EXHIBIT 10.1
CONFORMED COPY
CREDIT AGREEMENT
DATED AS OF JULY 31, 2003
among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, N.A.
as the Agent
BANC OF AMERICA SECURITIES LLC,
as the Sole Lead Arranger and Book Manager
and
WESTLAKE CHEMICAL CORPORATION
and each other Person listed on SCHEDULE 1 hereto,
as the Borrowers
$200,000,000
TABLE OF CONTENTS
Section Page
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ARTICLE 1 LOANS AND LETTERS OF CREDIT....................................... 1
1.1 Total Facility.................................................. 1
1.2 Revolving Loans................................................. 1
1.3 Letters of Credit............................................... 4
1.4 Bank Products................................................... 7
ARTICLE 2 INTEREST AND FEES................................................. 7
2.1 Interest........................................................ 7
2.2 Continuation and Conversion Elections........................... 8
2.3 Maximum Interest Rate........................................... 9
2.4 Closing Fee..................................................... 9
2.5 Unused Line Fee................................................. 9
2.6 Letter of Credit Fee............................................ 10
ARTICLE 3 PAYMENTS AND PREPAYMENTS.......................................... 10
3.1 Revolving Loans................................................. 10
3.2 Full or Partial Termination of Facility......................... 10
3.3 Prepayments of the Loans....................................... 11
3.4 LIBOR Rate Loan Prepayments..................................... 12
3.5 Payments by the Borrowers....................................... 12
3.6 Payments as Revolving Loans..................................... 12
3.7 Apportionment, Application and Reversal of Payments............. 12
3.8 Indemnity for Returned Payments................................. 13
3.9 Agent's and Lenders' Books and Records; Monthly Statements...... 13
ARTICLE 4 TAXES, YIELD PROTECTION AND ILLEGALITY............................ 14
4.1 Taxes........................................................... 14
4.2 Illegality...................................................... 14
4.3 Increased Costs and Reduction of Return......................... 15
4.4 Funding Losses.................................................. 15
4.5 Inability to Determine Rates.................................... 16
4.6 Certificates of the Agent....................................... 16
4.7 Survival........................................................ 16
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES................. 16
5.1 Books and Records............................................... 16
5.2 Financial Information........................................... 16
5.3 Notices to the Lenders.......................................... 19
ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS............................ 21
6.1 Authorization, Validity, and Enforceability of this
Agreement and the Loan Documents................................ 21
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6.2 Validity and Priority of Security Interest...................... 21
6.3 Organization and Qualification.................................. 22
6.4 Corporate Name; Prior Transactions.............................. 22
6.5 Subsidiaries and Affiliates..................................... 22
6.6 Financial Statements and Projections............................ 22
6.7 Capitalization.................................................. 22
6.8 Solvency........................................................ 23
6.9 Debt............................................................ 23
6.10 Distributions................................................... 23
6.11 Real Estate; Leases............................................. 23
6.12 Proprietary Rights.............................................. 23
6.13 Trade Names..................................................... 23
6.14 Litigation...................................................... 23
6.15 Labor Disputes.................................................. 23
6.16 Environmental Laws.............................................. 24
6.17 No Violation of Law............................................. 25
6.18 No Default...................................................... 25
6.19 ERISA Compliance................................................ 25
6.20 Taxes........................................................... 26
6.21 Regulated Entities.............................................. 26
6.22 Use of Proceeds; Margin Regulations............................. 26
6.23 Copyrights, Patents, Trademarks and Licenses, etc............... 26
6.24 No Material Adverse Change...................................... 26
6.25 Full Disclosure................................................. 26
6.26 Material Agreements............................................. 27
6.27 Bank Accounts................................................... 27
6.28 Governmental Authorization...................................... 27
6.29 No Restrictions................................................. 27
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS................................ 27
7.1 Taxes and Other Obligations..................................... 27
7.2 Legal Existence and Good Standing............................... 27
7.3 Compliance with Law and Agreements; Maintenance of
Licenses; Amendments to Bond Debt and Fixed Asset Loan.......... 28
7.4 Maintenance of Property; Inspection of Property................. 28
7.5 Insurance....................................................... 28
7.6 Insurance and Condemnation Proceeds............................. 29
7.7 Environmental Laws.............................................. 29
7.8 Compliance with ERISA........................................... 30
7.9 Mergers, Consolidations, or Sales............................... 30
7.10 Distributions; Capital Change; Restricted Investments........... 30
7.11 Transactions Affecting Collateral or Obligations................ 31
7.12 Guaranties...................................................... 31
7.13 Debt............................................................ 31
7.14 Prepayment/Prepayment of Debt................................... 32
7.15 Transactions with Affiliates.................................... 32
7.16 Business Conducted.............................................. 33
7.17 Liens........................................................... 33
7.18 Sale and Leaseback Transactions................................. 33
7.19 New Subsidiaries................................................ 33
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7.20 Fiscal Year..................................................... 33
7.21 Fixed Charge Coverage Ratio..................................... 33
7.22 Use of Proceeds................................................. 33
7.23 Collateral...................................................... 33
7.24 Tax Shelter Regulations......................................... 34
7.25 Permitted Debt under Bond Debt and Fixed Asset Loan............. 34
7.26 Permitted Acquisitions.......................................... 34
7.27 Excluded Deposit Accounts....................................... 35
7.28 Fixed Asset Loan Collateral Account............................. 35
7.29 Further Assurances.............................................. 35
ARTICLE 8 CONDITIONS OF LENDING............................................. 35
8.1 Conditions Precedent to Making of Loans on the Closing Date..... 35
8.2 Conditions Precedent to Each Loan............................... 38
ARTICLE 9 DEFAULT; REMEDIES................................................. 38
9.1 Events of Default............................................... 38
9.2 Remedies........................................................ 41
ARTICLE 10 TERM AND TERMINATION............................................. 42
10.1 Term and Termination............................................ 42
ARTICLE 11 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS..... 42
11.1 Amendments and Waivers.......................................... 42
11.2 Assignments; Participations..................................... 44
ARTICLE 12 THE AGENT........................................................ 45
12.1 Appointment and Authorization................................... 45
12.2 Delegation of Duties............................................ 46
12.3 Liability of Agent.............................................. 46
12.4 Reliance by Agent............................................... 46
12.5 Notice of Default............................................... 47
12.6 Credit Decision................................................. 47
12.7 Indemnification................................................. 47
12.8 Agent in Individual Capacity.................................... 47
12.9 Successor Agent................................................. 48
12.10 Withholding Tax................................................. 48
12.11 Collateral Matters.............................................. 49
12.12 Restrictions on Actions by Lenders; Sharing of Payments......... 50
12.13 Agency for Perfection........................................... 51
12.14 Payments by Agent to Lenders.................................... 51
12.15 Settlement...................................................... 51
12.16 Letters of Credit; Intra-Lender Issues.......................... 54
12.17 Concerning the Collateral and the Related Loan Documents........ 55
12.18 Field Audit and Examination Reports; Disclaimer by Lenders...... 56
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12.19 Relation Among Lenders.......................................... 56
12.20 Co-Agents....................................................... 56
ARTICLE 13 MISCELLANEOUS.................................................... 56
13.1 No Waivers; Cumulative Remedies................................. 56
13.2 Severability.................................................... 57
13.3 Governing Law; Choice of Forum; Service of Process.............. 57
13.4 WAIVER OF JURY TRIAL............................................ 58
13.5 Survival of Representations and Warranties...................... 58
13.6 Other Security and Guaranties................................... 58
13.7 Fees and Expenses............................................... 59
13.8 Notices......................................................... 59
13.9 Waiver of Notices............................................... 60
13.10 Binding Effect.................................................. 60
13.11 Indemnity of the Agent, the Arranger, and the Lenders by
the Borrower.................................................... 60
13.12 Limitation of Liability......................................... 61
13.13 Final Agreement................................................. 61
13.14 Counterparts.................................................... 61
13.15 Captions........................................................ 62
13.16 Right of Setoff................................................. 62
13.17 Confidentiality................................................. 62
13.18 Conflicts with Other Loan Documents............................. 63
13.19 Westlake as Agent............................................... 63
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ANNEXES, EXHIBITS AND SCHEDULES
ANNEX A - DEFINED TERMS
EXHIBIT A - FORM OF NOTE
EXHIBIT B - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C - FORM OF OBLIGATION GUARANTY
EXHIBIT D - FORM OF NOTICE OF BORROWING
EXHIBIT E - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT F - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT G - FORM OF COMPLIANCE CERTIFICATE
SCHEDULE 1 - BORROWERS
SCHEDULE 1.2 - LENDERS' COMMITMENTS
SCHEDULE 6.3 - ORGANIZATION AND QUALIFICATIONS
SCHEDULE 6.4 - PRIOR CORPORATE NAMES
SCHEDULE 6.5 - SUBSIDIARIES AND AFFILIATES
SCHEDULE 6.9 - DEBT AND LIENS
SCHEDULE 6.11 - REAL ESTATE; LEASES
SCHEDULE 6.12 - PROPRIETARY RIGHTS
SCHEDULE 6.13 - TRADE NAMES
SCHEDULE 6.14 - LITIGATION
SCHEDULE 6.15 - LABOR DISPUTES
SCHEDULE 6.16 - ENVIRONMENTAL LAW
SCHEDULE 6.19 - ERISA COMPLIANCE
SCHEDULE 6.26 - MATERIAL AGREEMENTS
SCHEDULE 6.27 - BANK ACCOUNTS
SCHEDULE 7.10 - EXISTING INVESTMENTS
SCHEDULE 7.17 - EXISTING LIENS
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CREDIT AGREEMENT
This Credit Agreement, dated as of July 31, 2003, (this "Agreement")
among the financial institutions from time to time parties hereto (such
financial institutions, together with their respective successors and assigns,
are referred to hereinafter each individually as a "LENDER" and collectively as
the "LENDERS"), BANK OF AMERICA, N.A. with an office at 55 S. Lake Avenue, Suite
900, Pasadena, CA 91101, as agent for the Lenders (in its capacity as agent, the
"AGENT"), and WESTLAKE CHEMICAL CORPORATION, a Delaware corporation ("WESTLAKE")
and certain of its domestic subsidiaries listed on SCHEDULE 1 hereto, each with
offices at 2801 Post Oak Boulevard, Houston, Texas 77056 (each a "BORROWER" and
collectively, all Borrowers, including Westlake, the "BORROWERS").
W I T N E S S E T H:
WHEREAS, the Borrowers have requested the Lenders to make available to
the Borrowers a revolving line of credit for loans and letters of credit in an
amount not to exceed $200,000,000, and which extensions of credit the Borrowers
will use for the purposes permitted hereunder;
WHEREAS, capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed thereto in ANNEX A which is
attached hereto and incorporated herein; the rules of construction contained
therein shall govern the interpretation of this Agreement, and all Annexes,
Exhibits, and Schedules attached hereto are incorporated herein by reference;
WHEREAS, the Lenders have agreed to make available to the Borrowers a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrowers hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
1.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders agree to make available a total credit facility of up to
$200,000,000 (the "TOTAL FACILITY") to the Borrowers from time to time during
the term of this Agreement. The Total Facility shall be composed of a revolving
line of credit consisting of Revolving Loans and Letters of Credit described
herein.
1.2 Revolving Loans.
(a) (i) Amounts. Subject to the satisfaction of the conditions
precedent set forth in ARTICLE 8, each Lender severally, but not jointly,
agrees, upon any Borrower's request from time to time on any Business Day during
the period from the Closing Date to the Termination Date, to make revolving
loans (the "REVOLVING LOANS") to the Borrowers in amounts not to exceed such
Lender's Pro Rata Share of Availability, except for Non-Ratable Loans and Agent
Advances. The Lenders, however, in their unanimous discretion, may elect to make
Revolving Loans or issue or arrange to have issued Letters of Credit in excess
of the Borrowing Base but not in excess of the Maximum Revolver Amount on one or
more occasions, but if they do so, neither the Agent nor the Lenders shall be
deemed thereby to have changed the limits of the Borrowing Base or to be
obligated to exceed such limits on any other occasion. If any Borrowing would
exceed Availability, the Lenders may refuse to make or may otherwise restrict
the making of Revolving Loans as the Lenders determine until such excess has
been eliminated, subject to
the Agent's authority, in its sole discretion, to make Agent Advances pursuant
to the terms of SECTION 1.2(I).
(ii) The Borrowers shall execute and deliver to each Lender
requesting a note, a note to evidence the Revolving Loan of that Lender. Each
note shall be in the principal amount of the requesting Lender's Pro Rata Share
of the Maximum Revolver Amount, dated the date hereof and substantially in the
form of EXHIBIT A (each a "NOTE" and, collectively, the "NOTES"). Each Note
shall represent the obligation of the Borrowers to pay the amount of the
requesting Lender's Pro Rata Share of the Maximum Revolver Amount, or, if less,
such Lender's Pro Rata Share of the aggregate unpaid principal amount of all
Revolving Loans to the Borrowers together with interest thereon as prescribed in
SECTION 2.1. The entire unpaid balance of the Revolving Loan and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Termination Date.
(b) Procedure for Borrowing.
(i) Each Borrowing shall be made upon any Borrower's irrevocable
written notice delivered to the Agent in the form of a notice of borrowing in
substantially the form of EXHIBIT E ("NOTICE OF BORROWING") and signed by
Westlake, on its behalf and as agent for the other Borrowers, which Notice of
Borrowing shall be received by the Agent prior to (i) 12:00 noon (Houston, Texas
time) three (3) Business Days prior to the requested Funding Date, in the case
of LIBOR Rate Loans and (ii) 11:00 a.m. (Houston, Texas time) on the requested
Funding Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which in the case of a LIBOR Rate
Loan must equal or exceed $5,000,000 (and integral increments of $1,000,000 in
excess of such amount);
(B) the requested Funding Date, which must be a Business Day;
(C) whether the Revolving Loans requested are to be Base Rate Loans
or LIBOR Rate Loans (and if not specified, it shall be deemed a request for a
Base Rate Loan);
(D) the duration of the Interest Period for LIBOR Rate Loans (and if
not specified, it shall be deemed a request for an Interest Period of one
month); and
(E) the Borrower or Borrowers which are to receive all or any
portion of such Borrowing and the amount of such Borrowing to be advanced to
such Borrower or Borrowers.
provided, however, that with respect to the Borrowing to be made on
the Closing Date, such Borrowings will consist of Base Rate Loans only.
(ii) In lieu of delivering a Notice of Borrowing, the Borrowers may
give the Agent telephonic notice of such request for advances to the Designated
Account on or before the deadline set forth above. The Agent at all times shall
be entitled to rely on such telephonic notice in making such Revolving Loans,
regardless of whether any written confirmation is received.
(iii) The Borrowers shall have no right to request a LIBOR Rate Loan
while a Default or Event of Default has occurred and is continuing.
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(c) Reliance upon Authority. Prior to the Closing Date, the
Borrowers shall deliver to the Agent, a notice setting forth the account of the
Borrowers ("DESIGNATED ACCOUNT") to which the Agent is authorized to transfer
the proceeds of the Revolving Loans requested hereunder. The Borrowers may
designate a replacement account from time to time by written notice. All such
Designated Accounts must be reasonably satisfactory to the Agent. The Agent is
entitled to rely conclusively on any person's request for Revolving Loans on
behalf of the Borrowers, so long as the proceeds thereof are to be transferred
to the Designated Account. The Agent has no duty to verify the identity of any
individual representing himself or herself as a person authorized by the
Borrowers to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to the
Borrowers as a result of acting upon any notice referred to in SECTIONS 1.2(B)
and (C), which the Agent believes in good faith to have been given by an officer
or other person duly authorized by any Borrowers to request Revolving Loans on
its behalf. The crediting of Revolving Loans to the Designated Account
conclusively establishes the obligation of the Borrowers to repay such Revolving
Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to SECTION 1.2(B) shall be irrevocable.
The Borrowers shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Agent's Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof), the Agent shall elect to have
the terms of SECTION 1.2(G) or the terms of SECTION 1.2(H) apply to such
requested Borrowing. If the Bank declines in its sole discretion to make a
Non-Ratable Loan pursuant to SECTION 1.2(H), the terms of SECTION 1.2(G) shall
apply to the requested Borrowing.
(g) Making of Revolving Loans. If Agent elects to have the terms of
this SECTION 1.2(G) apply to a requested Borrowing, then promptly after receipt
of a Notice of Borrowing or telephonic notice in lieu thereof, the Agent shall
notify the Lenders by telecopy, telephone or e-mail of the requested Borrowing.
Each Lender shall transfer its Pro Rata Share of the requested Borrowing
available to the Agent in immediately available funds, to the account from time
to time designated by Agent, not later than 12:00 noon (Houston, Texas time) on
the applicable Funding Date. After the Agent's receipt of all proceeds of such
Revolving Loans, the Agent shall make the proceeds of such Revolving Loans
available to the Borrowers on the applicable Funding Date by transferring same
day funds to the Designated Account; provided, however, that the amount of
Revolving Loans so made on any date shall not exceed the Availability on such
date.
(h) Making of Non-Ratable Loans.
(i) If any Borrower requests a Base Rate Loan and Agent elects,
with the consent of the Bank, to have the terms of this SECTION 1.2(H) apply to
a requested Borrowing, the Bank shall make a Revolving Loan in the amount of
that Borrowing available to the Borrowers on the applicable Funding Date by
transferring same day funds to the Designated Account. Each Revolving Loan made
solely by the Bank pursuant to this SECTION 1.2(H) is herein referred to as a
"NON-RATABLE LOAN", and such Revolving Loans are collectively referred to as the
"NON-RATABLE LOANS." Each Non-Ratable Loan shall be subject to all the terms and
conditions applicable to other Revolving Loans except that all payments thereon
shall be payable to the Bank solely for its own account. The aggregate amount of
Non-Ratable Loans outstanding at any time shall not exceed $20,000,000. The
Agent shall not request the Bank to make any Non-Ratable Loan if (1) the Agent
has received written notice from any Lender that one or more of the applicable
conditions precedent set forth in ARTICLE 8 will not be satisfied on the
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requested Funding Date for the applicable Borrowing, or (2) the requested
Borrowing would exceed Availability on that Funding Date.
(ii) The Non-Ratable Loans shall be secured by the Agent's Liens
in and to the Collateral and shall constitute Base Rate Loans and Obligations
hereunder.
(i) Agent Advances.
(i) Subject to the limitations set forth below, the Agent is
authorized by the Borrowers and the Lenders, from time to time in the Agent's
sole discretion, (A) after the occurrence of a Default or an Event of Default,
or (B) at any time that any of the other conditions precedent set forth in
ARTICLE 8 have not been satisfied, to make Base Rate Loans to the Borrowers on
behalf of the Lenders in an aggregate amount outstanding at any time not to
exceed 5% of the Borrowing Base but not in excess of the Maximum Revolver Amount
which the Agent, in its reasonable business judgment, deems necessary or
desirable (1) to preserve or protect the Collateral, or any portion thereof, (2)
to enhance the likelihood of, or maximize the amount of, repayment of the Loans
and other Obligations, or (3) to pay any other amount chargeable to the
Borrowers pursuant to the terms of this Agreement, including costs, fees, and
expenses as described in SECTION 13.7 (any of such advances are herein referred
to as "AGENT ADVANCES"); provided, that the Majority Lenders may at any time
revoke the Agent's authorization to make Agent Advances. Any such revocation
must be in writing and shall become effective prospectively upon the Agent's
receipt thereof.
(ii) The Agent Advances shall be secured by the Agent's Liens in
and to the Collateral and shall constitute Base Rate Loans and Obligations
hereunder.
1.3 Letters of Credit.
(a) Agreement to Issue or Cause To Issue. Subject to the terms and
conditions of this Agreement, the Agent agrees (i) to cause the Letter of Credit
Issuer to issue, and to amend or renew Letters of Credit previously issued by it
in accordance with this SECTION 1.3, for the account of any Borrower one or more
commercial/documentary and standby letters of credit (each a "LETTER OF CREDIT"
and collectively, the "LETTERS OF CREDIT") and/or (ii) to provide credit support
or other enhancement to a Letter of Credit Issuer acceptable to the Agent, which
issues a Letter of Credit for the account of any Borrower (any such credit
support or enhancement being herein referred to as a "CREDIT SUPPORT") from time
to time during the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
obligation to issue or cause to be issued any Letter of Credit or to provide
Credit Support for any Letter of Credit at any time if: (i) the maximum face
amount of the requested Letter of Credit is greater than the Unused Letter of
Credit Subfacility at such time; (ii) the maximum undrawn amount of the
requested Letter of Credit and all commissions, fees, and charges due from the
Borrowers in connection with the opening thereof would exceed Availability at
such time; or (iii) such Letter of Credit has an expiration date less than 30
days prior to the Stated Termination Date or more than twelve (12) months from
the date of issuance for standby letters of credit and 180 days from the date of
issuance for documentary letters of credit; provided that any Letter of Credit
issued in connection with the IRB may have an expiration date of not later than
the Termination Date. With respect to any Letter of Credit which contains any
"evergreen" or automatic renewal provision, each Lender shall be deemed to have
consented to any such extension or renewal unless any such Lender shall have
provided to the Agent, written notice that it declines to consent to any such
extension or renewal at least thirty (30) days prior to the date on which the
Letter of Credit Issuer is entitled to decline to extend or renew the Letter of
Credit. If all of the
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requirements of this SECTION 1.3 are met and no Default or Event of Default has
occurred and is continuing, no Lender shall decline to consent to any such
extension or renewal.
(c) Other Conditions. In addition to conditions precedent contained
in ARTICLE 8, the obligation of the Agent to issue or to cause to be issued any
Letter of Credit or to provide Credit Support for any Letter of Credit is
subject to the following conditions precedent having been satisfied in a manner
reasonably satisfactory to the Agent:
(i) The Borrowers shall have delivered to the Letter of Credit
Issuer, at such times and in such manner as such Letter of Credit Issuer may
prescribe, an application in form and substance satisfactory to such Letter of
Credit Issuer and reasonably satisfactory to the Agent for the issuance of the
Letter of Credit and such other documents as may be required pursuant to the
terms thereof, and the form, terms and purpose of the proposed Letter of Credit
shall be reasonably satisfactory to the Agent and the Letter of Credit Issuer;
and
(ii) As of the date of issuance, no order of any court,
arbitrator or Governmental Authority shall purport by its terms to enjoin or
restrain money center banks generally from issuing letters of credit of the type
and in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or the issuance of such Letters of Credit.
(d) Issuance of Letters of Credit.
(i) Request for Issuance. The Borrowers must notify the Agent of
a requested Letter of Credit at least three (3) Business Days prior to the
proposed issuance date. Such notice shall be irrevocable and must specify the
original face amount of the Letter of Credit requested, the Business Day of
issuance of such requested Letter of Credit, whether such Letter of Credit is
standby, commercial, or documentary, whether such Letter of Credit may be drawn
in a single or in partial draws, the Business Day on which the requested Letter
of Credit is to expire, the purpose for which such Letter of Credit is to be
issued, and the beneficiary of the requested Letter of Credit. The Borrowers
shall attach to such notice the proposed form of the Letter of Credit.
(ii) Responsibilities of the Agent; Issuance. As of the Business
Day immediately preceding the requested issuance date of the Letter of Credit,
the Agent shall determine the amount of the applicable Unused Letter of Credit
Subfacility and Availability. If (A) the face amount of the requested Letter of
Credit is less than the Unused Letter of Credit Subfacility and (B) the amount
of such requested Letter of Credit and all commissions, fees, and charges due
from the Borrowers in connection with the opening thereof would not exceed
Availability, the Agent shall cause the Letter of Credit Issuer to issue the
requested Letter of Credit on the requested issuance date so long as the other
conditions hereof are met.
(iii)No Extensions or Amendment. The Agent shall not be obligated
to cause the Letter of Credit Issuer to extend or amend any Letter of Credit
issued pursuant hereto unless the requirements of this SECTION 1.3 are met as
though a new Letter of Credit were being requested and issued.
(e) Payments Pursuant to Letters of Credit. The Borrowers joint and
severally agree to reimburse immediately the Letter of Credit Issuer for any
draw under any Letter of Credit and the Agent for the account of the Lenders
upon any payment pursuant to any Credit Support, and to pay the
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Letter of Credit Issuer the amount of all other charges and fees payable to the
Letter of Credit Issuer in connection with any Letter of Credit immediately when
due, irrespective of any claim, setoff, defense or other right which any
Borrower may have at any time against the Letter of Credit Issuer or any other
Person. Each drawing under any Letter of Credit shall constitute a request by
the Borrowers to the Agent for a Borrowing of a Base Rate Loan in the amount of
such drawing. The Funding Date with respect to such Borrowing shall be the date
of such drawing.
(f) Indemnification; Exoneration; Power of Attorney.
(i) Indemnification. In addition to amounts payable as elsewhere
provided in this SECTION 1.3, the Borrowers joint and severally agree to
protect, indemnify, pay, and save the Lenders and the Agent harmless from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees) which any Lender or
the Agent (other than a Lender in its capacity as a Letter of Credit Issuer) may
incur or be subject to as a consequence, direct or indirect, of the issuance of
any Letter of Credit or the provision of any Credit Support or enhancement in
connection therewith. The Borrowers' obligations under this Section shall
survive payment of all other Obligations.
(ii) Assumption of Risk by the Borrower. As among the Borrowers,
the Lenders, and the Agent, the Borrowers joint and severally assume all risks
of the acts and omissions of, or misuse of any of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lenders and the Agent shall not be responsible
for and the Borrowers shall not be relieved of any of their obligations
hereunder on account of: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it should prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (C) the failure of the beneficiary of any
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (D) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (G) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; (H) any
consequences arising from causes beyond the control of the Lenders or the Agent,
including any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority or (I) the Letter of Credit
Issuer's honor of a draw for which the draw or any certificate fails to comply
in any respect with the terms of the Letter of Credit. None of the foregoing
shall affect, impair or prevent the vesting of any rights or powers of the Agent
or any Lender under this SECTION 1.3(F). Nothing set forth herein shall prevent
Borrowers, following reimbursement in respect of any Letter of Credit, from
asserting claims against the Letter of Credit Issuer for any honor of any Letter
of Credit constituting gross negligence or willful misconduct.
(iii)Exoneration. Without limiting the foregoing, no action or
omission whatsoever by the Agent or any Lender (excluding any Lender in its
capacity as a Letter of Credit Issuer) shall result in any liability of the
Agent or any Lender to any Borrower, or relieve any Borrower of any of its
obligations hereunder to any such Person.
(iv) Rights Against Letter of Credit Issuer. Nothing contained in
this Agreement is intended to limit the Borrowers' rights, if any, with respect
to the Letter of Credit Issuer,
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which arise as a result of the letter of credit application and related
documents executed by and between the Borrowers and the Letter of Credit Issuer.
(v) Account Party. The Borrowers hereby authorize and direct any
Letter of Credit Issuer to name any Borrower as the "ACCOUNT PARTY" therein and
to deliver to the Agent all instruments, documents, and other writings and
property received by the Letter of Credit Issuer pursuant to the Letter of
Credit, and to accept and rely upon the Agent's instructions and agreements with
respect to all matters arising in connection with the Letter of Credit or the
application therefor.
(g) Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of SECTION 1.3(B) and SECTION 10.1, any Letter of
Credit or Credit Support is outstanding upon the termination of this Agreement,
then upon such termination the Borrowers shall deposit with the Agent, for the
ratable benefit of the Agent and the Lenders, with respect to each Letter of
Credit or Credit Support then outstanding, a standby letter of credit (a
"SUPPORTING LETTER OF CREDIT") in form and substance satisfactory to the Agent,
issued by an issuer satisfactory to the Agent in an amount equal to the greatest
amount for which such Letter of Credit or such Credit Support may be drawn plus
any fees and expenses associated with such Letter of Credit or such Credit
Support, under which Supporting Letter of Credit the Agent is entitled to draw
amounts necessary to reimburse the Agent and the Lenders for payments to be made
by the Agent and the Lenders under such Letter of Credit or Credit Support and
any fees and expenses associated with such Letter of Credit or Credit Support.
Such Supporting Letter of Credit shall be held by the Agent, for the ratable
benefit of the Agent and the Lenders, as security for, and to provide for the
payment of, the aggregate undrawn amount of such Letters of Credit or such
Credit Support remaining outstanding.
1.4 Bank Products. The Borrowers may request and the Agent may, in its
sole and absolute discretion, arrange for the Borrowers to obtain from the Bank
or the Bank's Affiliates, Bank Products, although the Borrowers are not required
to do so. If Bank Products are provided by an Affiliate of the Bank, the
Borrowers agree to indemnify and hold the Agent, the Bank, and the Lenders
harmless from any and all costs and obligations now or hereafter incurred by the
Agent, the Bank, or any of the Lenders which arise from any indemnity given by
the Agent to its Affiliates related to such Bank Products; provided, however,
nothing contained herein is intended to limit any Borrower's rights, with
respect to the Bank or its Affiliates, if any, which arise as a result of the
execution of documents by and between any Borrower and the Bank or its
Affiliates, as the case may be, which relate to Bank Products or the provision
of the Bank Products pursuant thereto. The agreement contained in this Section
shall survive termination of this Agreement. Each Borrower acknowledges and
agrees that the obtaining of Bank Products from the Bank or the Bank's
Affiliates (a) is in the sole and absolute discretion of the Bank or the Bank's
Affiliates, and (b) is subject to all rules and regulations of the Bank or the
Bank's Affiliates.
ARTICLE 2
INTEREST AND FEES
2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest
on the unpaid principal amount thereof (including, to the extent permitted by
law, on interest thereon not paid when due) from the date made until paid in
full in cash at a rate determined by reference to the Base Rate or the LIBOR
Rate plus the Applicable Margin as set forth below, but not to exceed the
Maximum Rate. If at any time Loans are outstanding with respect to which the
Borrowers have not delivered to the Agent a notice specifying the basis for
determining the interest rate applicable thereto in accordance herewith, those
Loans shall bear interest at a rate determined by reference to the Base Rate
(unless the Default Rate
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has been effected by the Agent and the Required Lenders pursuant to SECTION
2.1(B)) until notice to the contrary has been given to the Agent in accordance
with this Agreement and such notice has become effective. Except as otherwise
provided herein, the outstanding Obligations shall bear interest as follows:
(i) For all Base Rate Loans and other Obligations (other than
LIBOR Rate Loans) at a fluctuating per annum rate equal to the Base Rate plus
the Applicable Margin; and
(ii) For all LIBOR Rate Loans at a per annum rate equal to the
LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate applicable
to Base Rate Loans as of the effective date of such change. All interest charges
shall be computed on the basis of a year of 360 days and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). The Borrowers shall pay to the Agent, for the ratable benefit of
Lenders, interest accrued on all Base Rate Loans in arrears on the first day of
each month hereafter and on the Termination Date. The Borrowers shall pay to the
Agent, for the ratable benefit of Lenders, interest on all LIBOR Rate Loans in
arrears on each LIBOR Interest Payment Date.
(b) Default Rate. If any Event of Default occurs and is continuing
and the Agent or the Required Lenders in their discretion so elect, then, while
any such Event of Default is continuing, all of the Obligations shall bear
interest at the Default Rate applicable thereto.
2.2 Continuation and Conversion Elections.
(a) The Borrowers may:
(i) elect, as of any Business Day, in the case of Base Rate
Loans, to convert any Base Rate Loans (or any part thereof in an amount not less
than $5,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest Period,
to continue any LIBOR Rate Loans having Interest Periods expiring on such day
(or any part thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans; provided further that if the notice
shall fail to specify the duration of the Interest Period, such Interest Period
shall be one month.
(b) Westlake, on its behalf and as agent for the other Borrowers,
shall deliver a notice of continuation/conversion ("NOTICE OF
CONTINUATION/CONVERSION") to the Agent not later than 12:00 noon (Houston, Texas
time) at least three (3) Business Days in advance of the Continuation/Conversion
Date, if the Loans are to be converted into or continued as LIBOR Rate Loans and
specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the aggregate amount of Loans to be converted or renewed;
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(iii) the type of Loans resulting from the proposed conversion or
continuation; and
(iv) the duration of the requested Interest Period, provided,
however, the Borrowers may not select an Interest Period that ends after the
Stated Termination Date.
(c) If upon the expiration of any Interest Period applicable to
LIBOR Rate Loans, the Borrowers has failed to select timely a new Interest
Period to be applicable to LIBOR Rate Loans or if any Default or Event of
Default then exists, the Borrowers shall be deemed to have elected to convert
such LIBOR Rate Loans into Base Rate Loans effective as of the expiration date
of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a
Notice of Continuation/Conversion. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.
(e) There may not be more than twelve (12) different LIBOR Rate
Loans in effect hereunder at any time.
2.3 Maximum Interest Rate. In no event shall any interest rate provided
for hereunder (including any fees or other fees or other compensation which are
deemed or determined to be interest) exceed the maximum rate legally chargeable
by any Lender under applicable law for such Lender with respect to loans of the
type provided for hereunder (the "MAXIMUM RATE"). If, for any period, any
interest, absent such limitation, would have exceeded the Maximum Rate, then the
interest rate for that period shall be the Maximum Rate, and, if in future
periods, that interest rate would otherwise be less than the Maximum Rate, then
that interest rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest which would have
been paid if the same had not been limited by the Maximum Rate. In the event
that, upon payment in full of the Obligations, the total amount of interest paid
or accrued under the terms of this Agreement is less than the total amount of
interest which would, but for this SECTION 2.3, have been paid or accrued if the
interest rate otherwise set forth in this Agreement had at all times been in
effect, then the Borrowers shall, to the extent permitted by applicable law, pay
the Agent, for the account of the Lenders, an amount equal to the excess of (a)
the lesser of (i) the amount of interest which would have been charged if the
Maximum Rate had, at all times, been in effect or (ii) the amount of interest
which would have accrued had the interest rate otherwise set forth in this
Agreement, at all times, been in effect over (b) the amount of interest actually
paid or accrued under this Agreement. If a court of competent jurisdiction
determines that the Agent and/or any Lender has received interest and other
charges hereunder in excess of the Maximum Rate, such excess shall be deemed
received on account of, and shall automatically be applied to reduce, the
Obligations other than interest, in the inverse order of maturity, and if there
are no Obligations outstanding, the Agent and/or such Lender shall refund to the
Borrowers such excess.
2.4 Closing Fee. Borrowers shall pay the Agent for its account the fees
described in the Fee Letter (the "CLOSING FEE").
2.5 Unused Line Fee. On the first day of each month hereafter and on
the Termination Date, the Borrowers agree to pay to the Agent, for the account
of the Lenders, in accordance with their respective Pro Rata Shares, an unused
line fee (the "UNUSED LINE FEE") equal to the Applicable Margin for the Unused
Line Fee times the amount by which the Maximum Revolver Amount exceeded the sum
of the average daily outstanding principal amount of Revolving Loans and the
average daily undrawn face amount of outstanding Letters of Credit, during the
immediately preceding month or shorter period if
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calculated for the first month hereafter or on the Termination Date. The Unused
Line Fee shall be computed on the basis of a 360-day year for the actual number
of days elapsed. All principal payments received by the Agent shall be deemed to
be credited to the Borrowers' Loan Account immediately upon receipt for purposes
of calculating the Unused Line Fee pursuant to this SECTION 2.5.
