lease Obligations) referred to in subclause (iii) above shall
be the stated or determinable amounts of such obligations at such time, unless
the amounts of such obligations shall not be stated or determinable, in which
case the amounts of such obligations shall be deemed to be the maximum
reasonably anticipated liability of the Borrower and the Material Subsidiaries
in respect thereof as determined in good faith by the Borrower; provided
further, that no JV Owner Subsidiary shall have any Indebtedness except
Indebtedness arising under the Loan Documents.
Section 6.04. Total Leverage Ratio. Permit the Total Leverage Ratio at
any time during any period set forth below to exceed the applicable ratio set
forth below opposite such period:
80
Period Maximum
------ -------
Ratio
-----
June 30, 2002 - September 29, 2002 7.25 to 1.00
September 30, 2002 - December 30, 2002 6.25 to 1.00
December 31, 2002 - March 30, 2003 5.50 to 1.00
March 31, 2003 and all times thereafter 5.00 to 1.00
Section 6.05. Interest Coverage Ratio. Permit the Interest Coverage
Ratio for the period of four consecutive fiscal quarters ending on any date set
forth below to be less than the ratio set forth below opposite such date:
Date Ratio
September 30, 2001 1.20 to 1.00
December 31, 2001 1.20 to 1.00
March 31, 2002 1.25 to 1.00
June 30, 2002 1.40 to 1.00
September 30, 2002 1.75 to 1.00
December 31, 2002 2.00 to 1.00
March 31, June 30, September 30 and December 31, 2003 2.50 to 1.00
Each fiscal quarter end thereafter 3.00 to 1.00
Section 6.06. Consolidations, Mergers, Sales of Assets. (a) In the case
of a Loan Party, consolidate with or merge into any other person, or permit
another person to merge into it, except that, so long as at the time thereof and
immediately after giving effect thereto no Default has occurred and is
continuing, (i) any Subsidiary may be merged, liquidated or dissolved into the
Borrower or into any other Loan Party in a transaction in which the surviving
person is the Borrower or such Loan Party and (ii) any other person may be
merged into the Borrower or any other Loan Party in a transaction in which the
surviving person is the Borrower or a wholly owned Loan Party and, in the case
of any transaction in which the consideration (other than equity interests of
the Borrower) paid by the Borrower and the Material Subsidiaries has an
aggregate value in excess of 10% of Consolidated Net Tangible Assets as of the
most recently ended fiscal quarter, the Borrower has submitted to the
Administrative Agents calculations reasonably satisfactory to the Administrative
Agents showing pro forma compliance with the covenants in Sections 6.04, 6.05
---- ----
and 6.15.
----
(b) In the case of the Borrower, sell or otherwise dispose of all or
substantially all of its assets (determined on a consolidated basis) to any
other person or persons.
(c) Make any Asset Sale (other than a Securitization Transaction)
unless (i) the consideration therefor is not less than the fair market value of
the related asset (as determined in good faith by a Principal Financial Officer
of the
81
Borrower), (ii) the consideration therefor consists solely of cash or cash
equivalents and notes and equity securities and at least 75% of the aggregate
consideration received by the Borrower and the Material Subsidiaries with
respect to such Asset Sale is in the form of cash or cash equivalents received
at closing and (iii) if such Asset Sale involves a sale of Collateral, the
Collateral Coverage Test is met after giving effect thereto.
(d) Enter into a Securitization Transaction unless (i) the aggregate
outstanding amount at any time of the accounts receivable sold pursuant to all
Securitization Transactions by the Borrower and the Material Subsidiaries does
not exceed $200,000,000, (ii) the consideration therefor consists solely of cash
or cash equivalents and notes and equity securities and at least 70% of the
aggregate consideration received by the Borrower and the Material Subsidiaries
with respect to such Securitization Transactions is in the form of cash or cash
equivalents received at closing, (iii) the Revolving Commitments are reduced if
and to the extent required under Section 2.13(b) in connection with such
-------
Securitization Transaction and (iv) after giving effect thereto, the Collateral
Coverage Test is satisfied on each date that any of the accounts receivable sold
pursuant to such Securitization Transaction remain outstanding.
Section 6.07. Change of Business. (a) Engage to any material extent in
any business other than a Permitted Business; provided that the Borrower and the
Material Subsidiaries may engage in other businesses representing not more than
10% of Consolidated Net Tangible Assets of the Borrower as shown on the most
recent audited consolidated balance sheet of the Borrower and its Subsidiaries
delivered pursuant to Section 5.05(a); and provided further that a Material
-------
Subsidiary which was a Subsidiary before it became a Material Subsidiary may
continue to engage in any business in which it was engaged at the time it became
a Material Subsidiary.
(b) Permit Equistar Funding to hold any assets, become liable for any
obligations or engage in any business activities; provided that Equistar Funding
may be co-obligor with respect to the New Senior Notes and any other
Indebtedness of the Borrower permitted under Section 6.14 and may engage in any
----
activities directly related thereto or necessary in connection therewith.
Section 6.08. Use of Proceeds. (a) Use or permit the use of the
proceeds of Borrowings or other extensions of credit hereunder for purposes
other than those set forth in the preamble to this Agreement.
(b) Use the proceeds of Borrowings or other extensions of credit
hereunder to acquire capital stock of or other ownership interests in any
publicly held company unless such acquisition shall have been approved by the
board of directors or comparable governing body of such company prior to the
acquisition by the Borrower of a controlling interest in such company or the
commencement
82
by the Borrower of a tender offer or proxy solicitation with respect to shares
of capital stock of, or other ownership interests in, such company.
Section 6.09. Restrictive Agreements. Enter into or permit to exist any
agreement that restricts the ability of any Material Subsidiary to pay dividends
or other distributions, or to make or repay loans or advances, to the Borrower
or, in the case of dividends, to any other Subsidiary owning capital stock of
such Subsidiary; provided that the foregoing shall not apply to:
(a) customary restrictions and conditions contained in (i) any
agreement relating to the sale of a Material Subsidiary, or all or substantially
all of its assets, pending such sale or (ii) any agreement relating to secured
Indebtedness permitted by this Agreement, if such restrictions or conditions
apply only to such Subsidiary or to the property or assets securing such
Indebtedness, as the case may be;
(b) customary provisions in leases and other contracts restricting the
assignment thereof;
(c) restrictions and conditions existing with respect to any person at
the time it becomes a Material Subsidiary and not created in contemplation of
such person becoming a Material Subsidiary, which restrictions are not
applicable to any person, or the properties or assets of any person, other than
the person, or the property or assets of the person becoming a Material
Subsidiary;
(d) existing agreements as in effect on the Effective Date and listed
on Schedule 6.09;
----
(e) restrictions arising under applicable law;
(f) a Permitted Refinancing; or
(g) in the case of a Material Subsidiary that is a joint venture,
customary restrictions on such Material Subsidiary contained in its joint
venture agreement, which restrictions are consistent with the past practice of
the Borrower and members of the Existing Control Group (as conclusively
evidenced by a resolution of the Partnership Governance Committee).
Section 6.10. Business Acquisitions. Make any Business Acquisition
unless (i) after giving effect thereto, the Borrower is in compliance on a pro
forma basis with Sections 6.04, 6.05, 6.07(a) and 6.15 and (ii) in the case of
---- ---- ------- ----
any transaction in which the consideration (other than equity interests of the
Borrower) paid by the Borrower and the Material Subsidiaries has an aggregate
value in excess of 10% of Consolidated Net Tangible Assets as of the most
recently ended fiscal quarter, the Borrower has submitted to the Administrative
Agents calculations in detail reasonably satisfactory to the Administrative
Agents showing pro forma compliance with the covenants in Sections 6.04, 6.05
---- ----
and 6.15.
----
83
Section 6.11. Transactions with Affiliates. Directly or indirectly (a)
pay any funds to or for the account of any Affiliate, (b) make any investment in
any Affiliate (whether by acquisition of stock or indebtedness, by loan,
advance, transfer of property, guarantee or other agreement to pay, purchase or
service, directly or indirectly, any Indebtedness, or otherwise), (c) lease,
sell, transfer or otherwise dispose of any assets, tangible or intangible, to
any Affiliate, or (d) participate in, or effect, any transaction with any
Affiliate, except on terms that are no less favorable to the Borrower or such
Material Subsidiary, as the case may be, than those that could be obtained in a
comparable arm's length transaction with a person that is not an Affiliate;
provided that the foregoing provisions of this Section shall not prohibit:
(i) any transaction between a Subsidiary (other than a Joint
Venture Subsidiary) and the Borrower or another Subsidiary (other than
a Joint Venture Subsidiary);
(ii) any Permitted Dividend or Investment permitted by Section
6.16;
(iii) any Subsidiary from declaring or paying any lawful dividend
or other payment ratably in respect of all its capital stock of the
relevant class;
(iv) transactions or payments pursuant to any employment
agreement or employee, officer or director benefit plans or
arrangements entered into by the Borrower or any Subsidiary in the
ordinary course of business;
(v) customary loans, advances, fees and compensation paid to,
and indemnity provided on behalf of, officers, directors, employees or
consultants of the Borrower or any Subsidiary;
(vi) sales (including a sale in exchange for a promissory note
of or equity interest in a Subsidiary of the type referred to in clause
(b) of the definition of "Securitization Transaction" to the extent
permitted by Section 6.06(d)) of accounts receivable, related assets
and the provision of billing, collection and other services in
connection therewith, in each case to a Subsidiary of the type referred
to in clause (b) of the definition of "Securitization Transaction" in
connection with any Securitization Transaction; and
(vii) Transactions entered into by a person prior to the time
such person becomes a Material Subsidiary and not entered into in
contemplation of such person becoming a Material Subsidiary.
Section 6.12. Hedging Agreements. Enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Material Subsidiary is
exposed in the conduct of its business or the management of its liabilities (as
84
determined by the Borrower's or such Material Subsidiary's Principal Financial
Officer in the exercise of his or her good faith business judgment).
Section 6.13. Certain Payments of Indebtedness. Make or agree to pay or
make, directly or indirectly, any payment or other distribution (whether in
cash, securities or other property) of or in respect of principal of or interest
on any Indebtedness (or any capital stock that does not constitute Indebtedness
by operation of the proviso set forth in clause (h) of the definition thereof),
or any payment or other distribution (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness;
(iii) payment of any Indebtedness which matures prior to the Term
Loan Maturity Date with the proceeds of any Permitted Refinancing;
(iv) payment of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;
(v) payment of any Indebtedness owing to Lyondell or any
subsidiary of Lyondell; and
(vi) payment of other Indebtedness with (A) the portion of the
Net Cash Proceeds of any Prepayment Event that is not required to be
applied to prepayment of the Term Loans pursuant to Section 2.09(c),
-------
after giving effect to Sections 2.09(e) and 2.09(g) or (B) any amount
------- -------
that is offered in prepayment, and is not applied to prepayment, of the
Term Loans pursuant to Section 2.14(e).
-------
provided that in no event shall the Borrower or any Material Subsidiary make any
payment in respect of any Acceptable Subordinated Loan or other Indebtedness
which is by its terms subordinated to the Obligations which payment is
prohibited by the subordination provisions governing such Indebtedness.
Section 6.14. Borrower Indebtedness. In the case of the Borrower,
incur, issue, create, assume or permit to exist any Indebtedness other than:
(a) Indebtedness outstanding on the Effective Date and set forth in
Schedule 6.14;
----
(b) Indebtedness under the New Senior Notes;
85
(c) Indebtedness under the Loan Documents, including any Indebtedness
in the form of Deferred Amounts and interest thereon required to be paid to the
Lenders pursuant to Section 6.16 in connection with the making a Permitted
Dividend;
(d) Indebtedness secured by a Lien permitted by Section 6.01;
(e) Indebtedness arising in connection with a Sale/Leaseback
Transaction permitted by Section 6.02(a)(i), 6.02(a)(ii) or 6.02(a)(iii);
---------- ----------- ------------
(f) Indebtedness in the form of Acceptable Subordinated Loans; (g)
Indebtedness maturing after the Term Loan Maturity Date; (h)
Indebtedness owing to another Loan Party;
(i) Indebtedness represented by standby letters of credit, trade
letters of credit or documentary letters of credit, in each case to the extent
incurred in the ordinary course of business of the Borrower and in an aggregate
principal or face amount not to exceed $20,000,000 at any time;
(j) Indebtedness represented by industrial revenue bonds to finance
capital expenditures incurred to reduce NOx emissions in the Houston/Galveston
region pursuant to a Texas Natural Resource Conservation Commission plan; and
(k) any other Indebtedness; provided that the sum (without
duplication) of (A) all Indebtedness which would not be permitted but for this
Section 6.14(k), (B) all Indebtedness and Preferred Stock of Material
-------
Subsidiaries which would not be permitted but for Section 6.03(g) (other than
-------
any Guarantee by any Loan Party of Indebtedness of the Borrower permitted by
this Section), (C) all Indebtedness and other monetary obligations secured by
Liens which would not be permitted but for clause Section 6.01(x) and (D) all
-------
obligations of the Borrower and the Material Subsidiaries in respect of
Sale/Leaseback Transactions referred to in Section 6.02(a)(iv), shall not exceed
-----------
$75,000,000; provided further, that for purposes of determining compliance at
any time with this Section 6.14(k), the amounts of any other monetary
-------
obligations referred to in subclause (C) above or of any obligations (other than
Capitalized Lease Obligations) referred to in subclause (D) above shall be the
stated or determinable amounts of such obligations at such time, unless the
amounts of such obligations shall not be stated or determinable, in which case
the amounts of such obligations shall be deemed to be the maximum reasonably
anticipated liability of the Borrower and the Material Subsidiaries in respect
thereof as determined in good faith by the Borrower.
Section 6.15. Senior Secured Leverage Ratio. Permit the Senior Secured
Leverage Ratio during any period set forth below to exceed the applicable ratio
set forth below opposite such period:
86
Period Maximum Ratio
------ -------------
September 30, 2001 - June 29, 2002 3.00 to 1.00
June 30, 2002 and all times thereafter 2.50 to 1.00
Section 6.16. Restricted Payments; Restricted Investments. (a)(i)(A)
Declare or pay any dividend or make any distribution on account of its or such
Material Subsidiary's Equity Interests or (B) purchase, redeem or otherwise
acquire or retire for value any Equity Interests of the Borrower or any
Affiliate of the Borrower that controls the Borrower, in each case unless
permitted (and if permitted, only to the extent permitted) by Section 4.07 of
the New Senior Notes Indenture (as in effect on the date hereof) or (ii) make or
acquire any Investment unless permitted (and if permitted, only to the extent
permitted) by the New Senior Notes Indenture (as in effect on the date hereof),
including Section 4 .07 thereof, and, if applicable, by Sections 6.06(c),
6.06(d), 6.10 or 6.11 hereof; provided that the Borrower or such Material
------- ---- ----
Subsidiary shall not take any action permitted by this paragraph at any time
that a Default has occurred and is continuing.
(b) If at any time the Borrower or any Subsidiary makes a Permitted
Dividend and, in connection therewith, the Borrower is required by the terms of
the New Senior Notes Indenture (as in effect on the date hereof) to pay
additional pay-in-kind interest to any holder of New Senior Notes, the Borrower
shall:
(i) provide a copy of any press release issued in connection
with such Permitted Dividend to the Administrative Agents promptly upon
the issuance of such press release, which press release shall set forth
the applicable Dividend Payment Date and the amount of additional
interest that is required by the terms of the New Senior Notes
Indenture (as in effect on the date hereof) to be paid on such date to
the holders of New Senior Notes;
(ii) on the applicable Dividend Payment Date, pay to the Lenders,
additional interest, which interest shall be payable in accordance with
clause (c)(i) and calculated as follows:
(A) in the case of a Term Lender, an amount equal to .75%
of the aggregate outstanding principal amount of such Lender's
Term Loans on the applicable Dividend Payment Date; and
(B) in the case of a Revolving Lender, an amount equal to
.75% of the average daily amount of the aggregate Revolving
Committed Outstandings plus the aggregate Competitive Loan
----
Exposure of such Revolving Lender during the 30-day period ending
on the day immediately prior to such Dividend Payment Date.
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(c) Any additional interest ("Deferred Amounts") payable to any Lender
pursuant to clause (b)(ii) shall (i) if such Lender is a Term Lender, be payable
to such Term Lender on the Term Loan Maturity Date or, if earlier, the date on
which all Terms Loans of such Lender shall have been prepaid in full and (ii) if
such Lender is a Revolving Lender, be payable to such Revolving Lender on the
Revolving Maturity Date or, if earlier, the date on which the Revolving
Commitment of such Revolving Lender is terminated in its entirety.
Notwithstanding Section 2.11 but subject to Section 2.12, the Deferred Amount
payable to a Lender shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to (x)
in the case of a Term Lender, the weighted average of the rates of interest
applicable to the Term Loans outstanding during the preceding fiscal quarter of
the Borrower and (y) in the case of a Revolving Lender, the weighted average of
the rates of interest applicable to the Revolving Loans outstanding during the
preceding fiscal quarter of the Borrower, such weighted averages to be
determined by the Servicing Agent whose determinations shall be conclusive
absent manifest error. Such interest shall be payable on each March 31, June 30,
September 30 and December 31, commencing with the first such date to occur after
the relevant Dividend Payment Date, and on the date on which payment of such
Deferred Amount is due.
ARTICLE VII
Events Of Default
Section 7.01. Events of Default. In case of the happening of any of the
following events (herein called "Events of Default"):
(a) any representation or warranty made or deemed made by or on behalf
of any Loan Party in or in connection with the Loan Documents or the extensions
of credit thereunder or any representation, warranty or statement made or deemed
made by or on behalf of any Loan Party with respect to any financial statement
or in any report, certificate or other instrument or agreement furnished in
connection with the Loan Documents or in connection with the extensions of
credit thereunder shall prove to have been false or misleading in any material
respect when made or deemed made; provided that to the extent that the
representations and warranties in Sections 3.06(c) or 3.13 apply to any such
------- ----
report, certificate or other instrument or agreement, then the foregoing shall
not apply to any representation, warranty or statement made or deemed made in
such report, certificate or other instrument or agreement unless the
representations and warranties in Sections 3.06(c) or 3.13, as applicable, as
------- ----
they relate to such report, certificate or other instrument or agreement shall
prove to have been false or misleading in any material respect when made or
deemed made;
(b) default shall be made in the payment of any principal of any Loan
or any reimbursement obligation in respect of any LC Disbursement or any
Deferred
88
Amount when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on any Loan
or any interest on any Deferred Amount or any Fee or any other amount due under
this Agreement when and as the same shall become due and payable, and such
default shall continue for a period of five days;
(d) (i) default shall be made in the due observance or performance of
any covenant, condition or agreement contained in Section 5.01, 5.06, 5.11 or
---- ---- ----
5.12 or in Article VI; (ii) default shall be made in the due observance or
---- --
performance of any covenant, condition or agreement contained in Section 5.05,
----
which default referred to in this clause (ii) shall continue for a period of
five days or (iii) default shall be made in the due observance or performance of
any other covenant, condition or agreement to be observed or performed on the
part of the Borrower or any Subsidiary pursuant to the terms of any Loan
Document, which default referred to in this clause (iii) shall continue for a
period of 30 days after notice thereof from either Administrative Agent or the
Required Lenders to the Borrower;
(e) the Borrower or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code or any other Federal or state bankruptcy, insolvency,
liquidation or similar law, (ii) consent to the institution of, or fail to
contravene in a timely and appropriate manner in, any such proceeding or the
filing of any such petition, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for the Borrower
or any Material Subsidiary or for a substantial part of its property or assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) become unable or fail generally to pay its debts as they
become due;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower or any Material Subsidiary or of a substantial part
of the property or assets of the Borrower or any Material Subsidiary, under
Title 11 of the United States Code or any other Federal or state bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for the Borrower or any
Material Subsidiary or for a substantial part of the property or assets of the
Borrower or any Material Subsidiary or (iii) the winding up or liquidation of
the Borrower or any Material Subsidiary; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall continue unstayed and in effect for 30 days;
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(g) (i) default shall be made or another event shall occur with
respect to any Indebtedness of the Borrower or any Subsidiary if the effect of
any such default or other event shall be to accelerate, or to permit the holder
or obligee of any Indebtedness (or any trustee on behalf of such holder or
obligee) to accelerate (with or without the giving of notice or lapse of time or
both), such Indebtedness in an aggregate amount in excess of $50,000,000; or
(ii) any amount of principal of or interest on any Indebtedness of the Borrower
or any Subsidiary in an aggregate principal amount in excess of $50,000,000
shall not be paid when due, whether at maturity, by acceleration or otherwise
(after giving effect to any period of grace specified in the instrument
evidencing or governing such Indebtedness); or (iii) without limiting the rights
of the Lenders under clauses (g)(i) and (g)(ii) above, the Borrower or any
Subsidiary shall default in the payment of principal of any Indebtedness, which
principal, individually or in the aggregate with other defaulted principal,
shall be in excess of $15,000,000, when due and payable (after giving effect to
any period of grace specified in the instrument evidencing or governing such
Indebtedness), or the principal of such Indebtedness in excess of $15,000,000
shall be declared due and payable prior to the date on which it would otherwise
be due and payable and such acceleration shall not have been rescinded or
annulled within five Business Days of such acceleration;
(h) (A) a Reportable Event or Reportable Events, or a failure to make
a required payment (within the meaning of Section 412(n)(1) of the Code), shall
have occurred with respect to any Plan or Plans that reasonably could be
expected to result in a Material Adverse Effect; or (B) a trustee shall be
appointed by a United States District Court to administer any such Plan or Plans
or the PBGC shall institute proceedings to terminate any Plan or Plans and such
appointment or termination proceedings could reasonably be expected to result in
a Material Adverse Effect;
(i) (i) the Borrower or any ERISA Affiliate shall have been notified
by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability
to such Multiemployer Plan, (ii) the Borrower or such ERISA Affiliate does not
have reasonable grounds for contesting such Withdrawal Liability or is not, in
fact, contesting such Withdrawal Liability in a timely and appropriate manner
and (iii) the amount of the Withdrawal Liability specified in such notice, when
aggregated with all other amounts required to be paid by the Borrower and its
ERISA Affiliates to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date or dates of such notification), could
reasonably be expected to result in a Material Adverse Effect;
(j) the Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if solely as a result of such reorganization or termination the aggregate annual
contributions of the Borrower and its ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or have been or are being terminated have
been or
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will be increased could reasonably be expected to result in a Material Adverse
Effect;
(k) one or more judgments or orders for the payment of money (not
reimbursed by insurance policies of the Borrower or any Subsidiary) in excess of
$20,000,000 in the aggregate shall be rendered by a court or other tribunal or
governmental agency against the Borrower or any Subsidiary and shall remain
undischarged for a period of 30 consecutive days during which the execution of
such judgments shall not have been stayed effectively or any action shall be
legally taken by a judgment creditor to levy upon assets or properties of the
Borrower or any Subsidiary to enforce any such judgment;
(l) a Change in Control shall occur;
(m) (i) any Lien created by any of the Collateral Documents shall at
any time fail to constitute a valid and (to the extent required by the
Collateral Documents) perfected Lien on all the Collateral purported to be
subject thereto, securing the obligations purported to be secured thereby, with
the priority required by the Loan Documents, or (ii) any Loan Party shall so
assert in writing; provided that if a failure of the sort described in clause
(i) of this paragraph (m) is susceptible of cure, no Event of Default shall
arise under clause (i) of this paragraph (m) with respect thereto until 30 days
after notice of such failure shall have been given to the Borrower by the
Administrative Agents; or
(n) any Subsidiary Guarantee or any other Collateral Document shall
cease for any reason (other than pursuant to a transaction permitted hereunder)
to be in full force and effect, or any Loan Party shall so assert in writing;
then, and in any such event (other than an event with respect to the Borrower or
a Material Subsidiary described in paragraph (e) or (f) above), and at any time
thereafter during the continuance of such event, the Administrative Agents may,
or at the written direction of the Required Lenders shall, by written or
telecopied notice to the Borrower, take any or all of the following actions, at
the same or different times: (i) terminate forthwith the Commitments, (ii)
demand cash collateral as provided in Section 2.07(k) and (iii) declare the
-------
Loans then outstanding to be forthwith due and payable, whereupon the principal
of the Loans so declared due and payable, together with accrued interest and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder,
shall become forthwith due and payable both as to principal and interest,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein to
the contrary notwithstanding; provided, however, that, in the event of a default
with respect to the Borrower or a Material Subsidiary described in paragraph (e)
or (f) above, the Commitments shall automatically terminate, the deposit of cash
collateral as provided in Section 2.07(k) shall automatically be required and
-------
the principal of the Loans then outstanding, together with accrued interest
thereon and
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any unpaid accrued Fees and all other liabilities of the Borrower accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived
by the Borrower, anything contained herein to the contrary notwithstanding.
ARTICLE VIII
Administrative Agents
Each of the Lenders and Fronting Banks irrevocably authorizes the
Administrative Agents (and for purposes of this Article VIII, the term
----
"Administrative Agent" or "Administrative Agents" shall include BofA in its
capacity as Servicing Agent and Chase in its capacity as Collateral Agent, as
applicable) to take such action on its behalf and to exercise such powers under
the Loan Documents as are specifically delegated to the Administrative Agents by
the terms thereof together with such powers as are reasonably incidental
thereto. Each of the Administrative Agents may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
selected and appointed by such Administrative Agent. Each of the Administrative
Agents and any such sub-agent may perform any and all its duties and exercise
its rights and powers through Affiliates or its or its Affiliates' employees.
The exculpatory provisions of the following paragraphs shall apply to any such
sub-agent, to the Affiliates of the Administrative Agents and any such sub-agent
and to the directors, officers and employees of the Administrative Agents, any
such subagent and their respective Affiliates.
The Administrative Agents are hereby expressly authorized and directed
by the Lenders to the extent provided in this Agreement, without hereby limiting
any implied authority, (a) to receive on behalf of the Lenders all payments of
principal of and interest on the Loans and all other amounts due to the Lenders
under the Loan Documents, and promptly to distribute to each Lender its proper
share of each payment so received; (b) to give notice on behalf of each of the
Lenders to the Borrower of any Event of Default specified in this Agreement of
which the Administrative Agents have actual knowledge acquired in connection
with its agency hereunder; and (c) to distribute to each Lender copies of all
notices, financial statements and other materials delivered by the Borrower
pursuant to the Loan Documents as received by the Administrative Agents.
Neither the Administrative Agents nor any of their directors, officers,
employees or agents shall be liable as such for any action taken or omitted to
be taken by it or them under the Loan Documents or in connection therewith (a)
at the request or with the approval of the Required Lenders (or, if otherwise
specifically required hereunder, the consent of all the Lenders) or (b) in the
absence of its or their own gross negligence or wilful misconduct. Each Lender
acknowledges that it has decided to enter into this Agreement and to extend the
Loans hereunder based on its own analysis of the creditworthiness of the
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Borrower and agrees that the Administrative Agents shall bear no responsibility
for such creditworthiness.
The Administrative Agents shall not be responsible in any manner to any
of the Lenders for the effectiveness, enforceability, genuineness, validity or
due execution of the Loan Documents or any other agreements or certificates,
requests, financial statements, notices or opinions of counsel or for any
recitals, statements, warranties or representations contained in the Loan
Documents or in any such instrument or be under any obligation to ascertain or
inquire as to the performance or observance of any of the terms, provisions,
covenants, conditions, agreements or obligations of the Loan Documents or any
other agreements on the part of any Loan Party and, without limiting the
generality of the foregoing, the Administrative Agents shall, in the absence of
knowledge to the contrary, be entitled to accept any certificate furnished
pursuant to any Loan Document as conclusive evidence of the facts stated therein
and shall be entitled to rely on any note, notice, consent, certificate,
affidavit, letter, telegram, teletype or telecopy message, statement, order or
other document which it reasonably believes to be genuine and correct and to
have been signed or sent by the proper person or persons. It is understood and
agreed that each of the Administrative Agents may exercise its rights and powers
under other agreements and instruments to which it is or may be a party and
engage in other transactions with the Borrower or any Subsidiary or other
Affiliate as though it were not the agent of the Lenders hereunder.
The Administrative Agents may consult with legal counsel selected by
them in connection with matters arising under the Loan Documents and any action
taken or suffered in good faith by either of them in accordance with the opinion
of such counsel shall be full justification and protection to it. Each of the
Administrative Agents may exercise any of its powers and rights and perform any
duty under the Loan Documents through agents or attorneys.
The Lenders shall ratably, in accordance with their Credit Exposures at
the time of demand for indemnification hereunder, indemnify each of the
Administrative Agents, in its capacity as agent on behalf of the Lenders (to the
extent not reimbursed by the Borrower pursuant to the terms hereof and without
limiting the obligations of the Borrower to do so) against any cost, expense
(including reasonable counsel fees and disbursements), claim, demand, action,
loss or liability (except such as results from such Administrative Agent's gross
negligence or wilful misconduct) that such Administrative Agent may suffer or
incur in connection with this Agreement or any action taken or omitted by it
under the Loan Documents.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agents may resign at any time by
notifying the Lenders, the Fronting Banks and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
93
Administrative Agent; provided that if only one Administrative Agent resigns,
the remaining Administrative Agent automatically shall be deemed to have been
appointed as, and have accepted the position of, successor to the resigning
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agents give notice of
resignation, then the retiring Administrative Agents may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank having
an office (or an Affiliate with an office) in New York, New York, with a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor bank, or upon
the deemed appointment of one of the Administrative Agent or Agents as successor
to the other, such successor shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agents and each of the retiring Administrative Agents shall be discharged from
its duties and obligations hereunder. After any Administrative Agent's
resignation hereunder, the provisions of this Article shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Administrative Agent.
