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Exhibit 10.4
SUBSIDIARY GUARANTY AGREEMENT
GUARANTY dated as of May 13, 1994 ("Agreement") among each of the
Subsidiary Guarantors listed on the signature pages hereof under the caption
"Subsidiary Guarantors" or which hereafter becomes a party hereto pursuant to
Section 3.08(b) (collectively, the "Subsidiary Guarantors") and NationsBank of
Texas, N.A., as agent for the banks under the Credit Agreement referred to
below (the "Agent").
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement dated as of May 13, 1994 among
Union Texas Petroleum Holdings, Inc. (the direct or indirect parent of each of
the Subsidiary Guarantors) (the "Company"), the Banks and Co-Agents parties
thereto and the Agent (the "Credit Agreement"), the Company is entitled,
subject to certain conditions, to borrow up to $200,000,000;
WHEREAS, as a condition to borrowings under the Credit Agreement, each
Required Guarantor is required to execute and deliver to the Agent this
Agreement whereby such entity shall, subject to Section 2.08 hereof, guarantee
the payment when due of the principal of and interest on all Loans and all
other amounts payable at any time by any Obligor under any of the Financing
Documents, including, without limitation, interest which accrues during a
proceeding which occurs under the U.S. Bankruptcy Code or which would otherwise
accrue under the terms of any of the Financing Documents, but for a proceeding
under the U.S. Bankruptcy Code (such principal, interest and other amounts
being herein called the "Guaranteed Amounts");
WHEREAS, in consideration of the financial and other support that the
Company has provided, and such financial and other support as the Company may
in the future provide, to the Subsidiary Guarantors and in order to induce the
Banks to enter into the Credit Agreement and to consider requests to extend
financial accommodations to the Company, the Subsidiary Guarantors are willing
to guarantee, subject to Section 2.08 hereof, the Guaranteed Amounts;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined.
ARTICLE II
GUARANTEES
SECTION 2.01. The Guarantees. Subject to Section 2.08, the
Subsidiary Guarantors hereby jointly, severally, unconditionally and
irrevocably guarantee to the Agent, for the ratable benefit of the Banks, the
full and punctual payment of all present and future Guaranteed Amounts as and
when the same shall become due and payable, whether at maturity, by declaration
or otherwise, according to the terms thereof. In case of failure by the
Company punctually to pay any Guaranteed Amount, the Subsidiary Guarantors
hereby jointly, severally and unconditionally agree, forthwith upon demand by
the Agent, to make payment thereof to the Agent at the place and in the manner
specified in the Credit Agreement.
SECTION 2.02. Guarantees Unconditional. Subject to Section 2.08,
the obligations of each Subsidiary Guarantor under this Article II shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of the Company or any
other Subsidiary Guarantor under any Financing Document or any
Guaranteed Amount;
(b) any modification or amendment of or supplement to (i)
this Agreement insofar as the same does not purport to modify the
rights or obligations of such Subsidiary Guarantor hereunder or (ii)
any other Financing Document;
(c) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect security, or of
any guarantee or other liability of any third party, for any
obligation of
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the Company or any Subsidiary Guarantor under any Financing Document
or any Guaranteed Amount;
(d) any change in the corporate existence, structure or
ownership of the Company or any Subsidiary, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the
Company or any other Subsidiary or their respective assets;
(e) the existence of any claim, set-off or other rights
which any Subsidiary Guarantor may have at any time against the
Company or any Subsidiary Guarantor, the Agent, any Bank or any other
Person, whether or not arising in connection with any Financing
Document or any Guaranteed Amount,provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;
(f) any invalidity or unenforceability relating to or
against the Company or any Subsidiary Guarantor for any reason of any
Financing Document or any Guaranteed Amount, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Company or any Subsidiary Guarantor of any Guaranteed Amount; or
(g) any other act or omission to act or delay of any kind
by the Company or any Subsidiary Guarantor, the Agent, any Bank or any
other Person or any other circumstances whatsoever that might, but for
the provisions of this paragraph, constitute a legal or equitable
discharge of the obligations of a Subsidiary Guarantor under this
Article II.
SECTION 2.03. Discharge; Reinstatement in Certain Circumstances.
Subject to Section 2.08, each Subsidiary Guarantor's obligations under this
Article II shall remain in full force and effect until all of the Commitments
shall have been terminated in their entirety and the Guaranteed Amounts shall
have been paid in full. If at any time any payment of or any amount payable by
the Company or any Subsidiary Guarantor in respect of any Guaranteed Amount is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of such Person or otherwise, each Subsidiary
Guarantor's obligations under this Article II with
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respect to such payment shall be reinstated at such time as though such payment
had become due but had not been made at such time.