2.6 Letter of Credit Fee. The Borrowers agree to pay (a) to the Agent,
for the account of the Lenders, in accordance with their respective Pro Rata
Shares, for each Letter of Credit, a per annum fee (the "LETTER OF CREDIT Fee")
equal to the Applicable Margin for LIBOR Rate Loans multiplied by the stated
amount of each Letter of Credit, (b) on the date of issuance of any Letter of
Credit, to the Agent for the benefit of the Letter of Credit Issuer, a fronting
fee of one-quarter of one percent (0.25%) per annum of the undrawn face amount
of each Letter of Credit, and (c) on the date of issuance of any Letter of
Credit, to the Letter of Credit Issuer, all out-of-pocket costs, fees and
expenses incurred by the Letter of Credit Issuer in connection with the
application for, processing of, issuance of, or amendment to any Letter of
Credit. The Letter of Credit Fee shall be payable monthly in arrears on the
first day of each month following any month in which a Letter of Credit is
outstanding and on the Termination Date. The Letter of Credit Fee shall be
computed on the basis of a 360-day year for the actual number of days elapsed.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
3.1 Revolving Loans. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, on the Termination Date. The Borrowers may prepay Revolving Loans at
any time, and reborrow subject to the terms of this Agreement. In addition, and
without limiting the generality of the foregoing, upon demand, the Borrowers
shall pay to the Agent, for account of the Lenders, the amount, without
duplication, by which the Aggregate Revolver Outstandings exceeds the lesser of
the Borrowing Base or the Maximum Revolver Amount.
3.2 Full or Partial Termination of Facility.
(a) Termination of Facility. The Borrowers may terminate this
Agreement upon at least thirty (30) days' notice to the Agent and the
Lenders, upon (a) the payment in full of all outstanding Revolving
Loans, together with accrued interest thereon, and all fees payable
under SECTION 2.5, and the cancellation and return of all outstanding
Letters of Credit (or, in the alternative, with respect to Letters of
Credit, providing (i) cash collateral for all remaining Letters of
Credit in an amount equal to 110% of the aggregate face amounts of such
Letters of Credit or (ii) a back-up letter of credit for each such
Letter of Credit in form and substance and from an issuer acceptable to
the Agent in its sole discretion), (b) the payment of the early
termination fee set forth below, (c) the payment in full in cash of all
reimbursable expenses and other Obligations, and (d) with respect to
any LIBOR Rate Loans prepaid, payment of the amounts due under SECTION
4.4, if any.
(b) Partial Reduction of Facility. On and after August 1,
2004, the Borrowers may permanently reduce the Maximum Revolver Amount
in increments of $25,000,000 but in no event shall the Maximum Revolver
Amount be less than $100,000,000 (the amount of such reduction, the
"PARTIAL TERMINATION AMOUNT") upon at least thirty (30) days' notice to
the Agent and the Lenders, upon (a) the payment in full of any
Revolving Loans, together with accrued interest thereon, to the extent
such Revolving Loans exceed the Maximum Revolver Amount (after giving
effect to such reduction) and (b) the payment of the early termination
fee set forth below in respect of the Partial Termination Amount,
regardless of whether the Partial Termination Amount is outstanding on
the date of the partial reduction. Once
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reduced in accordance with this SECTION 3.2(B), the Maximum Revolver
Amount may not be increased.
(c) Early Termination Fee. If this Agreement is terminated or
the Maximum Revolver Amount is permanently reduced at any time prior to
the Stated Termination Date, whether pursuant to this Section or
pursuant to SECTION 9.2, the Borrowers shall pay to the Agent, in
addition to other amounts payable hereunder, for the account of the
Lenders, an early termination fee determined in accordance with the
following table:
PERIOD DURING WHICH
EARLY TERMINATION EARLY TERMINATION
OCCURS FEE
------------------------ ---------------------------------
On or prior to the first 1.0% of the Maximum Revolver
Anniversary Date Amount or the Partial Termination
Amount, as applicable
After the first Anniversary 0.5% of the Maximum Revolver
Date but on or prior to the Amount or the Partial Termination
second Anniversary Date Amount, as applicable
After the second Anniversary 0% of the Maximum Revolver Amount Date
or the Partial Termination Amount,
as applicable
Notwithstanding the foregoing, payment of the early termination fee shall not be
required in the event the Borrowers refinance the Total Facility with a credit
facility arranged by the Bank.
3.3 Prepayments of the Loans.
(a) Immediately upon receipt by any Loan Party of proceeds of any
Equity Issuance, the Borrowers shall prepay the Loans (without a reduction of
the Maximum Revolver Amount) in an amount equal to 100% of all such proceeds to
the extent any such proceeds are not paid to redeem the Bond Debt or prepay the
Fixed Asset Loan, net of (i) commissions and other reasonable and customary
transaction costs, fees, and expenses properly attributable to such transaction
and payable by such Loan Party in connection therewith (in each case, paid to
non-Affiliates), (ii) transfer taxes, and (iii) an appropriate reserve for taxes
in accordance with GAAP in connection therewith.
(b) To the extent set forth in this SECTION 3.3(B), immediately upon
receipt by any Loan Party of proceeds from the sale of any Collateral (other
than sales of Inventory in the ordinary course of business and any Term Priority
Collateral to the extent such proceeds are applied to repay the Fixed Asset Loan
or are used to acquire replacement assets as permitted by the Fixed Asset Loan)
the Borrowers shall prepay the Loans in an amount equal to 100% of all such
proceeds, net of (i) commissions and other reasonable and customary transaction
costs, fees, and expenses properly attributable to such transaction and payable
by such Loan Party in connection therewith (in each case, paid to
non-Affiliates), (ii) transfer taxes, and (iii) appropriate amounts required to
be reserved (in accordance with GAAP) for post-closing adjustments by any Loan
Party in connection with such transaction, against any liabilities retained by
any Loan Party after such transaction, which liabilities are associated with the
asset or assets sold ("NET SALE PROCEEDS"). No payment from the Net Sale
Proceeds shall be required hereunder to the extent Availability exceeds the
amount of Revolving Loans outstanding on such date of determination. In
addition, 100% of the Net Sale Proceeds shall be deducted from the
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calculation of the Borrowing Base, but such reduction shall not be deemed to be
a permanent reduction of the Maximum Revolver Amount.
(c) Prepayments from the proceeds of all Equity Issuances and
dispositions of Collateral in accordance with SECTIONS 3.3(A) and 3.3(B),
respectively, shall be applied as follows: first, to accrued interest with
respect to the Revolving Loans, second, to pay the principal of the Revolving
Loans, and third to cash collateralize outstanding Letters of Credit.
3.4 LIBOR Rate Loan Prepayments. In connection with any prepayment, if
any LIBOR Rate Loans are prepaid prior to the expiration date of the Interest
Period applicable thereto, the Borrowers shall pay to the Lenders the amounts
described in SECTION 4.4.
3.5 Payments by the Borrowers.
(a) All payments to be made by the Borrowers shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Borrowers shall be made to the Agent for the account
of the Lenders, at the account designated by the Agent and shall be made in
Dollars and in immediately available funds, no later than 12:00 noon (Houston,
Texas time) on the date specified herein. Any payment received by the Agent
after such time shall be deemed (for purposes of calculating interest only) to
have been received on the following Business Day and any applicable interest
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period", whenever any payment is due on a day other than a Business
Day, such payment shall be due on the following Business Day, and such extension
of time shall in such case be included in the computation of interest or fees,
as the case may be.
3.6 Payments as Revolving Loans. At the election of Agent, all payments
of principal, interest, reimbursement obligations in connection with Letters of
Credit and Credit Support for Letters of Credit, fees, premiums, reimbursable
expenses and other sums payable hereunder, may be paid from the proceeds of
Revolving Loans made hereunder. The Borrowers hereby irrevocably authorize the
Agent to charge the Loan Account for the purpose of paying all amounts from time
to time due hereunder (without regard to any grace periods hereunder, including,
without limitation, Loans that constitute Agent Advances) and agrees that all
such amounts charged shall constitute Revolving Loans (including Non-Ratable
Loans and Agent Advances).
3.7 Apportionment, Application and Reversal of Payments. Principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Loans to which such payments relate held by
each Lender) and payments of the fees shall, as applicable, be apportioned
ratably among the Lenders, except for fees payable solely to Agent and the
Letter of Credit Issuer and except as provided in SECTION 11.1(B). All payments
shall be remitted to the Agent and all such payments not relating to principal
or interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Accounts or other Collateral received by the Agent, shall be
applied, ratably, subject to the provisions of this Agreement, first, to pay any
fees, indemnities, or expense reimbursements then due to the Agent from the
Borrower; second, to pay any fees or expense reimbursements then due to the
Lenders from the Borrower; third, to pay interest due in respect of all Loans,
including Non-Ratable Loans and Agent Advances; fourth, to pay or prepay
principal of the Non-Ratable Loans and Agent Advances; fifth, to pay or prepay
principal of the Revolving Loans (other than Non-Ratable Loans and Agent
Advances) and unpaid reimbursement obligations in respect of Letters of Credit;
sixth, to pay an amount to Agent equal to all outstanding Letter of Credit
Obligations to be held as cash collateral for such Obligations; and seventh, to
the payment of any other Obligations including any
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amounts relating to Bank Products due to the Agent or any Lender by the
Borrower. Notwithstanding anything to the contrary contained in this Agreement,
unless so directed by the Borrowers, or unless an Event of Default has occurred
and is continuing, neither the Agent nor any Lender shall apply any payments
which it receives to any LIBOR Rate Loan, except (a) on the expiration date of
the Interest Period applicable to any such LIBOR Rate Loan, or (b) in the event,
and only to the extent, that there are no outstanding Base Rate Loans and, in
any event, the Borrowers shall pay LIBOR breakage losses in accordance with
SECTION 4.4. To the extent not inconsistent with the express terms of this
Agreement, the Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Obligations.
3.8 Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the
Agent, any Lender, the Bank or any Affiliate of the Bank is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Agent or such Lender and the Borrowers shall be liable to
pay to the Agent and the Lenders, and hereby does indemnify the Agent and the
Lenders and hold the Agent and the Lenders harmless for the amount of such
payment or proceeds surrendered. The provisions of this SECTION 3.8 shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Agent or any Lender in reliance upon such payment or application of
proceeds, and any such contrary action so taken shall be without prejudice to
the Agent's and the Lenders' rights under this Agreement and shall be deemed to
have been conditioned upon such payment or application of proceeds having become
final and irrevocable. The provisions of this SECTION 3.8 shall survive the
termination of this Agreement.
3.9 Agent's and Lenders' Books and Records; Monthly Statements. The
Agent shall record the principal amount of the Loans owing to each Lender, the
undrawn face amount of all outstanding Letters of Credit and the aggregate
amount of unpaid reimbursement obligations outstanding with respect to the
Letters of Credit from time to time on its books. In addition, each Lender may
note the date and amount of each payment or prepayment of principal of such
Lender's Loans in its books and records. Failure by the Agent or any Lender to
make such notation shall not affect the obligations of the Borrowers with
respect to the Loans or the Letters of Credit. Each Borrower agrees that the
Agent's and each Lender's books and records showing the Obligations and the
transactions pursuant to this Agreement and the other Loan Documents shall be
admissible in any action or proceeding arising therefrom, and shall constitute
rebuttably presumptive proof thereof, absent manifest error, irrespective of
whether any Obligation is also evidenced by a promissory note or other
instrument. The Agent will provide to the Borrowers a monthly statement of
Loans, payments, and other transactions pursuant to this Agreement. Such
statement shall be deemed correct, accurate, and binding on the Borrowers and an
account stated (except for reversals and reapplications of payments made as
provided in SECTION 3.7 and corrections of errors discovered by the Agent),
unless the Borrowers notify the Agent in writing to the contrary within thirty
(30) days after such statement is received. In the event a timely written notice
of objections is given by the Borrowers, only the items to which exception is
expressly made will be considered to be disputed by the Borrowers.
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ARTICLE 4
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by any Borrower to each Lender or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding, for any Taxes. In addition, the
Borrowers shall pay all Other Taxes.
(b) Subject to SECTION 12.10, each Borrower agrees to indemnify and
hold harmless each Lender and the Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this SECTION 4.1) paid by any Lender or the Agent and any
liability (including penalties, interest, additions to tax, and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payment under this indemnification
shall be made within 30 days after the date such Lender or the Agent makes
written demand therefor.
(c) If any Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been made;
(ii) such Borrower shall make such deductions and withholdings;
(iii) such Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) such Borrower shall also pay to each Lender or the Agent for
the account of such Lender, at the time interest is paid, all additional amounts
which the respective Lender specifies as necessary to preserve the after-tax
yield such Lender would have received if such Taxes or Other Taxes had not been
imposed.
(d) At the Agent's request, within 30 days after the date of any
payment by any Borrower of Taxes or Other Taxes, such Borrower shall furnish the
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment satisfactory to the Agent.
(e) If any Borrower is required to pay additional amounts to any
Lender or the Agent pursuant to SUBSECTION (C) of this SECTION 4.1, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by such Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
4.2 Illegality.
(a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by that Lender to the Borrowers
through the Agent together with an explanation of the
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circumstances, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until that Lender notifies the Agent and the Borrowers that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Rate Loan, the Borrowers shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such LIBOR
Rate Loans of that Lender then outstanding, together with interest accrued
thereon and amounts required under SECTION 4.4, either on the last day of the
Interest Period thereof, if that Lender may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if that Lender may not lawfully
continue to maintain such LIBOR Rate Loans and if applicable convert to Base
Rate Loans. If the Borrowers are required to so prepay any LIBOR Rate Loans,
then concurrently with such prepayment, the Borrowers shall borrow from the
affected Lender, in the amount of such prepayment, a Base Rate Loan.
4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the introduction
of or any change in the interpretation of any law or regulation after the date
hereof or (ii) the compliance by that Lender with any guideline or request from
any central bank or other Governmental Authority after the date hereof (whether
or not having the force of law), there shall be any increase in the cost to such
Lender as a consequence of such Lender's obligations hereunder of agreeing to
make or making, funding, or maintaining any LIBOR Rate Loans, then the Borrowers
shall be liable for, and shall from time to time, upon demand (with a copy of
such demand to be sent to the Agent), pay to the Agent for the account of such
Lender, additional amounts as are sufficient to compensate such Lender for such
increased costs.
(b) If any Lender shall have determined that the introduction after
the date hereof of (i) any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by such
Lender or any corporation or other entity controlling such Lender and (taking
into consideration such Lender's or such corporation's or other entity's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits, or obligations under this
Agreement, then, upon demand of such Lender to the Borrowers through the Agent,
the Borrowers shall pay to such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender for such
increase.
4.4 Funding Losses. The Borrowers shall reimburse each Lender and hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of:
(a) the failure of the Borrowers to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrowers to borrow, continue, or convert a
Loan after the Borrowers have given (or is deemed to have given) a Notice of
Borrowing or a Notice of Continuation/Conversion; or
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Rate Loans on a day that is not the last day of the
relevant Interest Period;
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(excluding any such loss of anticipated profit) including any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
its LIBOR Rate Loans or from fees payable to terminate the deposits from which
such funds were obtained. The Borrowers shall also pay any customary
administrative fees charged by any Lender in connection with the foregoing. For
purposes of calculating amounts payable by the Borrower to the Lenders under
this SECTION 4.4, each Lender shall be deemed to have funded each LIBOR Rate
Loan made by it at the LIBOR Rate for such Loan by a matching deposit or other
borrowing in the applicable London interbank Eurodollar market for a comparable
amount and for a comparable period, whether or not such LIBOR Rate Loan was in
fact so funded.
4.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan on
the basis provided for in the definition of LIBOR Rate, or that the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan
does not adequately and fairly reflect the cost to the Lenders of funding such
Loan, the Agent will promptly so notify the Borrowers and each Lender.
Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate Loans
hereunder shall be suspended until the Agent revokes such notice in writing.
Upon receipt of such notice, the Borrowers may revoke any Notice of Borrowing or
Notice of Continuation/Conversion then submitted by them. If the Borrowers do
not revoke such Notice, the Lenders shall make, convert or continue the Loans,
as proposed by the Borrowers, in the amount specified in the applicable notice
submitted by the Borrowers, but such Loans shall be made, converted, or
continued as Base Rate Loans instead of LIBOR Rate Loans.
4.6 Certificates of the Agent. If any Lender claims reimbursement or
compensation under this ARTICLE 4, Agent shall determine the amount thereof and
shall deliver to the Borrowers (with a copy to the affected Lender) a
certificate setting forth in reasonable detail the amount payable to the
affected Lender, and such certificate shall be conclusive and binding on the
Borrowers in the absence of manifest error.
4.7 Survival. The agreements and obligations of the Borrowers in this
ARTICLE 4 shall survive the payment of all other Obligations.
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
5.1 Books and Records. The Borrowers shall maintain, at all times,
correct and complete books, records and accounts in which complete, correct and
timely entries are made of their respective transactions in accordance with GAAP
applied consistently with the audited Financial Statements required to be
delivered pursuant to SECTION 5.2(A). The Borrowers shall, by means of
appropriate entries, reflect in such accounts and in all Financial Statements
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of property and bad debts, all in accordance with
GAAP. The Borrowers shall maintain at all times books and records pertaining to
the Collateral in such detail, form and scope as the Agent or any Lender shall
reasonably require, including, but not limited to, records of (a) all payments
received and all credits and extensions granted with respect to the Accounts;
(b) the return, rejection, repossession, stoppage in transit, loss, damage, or
destruction of any Inventory; and (c) all other dealings affecting the
Collateral.
5.2 Financial Information. The Borrowers shall promptly furnish to the
Agent, all such financial information regarding the Loan Parties as the Agent
shall reasonably request. Without limiting the foregoing, the Borrowers will
furnish to the Agent, in such detail as the Agent or the Lenders shall request
in their reasonable discretion, the following:
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(a) As soon as available, but in any event not later than the
earlier of (i) the filing thereof with the Securities and Exchange Commission
("SEC"), and (ii) ninety (90) days after the close of each Fiscal Year,
consolidated audited and consolidating unaudited balance sheets, and income
statements, cash flow statements and changes in stockholders' equity for
Westlake and its Subsidiaries for such Fiscal Year, and the accompanying notes
thereto, setting forth in each case in comparative form figures for the previous
Fiscal Year, all in reasonable detail, fairly presenting the financial position
and the results of operations of Westlake and its Subsidiaries as at the date
thereof and for the Fiscal Year then ended, and prepared in accordance with
GAAP. Such statements shall be examined in accordance with generally accepted
auditing standards by and, in the case of such statements performed on a
consolidated basis, accompanied by a report of independent certified public
accountants selected by the Borrowers and reasonably satisfactory to the Agent,
which is not qualified with respect to scope limitations imposed by any Loan
Party, with respect to accounting principles followed by any Loan Party not in
accordance with GAAP, or with respect to a "going concern" or similar nature.
Westlake, simultaneously with retaining such independent public accountants to
conduct such annual audit, shall send a letter to such accountants, with a copy
to the Agent and the Lenders, notifying such accountants that one of the primary
purposes for retaining such accountants' services and having audited financial
statements prepared by them is for use by the Agent and the Lenders. The
Borrowers hereby authorize the Agent to communicate directly with its certified
public accountants and, by this provision, authorizes those accountants to
disclose to the Agent any and all financial statements and other supporting
financial documents and schedules relating to the Borrowers and to discuss
directly with the Agent the finances and affairs of the Loan Parties.
(b) As soon as available, but in any event not later than the
earlier of: (i) the filing thereof with the SEC, and (ii) forty-five (45) days
after the last day of the first three fiscal quarters of each Fiscal Year,
consolidated and consolidating unaudited balance sheets and income statements,
and consolidated cash flow statements and changes in stockholders' equity, for
Westlake and its Subsidiaries for such fiscal quarter and for the period from
the beginning of the then-current fiscal year to, such last day. The Borrowers
shall certify by a certificate signed by a Responsible Officer of Westlake that
all such statements have been prepared in accordance with GAAP and present
fairly the financial position for the Loan Parties as at the dates thereof and
its results of operations for the periods then ended, subject to normal year-end
adjustments and the absence of applicable footnotes.
(c) As soon as available, but in any event not later than thirty
(30) days after the end of each month other than March, June, September, or
December (and, as soon as available, but in any event not later than forty-five
(45) days after the end of each March, June, September, and December, and
without duplication of the Financial Statements required by SECTION 5.2(B)),
consolidated unaudited balance sheets of Westlake and its Subsidiaries as at the
end of such month, and consolidated unaudited income statements and cash flow
statements for Westlake and its Subsidiaries for such month and for the period
from the beginning of the Fiscal Year to the end of such month, all in
reasonable detail, fairly presenting the financial position and results of
operations of Westlake and its Subsidiaries as at the date thereof and for such
periods, and prepared in accordance with GAAP (except for the inclusion of
necessary footnotes) applied consistently with the audited Financial Statements
required to be delivered pursuant to SECTION 5.2(A), together with a schedule
setting forth in reasonable detail the calculation of the Fixed Charge Coverage
Ratio for the immediately preceding twelve (12) month period. The Borrowers
shall certify by a certificate signed by a Responsible Officer of Westlake that
all such statements have been prepared in accordance with GAAP and present
fairly the financial position for the Loan Parties as at the dates thereof and
its results of operations for the periods then ended, subject to normal year-end
adjustments and the absence of applicable footnotes.
(d) With each of the audited Financial Statements delivered pursuant
to SECTION 5.2(A), a certificate of the independent certified public accountants
that examined such statement
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to the effect that they have reviewed and are familiar with this Agreement and
that, in examining such Financial Statements, they did not become aware of any
fact or condition which then constituted a Default or Event of Default with
respect to a financial covenant, except for those, if any, described in
reasonable detail in such certificate.
(e) Within thirty (30) days after the end of each month, other than
March, June, September, or December, in each case on the date the reports
described in SECTION 5.2(C) above, a Compliance Certificate in the form of
EXHIBIT G from a Responsible Officer on behalf of the Loan Parties stating that,
among other things, except as explained in reasonable detail in such
certificate, (i) all of the representations and warranties of the Loan Parties
contained in this Agreement and the other Loan Documents are correct and
complete in all material respects as at the date of such certificate as if made
at such time, except for those that speak as of a particular date, (ii) the Loan
Parties are, at the date of such certificate, in compliance in all material
respects with all of its respective covenants and agreements in this Agreement
and the other Loan Documents, and (iii) no Default or Event of Default then
exists or existed during the period covered by the Financial Statements and at
the end of such period and if the Loan Parties are required to comply with the
covenant in SECTION 7.21 during such period, including calculations (in
reasonable detail) required to establish that the Loan Parties were in
compliance with such covenant during such period. If such certificate discloses
that a representation or warranty is not correct or complete, or that a covenant
has not been complied with, or that a Default or Event of Default existed or
exists, such certificate shall set forth what action the Borrowers have taken or
propose to take with respect thereto.
(f) Within thirty (30) days after the beginning of each Fiscal Year,
annual forecasts (to include forecasted consolidated, as well as consolidating
by business segment in accordance with Westlake's customary practices, balance
sheets, income statements and cash flow statements) for Westlake and its
Subsidiaries as at the end of and for each fiscal month of such Fiscal Year.
(g) Intentionally omitted.
(h) Promptly upon the filing thereof, copies of all reports, if any,
to or other documents filed by any Loan Party with the Securities and Exchange
Commission under the Exchange Act, and all reports, notices, or statements sent
or received by any Loan Party to or from the holders of any of the Bond Debt or
other Debt of any Loan Party registered under the Securities Act of 1933 or to
or from the trustee under any indenture under which the same is issued, other
than non-material disclosures.
(i) As soon as available, but in any event not later than fifteen
(15) days after any Borrower's receipt thereof, a copy of any management letters
prepared for any Borrower by any independent certified public accountants of the
Borrowers in connection with the audited Financial Statements of the Borrowers
for any Fiscal Year.
(j) Promptly after their preparation, copies of any and all proxy
statements, financial statements, and reports which any Borrower makes available
to its public shareholders, if any.
(k) If requested by the Agent, promptly after filing with the IRS, a
copy of each tax return filed by any Loan Party.
(l) As soon as available, but in any event by the second Business
Day of each week for the prior week ending on the last Business Day of such
prior week; provided that not more than four (4) times in any fiscal year, the
following may be delivered by the third Business Day of such week, in form and
substance reasonably satisfactory to the Agent: (i) a schedule of each Loan
Party's Accounts created, credit memoranda, and collections for the applicable
week, together with a reconciliation of each
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Loan Party's Accounts created, credit memos, collections and other adjustments
to Accounts since the last such weekly reconciliation and a Borrowing Base
Certificate; (ii) a summary of each credit memorandum in excess of $250,000;
(iii) after the occurrence of the Account Triggering Date, an Inventory report;
and (iv) with the delivery of each of the foregoing, a certificate executed by a
Responsible Officer on behalf of all of the Loan Parties certifying as to the
accuracy and completeness of the foregoing.
(m) As soon as available, but in any event within fifteen (15) days
after the end of each month or more frequently if requested by the Agent to
determine Availability or otherwise, each in form and substance reasonably
satisfactory to the Agent: (i) a reconciliation of each Loan Party's Accounts
created, credit memoranda, collections and other adjustments to Accounts since
the last such monthly reconciliation and a Borrowing Base Certificate; (ii) an
aging of each Loan Party's Accounts together with a reconciliation to the
previous calendar month end's accounts receivable balance of such Loan Party's
Accounts and to its general ledger; (iii) an aging of each Loan Party's accounts
payable; (iv) a detailed calculation of Eligible Accounts and Eligible
Inventory; (v) upon the Agent's reasonable request, copies of invoices in
connection with each Loan Party's Accounts, customer statements, credit memos,
remittance advices and reports, deposit slips, and shipping and delivery
documents in connection with each Loan Party's Accounts and for Inventory
acquired by each Loan Party; (vi) an Inventory report; (vii) such other reports
as to the Collateral as the Agent shall reasonably request from time to time;
and (viii) with the delivery of each of the foregoing, a certificate executed by
a Responsible Officer on behalf of all of the Loan Parties certifying as to the
accuracy and completeness of the foregoing. If any of the Loan Parties' records
or reports of the Collateral are prepared by an accounting service or other
agent, each Loan Party hereby authorizes, and shall cause each Loan Party to
authorize, such service or agent to deliver such records, reports, and related
documents to the Agent for distribution to the Lenders.
(n) Such additional information as the Agent and/or any Lender may
from time to time reasonably request regarding the financial and business
affairs of Westlake or any of its Subsidiaries.
5.3 Notices to the Lenders. The Borrowers shall notify the Agent and
the Lenders in writing of the following matters at the following times:
(a) Immediately after any Responsible Officer of any Loan Party
becoming aware of any Default or Event of Default;
(b) Immediately after any Responsible Officer of any Loan Party
becoming aware of the assertion by the holder of any capital stock of any Loan
Party or the holder of any Debt of any Loan Party in a face amount in excess of
$5,000,000 that a default exists with respect thereto or that such Loan Party is
not in compliance with the terms thereof, or the threat or commencement by such
holder of any enforcement action because of such asserted default or
non-compliance;
(c) Immediately after any Responsible Officer of any Loan Party
becoming aware of any event or circumstance which could reasonably be expected
to have a Material Adverse Effect;
(d) Immediately after any Responsible Officer of any Loan Party
becoming aware of any pending or threatened action, suit, or proceeding, by any
Person, or any pending or threatened investigation by a Governmental Authority,
which could reasonably be expected to have a Material Adverse Effect;
(e) Immediately after any Responsible Officer of any Loan Party
becoming aware of any pending or threatened strike, work stoppage, unfair labor
practice claim, or other labor
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dispute affecting the any Loan Party in a manner which could reasonably be
expected to have a Material Adverse Effect;
(f) Immediately after any Responsible Officer of any Loan Party
becoming aware of any violation of any law, statute, regulation, or ordinance of
a Governmental Authority affecting any Loan Party which could reasonably be
expected to have a Material Adverse Effect;
(g) Immediately after receipt by a Responsible Officer of any Loan
Party of any notice of any violation by any Loan Party of any Environmental Law
which could reasonably be expected to have a Material Adverse Effect or that any
Governmental Authority has asserted in writing that any Loan Party is not in
compliance with any Environmental Law or is investigating any Loan Party's
compliance therewith;
(h) Immediately after receipt by any Responsible Officer of any Loan
Party of any written notice that the any Loan Party is or may be liable to any
Person as a result of the Release or threatened Release of any Contaminant or
that any Loan Party is subject to investigation by any Governmental Authority
evaluating whether any remedial action is needed to respond to the Release or
threatened Release of any Contaminant which, in either case, is reasonably
likely to give rise to liability in excess of $7,500,000;
(i) Immediately after receipt by a Responsible Officer of any Loan
Party of any written notice of the imposition of any Environmental Lien against
any property of any Loan Party securing an amount which could reasonably be
expected to exceed $5,000,000;
(j) Any change in any Loan Party's name as it appears in the state
of its incorporation or other organization, state of incorporation or
organization, type of entity, organizational identification number, locations of
Collateral, or form of organization, trade names under which any Loan Party will
sell Inventory or create Accounts, or to which instruments in payment of
Accounts may be made payable, in each case at least thirty (30) days prior
thereto;
(k) Within ten (10) Business Days after any Loan Party or any ERISA
Affiliate knows or has reason to know, that an ERISA Event, or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code), which
could reasonably be expected to result in liability to any Loan Party in excess
of $5,000,000, has occurred, and, when known, any action taken or threatened by
the IRS, the DOL, or the PBGC with respect thereto;
(l) Upon request, or, in the event that such filing reflects a
potentially adverse significant financial change with respect to the matters
covered thereby, within ten (10) Business Days after the filing thereof with the
PBGC, the DOL, or the IRS, as applicable, copies of the following: (i) each
annual report (form 5500 series), including Schedule B thereto, filed with the
PBGC, the DOL, or the IRS with respect to each Plan, (ii) a copy of each funding
waiver request filed with the PBGC, the DOL, or the IRS with respect to any Plan
and all communications received by any Loan Party or any ERISA Affiliate from
the PBGC, the DOL, or the IRS with respect to such request, and (iii) a copy of
each other filing or notice filed with the PBGC, the DOL, or the IRS, with
respect to each Plan by either any Loan Party or any ERISA Affiliate;
(m) Upon request, copies of each actuarial report for any Plan or
Multi-employer Plan and annual report for any Multi-employer Plan; and within
ten (10) Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of the following: (i) any notices of the PBGC's intention to
terminate a Plan or to have a trustee appointed to administer such Plan; (ii)
any unfavorable determination letter from the IRS regarding the qualification of
a Plan under Section 401(a) of the Code;
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or (iii) any notice from a Multi-employer Plan regarding the imposition of
withdrawal liability to any Loan Party in excess of $5,000,000;
(n) Within ten (10) Business Days after the occurrence of any
failure by any Loan Party or any ERISA Affiliate to make a required installment
or any other required payment under Section 412 of the Code on or before the due
date for such installment or payment;
(o) Within ten (10) Business Days after any Responsible Officer of
any Loan Party or any ERISA Affiliate knows or has reason to know that any of
the following events has or will occur which could reasonably be expected to
result in liability to any Loan Party in excess of $5,000,000: (i) a
Multi-employer Plan has been or will be terminated; (ii) the administrator or
plan sponsor of a Multi-employer Plan intends to terminate a Multi-employer
Plan; or (iii) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multi-employer Plan; or
(p) Promptly after the Borrowers have notified the Agent of any
intention by the Borrowers to treat the Loans and/or Letters of Credit and
related transactions as being a "reportable transaction" (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886 or
any successor form.
Each notice given under this SECTION 5.3 shall describe the subject
matter thereof in reasonable detail, and shall set forth the action that the
Loan Party, its Subsidiary, or any ERISA Affiliate, as applicable, has taken or
proposes to take with respect thereto.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Each Borrower (and each other Loan Party by executing an Obligation
Guaranty, with respect to such Loan Party) warrants and represents to the Agent
and the Lenders that except as hereafter disclosed to and accepted by the Agent
and the Required Lenders in writing:
6.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. Each Loan Party has the power and authority to execute,
deliver, and perform this Agreement and the other Loan Documents to which it is
a party, to incur the Obligations, and to grant to the Agent's Liens upon and
security interests in the Collateral. Each Loan Party has taken all necessary
action (including obtaining approval of its stockholders if necessary) to
authorize its execution, delivery, and performance of this Agreement and the
other Loan Documents to which it is a party. This Agreement and the other Loan
Documents to which it is a party have been duly executed and delivered by each
Loan Party, and constitute the legal, valid, and binding obligations of each
Loan Party, enforceable against each such Loan Party in accordance with their
respective terms except as enforceability may be limited by the Federal
Bankruptcy Code or by any other state or federal bankruptcy or insolvency act or
law and general principles of equity. Each Loan Party's execution, delivery, and
performance of this Agreement and the other Loan Documents to which it is a
party do not and will not conflict with, or constitute a violation or breach of,
or result in the imposition of any Lien (other than in favor of the Agent) upon
the property of such Loan Party or any of its Subsidiaries, by reason of the
terms of (a) any contract, mortgage, lease, material agreement, indenture, or
instrument to which such Loan Party is a party or which is binding upon it, (b)
any Requirement of Law applicable to such Loan Party or any of its Subsidiaries,
or (c) the certificate or articles of incorporation or by-laws or the limited
liability company or limited partnership agreement of such Loan Party or any of
its Subsidiaries.
6.2 Validity and Priority of Security Interest. The provisions of this
Agreement, the Collateral Documents, and the other Loan Documents create legal
and valid Liens on all the Collateral in
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favor of the Agent, for the ratable benefit of the Agent and the Lenders, and,
upon the filing of all applicable financing statements against the Borrowers,
such Liens shall constitute perfected and continuing Liens on all the
Collateral, having priority over all other Liens on the Collateral, except for
those Liens identified in CLAUSES (C), (D), and (E) of the definition of
Permitted Liens securing all the Obligations, and enforceable against each Loan
Party and all third parties and except as provided under the Intercreditor
Agreement.
6.3 Organization and Qualification. Each Loan Party (a) is duly
organized or incorporated and validly existing in good standing under the laws
of the state of its organization or incorporation, (b) is qualified to do
business and is in good standing in the jurisdictions set forth on SCHEDULE 6.3
which are the only jurisdictions in which qualification is necessary in order
for it to own or lease its property and conduct its business and (c) has all
requisite power and authority to conduct its business and to own its property.
6.4 Corporate Name; Prior Transactions. Except as set forth on SCHEDULE
6.4, no Loan Party has, during the past five (5) years, been known by or used
any other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property outside of the ordinary course of business.