The Lenders hereby acknowledge that the Administrative Agents shall not
be under any duty to take any discretionary action permitted to be taken by them
pursuant to the provisions of this Agreement unless they shall be requested in
writing to do so by the Required Lenders or, where required, all the Lenders.
Neither of the Co-Syndication Agents shall have any responsibility,
obligation or liability whatsoever under the Loan Documents in such capacity.
ARTICLE IX
Miscellaneous
Section 9.01. Notices. Except as specifically provided elsewhere
herein, notices and other communications provided for herein shall be in writing
and shall be delivered or mailed (or, if by telecopy equipment of the sending
party, delivered by such equipment) addressed:
(a) If to the Borrower, in all cases to it at
Equistar Chemicals, LP
1221 McKinney Street, Suite 700
Houston, Texas 77010
Telecopy: 713-652-4598
Attention of Treasury Department
(b) If to the Administrative Agents, in all cases to:
94
Bank of America, N.A.
333 Clay Street
Houston, Texas 77002
Telecopy: 713-651-4903
Attention of Mike Dillon
The Chase Manhattan Bank
712 Main Street, 7th Floor
Houston, Texas 77002
Telecopy: 713-216-6387
Attention of Steve Nordaker
(c) If to the Servicing Agent, the Swingline Lender or, in its
capacity as a Fronting Bank, in all cases to it at:
Bank of America, N.A.
901 Main Street
Dallas, Texas 75202
Telecopy: 214-290-9439
Attention of Ben Cosgrove
(d) If to any Lender, in all cases to it at its address as set forth
in its Administrative Questionnaire or as it shall subsequently specify in
writing to the Borrower and the Administrative Agents.
(e) If to the Collateral Agent or in its capacity as a Fronting Bank,
to it at:
The Chase Manhattan Bank
712 Main Street, 7th Floor
Houston, Texas 77002
Telecopy: 713-216-6387
Attention of Steve Nordaker
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy equipment of the sender, or on the date five Business Days
after dispatch by certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party as provided in this
Section 9.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 9.01.
----
Section 9.02. No Waivers; Amendments. (a) No failure or delay of any
Fronting Bank, any Agent or any Lender in exercising any power or right under
any Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance
95
of steps to enforce such a right or power, preclude any other or further
exercise thereof or the exercise of any other right or power. The rights and
remedies of the Agents, the Fronting Banks and the Lenders under the Loan
Documents are cumulative and not exclusive of any rights or remedies which they
would otherwise have. Except as may be otherwise expressly provided herein, no
waiver of any provision of this Agreement nor any consent to any departure by
the Borrower therefrom shall in any event be effective unless the same shall be
in writing and signed by the Required Lenders (unless otherwise specified
herein), and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether any Agent, any
Lender or any Fronting Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement or any Exhibit or Schedule hereto may be
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and by the Required Lenders; provided, however,
that no such agreement shall (i) change the Commitment of any Lender without the
prior written consent of such Lender, (ii) postpone any scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any Fee payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iii)
amend or modify or otherwise affect the rights or duties of any Agent, any
Fronting Bank or the Swingline Lender without its prior written consent or (iv)
amend or modify the definition of "Required Lenders", Section 2.18, this Section
----
9.02 or Section 9.07, without the prior written consent of each Lender.
---- ----
(c) Any provision of the Collateral Documents may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by each
Loan Party party thereto and the Collateral Agent with the consent of the
Required Lenders; provided that no such amendment or waiver shall, unless signed
by all the Lenders, effect or permit a release of all or substantially all of
the Collateral, release any Loan Party from its Subsidiary Guarantee or permit
termination of any Subsidiary Guarantee. Notwithstanding the foregoing,
Subsidiary Guarantees shall be terminated and Collateral (but not the proceeds
thereof) shall be released from the Lien of the Collateral Documents from time
to time as necessary to effect any sale of assets, including the sale of a
Subsidiary Loan Party, permitted by the Loan Documents, and the Collateral Agent
shall execute and deliver all release documents reasonably requested to evidence
such release (without the requirement of consent from any Lender).
Section 9.03. Payments. Except as otherwise provided in this Agreement,
all payments to be made by the Borrower to the Lenders hereunder shall be made
96
to the Servicing Agent in immediately available funds at Bank of America, N.A.
(ABA #121000358, Account #12339-15888 and Reference: Equistar) not later than
11:00 a.m., New York City time, on the date due. Funds received after the
applicable time shall be deemed to have been received by the Lenders on the
following Business Day.
Unless otherwise provided herein, if any payment of principal, interest
or any other amount payable by the Borrower hereunder shall fall due on a day
that is not a Business Day, then such due date shall be extended to the next
succeeding Business Day, and such extension of time shall be included in
computing interest, if any, in connection with such payment.
Upon receipt of any payment for the accounts of the Lenders hereunder,
the Servicing Agent will promptly distribute to each Lender its share of such
payment.
Section 9.04. Governing Law; Submission to Jurisdiction. (a) THIS
AGREEMENT SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.
(b) To the extent it may effectively do so under applicable law, the
Borrower (i) irrevocably submits to the nonexclusive jurisdiction of any New
York State or Federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or relating to any Loan
Document or any other document contemplated thereby, and (ii) irrevocably waives
and agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the jurisdiction of any such court, any objection that
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 such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.
(c) The Borrower agrees, to the fullest extent it may effectively do
so under applicable law, that a judgment in any suit, action or proceeding of
the nature referred to in paragraph (b) above brought in any such court shall be
conclusive and binding upon the Borrower and may be enforced in the courts of
the United States of America or the State of New York (or any other courts to
the jurisdiction of which the Borrower is or may be subject) by a suit upon such
judgment.
(d) To the extent it may effectively do so under applicable law, the
Borrower consents to process being served in any suit, action or proceeding of
the nature referred to in paragraph (b) by mailing a copy thereof by registered
or certified mail, postage prepaid, return receipt requested, to the address of
the Borrower set forth or referred to in Section 9.01. To the extent it may
----
effectively do so under applicable law, the Borrower agrees that such service
(i) shall be deemed in every respect effective service of process upon the
Borrower in any
97
such suit, action or proceeding and (ii) shall be taken and held to be valid
personal service upon and personal delivery to the Borrower.
(e) Nothing in this Section 9.04 shall affect the right of any Agent
----
or Lender to serve process in any manner permitted by law, or limit any right
that any Agent or Lender may have to bring proceedings against the Borrower in
the courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
Section 9.05. Expenses; Documentary Taxes; Indemnity. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agents, the Servicing Agent, the Collateral Agent, the Fronting
Banks and their respective Affiliates, including the reasonable fees, charges
and disbursements of Davis Polk & Wardwell, special counsel for the
Administrative Agents and any local counsel retained by them, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the Fronting Banks in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agents, the Servicing Agent, the Collateral Agent, the Fronting
Banks or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agents, the Servicing Agent, the Collateral
Agent, the Fronting Banks or any Lender, in connection with the enforcement or
protection of its rights in connection with any Loan Document, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout or restructuring in respect of such Loans or Letters of
Credit.
(b) The Borrower shall indemnify each Agent, each Fronting Bank and
each Lender, and each Related Party of any of the foregoing persons (each such
person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of any actual or threatened claim, litigation,
investigation or proceeding, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto, relating to (i) the
execution or delivery of the Loan Documents or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations under the Loan Documents or the consummation of the transactions
contemplated thereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by a Fronting Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly
98
comply with the terms of such Letter of Credit), or (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of its Subsidiaries;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
resulted from the gross negligence or wilful misconduct of such Indemnitee.
Without limiting the generality of the foregoing, the Borrower hereby waives all
rights for contribution or any other rights of recovery with respect to
liabilities, losses, damages, costs and expenses arising under or related to
Environmental and Safety Laws that it might have by statute or otherwise against
any Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in
----
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Lenders or the Administrative Agents. All amounts
due under this Section 9.05 shall be payable on written demand therefor.
Section 9.06. Survival of Agreements, Representations and Warranties,
Etc. All warranties, representations and covenants made by any Loan Party herein
or in any certificate or other instrument delivered by any Loan Party or on its
behalf in connection with the Loan Documents shall be considered to have been
relied upon by the Lenders and shall survive the making of the Loans and
issuance of any Letters of Credit herein contemplated regardless of any
investigation made by the Lenders or the Agents or on their behalf and shall
continue in full force and effect so long as any amount due or to become due
hereunder is outstanding and unpaid. The right of each Lender to receive
payments pursuant to Sections 2.15, 2.17 and 2.20 shall survive the termination
---- ---- ----
of this Agreement and the repayment of the Loans.
Section 9.07. Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns (including any Affiliate of a Fronting Bank that issues
any Letter of Credit). The Borrower may not assign or transfer any of its rights
or obligations hereunder without the prior written consent of all the Lenders.
(b) Each Lender may assign all or a portion of its interests, rights
and obligations under this Agreement (including all or a portion of its
Commitment (if still in existence) and the Loans at the time owing to it);
provided, however, that (i) except in the case of an assignment by a Lender to
an Affiliate of such Lender, to another Lender or to a Related Fund of a Lender
or in the case of an assignment by a Lender of all or a portion of its Term
Loans, the Borrower and the Servicing Agent (and, in the case of an assignment
of all or a portion of a Revolving Commitment or any Lender's obligations in
respect of its LC Exposure or
99
Swingline Exposure, each Fronting Bank and the Swingline Lender) must consent to
such assignment in writing (which consent may not be unreasonably withheld or
delayed), (ii) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement, as a Revolving Lender or as a Term Lender, as the case may be, (iii)
after giving effect to any such assignment, (1) the aggregate amount of the
Credit Exposure of the assigning Lender (together with its Related Funds and its
Affiliates) shall be either $0 or (x) in the case of a Term Lender, $1,000,000
or more (or such smaller amount agreed upon by the Administrative Agents and the
Borrower) and (y) in the case of a Revolving Lender, $10,000,000 or more and (2)
the aggregate amount of the Credit Exposure of the assignee Lender (together
with its Related Funds and its Affiliates) shall be in the case of a Term
Lender, $1,000,000 or more and (y) in the case of a Revolving Lender,
$10,000,000 or more (or, in any case, any other smaller amount agreed upon by
the Administrative Agents and the Borrower), and (iv) the parties to each such
assignment shall execute and deliver to the Servicing Agent for its acceptance
and recording in the Register an Assignment and Acceptance, together with
(except in the case of assignment to another Lender or an Affiliate or a Related
Fund of a Lender) a processing and recordation fee of $3,500 (provided that only
one such fee shall be required in the case of multiple assignments by a Lender
on a single day to funds managed or advised by the same investment advisor if
such funds are not Lenders hereunder); and provided, further, that any consent
of the Borrower otherwise required under this paragraph shall not be required if
an Event of Default has occurred and is continuing. The Credit Exposures held by
or assigned to or by any person and its Related Funds shall be aggregated for
purposes of determining compliance with the amount thresholds specified in this
Section. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, which effective
date shall be (unless waived by the Servicing Agent) at least five Business Days
after the execution thereof, (A) the assignee thereunder shall be a party
hereto, and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and (B) the assignor thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of the assignor's rights and obligations under this Agreement,
the assignor shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.15, 2.17 and 9.05 as well as to any interest and
---- ---- ----
Facility Fee accrued for its account hereunder and not yet paid).
Notwithstanding the foregoing, any Lender assigning its rights and obligations
under this Agreement may retain any Competitive Loans made by it outstanding at
such time, and in such case shall retain its rights hereunder in respect of any
Loans so retained until such Loans have been repaid in full in accordance with
this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assignor and the assignee thereunder shall be deemed to confirm to and agree
with
100
each other and the Borrower as follows: (i) such assignor warrants that it is
the legal and beneficial owner of the interest being assigned free and clear of
any adverse claim; (ii) except as set forth in clause (i) above, the assignor
makes no other representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, or any
other instrument or document furnished pursuant hereto or thereto, or the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its Obligations under this Agreement or any other instrument
or document furnished pursuant hereto or thereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements described in Section
3.06 or the most recent financial statements delivered pursuant to Section 5.05,
---- ----
as applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the assignor 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 action under this Agreement; (vi) such assignee appoints
and authorizes each of the Administrative Agents, the Servicing Agent and the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers under the Loan Documents, as are delegated to such Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will, to the extent of the interest assigned
to it, perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by the Lenders.
(d) The Borrower agrees that each Lender may without notice to or the
consent of the Borrower, the Servicing Agent, any Fronting Bank or the Swingline
Lender sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Revolving Commitment and the same portion of
the Revolving Loans owing to it) and the Borrower agrees that any purchaser of a
participation in such Loans so acquired may exercise any and all rights of
banker's lien, setoff, counterclaim or otherwise with respect to any and all
moneys owing by the Borrower to such purchaser as fully as if such purchaser
were a Lender acquiring such Loans hereunder in the amount of such
participation; provided, however, that (i) such selling Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the Borrower for the performance of its obligations
hereunder, (iii) the participating lenders or other entities shall be entitled
to the benefit of the cost protection provisions contained in Sections 2.15,
----
2.17 and 2.20 to the same extent as if they were such Lender (but the amount
---- ----
claimed by any participating lender
101
or other entity shall not exceed the amount that could have been claimed by the
Lender from which it acquired its participation) and (iv) the Borrower, the
Agents, the Fronting Banks and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans and to approve,
without the consent of or consultation with any participant, any amendment,
modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers with respect to Fees payable hereunder or
an increase in the amount of principal of or a decrease in the rate at which
interest is payable on the Loans, or an extension of the dates fixed for
payments of principal of or interest on the Loans or payments of Fees).
(e) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.07, disclose
----
to the assignee or participant or proposed assignee or participant any
information relating to the Borrower or the Subsidiaries furnished to the
Lenders (including pursuant to Section 5.08) by or on behalf of the Borrower or
----
the Subsidiaries, as applicable; provided that, prior to any such disclosure,
each such assignee or participant or proposed assignee or participant shall
execute an agreement whereby such assignee or participant shall agree (subject
to customary exceptions) to preserve the confidentiality of any confidential
information relating to the Borrower or any Subsidiary received from the Agents
or Lenders.
(f) The Servicing Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders and the Commitment (if
any) of, and the principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof (the "Register"), and no such
Assignment and Acceptance shall be effective until so recorded. The entries in
the Register shall be conclusive in the absence of manifest error and the
Borrower, the Agents, the Fronting Banks and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower at any reasonable time and from time to time upon
reasonable prior notice. Upon its receipt of an executed Assignment and
Acceptance, together with any Note subject to such assignment, and the payment
of any processing and registration fee, the Servicing Agent shall (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto.
(g) Any Lender may at any time pledge all or any portion of its rights
under the Loan Documents to secure obligations of such Lender, without the
consent of any party, without notice to any party and without payment of fees,
in accordance with applicable law, including without limitation any pledge or
102
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge shall release any Lender from its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Bank") may grant to a special purpose funding vehicle (an
"SPC") of such Granting Bank, identified as such in writing from time to time by
the Granting Bank to the Administrative Agents and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Bank
would otherwise be obligated to make to the Borrower pursuant to Section 2.02,
provided that (i) nothing herein shall constitute a commitment to make any Loan
by any SPC and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Bank shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall be deemed to utilize the Commitments of all the
Lenders to the same extent, and as if, such Loan were made by the Granting Bank.
Each party hereto hereby agrees that no SPC shall be liable for any payment
under this Agreement for which a Lender would otherwise be liable, for so long
as, and to the extent, the related Granting Bank makes such payment. In
furtherance of the foregoing, each party hereto hereby agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceedings under
the laws of the United States of America or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 9.07, any SPC
----
may assign all or a portion of its interests in any Loans to its Granting Bank
or to any financial institutions providing liquidity and/or credit facilities to
or for the account of such SPC to fund the Loans made by such SPC or to support
the securities (if any) issued by such SPC to fund such Loans; provided,
however, that except in the case of an assignment to a Granting Bank or a
financial institution that is either an affiliate of such SPC or another Lender,
the Borrower and the Servicing Agent must consent to such assignment in writing
(which consent may not be unreasonably withheld). Each SPC shall execute an
agreement whereby such SPC shall agree (subject to customary exceptions) to
preserve the confidentiality of any confidential information relating to the
Borrower and its Affiliates received from the Agents or Lenders.
Section 9.08. Right of Setoff. (a) Upon the occurrence and during the
continuation of any Event of Default each Lender is hereby authorized, in
addition to any other right or remedy that any Lender may have by operation of
law or otherwise, at any time and from time to time, without notice to the
Borrower except to the extent required by applicable law (any such notice being
expressly waived by the Borrower to the maximum extent possible under applicable
law), and subject to any requirements or limitations imposed by applicable law,
to exercise its banker's lien or right of setoff and apply any and all
103
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or any of its
Affiliates 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 any Loan
Document, irrespective of whether or not such Lender shall have made any demand
under such Loan Agreement and although such obligations may be unmatured.
(b) Each Lender agrees promptly to notify the Administrative Agents
and the Borrower after any such setoff and application; provided, however, that,
to the extent permitted by applicable law, the failure to give any such notice
shall not affect the validity of such setoff and application.
Section 9.09. Severability. In case any one or more of the provisions
contained in the Loan Documents shall be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
Section 9.10. Cover Page, Table of Contents and Section Headings. The
cover page, Table of Contents and Section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of or be taken into consideration in interpreting this
Agreement.
Section 9.11. Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts with the same effect as if the signatures thereon
and hereon were upon the same instrument. This Agreement shall become effective
when copies hereof which, when taken together, bear the signatures of each of
the parties hereto shall have been received by the Servicing Agent.
Section 9.12. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
104
Section 9.13. Entire Agreement. This Agreement, the Collateral
Documents, the agreements referred to in Section 2.08 and any promissory notes
----
delivered pursuant hereto constitute the entire contract between the parties
relative to the subject matter hereof. Any previous agreement among the parties
with respect to the subject matter hereof is superseded by the Loan Documents
and such letter agreements, except to the extent expressly provided therein.
Nothing in the Loan Documents or such letter agreements or promissory notes,
expressed or implied, is intended to confer upon any party other than the
parties hereto and thereto and Indemnitees referred to in Section 9.05(b) any
-------
rights, remedies, obligations or liabilities under or by reason of the Loan
Documents or such letter agreements or promissory notes.
Section 9.14. Confidentiality. Each of the Agents, each Fronting Bank,
the Lenders and the SPC's (as defined in Section 9.07(h)) agrees to maintain the
--------
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent required or requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies under any
Loan Document or any suit, action or proceeding relating to any Loan Document or
the enforcement of rights thereunder, (f) subject to obtaining a written
agreement containing provisions substantially the same as those of this Section
from the intended recipient of such Information, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement (including any assignee or any
prospective assignee of an SPC of the type described in the last sentence of
Section 9.07(h)), (g) with the consent of the Borrower, (h) for purposes of
--------
Section 9.07(h) only, to any rating agency, (i) to the extent such Information
-------
(x) becomes publicly available other than as a result of a breach of this
Section or (y) becomes available to any Fronting Bank or any Agent or Lender on
a nonconfidential basis from a source other than the Borrower or (j) to any
direct or indirect contractual counterparty in any swap, hedge or similar
agreement (or to such contractual counterparty's professional advisor) so long
as the recipient of such Information agrees to be bound by the provisions of
this Section. For the purposes of this Section, "Information" means all
information received from the Borrower relating to the Borrower and its
Affiliates or their respective business, other than any such information that is
available to any Fronting Bank or any Agent or Lender on a nonconfidential basis
prior to disclosure by the Borrower. Any person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such person has exercised the
same degree of care to maintain the confidentiality of such Information as such
person would accord to its own confidential information.
105
Section 9.15. Limitation on Recourse to General Partners. The Lenders,
the Agents, the SPCs (as defined in Section 9.07(h)) and the Fronting Banks
--------
agree that payment and performance of the obligations due to them from the Loan
Parties under the Loan Documents and any promissory notes delivered hereunder
shall be obligations of the Loan Parties only, and none of the Lenders, the
Agents, the SPCs or any Fronting Bank shall have any claim against or recourse
(whether by operation of law or otherwise) to any Equistar GP or any of its
Affiliates (other than the Borrower and its Subsidiaries) or any director,
officer, employee, partner, member of the Partnership Governance Committee,
holder of Equity Interests, agent or advisor of any such person in respect of
such obligations or for any claim based on, in respect of, or by reasons of,
such obligations.
106
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers as of the day and year first
above written.
EQUISTAR CHEMICALS, LP,
By: /s/ KAREN A. TWITCHELL
-----------------------
Name: Karen A. Twitchell
Title: Principal Financial Officer
BANK OF AMERICA, N.A., individually and as
Swingline Lender, Fronting Bank, Administrative
Agent and Servicing Agent
By: /s/ MICHAEL J. DILLON
----------------------
Name: Michael J. Dillon
Title: Managing Director
THE CHASE MANHATTAN BANK,
individually and as Fronting Bank, Administrative
Agent and Collateral Agent
By: /s/ STEVE A. NORDAKER
----------------------
Name: Steve A. Nordaker
Title: Managing Director
CITICORP USA, INC.
By: /s/ B.D. CROOK
---------------
Name: B.D. Crook
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By: /s/ PAUL L. COLON
------------------
Name: Paul L. Colon
Title: Vice President
By: /s/ ROBERT N. FINNEY
---------------------
Name: Robert Finney
Title: Managing Director
THE FUJI BANK, LIMITED
By: /s/ JACQUES AZAGURY
--------------------
Name: Jacques Azagury
Title: Senior Vice President and Manager
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. ASHBY
-----------------
Name: F.C.H. Ashby
Title: Senior Manager, Loan Operations
CREDIT LYONNIAS, NEW YORK BRANCH
By: /s/ PHILIPPE SOUSTRA
---------------------
Name: Philippe Soustra
Title: Executive Vice President
SOCIETE GENERALE
By: /s/ ANTHONY C. QUAGLIETTA
--------------------------
Name: Anthony C. Quaglietta
Title: Vice President
THE BANK OF NEW YORK
By: /s/ RAYMOND J. PALMER
----------------------
Name: Raymond J. Palmer
Title: Vice President
BANK ONE, N.A. (Main Office - Chicago)
By: /s/ DANIEL A. DAVIS
--------------------
Name: Daniel A. Davis
Title: Vice President
NATEXIS BANQUES
POPULAIRES
By: /s/ TIMOTHY L. POLVADO
----------------------
Name: Timothy L. Polvado
Title: Vice President and Group Manager
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ K. GLASSCOCK
----------------
Name: K.Glasscock
Title: Vice President and Manager
CITICORP USA, INC., as Co-Syndication Agent
By: /s/ B.T. CROOK
--------------
Name: B.T. Crook
Title: Vice President
CREDIT SUISSE FIRST BOSTON, as Co-
Syndication Agent
By: /s/ PAUL L. COLON
-----------------
Name: Paul L. Colon
Title: Vice President
By: /s/ ROBERT N. FINNEY
--------------------
Name: Robert N. Finney
Title: Managing Director
KZH CNC LLC
By: /s/ VIRGINIA CONWAY
-------------------
Name: Virginia Conway
Title: Authorized Agent
KZH RIVERSIDE LLC
By: /s/ VIRGINIA CONWAY
-------------------
Name: Virginia Conway
Title: Authorized Agent
KZH SHOSHONE LLC
By: /s/ VIRGINIA CONWAY
-------------------
Name: Virginia Conway
Title: Authorized Agent
KZH SOLEIL LLC
By: /s/ VIRGINIA CONWAY
-------------------
Name: Virginia Conway
Title: Authorized Agent
KZH SOLEIL-2 LLC
By: /s/ VIRGINIA CONWAY
-------------------
Name: Virginia Conway
Title: Authorized Agent
TCW SELECT LOAN FIND, LTD
By: TCW ADVISORS, INC. as its
Colletaral Manager
By: /s/ WILLIAM BRENNAN
-------------------
Name: William Brennan
Title: Vice President
By: /s/ MATTHEW A. MILLER
---------------------
Name: Matthew A Miller
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By: /s/ MICHAEL N. OAKES
--------------------
Name: Michael N. Oakes
Title: Senior Vice President,
Houston Office
JUPITER FUNDING TRUST
By: /s/ ANN E. MORRIS
-----------------
Name: Ann E. Morris
Title: Authorized Agent
OPPENHEIMER SENIOR
FLOATING RATE FUND
By: /s/ DAVID FOXHOVEN
-------------------
Name: David Foxhoven
Title: Assistant Vice President
PINEHURST TRADING, INC.
By: /s/ ANN E. MORRIS
-----------------
Name: Ann E. Morris
Title: Assistant Vice President
SCUDDER FLOATING RATE FUND
By: /s/ KELLY D. BABSON
-------------------
Name: Kelly D.Babson
Title: Managing Director
THE SUMITOMO TRUST & BANKING CO.,
LTD. New York Branch
By: /s/ STEPHEN A. STRATICO
-----------------------
Name: Stephen A. Stratico
Title: Vice President
STANWICH LOAN FUNDING LLC
By: /s/ ANN E. MORRIS
-----------------
Name: Ann E. Morris
Title: Assistant Vice President
TORONTO DOMINION (New York), INC.
By: /s/ GWEN ZIRKLE
---------------
Name: Gwen Zirkle
Title: Vice President
THE TRAVELERS INSURANCE COMPANY
By: /s/ ALLEN R. CANRELLI
---------------------
Name: Allen R. Cantrelli
Title: Investment Officer
WINGED FOOT TRUST
By: /s/ ANN E. MORRIS
-----------------
Name: Ann E. Morris
Title: Authorized Agent
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ PERZEMEK BLAZIAK
--------------------
Name: Perzemek Blaziak
Title: Account Officer
METROPOLITAN LIFE INSURANCE
COMPANY
By: /s/ JAMES A. WNIOTT
-------------------
Name: James A. Wniott
Title: Director
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ GREGORY HONG
----------------
Name: Gregory Hong
Title: Duly Authorized Signatory
EXHIBIT A
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement dated as
of August 24, 2001 (as the same has been and may be amended, modified,
supplemented or waived, the "Credit Agreement") among EQUISTAR CHEMICALS, LP, a
Delaware limited partnership, the lenders from time to time party thereto,
CITICORP USA, INC. and CREDIT SUISSE FIRST BOSTON, as Co-Syndication Agents,
BANK OF AMERICA, N.A. ("BofA"), as Servicing Agent, THE CHASE MANHATTAN BANK
("Chase"), as Collateral Agent, and BofA and Chase as administrative agents (in
such capacity, together with their successors, the "Administrative Agents").
Capitalized terms used but not defined herein shall have the meanings specified
in the Credit Agreement.
1. The Assignor named below hereby sells and assigns, without recourse
to the Assignor, to the Assignee named below, and the Assignee hereby purchases
and assumes, without recourse to the Assignor, from the Assignor, effective as
of the date of assignment set forth below (the "Assignment Effective Date"), the
interests set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth below in [the Revolving Commitment of the Assignor on the
Assignment Effective Date, the Revolving Loans owing to the Assignor which are
outstanding on the Assignment Effective Date, and participations in Letters of
Credit and Swingline Loans which are outstanding on the Assignment Effective
Date,] [and the Competitive Loans owing to the Assignor which are identified
below,] [the Term Loans owing to the Assignor which are outstanding on the
Assignment Effective Date,] together with unpaid interest accrued on the
assigned Loans to the Assignment Effective Date. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 9.07 of the Credit Agreement, a
copy of which has been received by each such party. From and after the
Assignment Effective Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) except as otherwise provided in the Credit Agreement,
the Assignor shall, to the extent of the interests assigned by this Assignment
and Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement to the extent of the Assigned Interest.
2. This Assignment and Acceptance is being delivered to the Servicing
Agent and the Borrower together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms referred to in
1
Section 2.20 (e) of the Credit Agreement, duly completed and executed by such
Assignee, (ii) if the Assignee is not already a Lender under the Agreement, an
Administrative Questionnaire in the form provided by the Servicing Agent and
(iii) a processing and recordation fee of $3,500.
3. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Date of Assignment:____________________________________________________________
Legal Name of Assignor:________________________________________________________
Legal Name of Assignee:________________________________________________________
Assignee's Address for Notices:________________________________________________
_______________________________________________________________________________
Assignee's Domestic Lending Office Address:____________________________________
_______________________________________________________________________________
Assignee's LIBOR Lending Office Address:_______________________________________
_______________________________________________________________________________
Assignment Effective Date (may not be fewer than 5 Business Days after the date
of assignment except as specified in the Credit Agreement):____________________
2
Principal Amount Assigned (and identifying
information as to individual Competitive
Assigned Interest Loans, if applicable)
------------------- ----------------------------
Revolving Commitment: $
Revolving Loans: $
Competitive Loans: $
Term Loans: $
The terms set forth herein
are hereby agreed to:
_________________, as Assignor,
By:__________________
Name:
Title:
_________________, as Assignee,
By:__________________
Name:
Title:
3
[Accepted (if required):
EQUISTAR CHEMICALS, LP
By:__________________
Name:
Title:
[SERVICING AGENT]
By:__________________
Name:
Title:
[FRONTING BANK]
By:__________________
Name:
Title:
[SWINGLINE LENDER]
By:__________________
Name:
Title:
4
EXHIBIT B
FORM OF
SYNDICATED BORROWING REQUEST
Bank of America, N.A., as
Servicing Agent for the Lenders referred to below,
901 Main Street
Dallas, Texas 75202
[Date]
Attention: Agency Management Services
Dear Sirs and Mesdames:
The undersigned, Equistar Chemicals, LP (the "Borrower"), refers to the
Amended and Restated Credit Agreement dated as of August 24, 2001 (as the same
has been and may be amended, modified, supplemented or waived, the "Credit
Agreement") among EQUISTAR CHEMICALS, LP, a Delaware limited partnership, the
lenders from time to time party thereto, CITICORP USA, INC. and CREDIT SUISSE
FIRST BOSTON, as Co-Syndication Agents, BANK OF AMERICA, N.A. ("BofA"), as
Servicing Agent, THE CHASE MANHATTAN BANK ("Chase"), as Collateral Agent, and
BofA and Chase as administrative agents (in such capacity, together with their
successors, the "Administrative Agents"). Capitalized terms used but not defined
herein shall have the meanings specified in the Credit Agreement.
