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Exhibit 10.7
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$100,000,000
CREDIT AGREEMENT
dated as of
June 30, 1995
among
UNION TEXAS PETROLEUM HOLDINGS, INC.
The BANKS Listed Herein
and
NATIONSBANK OF TEXAS, N.A.
as Agent
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
UNION BANK OF SWITZERLAND, HOUSTON AGENCY
as Co-Agents
THE INDEMNIFICATION PROVISIONS OF SECTIONS 7.06 AND 9.03(b)
OF THIS AGREEMENT INCLUDE INDEMNIFICATION FROM THE
CONSEQUENCES OF THE NEGLIGENCE OF THE PERSONS INDEMNIFIED
THEREBY TO THE EXTENT SET FORTH THEREIN
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Terms and Determinations . . . . . . . . . . . . . . . 20
SECTION 1.03. Types of Borrowings . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 1.04. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 1.05. Unimar. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 1.06. Ratings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE II
THE CREDITS . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.01. Commitments to Lend . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.02. Notice of Borrowings . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.03. Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.04. Notice to Banks; Funding of Loans . . . . . . . . . . . . . . . . 24
SECTION 2.05. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.06. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.07. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.08. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.09. Optional Termination or Reduction of Commitments . . . . . . . . 27
SECTION 2.10. Mandatory Termination or Reduction of Commitments . . . . . . . . 28
SECTION 2.11. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.12. General Provisions as to Payments . . . . . . . . . . . . . . . . 28
SECTION 2.13. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.14. Computation of Interest and Fees . . . . . . . . . . . . . . . . 30
SECTION 2.15. Chapter 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.16. Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.17. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE III
CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.01. Initial Borrowing . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.02. All Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 35
SECTION 4.01. Corporate Existence and Power . . . . . . . . . . . . . . . . . . 35
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SECTION 4.02. Corporate and Governmental Authorization; Contravention . . . . . 36
SECTION 4.03. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.04. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.05. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.06. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4.07. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.08. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.09. Ownership of Restricted Subsidiaries . . . . . . . . . . . . . . 38
SECTION 4.10. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.11. Taxes and Other Obligations . . . . . . . . . . . . . . . . . . . 39
SECTION 4.12. Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.13. Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.14. United Kingdom Assets . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE V
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.01. Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.02. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.03. Primary Business . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.04. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.05. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.06. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.07. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 5.08. Consolidations and Mergers . . . . . . . . . . . . . . . . . . . 47
SECTION 5.09. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.10. Parties to Subsidiary Guaranty Agreement . . . . . . . . . . . . 48
SECTION 5.11. Restrictions on Dividends, Intercompany Loans, or Investments . . 48
SECTION 5.12. Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.13. Cross-Default . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.14. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 5.15. Adjusted Equity and Interest Coverage . . . . . . . . . . . . . . 49
SECTION 5.16. Excluded Subordinated Debt and Preferred Stock . . . . . . . . . 50
SECTION 5.17. Certain Obligations . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.18. Restrictions on Asset Sales . . . . . . . . . . . . . . . . . . . 50
SECTION 5.19. UTEK Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5.20. Conversion to Unrestricted Subsidiary . . . . . . . . . . . . . . 50
ARTICLE VI
DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . 51
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SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.02. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE VII
THE AGENT . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.01. Appointment and Authorization . . . . . . . . . . . . . . . . . . 54
SECTION 7.02. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.03. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.04. Consultation with Experts . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.05. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.07. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.08. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.09. Agent's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VIII
CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . 56
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair . . . . 56
SECTION 8.02. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 8.03. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . 57
SECTION 8.04. Base Rate Loans Substituted for Affected Euro-Dollar Loans . . . 59
SECTION 8.05. Substitution of Bank . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 9.02. No Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.03. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . 60
SECTION 9.04. Sharing of Set-Offs, Etc. . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.05. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.06. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.07. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.08. Texas Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.09. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.11. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.12. COMPLETE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.13. Liability of Co-Agents . . . . . . . . . . . . . . . . . . . . . 64
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Schedule I - [Not used]
Schedule II - Existing Subsidiaries
Schedule III - Existing Liens
Schedule IV- Existing Restrictions
Schedule V - Joint Venture Debt Agreements
Schedule VI- Outstanding Options
Exhibit A - Note
Exhibit B - Subsidiary Guaranty Agreement
Exhibit C - Opinion of General Counsel of the Company
Exhibit D - Opinion of Special Counsel for the Company
Exhibit E - Opinion of Special Counsel for the Agent
Exhibit F - Assignment and Assumption Agreement
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CREDIT AGREEMENT
Credit Agreement dated as of June 30, 1995 among Union Texas Petroleum
Holdings, Inc., the Banks party hereto, NationsBank of Texas, N.A., as Agent,
and Bank of America National Trust and Savings Association and Union Bank of
Switzerland, Houston Agency, as Co-Agents.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Acceptable Engineer" means DeGolyer & MacNaughton or such other
independent engineering firm that is mutually acceptable to the Agent and the
Company.