6.5 Subsidiaries and Affiliates. SCHEDULE 6.5 is a correct and complete
list of the name and relationship to each Loan Party of each and all its
Subsidiaries and other Affiliates owned, directly or indirectly, by Parent. No
Loan Party has any ownership interest in any Subsidiary of any Unrestricted
Subsidiary of Westlake.
6.6 Financial Statements and Projections.
(a) The Borrowers have delivered to the Agent and the Lenders the
audited balance sheet and related statements of income, retained earnings, cash
flows, and changes in stockholders equity for the Loan Parties as of December
31, 2002, and for the Fiscal Year then ended, accompanied by the report thereon
of the Borrowers' independent certified public accountants,
PricewaterhouseCoopers LLP. The Borrowers have also delivered to the Agent and
the Lenders the unaudited balance sheet and related statements of income and
cash flows for the Loan Parties as of May 31, 2003. All such Financial
Statements have been prepared in accordance with GAAP and fairly present in all
material respects the financial position of the Loan Parties as at the dates
thereof and their results of operations for the periods then ended, subject to
normal year-end adjustments as to the May 31, 2003 statements, and the absence
of applicable footnotes.
(b) The Latest Projections when submitted to the Lenders as required
herein represent the Borrowers' good faith estimate of the future financial
performance of the Loan Parties for the periods set forth therein. The Latest
Projections have been prepared on the basis of the assumptions set forth
therein, which the Borrowers believes are fair and reasonable in light of
current and reasonably foreseeable business conditions at the time submitted to
the Lenders.
(c) The pro forma balance sheet of the Loan Parties as at June 30,
2003, delivered to the Agent and the Lenders, fairly presents the Loan Parties'
financial condition as at such date after giving effect to all of the
transactions contemplated to occur on the Closing Date, and has been prepared in
accordance with GAAP.
6.7 Capitalization. Westlake's authorized capital stock consists of
_________ shares of common stock, par value $_____ per share, of which _______
shares are validly issued and outstanding, fully paid and non-assessable and are
owned beneficially and of record by Parent.
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6.8 Solvency. On the Closing Date, at the time of each Borrowing
hereunder, and on the dates of the issuance of any Letters of Credit to be
issued hereunder, each Loan Party is (and after giving effect to the
transactions contemplated by the Loan Documents, and any incurrence of
additional Debt will be) Solvent.
6.9 Debt. After giving effect to (a) the making of the Revolving Loans
to be made on the Closing Date and (b) the issuance of any Letters of Credit to
be issued on the Closing Date, the Loan Parties have no Debt, except (i) the
Obligations, (ii) Debt described on SCHEDULE 6.9, and (iii) other Debt permitted
by SECTION 7.13.
6.10 Distributions. Since December 31, 2002, no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
securities of Westlake or any of its Subsidiaries except as permitted by SECTION
7.10.
6.11 Real Estate; Leases. SCHEDULE 6.11 sets forth, as of the Closing
Date, a correct and complete list of all Real Estate owned by any Loan Party and
all Real Estate owned by any of their Subsidiaries that is a Loan Party, all
leases and subleases of real or personal property held by any Loan Party as
lessee or sublessee (other than leases of personal property as to which any Loan
Party is lessee or sublessee for which the value of such personal property in
the aggregate is less than $1,000,000), and all leases and subleases of real or
personal property held by any Loan Party as lessor, or sublessor. Each of such
leases and subleases is valid and enforceable in accordance with its terms
against the Loan Party or Subsidiary thereof which is a party thereto and is in
full force and effect, and to the best of each Loan Party's knowledge, no
default by any party to any such lease or sublease exists. Each Loan Party has
good and indefeasible title in fee simple to the Real Estate identified on
SCHEDULE 6.11 as owned by such Loan Party, or valid leasehold interests in all
Real Estate designated therein as "leased" by such Loan Party and each Loan
Party has good and indefeasible title to all of its other property reflected on
the May 31, 2003 Financial Statements delivered to the Agent and the Lenders,
except as disposed of in the ordinary course of business since the date thereof,
free of all Liens except Permitted Liens.
6.12 Proprietary Rights. SCHEDULE 6.12 sets forth a correct and
complete list of all of the Proprietary Rights of each Loan Party. None of the
Proprietary Rights is subject to any licensing agreement or similar arrangement
except as set forth on SCHEDULE 6.12. To the best of each Loan Party's
knowledge, none of the Proprietary Rights of such Loan Party infringes on or
conflicts in any material respect with any other Person's property, and no other
Person's property infringes on or conflicts with the Proprietary Rights of such
Loan Party. The Proprietary Rights described on SCHEDULE 6.12 constitute all of
the property of such type necessary to the current conduct of the business of
each such Loan Party. No Proprietary Rights are necessary for the Agent to be
able to enforce the Agent's Liens granted in any Collateral Document in any
Inventory or Accounts.
6.13 Trade Names. All trade names or styles under which any Loan Party
or any of their Subsidiaries will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on SCHEDULE
6.13.
6.14 Litigation. Except as set forth on SCHEDULE 6.14, there is no
pending, or to the best of any Loan Party's knowledge threatened, action, suit,
proceeding, or counterclaim by any Person against any Loan Party, or to the best
of any Loan Party's knowledge, investigation by any Governmental Authority, or
any basis for any of the foregoing, which could reasonably be expected to have a
Material Adverse Effect.
6.15 Labor Disputes. Except as set forth on SCHEDULE 6.15, as of the
Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of any Loan
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Party or any of their Subsidiaries, (b) no such collective bargaining agreement
or other labor contract is scheduled to expire during the term of this
Agreement, (c) to the best of each Loan Party's knowledge, no union or other
labor organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of any Loan Party or any of their Subsidiaries or
for any similar purpose, and (d) there is no pending or (to the best of any Loan
Party's knowledge) threatened, strike, work stoppage, material unfair labor
practice claim, or other material labor dispute against or affecting any Loan
Party or their Subsidiaries or their employees.
6.16 Environmental Laws. Except as otherwise disclosed on SCHEDULE 6.16
or except as would not have a Material Adverse Effect:
(a) The Loan Parties and their Subsidiaries are and have been in
compliance with all Environmental Laws.
(b) Each of the Loan Parties and their Subsidiaries have obtained,
and have timely filed any renewal applications for, all permits necessary for
its current operations under Environmental Laws, and each Loan Party and its
Subsidiaries are in compliance with all terms and conditions of such permits,
or, when applicable, such applications.
(c) There has been no Release, nor to the best of any Loan Party's
knowledge, any threatened Release, that has resulted in or that could result in:
(i) a violation of or obligation under any Environmental Law, including without
limitation, notification, deed recordation, or remediation, or (ii) a diminution
in value of the Real Estate. The Real Estate has not contained and currently
does not contain any underground storage tanks, any polychlorinated biphenyls
(PCBs), or any asbestos.
(d) The Loan Parties and their Subsidiaries have not given, nor were
they required to give, and have not received, any notice that: (i) the Loan
Parties and their Subsidiaries have violated, or are about to violate, any
Environmental Law; (ii) there has been a Release, or there is a threat of
Release, from the Real Estate; (iii) the Loan Parties and their Subsidiaries may
be or are liable, in whole or in part, for the costs of cleaning up,
remediating, removing or responding to a Release; or (iv) the Real Estate is
subject to a lien in favor of any governmental entity for any liability, costs
or damages, under any Environmental Laws arising from, or costs incurred by,
such governmental entity in response to a Release. No conditions have existed,
currently exist, or are reasonably foreseeable, that would give rise to such a
notice.
(e) Neither Loan Parties nor any Subsidiary nor any Real Estate or
presently conducted operations, nor any previously owned real property or prior
operations, is subject to any enforcement order from or liability agreement with
any Governmental Authority or private Person respecting (i) compliance with any
Environmental Law or (ii) any potential liabilities and costs or remedial action
arising from the Release or threatened Release.
(f) To the best of any Loan Party's knowledge, none of the present
or past operations of the Loan Parties or their Subsidiaries is the subject of
any investigation by any Governmental Authority evaluating whether any
compliance action is warranted or any remedial action is needed to respond to a
Release or threatened Release.
(g) Neither the Loan Parties nor any of their Subsidiaries has
entered into any negotiations or settlement agreements with any Person
(including the prior owner of its property) imposing material obligations or
liabilities on the Borrower or any of its Subsidiaries with respect to any
remedial action in response to the Release of a Contaminant or environmentally
related claim.
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(h) Neither the Loan Parties nor any of their Subsidiaries have ever
disposed of, sent or arranged for the transportation of Hazardous Materials on
or from Real Estate or formerly owned real property which, pursuant to CERCLA or
any similar or analogous state law, has been placed or is proposed to be paced
(by the United States Environmental Protection Agency ("EPA") or similar state
authority) on the "National Priorities List" or similar state list.
(i) Neither the Loan Parties nor any of their Subsidiaries have been
identified by EPA, any similar state authority, or any third party, as a
potentially responsible party under CERCLA, or any similar or analogous state
law, with respect to the Real Estate or any other site currently or formerly
owned, operated or used by Loan Parties or their Subsidiaries.
(j) None of the products manufactured, distributed or sold by the
Loan Parties or any of their Subsidiaries contain asbestos containing material.
(k) No Environmental Lien has attached to the Real Estate.
6.17 No Violation of Law. Neither any Loan Party nor any of their
Subsidiaries is in violation of any Requirement of Law applicable to it which
violation could reasonably be expected to have a Material Adverse Effect.
6.18 No Default. Neither any Loan Party nor any of their Subsidiaries
is in default with respect to any note, indenture, loan agreement, mortgage,
lease, deed, or other agreement to which such Person is a party or by which it
is bound, which default could reasonably be expected to have a Material Adverse
Effect.
6.19 ERISA Compliance. Except as specifically disclosed in SCHEDULE
6.19:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS or an application for such a
letter is currently being processed by the IRS with respect thereto and to the
best knowledge of any Loan Party, nothing has occurred which would prevent or
cause the loss, of such qualification. Each Borrower and each ERISA Affiliate
has made all required contributions to any Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of any Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred within the past five (5) years
or is reasonably expected to occur which has or could reasonably be expected to
result in liability to any Loan Party in excess of $7,500,000; (ii) the Unfunded
Pension Liability, in the aggregate, for all Pension Plans does not exceed
$7,500,000; (iii) neither any Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA to the PBGC
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); and (iv) neither any Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.
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6.20 Taxes. The Loan Parties and their Subsidiaries have filed all
federal and other tax returns and reports required to be filed (or appropriate
extensions have been timely filed), and have paid all federal and other taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable unless such unpaid
taxes and assessments would constitute a Permitted Lien.
6.21 Regulated Entities. None of any Loan Party, any Person controlling
any Loan Party, or any Subsidiary of any Loan Party, is an "Investment Company"
within the meaning of the Investment Company Act of 1940. No Loan Party is a
regulated entity under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code
or law, or any other federal or state statute or regulation limiting its ability
to incur Debt.
6.22 Use of Proceeds; Margin Regulations. The proceeds of the Loans are
to be used solely (a) to refinance existing Debt, (b) to pay the costs and
expenses related to this Agreement, (c) for working capital purposes of the Loan
Parties, and (d) for general corporate purposes. None of such proceeds will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulations T, U, or X of the Board of Governors of the Federal Reserve System
or for any other purpose which might constitute this transaction a "purpose
credit" within the meaning of such Regulations. No part of the proceeds of the
Loan will be used for any purpose which violates, or is inconsistent with, the
provisions of Regulation X. No Loan Party nor any Subsidiary of any Loan Party
is engaged in the business of purchasing or selling Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock. Following the
application of the proceeds of each Loan or drawing under each Letter of Credit,
not more than 25% of the value of the assets (either of any individual Borrower
or of the Loan Parties on a consolidated basis) subject to the provisions of
SECTION 7.9 or SECTION 7.18 or subject to any restriction contained in any
agreement or instrument between the Borrower and any Lender or any Affiliate of
any Lender relating to Debt and within the scope of SECTION 9.1(D) will be
Margin Stock.
6.23 Copyrights, Patents, Trademarks and Licenses, etc. Each Loan Party
owns or is licensed or otherwise has the right to use all of the Proprietary
Rights, contractual franchises, licenses, permits, rights of way,
authorizations, and other rights that are reasonably necessary for the operation
of its businesses, without conflict with the rights of any other Person. To the
best knowledge of any Borrower, no slogan or other advertising device, product,
process, method, substance, part, or other material now employed, or now
contemplated to be employed, by any Loan Party or any Subsidiary of any Loan
Party infringes upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending, or, to the best knowledge of any Loan
Party, threatened, and no patent, invention, device, application, principle or
any statute, law, rule, regulation, standard or code is pending or, to the
knowledge of any Borrower, proposed, which, in either case, could reasonably be
expected to have a Material Adverse Effect.
6.24 No Material Adverse Change. No Material Adverse Effect has
occurred since the latest date of the Financial Statements delivered to the
Lenders.
6.25 Full Disclosure. None of the representations or warranties (other
than as to estimates, projections, and pro forma Financial Statements) made by
any Loan Party in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of any Loan
Party in connection with the Loan Documents (including the offering and
disclosure materials delivered by or on behalf of the Loan Parties to the
Lenders prior to the Closing Date), contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered. Any estimates,
projections, and pro forma Financial Statements
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delivered to the Agent or the Lenders were prepared in good faith based on
assumptions believed to be reasonable at the time.
6.26 Material Agreements. SCHEDULE 6.26 hereto sets forth as of the
Closing Date all Material Agreements to which any Borrower is a party or is
bound as of the date hereof.
6.27 Bank Accounts. SCHEDULE 6.27 contains as of the Closing Date a
complete and accurate list of all bank accounts maintained by the Loan Parties
with any bank or other financial institution.
6.28 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, any Loan
Party of this Agreement or any other Loan Document other than (a) those already
obtained, (b) the filing of UCC financing statements and mortgages, and (c) the
filing of the Copyright Security Agreements and the Patent and Trademark
Agreements.
6.29 No Restrictions. There exists no document, contract, or agreement
to which any Loan Party or any direct or indirect parent of any Loan Party is a
party that could reasonably be expected to materially and adversely affect this
Agreement, any other Loan Document, or the transactions contemplated hereby or
thereby or that otherwise restricts or prohibits the transactions contemplated
hereby or thereby.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Borrower (and each other Loan Party by execution of an Obligation
Guaranty, with respect to covenants applicable to such Loan Party) covenants to
the Agent and each Lender that so long as any of the Obligations remain
outstanding or this Agreement is in effect:
7.1 Taxes and Other Obligations. Each Loan Party shall, and shall cause
each of its Subsidiaries to, (a) file prior to delinquency all tax returns and
other reports which it is required to file; (b) pay, or provide for the payment,
when due, of all taxes, fees, assessments and other governmental charges against
it or upon its property, income and franchises, make all required withholding
and other tax deposits, and establish adequate reserves or other provision
required by GAAP for the payment of all such items, and provide to the Agent and
the Lenders, upon request, satisfactory evidence of its timely compliance with
the foregoing; and (c) pay when due all Debt owed by it and all claims of
materialmen, mechanics, carriers, warehousemen, landlords, processors and other
like Persons, and all other indebtedness owed by it and perform and discharge in
a timely manner all other obligations undertaken by it; provided, however, so
long as Westlake has notified the Agent in writing, no Loan Party or any of
their Subsidiaries need to pay any tax, fee, assessment, or governmental charge
(i) which such Loan Party is contesting in good faith by appropriate proceedings
diligently pursued, (ii) for which such Loan Party or its Subsidiary, as the
case may be, has established proper reserves as required under GAAP, and (iii)
the nonpayment of which does not result in the imposition of a Lien (other than
a Permitted Lien).
7.2 Legal Existence and Good Standing. Except as permitted by SECTION
7.9, each Loan Party shall maintain its legal existence and its qualification
and good standing in all jurisdictions in which the failure to maintain such
existence and qualification or good standing could reasonably be expected to
have a Material Adverse Effect.
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7.3 Compliance with Law and Agreements; Maintenance of Licenses;
Amendments to Bond Debt and Fixed Asset Loan. Each Loan Party shall comply, and
shall cause each of its Subsidiaries to comply, in all material respects, with
all Requirements of Law of any Governmental Authority having jurisdiction over
it or its business (including the Federal Fair Labor Standards Act and all
Environmental Laws), except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect. No Loan Party shall
violate the provisions of any Material Agreement, except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. Each Loan Party shall, and shall cause each of its Subsidiaries to,
obtain and maintain all licenses, permits, franchises, and governmental
authorizations necessary to own its property and to conduct its business as
conducted on the Closing Date, except to the extent that the failure to do so
could not reasonably be expected to have a Material Adverse Effect. No Loan
Party shall modify, amend, or alter its certificate or articles of
incorporation, or its limited liability company operating agreement or limited
partnership agreement, as applicable, other than in a manner which does not
adversely affect the rights of the Lenders or the Agent. No Loan Party shall
amend or modify any provision of, or waive any condition under, any document or
instrument evidencing or relating to the Bond Debt or the Fixed Asset Loan,
without first (a) providing to the Agent a copy of such proposed amendment,
modification, or waiver and (b) obtaining Required Lenders' prior written
consent thereto, if the Agent determines, in its reasonable discretion, that any
such change or changes could reasonably be expected to adversely affect the
rights of Lenders.
7.4 Maintenance of Property; Inspection of Property.
(a) Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain all of its property necessary and useful in the conduct of its
business, in good operating condition and repair, ordinary wear and tear
excepted.
(b) Each Loan Party shall permit representatives and independent
contractors of the Agent (at the expense of the Borrowers not to exceed four (4)
times per year unless a Default or an Event of Default has occurred and is
continuing) to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts
therefrom and to discuss its affairs, finances and accounts with its directors,
officers and independent public accountants, at such reasonable times during
normal business hours and as soon as may be reasonably desired, upon reasonable
advance notice to the Borrower; provided, however, when a Default or an Event of
Default exists, the Agent or any Lender may do any of the foregoing at the
expense of the Borrowers at any time during normal business hours without
advance notice.
(c) Each Loan Party shall own or have valid licenses for all
Proprietary Rights necessary for the anticipated future conduct of the business
of each such Loan Party.
7.5 Insurance.
(a) Each Loan Party shall maintain, and shall cause each of its
Subsidiaries with financially sound and reputable insurers having a rating of at
least A- or better by Best Rating Guide, or by other companies acceptable to the
Agent in its sole discretion (it being understood that the companies acceptable
to the Agent on the Closing Date shall be acceptable thereafter absent a change
in rating or other circumstances), insurance against loss or damage by fire with
extended coverage; theft, burglary, pilferage and loss in transit; public
liability and third party property damage; larceny, embezzlement, or other
criminal liability; business interruption (other than with respect to North
American Pipe Corporation for which no business interruption insurance is
required absent a change in circumstances); public liability and third party
property damage; and such other hazards or of such other types as is customary
for Persons engaged in the same or similar business, as the Agent, in its
discretion, or acting at the direction of the Required Lenders, shall specify,
in amounts, and under policies and coverages acceptable to the
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Agent and the Required Lenders (it being understood that policies acceptable in
form and substance to the Agent in connection with the initial closing shall be
generally acceptable thereafter absent a change in law, facts, or
circumstances).
(b) Each Loan Party shall cause the Agent, for the ratable benefit
of the Agent and the Lenders, to be named as loss payee or additional insured,
as its interest may appear, with respect to the Inventory, in a manner
acceptable to the Agent. Each policy of insurance (other than policies issued by
Oil Insurance Limited) shall contain a clause or endorsement requiring the
insurer to give not less than thirty (30) days' prior written notice to the
Agent in the event of cancellation of the policy for any reason whatsoever
(other than cancellation of the policy for non-payment of premiums, which shall
require not less than ten (10) days' prior written notice to the Agent) and a
clause or endorsement stating that the status of the Agent as loss payee or
additional insured shall not be impaired or invalidated by any act or neglect of
any Loan Party or any of their Subsidiaries or the owner of any Real Estate not
covered by the applicable policy. All premiums for such insurance shall be paid
by or on behalf of the Loan Parties when due, and certificates of insurance and,
if requested by the Agent or any Lender, photocopies of the policies, shall be
delivered to the Agent. If any Loan Party fails to procure such insurance or to
pay the premiums therefor when due, the Agent may, and at the direction of the
Required Lenders shall, do so from the proceeds of Revolving Loans.
7.6 Insurance and Condemnation Proceeds. The Borrowers shall promptly
notify the Agent and the Lenders of any loss, damage, or destruction to the
Collateral, whether or not covered by insurance, other than any loss, damage, or
destruction involving an amount or fair market value of less than $250,000 in
the aggregate for each occurrence or series of occurrences ("MINOR INSURANCE
EVENTS"). Other than with respect to Minor Insurance Events, and subject to the
Intercreditor Agreement, the Agent is hereby authorized to collect all insurance
and condemnation proceeds in respect of Collateral directly and, after deducting
from such proceeds the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Agent shall apply such proceeds, ratably, to
the reduction of the Obligations (but not a reduction of the Maximum Revolver
Amount) in the order provided for in SECTION 3.7. In the case of any loss,
damage, or destruction to any assets of the Loan Parties that includes
Collateral and other assets of the Loan Parties, the Loan Parties shall deliver
to the Agent satisfactory evidence of the amount of the insurance and
condemnation proceeds that are attributable to the Collateral; if the Agent is
not satisfied with such evidence, the Agent may, at the expense of the Loan
Parties, retain an independent third party to perform such valuation.
7.7 Environmental Laws.
(a) Each Loan Party shall, and shall cause each of their
Subsidiaries to, conduct its business in compliance in all material respects
with all Environmental Laws applicable to it, including those relating to the
generation, handling, use, storage, and disposal of any Hazardous Material. Each
Loan Party shall, and shall cause each of its Subsidiaries to, take prompt and
appropriate action to respond to any material non-compliance with Environmental
Laws and shall report to the Agent any such material non-compliance and any such
response.
(b) Without limiting the generality of the foregoing, the Borrowers
shall submit to the Agent and the Lenders annually, commencing on the first
Anniversary Date, and on each Anniversary Date thereafter, an update of the
status of each environmental compliance or material liability issue of a Loan
Party with respect to its property. The Agent or any Lender may request copies
of technical reports prepared by any Loan Party and their communications with
any Governmental Authority to determine whether any Loan Party or any of their
Subsidiaries is proceeding reasonably to correct, cure, or contest in good faith
any alleged non-compliance or environmental liability. The Borrowers shall, at
the Agent's or the Required Lenders' request and at the Borrowers' expense, (i)
retain
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an independent environmental engineer acceptable to the Agent to evaluate the
site, including tests if appropriate, where the non-compliance or alleged
non-compliance with Environmental Laws has occurred and prepare and deliver to
the Agent a report setting forth the results of such evaluation, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof, and (ii) provide to the Agent and the Lenders a
supplemental report of such engineer whenever the scope of the environmental
problems, or the response thereto or the estimated costs thereof, shall increase
in any material respect.
7.8 Compliance with ERISA. Each Loan Party shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code, and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; (c) make all required contributions to any
Plan subject to Section 412 of the Code; (d) not engage in a prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which could reasonably be expected to result in liability to any Loan
Party in excess of $7,500,000; and (e) not engage in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
7.9 Mergers, Consolidations, or Sales. No Loan Party nor any of their
Subsidiaries shall enter into any transaction of merger, reorganization, or
consolidation, or agree to do any of the foregoing other than (a) as permitted
by SECTION 7.26, or (b) mergers among Loan Parties; provided that, in any merger
involving a Borrower, a Borrower must be the surviving entity. No Loan Party nor
any of their Subsidiaries shall transfer, sell, assign, lease, or otherwise
dispose of all or any part of its property (including, without limitation, the
stock or equity of any Subsidiary of such Loan Party except as expressly
permitted by the immediately preceding sentence), or wind up, liquidate, or
dissolve, or agree to do any of the foregoing, except (a) for sales of Inventory
in the ordinary course of its business, (b) for sales or other dispositions of
Equipment in the ordinary course of business that are obsolete or no longer
useable by any Loan Party in its respective business with a book value or
contemplated sales proceeds not to exceed $2,000,000 in the aggregate in any
Fiscal Year, (c) for sales, leases, or other transfers or dispositions among
Loan Parties, (d) for the sale, discount, or transfer of delinquent Accounts in
the ordinary course of business for purposes of collection, and (e) so long as
no Default or Event of Default then exists or arises as a result thereof, sales
of assets, other than those in CLAUSES (A) through (D), for fair value for cash,
so long as any mandatory prepayments required by SECTION 3.3(B), if any are
required, are made. All assets purchased with such proceeds shall be free and
clear of all Liens, except the Agent's Liens or other Permitted Liens.
7.10 Distributions; Capital Change; Restricted Investments. No Loan
Party nor any of their Subsidiaries shall (a) directly or indirectly declare or
make, or incur any liability to make, any Distribution, except (i) Distributions
to any Loan Party from its direct Subsidiaries, and (ii) other Distributions by
Loan Parties, if, after giving effect to such Distribution, (x) Availability
equals or exceeds $100,000,000, and (y) the Fixed Charge Coverage Ratio is at
least 1.00 to 1.0, (b) make any change in its capital structure which could have
a Material Adverse Effect, or (c) make any Restricted Investment, provided that
if any payment, prepayment, redemption, purchase, or deposit in respect of any
Debt of the Loan Parties is permitted to be made under SECTION 7.14(C), and such
payment, prepayment, redemption, purchase, or deposit otherwise constitutes a
Restricted Investment, such payment, prepayment, redemption, purchase, or
deposit shall not be prohibited by the terms of this SECTION 7.10(C).
Notwithstanding the foregoing, Distributions are permitted hereunder only to the
extent that any such Distribution is made in accordance with applicable
Requirement of Law and constitutes a valid, non-voidable transaction.
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7.11 Transactions Affecting Collateral or Obligations. No Loan Party
nor any of their Subsidiaries shall enter into any transaction which would be
reasonably expected to have a Material Adverse Effect.
7.12 Guaranties. No Loan Party nor any of their Subsidiaries shall
make, issue, or become liable on any Guaranty, except (a) Obligation Guaranties
in favor of the Agent, (b) Guaranties of Debt permitted by SECTION 7.13, and (c)
a Guaranty by Westlake Olefins Corporation for the account of Suzhou Huasu
Plastics Co. Ltd. in an aggregate amount not to exceed $8,500,000.
7.13 Debt. No Loan Party shall incur or maintain any Debt, other than:
(a) the Obligations;
(b) Debt existing on the Closing Date and described on SCHEDULE 6.9;
(c) Capital Leases of Equipment and purchase money secured Debt
incurred to purchase Equipment; provided that (i) Liens securing the same attach
only to the Equipment acquired by the incurrence of such Debt, and (ii) the
aggregate amount of such Debt (including Capital Leases) outstanding does not
exceed $10,000,000 at any time;
(d) the Existing Letters of Credit, so long as Borrowers use their
best efforts to cause such Existing Letters of Credit to be replaced with
Letters of Credit hereunder within ninety (90) days of the Closing Date;
(e) the Bond Debt;
(f) Debt arising under the Fixed Asset Loan in a principal amount
not to exceed $170,000,000 at any time outstanding;
(g) other unsecured Debt not to exceed $100,000,000 so long as the
Fixed Charge Coverage Ratio on the date of incurrence of such Debt and after
giving effect to the incurrence of such Debt is at least 1.00 to 1.0;
(h) Debt evidencing a refunding, renewal, extension, or replacement
of the Debt existing on the Closing Date and described on SCHEDULE 6.9 and other
Debt permitted hereunder; provided that (i) the principal amount thereof is not
increased, (ii) the Liens, if any, securing such refunded, renewed, extended, or
replaced Debt do not attach to any assets in addition to those assets, if any,
securing the Debt to be refunded, renewed, extended, or replaced, (iii) no
Person that is not an obligor or guarantor of such Debt as of such date shall
become an obligor or guarantor thereof, and (iv) the terms of such refunding,
renewal, or extension are no less favorable to the Borrowers, the Agent, or the
Lenders than the original Debt, including, without limitation, the maturity date
thereof and any principal amortization thereof;
(i) Debt of any Loan Party owed to any of its Restricted
Subsidiaries, or Debt of any Restricted Subsidiary owed to the owner of its
equity interests which is a Loan Party;
(j) Debt to finance insurance premiums in an amount not to exceed
$10,000,000 at any time outstanding;
(k) Debt owed by Westlake and/or North American Pipe Corporation to
North American Profiles Limited in an amount not to exceed $5,000,000 in the
aggregate; provided that any payments or
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prepayments of such Debt shall permanently reduce the amount of Debt permitted
pursuant to this CLAUSE (K);
(l) Debt arising under Hedge Agreements;
(m) Debt among Loan Parties on terms of the kind customarily
employed to allocate charges among members of a consolidated group of entities,
in each such case, that are fair and reasonable to the Loan Parties and
consistent with past practices of the Loan Parties.
7.14 Prepayment/Prepayment of Debt. The Borrowers shall pay the
Obligations in accordance with the terms and provisions of the Loan Documents.
Each Loan Party
(a) shall promptly pay (or renew and extend) all of its material
obligations as the same become due (unless such obligations -- other than the
Obligations -- are being contested in good faith by appropriate proceedings);
(b) shall not, except as expressly permitted by CLAUSE (C) hereof,
voluntarily prepay any principal of, or interest on, any other Debt, including
the Bond Debt or the Fixed Asset Loan (except (i) the Obligations in accordance
with the terms of this Agreement, (ii) the Debt in connection with the IRBs,
(iii) prepayments and payments of the Debt permitted by SECTION 7.13(K), (iv)
refinancings of Debt to be refinanced on the Closing Date as a result of the
transactions occurring in such date, or (v) refinancings of the Fixed Asset Loan
or other Debt to the extent such refinancing is permitted by SECTION 7.13(H)),
whether subordinate to the Obligations or not; and
(c) shall not, directly or indirectly, pay, prepay, redeem, or
purchase, or deposit funds or property for the payment (including, without
limitation, a payment in respect of any sinking fund or defeasance of any Bond
Debt or the Fixed Asset Loan), prepayment, redemption, or purchase of, any Bond
Debt or the Fixed Asset Loan other than
(i) regularly scheduled interest and principal payments on the
Bond Debt and Fixed Asset Loan made in compliance with the provisions thereof;
(ii) redemptions or prepayments (whether voluntary or mandatory)
of the Bond Debt or the Fixed Asset Loan (other than Excess Cash Flow
Prepayments and Equity Proceeds Prepayments), if, after giving effect to such
redemption or prepayment, (x) the Availability is at least $80,000,000, and (y)
the Fixed Charge Coverage Ratio is at least 1.00 to 1.0;
(iii) Excess Cash Flow Prepayments and Equity Proceeds
Prepayments, if, after giving effect to such prepayments, (x) the Availability
is at least $50,000,000, and (y) the Fixed Charge Coverage Ratio is at least
1.00 to 1.0; and
(iv) mandatory prepayments of the Fixed Asset Loan with the
proceeds from sales of or condemnation or casualty events involving collateral
securing the Term Priority Collateral.
7.15 Transactions with Affiliates. Except as permitted by SECTION
7.9(A) or 7.12, or as set forth below, no Loan Party shall sell, transfer,
distribute, or pay any money or property, including, but not limited to, any
fees or expenses of any nature (including, but not limited to, any fees or
expenses for management services), to any Affiliate, or lend or advance money or
property to any Affiliate, or invest in (by capital contribution or otherwise)
or purchase or repurchase any stock or indebtedness (other than the Obligation
Guaranties), or any property, of any Affiliate, or become liable on any Guaranty
of the indebtedness, dividends, or other obligations of any Affiliate other than
(a) transactions between the
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Loan Parties on terms of the kind customarily employed to allocate charges among
members of a consolidated group of entities, in each such case, that are fair
and reasonable to the Loan Parties and consistent with past practices of the
Loan Parties, and (b) transactions with respect to tax sharing agreements so
long as the Loan Parties do not pay more taxes in the aggregate pursuant to such
tax sharing agreement than the Loan Parties in the aggregate would be required
to pay if each Loan Party filed a separate tax return. Notwithstanding the
foregoing, while no Event of Default has occurred and is continuing and so long
as done in compliance with SECTION 7.10, the Loan Parties and their Subsidiaries
may engage in transactions with Affiliates in the ordinary course of business
consistent with past practices, in amounts and on terms no less favorable to the
Loan Parties and their Subsidiaries than would be obtained in a comparable
arm's-length transaction with a third party who is not an Affiliate.
7.16 Business Conducted. No Loan Party will, directly or indirectly,
permit or suffer to exist any material change in the type of businesses in which
it is engaged from the businesses of the Loan Parties as conducted on the
Closing Date and in similar or related businesses that are reasonable extensions
or additions to the Loan Parties' business on the Closing Date.
7.17 Liens. No Loan Party shall create, incur, assume, or permit to
exist any Lien on any property now owned or hereafter acquired by any of them,
except Permitted Liens, and Liens securing Capital Leases and purchase money
Debt permitted in SECTION 7.13.
7.18 Sale and Leaseback Transactions. No Loan Party nor any of their
Subsidiaries shall, directly or indirectly, enter into any arrangement with any
Person providing for such Loan Party or such Subsidiary to lease or rent
property that such Loan Party or such Subsidiary has sold or will sell or
otherwise transfer to such Person.
7.19 New Subsidiaries. No Loan Party shall, directly or indirectly,
organize, create, acquire, or permit to exist any Subsidiary without giving the
Agent at least ten (10) days prior written notice of such organization,
creation, or acquisition. Borrowers shall cause each Person that becomes a
Restricted Subsidiary of any Loan Party after the Closing Date (whether as a
result of acquisition, merger, creation, or otherwise), (a) to execute an
Obligation Guaranty on the date such entity becomes a Restricted Subsidiary of a
Loan Party and promptly deliver (but in no event later than five (5) days
following consummation of such creation, acquisition, or merger) such Obligation
Guaranty to the Agent and (b) to execute and deliver to the Agent all required
Collateral Documents (in form and substance acceptable to the Agent) creating
Agent's Liens in favor of the Agent in the Collateral owned by such Restricted
Subsidiary.
7.20 Fiscal Year. No Loan Party shall change its Fiscal Year.
7.21 Fixed Charge Coverage Ratio. Following the Triggering Date and
based on the most recently delivered Financial Statements received pursuant to
SECTION 5.2, the Borrowers will maintain a Fixed Charge Coverage Ratio for each
period of immediately preceding twelve (12) months of not less than 1.00 to 1.0.
7.22 Use of Proceeds. No Loan Party shall nor shall a Loan Party suffer
or permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrowers or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
7.23 Collateral. To secure the full and complete payment and
performance of the Obligations, Borrowers shall (and shall cause each Restricted
Subsidiary to) enter into Collateral
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Documents (in form and substance acceptable to the Agent) pursuant to which,
among other things, each such entity shall, to the extent permitted by
applicable law, grant, pledge, assign, and create first priority Agent's Liens
(except to the extent Permitted Liens affect such priority or except as provided
under the Intercreditor Agreement) in and to all Collateral owned by such
entity.