The Borrower hereby gives you notice pursuant to Section 2.04 of the
Credit Agreement that it requests a Syndicated Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such
Syndicated Borrowing is requested to be made:
(A) Date of Borrowing (which is a Business Day) __________________
(B) Principal amount of Borrowing __________________
(C) Interest rate basis/1/ __________________
(D) Interest Period and the last day thereof/2/ __________________
_________________________
/1/ LIBOR Borrowing or ABR Borrowing.
/2/ Which shall be subject to the definition of "Interest Period" and end
not later than the Revolving Maturity Date or the Term Loan Maturity Date, as
applicable.
5
[(E) Class of Borrowing __________________
Upon the making of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b), to the
extent applicable to this Syndicated Borrowing, Section 4.01(c) and, if
applicable, Section 4.01(d), of the Credit Agreement have been satisfied.
Very truly yours,
EQUISTAR CHEMICALS, LP
By:_____________________
------------------------
Title:[Responsible Officer]
6
EXHIBIT C-1
FORM OF
COMPETITIVE BID REQUEST
Bank of America, N.A., as
Servicing Agent for the Lenders referred to below,
901 Main Street
Dallas, Texas 75202
[Date]
Attention: Agency Management Services
Dear Sirs and Mesdames:
The undersigned, Equistar Chemicals, LP (the "Borrower"), refers to the
Amended and Restated Credit Agreement dated as of August 24, 2001 (as the same
has been and may be amended, modified, supplemented or waived, the "Credit
Agreement") among EQUISTAR CHEMICALS, LP, a Delaware limited partnership, the
lenders from time to time party thereto, CITICORP USA, INC. and CREDIT SUISSE
FIRST BOSTON, as Co-Syndication Agents, BANK OF AMERICA, N.A. ("BofA"), as
Servicing Agent, THE CHASE MANHATTAN BANK ("Chase"), as Collateral Agent, and
BofA and Chase as administrative agents (in such capacity, together with their
successors, the "Administrative Agents"). Capitalized terms used but not defined
herein shall have the meanings specified in the Credit Agreement.
The Borrower hereby gives you notice pursuant to Section 2.03(a) of the
Credit Agreement that it requests a Competitive Borrowing, and in that
connection sets forth below the terms on which such Competitive Borrowing is
requested to be made:
(A) Date of Competitive Borrowing ____________________________
(which is a Business Day)
(B) Principal Amount of Competitive ____________________________
Borrowing/1/
(C) Interest rate basis/2/ ____________________________
(D) Interest Period and the last day ____________________________
____________________________
/1/ Not less than $25,000,000.
/2/ LIBOR Competitive Borrowing or Fixed Rate Borrowing.
1
thereof/3/
Upon acceptance of any or all of the Competitive Loans offered by the
Lenders in response to this request, the Borrower shall be deemed to have
represented and warranted that the conditions to lending specified in Section
4.01(b), to the extent applicable to this Borrowing, Section 4.01(c) and, if
applicable, Section 4.01(d), of the Credit Agreement have been satisfied.
Very truly yours,
EQUISTAR CHEMICALS, LP
By:___________________________
______________________________
Title: [Responsible Officer]
________________________________________________________________________________
/3/ Which shall be subject to the definition of "Interest Period" and
end not later than the Revolving Maturity Date.
2
EXHIBIT C-2
FORM OF
NOTICE OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address]
[Date]
Attention:
Dear Sirs and Mesdames:
Reference is made to the Amended and Restated Credit Agreement dated as
of August 24, 2001 (as the same has been and may be amended, modified,
supplemented or waived, the "Credit Agreement") among EQUISTAR CHEMICALS, LP, a
Delaware limited partnership, the lenders from time to time party thereto,
CITICORP USA, INC. and CREDIT SUISSE FIRST BOSTON, as Co-Syndication Agents,
BANK OF AMERICA, N.A. ("BofA"), as Servicing Agent, THE CHASE MANHATTAN BANK
("Chase"), as Collateral Agent, and BofA and Chase as administrative agents (in
such capacity, together with their successors, the "Administrative Agents").
Capitalized terms used but not defined herein shall have the meanings specified
in the Credit Agreement.
The Borrower made a Competitive Bid Request on [ ] [_], 20[_],
pursuant to Section 2.03(a) of the Credit Agreement, and in that connection you
are invited to submit a Competitive Bid by [Date] / [Time]./1/ Your Competitive
Bid must comply with Section 2.03(b) of the Credit Agreement and the terms set
forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing _______________________
(B) Principal amount of Competitive _______________________
Borrowing
(C) Interest rate basis _______________________
(D) Interest Period and the last day _______________________
thereof
_______________________
/1/ The Competitive Bid must be received by the Servicing Agent (i) in
the case of a LIBOR Competitive Borrowing, not later than 9:30 a.m., New York
City time, three Business Days before the proposed Competitive Borrowing, and
(ii) in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York
City time, on the day of the proposed Competitive Borrowing.
1
Very truly yours,
BANK OF AMERICA, N.A., as Servicing Agent,
By:___________________________________
___________________________________
Title:
2
EXHIBIT C-3
FORM OF
COMPETITIVE BID
Bank of America, N.A., as
Servicing Agent for the Lenders referred to below,
901 Main Street
Dallas, Texas 75202
[Date]
Attention: Agency Management Services
Dear Sirs and Mesdames:
The undersigned, [Name of Lender], refers to the Amended and Restated
Credit Agreement dated as of August 24, 2001 (as the same has been and may be
amended, modified, supplemented or waived, the "Credit Agreement") among
EQUISTAR CHEMICALS, LP, a Delaware limited partnership, the lenders from time to
time party thereto, CITICORP USA, INC. and CREDIT SUISSE FIRST BOSTON, as Co-
Syndication Agents, BANK OF AMERICA, N.A. ("BofA"), as Servicing Agent, THE
CHASE MANHATTAN BANK ("Chase"), as Collateral Agent, and BofA and Chase as
administrative agents (in such capacity, together with their successors, the
"Administrative Agents"). Capitalized terms used but not defined herein shall
have the meanings specified in the Credit Agreement.
The undersigned hereby makes a Competitive Bid pursuant to Section
2.03(b) of the Credit Agreement, in response to the Competitive Bid Request made
by Equistar Chemicals, LP (the "Borrower") on [ ] [_], 20[_], and in that
connection sets forth below the terms on which such Competitive Bid is made:
1
(A) Principal Amount/1/ ______________________________
(B) Competitive Bid Rate/2/ ______________________________
(C) Interest Period and last day thereof ______________________________
The undersigned hereby confirms that it is prepared to extend credit to
the Borrower upon acceptance by the Borrower of this bid in accordance with
Section 2.03(d) of the Credit Agreement.
Very truly yours,
[NAME OF LENDER],
By:__________________________________
__________________________________
Title:
__________________________________
/1/ Not less than $5,000,000 and not greater than the requested
Competitive Borrowing. Multiple bids will be accepted by the Servicing Agent.
/2/ i.e., LIBO Rate + or - %, in the case of LIBOR Competitive Loans,
or %, in the case of Fixed Rate Loans. The Competitive Bid Rate shall be
inclusive of any and all reserve requirement costs of the Lender pursuant to
paragraphs (a) and (e) of Section 2.15 of the Credit Agreement.
2
EXHIBIT C-4
FORM OF
COMPETITIVE BID ACCEPT/REJECT LETTER
Bank of America, N.A., as
Servicing Agent for the Lenders referred to below,
901 Main Street
Dallas, Texas 75202
[Date]
Attention: Agency Management Services
Dear Sirs and Mesdames:
The undersigned, Equistar Chemicals, LP (the "Borrower"), refers to the
Amended and Restated Credit Agreement dated as of August 24, 2001 (as the same
has been and may be amended, modified, supplemented or waived, the "Credit
Agreement") among EQUISTAR CHEMICALS, LP, a Delaware limited partnership, the
lenders from time to time party thereto, CITICORP USA, INC. and CREDIT SUISSE
FIRST BOSTON, as Co-Syndication Agents, BANK OF AMERICA, N.A. ("BofA"), as
Servicing Agent, THE CHASE MANHATTAN BANK ("Chase"), as Collateral Agent, and
BofA and Chase as administrative agents (in such capacity, together with their
successors, the "Administrative Agents"). Capitalized terms used but not defined
herein shall have the meanings specified in the Credit Agreement.
In accordance with Section 2.03(c) of the Credit Agreement, we have
received a summary of bids in connection with our Competitive Bid Request dated
____________ and, in accordance with Section 2.03(d) of the Credit Agreement, we
hereby accept following bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
---------------- ----------------- ------
$ [%] / [+ / - %]
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
---------------- ----------------- ------
$ [%] / [+ / - %]
1
The funds should be deposited in Bank of America, N.A. account number [_]
on [date] [or] [wire transferred to [Name of Bank] account number [_] [other
wire instructions] on [date]].
Very truly yours,
EQUISTAR CHEMICALS, LP
By:___________________________
___________________________
Name:
Title:
2
EXHIBIT D
APPLICATION AND AGREEMENT
FOR IRREVOCABLE STANDBY LETTER OF CREDIT
[_] WITHOUT RENEWALS [_] WITH RENEWALS
Renewable until _________________.
latest date
To: [THE CHASE MANHATTAN FOR BANK USE ONLY
BANK] ----------------------------------
Date: L/C No.:
[Address] ----------------------------------
Applicant No.:
Date of this Application___________ ----------------------------------
Beneficiary No.:
----------------------------------
Advising Bank No.:
----------------------------------
Sirs and Mesdames:
The undersigned Applicant(s) hereby request(s) that you establish an
irrevocable Standby Letter of Credit as set forth below in such language as you
may deem appropriate, with such variations from such terms as you may in your
discretion determine are necessary and are not materially inconsistent with this
Application and Agreement, and forward the same by:
[_] Cable/telex (full details)
[_] Airmail
[_] Brief Cable/telex
[_] Other___________________
[_] Through your correspondent for delivery to the beneficiary or advised
through_________________________________________________
[_] Directly to beneficiary
All banking charges other than the issuing Bank's are for
[_] Beneficiary [_] Applicant(s)
1
--------------------------------------------------------------------------------
Liability of on Behalf of
(as to appear on Letter of Credit)
_____In favor of (Beneficiary)_____ __________________________________
Amount
In figures:
In words:
--------------------------------------------------------------------------------
Partial drawings: [_] Allowed [_] Not Allowed Expiring at the close of
business on___________
If drawings are allowed in installments within
given periods and no drawing is made for an
installment within the applicable period, the credit
[_] Shall [_] Shall not _________________________
At your counters, unless
be available for subsequent installments otherwise indicated, for
Sight Payment
--------------------------------------------------------------------------------
To be available by drafts at sight drawn on you duly signed and endorsed, or
specify any other drawee: _____________________________
And accompanied by documents as specified below:
Beneficiary's manually signed statement on its letterhead reading exactly as
follows:
--------------------------------------------------------------------------------
(Complete only when the beneficiary's bank or correspondent is to issue its
undertaking based on the issued Standby Letter of Credit)
[_] Request beneficiary's bank to issue and deliver their (specify type of
undertaking, bid or performance bond, or other)
____________________________________________________________
In favor of:
2
----------------------------------------------------------
For an amount not exceeding that specified above, effective immediately and
expiring at their office on ___________________________________ (30 days prior
to expiry date above) relative to__________________________________ .
--------------------------------------------------------------------------------
The opening of this credit is subject to the terms and conditions as set
forth in the Amended and Restated Credit Agreement dated as of August 24, 2001
(as the same has been and may be amended, modified, supplemented or waived, the
"Credit Agreement") among EQUISTAR CHEMICALS, LP, a Delaware limited
partnership, the lenders from time to time party thereto, CITICORP USA, INC. and
CREDIT SUISSE FIRST BOSTON, as Co-Syndication Agents, BANK OF AMERICA, N.A.
("BofA"), as Servicing Agent, THE CHASE MANHATTAN BANK ("Chase"), as Collateral
Agent, and BofA and Chase as administrative agents (in such capacity, together
with their successors, the "Administrative Agents"), to which terms and
conditions you agree.
APPLICANTS:
_____________________________ ______________________________
Printed Name Printed Name
By:__________________________ By:___________________________
Authorized Signature Authorized Signature
CORRESPONDENT/MEMBER BANK:
_____________________________ ______________________________
Printed Name Printed Name
By:__________________________ By:___________________________
Authorized Signature Authorized Signature
BANK ACCEPTANCE: The Bank's Acceptance evidenced by the undersigned authorized
representative's signature is provided as its acknowledgment that his agreement
represents the final agreement by the parties which may not be
3
contradicted by evidence of prior contemporaneous, or subsequent oral agreements
between the parties.
[THE CHASE MANHATTAN BANK]
By: _________________________
4
August 24, 2001
To: Bank of America, N.A. and
The Chase Manhattan Bank, as
Administrative Agents,
and the Agents and the Lenders referred to below
Equistar Chemicals, L.P.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.02(b)(i) of the
Amended and Restated Credit Agreement dated as of August 24, 2001 (the "Credit
Agreement") among Equistar Chemicals, L.P., as Borrower (the "Company"),
Citicorp USA, Inc. and Credit Suisse First Boston, as Co-Syndication Agents,
Bank of America, N.A., as Servicing Agent and Administrative Agent and The Chase
Manhattan Bank, as Collateral Agent and Administrative Agent, and the Lenders
party thereto.
Capitalized terms used herein and not otherwise defined herein have
the meanings given to them in the Credit Agreement.
We have acted as counsel to the Company in connection with the Credit
Agreement. In that connection we have examined executed counterparts of the
following (each a "Loan Document," and collectively, the "Loan Documents"):
(i) the Credit Agreement;
(ii) the Security Agreement between the Company and the Collateral
Agent, dated as of the date hereof;
(iii) the Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Financing Statement from the Company to Steven
Nordaker, Trustee, for the benefit of the Collateral Agent,
with respect to the Channelview, Texas facility of the Company;
(iv) the Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Financing Statement from the Company to Steven
Nordaker, Trustee, for the benefit of the Collateral Agent,
with respect to the Corpus Christi, Texas facility of the
Company (together with the agreement referred to in clause
(iii) immediately above, the "Mortgages"); and
(v) each Note executed and delivered on the date hereof.
2
The Security Agreement and the Mortgages are collectively referred to herein as
the "Collateral Documents." In addition, we have examined the UCC financing
statements executed by the Company on or prior to the date hereof to be filed in
the office of the Secretary of State of the State of Delaware (a copy of which
is attached hereto as Exhibit A (the "Delaware Financing Statement")) and in the
real property records of Harris County, Texas and Nueces County, Texas
(hereinafter referred to as the "Texas Financing Statements," copies of which
are attached hereto as Exhibits B and C), certificates of representatives of the
Company and other documents as the basis for our opinions hereinafter set forth.
On the basis of the foregoing, and subject to the assumptions,
qualifications and limitations set forth below, we are of the opinion that:
1. The Credit Agreement, the Security Agreement and each Mortgage
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. Each Note, when properly
completed and executed and delivered by the Company, will constitute the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
2. The execution, delivery and performance by the Company of the
Loan Documents do not (a) violate any applicable federal, Texas or New York law
or (b) require as a condition precedent thereto consent or approval of,
registration or filing with, or any other action by, any governmental authority,
except for the filing and recordation of the Mortgages and of UCC financing
statements pursuant to the Loan Documents.
3. The Company is not an (a) an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, (b) a "holding
company" or a "subsidiary company" as defined in the Public Utility Holding
Company Act of 1935, as amended, or (c) otherwise subject to any statute or
regulation (other than Regulations U and X of the Board of Governors of the
Federal Reserve System) that restricts its ability to incur Indebtedness under
the Credit Agreement.
4. The Loans to be made on the date hereof and the application of
the proceeds thereof as provided for in the Credit Agreement do not violate
Regulation U or X of the Board of Governors of the Federal Reserve System.
5. The Security Agreement creates valid security interests in favor
of the Collateral Agent for the benefit of the "Secured Parties," as defined and
to the extent provided therein, in all right, title and interest of the Company
in that portion of the "Collateral" (as defined in the Security Agreement) in
which a security interest may be created under Article 9 of the Uniform
Commercial Code in effect in the State of New York (the "New York Code").
Except as otherwise provided by Sections 9-303 through 9-306 of the New York
Code, the perfection of such security interests will, pursuant to Section 9-301
of the New York Code, be determined under the local laws of the jurisdiction in
which the debtor is located, and assuming that Chapter 9 of the Uniform
Commercial Code of the State of Delaware ("Delaware Code")
3
governs the perfection of a security interest in personal property and that the
Delaware Code is identical to the New York Code, on the proper filing in the
office of the Secretary of State of the State of Delaware of the Delaware
Financing Statement, the Collateral Agent will have a perfected security
interest within the meaning of the Delaware Code in that portion of the
Collateral and in the proceeds thereof in which a security interest may be
created under Article 9 of the New York Code and perfected by filing of a
financing statement in the State of Delaware, subject, however, with respect to
proceeds, to Section 9-315 of the New York Code and any comparable provisions of
the Delaware Code.
6. Each Mortgage creates a valid lien in favor of the Collateral
Agent for the benefit of the "Secured Parties," as defined and to the extent
provided therein, in all right, title and interest of the Company in such of the
"Trust Property" described therein as constitutes real property under the law of
the State of Texas (the "Real Property"). The proper recordings of the
Mortgages in the real property records of the respective counties identified
therein (the "County Filing Offices") are the only filings, recordings and
registrations necessary to publish notice and preserve the liens of the
Mortgages in the Real Property. Each Mortgage creates a valid security interest
in favor of the Collateral Agent for the benefit of such "Secured Parties" to
the extent provided therein in all right, title and interest of the Company in
that portion of the "Trust Property" (other than the Real Property) in which a
security interest may be created under Chapter 9 of the Uniform Commercial Code
in effect in the State of Texas (the "Texas Code") (the "Texas UCC Collateral").
On the proper filing in the real property records of the County Filing Offices
of the Texas Financing Statements, the Collateral Agent will have a perfected
security interest within the meaning of Chapter 9 of the Texas Code in that
portion of the Texas UCC Collateral that constitute fixtures in which a security
interest may be perfected by filing a financing statement in the County Filing
Offices, subject, however, with respect to proceeds, to Section 9.315 of the
Texas Code.
7. No mortgage tax, documentary stamp tax, recording tax, transfer
tax or similar tax or charge is payable by either Administrative Agent or the
Collateral Agent to the State of Texas or any governmental agency thereof on
account of the Liens created by the Collateral Documents (as defined below in
paragraph 8) or the filing, recording or registration of the Mortgage or the
Texas Financing Statements, except for nominal filing or recording fees.
8. The security interests created by the Collateral Documents (to
the extent provided in paragraphs 5 and 6 above) secure all future Loans and the
LC Reimbursement Obligations (as defined in the Security Agreement) of the
Company in respect of the Letters of Credit and, insofar as the priority of
those security interests is governed by the New York Code, the Texas Code and
the Texas Property Code, have the same priority (subject to Section 9.323 of the
Texas Code and the New York Code) with respect to those future extensions of
credit as they have with respect to the Loans made on the date hereof, except
(a) to the extent that any priority may be affected by any Lien imposed by law
in favor of any government or governmental authority or agency and (b) as to
after acquired property that is covered by those documents, Liens to which such
property is subject at the time of acquisition by the Company.
4
9. If all material facts and issues of law were presented and
properly argued, a Texas court, or a federal court sitting in the State of
Texas, should give effect to the governing law provisions of the Loan Documents,
subject to Section 35.51(f)(4) of the Texas Code.
10. The execution and delivery of the Loan Documents, the issuance of
the Notes issued on the date hereof, and the performance by the Company of its
obligations under the Loan Documents and the consummation of the transactions
contemplated therein will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, the Indentures, Lyondell
Chemical Company's Credit Agreement dated as of July 23, 1998, as amended
heretofore, or the Indentures, each dated as of May 17, 1999, among Lyondell
Chemical Company, the guarantors party thereto and The Bank of NewYork, as
trustee.
The foregoing opinions are subject to the following assumptions,
qualifications and limitations:
A. We have, without independent verification, relied on certificates
of representatives of the Company and the representations and warranties of
the Company contained in the Loan Documents with respect to the accuracy of
the factual matters contained therein and assumed with your approval (i)
that each party to the Loan Documents has the power and authority to enter
into those Loan Documents and to perform its obligations thereunder, (ii)
the due authorization, execution and delivery of the Loan Documents by each
party thereto, (iii) that the Loan Documents constitute the legal, valid,
binding and enforceable obligation of each party thereto (other than the
Company) and (iv) the genuineness of all signatures, the conformity to
authentic, original documents of all documents submitted to us as certified
or photostatic copies and the authenticity of all documents submitted to us
as originals.
B. Our opinions set forth in paragraphs 1 and 8 are subject to the
effect of (i) applicable bankruptcy, insolvency, reorganization, fraudulent
transfer or conveyance, moratorium, conservatorship and similar laws
affecting creditor's rights and remedies generally, (ii) general principles
of equity (whether considered in a proceeding in equity or at law), (iii)
principles of materiality and reasonableness and implied covenants of good
faith and fair dealing and (iv) the rights of the United States under the
Federal Tax Lien Act of 1966, as amended. Additionally, the validity and
enforceability of certain of the remedial and waiver provisions of the
Collateral Documents may be limited by applicable laws and judicial
interpretations, but, in our opinion and subject to the other
qualifications and limitations set forth herein and the economic
consequences of any delay in the enforcement of the remedies provided for
in the Loan Documents, those limitations should not substantially interfere
with (i) the judicial enforcement of the obligation of the Company to repay
the Loans and LC Disbursements and the interest accrued thereon (to the
extent not deemed a penalty), as provided in the Credit Agreement, subject
to Sections 51.003, 51.004 and 51.005 of the Texas Property Code, (ii) the
acceleration of the obligation of the Company to repay the Loans and LC
Disbursements, together with such interest, upon an Event of Default
arising from the
5
failure to pay such obligations when due or upon the failure to perform any
other material provision of the Loan Documents to be performed by it or any
other Loan Party and (iii) the judicial foreclosure or, if the Collateral
Agent elects to exercise the power or right of sale as specified in the
Collateral Documents, the non-judicial foreclosure of the Liens created by
the Collateral Documents, and the sale of the personal property Collateral,
at maturity or upon an acceleration described in clause (ii) immediately
above in accordance with applicable law and the Loan Documents. Further to
the foregoing, the provisions of the Loan Documents regarding the rights
and remedies available to the Secured Parties after the occurrence of a
Default or Event of Default are subject to procedural requirements that are
not necessarily reflected in the Loan Documents which may affect or
restrict the rights and remedies so stated to be available thereunder. We
express no opinion as to whether a court would grant specific performance
or any other equitable remedy or any particular remedy or the
enforceability of any self-help remedy
C. With respect to our opinion in paragraph 3, we assume that the
Company owns no assets and conduct no business other than as described in
the Company's Annual Report on Form 10-K for fiscal year 2000.
D. We call to your attention that Section 552 of the United States
Bankruptcy Code limits the extent to which proceeds realized and property
acquired by a debtor after the commencement of a case thereunder may be
subject to a security interest arising from a security agreement entered
into by the debtor before the commencement of that case.
E. No opinion is expressed above as to the enforceability of Section
9.02 or 9.04 of the Credit Agreement or provisions of similar import
contained in any other Loan Document or any provision of the Loan Documents
that purports to (i) waive rights of any party that cannot be waived as a
matter of applicable law, (ii) entitle a party to indemnification or
absolution from liability in respect of any matters arising under any
securities laws or in whole or in part by reason of any illegal, wrongful
or grossly negligent act or omission of that party, (iii) prohibit any
unwritten waivers of or amendments to any provisions of the Loan Documents,
(iv) establish any evidentiary standard, (v) restrict access to legal or
equitable remedies or (vi) grant remedies exercisable when no Default or
Event of Default exists.
F. We express no opinion as to (i) the enforceability of provisions
relating to delay or omission of enforcement of rights or remedies,
marshaling of assets, rights of third parties or prohibitions against
transfer, alienation or hypothecation of property, (ii) the enforceability
of a present assignment of assets or rental income from the Mortgaged
Property without first requiring the Collateral Agent to obtain lawful
possession of the Mortgaged Property after the occurrence of an Event of
Default under the Loan Documents, (iii) any right to exclude the Company
from possession of the Mortgaged Property prior to the time lawful
possession is obtained through foreclosure proceedings or other lawful
means, (iv) the enforceability of provisions appointing a Person as
attorney-in-fact for another Person, (v) whether a court would construe a
yield
6
maintenance payment due as a penalty which is not enforceable or
collectible, (vi) the enforceability of provisions which leave any
provision to subsequent agreement or (vii) the enforceability of any
provisions that provide for certain acts or matters to be null and void
automatically or ab initio.
G. No opinion is expressed above as to (i) the effect of any state
or federal securities laws or regulations insofar as they are applicable to
or otherwise affect any party to any Loan Document, the transactions
contemplated by the Loan Documents or the exercise of any rights or
remedies of any party to the Loan Documents or (ii) various state and
federal laws and regulations applicable to banks, insurance companies or
other financial institutions or the business or lending transactions of the
Administrative Agent, the Agents or the Lenders or any assignee or
participant of any such Person which may relate to the Loan Documents or
the transactions contemplated thereby.
H. We express no opinion as to the priority of any Liens created by
the Collateral Documents. We have assumed, with your approval and without
independent verification, that (i) the Delaware Financing Statement and
Texas Financing Statements set forth the correct name and address of the
Collateral Agent and (ii) the Company has rights in the Collateral. We
express no opinion as to (i) the value of, the accuracy or completeness of
any description of, or the location or characterization of, any personal
property Collateral or the value of, the location or characterization of,
or the accuracy, completeness or sufficiency of any description of, the
Real Property, including for purposes of notice or conveyance, (ii) the
physical condition or actual use made of any Collateral and (iii) whether
any Collateral is in compliance with any laws or regulations relating to
the construction, occupancy or use thereof, including zoning laws, building
codes and environmental laws.
I. We express no opinion with respect to any Collateral which is or
may become fixtures (except as paragraph 6 sets forth), equipment used in
farming operations, farm products, accounts or general intangibles arising
from or relating to the sale of farm products by a farmer, consumer goods,
crops growing or to be grown, timber to be cut, minerals or the like
(including oil and gas) or accounts resulting from the sale of minerals at
the wellhead or minehead.
J. We call to your attention that (i) assuming the Delaware Code is
identical to the New York Code as to such matter, the Delaware Code (and,
as to the Texas Financing Statements filed in Texas, the Texas Code)
requires the filing of UCC continuation statements, executed by the secured
party of record, within the period of six months prior to the expiration of
each period of five years from the respective dates of the original filings
of UCC financing statements in order to maintain the effectiveness of such
filings, (ii) changes in the name, identity or corporate structure of the
Company or the location (within the meaning of Section 9-307 of the New
York Code (and any comparable provisions of the Delaware Code), which, in
the case of limited partnerships, means the state under whose laws such
entities have been legally organized) of the
7
Company may cause the security interests of the Collateral Agent purported
to be created by the Collateral Documents to be unperfected unless new,
appropriate UCC financing statements are properly filed in the appropriate
jurisdictions.
This opinion is limited to the applicable laws of the State of New
York, the State of Texas (but only with respect to our opinions regarding the
Texas Mortgages, perfection set forth in paragraphs 5 and 6, taxes set forth in
paragraph 7, future extensions of credit set forth in paragraph 8 and choice of
law set forth in paragraph 9) and applicable federal law, each as in effect on
the date hereof, and no opinion is expressed herein as to the laws of any other
jurisdiction. We are not licensed to practice law in the State of Delaware and
no opinion is expressed herein on the laws of the State of Delaware. We
undertake no obligation or responsibility to update or supplement this opinion
in response to subsequent changes in law or future events affecting any of the
transactions contemplated by any Loan Document. This opinion is rendered solely
for your benefit in connection with the transactions contemplated by the Credit
Agreement to be consummated on this date. This opinion may not be used for any
other purpose or relied on by any other Person without, in each instance, our
prior written consent.
Very truly yours,
August 24, 2001
To: The Chase Manhattan Bank and
Bank of America, N.A., as
Administrative Agents,
and the Agents and the Lenders referred to below
Equistar Chemicals, L.P.
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 4.02(b)(ii) of
Amended and Restated Credit Agreement dated as of August 24, 2001 (the "Credit
Agreement") among Equistar Chemicals, L.P., as Borrower (the "Company"),
Citicorp USA, Inc. and Credit Suisse First Boston, as Co-Syndication Agents,
Bank of America, N.A., as Servicing Agent and Administrative Agent and The Chase
Manhattan Bank, as Collateral Agent and Administrative Agent, and the Lenders
party thereto. Capitalized terms used herein and not otherwise defined herein
have the meanings given to them in the Credit Agreement.
I am the General Counsel of the Company, and I, or individuals under
my direction, have examined the following (each a "Loan Document," and
collectively, the "Loan Documents"):
(i) the Credit Agreement;
(ii) the Security Agreement between the Company and the Collateral
Agent, dated as of the date hereof;
(iii) the Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Financing Statement from the Company to Steven
Nordaker, Trustee, for the benefit of the Collateral Agent, with
respect to the Channelview, Texas facility of the Company;
(iv) the Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Financing Statement from the Company to Steven
Nordaker, Trustee, for the benefit of the Collateral Agent, with
respect to the Corpus Christi, Texas facility of the Company;
and
(v) each Note executed and delivered on the date hereof.