SECTION 2.04. Waiver. Each Subsidiary Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Company or any other Subsidiary Guarantor or any other
Person. Each Subsidiary Guarantor hereby irrevocably waives each and every
right to which it may be entitled by virtue of the suretyship laws of the State
of Texas, including, without limitation, any and all rights it may have
pursuant to Rule 31 or Rule 32, Texas Rules of Civil Procedure, Section 17.001
of the Texas Civil Practice and Remedies Code and Chapter 34 of the Texas
Business and Commerce Code.
SECTION 2.05. Subrogation and Contribution. Each Subsidiary
Guarantor irrevocably waives any and all rights to which it may be entitled, by
operation of law or otherwise, upon making any payment hereunder (i) to be
subrogated to the rights of the payee against the Company with respect to such
payment or otherwise to be reimbursed, indemnified or exonerated by the Company
in respect thereof or (ii) to receive any payment, in the nature of
contribution or for any other reason, from any other Obligor with respect to
such payment, in each case until such time as all of the Commitments shall have
been terminated in their entirety and the Guaranteed Amounts shall have been
paid in full.
SECTION 2.06. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by the Company or any Subsidiary Guarantor in
respect of any Guaranteed Amount is stayed upon the insolvency, bankruptcy or
reorganization of such Person, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement or any other agreement or
instrument evidencing such Guaranteed Amount shall nonetheless be payable by
each other Subsidiary Guarantor hereunder forthwith on demand by the Agent.
SECTION 2.07. Representations and Warranties. Each Subsidiary
Guarantor represents and warrants that as of the date hereof, and after giving
effect to this Agreement and the contingent obligations evidenced hereby
(including any limitation on the amount payable under this Agreement pursuant
to Section 2.08), it is and will be solvent, and has and will have assets
which, fairly valued, exceed its obligations, liabilities and debts, and has
and will have property and
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assets sufficient to satisfy and repay its obligations, liabilities and debts
when the same become due.
SECTION 2.08. Limit of Liability. Each Subsidiary Guarantor shall
be liable under this Agreement only for amounts aggregating up to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state or foreign law.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy,
telex, facsimile transmission or similar writing) and (i) in the case of a
Subsidiary Guarantor, shall be given to such Subsidiary Guarantor at c/o Union
Texas Petroleum Holdings, Inc., 1330 Post Oak Boulevard, Houston, Texas 77056
(telex number: 762255) and (ii) in the case of the Company or the Agent, at
its address or telex number set forth on the signature pages of the Credit
Agreement or in any case at such other address or telex number as such party
may hereafter specify for the purpose by notice to the Agent and the Company.
Each such notice, request or other communication shall be effective (i) if
given by telex, when such telex is transmitted to the telex number specified in
this Section and the appropriate answer is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Agent shall not be effective until received.
SECTION 3.02. No Waiver; Exercise of Remedies. No failure or delay
by the Agent in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. In
exercising the rights and remedies herein provided, the Agent shall act at the
instructions of the Required Banks or, failing such instruction, at its
discretion.
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SECTION 3.03. Amendments and Waivers. Any provision of this
Agreement may be amended or waived, and any Subsidiary Guarantor may be
released from any of its obligations hereunder, if, and only if, such
amendment, waiver or release is in writing and is signed by (i) each Subsidiary
Guarantor affected thereby and (ii) the Agent with the consent of Banks at the
time having at least 66-2/3% of the aggregate amount of the Commitments or, if
the Commitments shall have been terminated, holding Notes evidencing at least
66-2/3% of the aggregate unpaid principal amount of the Loans; provided that
any Subsidiary Guarantor shall be released from its obligations hereunder upon
the terms set forth in Section 5.10 or Section 5.20 of the Credit Agreement.
SECTION 3.04. Texas Law. This Agreement shall be construed in
accordance with and governed by the law of the state of Texas.