7.24 Tax Shelter Regulations. (a) The Borrowers do not intend to treat
the Loans and/or Letters of Credit and related transactions as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). In the event the Borrowers determine to take any action inconsistent
with such intention, it will promptly notify the Agent thereof. If the Borrowers
so notify the Agent, the Borrowers acknowledge that one or more of the Lenders
may treat its Loans and/or its interest in Non-Ratable Loans and/or Agent
Advances and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such Treasury
Regulation.
(b) Neither the Agent nor any Lender intends to treat the Loans
and/or Letters of Credit and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4). In
the event the Agent or any Lender determines to take any action inconsistent
with this intention, such person will so notify Westlake. If the Agent or any
Lender so notifies Westlake, the Agent and such Lender acknowledge that one or
more of the Borrowers may treat any Loans and/or Letter of Credit as part of a
transaction that is subject to Treasury Regulation Section 301.6112-1, and such
Borrower or Borrowers, as applicable, will maintain the lists and other records
required by such Treasury Regulation.
7.25 Permitted Debt under Bond Debt and Fixed Asset Loan. The Borrowers
shall at all times reserve the full amount of the Maximum Revolver Amount under
(a) Section 4.09(b)(1) (the basket permitting the credit facilities) of the
indenture for the Bond Debt and (b) Section 8.03(c)(i) of the Fixed Asset Loan.
7.26 Permitted Acquisitions. The Loan Parties may consummate
Acquisitions, so long as:
(a) the Acquisition by a Loan Party is of a Person or assets which
are in substantially the same lines of business as the business conducted by
such Loan Party on the date hereof, or any other business reasonably related
thereto;
(b) as of the closing thereof, each Acquisition has been approved
and recommended by the board of directors (or equivalent body) of the Person to
be acquired or from which such business or asset is to be acquired;
(c) prior to the closing of such Acquisition (other than an
Acquisition of assets), the Person to be acquired is Solvent;
(d) as of the closing of the Acquisition, after giving effect
thereto, the Loan Party that is the acquiring party must be Solvent and the Loan
Parties, on a consolidated basis, must be Solvent;
(e) as of the closing of any such Acquisition, (i) such Acquisition
is structured as a merger, a Borrower must be the surviving entity after giving
effect to such merger; and (ii) if such Acquisition is structured as a
stock/equity acquisition, the acquiring Loan Party shall own not less than a
100% interest in the entity being acquired and such acquired entity will be a
domestic company that is or becomes a Loan Party hereunder;
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(f) as of the closing of any Acquisition, no Default or Potential
Default shall exist or occur as a result thereof, and after giving effect
thereto;
(g) if the Acquisition target is to be a Restricted Subsidiary, then
Borrowers shall have complied with the terms and conditions of SECTION 7.19;
(h) the absence of action, suit, investigation, or proceeding
pending or threatened in a any court or before any arbitrator or Governmental
Authority that affects the target or the proposed Acquisition, which could
reasonably be expected to have a Material Adverse Effect on the target or the
Loan Parties;
(i) no Acquisition results in the formation or Acquisition of a
Foreign Subsidiary of any Loan Party; the Purchase Price for such Acquisition
(A) must be less than or equal to $20,000,000, and (B) when aggregated with the
Purchase Price of all other Acquisitions consummated during such Fiscal Year,
does not exceed $50,000,000 in the aggregate; and (ii) immediately prior to such
Acquisition and after giving effect to any Revolving Loans to be made in
connection therewith, (A) there is at least $100,000,000 of Availability, and
(B) the Pro Forma Fixed Charge Coverage Ratio shall be at least 1.00 to 1.0; and
(j) for the purposes of calculating Availability under this SECTION
7.26, no assets of the Person to be acquired or the assets to be acquired shall
be included in the Borrowing Base unless such assets are acceptable to the
Agent.
7.27 Excluded Deposit Accounts. In the event the amount of funds on
deposit in the Local Accounts ever exceeds $300,000 at any time in the aggregate
on any date of determination, the Borrowers shall immediately deliver to the
Agent Blocked Account Agreements with respect to each such Local Account.
7.28 Fixed Asset Loan Collateral Account. The Loan Parties shall not
deposit any funds into the Fixed Asset Loan Collateral Account other than net
proceeds from the sale of Term Priority Collateral and insurance or condemnation
proceeds received by any Loan Party in respect of any Term Priority Collateral.
7.29 Further Assurances. The Loan Parties shall execute and deliver, or
cause to be executed and delivered, to the Agent and/or the Lenders such
documents and agreements, and shall take or cause to be taken such actions, as
the Agent or any Lender may, from time to time, request to carry out the terms
and conditions of this Agreement and the other Loan Documents.
ARTICLE 8
CONDITIONS OF LENDING
8.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the initial Revolving Loans on the Closing
Date, and the obligation of the Agent to cause the Letter of Credit Issuer to
issue any Letter of Credit on the Closing Date, are subject to the following
conditions precedent having been satisfied in a manner satisfactory to the Agent
and each Lender:
(a) This Agreement and the other Loan Documents shall have been
executed by each party thereto and each Loan Party, as applicable, shall have
performed and complied with all covenants, agreements, and conditions contained
herein and the other Loan Documents which are required to be performed or
complied with by the Loan Parties before or on such Closing Date.
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(b) Upon making the Revolving Loans on the Closing Date (including
such Revolving Loans made to finance the Closing Fee or otherwise as
reimbursement for fees, costs, and expenses then payable under this Agreement),
and with all its obligations current, the Borrowers shall have Availability of
at least $100,000,000.
(c) All representations and warranties made hereunder and in the
other Loan Documents shall be true and correct as if made on such date.
(d) No Default or Event of Default shall have occurred and be
continuing after giving effect to the Loans to be made and the Letters of Credit
to be issued on the Closing Date.
(e) The Agent and the Lenders shall have received such opinions of
counsel for the Loan Parties (other than Westlake Overseas Corporation) as the
Agent or any Lender shall request, each such opinion to be in a form, scope, and
substance satisfactory to the Agent, the Lenders, and their respective counsel.
(f) The Agent shall have received:
(i) financing statements in proper form for filing, under the UCC
in all jurisdictions that the Agent may deem necessary or desirable in order to
perfect the Agent's Liens; and
(ii) duly authorized UCC-3 Termination Statements and such other
instruments, in form and substance satisfactory to the Agent, as shall be
necessary to terminate and satisfy all Liens on the Property of the Loan Parties
except Permitted Liens.
(g) The Borrowers shall have paid all fees, including the amounts
owing as of the Closing Date under the Fee Letter, and expenses of the Agent and
the Attorney Costs incurred in connection with any of the Loan Documents and the
transactions contemplated thereby to the extent invoiced.
(h) The Agent shall have received evidence, in form, scope, and
substance, reasonably satisfactory to the Agent, of all insurance coverage as
required by this Agreement.
(i) The Agent and the Lenders shall have had an opportunity, if they
so choose, to examine the books of account and other records and files of the
Loan Parties and to make copies thereof, and to conduct a pre-closing audit
which shall include, without limitation, verification of Inventory, Accounts,
and the Borrowing Base, and the results of such examination and audit shall have
been satisfactory to the Agent and the Lenders in all respects.
(j) All proceedings taken in connection with the execution of this
Agreement, the Notes, all other Loan Documents, and all documents and papers
relating thereto shall be satisfactory in form, scope, and substance to the
Agent and the Lenders.
(k) Each Loan Party shall have established all of its Deposit
Accounts at the Bank or shall have entered into Blocked Account Agreements (on
terms acceptable to the Agent) with respect to all Deposit Accounts not
established at the Bank other than (i) the account number 910-2-710192 at
JPMorgan Chase Bank and (ii) immaterial local accounts of the Loan Partners (the
"LOCAL ACCOUNTS") so long as the amount of funds on deposit in such accounts
does not exceed $300,000 in the aggregate at any time.
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(l) No event has occurred and is continuing, or would result from
such extension of credit, which has had or would (after giving effect thereto)
reasonably be expected to have a Material Adverse Effect.
(m) After giving effect to the incurrence of the Bond Debt and the
incurrence of Debt under the Agreement and the Fixed Asset Loan, the Agent shall
be reasonably satisfied with the corporate and capital structure and management
of Westlake and its Subsidiaries.
(n) Evidence satisfactory to Agent that there shall exist no action,
suit, investigation, litigation, or proceeding pending or threatened in any
court or before any arbitrator or Governmental Authority that in Agent's
judgment (a) could reasonably be expected to have a Material Adverse Effect, or
(b) could reasonably be expected to materially and adversely affect this
Agreement, any other Loan Document, or the transactions contemplated hereby or
thereby.
(o) Agent shall have received, each in form and substance
satisfactory to Agent, (a) a pro forma balance sheet of the Loan Parties as at
June 30, 2003, which balance sheet shall reflect no material changes from the
most recent pro forma balance sheet of the Loan Parties previously delivered to
Agent, (b) financial projections in form satisfactory to Agent of the Loan
Parties scheduling the amount of Availability and evidencing the Loan Parties'
ability to comply with the financial covenants set forth in SECTION 7.21, if
applicable, and (c) interim financial statements for the Loan Parties as of May
31, 2003.
(p) Receipt by Agent and satisfactory review by Agent of all
material contracts of the Loan Parties with material customers.
(q) Evidence satisfactory to Agent of closing of each of the Bond
Debt and the Fixed Asset Loan, each on terms and conditions satisfactory to
Agent.
(r) Execution and delivery of the Intercreditor Agreement by all
parties thereto.
(s) Without limiting the generality of the items described above,
each Loan Party shall have delivered or caused to be delivered to the Agent (in
form and substance reasonably satisfactory to the Agent), the financial
statements, instruments, resolutions, documents, agreements, certificates,
opinions, and other items set forth on the "Closing Checklist" delivered by the
Agent to Westlake prior to the Closing Date.
The acceptance by the Borrowers of any Loans made or Letters of Credit
issued on the Closing Date shall be deemed to be a representation and warranty
made by the Borrowers to the effect that all of the conditions precedent to the
making of such Loans or the issuance of such Letters of Credit have been
satisfied or waived, with the same effect as delivery to the Agent and the
Lenders of a certificate signed by a Responsible Officer on behalf of the
Borrowers, dated the Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this SECTION 8.1 have been fulfilled to the satisfaction
of such Lender, (ii) the decision of such Lender to execute and deliver to the
Agent an executed counterpart of this Agreement was made by such Lender
independently and without reliance on the Agent or any other Lender as to the
satisfaction of any condition precedent set forth in this SECTION 8.1, and (iii)
all documents sent to such Lender for approval consent, or satisfaction were
acceptable to such Lender.
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8.2 Conditions Precedent to Each Loan. The obligation of the Lenders to
make each Loan, including the initial Revolving Loans on the Closing Date, and
the obligation of the Agent to cause the Letter of Credit Issuer to issue any
Letter of Credit shall be subject to the further conditions precedent that on
and as of the date of any such extension of credit:
(a) The following statements shall be true, and the acceptance by
the Borrowers of any extension of credit shall be deemed to be a statement to
the effect set forth in CLAUSES (I), (II), and (III) with the same effect as the
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer on behalf of the Loan Parties, dated the date of such extension of
credit, stating that:
(i) The representations and warranties contained in this
Agreement and the other Loan Documents are correct in all material respects on
and as of the date of such extension of credit as though made on and as of such
date, other than any such representation or warranty which relates to a
specified prior date and except to the extent the Agent and the Lenders have
been notified in writing by the Borrowers that any representation or warranty is
not correct and the Required Lenders have explicitly waived in writing
compliance with such representation or warranty; and
(ii) No event has occurred and is continuing, or would result
from such extension of credit, which constitutes a Default or an Event of
Default; and
(iii) No event has occurred and is continuing, or would result
from such extension of credit, which has had or would have a Material Adverse
Effect.
(b) No such Borrowing shall exceed Availability, provided, however,
that the foregoing conditions precedent set forth in this SECTION 8.2 are not
conditions to each Lender participating in or reimbursing the Bank or the Agent
for such Lenders' Pro Rata Share of any Non-Ratable Loan or Agent Advance made
in accordance with the provisions of SECTIONS 1.2(H) and (I).
ARTICLE 9
DEFAULT; REMEDIES
9.1 Events of Default. It shall constitute an event of default ("EVENT
OF DEFAULT") if any one or more of the following shall occur for any reason:
(a) any failure or refusal by any Loan Party to pay (i) any
principal of the Obligations when the same becomes due (whether by its terms, by
acceleration, or as otherwise provided in the Loan Documents); or (ii) interest,
fees, premium, or any other part of the Obligations within one day after the
same becomes due and payable in accordance with the Loan Documents, whether upon
demand or otherwise;
(b) any representation or warranty made or deemed made by any Loan
Party in this Agreement or in any of the other Loan Documents, any Financial
Statement, or any certificate furnished by any Loan Party at any time to the
Agent or any Lender shall prove to be untrue in any material respect as of the
date on which made, deemed made, or furnished;
(c) (i) any default shall occur in the observance or performance of
any of the covenants and agreements contained in SECTIONS 5.2(L), 5.2(M), 7.2,
7.5, 7.9 through 7.29, or SECTION 11 of the Security Agreement, provided that
Agent, in its sole discretion may grant the Loan Parties one additional day to
deliver the reports described in SECTIONS 5.2(L) and 5.2(M), (ii) any default
shall occur in the observance or performance of any of the covenants and
agreements contained in SECTIONS 5.2 (other than SECTIONS 5.2(L) or 5.2(m)) or
5.3 and such default shall continue for three (3) days or more; or
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(iii) any default shall occur in the observance or performance of any of the
other covenants or agreements contained in any other Section of this Agreement
or any other Loan Document, any other Loan Documents, or any other agreement
entered into at any time to which any Loan Party and the Agent or any Lender are
party (including in respect of any Bank Products with respect to which the
aggregate liability to the Loan Parties exceeds $250,000) and such default shall
continue for thirty (30) days or more;
(d) any "default" or "event of default" shall occur with respect to
any Debt (other than the Obligations) of any Loan Party in an outstanding
principal amount which exceeds $5,000,000 (in the aggregate), or under any
agreement or instrument under or pursuant to which any such Debt may have been
issued, created, assumed, or guaranteed by any Loan Party, and such default
shall continue for more than the period of grace, if any, therein specified, if
the effect thereof (with or without the giving of notice or further lapse of
time or both) is to accelerate, or to permit the holders of any such Debt to
accelerate, the maturity of any such Debt; or any such Debt shall be declared
due and payable or be required to be prepaid prior to the stated maturity or
redemption date thereof;
(e) Westlake or any of its Subsidiaries shall (i) file a voluntary
petition in bankruptcy or file a voluntary petition or an answer or otherwise
commence any action or proceeding seeking reorganization, arrangement, or
readjustment of its debts or for any other relief under the federal Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency act or law, state
or federal, now or hereafter existing, or consent to, approve of, or acquiesce
in, any such petition, action, or proceeding; (ii) apply for or acquiesce in the
appointment of a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for it or for all or any part of its
property; (iii) make an assignment for the benefit of creditors; (iv) be unable
generally to pay its debts as they become due; or (v) not be Solvent;
(f) an involuntary petition shall be filed or an action or
proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of Westlake or any of its
Subsidiaries or for any other relief under the federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing and such petition or proceeding shall not be
dismissed within sixty (60) days after the filing or commencement thereof or an
order of relief shall be entered with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for Westlake or any of its Subsidiaries or
for all or any part of their respective property shall be appointed or a warrant
of attachment, execution, or similar process shall be issued against any part of
the property of Westlake or any of its Subsidiaries;
(h) any Loan Party shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up or shall
commence or have commenced against it any action or proceeding for dissolution,
winding-up or liquidation, or shall take any corporate action in furtherance
thereof except as permitted under SECTIONS 7.2 or 7.9;
(i) all or any material part of the property of any Loan Party shall
be nationalized, expropriated, or condemned, seized, or otherwise appropriated,
or custody or control of such property or of such Loan Party shall be assumed by
any Governmental Authority or any court of competent jurisdiction at the
instance of any Governmental Authority, except where contested in good faith by
proper proceedings diligently pursued where a stay of enforcement is in effect;
(j) any Loan Document shall be terminated, revoked, or declared
void, invalid, or unenforceable or challenged by any Loan Party or any other
obligor;
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(k) one or more judgments, orders, decrees, or arbitration awards is
entered against the Loan Parties involving in the aggregate liability (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage) as to any single or related or unrelated series of
transactions, incidents or conditions, of $10,000,000 or more, and either (i)
enforcement proceedings are commenced upon such judgment, order, decree, or
award, or (ii) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment, order, decree, or award, by reason of pending
appeal or otherwise, is not in effect;
(l) any loss, theft, damage, or destruction of any item or items of
Collateral or other property of any Loan Party occurs which could reasonably be
expected to cause a Material Adverse Effect and is not adequately covered by
insurance;
(m) there is filed against any Loan Party any action, suit, or
proceeding under any federal or state racketeering statute (including the
Racketeer Influenced and Corrupt Organization Act of 1970), which action, suit,
or proceeding (i) is not dismissed within one hundred twenty (120) days, and
(ii) could reasonably be expected to result in the confiscation or forfeiture of
any material portion of the Collateral;
(n) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens, pursuant to
the Loan Documents, any Loan Document ceases to be in full force and effect or
any Lien with respect to any material portion of the Collateral intended to be
secured thereby ceases to be, or is not, valid, perfected, and prior to all
other Liens (other than Permitted Liens or as required under the Intercreditor
Agreement) or is terminated, revoked, or declared void;
(o) (i) an ERISA Event shall occur with respect to a Pension Plan or
Multi-employer Plan which has resulted or could reasonably be expected to result
in liability of any Loan Party under Title IV of ERISA to the Pension Plan,
Multi-employer Plan, or the PBGC in an aggregate amount in excess of $7,500,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $7,500,000; or (iii) any Loan Party or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multi-employer Plan in an aggregate amount in excess of
$7,500,000;
(p) there occurs a Change of Control;
(q) there occurs an event having a Material Adverse Effect;
(r) other than those existing on the Closing Date and disclosed on
SCHEDULE 6.16, any Environmental Liabilities in excess of $10,000,000 (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage), but excluding: (i) Environmental Liabilities in an
aggregate amount at any time up to $20,000,000 for which a Reserve is
established for 100% of such aggregate amount; and (ii) amounts in excess of
$20,000,000 secured by a perfected first lien on cash collateral equal to 100%
of that portion of such amount in excess of the Reserves described in clause (i)
for a period not to exceed 30 days; or
(s) an event shall occur, including, without limitation, a "change
in control" or "change of control" as defined in any documents or agreements
evidencing or creating the Bond Debt or the Fixed Asset Loan and (i) the trustee
or the required holders of any such Debt shall initiate notice under provisions
governing such Debt to require (or any Loan Party shall automatically be so
required) to
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redeem or repurchase such Debt, or (ii) any Loan Party shall initiate notice to
holders of the Bond Debt or the Fixed Asset Loan in connection with a redemption
of such Debt.
9.2 Remedies.
(a) If a Default or an Event of Default exists, the Agent may, in
its discretion, and shall, at the direction of the Required Lenders, do one or
more of the following at any time or times and in any order, without notice to
or demand on the Borrower: (i) restrict the amount of or refuse to make
Revolving Loans; and (ii) restrict or refuse to provide Letters of Credit or
Credit Support. If an Event of Default exists, the Agent, may, in its
discretion, and shall, at the direction of the Required Lenders, reduce the
Maximum Revolver Amount, or the advance rates against Eligible Accounts and/or
Eligible Inventory used in computing the Borrowing Base, or reduce one or more
of the other elements used in computing the Borrowing Base. In addition, if an
Event of Default exists, the Agent shall, at the direction of the Required
Lenders, do one or more of the following, in addition to the actions described
in the preceding sentence, at any time or times and in any order, without notice
to or demand on the Borrower: (A) terminate the Commitments and this Agreement;
(B) declare any or all Obligations to be immediately due and payable; provided,
however, that upon the occurrence of any Event of Default described in SECTIONS
9.1(E), 9.1(F), 9.1(G), or 9.1(H), the Commitments shall automatically and
immediately expire and all Obligations shall automatically become immediately
due and payable without notice or demand of any kind; (C) require the Borrowers
to cash collateralize all outstanding Letter of Credit Obligations; and (D)
pursue its other rights and remedies under the Loan Documents and applicable
law.
(b) If an Event of Default has occurred and is continuing: (i) the
Agent shall have for the benefit of the Lenders, in addition to all other rights
of the Agent and the Lenders, the rights and remedies of a secured party under
the Loan Documents and the UCC; (ii) the Agent may, at any time, take possession
of the Collateral and keep it on any Loan Party's premises, at no cost to the
Agent or any Lender, or remove any part of it to such other place or places as
the Agent may desire, or the Loan Parties shall, upon the Agent's demand, at the
Borrowers' cost, assemble the Collateral and make it available to the Agent at a
place reasonably convenient to the Agent; and (iii) the Agent may sell and
deliver any Collateral at public or private sales, for cash, upon credit or
otherwise, at such prices and upon such terms as the Agent deems advisable, in
its sole discretion, and may, if the Agent deems it reasonable, postpone or
adjourn any sale of the Collateral by an announcement at the time and place of
sale or of such postponed or adjourned sale without giving a new notice of sale.
Without in any way requiring notice to be given in the following manner, the
Loan Parties agree that any notice by the Agent of sale, disposition, or other
intended action hereunder or in connection herewith, whether required by the UCC
or otherwise, shall constitute reasonable notice to such Loan Party if such
notice is mailed by registered or certified mail, return receipt requested,
postage prepaid, or is delivered personally against receipt, at least five (5)
Business Days prior to such action to Westlake's address specified in or
pursuant to SECTION 13.8. If any Collateral is sold on terms other than payment
in full at the time of sale, no credit shall be given against the Obligations
until the Agent or the Lenders receive payment, and if the buyer defaults in
payment, the Agent may resell the Collateral without further notice to any Loan
Party. In the event the Agent seeks to take possession of all or any portion of
the Collateral by judicial process, the Loan Parties irrevocably waive to the
extent permitted under applicable Law: (A) the posting of any bond, surety, or
security with respect thereto which might otherwise be required; (B) any demand
for possession prior to the commencement of any suit or action to recover the
Collateral; and (C) any requirement that the Agent retain possession and not
dispose of any Collateral until after trial or final judgment. The Loan Parties
agree that the Agent has no obligation to preserve rights to the Collateral or
marshal any Collateral for the benefit of any Person. The Agent is hereby
granted a license or other right to use, without charge, the Loan Parties'
labels, patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in advertising or selling any
Collateral, and unless the terms and
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provisions of such rights provide otherwise, in completing production of any
Collateral, and the Loan Parties' rights under all licenses and all franchise
agreements shall inure to the Agent's benefit for such purpose. The proceeds of
sale shall be applied first to all expenses of sale, including attorneys' fees,
and then to the Obligations. The Agent will return any excess to the Borrowers
and the Borrowers shall remain liable for any deficiency.
(c) If an Event of Default occurs and is continuing, the Loan
Parties hereby waive, to the extent permitted by applicable law, all rights to
notice and hearing prior to the exercise by the Agent of the Agent's rights to
repossess the Collateral without judicial process or to reply, attach or levy
upon the Collateral without notice or hearing.
ARTICLE 10
TERM AND TERMINATION
10.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date unless sooner terminated in accordance with the terms
hereof. The Agent upon direction from the Required Lenders may terminate this
Agreement without notice upon the occurrence of an Event of Default. Upon the
effective date of termination of this Agreement for any reason whatsoever, all
Obligations (including all unpaid principal, accrued and unpaid interest, and
any early termination or prepayment fees or penalties) shall become immediately
due and payable, and the Borrowers shall immediately arrange for the
cancellation and return of Letters of Credit then outstanding (or, in the
alternative, shall provide (a) cash collateral for all remaining Letters of
Credit in an amount equal to 110% of the aggregate face amounts of such Letters
of Credit or (b) a back-up letter of credit for each remaining Letter of Credit
in form and substance and from an issuer acceptable to the Agent in its sole
discretion). Notwithstanding the termination of this Agreement, until all
Obligations are indefeasibly paid and performed in full in cash or acceptable
back-up letters of credit are provided as set forth in the immediately preceding
sentence, the Borrowers shall remain bound by the terms of this Agreement and
shall not be relieved of any of its Obligations hereunder or under any other
Loan Document, and the Agent and the Lenders shall retain all their rights and
remedies hereunder (including the Agent's Liens in and all rights and remedies
with respect to all then existing and after-arising Collateral).
ARTICLE 11
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent with respect to any departure by the Loan
Parties therefrom, shall be effective unless the same shall be in writing and
signed by the Required Lenders (or by the Agent at the written request of the
Required Lenders) and the Borrowers and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by each Lender affected thereby and the Borrowers
and acknowledged by the Agent, do any of the following:
(i) extend the Commitment of any Lender;
(ii) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees (other than
fees payable solely to the Agent), or other amounts due to the Lenders (or any
of them) hereunder or under any other Loan Document;
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(iii) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document;
(iv) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Lenders or any of
them to take any action hereunder;
(v) increase any of the percentages set forth in the definition
of the Borrowing Base;
(vi) amend this Section or any provision of this Agreement
providing for consent or other action by all Lenders;
(vii) release all or substantially all of the Obligation
Guaranties or release Collateral other than as permitted by SECTION 12.11 or
amend any provisions of the Intercreditor Agreement that would affect the
priority of Agent's Liens in the Collateral;
(viii) change the definitions of "Majority Lenders" or "Required
Lenders"; or
(ix) increase the Maximum Revolver Amount, the Maximum Inventory
Loan Amount, or Letter of Credit Subfacility;
provided, however, the Agent may, in its sole discretion and notwithstanding the
limitations contained in CLAUSES (V) and (IX) above and any other terms of this
Agreement, make Agent Advances in accordance with SECTION 1.2(G) and, provided
further, that (A) no amendment, waiver, or consent shall, unless in writing and
signed by the Agent, affect the rights or duties of the Agent under this
Agreement or any other Loan Document; (B) no amendment shall increase the
Commitment of any Lender unless consented to by such Lender; and (C) SCHEDULE
1.2 hereto (Commitments) may be amended from time to time by Agent alone to
reflect assignments of Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers, or consents with respect to this Agreement, at Agent's
election, such fees may be paid only to those Lenders that agree to such
amendments, waivers or consents within the time specified for submission
thereof.
(c) If, in connection with any proposed amendment, waiver or consent
(a "PROPOSED CHANGE"):
(i) requiring the consent of all Lenders, the consent of Required
Lenders is obtained, but the consent of other Lenders is not obtained (any such
Lender whose consent is not obtained as described in this clause (i) and in
clause (ii) below being referred to as a "NON-CONSENTING LENDER"), or
(ii) requiring the consent of Required Lenders, the consent of
Majority Lenders is obtained,
then, so long as the Agent is not a Non-Consenting Lender, at the Borrowers'
request, the Agent or an Eligible Assignee shall have the right (but not the
obligation) with the Agent's approval, to purchase from the Non-Consenting
Lenders, and the Non-Consenting Lenders agree that they shall sell, all the
Non-Consenting Lenders' Commitments for an amount equal to the principal
balances thereof and all accrued
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interest and fees with respect thereto through the date of sale pursuant to
Assignment and Acceptance Agreement(s), without premium or discount.
11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent (which
consent shall not be unreasonably withheld), assign and delegate to one or more
Eligible Assignees (provided that no consent of the Agent shall be required in
connection with any assignment and delegation by a Lender to an Affiliate of
such Lender) (each an "ASSIGNEE") all, or any ratable part of all, of the Loans,
the Commitment, and the other rights and obligations of such Lender hereunder,
in a minimum amount of $10,000,000 (provided that, unless an assignor Lender has
assigned and delegated all of its Loans and Commitment, no such assignment
and/or delegation shall be permitted unless, after giving effect thereto, such
assignor Lender retains a Commitment in a minimum amount of $10,000,000;
provided, however, that the Borrowers and the Agent may continue to deal solely
and directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Borrowers and the Agent by such Lender and the
Assignee; (ii) such Lender and its Assignee shall have delivered to the
Borrowers and the Agent an Assignment and Acceptance in the form of EXHIBIT F
("ASSIGNMENT AND ACCEPTANCE") together with any note or notes, if any, subject
to such assignment and (iii) the assignor Lender or Assignee has paid to the
Agent a processing fee in the amount of $3,500. The Borrowers agree to promptly
execute and deliver new promissory notes and replacement promissory notes if
requested by an Assignee or assignor Lender to evidence assignments of the Loans
and Commitments in accordance herewith.
(b) From and after the date that the Agent notifies the assignor
Lender that it has received an executed Assignment and Acceptance (and consent
of the Agent thereto, if required) and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations, including, but not limited to, the
obligation to participate in Letters of Credit and Credit Support have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties, or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency, or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment, perfection, or priority of any Lien granted
by any Loan Party Borrower to the Agent or any Lender in the Collateral; (ii)
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
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;
(iv) such Assignee will, independently (without reliance upon the Agent, such
assigning Lender, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time), continue to make its own
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credit decisions in taking or not taking action under this Agreement; (v) such
Assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers, including the
discretionary rights and incidental power, as are reasonably incidental thereto;
and (vi) such Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of SECTION
11.2(A), this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom. The Commitment allocated to
each Assignee shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of any Borrower (a
"PARTICIPANT") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "ORIGINATING LENDER")
hereunder and under the other Loan Documents; provided, however, that (i) the
Originating Lender's obligations under this Agreement shall remain unchanged;
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations; (iii) the Borrowers and the Agent shall continue to deal
solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and the other
Loan Documents; and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, except the matters set forth in SECTION 11.1(A) (I), (II), and (III),
and all amounts payable by the Borrowers hereunder shall be determined as if
such Lender had not sold such participation; except that, if amounts outstanding
under this Agreement are due and unpaid, or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent and subject to the same limitation
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S. Treasury
Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable law.
ARTICLE 12
THE AGENT
12.1 Appointment and Authorization. Each Lender hereby designates and
appoints the Bank as its Agent under this Agreement and the other Loan Documents
and each Lender hereby irrevocably authorizes the Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. In addition, each Lender
hereby authorizes the Agent to enter into the Intercreditor Agreement. The Agent
agrees to act as such on the express conditions contained in this ARTICLE 12.
The provisions of this ARTICLE 12 are solely for the benefit of the Agent and
the Lenders and no Borrower shall have any rights as a third party beneficiary
of any of the provisions contained herein. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement or in any other Loan Document,
the Agent shall not have any duties or responsibilities, except those expressly
set forth
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herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including (a) the
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
SECTION 1.2(I), and (c) the exercise of remedies pursuant to SECTION 9.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
12.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees,
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
12.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation, or warranty made by any Borrower, any Affiliate of
any Borrower, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability, or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books, or records of any Borrower or any Affiliates of any Borrower.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document, or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any
Borrower), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Required
Lenders (or all Lenders if so required by SECTION 11.1) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the
Lenders.
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12.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, unless the Agent
shall have received written notice from a Lender or the Borrowers referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with SECTION 9; provided, however, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
12.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrowers and their Affiliates, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently (without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed
appropriate), made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition, and
creditworthiness of the Borrowers and their Affiliates, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Borrower.
Each Lender also represents that it will, independently (without reliance upon
any Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time), continue to make its own credit analysis,
appraisals, and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition, and creditworthiness of the Borrowers. Except for
notices, reports, and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition, or
creditworthiness of the Borrowers which may come into the possession of any of
the Agent-Related Persons.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), in
accordance with their Pro Rata Shares, from and against any and all Indemnified
Liabilities as such term is defined in SECTION 13.11; provided, however, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Agent upon demand for its Pro Rata Share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings, or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this SECTION 12.7 shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. The Bank and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with the Borrowers and their
Affiliates as though the Bank were not the Agent hereunder and without notice to
or consent of the Lenders. The Bank or its Affiliates may receive information
regarding the Borrowers, their Affiliates and Account Debtors (including
information that may be subject to confidentiality obligations
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in favor of the Borrowers, Affiliates, or Account Debtors) and acknowledge that
the Agent and the Bank shall be under no obligation to provide such information
to them. With respect to its Loans, the Bank shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders" include the
Bank in its individual capacity.
12.9 Successor Agent. The Agent may resign as Agent upon at least
thirty (30) days prior notice to the Lenders and the Borrowers, such resignation
to be effective upon the acceptance of a successor agent to its appointment as
Agent. In the event the Bank sells all of its Commitment and Revolving Loans as
part of a sale, transfer or other disposition by the Bank of substantially all
of its loan portfolio, the Bank shall resign as Agent and such purchaser or
transferee shall become the successor Agent hereunder. Subject to the foregoing,
if the Agent resigns under this Agreement, the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders. If no successor agent
is appointed prior to the effective date of the resignation of the Agent, the
Agent may appoint, after consulting with the Lenders and Westlake, a successor
agent from among the Lenders. Upon the acceptance of its appointment as
successor agent hereunder, (a) such successor agent shall succeed to all the
rights, powers, and duties of the retiring Agent, (b) the term "Agent" shall
mean such successor agent, (c) the retiring Agent's appointment, powers, and
duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this ARTICLE 12 shall continue to inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
12.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership, or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States of America tax treaty, properly completed
IRS Forms W-8BEN and W-8ECI before the payment of any interest in the first
calendar year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States of America withholding tax because it is
effectively connected with a United States of America trade or business of such
Lender, two properly completed and executed copies of IRS Form W-8ECI before the
payment of any interest is due in the first taxable year of such Lender and in
each succeeding taxable year of such Lender during which interest may be paid
under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States of America as a condition to exemption from,
or reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States of America tax treaty by providing IRS
Form W-8BEN, and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender, such
Lender agrees to notify the Agent of the percentage amount in which it is no
longer the beneficial owner
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of Obligations of the Borrowers to such Lender. To the extent of such percentage
amount, the Agent will treat such Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants
a participation in, or otherwise transfers all or part of the Obligations owing
to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by SUBSECTION (A)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States of America or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason), such Lender shall indemnify the Agent fully for all
amounts paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and expenses (including Attorney Costs). The obligation of the
Lenders under this subsection shall survive the payment of all Obligations and
the resignation or replacement of the Agent.