"Adjusted Equity" means the consolidated stockholders equity of the
Company and its Consolidated Subsidiaries, as determined on a consolidated basis
in accordance with generally accepted accounting principles, adjusted to exclude
(i) any cumulative foreign exchange translation adjustments, (ii) any non-cash
write-up or writedown of any assets of the Company and its Consolidated
Subsidiaries made after March 31, 1995 in accordance with generally accepted
accounting principles, and (iii) the non-cash effect of the adoption of any
change after March 31, 1995 required by generally accepted accounting
principles.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form requested by the Agent submitted to the
Agent (with a copy to the Company) duly completed by such Bank.
"Affiliate" means (i) any Person holding 5% or more of any class of
capital stock of the Company, and (ii) any Person (other than the Company, a
Subsidiary or a Partnership) directly or indirectly controlling, controlled by
or under common control with any Person described in clause (i). As used in this
definition of "Affiliate", the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.
"Agent" means NationsBank in its capacity as agent for the Banks
hereunder and any successor in such capacity.
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"Agreement" means this Credit Agreement dated as of June 30, 1995 among
the Company, the Banks, the Co-Agents and the Agent, as amended from time to
time in accordance with the terms hereof.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office, and (ii) in the case
of its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"Asset Sale" means any sale, lease, transfer or other disposition of
any Restricted Asset by the Company or any Restricted Subsidiary, whether such
sale, lease, transfer or other disposition is direct or indirect (such as by
selling capital stock of the Subsidiary that owns such Restricted Asset, but
excluding sales of capital stock of the Company), other than (i) farm-outs in
the ordinary course of business of properties containing substantially no proved
reserves at the time of the farm-out, (ii) sales in the ordinary course of
business of Hydrocarbons after severance, (iii) sales, transfers, leases or
other dispositions of inventory and obsolete or surplus equipment in the
ordinary course of business, and (iv) sales, transfers, leases or other
dispositions to the Company or any Restricted Subsidiary if no Default then
exists or would result therefrom.
"Assignee" has the meaning set forth in Section 9.06(c).
"Assignment" means an Assignment and Assumption Agreement in
substantially the form of Exhibit F hereto.
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 9.06(c), and their respective
successors.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Corporate Base Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.
"Base Rate Loan" means a Loan which bears interest as provided in
Section 2.07(a).
"Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Borrowing" has the meaning set forth in Section 1.03.
"Cash Interest Expense" means, for any period, the sum of (i) the
aggregate amount accrued during such period by the Company and its Consolidated
Subsidiaries for interest determined on a consolidated basis, but excluding
interest on
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Non-Recourse Debt and interest on Debt of Unrestricted Subsidiaries to the
extent such Debt does not constitute Debt of the Company or any Restricted
Subsidiary plus (ii) the aggregate amount paid during such period by the Company
and its Consolidated Subsidiaries for dividends on Restricted Preferred Stock,
determined on a consolidated basis.