-2-
In addition, I, or individuals under my direction, have examined the
originals, or copies certified or otherwise identified, of (i) the Company's
Certificate of Limited Partnership and Amended and Restated Limited Partnership
Agreement (as amended to date, the "Partnership Agreement") and (ii) the
corporate records of the Company, certificates of public officials and
representatives of the Company and other documents as the basis for my opinions
hereinafter set forth.
On the basis of the foregoing, and subject to the assumptions,
qualifications and limitations set forth below, I am of the opinion that:
1. The Company is a limited partnership duly formed under the
Revised Uniform Limited Partnership Act of the State of Delaware (the "Delaware
Limited Partnership Act") and is validly existing in good standing under the
laws of the State of Delaware. Except where the failure to do so, individually
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect, the Company is qualified, licensed or registered to do business
in, and is in good standing in, every jurisdiction where such qualification,
licensing and registration is required.
2. The Company has the requisite partnership power and authority
under the Partnership Agreement, the Delaware Limited Partnership Act and
applicable federal law to own, lease and operate its properties and to conduct
its business as presently conducted, and to execute and deliver the Loan
Documents and to perform its obligations thereunder. The execution, delivery and
performance by the Company of the Loan Documents have been duly authorized by
all necessary partnership proceedings of the Company.
3. The execution, delivery and performance by the Company of the
Loan Documents do not (a) contravene the Partnership Agreement, (b) constitute a
default under any agreement or instrument governing indebtedness of the Company
for borrowed money in a principal amount of $15,000,000 or more, (c) breach or
otherwise violate any other material agreement of the Company or any judgment,
order or decree of any governmental authority known to me that is binding on the
Company or any of its assets or (d) except for the Liens created by the Loan
Documents, result in the creation or imposition of any Lien on any material
properties or assets of the Company.
4. To my knowledge, there are no actions, suits or proceedings by or
before any court or arbitrator or any governmental body, agency or official that
are pending or threatened against or affecting the Company or the businesses,
assets or rights of the Company as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.
-3-
In rendering the foregoing opinions, I have, without independent
verification, relied on certificates of representatives of the Company and the
representations and warranties of the Company set forth in the Loan Documents
with respect to the accuracy of the factual matters contained therein and
assumed the genuineness of all signatures (other than those of the Company),
conformity to authentic, original documents of all documents submitted to me as
certified or photostatic copies and the authenticity of all documents submitted
to me as originals.
This opinion is limited to applicable federal law and the Delaware
Limited Partnership Act, each as in effect on the date hereof, and no opinion is
expressed herein as to the laws of any other jurisdiction. I undertake no
obligation or responsibility to update or supplement this opinion in response to
subsequent changes in law or future events affecting any of the transactions
contemplated by any Loan Document. This opinion is rendered solely for your
benefit in connection with the transactions contemplated by the Credit Agreement
to be consummated on this date. This opinion may not be used for any other
purpose or relied on by any other Person without, in each instance, my prior
written consent.
Very truly yours,
Gerald A. O'Brien
Vice President, General Counsel and
Secretary
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT
dated as of the August _____, 2001 but effective as of August 24, 2001
from
EQUISTAR CHEMICALS, LP,
a Delaware limited partnership,
the Grantor,
to
STEVEN NORDAKER,
the Trustee,
for the benefit of
THE CHASE MANHATTAN BANK,
as Collateral Agent,
the Beneficiary
Property: __________ Facility
County of ____________
State of Texas
--------------------------------------------------------------------------------
This Instrument Contains After-Acquired Property Provisions And Secures
Obligations Containing Provisions For Changes In Interest Rates. This Instrument
Also Secures Future Advances.
When Susan D. Kennedy, Esq.
recorded, return to: Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
TABLE OF CONTENTS
PREAMBLE 1
RECITALS 1
GRANTING CLAUSES 3
GRANTING CLAUSE I. Land 2
GRANTING CLAUSE II. Improvements 2
Personal Property and Equipment 3
GRANTING CLAUSE III. Appurtenant Rights 3
GRANTING CLAUSE IV. Agreements 4
GRANTING CLAUSE V. Leases 4
GRANTING CLAUSE VI. Rents, Issues and Profits 4
GRANTING CLAUSE VII. Permits 5
GRANTING CLAUSE VIII. Deposits 5
GRANTING CLAUSE IX. Proceeds and Awards 5
GRANTING CLAUSE X. Further Property 6
EXHIBIT A Description of the Land
EXHIBIT B Permitted Encumbrances
i
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FINANCING STATEMENT (this "Deed of Trust") dated as of August __, 2001 but
effective as of August 24, 2001 from EQUISTAR CHEMICALS, LP, a Delaware limited
partnership, having an address at One Houston Center, 1221 McKinney Street,
Harris County, Houston, Texas 77010 (the "Grantor"), to Steven Nordaker, an
officer of the Beneficiary, as trustee (the "Trustee") for the benefit of THE
CHASE MANHATTAN BANK, not in its individual capacity but in its limited capacity
as Collateral Agent, having an address at 712 Main Street, 7th Floor, Houston,
Texas 77002 (the "Beneficiary").
WITNESSETH:/1/
RECITALS
WHEREAS:
A. The Grantor is the owner of the Land described in Exhibit A and the
Improvements located thereon.
B. Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of August 24, 2001 (as further amended and in effect from
time to time, the "Credit Agreement") among the Grantor, the Lenders Party
Thereto (the "Lenders"), Citicorp USA, Inc. and Credit Suisse First Boston, as
co-syndication agents, Bank of America, N.A., as Servicing Agent and
Administrative Agent, and the Beneficiary, as Collateral Agent and
Administrative Agent. Pursuant to the Credit Agreement, the Lenders have
extended, or may from time to time extend, Loans, the Swingline Lender has
extended, or may from time to time extend, Swingline Loans and the Fronting Bank
has issued, or from time to time will issue, Letters of Credit, and the Borrower
has or may hereafter execute and deliver certain notes (herein collectively
called the "Notes") evidencing the Borrower's obligations to repay the Loans and
the Swingline Loans, and have agreed in Section 2.07 of the Credit Agreement to
pay the Reimbursement Obligations.
Granting Clauses
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, for the purpose of securing the due and punctual payment,
performance and observance of, subject to Section 7.10, the Secured Obligations,
and intending to be bound hereby, the Grantor (a) does hereby GRANT, BARGAIN,
SELL, CONVEY, ASSIGN, TRANSFER and WARRANT to the Trustee for the benefit of the
Secured Parties, with power of sale and right of entry as hereinafter provided,
all of the property and rights described in the following Granting Clauses (all
of which property and rights are collectively called the "Trust Property"), to
the extent not covered by the Uniform
_______________
/1/ Capitalized terms are defined in, or are referenced in, Section 1.01.
1
Commercial Code (hereinafter sometimes called the "Trust Property"), and (b)
does hereby GRANT and WARRANT to the Beneficiary and its successors as Agent for
the benefit of the Secured Parties, a continuing first security interest in and
to the Trust Property to the extent covered by the Uniform Commercial Code
(hereinafter sometimes called the "Collateral"), to wit:
Granting Clause I.
Land. All estate, right, title and interest of the Grantor in, to, under or
derived from those certain lots, pieces, tracts or parcels of land located in
the County of Harris, State of Texas, more particularly described in Exhibit A
(the "Land").
Granting Clause II.
Improvements. All estate, right, title and interest of the Grantor in, to,
under or derived from all buildings, structures and other improvements of every
kind and description now or hereafter located on the Land, including all parking
areas, roads, driveways, walks, fences, walls, berms, recreation facilities,
drainage facilities, lighting facilities and other site improvements, all water,
sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other
utility equipment and facilities, all plumbing, lighting, heating, ventilating,
air-conditioning, refrigerating, incinerating, compacting, fire protection and
sprinkler, surveillance and security, vacuum cleaning, public address and
communications equipment and systems, all kitchen and laundry appliances, all
walls, partitions, floor coverings, screens, awnings, elevators, escalators,
motors, machinery, pipes, fittings and other items of equipment and personal
property of every kind and description now or hereafter located on the Land or
attached to the improvements which by the nature of their location thereon or
attachment thereto are real property or fixtures under Applicable Laws; and
including all materials intended for the construction, reconstruction, repair,
replacement, alteration, addition or improvement of or to such buildings,
equipment, fixtures, structures and improvements, all of which materials shall
be deemed to be part of the Trust Property immediately upon delivery thereof on
the Land and to be part of the improvements immediately upon their incorporation
therein (the foregoing being collectively the "Improvements").
Personal Property and Equipment. All estate, right, title and interest of
the Grantor in, to, under or derived from all articles of personal property and
equipment of every kind and description now or hereafter located on or used in
connection with the use or operation of the Property (as defined below) which
are not real property under Applicable Laws; including all partitions, screens,
awnings, shades, blinds, curtains, draperies, carpets, rugs, all chattels,
furnishings, furniture, pictures, paintings, statues, works of art, decorations,
accessories, apparatus, materials, supplies, implements, tools, china,
glassware, silverware, pots, pans, utensils, linens, stoves, refrigerators,
freezers and other devices, appliances and equipment; and including all types of
property included within the term "equipment" as defined in the Uniform
Commercial Code (except vehicles, boats, barges, vessels, rail cars and related
equipment, airplanes and equipment leased by the Grantor from a person which is
not a subsidiary) now or hereafter located on the Property and now or hereafter
used or useful in connection with the use or operation of the Property, all of
which shall be deemed to be part of the Trust Property immediately upon the
location thereof on the Land (the foregoing being collectively the
2
"Equipment"; the Land, the Improvements, the Equipment and the Appurtenant
Rights (as defined below) being collectively the "Property"). If this Deed of
Trust is subject to a security interest covering any Equipment described in this
Granting Clause II, then all of the right, title and interest of the Grantor in
and to any and all such Equipment is hereby assigned to the Beneficiary,
together with the benefits of all deposits and payments now or hereafter made
thereon by or on behalf of the Grantor.
Granting Clause III.
Appurtenant Rights. All estate, right, title and interest of the Grantor,
to the extent such can be assigned or have security interests granted therein
without requiring the consent of third parties or violating any agreement or
contract creating such right, title or interest, in, to, under or derived from:
all tenements, hereditaments and appurtenances now or hereafter relating to the
Property; the streets, roads, sidewalks and alleys abutting the Land; all strips
and gores within or adjoining the Land; all land in the bed of any body of water
adjacent to the Land; all land adjoining the Land created by artificial means or
by accretion; all air space and rights to use said air space above the Land; all
development or similar rights appurtenant to the Land; all rights of ingress and
egress now or hereafter appertaining to the Property; all easements and rights
of way now or hereafter appertaining to the Property; and all royalties and
other rights appertaining to the use and enjoyment of the Property, including
alley, party walls, drainage, crop, timber, agriculture, horticulture, oil, gas
and other mineral, riparian and other water rights (the foregoing being
collectively the "Appurtenant Rights").
Granting Clause IV.
Agreements. All estate, right, title and interest of the Grantor in, to,
under and derived from all insurance policies (including all unearned premiums
and dividends thereunder), title insurance policies, guarantees and warranties
relating to the Property and all supply and service contracts for water,
sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other
utilities relating to the Property and all other contracts and agreements
affecting or relating to the use, enjoyment or occupancy of the Property, all to
the extent such can be assigned or have security interests granted therein
without requiring consent of third parties or violating such agreements or
contracts (the foregoing being collectively the "Agreements").
Granting Clause V.
Leases. All estate, right, title and interest of the Grantor as landlord
in, to, under and derived from all Leases now or hereafter in effect, whether or
not of record, for the use or occupancy of all or any part of the Property,
together with all amendments, supplements, consolidations, replacements,
extensions, renewals and other modifications of any thereof; and together with
all guarantees of any of the obligations of the tenants under any of the Leases;
and together with all Security Deposits given by any tenants under any of the
Leases.
Granting Clause VI.
Rents, Issues and Profits. All estate, right, title and interest of the
Grantor in, to, under or derived from all rents, royalties, issues, profits,
receipts, revenue, income and other benefits now or hereafter, including during
any period of redemption, accruing with respect to the Property; all
3
rents and other sums now or hereafter, including during any period of
redemption, payable pursuant to the Leases; all other sums now or hereafter,
including during any period of redemption, payable with respect to the use,
occupancy, operation or control of the Property; and all other claims, rights
and remedies now or hereafter, including during any period of redemption,
belonging to or accruing with respect to the Property, including fixed,
additional and percentage rents, occupancy charges, security deposits, parking,
maintenance, common area, tax, insurance, utility and service charges and
contributions (whether collected under the Leases or otherwise), proceeds of
sale of electricity, gas, heating, air conditioning and other utilities and
services (whether collected under the Leases or otherwise), oil, gas and mineral
royalties and deficiency rents and liquidated damages following default or
cancellation (the foregoing rents and other sums described in this Granting
Clause being collectively the "Rents"), all of which the Grantor hereby
irrevocably directs be paid to the Beneficiary, subject to Section 5.07(b), to
be held, applied and disbursed as provided in this Deed of Trust.
Granting Clause VII.
Permits. To the extent permitted by Applicable Laws and to the extent such
can be assigned or have security interests granted therein without requiring the
consent of third parties (including any governmental authorities) or violating
any such Permit, (as defined below), all estate, right, title and interest of
the Grantor in, to, under or derived from all licenses, authorizations,
certificates, variances, concessions, grants, franchises, consents, approvals
and other permits now or hereafter appertaining to the Property (the foregoing
being collectively the "Permits").
Granting Clause VIII.
Deposits. All estate, right, title and interest of the Grantor in, to,
under or derived from all amounts deposited with the Beneficiary hereunder,
including all insurance proceeds and awards, and including all notes,
certificates of deposit, securities and other investments relating thereto and
all interest, dividends and other income thereon, proceeds thereof and rights
relating thereto (the foregoing being collectively the "Deposits").
Granting Clause IX.
Proceeds and Awards. All estate, right, title and interest of the Grantor
in, to, under or derived from all proceeds of any sale, transfer, financing,
refinancing or conversion into cash or liquidated claims, whether voluntary or
involuntary, of any of the Trust Property, including all insurance proceeds, all
awards, all title insurance proceeds under any title insurance policy now or
hereafter held by the Grantor, and all rights, dividends and other claims of any
kind whatsoever (including damage, secured, unsecured, priority and bankruptcy
claims) now or hereafter relating to any of the Trust Property, all of which the
Grantor hereby irrevocably directs be paid to the Beneficiary to the extent a
Prepayment Event occurs in accordance with the terms of the Credit Agreement.
Granting Clause X.
Further Property. All greater estate, right, title and interest of the
Grantor in, to, under or derived from the Trust Property hereafter acquired by
the Grantor, and all right, title and interest
4
of the Grantor in, to, under or derived from all extensions, improvements,
betterments, renewals, substitutions and replacements of, and additions and
appurtenances to, any of the Trust Property hereafter acquired by or released to
the Grantor or constructed or located on, or attached to, the Property, in each
case, immediately upon such acquisition, release, construction, location or
attachment, without any further conveyance, Deed of Trust, assignment or other
act by the Grantor; and all estate, right, title and interest of the Grantor in,
to, under or derived from any other property and rights which are, by the
provisions of the Loan Documents, required to be subjected to the Lien hereof;
and all right, title and interest of the Grantor in, to, under or derived from
all other property and rights which are by any instrument or otherwise subjected
to the Lien hereof by the Grantor or by anyone acting on its behalf.
TO HAVE AND TO HOLD the Trust Property, together with all estate, right,
title and interest of the Grantor and anyone claiming by, through or under the
Grantor in, to, under or derived from the Trust Property and all rights and
appurtenances relating thereto, to the Trustee and the Trustee's successors and
assigns for the benefit of the Secured Parties forever.
THE GRANTOR ADDITIONALLY COVENANTS AND AGREES WITH THE TRUSTEE AND THE
BENEFICIARY AS FOLLOWS:
ARTICLE 1
Definitions and Interpretation
Section 1.01. Definitions. (a) Capitalized terms used in this Deed of
Trust, but not otherwise defined herein, are defined in, or are defined by
reference in, the Credit Agreement and have the same meanings herein as therein.
(b) In addition, in this Deed of Trust, unless otherwise specified, the
following terms have the following meanings:
"Acceleration Event" is defined in Section 5.01.
"Agreements" is defined in Granting Clause IV.
"Applicable Laws" means all applicable laws, codes, statutes, rules,
ordinances, regulations, certificates, orders, interpretations, licenses
and permits of any governmental authority, agency, board, commission or
court having jurisdiction.
"Appurtenant Rights" is defined in Granting Clause III.
"Awards" means at any time, all awards or payments paid or payable
with respect to any Condemnation or any agreement with any condemning
authority which has been made in settlement of any proceeding relating to a
Condemnation.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as amended.
"Beneficiary" is defined in the Preamble.
5
"Casualty" means any material damage to, or material destruction of,
the Property by reason of fire or any other cause or event.
"Collateral" is defined in the Granting Clauses.
"Condemnation" means any condemnation or other taking or temporary or
permanent requisition of the Property, any interest therein or right
appurtenant thereto, or any change of grade materially affecting the
Property as the result of the exercise of any right of condemnation or
eminent domain. A Transfer in lieu or anticipation of Condemnation shall be
deemed to be a Condemnation.
"Contingent Secured Obligation" means, at any time, any Secured
Obligation (or portion thereof) that is contingent in nature at such time,
including any Secured Obligation that is:
(i) an obligation to reimburse a bank for drawings not yet made
under a letter of credit issued by it;
(ii) an obligation under an Interest Rate Hedging Agreement to
make payments that cannot be quantified at such time;
(iii) any other obligation (including any guarantee) that is
contingent in nature at such time; or
(iv) an obligation to provide collateral to secure any of the
foregoing types of obligations.
"Credit Agreement" is defined in the Recitals.
"Deed of Trust" is defined in the Preamble.
"Deposits" is defined in Granting Clause VIII.
"Equipment" is defined in Granting Clause II.
"Grantor" is defined in the Preamble.
"Improvements" is defined in Granting Clause II.
"Insurance Proceeds" means, at any time, all insurance proceeds or
payments to which the Grantor may be or become entitled by reason of any
Casualty under the insurance policies maintained by the Grantor pursuant to
the Credit Agreement, plus all insurance proceeds and payments to which the
Grantor may be or become entitled by reason of any Casualty under any other
insurance policies or coverages maintained by the Grantor with respect to
the Property.
"Interest Rate Hedging Agreement" shall mean any interest rate
protection agreement or other interest rate price hedging arrangement
entered into by the Grantor
6
with a Lender or an Affiliate of a Lender to mitigate the risk that
interest rates payable under the Credit Agreement will fluctuate; provided
that if a Principal Financial Officer of the Borrower certifies in a
certificate delivered pursuant to Section 17 of the Security Agreement that
any such agreement or arrangement has been entered into for the purpose
specified above, then such agreement or arrangement shall be deemed
conclusively to be an Interest Rate Hedging Agreement.
"Land" is defined in Granting Clause I.
"Lease" means any lease, tenancy, subtenancy, license, franchise,
concession or other occupancy agreement relating to the Property, together
with any guarantee of the obligations of the landlord or the tenant
thereunder, or any occupancy or right to possession under Section 365 of
the Bankruptcy Code in the event of the rejection of any Lease by the
landlord or its trustee pursuant to said Section; "landlord" means the
landlord, sublandlord, lessor, sublessor, franchisor or other grantor of a
right of occupancy under a Lease and any guarantor of its obligations
thereunder; and "tenant" means the tenant, subtenant, lessee, sublessee,
licensee, franchisee, concessionaire or other occupant under a Lease and
any guarantor of its obligations thereunder.
"Loss" means a Casualty or Condemnation.
"Permits" is defined in Granting Clause VII.
"Permitted Encumbrances" means the Liens and other matters described
in Exhibit B.
"Permitted Liens" means the Liens and other matters permitted to exist
pursuant to Section 6.01 of the Credit Agreement.
"Proceeds" is defined in the Security Agreement.
"Property" is defined in Granting Clause II.
"Receiver" is defined in Section 5.02(a)(iii).
"Rents" is defined in Granting Clause VI.
"Restoration" means the restoration, repair, replacement or rebuilding
of the Property after a Casualty or Condemnation and "Restore" means to
restore, repair, replace or rebuild the Property after a Casualty or
Condemnation, in each case as nearly as possible to its value and condition
immediately prior to such Casualty or Condemnation.
"Secured Obligations" means (a) all principal of and premium and
interest (including, without limitation, any pay-in-kind interest and any
interest ("Post-Petition Interest") which accrues after the commencement of
any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of the Grantor (or would accrue but for the operation of
applicable bankruptcy or insolvency laws), whether or not
7
allowed or allowable as a claim in any such proceeding) on any Loan or any
LC Reimbursement Obligations or any Deferred Amounts under, or any Note
issued pursuant to, the Credit Agreement, (b) all other amounts payable by
the Grantor hereunder or under any other Loan Document (as the same may
hereafter be amended, restated, supplemented or otherwise modified from
time to time) (including any Post-Petition Interest with respect to such
amounts), (c) any renewals, refinancings or extensions of any of the
foregoing (including Post-Petition Interest) and (d) all obligations (if
any) designated by the Grantor as additional Secured Obligations pursuant
to Section 17 of the Security Agreement.
"Secured Parties" means the Lenders, the Fronting Bank and the Agents.
"Security Agreement" means the Security Agreement dated as of August
24, 2001 between the Grantor and the Beneficiary, as Collateral Agent.
"Security Deposit" means any payment, note, or other security or
deposit made or given by or on behalf of a tenant under any Lease as
security for the performance of its obligations thereunder.
"Security Interests" means the liens on and security interests in the
Trust Property and Collateral granted hereunder securing the Secured
Obligations.
"Transfer" means, when used as a noun, any sale, conveyance,
assignment, delegation of management or other transfer and, when used as a
verb, to sell, convey, assign, delegate the management of or otherwise
transfer, in each case (i) whether voluntary or involuntary, (ii) whether
direct or indirect and (iii) including any agreement providing for a
Transfer or granting any right or option providing for a Transfer.
"Trust Property" is defined in the Granting Clauses.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of Texas; provided that if by reason
of mandatory provisions of law, the perfection or the effect of perfection
or non-perfection or the priority of any Security Interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than Texas, "Uniform Commercial Code" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.
Section 1.02. Interpretation. In this Deed of Trust, unless otherwise
specified, (i) singular words include the plural and plural words include the
singular; (ii) words which include a number of constituent parts, things or
elements, including the terms Improvement, Equipment, Land, Property, Secured
Obligations and Trust Property, shall be construed as referring separately to
each constituent part, thing or element thereof, as well as to all of such
constituent parts, things or elements as a whole; (iii) words importing any
gender include the other gender; (iv) references to any Person include such
Person's successors and assigns and in the case of an individual, the word
"successors" includes such Person's heirs, devisees, legatees, executors,
administrators and personal representatives; (v) references to any statute or
other law include all
8
applicable rules, regulations and orders adopted or made thereunder and all
statutes or other laws amending, consolidating or replacing the statute or law
referred to; (vi) the words "consent", "approve" and "agree", and derivations
thereof or words of similar import, mean the prior written consent, approval or
agreement of the Person in question; (vii) the words "include" and "including",
and words of similar import, shall be deemed to be followed by the words
"without limitation"; (viii) the words "hereto", "herein", "hereof" and
"hereunder", and words of similar import, refer to this Deed of Trust in its
entirety; (ix) references to Articles, Sections, Schedules, Exhibits,
subsections, paragraphs and clauses are, unless otherwise specified, to the
Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses of
this Deed of Trust; (x) the Schedules and Exhibits to this Deed of Trust are
incorporated herein by reference; (xi) the titles and headings of Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses are inserted
as a matter of convenience and shall not affect the construction of this Deed of
Trust; (xii) all obligations of the Grantor hereunder shall be satisfied by the
Grantor or other third party at the Grantor's sole cost and expense; (xiii) all
rights and powers granted to the Beneficiary hereunder shall be deemed to be
coupled with an interest and be irrevocable; and (xiv) references to this Deed
of Trust, the Credit Agreement, Security Agreement, Notes, Collateral Documents
and Loan Documents include all amendments, supplements, consolidations,
replacements, restatements, extensions, renewals and other modifications
thereof, in whole or in part.
ARTICLE 2
Representations, Warranties and Covenants
Section 2.01. Title to Trust Property. (a) The Grantor represents and
warrants that (i) the Grantor is the owner of good and indefeasible title to the
fee simple interest in the Land and Improvements, free and clear of all Liens
other than the Permitted Encumbrances; (ii) the Grantor is the owner of or has a
valid leasehold interest in the Equipment and all other items constituting the
Trust Property, in each case free and clear of all Liens other than the
Permitted Liens and Permitted Encumbrances; (iii) the Permitted Encumbrances do
not result in a Material Adverse Effect; (iv) the current use of the Property
complies in all material respects with all Applicable Laws except for those
failures to comply that could not reasonably be expected to have a Material
Adverse Effect; (v) this Deed of Trust constitutes a valid and binding first
Lien on the Trust Property, subject only to the Permitted Encumbrances and the
Permitted Liens, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity (which principles may include implied duties of
good faith and fair dealing); and (vi) to the knowledge of Grantor after
reasonable diligence, the Grantor has good and lawful right to grant this deed
of trust on the Trust Property to the Beneficiary without the consent of any
Person other than those Persons whose consents have been obtained except to the
extent the failure thereof would not have a Material Adverse Effect.
(b) Upon request by the Beneficiary, the Grantor shall (i) promptly
correct any defect or error which may be discovered in this Deed of Trust or any
financing statement or other document relating hereto; and (ii) promptly
execute, acknowledge, deliver, record and re-record, register and re-register,
and file and re-file this Deed of Trust and any financing statements or other
documents which the Beneficiary may require from time to time (all in form and
substance reasonably satisfactory to the Beneficiary) which may be necessary in
the reasonable judgment
9
of the Beneficiary (A) to effectuate, complete, perfect, continue or preserve
the Lien of this Deed of Trust as a first Lien on the Trust Property, whether
now owned or hereafter acquired, subject only to the Permitted Encumbrances and
the Permitted Liens, or (B) to effectuate, complete, perfect, continue or
preserve any right, power or privilege granted or mutually intended to be
granted to the Beneficiary hereunder.
(c) Nothing herein shall be construed to subordinate the Lien of this Deed
of Trust to any Lien to which the Lien of this Deed of Trust is not otherwise
subordinate; however, to the extent Grantor grants or permits a Permitted Lien
on the Property of the type described in clauses (e)(i) and (f) of Section 6.01
of the Credit Agreement and the imposition of such Lien would not otherwise
create a Default under the Credit Agreement or result in a Material Adverse
Effect, the Beneficiary recognizes that such Lien is a Lien on the Property and
in the event of a foreclosure or conveyance in lieu of foreclosure pursuant to
this Deed of Trust, such Lien will remain a Lien against the Property and
continue in full force and effect as a binding obligation on the Property. The
foregoing provisions shall be self-operative and automatic, running with the
Property and binding on the Beneficiary and its successors and assigns, without
the execution or joinder by the Beneficiary in any further instruments. However,
upon request, from time to time, the Beneficiary shall promptly join in or
execute an instrument in favor of such third party or parties to evidence its
recognition that any such Lien will remain and continue in full force and effect
as a binding obligation on the Property in the event of a foreclosure or
conveyance in lieu of foreclosure.
Section 2.02. Liens. (a) The Grantor shall not create or permit to be
created or to remain, and shall immediately discharge or cause to be discharged,
any Lien on the Trust Property or any interest therein, except Permitted Liens
and Permitted Encumbrances, in each case (i) whether voluntarily or
involuntarily created, (ii) whether directly or indirectly a Lien thereon, and
(iii) whether or not subordinate hereto.
(b) The provisions of this Section 2.02 shall apply to each and every Lien
on the Trust Property or any interest therein, regardless of whether or not the
Beneficiary has previously consented to or waived its right to consent to any
other Lien thereon.
ARTICLE 3
Insurance, Casualty and Condemnation
Section 3.01. Insurance. The Grantor shall maintain in full force and
effect insurance policies with respect to the Property as required by Section
5.03(b) of the Credit Agreement. If an Event of Default occurs with respect to
the Grantor's obligations under Section 5.03(b) of the Credit Agreement and the
Beneficiary pays or performs such obligation, the Grantor shall forthwith on
demand pay to the Beneficiary the reasonable amount of any insurance premiums
which the Beneficiary may have been required to pay with respect to the minimum
level and types of coverages that the Grantor was required to obtain under
Section 5.03 of the Credit Agreement. The Grantor shall cause the Beneficiary to
be named as an additional insured on each insurance policy required to be
maintained pursuant to the Credit Agreement. The Grantor will deliver to the
Lenders on the Effective Date, a certificate from the Grantor's insurance broker
dated such date showing the amount of coverage as of such date, and certifying
that such policies will include effective waivers (whether under the terms of
any such policy or otherwise)
10
by the insurer of all claims for insurance premiums against all additional
insureds and all rights of subrogation against all additional insureds, and that
the insurer will endeavor to mail 30 days (10 days for nonpayment of premium)
prior written notice to Beneficiary if all or any part of such policy is
canceled, or if there is a reduction in the amount or material change in
coverage.
Section 3.02. Casualty and Condemnation. Any Insurance Proceeds in respect
of a Casualty and any Awards in respect of a Condemnation affecting the Property
shall be used or applied as set forth in Section 2.09 the Credit Agreement.