12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Liens upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by the Borrowers of all Aggregate Revolver Outstandings,
and the termination of all outstanding Letters of Credit (or, in the
alternative, with respect to Letters of Credit, providing (x) cash collateral
for all remaining Letters of Credit in an amount equal to 110% of the aggregate
face amounts of such Letters of Credit or (y) a back-up letter of credit for
each such Letter of Credit in form and substance and from an issuer acceptable
to the Agent in its sole discretion) (whether or not any of such obligations are
due) and all other Obligations; (ii) constituting property being sold or
disposed of if the Borrowers certify to the Agent that the sale or disposition
is made in compliance with SECTION 7.9 (and the Agent may rely conclusively on
any such certificate, without further inquiry); (iii) constituting property in
which the Loan Parties owned no interest at the time the Lien was granted or at
any time thereafter; or (iv) constituting property leased to the Loan Parties
under a lease which has expired or been terminated in a transaction permitted
under this Agreement. Except as provided above, the Agent will not release any
of the Agent's Liens without the prior written authorization of the Lenders;
provided that the Agent may, in its discretion, release the Agent's Liens on
Collateral valued in the aggregate not in excess of $500,000 during each Fiscal
Year without the prior written authorization of the Lenders and the Agent may
release the Agent's Liens on Collateral valued in the aggregate not in excess of
$1,000,000 during each Fiscal Year with the prior written authorization of
Required Lenders. Upon request by the Agent or the Borrowers at any time, the
Lenders will confirm in writing the Agent's authority to release any Agent's
Liens upon particular types or items of Collateral pursuant to this SECTION
12.11.
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(b) Upon receipt by the Agent of any authorization required pursuant
to SECTION 12.11(A) from the Lenders of the Agent's authority to release Agent's
Liens upon particular types or items of Collateral, and upon at least five (5)
Business Days prior written request by the Borrowers, the Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Agent's Liens upon such Collateral;
provided, however, that (i) the Agent shall not be required to execute any such
document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of any Loan
Party in respect of) all interests retained by any Loan Party, including the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by any Loan Party or is
cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the rights,
authorities, and powers granted or available to the Agent pursuant to any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, the Agent may act in
any manner it may deem appropriate, in its sole discretion given the Agent's own
interest in the Collateral in its capacity as one of the Lenders and that the
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing.
12.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the
express consent of all Lenders, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of all Lenders, set off against the
Obligations, any amounts owing by such Lender to any Borrower or any accounts of
any Borrower now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so by the
Agent, take or cause to be taken any action to enforce its rights under this
Agreement or against any Borrower, including the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations of any Borrower to such Lender arising under, or
relating to, this Agreement or the other Loan Documents, except for any such
proceeds or payments received by such Lender from the Agent pursuant to the
terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
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12.13 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only by
possession or control. Should any Lender (other than the Agent) obtain
possession or control of any such Collateral, such Lender shall notify the Agent
thereof, and, promptly upon the Agent's request therefor shall deliver such
Collateral or control thereof to the Agent or in accordance with the Agent's
instructions.
12.14 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, on the applicable Assignment and Acceptance),
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, or interest on the Revolving Loans or otherwise.
Unless the Agent receives notice from the Borrowers prior to the date on which
any payment is due to the Lenders that the Borrowers will not make such payment
in full as and when required, the Agent may assume that the Borrowers have made
such payment in full to the Agent on such date in immediately available funds
and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made
such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
12.15 Settlement.
(a) (i) Each Lender's funded portion of the Revolving Loans is
intended by the Lenders to be equal at all times to such Lender's Pro Rata Share
of the outstanding Revolving Loans. Notwithstanding such agreement, the Agent,
the Bank, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by any Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Revolving Loans, the Non-Ratable Loans and the Agent Advances
shall take place on a periodic basis in accordance with the following
provisions:
(ii) The Agent shall request settlement ("Settlement") with the
Lenders on at least a weekly basis, or on a more frequent basis at Agent's
election, (A) on behalf of the Bank, with respect to each outstanding
Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and (C)
with respect to collections received, in each case, by notifying the Lenders of
such requested Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 12:00 noon (Houston,
Texas time) on the date of such requested Settlement (the "SETTLEMENT DATE").
Each Lender (other than the Bank, in the case of Non-Ratable Loans and the Agent
in the case of Agent Advances) shall transfer the amount of such Lender's Pro
Rata Share of the outstanding principal amount of the Non-Ratable Loans and
Agent Advances with respect to each Settlement to the Agent, to Agent's account,
not later than 2:00 p.m. (Houston, Texas time), on the Settlement Date
applicable thereto. Settlements may occur during the continuation of a Default
or an Event of Default and whether or not the applicable conditions precedent
set forth in ARTICLE 8 have then been satisfied. Such amounts made available to
the Agent shall be applied against the amounts of the applicable Non-Ratable
Loan or Agent Advance and, together with the portion of such Non-Ratable Loan or
Agent Advance representing the Bank's Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not transferred to the
Agent by any Lender on the Settlement Date applicable thereto, the Agent shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after the
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Settlement Date and thereafter at the Interest Rate then applicable to the
Revolving Loans (A) on behalf of the Bank, with respect to each outstanding
Non-Ratable Loan, and (B) for itself, with respect to each Agent Advance.
(iii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or after the
occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent
Advance), each other Lender (A) shall irrevocably and unconditionally purchase
and receive from the Bank or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable Loan or
Agent Advance equal to such Lender's Pro Rata Share of such Non-Ratable Loan or
Agent Advance and (B) if Settlement has not previously occurred with respect to
such Non-Ratable Loans or Agent Advances, upon demand by Bank or Agent, as
applicable, shall pay to Bank or Agent, as applicable, as the purchase price of
such participation an amount equal to one-hundred percent (100%) of such
Lender's Pro Rata Share of such Non-Ratable Loans or Agent Advances. If such
amount is not in fact made available to the Agent by any Lender, the Agent shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after such demand and thereafter at the Interest Rate then applicable to Base
Rate Loans. (iv) From and after the date, if any, on which any Lender purchases
an undivided interest and participation in any Non-Ratable Loan or Agent Advance
pursuant to CLAUSE (III) above, the Agent shall promptly distribute to such
Lender, such Lender's Pro Rata Share of all payments of principal and interest
and all proceeds of Collateral received by the Agent in respect of such
Non-Ratable Loan or Agent Advance.
(v) Between Settlement Dates, the Agent, to the extent no Agent
Advances are outstanding, may pay over to the Bank any payments received by the
Agent, which in accordance with the terms of this Agreement would be applied to
the reduction of the Revolving Loans, for application to the Bank's Revolving
Loans including Non-Ratable Loans. If, as of any Settlement Date, collections
received since the then immediately preceding Settlement Date have been applied
to the Bank's Revolving Loans (other than to Non-Ratable Loans or Agent Advances
in which such Lender has not yet funded its purchase of a participation pursuant
to CLAUSE (III) above), as provided for in the previous sentence, the Bank shall
pay to the Agent for the accounts of the Lenders, to be applied to the
outstanding Revolving Loans of such Lenders, an amount such that each Lender
shall, upon receipt of such amount, have, as of such Settlement Date, its Pro
Rata Share of the Revolving Loans. During the period between Settlement Dates,
the Bank with respect to Non-Ratable Loans, the Agent with respect to Agent
Advances, and each Lender with respect to the Revolving Loans other than
Non-Ratable Loans and Agent Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement on the actual average
daily amount of funds employed by the Bank, the Agent, and the other Lenders,
respectively.
(vi) Unless the Agent has received written notice from a Lender
to the contrary, the Agent may assume that the applicable conditions precedent
set forth in ARTICLE 8 have been satisfied and the requested Borrowing will not
exceed Availability on any Funding Date for a Revolving Loan or Non-Ratable
Loan.
(b) Lenders' Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Revolving Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its
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obligation to make any Revolving Loans hereunder, (ii) no failure by any Lender
to perform its obligation to make any Revolving Loans hereunder shall excuse any
other Lender from its obligation to make any Revolving Loans hereunder, and
(iii) the obligations of each Lender hereunder shall be several, not joint and
several.
(c) Defaulting Lenders. Unless the Agent receives notice from a
Lender on or prior to the Closing Date or, with respect to any Borrowing after
the Closing Date, at least one (1) Business Day prior to the date of such
Borrowing, that such Lender will not make available as and when required
hereunder to the Agent that Lender's Pro Rata Share of a Borrowing, the Agent
may assume that each Lender has made such amount available to the Agent in
immediately available funds on the Funding Date. Furthermore, the Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If any Lender has not transferred its full Pro Rata Share
to the Agent in immediately available funds and the Agent has transferred
corresponding amount to the Borrowers on the Business Day following such Funding
Date, that the Lender shall make such amount available to the Agent, together
with interest at the Federal Funds Rate for that day. A notice by the Agent
submitted to any Lender with respect to amounts owing shall be conclusive,
absent manifest error. If each Lender's full Pro Rata Share is transferred to
the Agent as required, the amount transferred to the Agent shall constitute that
Lender's Revolving Loan for all purposes of this Agreement. If that amount is
not transferred to the Agent on the Business Day following the Funding Date, the
Agent will notify the Borrowers of such failure to fund and, upon demand by the
Agent, the Borrowers shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Revolving Loans comprising that particular Borrowing. The failure of any
Lender to make any Revolving Loan on any Funding Date (any such Lender, prior to
the cure of such failure, being hereinafter referred to as a "DEFAULTING
LENDER") shall not relieve any other Lender of its obligation hereunder to make
a Revolving Loan on that Funding Date. No Lender shall be responsible for any
other Lender's failure to advance such other Lenders' Pro Rata Share of any
Borrowing.
(d) Retention of Defaulting Lender's Payments. The Agent shall not
be obligated to transfer to a Defaulting Lender any payments made by any
Borrower to the Agent for the Defaulting Lender's benefit; nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder. Amounts
payable to a Defaulting Lender shall instead be paid to or retained by the
Agent. In its discretion, the Agent may loan the Borrowers the amount of all
such payments received or retained by it for the account of such Defaulting
Lender. Any amounts so loaned to the Borrowers shall bear interest at the rate
applicable to Base Rate Loans and for all other purposes of this Agreement shall
be treated as if they were Revolving Loans, provided, however, that for purposes
of voting or consenting to matters with respect to the Loan Documents and
determining Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender". Until a Defaulting Lender cures its failure to fund its Pro Rata Share
of any Borrowing (i) such Defaulting Lender shall not be entitled to any portion
of the Unused Line Fee and (ii) the Unused Line Fee shall accrue in favor of the
Lenders which have funded their respective Pro Rata Shares of such requested
Borrowing and shall be allocated among such performing Lenders ratably based
upon their relative Commitments. This Section shall remain effective with
respect to such Lender until such time as the Defaulting Lender shall no longer
be in default of any of its obligations under this Agreement. The terms of this
Section shall not be construed to increase or otherwise affect the Commitment of
any Lender, or relieve or excuse the performance by the Borrowers of their
duties and obligations hereunder.
(e) Removal of Defaulting Lender. At the Borrowers' request, the
Agent or an Eligible Assignee reasonably acceptable to the Agent and the
Borrowers shall have the right (but not the obligation) to purchase from any
Defaulting Lender, and each Defaulting Lender shall, upon such request, sell and
assign to the Agent or such Eligible Assignee, all of the Defaulting Lender's
outstanding
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Commitment hereunder. Such sale shall be consummated promptly after Agent has
arranged for a purchase by Agent or an Eligible Assignee pursuant to an
Assignment and Acceptance, and at a price equal to the outstanding principal
balance of the Defaulting Lender's Loans, plus accrued interest and fees,
without premium or discount.
12.16 Letters of Credit; Intra-Lender Issues.
(a) Notice of Letter of Credit Balance. On each Settlement Date the
Agent shall notify each Lender of the issuance of all Letters of Credit since
the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance of any
Letter of Credit in accordance with SECTION 1.3(D), each Lender shall be deemed
to have irrevocably and unconditionally purchased and received without recourse
or warranty, an undivided interest and participation equal to such Lender's Pro
Rata Share of the face amount of such Letter of Credit or the Credit Support
provided through the Agent to the Letter of Credit Issuer, if not the Bank, in
connection with the issuance of such Letter of Credit (including all obligations
of the Borrowers with respect thereto, and any security therefor or guaranty
pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments. Whenever the
Agent receives a payment from any Borrower on account of reimbursement
obligations in respect of a Letter of Credit or Credit Support as to which the
Agent has previously received for the account of the Letter of Credit Issuer
thereof payment from a Lender, the Agent shall promptly pay to such Lender such
Lender's Pro Rata Share of such payment from such Borrower. Each such payment
shall be made by the Agent on the next Settlement Date.
(iii) Documentation. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, Credit Support for
any Letter of Credit, reimbursement agreements executed in connection therewith,
applications for any Letter of Credit, and such other documentation as may
reasonably be requested by such Lender.
(iv) Obligations Irrevocable. The obligations of each Lender to
make payments to the Agent with respect to any Letter of Credit or with respect
to their participation therein or with respect to any Credit Support for any
Letter of Credit or with respect to the Revolving Loans made as a result of a
drawing under a Letter of Credit and the obligations of the Borrower for whose
account the Letter of Credit or Credit Support was issued to make payments to
the Agent, for the account of the Lenders, shall be irrevocable and shall not be
subject to any qualification or exception whatsoever, including any of the
following circumstances:
(1) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(2) the existence of any claim, setoff, defense, or other
right which any Borrower may have at any time against a beneficiary named in a
Letter of Credit or any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), any Lender, the Agent, the issuer of
such Letter of Credit, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein, or any
unrelated transactions (including any underlying transactions between any
Borrower or any other Person and the beneficiary named in any Letter of Credit);
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(3) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(4) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(5) the occurrence of any Default or Event of Default; or
(6) the failure of the Borrowers to satisfy the applicable
conditions precedent set forth in ARTICLE 8.
(c) Recovery or Avoidance of Payments; Refund of Payments In Error.
In the event any payment by or on behalf of any Borrower received by the Agent
with respect to any Letter of Credit or Credit Support provided for any Letter
of Credit and distributed by the Agent to the Lenders on account of their
respective participations therein is thereafter set aside, avoided, or recovered
from the Agent in connection with any receivership, liquidation, or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent their
respective Pro Rata Shares of such amount set aside, avoided, or recovered,
together with interest at the rate required to be paid by the Agent upon the
amount required to be repaid by it. Unless the Agent receives notice from the
Borrowers prior to the date on which any payment is due to the Lenders that the
Borrowers will not make such payment in full as and when required, the Agent may
assume that the Borrowers have made such payment in full to the Agent on such
date in immediately available funds and the Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrowers have not made such payment in full to the Agent, each
Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for each day
from the date such amount is distributed to such Lender until the date repaid.
(d) Indemnification by Lenders. To the extent not reimbursed by the
Borrowers and without limiting the obligations of the Borrowers hereunder, the
Lenders agree to indemnify the Letter of Credit Issuer ratably in accordance
with their respective Pro Rata Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees), or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by, or asserted against the Letter of Credit
Issuer in any way relating to or arising out of any Letter of Credit or the
transactions contemplated thereby or any action taken or omitted by the Letter
of Credit Issuer under any Letter of Credit or any Loan Document in connection
therewith; provided that no Lender shall be liable for any of the foregoing to
the extent it arises from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Letter of Credit Issuer promptly upon demand for its Pro
Rata Share of any costs or expenses payable by the Borrowers to the Letter of
Credit Issuer, to the extent that the Letter of Credit Issuer is not promptly
reimbursed for such costs and expenses by a Borrower. The agreement contained in
this Section shall survive payment in full of all other Obligations.
12.17 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into the other Loan Documents,
for the ratable benefit and obligation of the Agent and the Lenders. Each Lender
agrees that any action taken by the Agent, Majority Lenders, or Required
Lenders, as applicable, in accordance with the terms of this Agreement or the
other Loan Documents, and the exercise by the Agent, the Majority Lenders, or
the Required Lenders, as applicable, of their respective powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders. The Lenders
acknowledge that the
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Revolving Loans, Agent Advances, Non-Ratable Loans, Bank Products, and all
interest, fees and expenses hereunder constitute one Debt, secured pari passu by
all of the Collateral.
12.18 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by or on behalf of
the Agent;
(b) expressly agrees and acknowledges that neither the Bank nor the
Agent (i) makes any representation or warranty as to the accuracy of any Report,
or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or the Bank or other party
performing any audit or examination will inspect only specific information
regarding the Borrowers and will rely significantly upon the Borrowers' books
and records, as well as on representations of the Borrowers' personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to the Borrowers, or the indemnifying
Lender's participation in, or the indemnifying Lender's purchase of, a loan or
loans of the Borrower; and (ii) to pay and protect, and indemnify, defend and
hold the Agent and any such other Lender preparing a Report harmless from and
against, the claims, actions, proceedings, damages, costs, expenses, and other
amounts (including Attorney Costs) incurred by the Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
12.19 Relation Among Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
12.20 Co-Agents. None of the Lenders identified on the facing page or
signature pages of this Agreement as a "co-agent" (if any) shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "co-agent" (if any) shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE 13
MISCELLANEOUS
13.1 No Waivers; Cumulative Remedies. No failure by the Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or
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in any other agreement between or among any Borrower and the Agent and/or any
Lender, or delay by the Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by the Agent or any Lender will be effective
unless it is in writing, and then only to the extent specifically stated. No
waiver by the Agent or the Lenders on any occasion shall affect or diminish the
Agent's and each Lender's rights thereafter to require strict performance by the
Borrowers of any provision of this Agreement. The Agent and the Lenders may
proceed directly to collect the Obligations without any prior recourse to the
Collateral. The Agent's and each Lender's rights under this Agreement will be
cumulative and not exclusive of any other right or remedy which the Agent or any
Lender may have.
13.2 Severability. The illegality or unenforceability of any provision
of this Agreement or any Loan Document or any instrument or agreement required
hereunder shall not in any way affect or impair the legality or enforceability
of the remaining provisions of this Agreement or any instrument or agreement
required hereunder.
13.3 Governing Law; Choice of Forum; Service of Process.
(a) The Loan Documents have been entered into pursuant to Section
5-1401 of the New York General Obligations Law and the substantive laws of the
State of New York (except to the extent the laws of another jurisdiction govern
the creation, perfection, validity, or enforcement of Liens under the Collateral
Documents), and the applicable federal laws of the United States of America
shall govern the validity, construction, enforcement and interpretation of the
Loan Documents.
(b) EACH PARTY HERETO (INCLUDING EACH GUARANTOR BY EXECUTION OF AN
OBLIGATION GUARANTY), IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS,
HEREBY (A) IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE
(PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) AND FEDERAL
COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN THE STATE OF NEW YORK, AND AGREES
AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING
ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE OBLIGATION BY
SERVICE OF PROCESS AS PROVIDED BY NEW YORK LAW, (B) IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION
WITH THE LOAN DOCUMENTS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT, (C)
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY CLAIMS THAT ANY
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM,
(D) AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN NEW YORK
IN CONNECTION WITH ANY SUCH LITIGATION AND TO DELIVER TO THE AGENT EVIDENCE
THEREOF, IF REQUESTED, AND (E) IRREVOCABLY AGREES TO THE FULLEST EXTENT
PERMITTED BY LAW THAT ANY LEGAL PROCEEDING AGAINST ANY PARTY HERETO ARISING OUT
OF OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION SHALL BE BROUGHT
IN ONE OF THE AFOREMENTIONED COURTS. THE SCOPE OF EACH OF THE FOREGOING WAIVERS
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. THE LOAN PARTIES AND EACH OTHER PARTY TO
THE LOAN DOCUMENTS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO THE
AGREEMENT OF EACH PARTY HERETO TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THE LOAN DOCUMENTS, AND EACH
WILL CONTINUE TO RELY ON EACH OF SUCH WAIVERS IN RELATED FUTURE DEALINGS. THE
LOAN PARTIES AND EACH OTHER PARTY TO THE LOAN DOCUMENTS WARRANT AND REPRESENT
THAT THEY HAVE REVIEWED THESE WAIVERS WITH THEIR LEGAL COUNSEL, AND THAT THEY
KNOWINGLY AND VOLUNTARILY AGREE TO EACH SUCH WAIVER FOLLOWING CONSULTATION WITH
LEGAL
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COUNSEL. THE WAIVERS IN THIS SECTION 13.3 ARE IRREVOCABLE, MEANING THAT THEY MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND REPLACEMENTS TO OR OF THIS OR ANY
OTHER LOAN DOCUMENT. In the event of litigation, this agreement may be filed as
a written consent to a trial by the court. Notwithstanding the foregoing: (1)
the agent and the lenders shall have the right to bring any action or proceeding
against any loan party or their property in the courts of any other jurisdiction
the agent or the lenders deem necessary or appropriate in order to realize on
the collateral or other security for the obligations and (2) each of the parties
hereto acknowledges that any appeals from the courts described in the
immediately preceding sentence may have to be heard by a court located outside
those jurisdictions.
(c) EACH BORROWER AND EACH OTHER LOAN PARTY (BY EXECUTION OF AN
OBLIGATION GUARANTY) HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO WESTLAKE AT ITS ADDRESS SET FORTH IN
SECTION 13.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE
EARLIER OF (I) TWO (2) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED WITH A
NATIONALLY-RECOGNIZED OVERNIGHT COURIER OR (II) WHEN ACTUALLY DELIVERED TO SUCH
PERSON. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS
TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
13.4 WAIVER OF JURY TRIAL. EACH BORROWER AND EACH OTHER LOAN PARTY (BY
EXECUTION OF AN OBLIGATION GUARANTY), THE LENDERS, AND THE AGENT EACH
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY SUCH PARTIES
AGAINST ANY OTHER SUCH PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT, OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
EACH BORROWER, THE LENDERS, AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
13.5 Survival of Representations and Warranties. All of the Borrowers'
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Agent or the Lenders or their respective agents.
13.6 Other Security and Guaranties. The Agent, may, without notice or
demand and without affecting any Borrower's obligations hereunder, from time to
time: (a) take from any Person and hold collateral (other than the Collateral)
for the payment of all or any part of the Obligations and exchange, enforce, or
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or
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guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.
13.7 Fees and Expenses. The Borrowers agree to pay to the Agent and the
Arranger (as applicable), for their respective benefits, on demand, all
reasonable costs and expenses that the Agent and the Arranger pays or incurs in
connection with the negotiation, preparation, syndication, consummation,
administration, enforcement, and termination of this Agreement or any of the
other Loan Documents, including: (a) Attorney Costs; (b) costs and expenses
(including, without duplication, attorneys' and paralegals' fees and
disbursements) for any amendment, supplement, waiver, consent, or subsequent
closing in connection with the Loan Documents and the transactions contemplated
thereby; (c) costs and expenses of lien searches; (d) taxes, fees, and other
charges for recording any mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the Agent's
Liens (including costs and expenses paid or incurred by the Agent in connection
with the consummation of the Agreement); (e) sums paid or incurred to pay any
amount or take any action reasonably required of any Borrower under the Loan
Documents that Borrowers fail to pay or take; (f) costs of appraisals,
inspections, and verifications of the Collateral, including travel, lodging, and
meals for inspections of the Collateral and the Loan Parties' operations by the
Agent plus the Agent's then customary charge for field examinations and audits
and the preparation of reports thereof (such charge is currently $850 per day
(or portion thereof) for each Person retained or employed by the Agent with
respect to each field examination or audit); and (g) costs and expenses of
forwarding loan proceeds, collecting checks, and other items of payment, and
establishing and maintaining Payment Accounts and lock boxes, and costs and
expenses of preserving and protecting the Collateral. In addition, the Borrowers
agree to pay costs and expenses incurred by the Agent and the Arranger
(including Attorneys' Costs) to the Agent and the Arranger, as applicable, for
their respective benefit, on demand, and to the other Lenders for their benefit,
on demand, and all reasonable fees, expenses and disbursements incurred by such
other Lenders for one law firm retained by such other Lenders, in each case,
paid or incurred to obtain payment of the Obligations, enforce the Agent's
Liens, sell or otherwise realize upon the Collateral, and otherwise enforce the
provisions of the Loan Documents, or to defend any claims made or threatened
against the Agent, the Arranger, or any Lender arising out of the transactions
contemplated hereby (including preparations for and consultations concerning any
such matters). The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to be paid by the
Borrower. All of the foregoing costs and expenses may be (in the sole discretion
of the Agent) charged to the Borrowers' Loan Account as Revolving Loans as
described in SECTION 3.7 up to the Maximum Revolver Amount.
13.8 Notices. Except as otherwise provided herein, all notices, demands
and requests that any party is required or elects to give to any other shall be
in writing, or by a telecommunications device capable of creating a written
record, and any such notice shall become effective (a) on the earlier of (i) two
(2) days after the same shall have been so deposited with a
nationally-recognized overnight courier or (ii) when actually delivered to such
person, (b) four (4) days after it shall have been mailed by United States mail,
first class, certified or registered, with postage prepaid, or (c) in the case
of notice by such a telecommunications device, when properly transmitted, in
each case addressed to the party to be notified as follows:
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If to the Agent or to the Bank:
Bank of America, N.A.
55 S. Lake Avenue, Suite 900
Pasadena, CA 91101
Attention: Robert Mostert
Facsimile No.: 626.397.1275
with copies to:
Haynes and Boone, LLP
901 Main Street, Suite 3100
Dallas, TX 75202
Attention: Sue P. Murphy
Facsimile No.: 214.200.0565
If to the Borrower:
Westlake Chemical Corporation
2801 Post Oak Boulevard
Houston, TX 77056
Attention: Treasurer
Facsimile No.: 713.960.9420
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
13.9 Waiver of Notices. Unless otherwise expressly provided herein,
each Borrower waives presentment, and notice of demand or dishonor and protest
as to any instrument, notice of intent to accelerate the Obligations, and notice
of acceleration of the Obligations, as well as any and all other notices to
which it might otherwise be entitled. No notice to or demand on any Borrower
which the Agent or any Lender may elect to give shall entitle any Borrower to
any or further notice or demand in the same, similar, or other circumstances.
13.10 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective representatives, successors, and
assigns of the parties hereto; provided, however, that no interest herein may be
assigned by any Borrower without prior written consent of the Agent and each
Lender. The rights and benefits of the Agent and the Lenders hereunder shall, if
such Persons so agree, inure to any party acquiring any interest in the
Obligations or any part thereof.
13.11 Indemnity of the Agent, the Arranger, and the Lenders by the
Borrower.
(a) Each Borrower and each other Loan Party (by execution of an
Obligation Guaranty) agrees to defend, indemnify, and hold the Agent-Related
Persons, the Arranger, and each Lender and each of their respective officers,
directors, employees, counsel, representatives, agents, and attorneys-in-fact
(each, an "INDEMNIFIED PERSON") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses, and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time
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(including at any time following repayment of the Loans and the termination,
resignation, or replacement of the Agent or replacement of any Lender) be
imposed on, incurred by, or asserted against any such Person in any way relating
to or arising out of this Agreement or any document contemplated by or referred
to herein, or the transactions contemplated hereby, or any action taken or
omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation, or proceeding
(including any insolvency proceeding or appellate proceeding) related to or
arising out of this Agreement, any other Loan Document, or the Loans or the use
of the proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES");
provided, that the Borrower shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities to the extent
resulting from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section shall survive payment of all other
Obligations.
(b) Each Borrower and each other Loan Party (by execution of an
Obligation Guaranty) agrees to indemnify, defend, and hold harmless the Agent
and the Lenders from any Environmental Liability, arising directly or
indirectly, in whole or in part, out of any breach of this Agreement, including
without limitation, any breach of SECTION 6.16 or SECTION 7.7 by any Loan Party.
This indemnity will apply whether the Hazardous Material is on, under, or about
any Real Estate or operations or property leased to, or formerly owned or
operated by, any Loan Party or any of their Subsidiaries. The indemnity
includes, but is not limited to, Attorneys Costs. The indemnity extends to the
Agent and the Lenders, their parents, affiliates, subsidiaries, and all of their
directors, officers, employees, agents, successors, attorneys, and assigns. This
indemnity will survive repayment of all other Obligations. This indemnity is
intended to allocate responsibility between the Loan Parties and the Agent and
the Lenders as contemplated by Section 107(e)(1) of CERCLA and any successor
federal statute, rule, or regulations or comparable state statute, rule, or
regulations.
13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY ANY LOAN PARTY,
ANY LENDER, OR OTHER PERSON AGAINST THE AGENT, THE ARRANGER, ANY LENDER, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS, OR
ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT
OCCURRING IN CONNECTION THEREWITH, AND EACH BORROWER AND EACH OTHER LOAN PARTY
(BY EXECUTION OF AN OBLIGATION GUARANTY) AND EACH LENDER HEREBY WAIVES,
RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
13.13 Final Agreement. THIS AGREEMENT AND THE OTHER LOAN 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. No
modification, rescission, waiver, release, or amendment of any provision of this
Agreement or any other Loan Document shall be made, except by a written
agreement signed by the Borrowers and a duly authorized officer of each of the
Agent and the requisite Lenders.
13.14 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender, and each Borrower in separate
counterparts, each of which shall be an
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original, but all of which shall together constitute one and the same agreement;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
13.15 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
13.16 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to any Borrower, any such notice being waived by each
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of any Borrower
against any and all Obligations (for the benefit of all Lenders as provided
herein), now or hereafter existing, irrespective of whether or not the Agent or
such Lender shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify the Borrowers and the Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF,
BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY
BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS
CONSENT OF THE LENDERS. If any Lender shall obtain any payment or prepayment
with respect to the Obligation as a result of exercising its Right under this
SECTION 13.16 which is in excess of its share of any such payment in accordance
with the relevant rights of the Lenders under the Loan Documents, then such
Lender shall purchase from the other Lenders such participations as shall be
necessary to cause such purchasing Lender to share the excess payment with each
other Lender in accordance with the relevant rights under the Loan Documents. If
all or any portion of such excess payment is subsequently recovered from such
purchasing Lender, then the purchase shall be rescinded and the purchase price
restored to the extent of such recovery. Each Loan Party agrees that any Lender
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of offset) with respect to such participation as fully as
if such Lender were the direct creditor of such Loan Party in the amount of such
participation.
13.17 Confidentiality.
(a) Each Borrower hereby consents that the Agent and each Lender may
issue and disseminate to the public general non-confidential information
describing the credit accommodation entered into pursuant to this Agreement,
including the names and addresses of the Borrowers and a general description of
the business of the Borrowers and may use the Borrowers' name in advertising and
other promotional material.
(b) The Agent and each Lender severally agrees to take customary and
reasonable precautions and exercise due care to maintain the confidentiality of
all information identified as "confidential" or "secret" by the Borrowers and
provided to the Agent or such Lender by or on behalf of the Borrowers, under
this Agreement, or any other Loan Document, except to the extent that such
information (i) was or becomes generally available to the public other than as a
result of disclosure by the Agent or such Lender, or (ii) was or becomes
available on a nonconfidential basis from a source other than the Borrowers,
provided that such source is not bound by a confidentiality agreement with the
Borrowers known to the Agent or such Lender; provided, however, that the Agent
and any Lender may
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disclose such information (1) at the request or pursuant to any requirement of
any Governmental Authority to which the Agent or such Lender is subject or in
connection with an examination of the Agent or such Lender by any such
Governmental Authority; (2) pursuant to subpoena or other court process; (3)
when required to do so in accordance with the provisions of any applicable
Requirement of Law; (4) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
party; (5) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (6) to the Agent's or
such Lender's independent auditors, accountants, attorneys, and other
professional advisors; provided that such Persons have been informed that such
information is required to be kept confidential to the extent required by this
SECTION 13.17; (7) to any prospective Participant or Assignee under any
Assignment and Acceptance, actual or potential, provided that such prospective
Participant or Assignee agrees to keep such information confidential to the same
extent required of the Agent and the Lenders hereunder; (8) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which any Borrower is party with the Agent or such Lender,
and (9) to its Affiliates; provided that such Persons have been informed that
such information is required to be kept confidential to the extent required by
this SECTION 13.17. Notwithstanding anything herein to the contrary, the
information subject to this SECTION 13.17(B) shall not include, and the Agent,
each Lender, and each employee, representative, or other agent of the Agent or
any Lender may disclose to any and all persons without limitation of any kind,
the "tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Agent or such Lender relating to such tax treatment and tax
structure.
13.18 Conflicts with Other Loan Documents. Unless otherwise expressly
provided in this Agreement (or in another Loan Document by specific reference to
the applicable provision contained in this Agreement), if any provision
contained in this Agreement conflicts with any provision of any other Loan
Document, the provision contained in this Agreement shall govern and control.
13.19 Westlake as Agent. By executing this Agreement, each of the
Borrowers confirms to the other parties to this Agreement that Westlake shall
(and has been duly appointed by each of the Borrowers to) act as agent for the
Borrowers for all purposes of the Loan Documents, including, without limitation,
taking any action or receiving any communication on behalf of such Borrower in
connection with the Loan Documents. Each of the Lenders and Agent shall be
entitled to deal with any Borrower through Westlake and to rely on any
instructions or other communications from Westlake on behalf of any Borrower.
None of the Lenders or Agent shall have any responsibility to any Borrower for
dealing with the Borrowers as provided in this SECTION 13.19, and the Obligation
of each of the Borrowers to the Lenders shall not be affected by any matter
relating to acts or omissions of Westlake relating to the Borrowing or otherwise
as agent for the Borrowers hereunder. Notwithstanding the appointment of
Westlake as agent for the Borrowers hereunder, Agent and the Lenders shall in
their sole discretion be entitled to deal directly with any Borrower for all
purposes of the Loan Documents.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE FOLLOWS.]
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SIGNATURE PAGE TO CREDIT AGREEMENT IN WITNESS WHEREOF, the parties have
entered into this Agreement on the date first above written.
BANK OF AMERICA, N.A., as Agent
By: /s/ Robert Mostert
-----------------------------------------
Robert Mostert, Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
SIGNATURE PAGE TO THAT CERTAIN CREDIT AMENDMENT DATED AS OF JULY 31, 2003,
AMONG WESTLAKE CHEMICAL CORPORATION AND CERTAIN OF ITS DIRECT AND INDIRECT
SUBSIDIARIES, AS BORROWERS, BANK OF AMERICA, N.A., AS THE AGENT, AND THE LENDERS
DEFINED HEREIN.
BANK OF AMERICA, N.A., as a Lender
By: /s/ Robert Mostert
-----------------------------------------
Robert Mostert, Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
SIGNATURE PAGE TO THAT CERTAIN CREDIT AMENDMENT DATED AS OF JULY 31, 2003,
AMONG WESTLAKE CHEMICAL CORPORATION AND CERTAIN OF ITS DIRECT AND INDIRECT
SUBSIDIARIES, AS BORROWERS, BANK OF AMERICA, N.A., AS THE AGENT, AND THE LENDERS
DEFINED HEREIN.
WESTLAKE CHEMICAL CORPORATION,
a Delaware corporation
By: /s/ A. Chao
------------------------------------------
Albert Chao
President
SIGNATURE PAGE TO CREDIT AGREEMENT
SIGNATURE PAGE TO THAT CERTAIN CREDIT AMENDMENT DATED AS OF JULY 31, 2003,
AMONG WESTLAKE CHEMICAL CORPORATION AND CERTAIN OF ITS DIRECT AND INDIRECT
SUBSIDIARIES, AS BORROWERS, BANK OF AMERICA, N.A., AS THE AGENT, AND THE
LENDERS DEFINED HEREIN.