"Co-Agents" means Bank of America National Trust and Savings
Association and Union Bank of Switzerland, Houston Agency in their capacities as
Co-Agents hereunder.
"Commitment" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof (or, if such Bank
is an Assignee and its name is not set forth on the signature pages hereof, the
amount of its Commitment as set forth in the Assignment pursuant to which it
became a Bank), as such amount may be reduced from time to time pursuant to
Sections 2.09 and 2.10 or reduced or increased from time to time pursuant to any
Assignment to which it is a party.
"Company" means Union Texas Petroleum Holdings, Inc., a Delaware
corporation.
"Company's 1993 Form 10-K" means the Company's annual report on Form
10-K for 1993, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"Company's 1994 Form 10-K" means the Company's annual report on Form
10-K for 1994, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"Consolidated Debt" means, at any date, an amount equal to (a) the sum
(without duplication) of (i) the aggregate amount of Debt (other than Defeased
Debt, Excluded Subordinated Debt not exceeding $100,000,000 and Debt that would
not constitute Debt of the Company or any of its Consolidated Subsidiaries if
clause (viii) were not included in the definition herein of Debt) of the Company
and its Consolidated Subsidiaries, determined on a consolidated basis as of such
date, plus (ii) the Unimar Percentage at such date of the aggregate Debt (other
than Defeased Debt and Debt that would not constitute Debt of Unimar or any of
the Unimar Restricted Subsidiaries if clause (viii) were not included in the
definition herein of Debt) of Unimar and the Unimar Restricted Subsidiaries,
determined on a consolidated basis as of such date, plus (iii) the Excess Letter
of Credit/Guarantee Amount at such date, minus (b) the sum (without duplication
and only to the extent that any of the following are included in the foregoing
clause (a)) at such date of (1) Debt of Unrestricted Subsidiaries to the extent
such Debt does not constitute Debt of the Company or any Restricted Subsidiary,
plus (2) Non-Restricted Asset Non-Recourse Debt, plus (3) Existing Pakistan
Non-Recourse Debt.
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"Consolidated Subsidiary" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Company in
its consolidated financial statements as of such date.
"Convert", "Conversion" and "Converted" each refers to (i) the change
of Loans of one Type into Loans of the other Type pursuant to Section 2.03 or
Article VIII, (ii) the continuation of all Euro-Dollar Loans comprising the same
Borrowing as such for an additional Interest Period pursuant to Section 2.03,
and (iii) an election to change, pursuant to Section 2.03, the Interest Period
applicable to all Euro-Dollar Loans comprising the same Borrowing prior to the
end of the Interest Period then applicable thereto.
"Corporate Base Rate" means a fluctuating interest rate per annum as
shall be in effect from time to time equal to the rate of interest publicly
announced by NationsBank as its base rate, whether or not the Company has notice
thereof. Such rate is set by NationsBank as a general reference rate of
interest, taking into account such factors as NationsBank may deem appropriate,
it being understood that many of NationsBank's commercial or other loans are
priced in relation to such rate, that it is not necessarily the lowest or best
rate actually charged to any customer and that NationsBank may make various
commercial or other loans at rates of interest having no relationship to such
rate.