ARTICLE 4
Expenses and Indemnification
Section 4.01. Expenses and Indemnification. The Grantor agrees that it
will comply with the provisions of Section 9.05 of the Credit Agreement. In
addition, the Grantor agrees that its obligation to pay expenses pursuant to
Section 9.05(a)(iii) of the Credit Agreement includes expenses incurred in
connection with the exercise or enforcement of any right or remedy under this
Deed of Trust.
Section 4.02. Increased Costs. In the event of the enactment after the
date hereof of any Applicable Law deducting from the value of the Property for
the purpose of taxation any Lien thereon or changing in any way the Applicable
Law for the taxation of mortgages, deeds of trust or other Liens or obligations
secured thereby, or the manner of collection of such taxes, so as to materially
and adversely affect this Deed of Trust or the Secured Obligations, the
Beneficiary or any other Secured Party, upon demand by the Beneficiary, to the
extent permitted under Applicable Law, the Grantor shall pay or reimburse such
Secured Party, to the extent required to be paid by, and in accordance with,
Section 8.04 of the Credit Agreement, for all taxes, assessments or other
charges which such Secured Party is obligated to pay as a result thereof.
ARTICLE 5
Defaults, Remedies and Rights
Section 5.01. Acceleration Event. An "Acceleration Event" exists if all or
a portion of the Loans shall have been accelerated pursuant to Section 7.01 of
the Credit Agreement and such acceleration shall not have been rescinded.
Section 5.02. Remedies. (a) If an Acceleration Event shall exist, the
Beneficiary and/or the Trustee (whomsoever is the appropriate party to exercise
such remedy under Applicable Laws) shall have the right and power immediately to
exercise any of the following remedies and rights on behalf of the Secured
Parties, subject to Applicable Laws, to wit:
(i) to institute a proceeding or proceedings or continue a proceeding
or proceedings begun, by advertisement, judicial process or otherwise as
provided under Applicable Law, for collection of the Secured Obligations
and the complete or partial foreclosure of this Deed of Trust, or the
complete or partial sale of the Trust Property under the power of sale
hereunder or under any Applicable Law, and the Grantor agrees to pay all
unpaid Secured Obligations directly to the Beneficiary as Agent; or
11
(ii) to sell the Trust Property and all estate, right, title,
interest, claim and demand of the Grantor therein, and all rights of
redemption thereof, at one or more sales, as an entirety or in parcels,
with such elements of real or personal property, at such time and place and
upon such terms as the Trustee may deem expedient or as may be required
under Applicable Law, and in the event of a sale hereunder or under any
applicable provision of law of less than all of the Trust Property, this
Deed of Trust shall continue as a Lien on the remaining Trust Property; or
(iii) to apply for the appointment of a receiver, trustee,
liquidator, conservator or other custodian (a "Receiver") of the Trust
Property, to be appointed as a matter of right and without regard to, or
the necessity to disprove, the adequacy of the security for the Secured
Obligations or the solvency of either Grantor or any other Person, and the
Grantor hereby irrevocably waives such necessity and consents to such
appointment, and to be vested with the fullest powers permitted under
Applicable Law, subject to any limitations contained in the Credit
Agreement; or
(iv) by the Person exercising the rights under this clause, to enter
upon the Property, and exclude the Grantor and its managers, employees,
contractors, agents and other representatives therefrom, without liability
for trespass, damages or otherwise, and take possession of all other Trust
Property, and all books, records and accounts relating thereto, and the
Grantor shall surrender possession of the Property, the other Trust
Property and such books, records and accounts to the Person exercising the
rights under this clause on demand if an Acceleration Event exists; and
having and holding the same, subject to the terms of the Credit Agreement,
the Person exercising the rights under this clause may use, operate,
manage, preserve, control and otherwise deal therewith and conduct the
business thereof, either personally or by its managers, employees,
contractors, agents or other representatives, without interference from the
Grantor or its managers, employees, contractors, agents and other
representatives; and, upon each such entry and from time to time
thereafter, at the expense of the Grantor and the Trust Property, without
interference by the Grantor or its managers, employees, contractors, agents
and other representatives, the Person exercising the rights under this
clause may, as such Person deems expedient, (A) insure or reinsure the
Property to the extent required to be insured under the Credit Agreement,
(B) make all necessary or proper repairs, renewals, replacements,
alterations, additions, betterments and improvements to the Property and
(C) in such Person's own name or, at the option of such Person, in the
Grantor's name, exercise all rights, powers and privileges of the Grantor
with respect to the Trust Property, including the right to enter into
Leases with respect to the Property, including Leases extending beyond the
time of possession by the Person exercising the rights under this clause;
and the Person exercising the rights under this clause shall not be liable
to account for any action taken hereunder, other than for Rents actually
received by such Person, and shall not be liable for any loss sustained by
the Grantor resulting from any failure to let the Property or from any
other act or omission of such Person, except to the extent such loss is
caused by such Person's own willful misconduct or gross negligence; or
(v) with or without the entry upon the Property, in the name of the
Beneficiary or a Receiver (whichever is the Person exercising the rights
under this clause) or, at such
12
Person's option, in the name of the Grantor, to collect, receive, sue for
and recover all Rents and proceeds of or derived from the Trust Property,
and after deducting therefrom all costs, expenses and liabilities of every
character incurred by the Person exercising the rights under this clause in
collecting the same and in using, operating, managing, preserving and
controlling the Trust Property and otherwise in exercising the rights under
Section 5.02(a)(iv) or any other rights hereunder, including all amounts
necessary to pay the taxes (including real estate taxes and sales and use
taxes), assessments, water, sewer or other rents, rates and charges,
excises, levies, license fees, permit fees, inspection fees and other
authorization fees and other charges, insurance premiums and the other
costs, expenses and liabilities relating to the Property, as well as
reasonable compensation for the services of such Person and its managers,
employees, contractors, agents or other representatives, to apply the
remainder as provided in Section 5.06; or
(vi) to take any action with respect to any Trust Property
permitted under the Uniform Commercial Code; or
(vii) to exercise any statutory power of sale; or
(viii) to take any other action, or to pursue any other remedy or
right, as the Trustee or the Beneficiary may have under Applicable Law, and
the Grantor does hereby grant the same to each of the Trustee and the
Beneficiary.
(ix) Subject to Applicable Laws, no remedy or right hereunder or
under any other Loan Document shall be exclusive of any other remedy or
right, but each remedy or right hereunder or under any other Loan Document
shall be in addition to, and not in limitation of, any other remedy or
right hereunder, under any other Loan Document or now or hereafter existing
at law or in equity under Applicable Law.
(x) Subject to Applicable Laws, every remedy or right hereunder,
under any other Loan Document or under Applicable Law may be exercised
concurrently or independently and whenever and as often as deemed
appropriate by the Trustee or the Beneficiary.
(b) To the fullest extent permitted by Applicable Laws, (i) No failure to
exercise or delay in exercising any remedy or right hereunder, under any other
Loan Document or under Applicable Law shall be construed as a waiver of any
Event of Default (as defined in the Credit Agreement) or any Acceleration Event.
(i) No waiver of, failure to exercise or delay in exercising, any
remedy or right hereunder, under any other Loan Document or under
Applicable Law upon any Acceleration Event shall be construed as a waiver
of, or otherwise limit the exercise of, such remedy or right upon any other
or subsequent Event of Default or Acceleration Event under any other Loan
Document.
(ii) No single or partial exercise of any remedy or right
hereunder, under any other Loan Document or under Applicable Law upon any
Acceleration Event shall preclude, or otherwise limit, the exercise of any
other remedy or right hereunder, under any other Loan Document or under
Applicable Law upon the Event of Default leading to
13
such Acceleration Event or upon any other or subsequent Event of Default or
Acceleration Event.
(iii) The acceptance by any Secured Party of any payment of an amount
less than the amount of the Secured Obligation in question shall be deemed
to be an acceptance on account only and shall not be construed as a waiver
of any Event of Default.
(iv) The acceptance by any Secured Party of any payment of, or on
account of, any Secured Obligation shall not be deemed to be a waiver of
any Event of Default or other occurrence hereunder or under any other Loan
Document with respect to any other Secured Obligation.
(c) In the event that the Trustee or the Beneficiary has proceeded to
enforce any remedy or right hereunder or with respect hereto by foreclosure,
sale, entry or otherwise, it may compromise, discontinue or abandon such
proceeding for any reason without notice to the Grantor or any other Person;
and, in the event that any such proceeding shall be discontinued or abandoned
for any reason, the Grantor, the Trustee and the Beneficiary shall retain and be
restored to their former positions and rights hereunder with respect to the
Trust Property, subject to the Lien hereof.
(d) To the fullest extent permitted by Applicable Laws, and while an
Acceleration Event exists, for the purpose of carrying out any provisions
hereunder authorizing the Trustee or the Beneficiary or any other Person to
perform any action on behalf of the Grantor, the Grantor hereby irrevocably
appoints each of the Trustee, the Beneficiary or a Receiver appointed pursuant
to Section 5.02(a)(iii) or such other Person (as the case may be as the Person
appointed under this subsection), as the attorney-in-fact of the Grantor (with a
power to substitute any other Person in its place as such attorney-in-fact) to
act in the name of the Grantor or, at the option of the Person appointed to act
under this subsection, in such Person's own name, to take the action authorized
under the provisions hereof, and to execute, acknowledge and deliver any
document in connection therewith or to take any other action incidental thereto,
as the Person appointed to act under this Section 5.02(e) shall deem appropriate
in its discretion; and the Grantor hereby irrevocably authorizes and directs any
other Person to act upon the foregoing appointment and a certificate of the
Person appointed to act under this Section 5.02(e) that such Person is
authorized to act under this Section 5.02(e), so long as an Acceleration Event
exists.
Section 5.03. Waivers by the Grantor. To the extent permitted under
Applicable Law, the Grantor shall not assert, and hereby irrevocably waives, any
right or defense the Grantor may have under any statute or rule of law or equity
now or hereafter in effect (other than Section 51.003, 51.004 and 51.005 of the
Texas Property Code, as amended from time to time) relating to (i) appraisement,
valuation, homestead exemption, extension, moratorium, stay, statute of
limitations, redemption, marshaling of the Trust Property or the other assets of
the Grantor, sale of the Trust Property in any order; (ii) impairment of any
right of subrogation or reimbursement; (iii) any requirement that at any time
any action must be taken against any other Person, any portion of the Trust
Property or any other asset of the Grantor or any other Person; (iv) any
provision barring or limiting the right of the Trustee or the Beneficiary to
sell any Trust Property after any other sale of any other Trust Property or any
other action against the Grantor
14
or any other Person; (v) any provision barring or limiting the recovery by the
Trustee or the Beneficiary or the other Secured Parties of a deficiency after
any sale of the Trust Property; (vi) any other provision of Applicable Law
(including any provision relating to decedents' estates) which might defeat,
limit or adversely affect any right or remedy of the Trustee or the Beneficiary
or any other Secured Party under or with respect to this Deed of Trust or the
other Loan Documents; or (vii) the right of the Trustee or the Beneficiary as
Agent to foreclose this Deed of Trust in its own name on behalf of all Secured
Parties by judicial action as the real party in interest without the necessity
of joining any other Secured Party.
Section 5.04. Jurisdiction and Process. (a) To the extent permitted under
Applicable Law, in any suit, action or proceeding arising out of or relating to
this Deed of Trust, the Grantor (i) irrevocably consents to the nonexclusive
jurisdiction of any State or Federal court sitting in the State in which such
Trust Property is located and irrevocably waives any defense or objection which
it may now or hereafter have to the jurisdiction of such court over, the venue
of such court for or the convenience of such court as the forum for any such
suit, action or proceeding; and (ii) irrevocably consents to the service of (A)
any process in any such suit, action or proceeding, or (B) any notice relating
to any sale, or the exercise of any other remedy by the Beneficiary hereunder by
sending a copy of such process or notice by prepaid overnight courier or United
States registered or certified mail, postage prepaid, return receipt requested
to the Grantor at its address specified in or pursuant to Section 7.03, such
service to be effective when received at the address specified or when delivery
at such address is refused.
(b) Nothing in this Section 5.04 shall affect the right of the Beneficiary
or any other Secured Party to bring any suit, action or proceeding arising out
of or relating to this Deed of Trust or any other Loan Document in any court
having jurisdiction under the provisions of any other Loan Document or
Applicable Law or to serve any process, notice of sale or other notice in any
manner permitted by any other Loan Document or Applicable Law.
Section 5.05. Sales. Except as otherwise provided herein, to the extent
permitted under Applicable Law, at the election of the Beneficiary, the
following provisions shall apply to any sale of the Trust Property hereunder,
whether made pursuant to the power of sale hereunder or under any Applicable
Law, any judicial proceeding or any judgment or decree of foreclosure or sale or
otherwise:
(a) The Beneficiary or the court officer (as the case may be as the
Person conducting any sale) may conduct any number of sales from time to
time. The power of sale hereunder or under any Applicable Law shall not be
exhausted by any sale as to any part or parcel of the Trust Property which
is not sold, unless and until the Secured Obligations shall have been paid
in full, and shall not be exhausted or impaired by any sale which is not
completed or is defective. Any sale may be as a whole or in part or parcels
and the Grantor hereby waives its right to direct the order in which the
Trust Property or any part or parcel thereof is sold.
(b) Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or for such postponed or
adjourned sale without further notice.
15
(c) After each sale, the Person conducting such sale shall execute
and deliver to the purchaser or purchasers at such sale a good and
sufficient instrument or instruments granting, conveying, assigning and
transferring but without warranty all right, title and interest of the
Grantor in and to the Trust Property sold and shall receive the proceeds of
such sale and apply the same as provided in Section 5.06. The Grantor
hereby irrevocably appoints the Person conducting such sale as the
attorney-in-fact of the Grantor (with full power to substitute any other
Person in its place as such attorney-in-fact), to act in the name of the
Grantor or, at the option of the Person conducting such sale, in such
Person's own name, to make without warranty by such Person any conveyance,
assignment, Transfer or delivery of the Trust Property sold, and to
execute, acknowledge and deliver any instrument of conveyance, assignment,
Transfer or delivery or other document in connection therewith or to take
any other action incidental thereto, as the Person conducting such sale
shall deem appropriate in its discretion; and the Grantor hereby
irrevocably authorizes and directs any other Person to act upon the
foregoing appointment and a certificate of the Person conducting such sale
that such Person is authorized to act hereunder. Nevertheless, upon the
request of such attorney-in-fact the Grantor shall promptly execute,
acknowledge and deliver any documentation which such attorney-in-fact may
require for the purpose of ratifying, confirming or effectuating the powers
granted hereby or any such conveyance, assignment, Transfer or delivery by
such attorney-in-fact.
(d) Any statement of fact or other recital made in any instrument
referred to in Section 5.05(c) given by the Person conducting any sale as
to the nonpayment of any Secured Obligation, the existence of any
Acceleration Event (or Event of Default leading thereto), the amount of the
Secured Obligations due and payable, the request to the Trustee to sell,
the notice of the time, place and terms of sale and of the Trust Property
to be sold having been duly given, or any other act or thing having been
duly done or not done by the Grantor, the Beneficiary, the Trustee or any
other Person, shall be taken as conclusive and binding against all other
Persons as evidence of the truth of the facts so stated or recited. The
Person conducting any sale may appoint or delegate any other Person as
agent to perform any act necessary or incident to such sale, including the
posting of notices and the conduct of such sale, but in the name and on
behalf of the Person conducting such sale.
(e) The receipt of the Person conducting any sale for the purchase
money paid at any such sale shall be sufficient discharge therefor to any
purchaser of any Trust Property sold, and no such purchaser, or its
representatives, grantees or assigns, after paying such purchase price and
receiving such receipt, shall be bound to see to the application of such
purchase price or any part thereof upon or for any trust or purpose of this
Deed of Trust or the Loan Documents or, in any manner whatsoever, be
answerable for any loss, misapplication or nonapplication of any such
purchase money or be bound to inquire as to the authorization, necessity,
expediency or regularity of such sale.
(f) Any sale shall operate to divest all of the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of the
Grantor in and to the Trust Property sold, and (to the extent permitted
under Applicable Law) shall be a perpetual bar
16
both at law and in equity against the Grantor and any and all Persons
claiming such Trust Property or any interest therein by, through or under
the Grantor.
(g) At any sale, the Beneficiary, the Trustee or any Secured Party
may bid for and acquire the Trust Property sold and, in lieu of paying cash
therefor, may make settlement for the purchase price by causing the Secured
Parties to credit against the Secured Obligations, including the expenses
of the sale and the cost of any enforcement proceeding hereunder, the
amount of the bid made therefor to the extent necessary to satisfy such
bid.
(h) In the event that the Grantor or any Person claiming by, through
or under the Grantor shall transfer or fail to surrender possession of the
Trust Property after the exercise of any of the remedies provided for
herein or any sale thereof, then the Grantor or such Person shall be deemed
a tenant at sufferance of the purchaser at such sale, subject to eviction
by means of forcible entry and unlawful detainer proceedings, or subject to
any other right or remedy available hereunder or under Applicable Law.
(i) Upon any sale, it shall not be necessary for the Person
conducting such sale to have any Trust Property being sold present or
constructively in its possession.
(j) To the extent permitted under Applicable Law, in the event that a
foreclosure hereunder shall be commenced by the Beneficiary, the
Beneficiary may at any time before the sale abandon the sale, and may
institute suit for the collection of the Secured Obligations or reinstitute
suit for the foreclosure of this Deed of Trust, or in the event that the
Beneficiary should institute suit for collection of the Secured Obligations
or the foreclosure of this Deed of Trust, the Beneficiary may at any time
before the entry of final judgment in said suit dismiss the same and sell
the Trust Property in accordance with the provisions of this Deed of Trust.
Section 5.06. Proceeds. (a) Except as otherwise provided herein, in the
Credit Agreement or the other Loan Documents or required under Applicable Law,
subject to Section 7.12, the proceeds of any sale of, or other realization upon,
the Trust Property hereunder, whether made pursuant to the power of sale
hereunder, any judicial proceeding or any judgment or decree of foreclosure or
sale or otherwise shall be applied and paid as follows:
(i) First: to the payment of all expenses of such sale or other
realization, including the cost of title searches and reasonable attorneys'
fees and expenses incurred by such Person and reasonable compensation to
agents contemplated by Section 14 of the Security Agreement and counsel for
the Beneficiary, and all expenses, liabilities and advances incurred or
made by the Beneficiary in connection therewith, and then ratably to pay
any other unreimbursed expenses for which any Secured Party is to be
reimbursed pursuant to Section 5.10 of this Deed of Trust or Section 9.05
of the Credit Agreement or Section 15 of the Security Agreement, any unpaid
fees owing to the Agents under the Credit Agreement;
17
(ii) Second: to pay ratably the unpaid principal of the Secured
Obligations (or provide for the payment thereof pursuant to Section
5.06(b)), until payment in full of the principal of all Secured Obligations
shall have been made (or so provided for);
(iii) Third: to pay ratably all unpaid interest accrued on the
Secured Obligations and all Facility Fees payable under the Credit
Agreement in accordance with the provisions of the Credit Agreement and
this Deed of Trust, until payment in full of all such interest shall have
been made;
(iv) Fourth: to pay ratably all other Secured Obligations (or
provide for the payment thereof pursuant to Section 5.06(b)), until payment
in full of all such other Secured Obligations shall have been made (or so
provided for); and
(v) Fifth: to pay to the Grantor or its successors or assigns, or
as a court of competent jurisdiction may direct, any surplus then remaining
from such proceeds.
The Beneficiary may make distributions hereunder in cash or in kind or, on
a ratable basis, in any combination thereof.
(b) If at any time any portion of any monies collected or received by the
Beneficiary would, but for the provisions of the this Section 5.06(b), be
payable pursuant to Section 5.06(a) in respect of a Contingent Secured
Obligation, the Beneficiary shall not apply any monies to pay such Contingent
Secured Obligation but instead shall request the holder thereof, at least 10
days before each proposed distribution hereunder, to notify the Beneficiary as
to the maximum amount of such Contingent Secured Obligation if then
ascertainable (e.g., in the case of a letter of credit, the maximum amount
available for subsequent drawings thereunder). If the holder of such Contingent
Secured Obligation does not notify the Beneficiary of the maximum ascertainable
amount thereof at least two Business Days before such distribution, such holder
will not be entitled to share in such distribution. If such holder does so
notify the Beneficiary as to the maximum ascertainable amount thereof, the
Beneficiary will allocate to such holder a portion of the monies to be
distributed in such distribution, calculated as if such Contingent Secured
Obligation were outstanding in such maximum ascertainable amount. However, the
Beneficiary will not apply such portion of such monies to pay such Contingent
Secured Obligation, but instead will hold such monies or invest such monies in
Liquid Investments. All such monies and Liquid Investments and all proceeds
thereof will constitute Collateral under the Security Agreement, but will be
subject to distribution in accordance with Section 12(b) of the Security
Agreement rather than Section 12(a) of the Security Agreement. The Beneficiary
will hold all such monies and Liquid Investments and the net proceeds thereof in
trust until all or part of such Contingent Secured Obligation becomes a Non-
Contingent Secured Obligation, whereupon the Beneficiary at the request of the
relevant Secured Party will apply the amount so held in trust to pay such Non-
Contingent Secured Obligation; provided that, if the other Secured Obligations
theretofore paid pursuant to the same clause of Section 12(a) of the Security
Agreement (i.e., clause second or fourth) were not paid in full, the Beneficiary
will apply the amount so held in trust to pay the same percentage of such Non-
Contingent Secured Obligation as the percentage of such other Secured
Obligations theretofore paid pursuant to the same clause of Section 12(a) of the
Security Agreement. If (x) the holder of such Contingent Secured Obligation
shall advise the Beneficiary that no portion thereof remains in the category of
a
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Contingent Secured Obligation and (y) the Beneficiary still holds any amount
held in trust pursuant to Section 12(b) of the Security Agreement in respect of
such Contingent Secured Obligation (after paying all amounts payable pursuant to
the preceding sentence with respect to any portions thereof that became Non-
Contingent Secured Obligations), such remaining amount will be applied by the
Beneficiary in the order of priorities set forth in Section 12(a) of the
Security Agreement.
(c) In making the payments and allocations required by this Section, the
Beneficiary may rely upon information supplied to it pursuant to Section 13(c)
of the Security Agreement. All distributions made by the Beneficiary pursuant to
this Section shall be final (except in the event of manifest error) and the
Beneficiary shall have no duty to inquire as to the application by any Secured
Party of any amount distributed to it.
Section 5.07. Assignment of Leases. (a) To the fullest extent permitted by
Applicable Laws, the assignments of the Leases and the Rents under Granting
Clauses V and VI are and shall be present, absolute and irrevocable assignments
by the Grantor to the Beneficiary and, subject to the license to the Grantor
under Section 5.07(b), the Beneficiary or a Receiver appointed pursuant to
Section 5.02(a)(iii) (or other Person exercising the rights under this Section
5.07) shall have the absolute, immediate and continuing right, subject to
provisions of Applicable Law, to collect and receive all Rents now or hereafter,
including during any period of redemption, accruing with respect to the
Property. At the request of the Beneficiary or such Receiver, the Grantor shall
promptly execute, acknowledge, deliver, record, register and file any additional
general assignment of the Leases or specific assignment of any Lease which the
Beneficiary or such Receiver may require from time to time (all in form and
substance satisfactory to the Beneficiary or such Receiver) to effectuate,
complete, perfect, continue or preserve the assignments of the Leases and the
Rents under Granting Clauses V and VI. Neither the acceptance hereof nor the
exercise of the rights and remedies hereunder nor any other action on the part
of the Beneficiary or any Person exercising the rights of the Beneficiary
hereunder shall be construed to be an assumption by the Beneficiary or any such
Person of, or to otherwise make the Beneficiary or such Person liable or
responsible for, any of the obligations of the Grantor under or with respect to
the Leases or for any Rent, Security Deposit or other amount delivered to the
Grantor, provided that the Beneficiary or any such Person exercising the rights
of the Beneficiary hereunder shall be accountable as provided in Section 5.07(c)
for any Rents, Security Deposits or other amounts actually received by the
Beneficiary or such Person, as the case may be. Neither the acceptance hereof
nor the exercise of the rights and remedies hereunder nor any other action on
the part of the Beneficiary or any Person exercising the rights of the
Beneficiary hereunder shall be construed to obligate the Beneficiary or any such
Person to take any action under or with respect to the Leases or with respect to
the Property, to incur any expense or perform or discharge any duty or
obligation under or with respect to the Leases or with respect to the Property,
to appear in or defend any action or proceeding relating to the Leases or the
Property, to constitute the Beneficiary as a "mortgagee" in possession (unless
the assignee hereunder actually enters and takes possession of the Property), or
to be liable in any way for any injury or damage to person or property sustained
by any Person in or about the Property other than to the extent caused by the
willful misconduct or gross negligence of the Beneficiary or any Person
exercising the rights of the Beneficiary hereunder.
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(b) As long as no Acceleration Event exists, the Grantor shall have the
right under a license granted hereby, subject to Section 5.07(c), to collect the
Rents upon the due date thereof.
(c) If an Acceleration Event exists, the Beneficiary or a Receiver
appointed pursuant to Section 5.02(a)(iii) (as the case may be as the Person
exercising the rights under this Section 5.07(c)) shall have the right to
terminate the license granted under Section 5.07(b) by notice to the Grantor and
exercise the rights and remedies provided under Section 5.07(a), under Sections
5.02(a)(iv) and 5.02(a)(v) or under Applicable Law. If an Acceleration Event
exists, upon written demand by the Person exercising the rights under this
Section 5.07, any tenants of the Grantor shall promptly pay to such Person all
Security Deposits under the Leases and all Rents allocable to any period after
the making of such demand. Subject to Sections 5.02(a)(iv) and 5.02(a)(v) and
any Applicable Law, any Rents received hereunder by the Person exercising the
rights under this Section shall be promptly paid to the Beneficiary, and any
Rents received hereunder by the Beneficiary shall be applied and disbursed as
provided in Section 5.06, provided that, subject to Sections 5.02(a)(iv) and
5.02(a)(v) and any provision of Applicable Law, any Security Deposits actually
received by the Beneficiary shall be held, applied and disbursed as provided in
the applicable Leases.
(d) Nothing herein shall be construed to be an assumption by the Person
exercising the rights under this Section, or to otherwise make such Person
liable for the performance, of any of the obligations of the Grantor under the
Leases, provided that such Person shall be accountable as provided in Section
5.07(c) for any Rents or Security Deposits actually received by such Person.
Section 5.08. Dealing with the Trust Property. The Beneficiary shall have
the right to release or cause the Trustee to release any portion of the Trust
Property from this Deed of Trust for such consideration as the Beneficiary may
require, or without consideration, without, as to the remainder of the Trust
Property, in any way impairing or affecting the Lien or priority of this Deed of
Trust, or improving the position of any subordinate lienholder with respect
thereto, except to the extent that the Secured Obligations shall have been
reduced by any actual monetary consideration received for such release and
applied to the Secured Obligations and may accept by assignment, pledge or
otherwise any other property in place thereof as the Beneficiary may require
without being accountable therefor to any other lienholder.
Section 5.09. Information and Right of Entry. (a) Upon request by the
Beneficiary, the Grantor shall deliver to the Beneficiary promptly after such
request or, if requested by the Beneficiary, on a continuing or periodic basis
any information, certificates and documents with respect to the matters referred
to in this Deed of Trust as the Beneficiary shall reasonably request.
(b) The Beneficiary and the representatives of the Beneficiary shall have
the right, (i) without prior notice if an Acceleration Event exists, or (ii)
after reasonable notice and at the Beneficiary's expense if no Acceleration
Event exists, to enter upon the Property at all reasonable times, as often as
the Beneficiary may reasonably require, to inspect the Trust Property or,
subject to the provisions hereof, to exercise any right, power or remedy of the
Beneficiary hereunder provided that no such entry on the Property shall be
construed to be possession of the Property by the Beneficiary or to constitute
the Beneficiary as a "mortgagee" in
20
possession (unless the Beneficiary exercises its right to take possession of the
Property under Section 5.02(a)(iv)) or to be a cure of any Default or waiver of
any Default subject to reimbursement under Section 5.06, and provided, further,
that if no Acceleration Event exists, the Grantor may place reasonable limits on
such access.
Section 5.10. Reimbursement of Expenses to Perform Secured Obligations.
Grantor shall forthwith upon demand pay to Beneficiary:
(a) the amount of any taxes (other than Excluded Taxes) which the
Beneficiary may have been required to pay by reason of the Security
Interests or to free any of the Trust Property from any Lien thereon
resulting from the failure to pay such taxes to the extent such Lien is not
a Permitted Lien or a Permitted Encumbrance; and
(b) the amount of any and all out-of-pocket expenses, including the
reasonable fees and disbursements of counsel and of any other experts,
which the Beneficiary may incur in connection with (w) the enforcement of
this Deed of Trust, including such expenses as are incurred to preserve the
value of the Trust Property and the validity, perfection, rank and value of
any Security Interest, (x) the collection, sale or other disposition of any
of the Trust Property, (y) the exercise by the Beneficiary of any of the
rights conferred upon it hereunder, and (z) any Default.
Any such amount not paid on demand shall bear interest at the rate
applicable to Base Rate Loans from time to time plus 2% and shall be an
additional Secured Obligation hereunder.
ARTICLE 6
Security Agreement
Section 6.01. Security Agreement. To the extent of the Collateral or to
the extent that the Trust Property includes items of personal property which are
or are to become fixtures under Applicable Law, this Deed of Trust shall also be
construed as a security agreement under the Uniform Commercial Code; and, if an
Acceleration Event exists, the Beneficiary shall be entitled with respect to
such Collateral and personal property to all remedies hereunder and under the
Security Agreement, all remedies available under the Uniform Commercial Code
with respect to fixtures and all other remedies available under Applicable Law.