SECTION 3.05. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH
SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND OF ANY FEDERAL COURT
LOCATED IN SUCH STATE OVER EACH OF THEM IN CONNECTION WITH ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY FINANCING DOCUMENT AND, TO THE
FULLEST EXTENT PERMITTED BY LAW, FURTHER AGREES (AND SHALL NOT CONTEST) THAT
THE PROPER VENUE FOR FILING AND MAINTAINING ANY SUCH ACTION, SUIT OR PROCEEDING
SHALL BE IN THE STATE OF TEXAS. IN ANY SUCH ACTION, SUIT OR PROCEEDING, EACH
SUBSIDIARY GUARANTOR WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS OR NOTICE AND AGREES THAT SERVICE BY FIRST CLASS MAIL, RETURN RECEIPT
REQUESTED, TO SUCH SUBSIDIARY GUARANTOR AT ITS ADDRESS FOR NOTICES HEREUNDER,
OR ANY FORM OF SERVICE PROVIDED FOR IN THE TEXAS CIVIL PRACTICE AND REMEDIES
CODE THEN IN EFFECT SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE UPON SUCH
SUBSIDIARY GUARANTOR. EACH SUBSIDIARY GUARANTOR THAT IS NOT ORGANIZED UNDER
THE LAWS OF THE UNITED STATES OR A STATE THEREOF (EACH A "NON-U.S. GUARANTOR")
HEREBY APPOINTS THE PRINCIPAL OFFICE OF CT CORPORATION SYSTEM IN HOUSTON,
TEXAS, WHICH, ON THE DATE HEREOF, IS LOCATED AT 911 DALLAS ST., HOUSTON, TEXAS
77002, AS THE AUTHORIZED AGENT THEREOF (THE "AUTHORIZED AGENT") UPON WHOM
PROCESS MAY BE SERVED IN ANY SUCH ACTION, SUIT OR PROCEEDING WHICH MAY BE
INSTITUTED IN THE STATE OF TEXAS. SUCH APPOINTMENT SHALL BE IRREVOCABLE UNLESS
AND UNTIL THE APPOINTMENT OF A SUCCESSOR AUTHORIZED AGENT FOR SUCH PURPOSE, AND
SUCH SUCCESSOR'S ACCEPTANCE OF SUCH APPOINTMENT, SHALL HAVE OCCURRED AND THE
AGENT SHALL HAVE BEEN NOTIFIED THEREOF. EACH NON-U.S. GUARANTOR AGREES TO TAKE
ANY AND ALL ACTIONS, INCLUDING, WITHOUT LIMITATION, THE FILING OF ANY AND
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ALL DOCUMENTS AND INSTRUMENTS, THAT MAY BE NECESSARY TO CONTINUE SUCH
APPOINTMENT IN FULL FORCE AND EFFECT AS AFORESAID. SERVICE OF PROCESS UPON THE
AUTHORIZED AGENT WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE
DEEMED, IN EVERY RESPECT, EFFECTIVE SERVICE OF PROCESS UPON ANY SUCH NON-U.S.
GUARANTOR. EACH NON-U.S. GUARANTOR SHALL REQUIRE THE AUTHORIZED AGENT TO AGREE
IN WRITING TO ACCEPT THE FOREGOING APPOINTMENT AS AGENT FOR SERVICE OF PROCESS.
SECTION 3.06. WAIVER OF JURY TRIAL. EACH SUBSIDIARY GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 3.07. WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY
SUBSIDIARY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH SUBSIDIARY GUARANTOR
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY DO SO, SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, AGREES, TO THE FULLEST EXTENT IT MAY
LEGALLY DO SO, THAT THE WAIVERS SET FORTH IN THIS SECTION 3.07 SHALL HAVE THE
FULLEST SCOPE PERMITTED UNDER THE FOREIGN SOVEREIGN IMMUNITIES ACT OF 1976 OF
THE UNITED STATES AND ARE INTENDED TO BE IRREVOCABLE FOR PURPOSES OF SUCH ACT.
SECTION 3.08. Successors and Assigns.
(a) All of the provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no Subsidiary Guarantor
may assign or transfer any of its rights or obligations under this
Agreement.
(b) Any Subsidiary may become a party hereto and a
Subsidiary Guarantor hereunder, without any further action by any
other party, by executing and delivering a counterpart hereof to the
Agent.
SECTION 3.09. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, and all of which
taken together shall constitute a single instrument, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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SECTION 3.10. Judgment Currency. Each Non-U.S. Guarantor agrees to
indemnify the Agent and each Bank against any loss incurred by it as a result
of any judgment or order being given or made and expressed and paid in a
currency (the "Judgment Currency") other than United States dollars and as a
result of any variation as between (i) the rate of exchange at which the United
States dollar amount is converted into the Judgment Currency for the purpose of
such judgment or order and (ii) the spot rate of exchange in The City of New
York at which the Agent or such Bank on the date of payment of such judgment or
order is able to purchase United States dollars with the amount of the Judgment
Currency actually received by the Agent or such Bank. The foregoing indemnity
shall constitute a separate and independent obligation of each Non-U.S.
Guarantor and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid. The term "spot rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of,
or conversion into, United States dollars.