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except accrued expenses, trade accounts payable and taxes payable
arising in the ordinary course of business, (iv) the present value, determined
in accordance with generally accepted accounting principles, of the obligations
of such Person to make payments under capital leases, (v) all obligations of
such Person which shall have been outstanding for more than five days owed to a
bank or other Person in respect of amounts theretofore paid under a letter of
credit or similar instrument, (vi) all Debt of others secured by a Lien on any
asset owned by such Person whether or not such Debt is assumed by such Person
(except that Joint Venture Debt shall for purposes of this Agreement be deemed
to be Debt of Pertamina and not of the Company or a Subsidiary), (vii) all
Restricted Preferred Stock issued by such Person or as to which such Person is
otherwise liable, (viii) all Debt of others Guaranteed by such Person, to the
extent of such Guarantee, and (ix) all obligations of such Person which have
been outstanding for more than five days to pay any margin call (or similar
requirement) on any Derivative Transaction (excluding, in the case of the
Company and its Subsidiaries, such obligations not exceeding $5,000,000 in the
aggregate); provided that neither Debt nor Guarantee includes (a) obligations
under leases other than capital leases and under bona fide Derivative
Transactions (except as provided in clause (ix) above) and obligations with
respect to take-or-pay payments theretofore received which remain subject to
cash settlement or make-up; (b) Debt of the
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Company or a Subsidiary owing to the Company or a Subsidiary, except for Debt
not eliminated in consolidation pursuant to the proviso in Section 1.02; (c)
obligations under the Indonesian Participating Units; (d) any preferred stock
that does not constitute Restricted Preferred Stock; and (e) the existing
agreements relating to Joint Venture Debt set forth in the contracts described
on Schedule V of the parties thereto as to allocation of responsibility for
damages caused by reason of an act or failure to act by, or otherwise related
to, any such party, or any similar agreement hereafter entered into providing
for a similar allocation of liability in respect of similar actions or failures
to act. The amount of Debt attributable to any Restricted Preferred Stock shall
be the maximum consideration required to be paid upon the purchase, retirement,
redemption, exchange, or conversion of the portion thereof constituting Debt
(such consideration, if other than cash, to be valued at the fair market value
thereof); provided that in computing such consideration there shall be excluded
(A) any consideration payable solely in common stock of the Company, (B)
dividends to the extent such dividends do not materially exceed the generally
prevailing market rate (at the time of issuance of such Restricted Preferred
Stock) on preferred stock of comparable risk and maturity; and (C) any premium
payable upon any such purchase, retirement, redemption, exchange or conversion
only as a result of the exercise by the issuer of a call provision exercisable
only at the option of the issuer, if failure to exercise such option would not
have an adverse effect on the Company or any Subsidiary pursuant to the terms of
any such Restricted Preferred Stock or any documents related thereto.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defeased Debt" means any Debt of the Company or any Subsidiary (i)
which has been defeased in accordance with the terms of the applicable Debt
instruments, (ii) which is deemed to be extinguished under generally accepted
accounting principles applicable to the Company or such Subsidiary, and (iii)
with respect to which the Agent has received a certificate of an officer of the
Company or such Subsidiary to the effect that the requirements of clauses (i)
and (ii) of this definition have been met as to such Debt and such evidence, if
any, in support of such certificate as the Agent may reasonably request.
"Derivative Transactions" means foreign exchange transactions and
commodity, currency and interest rate swaps, floors, caps, collars, forward
sales, options, other similar transactions and combinations of the foregoing.
"Dollar" (whether or not capitalized) and "$" mean lawful money of the
United States of America.
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"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City, San Francisco or Houston
are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Company and the Agent.
"EBITDA" means, for any period, the sum of (i) the consolidated net
income of the Company and its Consolidated Subsidiaries for such period before
non-cash non-recurring items, gains or losses on dispositions of assets and the
cumulative effect of changes in accounting principles, plus (ii) to the extent
included in the determination of such income, the consolidated charges for such
period for interest, depreciation, depletion and amortization plus (or, if there
is a benefit from income taxes, minus) (iii) to the extent included in the
determination of such income, the amount of the provision for or benefit from
income taxes; provided that in determining such consolidated net income, such
consolidated charges and such provision for or benefit from income taxes, there
shall be excluded therefrom (to the extent otherwise included therein) (a) the
net income (or loss) of, charges for interest, depreciation, depletion and
amortization of, and such provision for or benefit from income taxes of, any
Person acquired by the Company or a Subsidiary in a pooling-of-interest
transaction for any period prior to the date of such transaction, and (b) the
net income (but not loss) of, charges for interest, depreciation, depletion and
amortization of, and such provision for (but not benefit from) income taxes of,
any Person which is subject to any contractual restriction which prevents the
payment of dividends or the making of distributions on the capital stock or
other ownership interests of such Person to the extent of such contractual
restrictions.