To the extent that the Collateral includes Equipment and other items of personal
property which are not fixtures under Applicable Law, this Deed of Trust shall
also be construed as a security agreement under the Uniform Commercial Code; and
if an Acceleration Event exists, the Beneficiary shall be entitled with respect
to such Collateral to all remedies hereunder and under the Security Agreement,
all remedies available under the Uniform Commercial Code and all other remedies
available under Applicable Law. Without limiting the foregoing, any Collateral
may, at the Beneficiary's option, during the continuance of an Acceleration
Event (i) be sold hereunder together with any sale of the Property or otherwise,
(ii) be sold pursuant to the Uniform Commercial Code, or (iii) be dealt with by
the Beneficiary in any other manner permitted under Applicable Law. The
Beneficiary may require the Grantor to assemble the Collateral and make it
available to the Beneficiary as described in Section 10(b) of the Security
Agreement. If an Acceleration Event exists, the Beneficiary shall be the
attorney-in-fact of the Grantor with respect to any and all matters pertaining
to the Collateral with full power and authority to give instructions with
respect to the
21
collection and remittance of payments, to endorse checks, to enforce the rights
and remedies of the Grantor and to execute on behalf of the Grantor and in the
Grantor's name any instruction, agreement or other writing required therefor.
The Beneficiary may, at its option, appoint any other Person as the agent of the
Beneficiary for the purpose of disposition of the Collateral in accordance with
the Uniform Commercial Code.
Notwithstanding the foregoing, to the extent that the Trust Property
includes personal property covered by the Security Agreement or any other
Security Document, the provisions of the Security Agreement or such other
Security Document shall govern with respect to such personal property.
Section 6.02. Fixture Filing. To the extent that the Trust Property
includes items of personal property which are or are to become fixtures under
Applicable Law, and to the extent permitted under Applicable Law, the filing of
this Deed of Trust in the real estate records of the county in which such Trust
Property is located shall also operate from the time of filing as a fixture
filing with respect to such Trust Property, and the following information is
applicable for the purpose of such fixture filing, to wit:
(a) Name and Address of the debtor:
The Grantor:
Equistar Chemicals, LP
One Houston Center
1221 McKinney Street
Houston, Texas 77010
(b) Name and Address of the secured party:
The Beneficiary:
The Chase Manhattan Bank, as Collateral Agent
712 Main Street
7th Floor
Houston, Texas 77002
(c) This instrument covers goods or items of personal property which
are or are to become fixtures upon the Property.
(d) The name of the record owner of the Property on which such
fixtures are or are to be located is Equistar Chemicals, LP.
ARTICLE 7
Miscellaneous
Section 7.01. Beneficiary as Agent. The Grantor acknowledges that each
Bank has appointed the Agents to take such action on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agents by the terms
of the Loan Documents. The provisions of Article 8 of the Credit Agreement are
incorporated by reference herein as if fully restated herein.
22
Section 7.02. Release of Trust Property. (a) This Deed of Trust and the
covenants and obligations contained herein shall cease, terminate and thereafter
be of no further force or effect upon the repayment in full of all principal and
interest of the Loans and the LC Disbursements, all accrued fees and all other
Secured Obligations, the termination of the Commitments under the Credit
Agreement and the termination or cancellation of all outstanding Letters of
Credit (or the cash collateralization or other support thereof in a manner
satisfactory to the Beneficiary). At any time and from time to time prior to
such termination of the Security Interests, the Beneficiary may release or cause
the Trustee to release any of the Trust Property in accordance with the
provisions of the Credit Agreement. At any time and from time to time prior to
such termination of the Security Interests, the Beneficiary shall release and
shall cause the Trustee to release any of the Trust Property required to be
released in accordance with the provisions of Section 9.02(c) of the Credit
Agreement.
(b) At any time and from time to time prior to such termination of the
Security Interests as described above, unless a Default shall have occurred and
be continuing prior to such termination of the Security Interests, unless a
Default shall have occurred and be continuing, the Beneficiary shall release the
Trust Property (but not the Proceeds thereof and not all or substantially all of
the Collateral) if (i) the Beneficiary receives a certificate from a Principal
Financial Officer of the Grantor stating that (x) the Trust Property to be
released is being sold (or in the case of a Securitization Transaction otherwise
transferred) in a transaction which complies with the applicable requirements of
Sections 6.06(c) or (d) of the Credit Agreement, as the case may be, (y) such
release is necessary to effect such transaction and (z) the Net Cash Proceeds of
such sale or transfer will be applied to prepay Term Loans as required by
Section 2.09(c), (d) and (e) of the Credit Agreement and (ii) arrangements
satisfactory to the Beneficiary have been made so that such release will become
effective no earlier than the closing of such sale or transfer.
(c) Upon any termination of the Security Interests pursuant to Section
7.02(a) or upon the satisfaction of the conditions set forth in Section 7.02(b),
the Trustee, acting on direction from the Beneficiary, will, at the expense of
the Grantor, execute and deliver to the Grantor such documents as it shall
reasonably request to evidence the termination of the security interests or the
release of the Trust Property or the release of a portion of the Trust Property,
as the case may be. Any release of this Deed of Trust shall also be deemed to be
a termination of any separately filed financing statements relating to the Trust
Property and a release of any other assignments relating to the Trust Property
to the same extent as the release of this Deed of Trust. The Beneficiary may
conclusively rely on any certificate delivered to it by the Grantor stating that
the execution of such documents and release of the Trust Property is in
accordance with and permitted by the terms of this Deed of Trust.
Section 7.03. Notices. All notices, requests and other communications
required or permitted to be given under this Deed of Trust shall be in writing
(including bank wire, telex, facsimile transmission or similar writing) and
shall be given to the Grantor or the Beneficiary as specified in Section 9.01 of
the Credit Agreement. Except as otherwise provided herein, each notice, request
or other communication shall be effective as determined by Section 9.01 of the
Credit Agreement.
Section 7.04. Modification and Waiver. No provision of this Deed of Trust
shall be modified, waived or terminated, and no consent to any departure by the
Grantor from any
23
provision of this Deed of Trust shall be effective, unless the same shall be by
an instrument in writing, signed by the Grantor and the Beneficiary in
accordance with Section 9.02 of the Credit Agreement. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
Section 7.05. Severability. All rights, powers and remedies provided in
this Deed of Trust may be exercised only to the extent that the exercise thereof
does not violate Applicable Law, and all the provisions of this Deed of Trust
are intended to be subject to all mandatory provisions of Applicable Law and to
be limited to the extent necessary so that they will not render this Deed of
Trust illegal, invalid, unenforceable or not entitled to be recorded, registered
or filed under Applicable Law. If any provision of this Deed of Trust or the
application thereof to any Person or circumstance shall, to any extent, be
illegal, invalid or unenforceable, or cause this Deed of Trust not to be
entitled to be recorded, registered or filed, the remaining provisions of this
Deed of Trust or the application of such provision to other Persons or
circumstances shall not be affected thereby, and each provision of this Deed of
Trust shall be valid and be enforced to the fullest extent permitted under
Applicable Law.
Section 7.06. Binding Effect. (a) The provisions of this Deed of Trust
shall be binding upon and inure to the benefit of each of the parties hereto,
the respective successors and assigns of the Grantor and the Beneficiary in its
capacity as the Agent, and shall inure to the benefit of the Secured Parties and
their respective successors and assigns and in the case of the Lenders,
permitted assigns pursuant to Section 9.07 of the Credit Agreement; and all
references herein to the "Grantor", the "Beneficiary", the "Trustee" and the
"Secured Parties" shall include the respective successors and assigns of such
parties.
(b) To the fullest extent permitted under Applicable Law, the provisions
of this Deed of Trust binding upon the Grantor and the Beneficiary shall be
deemed to be covenants which run with the land.
(c) Nothing in this Section shall be construed to permit the Grantor to
Transfer or grant a Lien upon the Trust Property contrary to the provisions of
the Credit Agreement.
Section 7.07. Governing Law. This Deed of Trust shall be governed by and
construed in accordance with the laws of the State of Texas, except as otherwise
required by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than Texas are governed by the
laws of such jurisdiction.
Section 7.08. Severability. If any provision of this Deed of Trust is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of this Deed of Trust shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
favor of the Mortgagee and the Secured Parties in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
Section 7.09. Revolving Loans. The obligations secured by this Deed of
Trust include revolving credit loans and reimbursement obligations in respect of
Letters of Credit which are
24
revolving in nature, which may be advanced, paid, and readvanced from time to
time after the date hereof. Subject to Section 7.12, the aggregate maximum
principal amount of revolving obligations which may be outstanding at any one
time is $500,000,000. The interest of the Beneficiary hereunder will remain in
full force and effect notwithstanding a zero balance of the total revolving
obligations and the Lien of this Deed of Trust will not be extinguished until
all Secured Obligations have been paid and performed and the obligation of all
Secured Parties to extend further credit under the Loan Documents shall have
expired or terminated.
Section 7.10. Subrogation. To the extent that the Beneficiary pays
pursuant to the terms of this Deed of Trust any sum due under any provision of
law or any instrument or documents creating any Lien prior or superior to the
Lien of this Deed of Trust, the Beneficiary shall have and be entitled to a Lien
on the Trust Property equal in priority to that discharged, and the Beneficiary
shall be subrogated to, and receive and enjoy all rights and Liens possessed,
held or enjoyed by, the holder of such Lien, which shall remain in existence for
the benefit of the Beneficiary to secure the amount expended by the Beneficiary
on account of or in connection with such Lien. The Beneficiary shall be
subrogated, notwithstanding their release of record, to mortgages, trust deeds,
superior titles, vendor's liens, liens, charges, encumbrances, rights and
equities on the Property to the extent that any obligation under any thereof is
paid or discharged with proceeds of disbursements or advances under any
instrument evidencing the Secured Obligations.
Section 7.11. Trustee. (a) The Grantor hereby irrevocably appoints the
Trustee to act in that capacity hereunder and the Trustee hereby accepts such
appointment. The Grantor hereby irrevocably ratifies and confirms all acts which
the Trustee shall lawfully take in accordance with the provisions hereof.
(b) The Trustee may, at its option, resign as trustee hereunder by notice
given to the Beneficiary, and such resignation shall be effective on the earlier
to occur of (i) the date which is 30 days after the date on which the Trustee
gives such notice to the Beneficiary or (ii) the date on which a successor
trustee is appointed by the Beneficiary and accepts such appointment.
(c) The Beneficiary may, at its option, with or without cause or notice,
remove the Trustee, appoint a successor trustee or appoint an additional trustee
or trustees (including a separate trustee for each jurisdiction in which the
Trust Property is located) hereunder by an instrument in writing executed and
acknowledged by the Beneficiary and accepted by such successor or additional
trustee and recorded, registered or filed in the real estate records of the
jurisdiction in which the Trust Property affected by such instrument is located;
and, thereupon, without further act, deed or conveyance, such substitute or
additional trustee shall be fully vested with all estate, right, title and
interest of its predecessor or co-trustee in, to, under or derived from the
Trust Property and all rights, powers, privileges and obligations of such
predecessor or co-trustee, with the same effect as if such successor or
additional trustee had originally been named as trustee or co-trustee hereunder.
The execution, acknowledgment and recording, registration or filing of such an
instrument shall be conclusive evidence against the Grantor and all other
Persons of the proper removal of the Trustee and substitution or addition of the
successor or additional trustee; and, if the Beneficiary or such successor or
additional trustee is a corporation, the execution and acknowledgment by an
officer of such corporation shall be
25
conclusive evidence against all other Persons of the due authorization,
execution and delivery thereof by such corporation.
(d) Notwithstanding anything herein to the contrary, the Trustee shall not
exercise or waive the exercise of any of its rights, powers or remedies
hereunder or otherwise act or refrain from acting hereunder unless directed to
do so by the Beneficiary, and the Trustee shall exercise or waive the exercise
of any of its rights, powers or remedies hereunder and otherwise act or refrain
from acting when and in the manner directed by the Beneficiary, provided that
the Trustee (i) shall not be required to follow any direction of the Beneficiary
if the Trustee has been advised by counsel that such action would violate
Applicable Laws, (ii) shall not be required to expend or risk its own funds or
otherwise incur any financial liability in connection with such action if it has
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not assured to it, and (iii) shall be entitled to
exercise its rights under Section 7.11(e) without such direction by the
Beneficiary.
(e) The Trustee shall be entitled to receive, and the Grantor shall pay,
reasonable and customary compensation to the Trustee for its services rendered
hereunder while an Acceleration Event exists and reimbursement to the Trustee
for its expenses (including attorneys' fees and expenses) in connection herewith
or the exercise of any right, power or remedy hereunder.
(f) The Trustee shall not be liable with respect to any act taken or
omitted by it in good faith in accordance with any direction of the Beneficiary.
Except for willful misconduct or gross negligence, the Trustee shall not be
liable (i) in acting upon any direction, demand, request, notice, statement or
other document believed by it in good faith to be genuine and delivered by the
Person empowered to do so, (ii) for any error in judgment or mistake of fact or
law made in good faith, or (iii) for any action taken or omitted by it in
accordance with the provisions of this Deed of Trust. The Trustee shall not be
responsible to see to the recording, registration or filing of this Deed of
Trust or any financing statement relating hereto in any jurisdiction or for the
payment of any fees, charges or taxes in connection therewith. No co-trustee
hereunder shall be liable for any act or omission of any other co-trustee.
(g) All moneys received by the Trustee hereunder (other than amounts
payable to the Trustee pursuant to Section 7.11(e)) shall be held by the Trustee
in trust for the purposes for which such moneys were received; and, except as
provided herein or under mandatory provisions of Applicable Laws, the Trustee
need not segregate such moneys from any other moneys and shall have no liability
to pay interest thereon, except such interest as it may actually earn thereon.
Section 7.12. Maximum Secured Amount. It is the intention of the parties
that the Liens granted pursuant to this Deed of Trust and the other Collateral
Documents shall not contravene the limitations on Liens set forth in the
Indentures, but insofar as such Liens are on Restricted Property (as defined in
any of the Indentures) such Liens on Restricted Property will secure an amount
of the Secured Obligations equal to the Maximum Secured Amount (as defined in
Section 5.12(d) of the Credit Agreement).
26
ARTICLE 8
Local Law Provisions
Section 8.01. Fair Market Value for Calculating Deficiencies. The
following shall be considered competent evidence for the finder of fact's
determination of the fair market value of the Property as of the date of the
foreclosure sale in proceedings governed by Sections 51.003, 51.004, and 51.005
of the Texas Property Code (as amended from time to time):
(i) The Property shall be valued in an "as is" condition as of the
date of the foreclosure sale, without any assumption or expectation that
the Property will be repaired or improved in any manner before a resale of
the Property after foreclosure;
(ii) The valuation shall be based upon an assumption that the
foreclosure purchaser desires a resale of the Property for cash promptly
(but no later than twelve months) following the foreclosure sale;
(iii) All reasonable expenses to be incurred when the Beneficiary
resells the Property including reasonable closing costs customarily borne
by the seller in a commercial real estate transaction should be added to
the Secured Obligations, including, without limitation, reasonable
brokerage commissions, title insurance for the fair market value determined
in accordance with this Section 8.01, a survey of the Property, tax
prorations, reasonable attorneys' fees, and reasonable marketing costs;
(iv) The gross market value of the Property shall be further
discounted to account for any estimated holding costs associated with
maintaining the Property pending sale for a period not to exceed twelve
months, including, without limitation, utilities expenses, property
management fees, taxes and assessments (to the extent not accounted for in
(iii) above), and other maintenance expenses; and
(v) Any expert opinion testimony given or considered in connection
with a determination of the fair market value of the Property must be given
by persons having at least five years experience in appraising improved
property in the vicinity where the Property is located and being actively
engaged therein at the time of such testimony.
NOTICE pursuant to Section 26.02(e) of the Texas Business and Commerce
Code:
THIS WRITTEN DEED OF TRUST AND THE OTHER FINANCING DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
27
IN WITNESS WHEREOF, the undersigned has executed and delivered this Deed of
Trust as of the date first set forth above.
Grantor:
EQUISTAR CHEMICALS, LP,
a Delaware limited partnership
By: ____________________________
Name:
Title:
THE STATE OF (S)
(S)
COUNTY OF _________ (S)
This instrument was acknowledged before me on the ______ day of August,
2001, by ________________________, _____________________ of __________, general
partner of Equistar Chemicals, LP, a Delaware limited partnership, on behalf of
said limited partnership.
_________________________________
Notary Public, State of _________
_________________________________
Printed Name of Notary
_________________________________
My Commission Expires:
28
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
PERMITTED ENCUMBRANCES
1. Liens for taxes, assessments or other governmental charges not yet due or
which are being contested in good faith and by appropriate proceedings;
2. Carriers', warehousemen's, mechanics', materialmens', repairmens' or other
like Liens arising by operation of law in the ordinary course of business
so long as (a) the underlying obligations are not overdue for a period of
more than 90 days or (b) such Liens are being contested in good faith and
by appropriate proceedings;
3. Any recorded or unrecorded easements, rights of way, leases or other
occupancy agreements for pipelines, equipment, cables, lines, wires and
conduits and underground tunnels relating to the Property;
4. Any title or rights, asserted by anyone, including but not limited to
persons, the public, corporations, governments or other entities, to lands
comprising the beds of navigable rivers and streams, lakes, bays, gulfs or
oceans; and to statutory water rights, including riparian rights;
5. Any recorded or unrecorded operating, services, facilities use, utilities,
process stream or supply agreement or similar agreement relating to the
Property;
6. Other Liens or title defects (including matters which an accurate survey
might disclose) which (x) do not secure Debt and (y) do not materially
detract from the value of such property or materially impair the use
thereof by Grantor in the operation of its business; and
7. The exceptions shown in that certain commitment for title insurance issued
by [Lawyers Title Insurance Corporation, Commitment No. ____________,
dated ____________.]
EXHIBIT G
SECURITY AGREEMENT
dated as of
August 24, 2001
between
EQUISTAR CHEMICALS, LP
and
THE CHASE MANHATTAN BANK
as Collateral Agent
TABLE OF CONTENTS
______________
Page
----
Section 1. Definitions....................................................... 1
Section 2. Representations and Warranties.................................... 5
Section 3. The Security Interests............................................ 7
Section 4. Further Assurances; Covenants..................................... 9
Section 5. Investment Property............................................... 10
Section 6. Collateral Account................................................ 12
Section 7. Transfer of Record Ownership...................................... 14
Section 8. Right to Vote Securities.......................................... 14
Section 9. General Authority................................................. 15
Section 10. Remedies upon Acceleration Event................................. 15
Section 11. Limitation on Duty of Collateral Agent in Respect of Collateral.. 18
Section 12. Application of Proceeds.......................................... 18
Section 13. Concerning the Collateral Agent.................................. 20
Section 14. Appointment of Co-Collateral Agents.............................. 20
Section 15. Expenses......................................................... 21
Section 16. Termination of Security Interests; Release of Collateral......... 21
Section 17. Additional Secured Obligations................................... 22
Section 18. Notices.......................................................... 22
Section 19. Waivers, Non-Exclusive Remedies.................................. 22
Section 20. Successors and Assigns........................................... 22
Section 21. Changes in Writing............................................... 23
Section 22. New York Law..................................................... 23
Section 23. Severability..................................................... 23
Section 24. Nature of Securities............................................. 1
Section 25. Instructions..................................................... 1
Section 26. Waiver of Lien; Waiver of Set-off................................ 1
Section 27. Choice of Law.................................................... 2
Section 28. Conflict with Other Agreements................................... 2
Section 29. Amendments....................................................... 2
Section 30. Notice of Adverse Claims......................................... 2
Section 31. Maintenance of Securities........................................ 2
Section 32. Representations, Warranties and Covenants of the Issuer.......... 3
Section 33. Successors....................................................... 3
Section 34. Notices.......................................................... 3
Section 35. Termination...................................................... 4
Section 36. Counterparts..................................................... 4
SCHEDULES:
---------
Schedule 1 Equity Interests in Subsidiaries and Affiliates Owned by the
Borrower
Schedule 2 Other Equity Interests Owned by the Borrower
EXHIBITS:
--------
Exhibit A Perfection Certificate
Exhibit B Form of Lockbox Letter
Exhibit C Form of Issuer Control Agreement
SECURITY AGREEMENT
AGREEMENT dated as of August 24, 2001 between EQUISTAR CHEMICALS, LP (with
its successors, the "Borrower") and THE CHASE MANHATTAN BANK, as Collateral
Agent (with its successors, the "Collateral Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, certain financial institutions (each, a "Lender" and
collectively, the "Lenders"), The Chase Manhattan Bank, as Administrative Agent
and Collateral Agent, Bank of America, N.A., as Servicing Agent and
Administrative Agent, and Credit Suisse First Boston and Citicorp USA, Inc., as
Co-Syndication Agents, are parties to an Amended and Restated Credit Agreement
dated as of August 24, 2001 (as the same has been and may be amended from time
to time, the "Credit Agreement"); and
WHEREAS, the Borrower has agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure (i) its obligations under
the Credit Agreement and any Notes that may be issued pursuant thereto and (ii)
its obligations under interest rate hedging arrangements designed to mitigate
the risk that interest rates payable under the Credit Agreement will fluctuate,
by granting security interests on its assets to the Collateral Agent as provided
in the Collateral Documents (such term and each other capitalized term used but
not otherwise defined herein having the meaning assigned to it in Section 1);
and
WHEREAS, the Lenders, the Swingline Lender and the Fronting Banks are not
willing to make Loans or issue or participate in Letters of Credit under the
Credit Agreement, and the counterparties to the interest rate hedging
arrangements referred to above may not be willing to enter into or maintain
them, unless the foregoing obligations of the Borrower are secured as described
above;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
(a) Terms Defined in Credit Agreement. Terms defined in the Credit
Agreement and not otherwise defined in subsection (b) or (c) of this Section
have, as used herein, the respective meanings provided for therein.
(b) Terms Defined in UCC. As used herein, each of the following terms
has the meaning specified in the UCC:
Term UCC
---- ---
Account 9-102
Authenticate 9-102
Certificated Security 8-102
Chattel Paper 9-102
Commodity Account 9-102
Commodity Contract 9-102
Document 9-102
Entitlement Holder 8-102
Equipment 9-102
Financial Asset 8-102 & 103
General Intangibles 9-102
Instrument 9-102
Inventory 9-102
Investment Property 9-102
Record 9-102
Securities Intermediary 8-102
Security 8-102 & 103
Security Entitlement 8-102
Uncertificated Security 8-102
(c) Additional Definitions. The following additional terms, as used
herein, have the following meanings:
An "Acceleration Event" exists if all or a portion of the Loans shall have
been accelerated pursuant to Article VII of the Credit Agreement and such
acceleration shall not have been rescinded.
"Collateral" has the meaning specified in Section 3.
"Collateral Account" has the meaning specified in Section 6.
"Contingent Secured Obligation" means, at any time, any Secured Obligation
(or portion thereof) that is contingent in nature at such time, including any
Secured Obligation that is:
(i) an obligation to reimburse a bank for drawings not yet made
under a letter of credit issued by it;
(ii) an obligation under an Interest Rate Hedging Agreement to
make payments that cannot be quantified at such time;
(iii) any other obligation (including any guarantee) that is
contingent in nature at such time; or
(iv) an obligation to provide collateral to secure any of the
foregoing types of obligations.
"Control", when used with respect to any Security or Security Entitlement,
has the meaning specified in UCC Section 8-106.
"Equity Interest" means (i) in the case of a corporation, any shares of its
capital stock, (ii) in the case of a limited liability company, any membership
interest therein, (iii) in the case of a partnership, any partnership interest
(whether general or limited) therein, (iv) in the case of any other business
entity, any participation or other interest in the equity or profits thereof,
(v) any warrant, option or other right to acquire any Equity Interest described
in this definition or (vi) any Security Entitlement in respect of any Equity
Interest described in this definition.
"Interest Rate Hedging Agreement" shall mean any interest rate protection
agreement or other interest rate price hedging arrangement entered into by the
Borrower with a Lender or an Affiliate of a Lender to mitigate the risk that
interest rates payable under the Credit Agreement will fluctuate; provided that
if a Principal Financial Officer of the Borrower certifies in a certificate
delivered pursuant to Section 17 that any such agreement or arrangement has been
entered into for the purpose specified above, then such agreement or arrangement
shall be deemed conclusively to be an Interest Rate Hedging Agreement.
"Issuer Control Agreement" means an Issuer Control Agreement substantially
in the form of Exhibit C (with any changes that the Collateral Agent shall have
approved).
"LC Reimbursement Obligations" means, at any time, all obligations of the
Borrower to reimburse a Fronting Bank for amounts paid by such Fronting Bank in
respect of drawings under Letters of Credit, including any portion of any such
obligations with respect to which a Lender has made a payment to such Fronting
Bank pursuant to Section 2.07(f) of the Credit Agreement.
"LLC Interest" means a membership interest or similar interest in a limited
liability company.
"Liquid Investments" has the meaning specified in Section 6(d).
"Non-Contingent Secured Obligation" means at any time any Secured
Obligation (or portion thereof) that is not a Contingent Secured Obligation at
such time.
"Partnership Interest" means a partnership interest, whether general or
limited.
"Perfection Certificate" means a certificate substantially in the form of
Exhibit A hereto, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Collateral Agent, and duly
executed by an executive officer of the Borrower.
"Permitted Liens" means the Security Interests and Liens on the Collateral
permitted to be created, to be assumed or to exist pursuant to Section 6.01 of
the Credit Agreement.
"Personal Property Collateral" means all property included in the
Collateral except Real Property Collateral.
"Pledged", when used in conjunction with any type of asset, means at any
time an asset of such type that is included (or that creates rights that are
included) in the Collateral at such time. For example, "Pledged Equity
Interest" means an Equity Interest that is included in the Collateral at such
time.
"Proceeds" means all proceeds of, and all other profits, products, rents or
receipts, in whatever form, arising from the collection, sale, lease, exchange,
assignment, licensing or other disposition of, or other realization upon, any
Collateral, including without limitation all claims of the Borrower against
third parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any Collateral, and any condemnation or requisition payments with respect to
any Collateral, in each case whether now existing or hereafter arising.
"Real Property Collateral" means all real property (including leasehold
interests in real property) included in the Collateral.
"Secured Obligations" means (a) all principal of and premium and interest
(including, without limitation, any interest ("Post-Petition Interest") which
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Borrower (or would accrue
but for the operation of applicable bankruptcy or insolvency laws), whether or
not allowed or allowable as a claim in any such proceeding) on any Loan any LC
Reimbursement Obligations or any Deferred Amounts under, or any Note issued
pursuant to, the Credit Agreement, (b) all other amounts payable by the Borrower
hereunder or under any other Loan Document (as the same may hereafter be
amended, restated, supplemented or otherwise modified from time to time)
(including any Post-Petition Interest with respect to such amounts), (c) any
renewals, refinancings or extensions of any of the foregoing (including Post-
Petition Interest) and (d) all obligations (if any) designated by the Borrower
as additional Secured Obligations pursuant to Section 17.
"Secured Parties" means the holders from time to time of the Secured
Obligations.
"Security Interests" means the security interests in the Collateral granted
under the Collateral Documents securing the Secured Obligations.
"Transferred Receivables" means Accounts (including without limitation,
proceeds of Inventory to the extent it also constitutes an Account, and Chattel
Paper, Documents and Instruments and proceeds thereof) that are sold,
contributed or otherwise transferred in connection with a Securitization
Transaction entered into in accordance with the Credit Agreement (a) to one or
more third party purchasers or (b) to a special purpose entity that borrows
against such Accounts or sells such Accounts to one or more third party
purchasers, but only to the extent that amounts received in connection with the
sale or other transfer of such Accounts would not under GAAP be accounted for as
liabilities on a consolidated balance sheet of the Borrower.
"Transport and Storage Facilities" means any docks, pipelines, roads,
warehouses, runways, loading areas, piers, rail cars, railroads, platforms,
wharfs and other facilities, objects, means or channels of transportation or
properties the Borrower uses primarily for storage or transportation of (a)
feedstock, raw materials or other inputs or (b) finished or manufactured
products or other goods to be sold or otherwise transferred to third parties.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection or the
priority of any Security Interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than New York, "UCC" means
the Uniform Commercial Code as in effect in such other jurisdiction for purposes
of the provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.
Section 2. Representations and Warranties. The Borrower represents and
warrants as follows:
(a) The Borrower is a limited partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction identified as
its jurisdiction of organization in its Perfection Certificate.
(b) On the date hereof, the Borrower is located (within the meaning of
UCC Section 9-307) in the State of Delaware.
(c) Schedule 1 lists all Equity Interests in Subsidiaries and Affiliates
owned by the Borrower as of the Effective Date. The Borrower holds all such
Equity Interests directly (i.e., not through a Subsidiary, a Securities
Intermediary or any other Person).
(d) Schedule 2 lists, as of the Effective Date, all Equity Interests
owned by the Borrower, other than Equity Interests in Subsidiaries and
Affiliates.
(e) All Pledged Equity Interests owned by the Borrower are owned by
it free and clear of any Lien other than (i) the Security Interests and (ii) any
tax liens and judgment liens that are Permitted Liens. All shares of capital
stock included in such Pledged Equity Interests (including shares of capital
stock in respect of which the Borrower owns a Security Entitlement) have been
duly authorized and validly issued and are fully paid and non-assessable. None
of such Pledged Equity Interests is subject to any option to purchase or similar
right of any Person. The Borrower is not and will not become a party to or
otherwise bound by any agreement (except the Loan Documents) which restricts in
any manner the rights of any present or future holder of any Pledged Equity
Interest with respect thereto.