NORTH AMERICAN PIPE CORPORATION,
a Delaware corporation
VAN BUREN PIPE CORPORATION,
a Delaware corporation
WESTECH BUILDING PRODUCTS, INC.,
a Delaware corporation
WESTLAKE PVC CORPORATION,
a Delaware corporation
WESTLAKE VINYLS, INC.,
a Delaware corporation
By: /s/ Tai-Li Keng
------------------------------------------
Tai-Li Keng
Vice-President of the above Borrowers
SIGNATURE PAGE TO CREDIT AGREEMENT
SIGNATURE PAGE TO THAT CERTAIN CREDIT AMENDMENT DATED AS OF JULY 31, 2003,
AMONG WESTLAKE CHEMICAL CORPORATION AND CERTAIN OF ITS DIRECT AND INDIRECT
SUBSIDIARIES, AS BORROWERS, BANK OF AMERICA, N.A., AS THE AGENT, AND THE
LENDERS DEFINED HEREIN.
GEISMAR VINYLS COMPANY LP,
a Delaware limited partnership
By: GVGP, Inc., its general partner
WESTLAKE PETROCHEMICALS LP,
a Delaware limited partnership
By: Westlake Chemical Investments, Inc.,
its general partner
WESTLAKE POLYMERS LP,
a Delaware limited partnership
By: Westlake Chemical Investments, Inc.,
its general partner
WESTLAKE STYRENE LP, a Delaware limited
partnership
By: Westlake Chemical Holdings, Inc.,
its general partner
WPT LP, a Delaware limited partnership
By: Westlake Chemical Holdings, Inc.,
its general partner
By: /s/ Tai-Li Keng
------------------------------------
Tai-Li Keng
Vice President of the general
partners of the above Borrowers
SIGNATURE PAGE TO CREDIT AGREEMENT
ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have the
following respective meanings (unless otherwise defined therein), and all
section references in the following definitions shall refer to sections of the
Agreement:
"ACCOUNTS" means all of the Loan Party's now owned or hereafter
acquired or arising accounts, as defined in the UCC, including any rights to
payment for the sale or lease of goods or rendition of services, whether or not
they have been earned by performance.
"ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account, Chattel Paper, or General Intangibles (including a
payment intangible).
"ACCOUNT TRIGGERING DATE" means the date upon which the Availability
is less than $60,000,000 at any time.
"ACH TRANSACTIONS" means any cash management or related services
including the automatic clearing house transfer of funds by the Bank for the
account of any Borrower pursuant to agreement or overdrafts.
"ACQUISITION" means any transaction or series of related
transactions for the purpose of, or resulting in, directly or indirectly, (a)
the acquisition by any Loan Party of all or substantially all of the assets of a
Person or of any business or division of a Person; (b) the acquisition by any
Loan Party of more than 50% of any class of Voting Stock (or similar ownership
interests) of any Person; or (c) a merger, consolidation, amalgamation, or other
combination by any Loan Party with another Person if a Loan Party is the
surviving entity, provided that, (i) in any merger involving any Borrower, a
Borrower must be the surviving entity; and (ii) for purpose of this Agreement,
any Acquisition among Loan Parties is not an "Acquisition."
"ADJUSTED NET EARNINGS FROM OPERATIONS" means, with respect to any
fiscal period of Westlake, the Loan Parties' consolidated net income after
provision for income taxes for such fiscal period, as determined in accordance
with GAAP and reported on the Financial Statements for such period, excluding
any and all of the following included in such net income: (a) gain or loss
arising from the sale of any capital assets; (b) gain arising from any write-up
in the book value of any asset; (c) earnings of any Person, substantially all
the assets of which have been acquired by any Loan Party in any manner, to the
extent realized by such other Person prior to the date of acquisition; (d)
earnings of any Person in which any Loan Party has an ownership interest unless
(and only to the extent) such earnings shall actually have been received by such
Loan Party in the form of cash distributions; (e) earnings of any Person to
which assets of any Loan Party shall have been sold, transferred, or disposed
of, or into which any Loan Party shall have been merged, or which has been a
party with any Loan Party to any consolidation or other form of reorganization,
prior to the date of such transaction; (f) gain arising from the acquisition of
Debt or equity security of any Loan Party or from cancellation or forgiveness of
Debt; and (g) gain arising from extraordinary items, as determined in accordance
with GAAP, or from any other non-recurring transaction.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or which owns, directly or
ANNEX A TO CREDIT AGREEMENT
indirectly, five percent (5%) or more of the outstanding equity interest of such
Person. A Person shall be deemed to control another Person if the controlling
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the other Person, whether through
the ownership of voting securities, by contract, or otherwise.
"AGENT" means the Bank, solely in its capacity as agent for the
Lenders, and any successor agent.
"AGENT ADVANCES" has the meaning specified in SECTION 1.2(I).
"AGENT'S LIENS" means the Liens in the Collateral granted to the
Agent, for the benefit of the Lenders, Bank, and Agent pursuant to this
Agreement and the other Loan Documents.
"AGENT-RELATED PERSONS" means the Agent, together with its
Affiliates, and the officers, directors, employees, counsel, representatives,
agents and attorneys-in-fact of the Agent and such Affiliates.
"AGGREGATE REVOLVER OUTSTANDINGS" means, at any date of
determination: the sum of (a) the unpaid balance of Revolving Loans, (b) the
aggregate amount of Pending Revolving Loans, (c) one hundred percent (100%) of
the aggregate undrawn face amount of all outstanding Letters of Credit, and (d)
the aggregate amount of any unpaid reimbursement obligations in respect of
Letters of Credit.
"AGREEMENT" means the Credit Agreement dated as of July 31, 2003, by
and among the Borrowers, the Agent, and the other Lenders, as from time to time
amended, modified or restated.
"ANNIVERSARY DATE" means each anniversary of the Closing Date.
"APPLICABLE MARGIN" means
(i) with respect to Base Rate Loans and all other Obligations
(other than LIBOR Rate Loans and the Unused Line Fee), 0.25%;
(ii) with respect to LIBOR Rate Loans, 2.25%; and
(iii) with respect to the Unused Line Fee, .50%.
The Applicable Margins with respect to Base Rate Loans and LIBOR
Rate Loans shall be adjusted (up or down) prospectively on a quarterly basis, as
determined by the Loan Parties' consolidated financial performance, commencing
with the first day of the first calendar quarter that occurs more than five (5)
days after delivery of the Borrowers' quarterly Financial Statements to Lenders
for the fiscal quarter ending June 30, 2004. Adjustments in Applicable Margins
shall be determined by reference to the following grids:
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ANNEX A TO CREDIT AGREEMENT
IF FIXED CHARGE COVERAGE RATIO IS: LEVEL OF
APPLICABLE MARGINS:
- --------------------------------------------------------------------------------
Less than 1.20:1.0 Level I
Less than 1.40:1.0, but greater than or equal to Level II
1.20:1.0
Less than 1.60:1.0, but greater than or equal to Level III
1.40:1.0
Less than 1.80:1.0, but greater than or equal to Level IV
1.60:1.0
Greater than or equal to 1.80:1.0 Level V
LOW TO HIGH
APPLICABLE MARGINS
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
- ---------------------------------------------------------------------------------------------
Base Rate Loans 1.00% 0.75% 0.50% 0.25% 0.00%
LIBOR Rate Loans 3.00% 2.75% 2.50% 2.25% 2.00%
All adjustments in the Applicable Margins after June 30, 2004 shall
be implemented quarterly on a prospective basis, for each calendar quarter
commencing at least five (5) days after the date of delivery to the Lenders of
monthly Financial Statements evidencing the need for an adjustment. Concurrently
with the delivery of those Financial Statements, the Borrowers shall deliver to
the Agent and the Lenders a certificate, signed by a Responsible Officer on
behalf of the Borrowers, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the first day of the
first calendar month following the delivery of those Financial Statements
demonstrating that such an increase is not required. If a Default or Event of
Default has occurred and is continuing at the time any reduction in the
Applicable Margins is to be implemented, no reduction may occur until the first
day of the first calendar month following the date on which such Default or
Event of Default is waived or cured.
"ARRANGER" means Banc of America Securities LLC and its successors
and assigns, in its capacity as sole lead arrangers and sole book manager under
the Loan Documents.
"ASSIGNEE" has the meaning specified in SECTION 11.2(A).
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in SECTION
11.2(A).
"ATTORNEY COSTS" means and includes all reasonable fees, expenses,
and disbursements of any law firm or other counsel engaged by the Agent or the
Arranger, and the reasonably allocated costs and expenses of internal legal
services of the Agent and the Arranger.
"AVAILABILITY" means, at any time (a) the lesser of (i) the Maximum
Revolver Amount or (ii) the Borrowing Base, minus (b) Reserves from time to time
established by the Agent in its reasonable credit judgment without duplication
to the Reserves deducted in the calculation of the Borrowing Base, minus (c) in
each case, the Aggregate Revolver Outstandings.
"BANK" means Bank of America, N.A., a national banking association,
or any successor entity thereto.
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ANNEX A TO CREDIT AGREEMENT
"BANK PRODUCTS" means any one or more of the following types of
services or facilities extended to any Loan Party by the Bank or any Affiliate
of the Bank in reliance on the Bank's agreement to indemnify such Affiliate: (i)
credit cards; (ii) ACH Transactions; (iii) cash management, including controlled
disbursement services; and (iv) Hedge Agreements.
"BANK PRODUCT RESERVES" means all reserves which the Agent from time
to time establishes in its reasonable discretion for the Bank Products then
provided or outstanding.
"BANKRUPTCY CODE" means Title 11 of the United States Code (11
U.S.C.Section 101 et seq.).
"BASE RATE" means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by the Bank in Charlotte, North
Carolina as its "prime rate" (the "prime rate" being a rate set by the Bank
based upon various factors including the Bank'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 the prime rate announced by the Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"BASE RATE LOAN" means, a Revolving Loan during any period in which
it bears interest based on the Base Rate.
"BENEFICIAL OWNER" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The terms
"BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" have corresponding meanings.
"BLOCKED ACCOUNT AGREEMENT" means an agreement among any Borrower,
the Agent, and a Clearing Bank, in form and substance reasonably satisfactory to
the Agent, concerning the collection of payments which represent the proceeds of
Accounts or of any other Collateral of such Borrower.
"BOND DEBT" means the 8-3/4% Senior Notes due 2011 issued by
Westlake pursuant to that certain Indenture dated as of the Closing Date,
between Westlake and JPMorgan Chase Bank in an aggregate original principal
amount of $380,000,000, and the documents and agreements evidencing and
establishing such Debt, as the same may be amended from time to time in
accordance with the terms thereof and hereof.
"BORROWER" and "BORROWERS" have the meaning specified in the
preamble to this Agreement.
"BORROWING" means a borrowing hereunder consisting of Revolving
Loans made on the same day by the Lenders to the Borrowers or by Bank in the
case of a Borrowing funded by Non-Ratable Loans or by the Agent in the case of a
Borrowing consisting of an Agent Advance, or the issuance of Letters of Credit
hereunder.
"BORROWING BASE" means, at any time, an amount equal to (a) the sum
of (i) eighty-five percent (85%) of the Net Amount of Eligible Accounts; plus
(ii) the lesser of (y) seventy percent (70%) of the value of the lower of cost
or market of Eligible Inventory or (z) eighty-five percent (85%) of the Net
A-4
ANNEX A TO CREDIT AGREEMENT
Orderly Liquidation Value of all Eligible Inventory; minus (b) Reserves from
time to time established by the Agent in its reasonable credit judgment;
provided that the aggregate Revolving Loans advanced against Eligible Inventory
shall not exceed the Maximum Inventory Loan Amount.
"BORROWING BASE CERTIFICATE" means a certificate by a Responsible
Officer for the benefit of the Borrowers, substantially in the form of EXHIBIT B
(or another form acceptable to the Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to the Agent. All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by the Borrowers and certified to the
Agent; provided, that the Agent shall have the right to review and adjust, in
the exercise of its reasonable credit judgment, any such calculation (1) to
reflect its reasonable estimate of declines in value of any of the Collateral
described therein, and (2) to the extent that such calculation is not in
accordance with this Agreement.
"BUSINESS DAY" means (a) any day that is not a Saturday, Sunday, or
a day on which banks in Pasadena, California, Houston, Texas, New York, New
York, or Charlotte, North Carolina are required or permitted to be closed, and
(b) with respect to all notices, determinations, fundings and payments in
connection with the LIBOR Rate or LIBOR Rate Loans, any day that is a Business
Day pursuant to CLAUSE (A) above and that is also a day on which trading in
Dollars is carried on by and between banks in the London interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request, or
directive of any central bank or other Governmental Authority, or any other law,
rule, or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"CAPITAL STOCK" means (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights, or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests, and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"CAPITAL EXPENDITURES" means all payments due (whether or not paid
during any fiscal period) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those costs
arising in connection with the direct or indirect acquisition of such asset by
way of increased product or service charges or in connection with a Capital
Lease.
"CAPITAL LEASE" means any lease of property by a Person which, in
accordance with GAAP, should be reflected as a capital lease on the balance
sheet of such Person.
"CHANGE OF CONTROL" means the occurrence of any of the following:
(a) the direct or indirect sale, transfer, conveyance, or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of
Westlake and its Subsidiaries taken as a whole to any "person" (as that term is
used in Section 13(d) of the Exchange Act) other than a Principal or a Related
Party of a Principal; (b) the adoption of a plan relating to the liquidation or
dissolution of Westlake; (c) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principals and their Related Parties
or a Permitted Group, becomes the Beneficial Owner, directly or indirectly, of
more than 50% of the Voting Stock of Westlake, measured by voting power
A-5
ANNEX A TO CREDIT AGREEMENT
rather than number of shares, other than in any transaction that complies with
CLAUSE (d) herein; (d) Westlake consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, Westlake, in
any such event pursuant to a transaction in which any of the outstanding Voting
Stock of Westlake or such other Person is converted into or exchanged for cash,
securities, or other property, other than any such transaction where the Voting
Stock of Westlake outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock (other than Disqualified Stock) of the
surviving or transferee Person constituting a majority of the outstanding shares
of such Voting Stock of such surviving or transferee Person (immediately after
giving effect to such issuance); or (e) after an initial public offering of
Westlake or any direct or indirect parent of Westlake, the first day on which a
majority of the members of the board of directors of Westlake are not Continuing
Directors.
"CHATTEL PAPER" means all of any Loan Party's now owned or hereafter
acquired chattel paper, as defined in the UCC, including electronic chattel
paper.
"CLEARING BANK" means the Bank or any other banking institution with
whom a Payment Account has been established pursuant to a Blocked Account
Agreement.
"CLOSING DATE" means the date of this Agreement.
"CLOSING FEE" has the meaning specified in SECTION 2.4.
"CODE" means the Internal Revenue Code of 1986.
"COLLATERAL" means (a) all of each Loan Party's Inventory, Accounts,
Instruments, Chattel Paper, Deposit Accounts (other than the Fixed Asset Loan
Collateral Account), Documents, and Related General Intangibles; and (b) all
other assets of any Person from time to time subject to Agent's Liens securing
payment or performance of the Obligations.
"COLLATERAL DOCUMENTS" means all Security Agreements, pledge
agreements, Copyright Security Agreements, Patent and Trademark Agreements,
financing statements, assignments of partnership interests, Obligation
Guaranties, and mortgages at any time delivered to the Agent to create or
evidence Liens securing the Obligations, together with all reaffirmations,
amendments, and modifications thereof or supplements thereto.
"COMMITMENT" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"COMMITMENT" on SCHEDULE 1.2 attached to the Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of SECTION 11.2, as such Commitment
may be adjusted from time to time in accordance with the provisions of SECTION
11.2, and "COMMITMENTS" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, PCBs, or any constituent
of any such substance or waste.
"CONTINUATION/CONVERSION DATE" means the date on which a Loan is
converted into or continued as a LIBOR Rate Loan.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the board of directors of Westlake who (a) was a member of such board
of directors on the Closing Date or (b) was
A-6
ANNEX A TO CREDIT AGREEMENT
nominated for election or elected or appointed to such board of directors with
the approval of, or whose nomination for election by the stockholders was
approved by, a majority of the Continuing Directors who were members of such
board of directors at the time of such nomination, appointment, or election.
"COPYRIGHT SECURITY AGREEMENT" means any Copyright Security
Agreement, executed and delivered by any Loan Party to the Agent, for the
benefit of the Agent and the Lenders, to evidence and perfect the Agent's
security interest in the Loan Parties' present and future copyrights and related
licenses and rights.
"CREDIT SUPPORT" has the meaning specified in SECTION 1.3(A).
"DEBT" means, without duplication, all liabilities, obligations, and
indebtedness of any Loan Party to any Person, of any kind or nature, now or
hereafter owing, arising, due or payable, howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, contingent,
fixed or otherwise, consisting of indebtedness for borrowed money, the deferred
purchase price of property, or preferred stock or other equity interests that
have characteristics of Debt such as, dividend requirements (whether cash or
paid in kind) or mandatory redemption requirements, excluding trade payables,
but including (a) all Obligations; (b) all obligations and liabilities of any
Person secured by any Lien on any Loan Party's property, even though such Loan
Party shall not have assumed or become liable for the payment thereof; provided,
however, that all such obligations and liabilities which are limited in recourse
to such property shall be included in Debt only to the extent of the book value
of such property as would be shown on a balance sheet of such Loan Party
prepared in accordance with GAAP; (c) all obligations or liabilities created or
arising under any Capital Lease or conditional sale or other title retention
agreement with respect to property used or acquired by any Borrower, even if the
rights and remedies of the lessor, seller or lender thereunder are limited to
repossession of such property; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of any Loan Party prepared in accordance with GAAP; (d) all
obligations and liabilities under Guaranties of another Person of borrowed
money; and (e) the present value (discounted at the Base Rate) of lease payments
due under synthetic leases.
"DEFAULT" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured, waived, or otherwise
remedied during such time) constitute an Event of Default.
"DEFAULT RATE" means a fluctuating per annum interest rate at all
times equal to the sum of (a) the otherwise applicable Interest Rate plus (b)
two percent (2%) per annum. Each Default Rate shall be adjusted simultaneously
with any change in the applicable Interest Rate. In addition, the Default Rate
shall result in an increase in the Letter of Credit Fee by two (2) percentage
points per annum.
"DEFAULTING LENDER" has the meaning specified in SECTION 12.15(C).
"DEPOSIT ACCOUNTS" means all "deposit accounts" as such term is
defined in the UCC, now or hereafter held in the name of any Borrower,
including, without limitation, the Payment Accounts.
"DESIGNATED ACCOUNT" has the meaning specified in Section 1.2(c).
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder of the Capital
A-7
ANNEX A TO CREDIT AGREEMENT
Stock, in whole or in part, on or prior to the date that is 91 days after the
Stated Termination Date. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because the holders of the
Capital Stock have the right to require Westlake to repurchase such Capital
Stock upon the occurrence of a change of control or an asset sale will not
constitute Disqualified Stock if the terms of such Capital Stock provide that
Westlake may not repurchase or redeem any such Capital Stock pursuant to such
provisions unless such repurchase or redemption complies with SECTION 7.10. The
amount of Disqualified Stock deemed to be outstanding at any time for purposes
of this Agreement will be the maximum amount that Westlake and its Subsidiaries
may become obligated to pay upon the maturity of, or pursuant to any mandatory
redemption provisions of, such Disqualified Stock, exclusive of accrued
dividends.
"DISTRIBUTION" means, in respect of any corporation: (a) the payment
or making of any dividend or other distribution of property in respect of
capital stock (or any options or warrants for, or other rights with respect to,
such stock) of such corporation, other than distributions in capital stock (or
any options or warrants for such stock) of the same class; or (b) the redemption
or other acquisition by such corporation of any capital stock (or any options or
warrants for such stock) of such corporation.
"DOCUMENTS" means all documents as such term is defined in the UCC,
including bills of lading, warehouse receipts or other documents of title, now
owned or hereafter acquired by any Borrower.
"DOL" means the United States Department of Labor or any successor
department or agency.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States. Unless otherwise specified, all payments under this Agreement shall be
made in Dollars.
"DOMESTIC SUBSIDIARY" of any Person means a direct or indirect
Subsidiary of such Person that is organized or incorporated under the laws of a
jurisdiction of the United States, other than a direct or indirect Subsidiary of
a Foreign Subsidiary of such Person.
"EBITDA" means, with respect to any fiscal period of the Borrowers,
Adjusted Net Earnings from Operations, plus, to the extent deducted in the
determination of Adjusted Net Earnings from Operations for that fiscal period,
interest expenses, interest on financed insurance premiums permitted pursuant to
SECTION 7.13(J), Federal, state, local and foreign income taxes, depreciation
and amortization.
"ELIGIBLE ACCOUNTS" means the Accounts which the Agent in the
exercise of its reasonable commercial discretion determines to be Eligible
Accounts. Without limiting the discretion of the Agent to establish other
criteria of ineligibility, Eligible Accounts shall not, unless the Agent in its
sole discretion elects, include any Account:
(a) with respect to which more than ninety (90) days have elapsed
since the date of the original invoice therefor or which is more than sixty (60)
days past due (without duplication);
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Security Agreement are incorrect or
have been breached;
(c) with respect to which Account (or any other Account due from
such Account Debtor), in whole or in part, a check, promissory note, draft,
trade acceptance or other instrument for the payment of money has been received,
presented for payment, and returned uncollected for any reason;
A-8
ANNEX A TO CREDIT AGREEMENT
(d) which represents a progress billing (as hereinafter defined) or
as to which any Loan Party has extended the time for payment without the consent
of the Agent; for the purposes hereof, "progress billing" means any invoice for
goods sold or leased or services rendered under a contract or agreement pursuant
to which the Account Debtor's obligation to pay such invoice is conditioned upon
any Loan Party's completion of any further performance under the contract or
agreement;
(e) with respect to which any one or more of the following events
has occurred to the Account Debtor on such Account: death or judicial
declaration of incompetency of an Account Debtor who is an individual; the
filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication as a
bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or any
foreign jurisdiction, now or hereafter in effect; the making of any general
assignment by the Account Debtor for the benefit of creditors; the appointment
of a receiver or trustee for the Account Debtor or for any of the assets of the
Account Debtor, including, without limitation, the appointment of or taking
possession by a "custodian," as defined in the Federal Bankruptcy Code; the
institution by or against the Account Debtor of any other type of insolvency
proceeding (under the bankruptcy laws of the United States or otherwise) or of
any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, the Account Debtor;
the sale, assignment, or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor as a
going concern;
(f) if fifty percent (50%) or more of the aggregate Dollar amount of
outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under CLAUSE (A) above;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States of America or Canada (other than the
Province of Newfoundland); or (ii) is not organized under the laws of the United
States of America or any state thereof; or (iii) is the government of any
foreign country or sovereign state, or of any state, province, municipality, or
other political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof; except to the extent that such
Account is secured or payable by a letter of credit in form and substance and
from a domestic issuer acceptable to the Agent in its sole discretion;
(h) owed by an Account Debtor which is another Loan Party or an
Affiliate or employee of any Loan Party;
(i) except as provided in CLAUSE (K) below, with respect to which
either the perfection, enforceability, or validity of the Agent's Liens in such
Account, or the Agent's right or ability to obtain direct payment to the Agent
of the proceeds of such Account, is governed by any federal, state, or local
statutory requirements other than those of the UCC;
(j) owed by an Account Debtor to which any Loan Party is indebted in
any way, or which is subject to any right of setoff or recoupment by the Account
Debtor, unless the Account Debtor has entered into an agreement acceptable to
the Agent to waive setoff rights; or if the Account Debtor thereon has disputed
liability or made any claim with respect to any other Account due from such
Account Debtor; but in each such case only to the extent of such indebtedness,
setoff, recoupment, dispute, or claim, and other Accounts owing pursuant to
performance contracts which the Agent determines in its reasonable credit
judgment could be set off in the event of any Loan Party's default thereunder;
A-9
ANNEX A TO CREDIT AGREEMENT
(k) owed by the government of the United States of America, or any
department, agency, public corporation, or other instrumentality thereof, unless
the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C.Section 3727
et seq.), and any other steps necessary to perfect the Agent's Liens therein,
have been complied with to the Agent's satisfaction with respect to such
Account;
(l) owed by any state, municipality, or other political subdivision
of the United States of America, or any department, agency, public corporation,
or other instrumentality thereof and as to which the Agent determines that its
Lien therein is not or cannot be perfected;
(m) which represents a sale on a bill-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other repurchase or return
basis, a sale on cash on delivery terms, or the remaining balances on Accounts
that were short paid by an Account Debtor and are evidenced by debit memoranda;
(n) which is evidenced by a promissory note or other instrument or
by chattel paper;
(o) if the Agent believes, in the exercise of its reasonable
judgment, that the prospect of collection of such Account is impaired or that
the Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar report
in order to permit a Loan Party to seek judicial enforcement in such State of
payment of such Account, unless such Loan Party has qualified to do business in
such state or has filed a Notice of Business Activities Report or equivalent
report for the then-current year;
(q) which arises out of a sale not made in the ordinary course of
any Loan Party's business;
(r) with respect to which the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by a Loan Party,
and, if applicable, accepted by the Account Debtor, or the Account Debtor
revokes its acceptance of such goods or services;
(s) owed by an Account Debtor or a group of affiliated Account
Debtors which is obligated to one or more Loan Parties respecting Accounts the
aggregate unpaid balance of which exceeds fifteen percent (15%) of the aggregate
unpaid balance of all Accounts owed to the Loan Parties at such time by all of
the Loan Parties' Account Debtors, but only to the extent of such excess;
(t) which is not subject to a first priority and perfected security
interest in favor of the Agent for the benefit of the Lenders;
(u) owed by an Account Debtor pursuant to a performance contract
(including, without limitation, any exchange contracts), which Agent determines
in its reasonable credit judgment could be set off in the event of any Loan
Party's default thereunder; or
(w) on and after a Default, Event of Default, or the Account
Triggering Date, with respect to which the Agent does not have control of the
Payment Accounts.
A-10
ANNEX A TO CREDIT AGREEMENT
If any Account at any time ceases to be an Eligible Account, then
such Account shall promptly be excluded from the calculation of Eligible
Accounts.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank, commercial finance
company, or other asset based lender, having total assets in excess of
$1,000,000,000; (b) any Lender listed on the signature page of this Agreement;
(c) any Affiliate of any Lender; and (d) if an Event of Default has occurred and
is continuing, any Person reasonably acceptable to the Agent.
"ELIGIBLE INVENTORY" means Inventory, valued at the lower of cost
(on a first-in, first-out basis) or market, which the Agent, in its reasonable
discretion, determines to be Eligible Inventory. Without limiting the discretion
of the Agent to establish other criteria of ineligibility, Eligible Inventory
shall not, unless the Agent in its sole discretion elects, include any
Inventory:
(a) that is not owned by a Loan Party;
(b) that is not subject to the Agent's Liens, which are perfected as
to such Inventory, or that are subject to any other Lien whatsoever (other than
the Liens described in CLAUSE (D) of the definition of Permitted Liens; provided
that such Permitted Liens (i) are junior in priority to the Agent's Liens or
subject to Reserves and (ii) do not impair directly or indirectly the ability of
the Agent to realize on or obtain the full benefit of the Collateral);
(c) that does not consist of finished goods or raw materials;
(d) that consists of work-in-process, spare parts, scrap Inventory,
additive, compounds, regrinds, samples, prototypes, supplies, or packing and
shipping materials;
(e) that is not in good condition, is unmerchantable, is defective,
or does not meet all standards imposed by any Governmental Authority, having
regulatory authority over such goods, their use or sale;
(f) that is not currently either usable or salable, at prices
approximating at least cost, in the normal course of any Loan Party's business,
or that is slow moving or stale;
(g) that is obsolete or returned or repossessed or used goods taken
in trade;
(h) that is located outside the United States of America or that is
in-transit from vendors or suppliers or to customers;
(i) that is located in a public warehouse or in possession of a
bailee or in a facility leased by any Person for which appropriate bailee
letters and lien releases and waivers have not been obtained or for which
Reserves acceptable to Agent have not been established; notwithstanding the
foregoing, any Inventory that is located in a facility leased by any Loan Party
will be Eligible Inventory to the extent the value of Inventory in such location
equals or exceeds $250,000 if a Reserve for rents or storage charges has been
established for Inventory at such location;
(j) that contains or bears any Proprietary Rights licensed to a Loan
Party by any Person, if the Agent is not satisfied that it may sell or otherwise
dispose of such Inventory in accordance with the terms of the Security Agreement
and SECTION 9.2 without infringing the rights of the licensor of such
Proprietary Rights or violating any contract with such licensor (and without
payment of any royalties other than any royalties due with respect to the sale
or disposition of such Inventory pursuant to the
A-11
ANNEX A TO CREDIT AGREEMENT
existing license agreement), and, as to which such Loan Party has not delivered
to the Agent a consent or sublicense agreement from such licensor in form and
substance acceptable to the Agent if requested;
(k) that is not reflected in the details of a current perpetual
inventory report;
(l) that is placed on consignment;
(m) that is located in pipelines;
(n) that is located with vendors to whom any Loan Party has any
accounts payable to the extent of such accounts payable balance; or
(o) that has been capitalized on the Financial Statements of any
Loan Party.
If any Inventory at any time ceases to be Eligible Inventory, such
Inventory shall promptly be excluded from the calculation of Eligible Inventory.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"ENVIRONMENTAL COMPLIANCE RESERVE" means any reserve which the Agent
establishes in its reasonable discretion after prior written notice to the
Borrowers from time to time for amounts that are reasonably likely to be
expended by the Loan Parties in order for the Loan Parties and their operations
and property (a) to comply with any notice from a Governmental Authority
asserting material non-compliance with Environmental Laws, or (b) to correct any
such material non-compliance identified in a report delivered to the Agent and
the Lenders pursuant to SECTION 7.7.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"ENVIRONMENTAL LIABILITY" means any obligation, liability
(including, without limitation, any strict liability), loss, fine, penalty,
charge, Lien, damage, cost, reasonable attorneys' and expert fees, or any other
expense arising under, or resulting from a violation of any Environmental Law,
the presence, Release, or threatened Release of any Hazardous Materials, or
actual or threatened damages to natural resources.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release.
"ENVIRONMENTAL PERMIT" means any permit, license, or other
authorization from any Governmental Authority that is required under any
Environmental Law for the lawful conduct of any business, process, or other
activity.
"EQUIPMENT" means all of any Loan Party's now owned and hereafter
acquired machinery, equipment, furniture, furnishings, fixtures, and other
tangible personal property (except Inventory), including embedded software,
motor vehicles with respect to which a certificate of title has been issued,
aircraft, dies, tools, jigs, molds, and office equipment, as well as all of such
types of property
A-12
ANNEX A TO CREDIT AGREEMENT
leased by any Loan Party and all of any Loan Party's rights and interests with
respect thereto under such leases (including, without limitation, options to
purchase); together with all present and future additions and accessions
thereto, replacements therefor, component and auxiliary parts and supplies used
or to be used in connection therewith, and all substitutes for any of the
foregoing, and all manuals, drawings, instructions, warranties and rights with
respect thereto; wherever any of the foregoing is located.
"EQUITY ISSUANCE" means the issuance on and after the Closing Date
by any Loan Party of any shares of any class of stock, warrants, or other equity
interests, other than present and future shares of stock, options, or warrants
issued to employees, or directors of any Loan Party under any Loan Party's stock
option or other benefit or compensation plans or arrangements, or stock issued
upon their exercise.
"EQUITY PROCEEDS PREPAYMENT" means any prepayment of the Fixed Asset
Loan from the issuance of Capital Stock, as currently set forth in Sections
2.04(a)(ii) or 2.04(b)(iii)of the Fixed Asset in effect on the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with any Loan Party within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan, (b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by any Loan Party or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan
is in reorganization, (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multi-employer Plan, (e) the occurrence of an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan, or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate.
"EVENT OF DEFAULT" has the meaning specified in SECTION 9.1.
"EXCESS CASH FLOW PREPAYMENT" means any prepayment of the Fixed
Asset Loan from "Excess Cash Flow", as defined in and as currently set forth in
Section 2.04(b)(i)of the Fixed Asset in effect on the Closing Date.
"EXISTING LETTERS OF CREDIT" means (a) that certain letter of credit
in the amount of $11,268,475.00 issued by JPMorgan Chase Bank to JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as trustee on behalf of
Westlake to secure the payment of IRBs, (b) that certain letter of credit in the
amount of $100,000.00 issued by JPMorgan Chase Bank to Reliance National
Insurance Co., (c) that certain letter of credit in the amount of $362,635.00
issued by JPMorgan Chase Bank to Indemnity Insurance Co., (d) that certain
letter of credit in the amount of $500,000.00 issued by JPMorgan Chase Bank to
National Union Fire Insurance Co., (e) that certain letter of credit in the
amount of $650,000.00 issued by JPMorgan Chase Bank to Zurich Insurance Company,
and (e) that certain letter of credit in the amount of $595,000.00 issued by
JPMorgan Chase Bank to Oil Insurance Limited.
A-13
ANNEX A TO CREDIT AGREEMENT
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the
Bank on such day on such transactions as determined by the Agent.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"FEE LETTER" means that certain letter agreement relating to certain
fees dated as of July 3, 2003, between Westlake, the Bank, and the Arranger.
"FINANCIAL STATEMENTS" means, according to the context in which it
is used, the financial statements referred to in SECTIONS 5.2 and 6.6 or any
other financial statements required to be given to the Lenders pursuant to this
Agreement.
"FISCAL YEAR" means the Loan Parties' fiscal year for financial
accounting purposes. The current Fiscal Year of the Loan Parties will end on
December 31, 2003.
"FIXED ASSET AGENT" means the "Administrative Agent" under and as
defined in the Fixed Asset Loan.
"FIXED ASSET LOAN" means the loans under the Credit Agreement dated
as of July __, 2003, among Westlake, as borrower, certain Subsidiaries of
Westlake, as guarantors, Bank of America, N.A., as administrative agent, and the
lenders party thereto.
"FIXED ASSET LOAN COLLATERAL ACCOUNT" means the Deposit Account
maintained by Westlake with the Fixed Asset Agent into which (a) net proceeds
from the disposition of and (b) insurance proceeds with respect to the Term
Priority Collateral securing the Fixed Asset Loan shall be deposited pursuant to
the requirements of the Fixed Asset Loan; provided that no other amounts are
deposited into such Deposit Accounts.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any fiscal
period of the Loan Parties, the ratio of EBITDA during the preceding twelve (12)
months to Fixed Charges during such twelve (12) month period.
"FIXED CHARGES" means, with respect to any fiscal period of the Loan
Parties on a consolidated basis, without duplication, interest expense, Capital
Expenditures (excluding Capital Expenditures funded with Debt other than
Revolving Loans, but including, without duplication, principal payments with
respect to such Debt), scheduled principal payments of Debt, prepayments and
A-14
ANNEX A TO CREDIT AGREEMENT
unscheduled payments of Debt (other than the Fixed Asset Loan), payments on any
deferred payment plan for insurance premiums permitted pursuant to SECTION
7.13(J), cash Distributions paid by any Loan Party, and Federal, state, local
and foreign income taxes, excluding deferred taxes.