"Effective Date" means the date of this Agreement, which is June 30,
1995.
"Engineering Report" means a report of an Acceptable Engineer providing
an estimate of the proved reserves of Hydrocarbons attributable to the
properties of the Company and the Restricted Subsidiaries.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the
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manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes or
the clean-up or other remediation thereof, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act, the Oil Pollution Act, and their state
analogs, in each case as they have been or may be amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Obligors and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Obligor, are treated as a single
employer under Section 414 of the Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Company and the Agent.
"Euro-Dollar Loan" means a Loan which bears interest as provided in
Section 2.07(b).
"Event of Default" has the meaning set forth in Section 6.01.
"Excess Letter of Credit/Guarantee Amount" means, at any date, the
excess of (a) the sum of (i) the aggregate undrawn amount, at such date, of all
letters of credit as to which the Company or any Restricted Subsidiary (other
than Unimar and the Unimar Restricted Subsidiaries) is the account party or in
respect of which the Company or any Restricted Subsidiary (other than Unimar and
the Unimar Restricted Subsidiaries) has Guaranteed payment plus the unpaid drawn
portions, at such date, of all such letters of credit to the extent such drawn
portions do not constitute Debt of the Company or a Restricted Subsidiary (other
than Unimar and the Unimar Restricted Subsidiaries), plus (ii) the Unimar
Percentage of the aggregate undrawn amount, at such date, of all letters of
credit as to which Unimar or any of the Unimar Restricted Subsidiaries is the
account party or in respect of which Unimar or any of the Unimar Restricted
Subsidiaries has Guaranteed payment plus the unpaid drawn portions, at such
date, of such letters of credit to the extent such drawn portions do not
constitute Debt of Unimar or any of the
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13
Unimar Restricted Subsidiaries, plus (iii) Debt that constitutes Debt of the
Company or any Restricted Subsidiary (other than Unimar or any Unimar Restricted
Subsidiary) pursuant to clause (viii) of the definition herein of Debt, plus
(iv) the Unimar Percentage at such date of Debt that constitutes Debt of Unimar
or any of the Unimar Restricted Subsidiaries pursuant to clause (viii) of the
definition herein of Debt, over (b) $50,000,000.
"Excess Net Sales Proceeds" means
(i) with respect to any Asset Sale involving, directly or
indirectly, a UK Asset (a "UK Asset Sale"),
(a) if, after giving effect to such Asset Sale, the
aggregate Net Sales Proceeds from all UK Asset Sales
since December 31, 1993 would be less than or equal to
$50,000,000 and the aggregate Net Sales Proceeds from
all Asset Sales since such date would be less than or
equal to $100,000,000, zero; or
(b) if, after giving effect to such Asset Sale, the
aggregate Net Sales Proceeds from all UK Asset Sales
since December 31, 1993 ("UK Aggregate Amount") would
be greater than $50,000,000 or the aggregate Net Sales
Proceeds from all Asset Sales since such date ("Total
Aggregate Amount") would be greater than $100,000,000,
the lesser of (1) the greater of the amount by which
the UK Aggregate Amount exceeds $50,000,000 or the
amount by which the Total Aggregate Amount exceeds
$100,000,000 or (2) the Net Sales Proceeds from such
Asset Sale; and
(ii) with respect to any Asset Sale not involving, directly or
indirectly, a UK Asset,
(a) if, after giving effect to such Asset Sale, the
aggregate Net Sales Proceeds from all Asset Sales
since December 31, 1993 would be less than or equal to
$100,000,000, zero; or
(b) if, after giving effect to such Asset Sale, the
aggregate Net Sales Proceeds from all Asset Sales
since December 31, 1993 would be greater than
$100,000,000, the lesser of (1) the amount by which
such aggregate Net Sales Proceeds exceeds $100,000,000
or (2) the Net Sales Proceeds from such Asset Sale.