(f) The Borrower has good title to all of the Collateral, free and
clear of any Liens other than the Security Interests and Permitted Liens. The
Borrower has taken, and will continue to take, all actions necessary under the
UCC to perfect its interest in any Accounts or Chattel Paper purchased or
otherwise acquired by it, as against its assignors and creditors of its
assignors.
(g) The Borrower has not performed any acts that might prevent the
Collateral Agent from enforcing any of the provisions of the Collateral
Documents or that would limit the Collateral Agent in any such enforcement.
Other than financing statements, mortgages or other similar or equivalent
documents or instruments with respect to the Security Interests and Permitted
Liens, no financing statement, mortgage, security agreement or similar or
equivalent document or instrument covering all or any part of the Collateral is
on file or of record in any jurisdiction in which such filing or recording is
effective to perfect or record a Lien on such Collateral. After the Effective
Date, no Collateral owned by the Borrower will be in the possession or under the
Control of any other Person having a claim thereto or security interest therein,
other than the Security Interests or a Permitted Lien.
(h) The Security Interests on all Personal Property Collateral owned
by the Borrower (i) have been validly created, (ii) will attach to each item of
such Collateral on the Effective Date (or, if the Borrower first obtains rights
thereto on a later date, on such later date) and (iii) when so attached, will
secure all the Secured Obligations.
(i) When the relevant Mortgages have been duly executed and
delivered, the Security Interests on all Real Property Collateral owned by the
Borrower as of the Effective Date will have been validly created and will secure
all the Secured Obligations. When such Mortgages (and memoranda of lease with
respect to any leasehold interests included in such Real Property Collateral)
have been duly recorded, such Security Interests will rank prior to all other
Liens (except Permitted Liens) on such Real Property Collateral.
(j) The Borrower has heretofore delivered the Perfection Certificate
to the Collateral Agent. The information specified therein is correct and
complete as of the Effective Date.
(k) When a UCC financing statement describing the Collateral as set
forth in Exhibit [ ] to the Perfection Certificate has been filed in the office
of the Secretary of State in the Borrower's jurisdiction of organization
specified in such Perfection Certificate, the Security Interests will constitute
perfected security interests in the Personal Property Collateral owned by the
Borrower to the extent that a security interest therein may be perfected by
filing pursuant to the UCC, prior to all Liens and rights of others therein
except Permitted Liens. Except for (i) the filing of such UCC financing
statement, (ii) the due recordation of memoranda of lease with respect to the
Pledged leasehold interests and (iii) the due recordation of the Mortgages, no
registration, recordation or filing with any governmental body, agency or
official is required in connection with the execution or delivery of the
Collateral Documents or is necessary for the validity or enforceability thereof
or for the perfection or due recordation of the Security Interests or for the
enforcement of the Security Interests.
(l) The Collateral Agent has Control of the Financial Assets and
Security Entitlements (if any) held in the Collateral Account.
(m) The Inventory and Equipment are insured in accordance with the
requirements of the Credit Agreement.
Section 3. The Security Interests. (a) In order to secure the full and
punctual payment of the Secured Obligations in accordance with the terms
thereof, and to secure the performance of all the Borrower's obligations
hereunder and under the Loan Documents, the Borrower grants to the Collateral
Agent for the ratable benefit of the Secured Parties a continuing security
interest in and to all of the following property of the Borrower, whether now
owned or existing or hereafter acquired or arising and regardless of where
located, but subject to the exclusions in Section 3(b) (all being collectively
referred to as the "Collateral"):
(i) Accounts;
(ii) Chattel Paper;
(iii) Documents;
(iv) Equipment;
(v) General Intangibles (including Equity Interests in other
Persons that do not constitute Investment Property);
(vi) Instruments;
(vii) Inventory;
(viii) Investment Property;
(ix) The Collateral Account, all Financial Assets credited to
the Collateral Account from time to time and all Security Entitlements in
respect thereof, all cash deposited therein from time to time, the Liquid
Investments made pursuant to Section 6(d) and other monies and property of
any kind of the Borrower in the possession or under the control of the
Collateral Agent;
(x) All books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other
computer materials and records) of the Borrower pertaining to any of the
Collateral; and
(xi) All Proceeds of the Collateral described in Clauses
3(a)(i) through 3(a)(x) hereof.
(b) The Collateral shall not include:
(i) rights of the Borrower in respect of any General
Intangible to the extent such General Intangible by its terms, by the terms
of any related agreement with a Person other than a Subsidiary or by the
terms of any applicable law under which it arises (A) validly prohibits the
creation of a security interest therein by the Borrower, (B) validly
requires the consent of any third party to the creation of a security
interest therein or (C) validly gives rise to any right of termination or
default remedy by reason of the creation of a security interest therein;
(ii) rights of the Borrower in respect of goods which (x) are
subject to a purchase money security interest permitted to be granted under
the Credit Agreement and in favor of a Person other than a Subsidiary and
(y) in respect of which the agreement pursuant to which such purchase money
security interest arises (A) validly prohibits the creation of a security
interest therein by the Borrower, (B) validly requires the consent of any
third party to the creation of a security interest therein or (C) validly
gives rise to any right of termination or default remedy by reason of the
creation of a security interest therein;
(iii) Transferred Receivables and (A) security interests or
liens and property subject thereto purporting to secure payment of such
Transferred Receivables, (B) guaranties, insurance and other arrangements
supporting payment of such Transferred Receivables, (C) rights to payment
and collections in respect of such Transferred Receivables, (D) books,
records and similar information relating to such Transferred Receivables or
the obligors thereon and (E) with respect to any such Transferred
Receivables, the transferee's interest in goods the sale of which gave rise
to such Transferred Receivables;
(iv) any Security issued by a Foreign Subsidiary which is a
voting security, if and to the extent that the Collateral hereunder and
under any other Collateral Document would include in the aggregate more
than 65% of the shares of any class of voting securities of such Foreign
Subsidiary;
(v) any Equity Interests in a Joint Venture Subsidiary other
than any such Equity Interests that are required to be subject to the
Collateral and Guarantee Requirement pursuant to Section 5.12(a) of the
Credit Agreement; and
(vi) rights of the Borrower in Transportation and Storage
Facilities.
(c) The Security Interests are granted as security only and shall not
subject the Collateral Agent or any Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of the Borrower with respect to
any of the Collateral or any transaction in connection therewith.
(d) It is the intention of the parties that the Liens granted pursuant
to this Agreement and the other Collateral Documents shall not contravene the
limitations on Liens set forth in the Indentures, but insofar as such Liens are
on Restricted Property (as defined in any of the Indentures) such Liens on
Restricted Property will secure an amount of the Secured Obligations equal to
the Maximum Secured Amount (as defined in Section 5.12(d) of the Credit
Agreement).
In the event of any inconsistency between the provisions of this Agreement
or any other Collateral Document and the provisions of Section 5.12(d) of the
Credit Agreement, the provisions of Section 5.12(d) of the Credit Agreement
shall prevail.
Section 4. Further Assurances; Covenants. (a) The Borrower will not (i)
change its name or organizational structure, (ii) change its location
(determined as provided in UCC Section 9-307) or (iii) become bound, as provided
in UCC Section 9-203(d) or otherwise, by a security agreement entered into by
another Person, except, if applicable, in accordance with Section 5.11 of the
Credit Agreement.
(a) The Borrower will, from time to time, at its expense, execute,
deliver, file and record any statement, assignment, instrument, document,
agreement or other paper and take any other action, (including, without
limitation, any filings of financing or continuation statements under the UCC)
that from time to time is required under Section 5.12(b) of the Credit Agreement
or to enable the Collateral Agent and the other Secured Parties to obtain the
full benefits of the Collateral Documents or to enable the Collateral Agent to
exercise and enforce any of its rights, powers and remedies under the Collateral
Documents with respect to any of the Collateral. To the extent permitted by
applicable law, the
Borrower hereby authorizes the Collateral Agent to execute and file financing
statements or continuation statements without the Borrower's signature appearing
thereon. The Borrower agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement is sufficient as a
financing statement. The Borrower constitutes the Collateral Agent its attorney-
in-fact to execute and file any filings required or so requested for the
foregoing purposes, all acts of such attorney being hereby ratified and
confirmed; and such power, being coupled with an interest, shall be irrevocable
until all the Security Interests granted by the Borrower terminate pursuant to
Section 16. The Borrower shall pay the costs of, or incidental to, any recording
or filing of any financing or continuation statements or other documents
recorded or filed pursuant thereto concerning the Collateral.
(b) If any Collateral is in the possession or control of a
warehouseman, bailee or agent at any time, the Borrower will upon request of the
Required Lenders (i) notify such warehouseman, bailee or agent of the relevant
Security Interests, (ii) instruct such warehouseman, bailee or agent to hold all
such Collateral for the Collateral Agent's account subject to the Collateral
Agent's instructions (which shall permit such Collateral to be removed by the
Borrower in the ordinary course of business until the Collateral Agent notifies
such warehouseman, bailee or agent that an Event of Default has occurred and is
continuing), (iii) use reasonable commercial efforts to cause such warehouseman,
bailee or agent to Authenticate a Record acknowledging that it holds possession
of such Collateral for the Collateral Agent's benefit and (iv) make such
Authenticated Record available to the Collateral Agent.
(c) The Borrower shall stamp or otherwise mark all books and records
relating to the Collateral in such manner as the Required Lenders may reasonably
require in order to reflect the Security Interests.
(d) Upon the occurrence and during the continuance of any Acceleration
Event, upon request of the Required Lenders through the Administrative Agents,
the Borrower will promptly notify (and the Borrower hereby authorizes the
Collateral Agent so to notify) each account debtor in respect of any Account or
Instrument then included in the Collateral that such Collateral has been
assigned to the Collateral Agent hereunder, and that any payments due or to
become due in respect of such Collateral are to be made directly to the
Collateral Agent or its designee.
(e) The Borrower will, promptly upon request, provide to the Collateral
Agent all information and evidence it may reasonably request concerning the
Collateral to enable the Collateral Agent to enforce the provisions of the
Collateral Documents.
Section 5. Investment Property. The Borrower represents, warrants and
covenants as follows:
(a) Certificated Securities. On the Effective Date, the Borrower will
deliver to the Collateral Agent as Collateral hereunder all certificates
representing Pledged Certificated Securities in any Material Subsidiary then
owned by the Borrower. Thereafter, whenever the Borrower acquires any other
certificate representing a Pledged Certificated Security in any Material
Subsidiary, the Borrower will immediately deliver such certificate to the
Collateral Agent as Collateral hereunder. The provisions of this subsection are
subject to the limitation in Section 5(g) in the case of voting Equity Interests
in a Foreign Subsidiary and to the limitation in Section 5(h) in the case of
Equity Interests in a Joint Venture Subsidiary.
(b) Uncertificated Securities. On the Effective Date, the Borrower will
enter into (and cause the relevant issuer to enter into) an Issuer Control
Agreement in respect of each Pledged Uncertificated Security in any Material
Subsidiary then owned by the Borrower and deliver such Issuer Control Agreement
to the Collateral Agent (which shall enter into the same). Thereafter, whenever
the Borrower acquires any other Pledged Uncertificated Security in any Material
Subsidiary, the Borrower will enter into (and cause the relevant issuer to enter
into) an Issuer Control Agreement in respect of such Pledged Uncertificated
Security and deliver such Issuer Control Agreement to the Collateral Agent
(which shall enter into the same). The provisions of this subsection are subject
to (i) the limitation in Section 5(g) in the case of voting Equity Interests in
a Foreign Subsidiary, (ii) Sections 5(i) and 7(c) and (iii) the limitation in
Section 5(h) in the case of Equity Interests in a Joint Venture Subsidiary.
(c) Perfection as to Certificated Securities. When the Borrower
delivers the certificate representing any Pledged Certificated Security in any
Material Subsidiary owned by it to the Collateral Agent and complies with
Section 5(e) in connection with such delivery, (i) the Security Interest on such
Pledged Certificated Security will be perfected, subject to no prior Liens or
rights of others, (ii) the Collateral Agent will have Control of such Pledged
Certificated Security and (iii) the Collateral Agent will be a protected
purchaser (within the meaning of UCC Section 8-303) thereof if the Collateral
Agent does not have notice of any adverse claim to the applicable security.
(d) Perfection as to Uncertificated Securities. When the Borrower, the
Collateral Agent and the issuer of any Pledged Uncertificated Security in any
Material Subsidiary owned by the Borrower enter into an Issuer Control Agreement
with respect thereto, (i) the Security Interest on such Pledged Uncertificated
Security will be perfected, subject to no prior Liens or rights of others, (ii)
the Collateral Agent will have Control of such Pledged Uncertificated Security
and (iii) the Collateral Agent will be a protected purchaser (within the meaning
of UCC Section 8-303) thereof if the Collateral Agent does not have notice of
any adverse claim to the applicable security.
(e) Delivery of Pledged Certificates. Any certificate representing a
Pledged Certificated Security, when delivered to the Collateral Agent, will be
in
suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank, with signatures appropriately
guaranteed, all in form and substance satisfactory to the Collateral Agent.
(f) Communications. The Borrower will promptly give to the Collateral
Agent copies of any notices and other communications received by it with respect
to (i) Pledged Securities registered in the name of the Borrower or its nominee
and (ii) Pledged Security Entitlements as to which the Borrower is the
Entitlement Holder.
(g) Foreign Subsidiaries. The Borrower will not be obligated to comply
with the provisions of this Section at any time with respect to any voting
Equity Interest in a Foreign Subsidiary if and to the extent (but only to the
extent) that such voting Equity Interest is excluded from the Security Interests
at such time pursuant to Section 3(b)(iv).
(h) Joint Venture Subsidiaries. The Borrower will not be obligated to
comply with the provisions of this Section at any time with respect to any
Equity Interest in a Joint Venture Subsidiary if and to the extent (but only to
the extent) that such Equity Interest is excluded from the Security Interests at
such time pursuant to Section 3(b)(v).
(i) Compliance with Applicable Foreign Laws. If and so long as the
Collateral includes (i) any Equity Interest in, or other Investment Property
issued by, a legal entity organized under the laws of a jurisdiction outside the
United States or (ii) any Security Entitlement in respect of a Financial Asset
issued by such a foreign legal entity, the Borrower will take all such action as
may be required under the laws of such foreign jurisdiction to ensure that the
Security Interests on such Collateral ranks prior to all Liens and rights of
others therein. If and so long as the Collateral includes any Pledged
Uncertificated Security issued by such a foreign legal entity, the Borrower will
comply with this subsection, and will not be required to comply with Section
5(b), with respect thereto.
Section 6. Collateral Account. (a) There is hereby established with the
Collateral Agent a cash collateral account (the "Collateral Account") in the
name and under the exclusive control of the Collateral Agent into which there
shall be deposited from time to time after the occurrence of an Acceleration
Event the cash proceeds of the Collateral required to be delivered to the
Collateral Agent pursuant to subsection 6(b) hereof or any other provision of
this Agreement. Any income received by the Collateral Agent with respect to the
balance from time to time standing to the credit of the Collateral Account,
including any interest or capital gains on Liquid Investments, shall remain, or
be deposited, in the Collateral Account. All cash amounts on deposit in the
Collateral Account from time to time after the occurrence of an Acceleration
Event, together with any Liquid Investments from time to time made pursuant to
subsection 6(d) hereof, shall at all times be within the exclusive possession,
dominion and control of the Collateral Agent, shall constitute part of the
Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied thereto as
hereinafter provided.
(a) If so requested by the Required Lenders during the continuation of
an Acceleration Event, the Borrower shall instruct all account debtors and other
Persons obligated in respect of all Accounts then included in the Collateral to
make all payments in respect of the Accounts either (i) directly to the
Collateral Agent (by instructing that such payments be remitted to a post office
box which shall be in the name of the Borrower (with a notation that proceeds
held therein are held in trust for and subject to the Liens of the Secured
Parties) and under the control of the Collateral Agent) or (ii) to one or more
other banks in any state in the United States (by instructing that such payments
be remitted to a post office box which shall be in the name and under the
control of such bank) under a Lockbox Letter substantially in the form of
Exhibit B hereto duly executed by the Borrower and such bank or under other
arrangements, in form and substance satisfactory to the Collateral Agent,
pursuant to which the Borrower shall have irrevocably instructed such other bank
(and such other bank shall have agreed) to remit all proceeds of such payments
directly to the Collateral Agent for deposit into the Collateral Account or as
the Collateral Agent may otherwise instruct such bank. All such payments made to
the Collateral Agent shall be deposited in the Collateral Account. In addition
to the foregoing, the Borrower agrees that if the proceeds of any Collateral
hereunder (including the payments made in respect of Accounts) are received by
it at a time when the foregoing provisions of this Section 6(b) are in effect,
the Borrower shall as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited into the Collateral Account, all such
proceeds shall, during the continuation of an Acceleration Event, be held in
trust by the Borrower for the Secured Parties and shall not be commingled with
any other funds or property of the Borrower.
(b) Upon the occurrence and continuation of an Acceleration Event, the
Collateral Agent shall, if so instructed by the Required Lenders, apply or cause
to be applied (subject to collection) any or all of the balance from time to
time standing to the credit of the Collateral Account in the manner specified in
Section 12.
(c) Amounts on deposit in the Collateral Account following the
occurrence of an Acceleration Event, to the extent not applied in the manner
specified in Section 12 pursuant to paragraph (c) above, shall be invested and
re-invested from time to time in such Liquid Investments as the Borrower shall
determine, which Liquid Investments shall be held in the name and be under the
control of the Collateral Agent, provided that the Collateral Agent shall, if
instructed by the Required Lenders, liquidate any such Liquid Investments and
apply or cause to be applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 12; and provided further that the
Collateral Agent shall, if so instructed by the Required Lenders, liquidate any
such Liquid Investments and release the proceeds thereof to the Borrower. For
this purpose, "Liquid Investments" means Temporary Cash Investments; provided
that each Liquid Investment shall mature within 30 days after it is acquired by
the Collateral Agent.
Section 7. Transfer of Record Ownership. (a) If an Acceleration Event
shall exist, the Collateral Agent may (and to the extent that action by it is
required, the Borrower, if directed to do so by the Collateral Agent, will as
promptly as practicable) cause each of the Pledged Securities in any Material
Subsidiary (or any portion thereof specified in such direction) to be
transferred of record into the name of the Collateral Agent or its nominee.
Promptly upon receiving any such direction, the Collateral Agent will notify the
Borrower thereof, and from time to time thereafter the Borrower will take any
and all actions reasonably requested by the Collateral Agent to facilitate
compliance with this subsection.
(a) Perfection upon Transfer of Record Ownership. If and when any
Pledged Security (whether certificated or uncertificated) owned by the Borrower
is transferred of record into the name of the Collateral Agent or its nominee
pursuant to Section 7(a), (i) the Security Interest on such Pledged Security
will be perfected, subject to no prior Liens or rights of others, (ii) the
Collateral Agent will have Control of such Pledged Security and (iii) the
Collateral Agent will be a protected purchaser (within the meaning of UCC
Section 8-303) thereof if the Collateral Agent does not have notice of any
adverse claim to the applicable security.
(b) Provisions Inapplicable after Transfer of Record Ownership. If the
provisions of Section 7(a) are implemented, Section 5(b) shall not thereafter
apply to any Pledged Security that is registered in the name of the Collateral
Agent or its nominee.
(c) Communications after Transfer of Record Ownership. The Collateral
Agent will promptly give to the Borrower copies of any notices and other
communications received by the Collateral Agent with respect to Pledged
Securities registered in the name of the Collateral Agent or its nominee.
Section 8. Right to Vote Securities. (a) Unless an Acceleration Event
shall exist, the Borrower will have the right, from time to time, to vote and to
give consents, ratifications and waivers with respect to any Pledged Security
owned by it, and the Collateral Agent will, upon receiving a written request
from the Borrower, deliver to the Borrower or as specified in such request such
proxies, powers of attorney, consents, ratifications and waivers in respect of
any such Pledged Security that is registered in the name of the Collateral Agent
or its nominee, in each case as shall be specified in such request and be in
form and substance satisfactory to the Collateral Agent. Unless an Acceleration
Event shall exist, the Collateral Agent will have no right to take any action
which the owner of a Pledged Partnership Interest or Pledged LLC Interest is
entitled to take with
respect thereto, except the right to receive payments and other distributions to
the extent provided herein.
(a) If an Acceleration Event shall exist, the Collateral Agent will
have the right to the extent permitted by law (and, in the case of a Pledged
Partnership Interest or Pledged LLC Interest, by the relevant partnership
agreement, limited liability company agreement, operating agreement or other
governing document) to vote, to give consents, ratifications and waivers and to
take any other action with respect to the Pledged Equity Interests (if any) with
the same force and effect as if the Collateral Agent were the absolute and sole
owner thereof, and the Borrower will take all such action as the Collateral
Agent may reasonably request from time to time to give effect to such right.
Section 9. General Authority. The Borrower hereby irrevocably appoints the
Collateral Agent its true and lawful attorney, with full power of substitution,
in the name of the Borrower, the Collateral Agent, the Secured Parties or
otherwise, for the use and benefit of the Secured Parties, but at the Borrower's
expense, to the extent permitted by law to exercise, at any time and from time
to time while an Acceleration Event exists, all or any of the following powers
with respect to all or any of the Collateral:
(a) to demand, sue for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(b) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if the Collateral
Agent were the absolute owner thereof, and
(d) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto;
provided that, except in the case of Personal Property Collateral that is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Collateral Agent will give the Borrower at
least ten days' prior written notice of the time and place of any public sale
thereof or the time after which any private sale or other intended disposition
thereof will be made. Any such notice shall (i) contain the information
specified in UCC Section 9-613, (ii) be Authenticated and (iii) be sent to the
parties required to be notified pursuant to UCC Section 9-611(c); provided that,
if the Collateral Agent fails to comply with this sentence in any respect, its
liability for such failure shall be limited to the liability (if any) imposed on
it as a matter of law under the UCC.
Section 10. Remedies upon Acceleration Event. (a If an Acceleration Event
shall exist, the Collateral Agent may exercise (or cause its sub-agents to
exercise) any and all remedies available to it (or to such sub-agents) under the
Collateral Documents. Without limiting the generality of the foregoing, if an
Acceleration Event shall exist, the Collateral Agent may exercise (or cause its
sub-agents to exercise) on behalf of the Secured Parties all rights of a secured
party after default under the UCC (whether or not in effect in the jurisdiction
where such rights are exercised) with respect to any Personal Property
Collateral and, in addition, the Collateral Agent may, without being required to
give any notice, except as herein provided or as may be required by mandatory
provisions of law, (i) withdraw all cash and Liquid Investments in the
Collateral Account and apply such cash and Liquid Investments and other cash, if
any, then held by it as Collateral as specified in Section 12 and (ii) if there
shall be no such cash or Liquid Investments or if such cash and Liquid
Investments shall be insufficient to pay all the Secured Obligations in full,
sell, lease, license or otherwise dispose of the Collateral or any part thereof
at public or private sale, for cash, upon credit or for future delivery, and at
such price or prices as the Collateral Agent may deem satisfactory. Any Secured
Party may be the purchaser of any or all of the Collateral so sold at any public
sale (or, if the Collateral is of a type customarily sold in a recognized market
or is of a type which is the subject of widely distributed standard price
quotations, at any private sale). The Borrower will execute and deliver such
documents and take such other action as the Collateral Agent deems reasonably
necessary or advisable in order that any such sale may be made in compliance
with law. Upon any such sale the Collateral Agent shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of the Borrower which may be waived, and the
Borrower, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 9 shall comply with the requirements set forth in Section 9. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix in the notice of
such sale. At any such sale the Collateral may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may determine. The Collateral
Agent shall not be obligated to make any such sale pursuant to any such notice.
The Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In the case of any sale of all
or any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the selling price is paid
by the purchaser thereof, but the Collateral Agent shall not incur any liability
in the case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in the case of any such failure, such Collateral may
again be sold upon like notice. The Collateral Agent, instead of exercising the
power of sale herein conferred upon it, may proceed by a suit or suits at law or
in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction. The foregoing provisions
of this subsection shall apply to Real Property Collateral only to the extent
permitted by applicable law and the provisions of any applicable Mortgage or
other document.
(a) For the purpose of enforcing any and all rights and remedies under the
Collateral Documents upon the occurrence of an Acceleration Event, the
Collateral Agent may (i) require the Borrower to, and the Borrower agrees that
it will, at its expense and upon the request of the Collateral Agent, forthwith
assemble all or any part of the Collateral as directed by the Collateral Agent
and make it available at a place designated by the Collateral Agent which is, in
its opinion, reasonably convenient to the Collateral Agent and the Borrower,
whether at the premises of the Borrower or otherwise, (ii) to the extent
permitted by applicable law, enter, with or without process of law and without
breach of the peace, any premise where any of the Collateral is or may be
located, and without charge or liability to it seize and remove such Collateral
from such premises, (iii) have access to and use the Borrower's books and
records relating to the Collateral and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any storage or
transportation facility owned or leased by the Borrower, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent the Collateral Agent reasonably deems appropriate and, in connection with
such preparation and disposition, use without charge any trademark, trade name,
copyright, patent or technical process used by the Borrower. The Collateral
Agent may also render any or all of the Collateral unusable at the Borrower's
premises and may dispose of such Collateral on such premises without liability
for rent or costs.
(b) In addition to the rights set forth in the preceding subsections, for
the purpose of enforcing any and all rights and remedies with respect to any
Collateral upon the occurrence of an Acceleration Event, the Borrower shall
provide or make available to the Collateral Agent and any purchaser of the
Borrower's interest in any such Collateral at any judicial or non-judicial
foreclosure sale or any grantee acquiring such interest in such Collateral named
in a deed in lieu of foreclosure, or otherwise (a "Successor Owner") on a full-
time basis during normal working hours all the Support Facilities and shall
supply to the Collateral Agent or such Successor Owner all the Support Services,
in each case, that are necessary or desirable for the continued commercial
operation of such Collateral on a regular, unimpaired basis for the functions
for which it is intended to be used and/or has been used for the continued
operation by the Borrower of its business conducted where such Collateral is
located; provided that the Borrower will provide such access to the Support
Facilities and such Support Services only in a manner that is commercially
reasonable, consistent with past practices, and that will not interfere in any
material respect with the Borrower's other commercial activities involving the
Support Facilities and Support Services. For purposes of this subsection (c),
"Support Facilities" means, in relation to any
of the Collateral, any facilities providing transportation, storage or similar
services, and any utilities and other support facilities, including without
limitation, the approximately 1600 miles of pipeline servicing the Mortgaged
Properties and the barge docking facility servicing the Channelview Mortgaged
Property (but shall not include raw materials, feedstocks or other product
inputs) and "Support Services" means, in relation to any of the Collateral,
services, equipment, permits and know-how (but shall not include raw materials,
feedstocks or other product inputs).
Section 11. Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Collateral Agent in good
faith.
Section 12. Application of Proceeds. (a Upon the occurrence and during
the continuance of an Acceleration Event, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral and any cash held in the
Collateral Account shall be applied by the Collateral Agent in the following
order of priorities:
first, to pay the expenses of such sale or other realization, including
reasonable compensation to agents contemplated by Section 14 and counsel for the
Collateral Agent, and all expenses, liabilities and advances incurred or made by
the Collateral Agent in connection with the Collateral Documents, and then
ratably to pay any other unreimbursed expenses for which any Secured Party is to
be reimbursed pursuant to Section 9.05 of the Credit Agreement or Section 15
hereof, and any unpaid fees owing to the Agents under the Credit Agreement;
second, to pay the unpaid principal of the Secured Obligations ratably (or
provide for the payment thereof pursuant to Section 12(b)), until payment in
full of the principal of all Secured Obligations shall have been made (or so
provided for);
third, to pay ratably all interest on the Secured Obligations and all
Facility Fees payable under the Credit Agreement, until payment in full of all
such interest and fees shall have been made;
fourth, to pay all other Secured Obligations ratably (or provide for the
payment thereof pursuant to Section 12(b)), until payment in full of all such
other Secured Obligations shall have been made (or so provided for); and
finally, to pay to the Borrower or its successors or assigns, or as a court
of competent jurisdiction may direct, any surplus then remaining from such
proceeds.
The Collateral Agent may make distributions hereunder in cash or in kind or, on
a ratable basis, in any combination thereof.
(a) If at any time any portion of any monies collected or received by
the Collateral Agent would, but for the provisions of this Section 12(b), be
payable pursuant to Section 12(a) in respect of a Contingent Secured Obligation,
the Collateral Agent shall not apply any monies to pay such Contingent Secured
Obligation but instead shall request the holder thereof, at least 10 days before
each proposed distribution hereunder, to notify the Collateral Agent as to the
maximum amount of such Contingent Secured Obligation if then ascertainable
(e.g., in the case of a letter of credit, the maximum amount available for
subsequent drawings thereunder). If the holder of such Contingent Secured
Obligation does not notify the Collateral Agent of the maximum ascertainable
amount thereof at least two Business Days before such distribution, such holder
will not be entitled to share in such distribution. If such holder does so
notify the Collateral Agent as to the maximum ascertainable amount thereof, the
Collateral Agent will allocate to such holder a portion of the monies to be
distributed in such distribution, calculated as if such Contingent Secured
Obligation were outstanding in such maximum ascertainable amount. However, the
Collateral Agent will not apply such portion of such monies to pay such
Contingent Secured Obligation, but instead will hold such monies or invest such
monies in Liquid Investments. All such monies and Liquid Investments and all
proceeds thereof will constitute Collateral hereunder, but will be subject to
distribution in accordance with this Section 12(b) rather than Section 12(a).