SECTION 3.11. Existence. Each Subsidiary Guarantor agrees to
maintain its existence except as permitted by Section 5.02 of the Credit
Agreement.
SECTION 3.12. Taxes. (a) Any and all payments by any Subsidiary
Guarantor hereunder shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding (i) in the
case of the Agent, each Co-Agent and each Bank, United States federal income
taxes and, without duplication, any taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which the Agent,
such Co-Agent or such Bank, as the case may be, is organized or any political
subdivision thereof and (ii) in the case of each Bank, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Subsidiary
Guarantor shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Bank, any Co-Agent or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 3.12) such Bank, such Co-Agent or the Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Subsidiary Guarantor
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shall make such deductions and (iii) such Subsidiary Guarantor shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(b) Each Subsidiary Guarantor will indemnify each Bank, each
Co-Agent and the Agent for the full amount of Taxes (including, without
limitation, any Taxes imposed by any jurisdiction on amounts payable under this
Section 3.12) paid by such Bank, such Co-Agent or the Agent (as the case may
be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
legally asserted. Payments under any indemnification provided for in this
Section 3.12(b) shall be made within 30 days from the date such Bank, such
Co-Agent or the Agent (as the case may be) makes written demand therefor.
(c) Within 30 days after the date of any payment of Taxes by a
Subsidiary Guarantor, such Subsidiary Guarantor will furnish to the Agent, at
its address referred to in Section 9.01 of the Credit Agreement, the original
or a certified copy of a receipt evidencing payment thereof. Should any Bank,
any Co-Agent or the Agent ever receive any refund, credit or deduction from any
taxing authority to which such Bank, such Co-Agent or the Agent, as the case
may be, would not be entitled but for the payment by a Subsidiary Guarantor of
Taxes as required by this Section 3.12 (it being understood that the decision
as to whether or not to claim, and if claimed, as to the amount of any such
refund, credit or deduction shall be made by such Bank, such Co-Agent or the
Agent, as the case may be, in its sole discretion), such Bank, such Co-Agent or
the Agent, as the case may be, thereupon shall repay to such Subsidiary
Guarantor an amount with respect to such refund, credit or deduction equal to
any net reduction in taxes actually obtained by such Bank, such Co-Agent or the
Agent, as the case may be, and reasonably determined by such Bank, such
Co-Agent or the Agent, as the case may be, to be attributable to such refund,
credit or deduction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the date first
above written.
SUBSIDIARY GUARANTORS:
UNION TEXAS PETROLEUM
ENERGY CORPORATION
By:________________________
Title:
UNION TEXAS PRODUCTS CORPORATION
By:________________________
Title:
UNION TEXAS EAST KALIMANTAN
LIMITED
By:________________________
Title:
UNION TEXAS INTERNATIONAL
CORPORATION
By:________________________
Title:
UNISTAR, INC.
By:________________________
Title:
AGENT: NATIONSBANK OF TEXAS,
N.A., as Agent
By:________________________
Title:
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EXHIBIT A
NOTE
Houston, Texas
May 13, 1994
For value received, Union Texas Petroleum Holdings, Inc., a Delaware
corporation (the "Company"), promises to pay to the order of _________________
______________________ (the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan owed to the Bank on April 30,
1996 or as otherwise required by the Credit Agreement. The Company promises to
pay interest on the unpaid principal amount of each such Loan on the dates and
at the rate or rates provided for in the Credit Agreement (including, without
limitation, Section 2.16 thereof). All such payments of principal and interest
shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of NationsBank of Texas, N.A., 700
Louisiana St., Houston, Texas 77002.
All Loans made by the Bank and the respective Types thereof and all
repayments of the principal thereof shall be recorded by the Bank and, prior to
any transfer hereof, appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding shall be endorsed
by the Bank on the schedule attached hereto, or on a continuation of such
schedule attached to and made a part hereof; provided that the failure of the
Bank to make any such recordation or endorsement shall not affect the
obligations of the Company hereunder or under the Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement
dated as of May 13, 1994 among the Company, the lenders and Co-Agents parties
thereto and NationsBank of Texas, N.A., as Agent (as the same may be amended
from time to time, the "Credit Agreement"). Terms not defined herein and
defined in the Credit Agreement are used herein with the same
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meanings. Reference is made to the Credit Agreement for provisions for the
prepayment hereof and the acceleration of the maturity hereof. This note shall
be construed in accordance with and governed by the law of the State of Texas.
UNION TEXAS PETROLEUM
HOLDINGS, INC.
By:___________________________
Title:
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Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
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Amount of
Amount of Type of Principal Date of Notation
Date Loan Loan Repaid Payment Made By
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