"FOREIGN SUBSIDIARY" of any Person means a Subsidiary of such Person
that is organized or incorporated under the laws of a jurisdiction other than a
jurisdiction of the United States.
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices
set forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
Closing Date.
"GENERAL INTANGIBLES" means all of the Loan Parties' now owned or
hereafter acquired general intangibles, choses in action, and causes of action
and all other intangible personal property of the Loan Parties of every kind and
nature (other than Accounts), including, without limitation, all contract
rights, payment intangibles, Proprietary Rights, corporate or other business
records, inventions, designs, blueprints, plans, specifications, patents, patent
applications, trademarks, service marks, trade names, trade secrets, goodwill,
copyrights, computer software, customer lists, registrations, licenses,
franchises, tax refund claims, any funds which may become due to any Loan Party
in connection with the termination of any Plan or other employee benefit plan or
any rights thereto and any other amounts payable to any Loan Party from any Plan
or other employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds thereof,
property, casualty, or any similar type of insurance and any proceeds thereof,
proceeds of insurance covering the lives of key employees on which any Loan
Party is beneficiary, rights to receive dividends, distributions, cash,
Instruments, and other property in respect of or in exchange for any letter of
credit, guarantee, claim, security interest, or other security held by or
granted to any Loan Party.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTOR" means any Person, including, but not limited to, each
Restricted Subsidiary of Westlake, which undertakes to be liable for all or any
part of the Obligations by execution of an Obligations Guaranty or otherwise.
"GUARANTY" means, with respect to any Person, all obligations of
such Person which in any manner directly or indirectly guarantee or assure, or
in effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
A-15
ANNEX A TO CREDIT AGREEMENT
"HAZARDOUS MATERIALS" means any material that poses a threat to, or
is regulated to protect, human health, safety, public welfare or the
environment, including without limitation, "hazardous substance," "pollutant or
contaminant," "petroleum" and "natural gas liquids," as those terms are defined
or used in Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, polychlorinated biphenyls, lead, asbestos, urea
formaldehyde, radioactive materials, putrescible materials, infectious
materials, and toxic microorganisms (including mold).
"HEDGE AGREEMENT" means any and all transactions, agreements, or
documents now existing or hereafter entered into, which provides for an interest
rate, credit, commodity, or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging any Loan Party's exposure to fluctuations in interest
or exchange rates, loan, credit exchange, security or currency valuations or
commodity prices; provided that such Hedge Agreement shall be incurred in the
ordinary course of business and consistent with prior business practices of the
Loan Parties and not for speculative purposes.
"INSTRUMENTS" means all instruments as such term is defined in the
UCC, now owned or hereafter acquired by any Borrower.
"INTANGIBLE ASSETS" means assets that are considered to be
intangible assets under GAAP, including customer lists, goodwill, computer
software, copyrights, trade names, trade marks, patents, unamortized deferred
charges, unamortized debt discount, and capitalized research and development
costs.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement
dated as of the Closing Date, by and among, Borrowers, Agent, and Fixed Asset
Agent.
"INTEREST PERIOD" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, or three months thereafter as selected by the
Borrowers in any Notice of Borrowing, in the form attached hereto as EXHIBIT D,
or Notice of Continuation/Conversion, in the form attached hereto as EXHIBIT E,
provided that:
(a) if any Interest Period would otherwise end on a day that is not
a Business Day, that Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Stated Termination
Date.
"INTEREST RATE" means each or any of the interest rates, including
the Default Rate, set forth in SECTION 2.1.
"INVENTORY" means all of any Loan Party's now owned and hereafter
acquired inventory, goods and merchandise, wherever located, to be furnished
under any contract of service or held for sale or lease, all returned goods, raw
materials, work-in-process, finished goods (including embedded software),
A-16
ANNEX A TO CREDIT AGREEMENT
other materials and supplies of any kind, nature, or description which are used
or consumed in any Loan Party's business or used in connection with the packing,
shipping, advertising, selling or finishing of such goods, merchandise, and all
documents of title or other Documents representing them.
"IRBS" means the $10,889,000 original principal amount Calcasieu
Parish Public Trust Authority Waste Disposal Revenue Bonds issued pursuant to
the Indenture of Trust dated December 1, 1997, between Calcasieu Parish Public
Trust Authority, as issuer, and JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank), as trustee.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"LATEST PROJECTIONS" means: (a) on the Closing Date and thereafter
until the Agent receives new projections pursuant to SECTION 5.2(F), the
projections of the Loan Parties' financial condition, results of operations, and
cash flows, for the period commencing on April 1, 2003, and ending on December
31, 2007, and delivered to the Agent prior to the Closing Date; and (b)
thereafter, the projections most recently received by the Agent pursuant to
SECTION 5.2(F).
"LENDER" and "LENDERS" have the meanings specified in the
introductory paragraph hereof and shall include the Agent to the extent of any
Agent Advance outstanding and the Bank to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share.
"LETTER OF CREDIT" has the meaning specified in SECTION 1.3(A).
"LETTER OF CREDIT FEE" has the meaning specified in SECTION 2.6.
"LETTER OF CREDIT ISSUER" means the Bank, any affiliate of the Bank,
or any other financial institution that issues any Letter of Credit pursuant to
this Agreement.
"LETTER-OF-CREDIT RIGHTS" means "letter-of-credit rights" as such
term is defined in the UCC, now owned or hereafter acquired by any Loan Party,
including rights to payment or performance under a letter of credit, whether or
not any Loan Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
"LETTER OF CREDIT SUBFACILITY" means $50,000,000.
"LIBOR INTEREST PAYMENT DATE" means, with respect to a LIBOR Rate
Loan, the Termination Date and the last day of each Interest Period applicable
to such Loan or, with respect to each Interest Period of greater than three
months in duration, the last day of the third month of such Interest Period and
the last day of such Interest Period.
"LIBOR RATE" means, for any Interest Period, with respect to LIBOR
Rate Loans, the rate of interest per annum determined pursuant to the following
formula:
LIBOR Rate = Offshore Base Rate
--------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"OFFSHORE BASE RATE" means the rate per annum appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at
A-17
ANNEX A TO CREDIT AGREEMENT
approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available,
the Offshore Base Rate shall be, for any Interest Period, the rate
per annum appearing on Reuters Screen LIBOR Page as the London
interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest
Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates. If for any reason none of the
foregoing rates is available, the Offshore Base Rate shall be, for
any Interest Period, the rate per annum determined by Agent as the
rate of interest at which dollar deposits in the approximate amount
of the LIBOR Rate Loan comprising part of such Borrowing would be
offered by the Bank's London Branch to major banks in the offshore
dollar market at their request at or about 11:00 a.m. (London time)
two (2) Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day
applicable to member banks under regulations issued from time to
time by the Federal Reserve Board for determining the maximum
reserve requirement (including any emergency, supplemental, or other
marginal reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The Offshore
Rate for each outstanding LIBOR Rate Loan shall be adjusted
automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"LIBOR RATE LOAN" means a Revolving Loan during any period in which
it bears interest based on the LIBOR Rate.
"LIEN" means: (a) any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute, or contract, and including a
security interest, charge, claim, or lien arising from a mortgage, deed of
trust, encumbrance, pledge, hypothecation, assignment, deposit arrangement,
agreement, security agreement, conditional sale or trust receipt, or a lease,
consignment, or bailment for security purposes; (b) to the extent not included
under CLAUSE (A), any reservation, exception, encroachment, easement,
right-of-way, covenant, condition, restriction, lease, or other title exception
or encumbrance affecting property; and (c) any contingent or other agreement to
provide any of the foregoing.
"LOAN ACCOUNT" means the loan account of the Borrowers, which
account shall be maintained by the Agent.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Collateral
Documents, the Letters of Credit, any applications for Letters of Credit, the
Intercreditor Agreement, and any other agreements, instruments, and documents
heretofore, now or hereafter evidencing, securing, guaranteeing or otherwise
relating to the Obligations, the Collateral, or any other aspect of the
transactions contemplated by this Agreement.
"LOAN PARTIES" means, on any date of determination, each Borrower
and all Guarantors, and "LOAN PARTY" means any Borrower or any Guarantor.
"LOANS" means, collectively, all loans and advances provided for in
ARTICLE 1.
"LOCAL ACCOUNTS" has the meaning specified in SECTION 8.1(K).
A-18
ANNEX A TO CREDIT AGREEMENT
"MAJORITY LENDERS" means at any date of determination Lenders whose
Pro Rata Shares aggregate more than 50%.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U, or X of the Federal Reserve Board.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or
a material adverse effect upon, the assets, liabilities, business, operations,
properties, or condition (financial or otherwise) of Westlake, the Loan Parties
taken as a whole or the Collateral; (b) a material impairment of the ability of
any Loan Party to perform under any Loan Document to which it is a party; or (c)
a material adverse effect upon the legality, validity, binding effect, or
enforceability against any Loan Party of any Loan Document to which it is a
party.
"MATERIAL AGREEMENT" means any material written or oral agreement,
contract, commitment, or understanding to which any Loan Party is a party, by
which such Loan Party is directly or indirectly bound, or to which any assets of
such Loan Party may be subject, which involves amounts payable to any Loan Party
in excess of $10,000,000 in the aggregate during any 12-month period, or
financial obligations of any Loan Party in excess of $5,000,000 in the aggregate
during any 12-month period, and which is not cancellable by such Loan Party upon
30 days or less notice without liability for further payment (other than nominal
penalties).
"MAXIMUM INVENTORY LOAN AMOUNT" means $120,000,000.
"MAXIMUM RATE" has the same meaning specified in SECTION 2.3.
"MAXIMUM REVOLVER AMOUNT" means $200,000,000, as such amount may be
reduced from time to time pursuant to the terms of this Agreement.
"MULTI-EMPLOYER PLAN" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by any Loan Party or
any ERISA Affiliate.
"NET AMOUNT OF ELIGIBLE ACCOUNTS" means, at any time, the gross
amount of Eligible Accounts less sales, excise, or similar taxes, and less
returns, discounts, claims, credits, allowances, accrued rebates, offsets,
deductions, counterclaims, disputes, and other defenses of any nature at any
time issued, owing, granted, outstanding, available, or claimed.
"NET ORDERLY LIQUIDATION VALUE" shall mean (a) the "net orderly
liquidation value" determined by a valuation company acceptable to the Agent
after performance of an Inventory valuation to be done at the Agent's request
and the Borrowers' expense, less the amount estimated by such valuation company
for marshalling, reconditioning, carrying, and sales expenses designed to
maximize the resale value of such Inventory and assuming that the time required
to dispose of such Inventory is three (3) months; or (b) if no such Inventory
valuation has been requested by the Agent, the value customarily attributed to
Inventory in the appraisal industry for Inventory of similar quality and
quantity, and similarly dispersed (under similar and relevant circumstances
under standard asset-based lending procedures), at the time of the valuation,
less the amount customarily estimated in the appraisal industry at the time of
any determination for marshalling, recondition, carrying, and sales expenses
designed to maximize the resale value of such Inventory and assuming that the
time required to dispose of such Inventory is three (3) months.
A-19
ANNEX A TO CREDIT AGREEMENT
"NON-RATABLE LOAN" and "NON-RATABLE LOANS" have the meanings
specified in SECTION 1.2(h).
"NOTE and NOTES" have the same meaning specified in SECTION
1.2(a)(ii).
"NOTICE OF BORROWING" has the meaning specified in SECTION 1.2(b).
"NOTICE OF CONTINUATION/CONVERSION" has the meaning specified in
SECTION 2.2(b).
"OBLIGATION GUARANTY" means the (a) a Guaranty of the Obligations in
substantially the form and upon the terms of EXHIBIT C, executed and delivered
by any Person pursuant to the requirements of the Loan Documents; and (b) any
amendments, modifications, supplements, restatements, ratifications, or
reaffirmations of any Guaranty made in accordance with the Loan Documents.
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by any Loan Party
to the Agent and/or any Lender, arising under or pursuant to this Agreement or
any of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect, absolute or contingent, due or to become due,
primary or secondary, as principal or guarantor, and including all principal,
interest, charges, expenses, fees, attorneys' fees, filing fees, and any other
sums chargeable to any Loan Party hereunder or under any of the other Loan
Documents. "Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter arising from or in connection with
the Letters of Credit and (b) all debts, liabilities and obligations now or
hereafter arising from or in connection with Bank Products.
"OTHER TAXES" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Documents.
"PARENT" means Westlake Polymer & Petrochemical, Inc., a Delaware
corporation.
"PARTICIPANT" means any Person who shall have been granted the right
by any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"PATENT AND TRADEMARK AGREEMENTS" means any Patent Security
Agreement and any Trademark Security Agreement, executed and delivered by any
Loan Party to the Agent to evidence and perfect the Agent's security interest in
each such Loan Party's present and future patents, trademarks, and related
licenses and rights, for the benefit of the Agent and the Lenders.
"PAYMENT ACCOUNT" means each bank account established pursuant to
the Security Agreement, to which the proceeds of Accounts and other Collateral
are deposited or credited, and which is maintained in the name of the Agent or
the Borrowers, as the Agent may determine, on terms acceptable to the Agent.
"PCBS" means polychlorinated biphenyls.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
A-20
ANNEX A TO CREDIT AGREEMENT
"PENDING REVOLVING LOANS" means, at any time, the aggregate
principal amount of all Revolving Loans requested in any Notice of Borrowing
received by the Agent which have not yet been advanced.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which any Loan Party or any ERISA Affiliate
sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"PERMITTED GROUP" means any group of investors that is deemed to be
a "person" (as that term is used in Section 13(d)(3) of the Exchange Act) at any
time prior to Westlake's initial public offering of common stock, provided that
no single Person (other than the Principals and their Related Parties)
Beneficially Owns (together with its Affiliates) more of the Voting Stock of the
Borrower that is Beneficially Owned by such group of investors than is then
collectively Beneficially Owned by the Principals and their Related Parties in
the aggregate.
"PERMITTED LIENS" means:
(a) Liens for taxes not delinquent or statutory Liens for taxes and
other governmental charges in an amount not to exceed $100,000 provided that the
payment of such taxes or governmental charges which are due and payable is being
contested in good faith and by appropriate proceedings diligently pursued and as
to which adequate financial reserves have been established on the applicable
Loan Party's books and records and a stay of enforcement of any such Lien is in
effect;
(b) the Agent's Liens;
(c) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance, social security, and other similar laws,
or to secure the performance of bids, tenders, or contracts (other than for the
repayment of Debt), or to secure indemnity, performance or other similar bonds
for the performance of bids, tenders or contracts (other than for the repayment
of Debt), or to secure statutory obligations (other than liens arising under
ERISA or Environmental Liens) or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds;
(d) Liens securing the claims or demands of materialmen, mechanics,
carriers, rail carriers, warehousemen, landlords, and other like Persons,
provided that if any such Lien arises from the nonpayment of such claims or
demand when due, such claims or demands do not exceed $1,000,000 in the
aggregate unless any such claims or demands is being contested in good faith and
by appropriate proceedings diligently pursued and as to which adequate financial
reserves have been established on the applicable Loan Party's books and records
and a stay of enforcement of any such Lien is in effect;
(e) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running with the
land, and other similar title exceptions or encumbrances affecting any Real
Estate; provided that they do not in the aggregate materially detract from the
value of the Real Estate or materially interfere with its use in the ordinary
conduct of the applicable Loan Party's business;
(f) Liens arising from judgments and attachments in connection with
court proceedings provided that the attachment or enforcement of such Liens
would not result in an Event of Default hereunder and such Liens are being
contested in good faith by appropriate proceedings, adequate reserves have been
set aside and no material Property is subject to a material risk of loss or
forfeiture and
A-21
ANNEX A TO CREDIT AGREEMENT
the claims in respect of such Liens are fully covered by insurance (subject to
ordinary and customary deductibles) and a stay of execution pending appeal or
proceeding for review is in effect;
(g) Financing statements filed by the owner of Equipment leased to a
Loan Party and filed solely for the purpose of putting third parties on notice
of such owner's interest (as a lessor under an operating lease) in such
Equipment, so long as such operating lease remains a true operating lease under
GAAP and under applicable law;
(h) Liens securing the Existing Letters of Credit existing on the
Closing Date, so long as such Existing Letters of Credit are replaced with
Letters of Credit hereunder within ninety (90) days of the Closing Date;
(i) Liens securing the Fixed Asset Loan (including, without
limitation, Liens in the Fixed Asset Loan Collateral Account), which to the
extent such Liens attach to Collateral, are subject to the Intercreditor
Agreement, but in no event shall such Liens attach to any Accounts or Inventory;
(j) Liens securing Debt existing on the Closing Date to the extent
such Liens are described on SCHEDULE 7.17;
(k) Liens evidencing consignments of Inventory;
(l) Liens securing Debt permitted pursuant to SECTION 7.13(j) so
long as such Liens attached only to unearned premiums for such financed
insurance; and
(m) Liens securing Hedge Agreements; provided that if such Hedge
Agreements do not constitute Bank Products, the amount secured by such Liens
does not exceed $1,000,000 and the assets subject to such Liens attach solely to
margin accounts related thereto.
"PERSON" means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Loan Party or any ERISA Affiliate makes, is making, or is
obligated to make contributions and includes any Pension Plan.
"PRINCIPALS" means T.T. Chao, his descendents, including by
adoption, and the spouses of any such individuals.
"PROPRIETARY RIGHTS" means all of any Loan Party's now owned and
hereafter arising or acquired: licenses, franchises, permits, patents, patent
rights, copyrights, works which are the subject matter of copyrights,
trademarks, service marks, trade names, trade styles, patent, trademark, and
service mark applications, and all licenses and rights related to any of the
foregoing, including those federally registered or otherwise material patents,
trademarks, service marks, trade names, and copyrights set forth on SCHEDULE
6.12 hereto, and all other rights under any of the foregoing, all extensions,
renewals, reissues, divisions, continuations, and continuations-in-part of any
of the foregoing, and all rights to sue for past, present and future
infringement of any of the foregoing.
"PRO FORMA FIXED CHARGE COVERAGE RATIO" means, with respect to any
proposed Acquisition, calculation of the Fixed Charge Coverage Ratio with
respect to the immediately preceding twelve (12) months, calculated as though
the proposed Acquisition had occurred at the beginning of such
A-22
ANNEX A TO CREDIT AGREEMENT
period, and calculation of the Fixed Charge Coverage Ratio on a pro forma basis,
based on the Loan Parties' best estimates as of the date of calculation, of the
ratio of EBITDA during the succeeding twelve (12) months to the projected Fixed
Charges during such succeeding twelve (12) month period, after giving effect to
the proposed Acquisition.
"PRO RATA SHARE" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the denominator of which is the sum of the amounts of
all of the Lenders' Commitments, or if no Commitments are outstanding, a
fraction (expressed as a percentage), the numerator of which is the amount of
Obligations owed to such Lender and the denominator of which is the aggregate
amount of the Obligations owed to the Lenders, in each case giving effect to a
Lender's participation in Non-Ratable Loans and Agent Advances.
"PURCHASE PRICE" means, with respect to any Acquisition, all direct,
indirect, and deferred cash and non-cash payments made to or for the benefit of
the Person being acquired (or whose assets are being acquired), its
shareholders, officers, directors, employees, or Affiliates in connection with
such Acquisition, including, without limitation, the amount of any Debt being
assumed in connection with such Acquisition (and subject to the limitations on
Debt in this Agreement), seller financing, payments under non-competition or
consulting agreements entered into in connection with such Acquisition and
similar agreements, all non-cash consideration and the value of any stock,
options, or warrants or other rights to acquire stock issued as part of the
consideration in such transaction; provided that, for the purposes hereof,
non-competition agreements and consulting agreements shall be valued at their
present value discounted over the term of such agreement at the Base Rate in
effect at the time of the Acquisition.
"REAL ESTATE" means all of any Loan Party's now or hereafter owned
or leased estates in real property, including, without limitation, all fees,
leaseholds and future interests, together with all of
any Loan Party's now or hereafter owned or leased interests in the improvements
thereon, the fixtures attached thereto, and the easements appurtenant thereto.
"RELATED GENERAL INTANGIBLES" means all of each Loan Parties'
intangible personal property used or useful for, in connection with, or in any
respect related to, any Accounts, Inventory, Instruments, Chattel Paper,
Documents, or Deposit Accounts, which Related General Intangibles shall include
all money, General Intangibles (including payment intangibles and software), and
Proprietary Rights, together with all additions, amendments, and modifications
thereto, extensions, renewals, enlargements, and proceeds thereof, substitutions
therefor, and income and profits therefrom. To the extent obtained in connection
with or otherwise related to Accounts, Inventory, Instruments, Chattel Paper,
Documents, or Deposit Accounts, the following are included, without limitation,
in the definition of "RELATED GENERAL INTANGIBLES": loan commitments, financing
arrangements, bonds, leases, permits, sales contracts, insurance policies, and
the proceeds therefrom, books and records, funds, bank deposits; all Proprietary
Rights used in connection therewith; any award, remuneration, settlement, or
compensation heretofore made or hereafter to be made by any Governmental
Authority to any Loan Party, all deposits, funds, accounts, contract rights, or
documents, arising from or by virtue of any transactions; all permits, licenses,
franchises, certificates, and other rights and privileges; all proceeds arising
from or by virtue of the sale, lease, or other disposal of all or any part of
the foregoing; and all proceeds (including premium refunds) payable or to be
payable under each policy of insurance relating to the foregoing.
"RELATED PARTY" means (a) any controlling stockholder, 80% (or more)
owned Subsidiary, or immediate family member (in the case of an individual) of
any Principal or (b) any Person,
A-23
ANNEX A TO CREDIT AGREEMENT
the beneficiaries, stockholders, partners, owners, or Persons beneficially
holding a 50% or more controlling interest of which consist of any one or more
Principals and/or such other Persons referred to in the immediately preceding
CLAUSE (A).
"RELEASE" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, or migration of
any Hazardous Materials into the environment, including the movement of
Hazardous Materials through or in the air, soil, surface water, groundwater or
Real Estate or other property.
"REPORTABLE EVENT" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"REQUIRED LENDERS" means at any time Lenders whose Pro Rata Shares
aggregate more than 66-2/3%.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"RESERVES" means reserves that limit the availability of credit
hereunder, consisting of reserves against Availability, Eligible Accounts, or
Eligible Inventory, established by Agent from time to time in Agent's reasonable
credit judgment. Without limiting the generality of the foregoing, the following
reserves shall be deemed to be a reasonable exercise of Agent's credit judgment:
(a) Bank Product Reserves, (b) a reserve for accrued, unpaid interest on the
Obligations, (c) reserves for rent at leased locations subject to statutory or
contractual landlord liens, (d) Inventory shrinkage, (e) Environmental
Compliance Reserves, (f) customs charges, (g) dilution, and (h) warehousemen's
or bailees' charges.
"RESPONSIBLE OFFICER" means the chief executive officer, president,
chief financial officer, treasurer, assistant treasurer, or controller of a Loan
Party. Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership, and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.
"RESTRICTED INVESTMENT" means, as to any Loan Party, any acquisition
of property by such Loan Party in exchange for cash or other property, whether
in the form of an acquisition of stock, debt, or other indebtedness or
obligation, or the purchase or acquisition of any other property, or an
investment, loan, advance, extension of credit, capital contribution, or
subscription, except the following: (a) acquisitions of Equipment to be used in
the business of such Loan Party so long as the acquisition costs thereof
constitute Capital Expenditures permitted hereunder; (b) acquisitions of
Inventory in the ordinary course of business of such Loan Party; (c)
acquisitions of current assets acquired in the ordinary course of business of
such Loan Party; (d) direct obligations of the United States of America, or any
agency thereof, or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof; (e) acquisitions of certificates of deposit maturing within
one year from the date of acquisition, bankers' acceptances, Eurodollar bank
deposits, or overnight bank deposits, in each case issued by, created by, or
with a bank or trust company organized under the laws of the United States of
America or any state thereof having capital and surplus aggregating at least
$100,000,000; (f) acquisitions of commercial paper given a rating of "A2" or
better by Standard & Poor's Corporation or "P2" or better by Moody's Investors
Service, Inc. and maturing not more than 90
A-24
ANNEX A TO CREDIT AGREEMENT
days from the date of creation thereof; (g) loans, advances, extensions of
credit, capital contributions, and other investments (i) by any Loan Party to
its Subsidiaries or (ii) to any Loan Party by its Subsidiaries, or the direct or
indirect owners of the equity interests in such Loan Party; (h) investments
existing on the Closing Date and identified on SCHEDULE 7.10, including, without
limitation, loans, advances, extensions of credit to, and renewals or extensions
thereof in accordance with SECTION 7.13, or capital contributions and other
investments in any Unrestricted Subsidiary of Westlake; (i) Hedge Agreements;
(j) Acquisitions made in accordance with SECTION 7.26; (k) sales of Inventory by
one Loan Party to another Loan Party so long as the payment terms with respect
to such Inventory are in accordance with the customary business terms of such
Loan Parties and payment for such Inventory is made within thirty (30) days of
delivery of such Inventory; (l) payments on any Debt permitted by SECTION
7.13(k), and (m) transactions among Loan Parties so long as such transactions
are otherwise permitted by the terms of SECTION 7.15.
"RESTRICTED SUBSIDIARY" means, at any time of determination, all
Subsidiaries of Westlake, other than Unrestricted Subsidiaries of Westlake.
"REVOLVING LOANS" has the meaning specified in SECTION 1.2 and
includes each Agent Advance and Non-Ratable Loan.
"SEC" has the meaning specified in SECTION 5.2(a).
"SECURITY AGREEMENT" means, collectively, the Security Agreements of
even date herewith executed by the Loan Parties in favor of the Agent for the
benefit of the Agent and the other Lenders.
"SETTLEMENT" AND "SETTLEMENT DATE" have the meanings specified in
SECTION 12.15(a)(ii).
"SOLVENT" means, when used with respect to any Person, that at the
time of determination:
(a) the assets of such Person, at a fair valuation, are in excess of
the total amount of its debts (including contingent liabilities); and
(b) the present fair saleable value of its assets is greater than
its probable liability on its existing debts as such debts become absolute
and matured; and
(c) it is then able and expects to be able to pay its debts
(including contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount
of any contingent liability shall be computed as the amount that, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability of such
Person.
"STATED TERMINATION DATE" means July 14, 2007.
"SUBSIDIARY" of a Person means (a) any entity of which more than
fifty percent (50%) of the voting stock or other equity interests (in the case
of Persons other than corporations), is owned or controlled directly or
indirectly by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof or (b) any partnership (limited or general) of which such
Person shall at any time be
A-25
ANNEX A TO CREDIT AGREEMENT
the general partner or of which more than fifty percent (50%) of the issued and
outstanding partnership interests, is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of Westlake.
"SUPPORTING LETTER OF CREDIT" has the meaning specified in SECTION
1.3(g).
"TAXES" means any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Agent's or
each Lender's net income in any the jurisdiction (whether federal, state or
local and including any political subdivision thereof) under the laws of which
such Lender or the Agent, as the case may be, is organized or maintains a
lending office.
"TERMINATION DATE" means the earliest to occur of (a) the Stated
Termination Date, (b) the date the Total Facility is terminated either by the
Borrowers pursuant to SECTION 3.2 or by the Required Lenders pursuant to SECTION
9.2, and (c) the date this Agreement is otherwise terminated for any reason
whatsoever pursuant to the terms of this Agreement.
"TERM PRIORITY COLLATERAL" has the meaning given such term in the
Intercreditor Agreement.
"TOTAL FACILITY" has the meaning specified in SECTION 1.1.
"TRIGGERING DATE" means the date upon which either (a) the
Availability has been less than $50,000,000 for the immediately preceding three
(3) consecutive Business Days or (b) the Availability is less than $35,000,000
at any time; provided that in the event (i) the Availability has been greater
than $50,000,000 at all times for ninety (90) consecutive days and (ii) the
Fixed Charge Coverage Ratio on such date of determination is 1.00 to 1.0,
commencing on the first day of any month after the criteria set forth above is
satisfied, then the Triggering Date shall be deemed to not be continuing for
purposes of this Agreement, and the requirements of SECTIONS 5.2(l)(iii) and
7.21 shall not be required unless a subsequent Triggering Date occurs.
"UCC" means the Uniform Commercial Code, as in effect from time to
time, of the State of New York or of any other state the laws of which are
required as a result thereof to be applied in connection with the issue of
perfection of security interests; provided, that to the extent that the UCC is
used to define any term herein or in any other documents and such term is
defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern.
"UNFUNDED PENSION LIABILITY" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA for the most recent plan
year for which an Actuarial Valuation has been prepared, over the current value
of that Plan's assets, determined in accordance with any assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"UNRESTRICTED SUBSIDIARY" means, at any time of determination
thereof, (a) Westlake AR Corporation, (b) any Foreign Subsidiary of Westlake or
any other Loan Party (other than Westlake Overseas Corporation which shall be a
Restricted Subsidiary under this Agreement), and (c) any Subsidiary of an
Unrestricted Subsidiary of Westlake.
A-26
ANNEX A TO CREDIT AGREEMENT
"UNUSED LETTER OF CREDIT SUBFACILITY" means an amount equal to
$50,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus, without duplication, (b) the aggregate unpaid
reimbursement obligations with respect to all Letters of Credit.
"UNUSED LINE FEE" has the meaning specified in SECTION 2.5.
"VOTING STOCK" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the board
of directors of such Person.
Accounting Terms. Any accounting term used in the Agreement shall have,
unless otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations in the Agreement shall be
computed, unless otherwise specifically provided therein, in accordance with
GAAP as consistently applied and using the same method for inventory valuation
as used in the preparation of the Financial Statements. If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrowers or the
Required Lenders shall so request, the Agent, the Lenders, and the Borrowers
shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrowers shall provide to the Agent and the Lenders
Financial Statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words
refer to the Agreement as a whole and not to any particular provision of the
Agreement; and Subsection, Section, Schedule and Exhibit references are to the
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and
the word "through" means "to and including."
(iv) The word "or" is not exclusive.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including the Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
A-27
ANNEX A TO CREDIT AGREEMENT
(e) The captions and headings of the Agreement and other Loan
Documents are for convenience of reference only and shall not affect the
interpretation of the Agreement.
(f) The Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) For purposes of SECTION 9.1, a breach of the financial covenant
contained in SECTION 7.21 shall be deemed to have occurred as of any date of
determination thereof by the Agent or as of the last day of any specified
measuring period, regardless of when the Financial Statements reflecting such
breach are delivered to the Agent.
(h) The Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrowers
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Lenders or the Agent merely because of the
Agent's or Lenders' involvement in their preparation.
A-28
ANNEX A TO CREDIT AGREEMENT
EXHIBIT A
FORM OF NOTE
$____________________ __________ __, 2003
For Value Received, the undersigned (referred to herein as the
"BORROWERS") hereby jointly and severally promise to pay to the order of
____________________(the "LENDER") in care of Bank of America, N.A. (the
"AGENT"), at the Agent's office located at 55 S. Lake Avenue, Suite 900,
Pasadena, CA 91101, for the account of the Lender, the lesser of the principal
amount of _____________________ ($_______________) or the aggregate amount of
all outstanding Revolving Loans made to Borrowers by the Lender from time to
time. The undersigned also promise to pay interest on the unpaid principal
amount of each Borrowing from the date of such Borrowing until such principal
amount is paid. This Note shall be subject to the terms of that certain Credit
Agreement described below (the "CREDIT AGREEMENT"), and all principal and
interest payable hereunder shall be due and payable in accordance with the terms
of the Credit Agreement.
This Note is the Note referred to in the Credit Agreement, dated as of
July 31, 2003, among the Borrowers, the Lender, certain other Lenders party
thereto, and Bank of America, N.A., as Agent for the Lenders. Terms defined in
the Credit Agreement are used herein with the same meanings. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity of this Note, upon the happening of certain stated events and also for
prepayments on account of the principal of this Note prior to the maturity of
this Note upon the terms and conditions specified in the Credit Agreement.
Without limiting the immediately preceding sentence, reference is made to
SECTION 2.3 of the Credit Agreement for usury savings provisions.
Principal and interest payments shall be in money of the United States of
America, lawful at such times for the satisfaction of public and private debts,
and shall be in immediately available funds.
The Borrowers jointly and severally promise to pay the costs of
collection, including reasonable attorney's fees, if default is made in the
payment of this Note.
THIS NOTE AND THE OTHER LOAN DOCUMENTS HAVE BEEN ENTERED INTO PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND THE SUBSTANTIVE LAWS
OF THE STATE OF NEW YORK, AND THE APPLICABLE FEDERAL LAWS OF THE UNITED STATES
OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION HEREOF.
IN WITNESS WHEREOF, the undersigned have caused this Note to be executed
by officers thereunto duly authorized and directed by appropriate corporate
authority.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES FOLLOW]
EXHIBIT A
BORROWERS:
WESTLAKE CHEMICAL CORPORATION, A DELAWARE CORPORATION
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
NORTH AMERICAN PIPE CORPORATION, A DELAWARE CORPORATION
By:
---------------------------------------
Name:
-------------------------------
Title:
WESTLAKE STYRENE LP, A DELAWARE LIMITED PARTNERSHIP
By: Westlake Chemical Holdings, Inc., its general partner
By:
---------------------------------
Name:
-------------------------
Title:
------------------------
WPT LP, A DELAWARE LIMITED PARTNERSHIP
By: Westlake Chemical Holdings, Inc., its general partner
By:
---------------------------------
Name:
-------------------------
Title:
------------------------
WESTLAKE VINYLS, INC., A DELAWARE CORPORATION
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
SIGNATURE PAGE TO NOTE
WESTLAKE PVC CORPORATION, A DELAWARE CORPORATION
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
GEISMER VINYLS COMPANY LP, A DELAWARE LIMITED PARTNERSHIP
By: GVGP, Inc., its general partner
By:
---------------------------------
Name:
-------------------------
Title:
------------------------
WESTECH BUILDING PRODUCTS, INC., A DELAWARE CORPORATION
By:
---------------------------------------
Name:
-------------------------------
Title:
------------------------------
WESTLAKE PETROCHEMICALS LP, A DELAWARE LIMITED PARTNERSHIP
By: Westlake Chemical Investments, Inc., its general partner
By:
---------------------------------
Name:
-------------------------
Title:
------------------------
WESTLAKE POLYMERS LP, A DELAWARE LIMITED PARTNERSHIP
By: Westlake Chemical Investments, Inc., its general partner
By:
---------------------------------
Name:
-------------------------
Title:
------------------------
SIGNATURE PAGE TO NOTE
VAN BUREN PIPE CORPORATION, A DELAWARE CORPORATION
By:
---------------------------------------
Name:
-------------------------------
Title:
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SIGNATURE PAGE TO NOTE
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
REPORTING DATE:
To: BANK OF AMERICA, N.A., individually as a Lender and as agent for itself
and the other Lenders (the "AGENT") under that certain Credit Agreement
dated as of July 31, 2003 (such agreement, as it may be amended, restated,
or otherwise modified from time to time, the "CREDIT AGREEMENT"), by and
among the Agent, Westlake Chemical Corporation and certain of its domestic
subsidiaries listed as Borrowers thereto (collectively, the "BORROWERS"),
and the Lenders party thereto.