The Collateral Agent will hold all such monies and Liquid Investments and the
net proceeds thereof in trust until all or part of such Contingent Secured
Obligation becomes a Non-Contingent Secured Obligation, whereupon the Collateral
Agent at the request of the relevant Secured Party will apply the amount so held
in trust to pay such Non-Contingent Secured Obligation; provided that, if the
other Secured Obligations theretofore paid pursuant to the same clause of
Section 12(a) (i.e., clause second or fourth) were not paid in full, the
Collateral Agent will apply the amount so held in trust to pay the same
percentage of such Non-Contingent Secured Obligation as the percentage of such
other Secured Obligations theretofore paid pursuant to the same clause of
Section 12(a). If (i) the holder of such Contingent Secured Obligation shall
advise the Collateral Agent that no portion thereof remains in the category of a
Contingent Secured Obligation and (ii) the Collateral Agent still holds any
amount held in trust pursuant to this Section 12(b) in respect of such
Contingent Secured Obligation (after paying all amounts payable pursuant to the
preceding sentence with respect to any portions thereof that became Non-
Contingent Secured Obligations), such remaining amount will be applied by the
Collateral Agent in the order of priorities set forth in Section 12(a).
(b) In making the payments and allocations required by this Section,
the Collateral Agent may rely upon information supplied to it pursuant to
Section 13(c). All distributions made by the Collateral Agent pursuant to this
Section shall be final (except in the event of manifest error) and the
Collateral Agent shall have no duty to inquire as to the application by any
Secured Party of any amount distributed to it.
Section 13. Concerning the Collateral Agent. The provisions of Article
VIII of the Credit Agreement shall inure to the benefit of the Collateral Agent
in respect of this Agreement (as if the Collateral Agent were an Administrative
Agent referred to therein) and shall be binding upon the parties to the Credit
Agreement. In furtherance and not in derogation of the rights, privileges and
immunities of the Collateral Agent therein specified:
(a) The Collateral Agent is authorized to take all such action as is
provided to be taken by it as Collateral Agent hereunder and all other action
reasonably incidental thereto. As to any matters not expressly provided for
herein (including, without limitation, the timing and methods of realization
upon the Collateral) the Collateral Agent shall act or refrain from acting in
accordance with written instructions from the Required Lenders or, in the
absence of such instructions, in accordance with its discretion.
(b) The Collateral Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Security Interests in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part under the Collateral Documents. The Collateral Agent shall have
no duty to ascertain or inquire as to the performance or observance of any of
the terms of any Collateral Document by the Borrower.
(c) For all purposes of the Collateral Documents, including
determining the amounts of the Secured Obligations and whether a Secured
Obligation is a Contingent Secured Obligation or not, the Collateral Agent will
be entitled to rely on information from (i) its own records for information as
to the Lender and Agents, their Secured Obligations and actions taken by them,
(ii) any Secured Party for information as to its Secured Obligations and actions
taken by it, to the extent that the Collateral Agent has not obtained such
information from the foregoing sources, and (iii) the Borrower, to the extent
that the Collateral Agent has not obtained information from the foregoing
sources.
Section 14. Appointment of Co-Collateral Agents. At any time or times,
in order to comply with any legal requirement in any jurisdiction, the
Collateral Agent may appoint another bank or trust company or one or more other
Persons,
either to act as co-agent or co-agents, jointly with the Collateral Agent, or to
act as separate agent or agents on behalf of the Secured Parties with such power
and authority as may be necessary for the effective operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in the
discretion of the Collateral Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 13).
Section 15. Expenses. The Borrower agrees that it will forthwith upon
demand pay to the Collateral Agent:
(i) the amount of any taxes (other than Excluded Taxes)
which the Collateral Agent may have been required to pay by reason of the
Security Interests or to free any of the Collateral from any Lien thereon
resulting from the failure to pay such taxes to the extent such Lien is not
a Permitted Lien, and
(ii) the amount of any and all out-of-pocket expenses,
including the reasonable fees and disbursements of counsel and of any other
experts, which the Collateral Agent may incur in connection with (w) the
administration or enforcement of the Collateral Documents, including such
expenses as are incurred to preserve the value of the Collateral and the
validity, perfection, rank and value of any Security Interest, (x) the
collection, sale or other disposition of any of the Collateral, (y) the
exercise by the Collateral Agent of any of the rights conferred upon it
under the Collateral Documents or (z) any Default.
Any such amount not paid on demand shall bear interest at the rate
applicable to ABR Revolving Loans from time to time plus 2% and shall be an
additional Secured Obligation hereunder.
Section 16. Termination of Security Interests; Release of Collateral.
(a) Upon the repayment in full of all principal of and premium and interest on
the Loans and the LC Disbursements, all accrued fees and other Non-Contingent
Secured Obligations, the termination of the Commitments and the termination or
cancellation of all outstanding Letters of Credit (or the cash collateralization
or other support thereof in a manner satisfactory to the Collateral Agent), the
Security Interests shall terminate and all rights to the Collateral shall revert
to the Borrower.
(a) At any time and from time to time prior to such termination of
the Security Interests as described above, unless a Default shall have occurred
and be continuing, the Collateral Agent shall release any of the Collateral (but
not the Proceeds thereof or all or substantially all of the Collateral) if (i)
the Collateral Agent receives a certificate from a Principal Financial Officer
of the Borrower stating that (x) the assets to be released are being sold (or in
the case of a Securitization Transaction otherwise transferred) in a transaction
which complies with the applicable requirements of Sections 6.06(c) or (d) of
the Credit
Agreement, as the case may be, (y) such release is necessary to effect such
transaction and (z) the Net Cash Proceeds of such sale or transfer will be
applied to prepay Term Loans as required by Section 2.09(c), (d) and (e) of the
Credit Agreement and (ii) arrangements satisfactory to the Collateral Agent have
been made so that such release will become effective no earlier that the closing
of such sale or transfer.
(b) At any time and from time to time prior to such termination of
the Security Interests or release of Collateral as described above, the
Collateral Agent shall release any of the Collateral in accordance with Section
9.02(c) of the Credit Agreement.
(c) Upon any such termination of the Security Interests or release of
Collateral, the Collateral Agent will, at the expense of the Borrower, execute
and deliver to the Borrower such documents as the Borrower shall reasonably
request to evidence the termination of the Security Interests or the release of
such Collateral, as the case may be.
Section 17. Additional Secured Obligations. The Borrower may from time
to time designate its obligations under any Interest Rate Hedging Agreement as
an additional Secured Obligation for purposes hereof by delivering to the
Collateral Agent a certificate signed by a Principal Financial Officer that (i)
identifies such Interest Rate Hedging Agreement, specifying the name and address
of the other party thereto, the notional principal amount thereof and the
expiration date thereof, (ii) states that the Borrower's obligations thereunder
are designated as Secured Obligations for purposes hereof and (iii) states that
such Interest Rate Hedging Agreement otherwise complies with Section 6.14 of the
Credit Agreement.
Section 18. Notices. All notices, communications and distributions
hereunder shall be given in accordance with Section 9.01 of the Credit
Agreement.
Section 19. Waivers, Non-Exclusive Remedies. No failure on the part of
the Collateral Agent or any Secured Party to exercise, and no delay in
exercising and no course of dealing with respect to, any right or remedy under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise by the Collateral Agent or any Secured Party of any right under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right or remedy. The rights and remedies in the Loan Documents are
cumulative and are not exclusive of any other rights or remedies provided by
law.
Section 20. Successors and Assigns. This Agreement is for the benefit of
the Collateral Agent and the Secured Parties and their successors and, in the
case of the Lenders, permitted assigns pursuant to Section 9.07 of the Credit
Agreement and in the event of an assignment of all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the obligation so
assigned, shall be automatically transferred with such obligation. This
Agreement shall be binding on the Borrower and its successors and assigns.
Section 21. Changes in Writing. Neither this Agreement nor any provision
hereof may be waived, amended, modified or terminated except pursuant to an
agreement or agreements in writing entered into by the parties hereto, with the
consent of such Lenders as are required to consent thereto under Section 9.02 of
the Credit Agreement.
Section 22. New York Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York, except as
otherwise required by mandatory provisions of law and except to the extent that
remedies provided by the laws of any jurisdiction other than New York are
governed by the laws of such jurisdiction.
Section 23. Severability. If any provision of any Collateral Document is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of the Collateral Documents shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Collateral Agent and the Secured Parties in order to
carry out the intentions of the parties hereto as nearly as may be possible; and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
EQUISTAR CHEMICALS, LP
By: _________________________________________
Name: Gerald A. O'Brien
Title: Vice President, General Counsel
and Secretary
THE CHASE MANHATTAN BANK, as Collateral Agent
By: _________________________________________
Name:
Title:
SCHEDULE 1
EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES
OWNED BY THE BORROWER
(as of the Effective Date)
________________ ________________ __________________ ______________ ____________
Number
Jurisdiction of
Issuer of Owner of Percentage Shares
Organization Equity Interest Owned or Units
SCHEDULE 2
OTHER EQUITY INTERESTS
OWNED BY THE BORROWER
(as of the Effective Date)
________________ ______________ ______________ ______________ ____________
Jurisdiction
Issuer of Owner of Amount Type of
Organization Securities Owned Security
EXHIBIT A
PERFECTION CERTIFICATE
EXHIBIT B
[FORM OF LOCKBOX LETTER]
_____________ __, ____
[Name and Address of Lockbox Bank]
Re: EQUISTAR CHEMICALS, LP
Gentlemen:
We hereby notify you that effective ___________, ____, we have transferred
exclusive possession, dominion and control of our lock-box account[s] No[s].
_________________ (the "Lockbox Account[s]") maintained with you under the terms
of the [Lockbox Agreement] attached hereto as Exhibit A (the "Lockbox
Account[s]") to THE CHASE MANHATTAN BANK, as Collateral Agent (with its
successors, the "Collateral Agent").
We hereby irrevocably instruct you to make all payments to be made by you
out of or in connection with the Lockbox Account[s] (i) to the Collateral Agent
for credit to account no. ___________ maintained by it at its office at
[___________________] or (ii) as you may otherwise be instructed by the
Collateral Agent.
We also hereby notify you that the Collateral Agent shall be irrevocably
entitled to exercise any and all rights in respect of or in connection with the
Lockbox Account[s], including, without limitation, the right to specify when
payments are to be made out of or in connection with the Lockbox Account[s].
All funds deposited into the Lockbox Account[s] will not be subject to
deductions, set-off, banker's lien or any other right in favor of any other
person than the Collateral Agent, except that you may set-off against the
Lockbox Account[s] the face amount of any check deposited in and credited to
such Lockbox Account[s] which is subsequently returned for any reason. Your
compensation for providing the services contemplated herein shall be as mutually
agreed between you and us from time to time and we will continue to pay such
compensation.
Please confirm your acknowledgment of and agreement to the foregoing
instructions by signing in the space provided below.
Very truly yours,
EQUISTAR CHEMICALS, LP
By:___________________________
Name:
Title:
Acknowledged and agreed to
as of this ____ day of ______, ____.
[LOCKBOX BANK]
By:________________________________
Name:
Title:
EXHIBIT C
to Security Agreement
ISSUER CONTROL AGREEMENT
ISSUER CONTROL AGREEMENT dated as of ______, _____ among EQUISTAR
CHEMICALS, LP (with its successors, the "Borrower"), THE CHASE MANHATTAN BANK,
as Collateral Agent (with its successors, the "Secured Party"), and _________
(the "Issuer"). All references herein to the "UCC" refer to the Uniform
Commercial Code as in effect from time to time in [Issuer's jurisdiction of
incorporation].
W I T N E S S E T H :
WHEREAS, the Borrower is the registered holder of [specify Pledged
Uncertificated Securities issued by the Issuer] issued by the Issuer (the
"Securities");
WHEREAS, pursuant to a Security Agreement dated as of [date of Security
Agreement] (as such agreement may be amended and/or supplemented from time to
time, the "Security Agreement"), the Borrower has granted to the Secured Party a
continuing security interest (the "Security Interest") in all right, title and
interest of the Borrower in, to and under the Securities, whether now existing
or hereafter arising; and
WHEREAS, the parties hereto are entering into this Agreement in order to
perfect the Security Interest on the Securities;
NOW, THEREFORE, the parties hereto agree as follows:
Section 24. Nature of Securities. The Issuer confirms that (i) the
Securities are "uncertificated securities" (as defined in Section 8-102 of the
UCC) and (ii) the Borrower is registered on the books of the Issuer as the
registered holder of the Securities.
Section 25. Instructions. The Issuer agrees to comply with any
"instruction" (as defined in Section 8-102 of the UCC) originated by the Secured
Party and relating to the Securities without further consent by the Borrower or
any other person. The Borrower consents to the foregoing agreement by the
Issuer.
Section 26. Waiver of Lien; Waiver of Set-off. The Issuer waives any
security interest, lien or right of setoff that it may now have or hereafter
acquire in or with respect to the Securities. The Issuer's obligations in
respect of the
Securities will not be subject to deduction, set-off or any other right in favor
of any person other than the Secured Party.
Section 27. Choice of Law. This Agreement shall be governed by the laws of
[Issuer's jurisdiction of incorporation].
Section 28. Conflict with Other Agreements. There is no agreement (except
this Agreement) between the Issuer and the Borrower with respect to the
Securities [except for [identify any existing other agreements] (the "Existing
Other Agreements")]. In the event of any conflict between this Agreement (or any
portion hereof) and any other agreement [(including any Existing Other
Agreement)] between the Issuer and the Borrower with respect to the Securities,
whether now existing or hereafter entered into, the terms of this Agreement
shall prevail.
Section 29. Amendments. No amendment or modification of this Agreement or
waiver of any right hereunder shall be binding on any party hereto unless it is
in writing and is signed by all the parties hereto.
Section 30. Notice of Adverse Claims. Except for the claims and interests
of the Secured Party and the Borrower in the Securities, the Issuer does not
know of any claim to, or interest in, the Securities. If any person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
attachment, execution or similar process) against the Securities, the Issuer
will promptly notify the Secured Party and the Borrower thereof.
Section 31. Maintenance of Securities. In addition to, and not in lieu of,
the obligation of the Issuer to honor instructions as agreed in Section 2
hereof, the Issuer agrees as follows:
(i) Borrower Instructions; Notice of Exclusive Control. So long as
the Issuer has not received a Notice of Exclusive Control (as defined
below), the Issuer may comply with instructions of the Borrower or any duly
authorized agent of the Borrower in respect of the Securities. After the
Issuer receives a written notice from the Secured Party that it is
exercising exclusive control over the Securities (a "Notice of Exclusive
Control"), the Issuer will cease complying with instructions of the
Borrower or any of its agents.
(ii) Non-Cash Dividends and Distributions. The Issuer shall deliver
to the Secured Party all dividends, interest and other distributions paid
or made upon or with respect to the Securities.
(iii) Voting Rights. Until the Issuer receives a Notice of Exclusive
Control, the Borrower shall be entitled to direct the Issuer with respect
to voting the Securities.
(iv) Statements and Confirmations. The Issuer will promptly send
copies of all statements and other correspondence concerning the Securities
simultaneously to each of the Borrower and the Secured Party at their
respective addresses specified in Section 11 hereof.
(v) Tax Reporting. All items of income, gain, expense and loss
recognized in respect of the Securities shall be reported to the Internal
Revenue Service and all state and local taxing authorities under the name
and taxpayer identification number of the Borrower.
Section 32. Representations, Warranties and Covenants of the Issuer. The
Issuer makes the following representations, warranties and covenants:
(i) This Agreement is a valid and binding agreement of the Issuer
enforceable in accordance with its terms.
(ii) The Issuer has not entered into, and until the termination of
this Agreement will not enter into, any agreement with any other person
relating to the Securities pursuant to which it has agreed, or will agree,
to comply with instructions (as defined in Section 8-102 of the UCC) of
such person. The Issuer has not entered into any other agreement with the
Borrower or the Secured Party purporting to limit or condition the
obligation of the Issuer to comply with instructions as agreed in Section 2
hereof.
Section 33. Successors. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
Section 34. Notices. Each notice, request or other communication given to
any party hereunder shall be in writing (which term includes facsimile or other
electronic transmission) and shall be effective (i) when delivered to such party
at its address specified below, (ii) when sent to such party by facsimile or
other electronic transmission, addressed to it at its facsimile number or
electronic address specified below, and such party sends back an electronic
confirmation of receipt or (iii) ten days after being sent to such party by
certified or registered United States mail, addressed to it at its address
specified below, with first class or airmail postage prepaid:
Borrower:
Secured Party:
Issuer:
Any party may change its address, facsimile number and/or e-mail address for
purposes of this Section by giving notice of such change to the other parties in
the manner specified above.
Section 35. Termination. The rights and powers granted herein to the
Secured Party (i) have been granted in order to perfect the Security Interest,
(ii) are powers coupled with an interest and (iii) will not be affected by any
bankruptcy of the Borrower or any lapse of time. The obligations of the Issuer
hereunder shall continue in effect until the Secured Party has notified the
Issuer in writing that the Security Interest has been terminated pursuant to the
Security Agreement.
Section 36. Counterparts. This Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any
party hereto may execute this Agreement by signing and delivering one or more
counterparts.
EQUISTAR CHEMICALS, LP
By:__________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:__________________________
Name:
Title:
[NAME OF ISSUER]
By:__________________________
Name:
Title:
Exhibit A
[Letterhead of Secured Party]
[Date]
[Name and Address of Issuer]
Attention: ________________________
Re: Notice of Exclusive Control
---------------------------
Ladies and Gentlemen:
As referenced in the Issuer Control Agreement dated as of ______, ____
among Equistar Chemicals, LP, us and you (a copy of which is attached), we
notify you that we will hereafter exercise exclusive control over [specify
Pledged Uncertificated Securities] registered in the name of Equistar Chemicals,
LP (the "Securities"). You are instructed not to accept any directions or
instructions with respect to the Securities from any person other than the
undersigned unless otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by facsimile
transmission to Equistar Chemicals, LP.
Very truly yours,
THE CHASE MANHATTAN BANK,
as Collateral Agent
By:___________________________
Title:
cc: Equistar Chemicals, LP
EXHIBIT H
SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE dated as of [ ] by [NAME OF GUARANTOR], [a _________
corporation] (with its successors, the "Guarantor") for the benefit of the
Secured Parties (as defined in the Security Agreement referred to below).
WHEREAS, the Guarantor is a Subsidiary of Equistar Chemicals, LP, a Delaware
limited partnership (with its successors, the "Borrower"); and
WHEREAS, the Borrower, certain financial institutions (each, a "Lender" and
collectively, the "Lenders"), The Chase Manhattan Bank, as Administrative Agent
and Collateral Agent, Bank of America, N.A., as Servicing Agent and
Administrative Agent, and Credit Suisse First Boston and Citicorp USA, Inc., as
Co-Syndication Agents, are parties to an Amended and Restated Credit Agreement
dated as of August 24, 2001 (as the same has been and may be amended from time
to time, the "Credit Agreement"); and
WHEREAS, the Lenders, the Swingline Lender and the Fronting Banks are not
willing to make Loans or issue or participate in Letters of Credit under the
Credit Agreement, and the counterparties to certain interest rate hedging
arrangements referred to in the Security Agreement may not be willing to enter
into or maintain them, unless the Guarantor enters into this Subsidiary
Guarantee;
WHEREAS, in conjunction with the transactions contemplated by the Credit
Agreement and in consideration of the financial and other support that the
Borrower has provided, and such financial and other support as the Borrower may
in the future provide, to the Guarantor, the Guarantor is willing to enter into
this Subsidiary Guarantee; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby agrees as follows:
ARTICLE 1
Definitions
Section 1.01. Definitions. Terms defined in the Credit Agreement and
the Security Agreement (as defined in the Credit Agreement) and not otherwise
defined herein are used herein as therein defined. In addition, "Guaranteed
Obligations" means (a) all principal of and premium and interest (including,
without limitation, any pay-in-kind interest and any interest which accrues
after
1
the commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrower (or would accrue but
for the operation of applicable bankruptcy or insolvency laws), whether or not
allowed or allowable as a claim in any such proceeding ("Post-Petition
Interest")) on any Loan or any LC Reimbursement Obligations under, or any Note
issued pursuant to, the Credit Agreement, (b) all other amounts payable by the
Borrower under any Loan Document (as the same may hereafter be amended,
restated, supplemented or otherwise modified from time to time) (including any
Post-Petition Interest with respect to such amounts), (c) any renewals,
refinancings or extensions of any of the foregoing (including Post-Petition
Interest) and (d) all obligations (if any) designated by the Borrower as
additional Secured Obligations pursuant to Section 17 of the Security Agreement.
ARTICLE 2
Guarantee
Section 2.01. The Guarantee. Subject to Section 2.03, the Guarantor hereby
unconditionally and irrevocably guarantees to the Secured Parties, the due and
punctual payment of all Guaranteed Obligations as and when the same shall become
due and payable, whether at maturity, by declaration or otherwise, according to
the terms thereof. This is a guarantee of payment and not merely of collection.
In case of failure by the Borrower punctually to pay any Guaranteed Obligation,
the Guarantor, subject to Section 2.03, hereby unconditionally agrees forthwith
upon demand to cause such payment to be made punctually as and when the same
shall become due and payable, whether at maturity or by declaration or
otherwise, and as if such payment were made by the Borrower.
Section 2.02. Guarantee Unconditional. The obligations of the Guarantor
under this Article 2 shall be unconditional and absolute and, without limiting
the generality of the foregoing, to the fullest extent permitted by law, shall
not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Borrower under any Loan Document, by operation
of law or otherwise;
(b) any modification or amendment of or supplement to any Loan Document;
(c) any modification, amendment, waiver, impairment, release, non-
perfection or invalidity of any direct or indirect security, or of any guaranty
or other liability of any third party, for any obligation of the Borrower under
any Loan Document;
(d) any change in the partnership existence, structure or ownership of the
Borrower, or any insolvency, bankruptcy, reorganization or other similar
2
proceeding affecting the Borrower or its assets or any resulting release or
discharge of any obligation of the Borrower contained in any Loan Document;
(e) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Borrower, any Secured Party or any
other person, whether or not arising in connection with the Loan Documents;
provided that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the Borrower
for any reason of any Loan Document, or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrower of the principal
of, or premium or interest on, any Loan or Note or any other amount payable by
the Borrower under any Loan Document; or
(g) any other act or omission to act or delay of any kind by the Borrower,
the Secured Parties or any other person or any other circumstance whatsoever
that might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of or defense to the obligations of the Guarantor under this
Article 2.
Section 2.03. Limit of Liability. The Guarantor shall be liable under this
Subsidiary Guarantee only for amounts aggregating up to the largest amount that
would not render its obligations hereunder subject to avoidance under Section
548 of the United States Bankruptcy Code or any comparable provisions of any
other applicable law.
Section 2.04. Discharge; Reinstatement in Certain Circumstances. (a) The
Guarantor's obligations under this Article 2 shall remain in full force and
effect until all Guaranteed Obligations (other than those described in clause
(d) of the definition thereof) shall have been paid in full, all Commitments
shall have terminated and all outstanding Letters of Credit shall have
terminated or been cancelled (or cash collateralized or otherwise supported in a
manner satisfactory to the Collateral Agent). If at any time any payment of any
Guaranteed Obligation is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise,
the Guarantor's obligations under this Article 2 with respect to such payment
shall be reinstated at such time as though such payment had become due but had
not been made at such time.
(b) At any time and from time to time prior to the termination of the
Guarantor's obligations hereunder in accordance with subsection (a), obligations
of the Guarantor hereunder may be terminated in accordance with Section 9.02(c)
of the Credit Agreement.
Section 2.05. Waiver. The Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as
3
well as any requirement that at any time any action be taken by any person
against the Guarantor, the Borrower or any other person.
Section 2.06. Subrogation. Upon making full payment with respect to any
obligation of the Borrower hereunder, the Guarantor shall be subrogated to the
rights of the payee against the Borrower with respect to such obligation;
provided that the Guarantor shall not enforce any payment by way of subrogation
until all Guaranteed Obligations (other than those described in clause (d) of
the definition thereof) shall have been paid in full, all Commitments shall have
terminated and all outstanding Letters of Credit shall have terminated or been
cancelled (or cash collateralized or otherwise supported in a manner
satisfactory to the Collateral Agent).
Section 2.07. Stay of Acceleration. If acceleration of the time for payment
of any Guaranteed Obligation is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such Guaranteed Obligations otherwise
subject to acceleration under the terms of any Loan Document shall nonetheless
be payable by the Guarantor hereunder forthwith on demand by the Administrative
Agents on behalf of the Required Lenders.
ARTICLE 3
Miscellaneous
Section 3.01. Notices. All notices, requests and other communications to be
made to or by the Guarantor hereunder shall be in writing (including, without
limitation, bank wire, telex, facsimile transmission or similar writing) and
shall be given: (a) if to the Guarantor, to it at its address or facsimile
number set forth on the signature pages hereof or such other address or
facsimile number as the Guarantor may hereafter specify for the purpose by
notice to the Collateral Agent and (b) if to any party to the Credit Agreement,
to it at its address or telex or facsimile number for notices specified in or
pursuant to the Credit Agreement. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex is
transmitted to the telex number specified in this Section 3.01 and the
appropriate answerback is received, (ii) if given by facsimile, when such
facsimile is transmitted to the facsimile transmission number specified in this
Section 3.01 and electronic, telephonic or other appropriate confirmation of
receipt thereof is received by the sender, (iii) if given by mail, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (iv) if given by any other means, when
delivered at the address specified in this Section 3.01.
Section 3.02. No Waiver. No failure or delay by any Secured Party in
exercising any right, power or privilege under this Subsidiary Guarantee or any
other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
and
4
therein provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 3.03. Amendments and Waivers. Neither this Subsidiary Guarantee nor
any provision hereof may be waived, amended, modified or terminated except
pursuant to an agreement or agreements in writing entered into by the Guarantor
and the Collateral Agent, with the consent of such Lenders as are required to
consent thereto under Section 9.02 of the Credit Agreement.
Section 3.04. Successors and Assigns. This Subsidiary Guarantee is for the
benefit of the Secured Parties and their successors and permitted assigns
pursuant to Section 9.07 of the Credit Agreement and in the event of an
assignment of the Loans, or other amounts payable under the Loan Documents in
accordance with the terms of the Loan Documents, the rights hereunder, to the
extent applicable to the obligations so assigned, shall be transferred with such
obligation. All the provisions of this Subsidiary Guarantee shall be binding
upon the Guarantor and its successors and permitted assigns, for the benefit of
the Secured Parties and their successors and assigns, except that the Guarantor
may not transfer or assign any or all of its rights or obligations hereunder
without the prior written consent of the Required Lenders.
Section 3.05. Taxes. All payments by the Guarantor hereunder shall be made
free and clear of and without deduction for any Indemnified Taxes or Other Taxes
in accordance with Section 2.20 of the Credit Agreement and the Guarantor agrees
to be bound by the provisions of Section 2.20 of the Credit Agreement as if it
were the "Borrower".
Section 3.06. Effectiveness. This Subsidiary Guarantee shall become
effective when the Collateral Agent receives a counterpart hereof signed by the
Guarantor.
Section 3.07. GOVERNING LAW; SUBMISSION TO JURISDICTION . (a) THIS
SUBSIDIARY GUARANTEE SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(b) To the extent it may effectively do so under applicable law, the
Guarantor (i) irrevocably submits to the nonexclusive jurisdiction of any New
York State or Federal court sitting in the Borough of Manhattan, The City of New
York, over any suit, action or proceeding arising out of or relating to this
Subsidiary Guarantee or any other document contemplated thereby, and (ii)
irrevocably waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of any such
court, any objection that 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 such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
5
(c) The Guarantor agrees, to the fullest extent it may effectively do so
under applicable law, that a judgment in any suit, action or proceeding of the
nature referred to in paragraph (b) above brought in any such court shall be
conclusive and binding upon the Guarantor and may be enforced in the courts of
the United States of America or the State of New York (or any other courts to
the jurisdiction of which the Borrower is or may be subject) by a suit upon such
judgment.
(d) To the extent it may effectively do so under applicable law, the
Guarantor consents to process being served in any suit, action or proceeding of
the nature referred to in paragraph (b) by mailing a copy thereof by registered
or certified mail, postage prepaid, return receipt requested, to the address of
the Guarantor set forth or referred to in Section 3.01. To the extent it may
effectively do so under applicable law, the Guarantor agrees that such service
(i) shall be deemed in every respect effective service of process upon the
Guarantor in any such suit, action or proceeding and (ii) shall be taken and
held to be valid personal service upon and personal delivery to the Guarantor.
(e) Nothing in this Section shall affect the right of any Agent or Lender
to serve process in any manner permitted by law, or limit any right that any
Agent or Lender may have to bring proceedings against the Guarantor in the
courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
Section 3.08. Wavier of Immunity. To the extent that the Guarantor has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid or execution, or otherwise) with respect to itself or its
property, the Guarantor hereby irrevocably waives such immunity in respect of
its obligations under this Subsidiary Guarantee to the extent permitted by
applicable law and, without limiting the generality of the foregoing, agrees
that the waivers set forth in this Section 3.08 shall have effect to the fullest
extent permitted under the Foreign Sovereign Immunities Act of 1976 of the
United States of America and are intended to be irrevocable for purposes of such
Act.
Section 3.09. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS SUBSIDIARY GUARANTEE. THE GUARANTOR (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THE
SECURED PARTIES HAVE BEEN INDUCED TO ENTER INTO THE LOAN
6
DOCUMENTS BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
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IN WITNESS WHEREOF, the Guarantor has caused this instrument to be duly
executed by its authorized officer as of the date first above written.
[GUARANTOR]
By ____________________________
Title:
[Address]
Facsimile Number:
8