Reference is hereby made to the Credit Agreement, the terms defined
therein being used herein as therein defined. This Borrowing Base Certificate is
delivered pursuant to the terms of the Credit Agreement.
The undersigned hereby certifies and warrants to the Agent and the Lenders
on behalf of the Borrowers as follows:
I. I am a duly qualified and acting Responsible Officer of Westlake, and I am
familiar with the financial statements and financial affairs of the Loan
Parties. I am authorized to execute this Borrowing Base Certificate on
behalf of the Loan Parties.
II. Attached hereto as SCHEDULE 1 are true and correct computations of the
Borrowing Base under the Credit Agreement as of the date set forth below.
The Borrowers further represent and warrant to the Agent and the Lenders
that the representations and warranties contained in ARTICLE VI of the Credit
Agreement are true and correct in all material respects on and as of the date of
this Borrowing Base Certificate as if made on and as of the date hereof (except
to the extent that such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct in all material
respects as of such earlier date and except to the extent that (a) the Agent and
the Lenders have been notified in writing by the Borrowers that any
representation or warranty is not correct and the Required Lenders have
explicitly waived in writing compliance with such representation or warranty or
(b) any representation or warranty has been qualified by the updated information
reflected in, and as permitted under, the Compliance Certificate submitted by
Westlake to the Agent periodically), and that no Event of Default or Default has
occurred and is continuing, except as disclosed in an attachment to this
Certificate.
IN WITNESS WHEREOF, Westlake has caused this Borrowing Base Certificate to
be executed and delivered on this ___ day of __________, 200_.
WESTLAKE CHEMICAL CORPORATION, ON ITS
BEHALF AND AS AGENT FOR THE OTHER
BORROWERS
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
EXHIBIT B
SCHEDULE 1
(See attached computations of the Borrowing Base)
SCHEDULE I TO EXHIBIT B
EXHIBIT C
FORM OF OBLIGATION GUARANTY
THIS OBLIGATION GUARANTY (this "GUARANTY") is executed as of ____________,
2003, jointly and severally by the undersigned (each a "GUARANTOR" and
collectively the "GUARANTORS"), for the benefit of BANK OF AMERICA, N.A., a
national banking association (in its capacity as Agent for the benefit of
Lenders (defined below)).
RECITALS
A. WHEREAS, Westlake Chemical Corporation and certain of its domestic
subsidiaries listed as Borrowers thereto (each a "BORROWER" and collectively the
"BORROWERS"), Bank of America, N.A., as Agent (including its permitted
successors and assigns in such capacity, "AGENT"), and Lenders now or hereafter
party to the Credit Agreement have entered into a Credit Agreement, dated as of
July 31, 2003 (as amended, modified, supplemented, or restated from time to
time, the "CREDIT AGREEMENT");
B. WHEREAS, provisions of the Credit Agreement permit Guarantors to
directly or indirectly receive proceeds of Borrowings made pursuant thereto; and
C. WHEREAS, this Guaranty is integral to the transactions contemplated by
the Loan Documents and is a condition precedent to Lenders' obligations to
extend credit under the Loan Documents.
ACCORDINGLY, for adequate and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, each Guarantor, jointly and severally
(together with any other Person that executes an Obligation Guaranty),
guarantees to Agent and Lenders the prompt payment of the Guaranteed Debt
(defined below) as follows:
1. DEFINITIONS. Terms defined in the Credit Agreement or in ANNEX A
thereto have the same meanings when used, unless otherwise defined, in this
Guaranty. As used in this Guaranty:
AGENT is defined in the recitals to this Guaranty.
BORROWERS means Borrowers, any Borrower as debtors-in-possession, and any
receiver, trustee, liquidator, conservator, custodian, or similar party
appointed for any Borrower or for all or substantially all of any Borrower's
assets under any Debtor Relief Law.
CREDIT AGREEMENT is defined in the recitals to this Guaranty.
DEBTOR RELIEF LAW means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments, or similar laws from time to
time in effect affecting the rights of creditors generally.
GUARANTEED DEBT means, collectively, (a) the Obligations and (b) all
present and future costs,
1
EXHIBIT C
Attorney Costs, and expenses reasonably incurred by Agent or any Lender to
enforce any Borrower's, any Guarantor's, or any other obligor's payment of any
of the Guaranteed Debt, including, without limitation (to the extent lawful),
all present and future amounts that would become due but for the operation of
Sections 502 or 506 or any other provision of Title 11 of the United
States Code and all present and future accrued and unpaid interest (including,
without limitation, all post-maturity interest and any post-petition interest in
any proceeding under Debtor Relief Laws to which any Borrower or any Guarantor
becomes subject).
GUARANTOR and GUARANTORS is defined in the preamble to this Guaranty.
LENDER means, individually, or LENDERS means, collectively, on any date of
determination, Agent and the Lenders and their permitted successors and assigns.
SUBORDINATED DEBT means, for each Guarantor, all present and future
obligations of any Company to such Guarantor, whether those obligations are (a)
direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several, (b) due or to become due to such Guarantor, (c) held by or
are to be held by such Guarantor, (d) created directly or acquired by assignment
or otherwise, or (e) evidenced in writing.
2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty of
payment, not collection, and the circumstance that at any time or from time to
time the Guaranteed Debt may be paid in full does not affect the obligation of
any Guarantor with respect to the Guaranteed Debt incurred after that. This
Guaranty remains in effect until the Guaranteed Debt is fully paid and
performed, all commitments to extend any credit under the Loan Documents have
terminated, all Letters of Credit which have not been fully cash collateralized
have expired or been terminated, and all Hedge Agreements with any Lender have
expired. No Guarantor may rescind or revoke its obligations with respect to the
Guaranteed Debt. Notwithstanding any contrary provision, it is the intention of
Guarantors, Lenders, and Agent that the amount of the Guaranteed Debt guaranteed
by Guarantors by this Guaranty shall be, but not in excess of, the maximum
amount permitted by fraudulent conveyance, fraudulent transfer, or similar laws
applicable to Guarantors. Accordingly, notwithstanding anything to the contrary
contained in this Guaranty or any other agreement or instrument executed in
connection with the payment of any of the Guaranteed Debt, the amount of the
Guaranteed Debt guaranteed by any Guarantor by this Guaranty shall be limited to
an aggregate amount equal to the largest amount that would not render such
Guarantor's obligations hereunder subject to avoidance under Section 548 of the
United States Bankruptcy Code or any comparable provision of any applicable
state law.
3. CONSIDERATION. Each Guarantor represents and warrants that its
liability under this Guaranty may reasonably be expected to directly or
indirectly benefit it.
4. CUMULATIVE RIGHTS. If any Guarantor becomes liable for any indebtedness
owing by any Borrower to Agent or any Lender, other than under this Guaranty,
that liability shall not be in any manner impaired or affected by this Guaranty.
The rights of Agent or Lenders under this Guaranty are cumulative of any and all
other rights that Agent or Lenders may ever have against any Guarantor. The
exercise by Agent or Lenders of any right under this Guaranty or otherwise does
not preclude the concurrent or subsequent exercise of any other right.
5. PAYMENT UPON DEMAND. If an Event of Default exists, each Guarantor
shall, on demand and without further notice of dishonor and without any notice
having been given to any
2
EXHIBIT C
Guarantor previous to that demand of either the acceptance by Agent or Lenders
of this Guaranty or the creation or incurrence of any Guaranteed Debt, pay the
amount of the Guaranteed Debt then due and payable to Agent and Lenders;
provided that, if an Event of Default exists and Agent or Lenders cannot, for
any reason, accelerate the Obligations, then the Guaranteed Debt shall be, as
among Guarantors, Agent, and Lenders, a fully matured, due, and payable
obligation of Guarantors to Agent and Lenders. It is not necessary for Agent or
Lenders, in order to enforce that payment by any Guarantor, first or
contemporaneously to institute suit or exhaust remedies against any Borrower or
others liable on any Guaranteed Debt or to enforce rights against any Collateral
securing any Guaranteed Debt.
6. SUBORDINATION. The Subordinated Debt is expressly subordinated to the
full and final payment of the Guaranteed Debt. Each Guarantor agrees not to
accept any payment of any Subordinated Debt from any Company if an Event of
Default exists. If any Guarantor receives any payment of any Subordinated Debt
in violation of the foregoing, such Guarantor shall hold that payment in trust
for Agent and Lenders and promptly turn it over to Agent, in the form received
(with any necessary endorsements), to be applied to the Guaranteed Debt.
7. SUBROGATION AND CONTRIBUTION. Until payment in full of the Guaranteed
Debt, the termination of the obligation of Lenders to extend credit under the
Loan Documents, and expiration of all Hedge Agreements between any Loan Party
and any Lender, (a) no Guarantor may assert, enforce, or otherwise exercise any
right of subrogation to any of the rights or Liens of Agent or Lenders or any
other beneficiary against any Borrower or any other obligor on the Guaranteed
Debt or any Collateral or other security or any right of recourse,
reimbursement, subrogation, contribution, indemnification, or similar right
against any Borrower or any other obligor on any Guaranteed Debt or any
guarantor of it, (b) each Guarantor defers all of the foregoing rights (whether
they arise in equity, under contract, by statute, under common law, or
otherwise), and (c) each Guarantor defers the benefit of, and subordinates any
right to participate in, any Collateral or other security given to Agent or
Lenders or any other beneficiary to secure payment of any Guaranteed Debt.
8. NO RELEASE. Guarantors' obligations under this Guaranty shall not be
released, diminished, or affected by the occurrence of any one or more of the
following events: (a) any taking or accepting of any other security or assurance
for any Guaranteed Debt; (b) any release, surrender, exchange, subordination,
impairment, or loss of any Collateral securing any Guaranteed Debt; (c) any full
or partial release of the liability of any other obligor on any Guaranteed Debt,
except for any final release resulting from payment in full of such Guaranteed
Debt; (d) the modification of, or waiver of compliance with, any terms of any
other Loan Document; (e) the insolvency, bankruptcy, or lack of corporate or
partnership power of any other obligor at any time liable for any Guaranteed
Debt, whether now existing or occurring in the future; (f) any renewal,
extension, or rearrangement of any Guaranteed Debt or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by Agent or
any Lender to any other obligor on any Guaranteed Debt; (g) any neglect, delay,
omission, failure, or refusal of Agent or any Lender to take or prosecute any
action in connection with the Guaranteed Debt or to foreclose, take, or
prosecute any action in connection with any Loan Document; (h) any failure of
Agent or any Lender to notify any Guarantor of any renewal, extension, or
assignment of any Guaranteed Debt, or the release of any security or of any
other action taken or refrained from being taken by Agent or any Lender against
any Borrower or any new agreement between Agent, any Lender, and any Borrower;
it being understood that neither Agent nor any Lender is required to give any
Guarantor any notice of any kind under any circumstances whatsoever with respect
to or in connection with any Guaranteed Debt, other than any notice required to
be given to any Guarantor by law or elsewhere in this Guaranty; (i) the
unenforceability of any Guaranteed Debt against any other obligor or any
security securing same because
3
EXHIBIT C
it exceeds the amount permitted by law, the act of creating it is ultra vires,
the officers creating it exceeded their authority or violated their fiduciary
duties in connection with it, or otherwise; or (j) any payment of any Guaranteed
Debt to Agent or any Lender is held to constitute a preference under any Debtor
Relief Law or for any other reason Agent or any Lender is required to refund
that payment or make payment to someone else (and in each such instance this
Guaranty will be reinstated in an amount equal to that payment).
9. WAIVERS. By execution hereof, each Guarantor acknowledges and agrees to
the waivers set forth in SECTION 13.9 of the Credit Agreement. To the maximum
extent lawful, each Guarantor waives all rights by which it might be entitled to
require suit on an accrued right of action in respect of any Guaranteed Debt or
require suit against any Borrower or others.
10. LOAN DOCUMENTS. By execution hereof, each Guarantor covenants and
agrees that certain representations, warranties, terms, covenants, and
conditions set forth in the Loan Documents are applicable to Guarantors and
shall be imposed upon Guarantors, and each Guarantor reaffirms that each such
representation and warranty is true and correct and covenants and agrees to
promptly and properly perform, observe, and comply with each such term,
covenant, or condition. Moreover, each Guarantor acknowledges and agrees that
this Guaranty is subject to the offset provisions of the Loan Documents in favor
of Agent and Lenders. In the event the Credit Agreement or any other Loan
Document shall cease to remain in effect for any reason whatsoever during any
period when any part of the Guaranteed Debt remains unpaid, the terms,
covenants, and agreements of the Credit Agreement or such other Loan Document
incorporated herein by reference shall nevertheless continue in full force and
effect as obligations of Guarantors under this Guaranty.
11. RELIANCE AND DUTY TO REMAIN INFORMED. Each Guarantor confirms that it
has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Each Guarantor confirms that it has made its own
independent investigation with respect to Borrowers' creditworthiness and is not
executing and delivering this Guaranty in reliance on any representation or
warranty by Agent or any Lender as to that creditworthiness. Each Guarantor
expressly assumes all responsibilities to remain informed of the financial
condition of Borrowers and any circumstances affecting Borrowers' ability to
perform under the Loan Documents to which it is a party or any Collateral
securing any Guaranteed Debt.
12. NO REDUCTION. The Guaranteed Debt shall not be reduced, discharged, or
released because or by reason of any existing or future offset, claim, or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of any Borrower or any other obligor against Agent or any Lender or
against payment of the Guaranteed Debt, whether that offset, claim, or defense
arises in connection with the Guaranteed Debt or otherwise. Those claims and
defenses include, without limitation, failure of consideration, breach of
warranty, fraud, bankruptcy, incapacity/infancy, statute of limitations, lender
liability, accord and satisfaction, usury, forged signatures, mistake,
impossibility, frustration of purpose, and unconscionability.
13. INSOLVENCY OF GUARANTOR. Should any Guarantor become insolvent, or
fail to pay such Guarantor's debts generally as they become due, or voluntarily
seek, consent to, or acquiesce in, the benefit or benefits of any Debtor Relief
Law (other than as a creditor or claimant), or become a party to (or be made the
subject of) any proceeding provided for by any Debtor Relief Law (other than as
a creditor or claimant) that could suspend or otherwise adversely affect the
rights of Agent or any Lender
4
EXHIBIT C
granted hereunder, then, in any such event, the Guaranteed Debt shall be, as
among such Guarantor, Agent and Lenders, a fully matured, due, and payable
obligation of such Guarantor to Agent and Lenders (without regard to whether any
Borrower is then in default under the Loan Documents or whether the Obligations,
or any part thereof, is then due and owing by any Borrower to any Lender),
payable in full by such Guarantor to Lenders upon demand, and the amount thereof
so payable shall be the estimated amount owing in respect of the contingent
claim created hereunder.
14. LOAN DOCUMENT. This Guaranty is a Loan Document and is subject to the
applicable provisions of SECTION 13 of the Credit Agreement, including, without
limitation, the provisions relating to GOVERNING LAW, CHOICE OF FORUM, SERVICE
OF PROCESS AND JURISDICTION, AND WAIVER OF JURY TRIAL, all of which are
incorporated into this Guaranty by reference the same as if set forth in this
Guaranty verbatim.
15. NOTICES. To be effective, notices required or permitted to be given
under this Guaranty must be in writing, shall be delivered as provided in
SECTION 13.8 of the Credit Agreement to the address or facsimile number set
forth on the signature pages to this Guaranty, and shall be effective as
provided in SECTION 13.8 of the Credit Agreement.
16. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this
Guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced.
17. AGENT AND LENDERS. Agent is Agent for each Lender under the Credit
Agreement. All rights granted to Agent under or in connection with this Guaranty
are for each Lender's ratable benefit. Agent may, without the joinder of any
Lender, exercise any rights in Agent's or Lenders' favor under or in connection
with this Guaranty. Agent's and each Lender's rights and obligations vis-a-vis
each other may be subject to one or more separate agreements between those
parties. However, no Guarantor is required to inquire about any such agreement
or is subject to any terms of such agreement unless such Guarantor specifically
joins such agreement. Therefore, neither Guarantor nor its successors or assigns
is entitled to any benefits or provisions of any such separate agreement or is
entitled to rely upon or raise as a defense any party's failure or refusal to
comply with the provisions of such agreement.
18. PARTIES. This Guaranty benefits Agent, Lenders, and their respective
successors and assigns and binds Guarantors and their respective successors and
assigns. Upon appointment of any successor Agent under the Credit Agreement, all
of the rights of Agent under this Guaranty automatically vest in that new Agent
as successor Agent on behalf of Lenders without any further act, deed,
conveyance, or other formality other than that appointment. The rights of Agent
and Lenders under this Guaranty may be transferred with any assignment of the
Guaranteed Debt. The Credit Agreement contains provisions governing assignments
of the Guaranteed Debt and of rights and obligations under this Guaranty.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) TO FOLLOW.
5
EXHIBIT C
EXECUTED as of the date first stated in this Guaranty.
GUARANTORS: NOTICE INFORMATION FOR ALL GUARANTORS:
- --------------------------------- --------------------------------------
--------------------------------------
--------------------------------------
By:
---------------------------------
Name:
-------------------------
Title:
------------------------
SIGNATURE PAGE TO OBLIGATION GUARANTY
EXHIBIT D
NOTICE OF BORROWING
Date: __________________, 200_
To: BANK OF AMERICA, N.A., individually as a Lender and as agent for itself
and the other Lenders (the "AGENT") under that certain Credit Agreement
dated as of July 31, 2003 (such agreement, as it may be amended, restated,
or otherwise modified from time to time, the "CREDIT AGREEMENT"), by and
among the Agent, Westlake Chemical Corporation and certain of its domestic
subsidiaries listed as Borrowers thereto (collectively, the "BORROWERS"),
and the Lenders party thereto.
Ladies and Gentlemen:
The undersigned, Westlake Chemical Corporation ("WESTLAKE"), on its behalf
and as agent for the other Borrowers refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is ____________, 200___.
2. The aggregate amount of the proposed Borrowing is $_____________.
3. The Borrowing is to be comprised of $_______ of Base Rate and $_______
of LIBOR Rate Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans, if any,
included in the Borrowing shall be _____ month[s].
5. Name of Borrower or Borrowers to receive all or any portion of the
requested Borrowing and the amount to be advanced to such Borrower or Borrowers:
_________________________
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Loan Parties contained in
the Credit Agreement are true and correct as though made on and as of such date
and except to the extent that (a) the Agent and the Lenders have been notified
in writing by any Borrower that any representation or warranty is not correct
and the Required Lenders have explicitly waived in writing compliance with such
representation or warranty or (b) any representation or warranty has been
qualified by the updated information reflected in, and as permitted under, the
Compliance Certificate submitted by Westlake to the Agent periodically;
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing;
(c) The full amount of the Maximum Revolver Amount has been reserved
under (a) Section [4.09(b)(1)] (the basket permitting the credit facilities) of
the indenture for the Bond Debt and (b) Section 8.03(c)(i) of the Fixed Asset
Loan; and
1
EXHIBIT D
(d) The proposed Borrowing will not cause the aggregate principal amount
of all outstanding Revolving Loans plus the aggregate amount available for
drawing under all outstanding Letters of Credit, to exceed the Borrowing Base,
the Maximum Revolver Amount, or the Maximum Inventory Amount.
IN WITNESS WHEREOF, Westlake has caused this Notice of Borrowing to be
executed and delivered on this ___ day of __________, 200_.
2
EXHIBIT D
WESTLAKE CHEMICAL CORPORATION, ON ITS
BEHALF AND AS AGENT FOR THE OTHER
BORROWERS
By:
---------------------------------
Name:
----------------------------
Title:
---------------------------
Signature Page to Notice of Borrowing
EXHIBIT E
NOTICE OF CONTINUATION/CONVERSION
Date: __________________, 200_
To: BANK OF AMERICA, N.A., individually as a Lender and as agent for itself
and the other Lenders (the "AGENT") under that certain Credit Agreement
dated as of July 31, 2003 (such agreement, as it may be amended, restated,
or otherwise modified from time to time, the "CREDIT AGREEMENT"), by and
among the Agent, Westlake Chemical Corporation and certain of its domestic
subsidiaries listed as Borrowers thereto (collectively, the "BORROWERS"),
and the Lenders party thereto.
Ladies and Gentlemen:
The undersigned, Westlake Chemical Corporation ("WESTLAKE"), on its behalf
and as agent for the other Borrowers refers to the Credit Agreement, the terms
defined therein being used herein as therein defined, and hereby gives you
notice irrevocably of the [conversion] [continuation] of the Loans specified
herein, that:
1. The Continuation/Conversion Date is _______, 200_.
2. The aggregate amount of the Loans to be [converted] [continued] is
$________.
3. The Loans are to be [converted into] [continued as] [LIBOR Rate]
[Base Rate] Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans
included in the [conversion] [continuation] shall be ____ month[s].
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the proposed
Continuation/Conversion Date, before and after giving effect thereto and to the
application of the proceeds therefrom:
(a) The representations and warranties of the Loan Parties contained in
the Credit Agreement are true and correct as though made on and as of such date
and except to the extent that (a) the Agent and the Lenders have been notified
in writing by any Borrower that any representation or warranty is not correct
and the Required Lenders have explicitly waived in writing compliance with such
representation or warranty or (b) any representation or warranty has been
qualified by the updated information reflected in, and as permitted under, the
Compliance Certificate submitted by Westlake to the Agent periodically;
(b) No Default or Event of Default has occurred and is continuing, or
would result from such proposed [conversion] [continuation]; and
(c) The proposed conversion-continuation will not cause the aggregate
principal amount of all outstanding Revolving Loans plus the aggregate amount
available for drawing under all outstanding Letters of Credit to exceed the
Borrowing Base, the Maximum Revolver Amount, or the Maximum Inventory Amount.
IN WITNESS WHEREOF, Westlake has caused this Notice of
Continuation/Conversion to be executed and delivered on this ___ day of
__________, 200_.
1 EXHIBIT E
WESTLAKE CHEMICAL CORPORATION, ON ITS
BEHALF AND AS AGENT FOR THE OTHER BORROWERS
By: ______________________________________
Name: ________________________________
Title: _______________________________
2
EXHIBIT F
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "ASSIGNMENT AND
ACCEPTANCE") dated as of ____________________, 200_ is made between
______________________________ (the "ASSIGNOR") and __________________________
(the "ASSIGNEE").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement
dated as of July 31, 2003 (as amended, amended and restated, modified,
supplemented, or renewed, the "CREDIT AGREEMENT") by and among Westlake Chemical
Corporation and certain of its domestic subsidiaries listed as Borrowers thereto
(collectively, the "BORROWERS"), the several financial institutions from time to
time party thereto (including the Assignor, the "LENDERS"), and Bank of America,
N.A., as agent for the Lenders (the "Agent"). Any terms defined in the Credit
Agreement and not defined in this Assignment and Acceptance are used herein as
defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to make Revolving Loans (the "REVOLVING COMMITTED LOANS") to the
Borrowers in an aggregate amount not to exceed $__________ (the "REVOLVING
COMMITMENT");
WHEREAS, the Assignor has made Revolving Committed Loans in the
aggregate principal amount of $__________ to the Borrowers;
WHEREAS, [the Assignor has acquired a participation in its pro rata
share of the Letter of Credit Issuer's liabilities under Letters of Credit in an
aggregate principal amount of $____________ (the "L/C OBLIGATIONS")] [no Letters
of Credit are outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Revolving Commitment, together with a corresponding portion of
each of its outstanding Revolving Committed Loans and L/C Obligations, in an
aggregate amount equal to $__________ (the "ASSIGNED AMOUNT") on the terms and
subject to the conditions set forth herein and the Assignee wishes to accept
assignment of such rights and to assume such obligations from the Assignor on
such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment
and Acceptance, (i) the Assignor hereby sells, transfers, and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes, and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "ASSIGNEE'S PERCENTAGE
SHARE") of (A) the Revolving Commitment, the Revolving Committed Loans, and the
L/C Obligations of the Assignor and (B) all related rights, benefits,
obligations, liabilities, and indemnities of the Assignor under and in
connection with the Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined
in SECTION 5
1 EXHIBIT F
hereof), the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Lender
under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Revolving Commitment
in an amount equal to the Assigned Amount. The Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender. It is
the intent of the parties hereto that the Revolving Commitment of the Assignor
shall, as of the Effective Date, be reduced by an amount equal to the Assigned
Amount, and the Assignor shall relinquish its rights and be released from its
obligations under the Credit Agreement to the extent such obligations have been
assumed by the Assignee; provided, however, the Assignor shall not relinquish
its rights under SECTIONS 3.8, 4, and 13.11 of the Credit Agreement to the
extent such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's Revolving Commitment will be
$__________ and Revolving Committed Loans will be $__________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's Revolving Commitment will be
$__________ and Revolving Committed Loans will be $__________.
2. Payments.
(a) As consideration for the sale, assignment, and transfer
contemplated in SECTION 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to the purchase
price agreed between the Assignor and the Assignee for the Assigned Amount.
(b) The [Assignor] [Assignee] further agrees to pay to the
Agent a processing fee in the amount specified in SECTION 11.2(A) of the Credit
Agreement.
3. Reallocation of Payments.
Any interest, fees, and other payments accrued to the
Effective Date with respect to the Revolving Commitment, Revolving Committed
Loans, and L/C Obligations shall be for the account of the Assignor. Any
interest, fees, and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignee. Each of
the Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees, and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of
the Credit Agreement and the Schedules and Exhibits thereto, together with
copies of the most recent Financial Statements of the Loan Parties, and such
other documents and information as it has deemed appropriate to make its own
credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance upon
the Assignor, the Agent, or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Credit
Agreement.
5. Effective Date; Notices.
2 EXHIBIT F
(a) As between the Assignor and the Assignee, the effective
date for this Assignment and Acceptance shall be __________, 200_ (the
"EFFECTIVE DATE"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Agent (if necessary) required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
shall have been duly obtained and shall be in full force and effect as of the
Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with SECTION 11.2 of
the Credit Agreement (if applicable);
(v) the processing fee referred to in SECTION 2(B) hereof
and in SECTION 11.2(A) of the Credit Agreement shall have been paid to the
Agent; and
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrowers and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached hereto
as SCHEDULE 1.
6. Agent.
(a) The Assignee hereby appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Lenders pursuant to the
terms of the Credit Agreement.
[INCLUDE (b) ONLY IF ASSIGNOR IS AGENT]
(b) The Assignee shall assume no duties or obligations held
by the Assignor in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Agent and the
Borrowers that under applicable law and treaties no tax will be required to be
withheld by the Agent or the Borrowers with respect to any payments to be made
to the Assignee hereunder, (b) agrees to furnish (if it is organized under the
laws of any jurisdiction other than the United States or any State thereof) to
the Agent and the Borrowers prior to the time that the Agent or the Borrowers is
required to make any payment of principal, interest, or fees in respect of the
interest assigned hereunder, duplicate executed originals of either U.S.
Internal Revenue Service Form W-8ECI or U.S. Internal Revenue Service Form
W-8BEN (wherein the Assignee claims entitlement to the benefits of a tax treaty
that provides for a complete exemption from U.S. federal income withholding tax
on all payments hereunder) and agrees to provide new Forms W-8ECI or W-8BEN upon
the expiration of any previously delivered form or comparable statements in
accordance with applicable U.S. law and regulations and amendments thereto, duly
executed and completed by the Assignee, and (c) agrees to comply with all
applicable U.S. laws and regulations with regard to such withholding tax
exemption.
3 EXHIBIT F
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to take,
and has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations, or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery, and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery, or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid, and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof, subject,
as to enforcement, to bankruptcy, insolvency, moratorium, reorganization, and
other laws of general application relating to or affecting creditors' rights and
to general equitable principles.
(b) The Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties, or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency, or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto. The Assignor makes no representation or warranty in connection
with, and assumes no responsibility with respect to, the solvency, financial
condition, or statements of the Companies, or the performance or observance by
any Loan Party of any of its respective obligations under the Credit Agreement
or any other instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations, or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery, and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery, or
performance; (iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes the legal, valid, and binding obligation of the
Assignee, enforceable against the Assignee in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization, and other laws of general application relating to or affecting
creditors' rights and to general equitable principles; and (iv) it is an
Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and
deliver such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Borrowers or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this
Assignment and
4 EXHIBIT F
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power, or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own
costs and expenses incurred in connection with the negotiation, preparation,
execution, and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF [TEXAS]. The Assignor and
the Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in Texas over any suit, action, or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such Texas State or Federal court. Each party to this Assignment
and Acceptance hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
this Assignment and Acceptance to be executed and delivered by their duly
authorized officers as of the date first above written.
5 EXHIBIT F
[ASSIGNOR]
By:______________________________________
Title:___________________________________
Address:_________________________________
[ASSIGNEE]
By:______________________________________
Title:___________________________________
Address:_________________________________
6 EXHIBIT F
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_________________, 200_
Bank of America, N.A, as Agent (as hereinafter defined)
55 S. Lake Avenue, Suite 900
Pasadena, CA 91101
Attn: Robert Mostert
Re: Westlake Chemical Corporation et al.
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of July 31, 2003 (such
agreement, as it may be amended, restated, or otherwise modified from time to
time, the "CREDIT AGREEMENT") by and among Westlake Chemical Corporation and
certain of its domestic subsidiaries listed as Borrowers thereto (collectively,
the "BORROWERS"), the Lenders referred to therein, and Bank of America, N.A., as
agent for the Lenders (the "AGENT"). Terms defined in the Credit Agreement are
used herein as therein defined.
1. We hereby give the Agent notice of, and request the Agent's consent
to, the assignment by __________________ (the "ASSIGNOR") to _______________
(the "ASSIGNEE") of _____% of the right, title, and interest of the Assignor in
and to the Credit Agreement (including the right, title, and interest of the
Assignor in and to the Revolving Commitment of the Assignor to make Revolving
Loans, all outstanding Revolving Loans made by the Assignor, and the Assignor's
participation in the Letters of Credit pursuant to the Assignment and Acceptance
Agreement attached hereto (the "ASSIGNMENT AND ACCEPTANCE"). We understand and
agree that the Assignor's Revolving Commitment to make Revolving Loans, as of ,
200 , is $ ___________, the aggregate amount of its outstanding Revolving Loans
is $_____________, and its participation in Letters of Credit is $_____________.
2. The Assignee agrees that, upon receiving the consent of the Agent to
such assignment, the Assignee will be bound by the terms of the Credit Agreement
as fully and to the same extent as if the Assignee were the Lender originally
holding such interest in the Credit Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address: ____________________
Assignee name: _____________________
Address: ___________________________
Attention: _________________________
Telephone: (___) __________________
Telecopier: (___) _________________
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
Telex (Answerback): ___
(B) Payment Instructions:
Account No.: ______________________
At: ______________________
______________________
______________________
Reference: ______________________
Attention: ______________________
4. The Agent is entitled to rely upon the representations,
warranties, and covenants of each of the Assignor and Assignee contained in the
Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers, or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By: __________________________
Title: __________________________
[NAME OF ASSIGNEE]
By: __________________________
Title: __________________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
Bank of America, N.A.,
as Agent
By: _________________________
Title: _________________________
2
EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
(Westlake Chemical Corporation et al.)
FOR ________ENDED ________________, ______
DATE: _________________, _____
AGENT: Bank of America, N.A.
BORROWER: Westlake Chemical Corporation and certain of its domestic subsidiaries
This certificate is delivered under the Credit Agreement, dated as of July
31, 2003 (as amended, modified, supplemented, or restated from time to time, the
"CREDIT AGREEMENT"), among Agent, Westlake Chemical Corporation and certain of
its domestic subsidiaries listed as Borrowers thereto (collectively, the
"BORROWERS"), and the Lenders party thereto. Capitalized terms used herein and
not otherwise defined herein shall have the meaning given to such terms in the
Credit Agreement.
I certify to Agent and Lenders on behalf of the Loan Parties that:
(a) I am a Responsible Officer of the Loan Parties in the position(s)
set forth under my signature below;
(b) the Financial Statements of the Loan Parties attached to this
certificate were prepared in accordance with GAAP, and present fairly in all
material respects the consolidated, and, with respect to annual or quarterly
Financial Statements, consolidating, financial condition and results of
operations of Westlake and its Subsidiaries as of, and for the (______ months,
or fiscal year) ended on, ____________, _____(the "SUBJECT PERIOD") [(subject
only to normal year-end audit adjustments)];
(c) a review of the activities of the Loan Parties during the Subject
Period has been made under my supervision with a view to determining whether,
during the Subject Period, the Loan Parties have kept, observed, performed, and
fulfilled all of their respective obligations under the Loan Documents, and
during the Subject Period, (i) all of the representations and warranties of the
Loan Parties contained in the Credit Agreement and the other Loan Documents are
correct and complete in all material respects as at the date pf this
certificate, except for those that speak as of a particular date, (ii) each of
the Loan Parties is, as of the date of this certificate, in compliance in all
material respects with all of its respective covenants and agreements in the
Credit Agreement and the other Loan Documents (except for the deviations, if
any, set forth on ANNEX A to this certificate), and (iii) no Event of Default
(nor any Default) exists as of the date of this certificate or existed during
the Subject Period and at the end of such period, which has not been cured or
waived (except the Defaults or Events of Defaults, if any, described on ANNEX A
to this Certificate);
(d) ANNEX B to this certificate sets forth in reasonable detail the
calculation of the Fixed Charge Coverage Ratio at the end of the Subject Period
(for the immediately preceding twelve (12) month period);
(e) to the extent any Equity Issuance or Collateral disposition occurred
during the Subject
EXHIBIT G
Period, all mandatory prepayments reductions required pursuant to SECTION 3.3
have been made;
(f) attached hereto as ANNEX C, is a true and correct copy of a schedule
indicating the outstanding principal amount of the Debt permitted by SECTION
7.13(K) of the Credit Agreement at the end of the Subject Period; and
(g) during the Subject Period, any revisions to SCHEDULES 6.3, 6.5,
6.12, and 6.13 to the Credit Agreement or any Schedule or Annex to each
Collateral Document that was required to be revised and supplied to Agent in
accordance with the terms of the Loan Documents has been so revised and
supplied.
WESTLAKE CHEMICAL CORPORATION, ON ITS
BEHALF AND AS AGENT FOR THE OTHER LOAN PARTIES
By: _______________________________________
Name: ________________________________
Title: ________________________________
EXHIBIT G
2
ANNEX A TO COMPLIANCE CERTIFICATE
DEVIATIONS FROM LOAN DOCUMENTS/
EVENTS OF DEFAULTS OR DEFAULTS
(If none, so state.)
ANNEX A TO COMPLIANCE CERTIFICATE
ANNEX B TO COMPLIANCE CERTIFICATE
FIXED CHARGE COVERAGE RATIO CALCULATION
[Form to be Agreed to by Agent and Borrowers]
ANNEX B TO COMPLIANCE CERTIFICATE