"Excluded Subordinated Debt" means Debt that (i) is subordinate and
junior, on terms reasonably satisfactory to the Agent, to the Loans in all
respects and
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14
(ii) has no requirement, absent a default under such Debt, that any principal
thereof be paid, purchased, redeemed, defeased, acquired, exchanged or converted
(other than exchange for or conversion to common stock of the Company) prior to
April 30, 2000.
"Existing Pakistan Non-Recourse Debt" means the Debt, not exceeding the
principal amount of $9,500,000, evidenced by that certain promissory note dated
December 20, 1988, issued by UT Pakistan in the original principal amount of
$21,250,000, the related Finance Agreement between UT Pakistan and the Overseas
Private Investment Corporation ("OPIC") and the related Issuing and Paying
Agency Agreement among First Trust New York, National Association (as successor
to Morgan Guaranty Trust Company of New York) as issuing and paying agent, OPIC
and UT Pakistan.
"Fair Market Value" means with respect to any asset of the Company or
any Subsidiary at any date the open market cash purchase price that an informed
and willing purchaser would pay for such asset in an arm's length transaction to
a willing and informed owner under no compulsion to sell, all as reasonably
determined in good faith by the Company.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th 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 Domestic Business Day
next succeeding such day; provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day, as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to NationsBank on such day on such
transactions as determined by the Agent.
"Financing Documents" means this Agreement, the Notes and the
Subsidiary Guaranty Agreement.
"Guarantee" by any Person means any obligation, contingent or otherwise
(including, without limitation, any obligation to repay to a payor or creditor
of a payor amounts previously paid to such Person by such payor), of such Person
directly or indirectly guaranteeing any Debt of any other Person or otherwise
incurred for the purpose of assuring the holder of payment of any such Debt;
provided that (i) the obligations of any Person in respect of Debt of any
Partnership in which such Person is a general partner shall not constitute a
Guarantee of such Debt so long as substantially all assets of such Person are
comprised of its Investment in such Partnership, (ii) the obligation of a Person
to transfer or restore cash to the account of a Partnership,
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15
Subsidiary or Affiliate pursuant to periodic settlements or adjustments under
cash management practices of such Persons shall not constitute a Guarantee,
(iii) the contractual obligation of a Person to assure that a Subsidiary,
Partnership or Affiliate conducts its operations as a prudent operator shall not
constitute a Guarantee of indebtedness of the Subsidiary, Partnership or
Affiliate, (iv) the obligation of a Person to cause net amounts of cash owned by
a Subsidiary, Partnership or Affiliate to be applied to payment of indebtedness
of such Subsidiary, Partnership or Affiliate shall not constitute a Guarantee of
such indebtedness and (v) the reaffirmation to or for the benefit of a lender of
contractual obligations (as, for example, those set forth in the Production
Sharing Contracts) previously entered into in good faith and not in
contemplation of the incurrence of Debt shall not constitute a Guarantee so long
as the other arrangements entered into in connection with such reaffirmation do
not increase the likelihood that additional funds will be required to meet such
obligations (as would be the case, for example, if revenues otherwise available
to meet such obligations were dedicated to such lender).
"HPG Plant" means the five-twelfths interest in the Geismar, Louisiana
olefins plant owned by UTPC and its subsidiaries, the supply and distribution
assets related to such plant and all other operating assets of UTPC and its
subsidiaries as of December 31, 1993.
"Hydrocarbons" means crude oil, including all kinds of hydrocarbons and
bitumens in solid or liquid form, and natural gas, including all gaseous
hydrocarbons produced from wells, and liquefied natural gas and liquefied
petroleum gases.
"Indonesian Participating Units" means the Indonesian Participating
Units issued by Unimar pursuant to the Indenture dated as of September 24, 1984
between Unimar and Irving Trust Company, Trustee, as amended and in effect on
April 24, 1995, and as thereafter amended to the extent such subsequent
amendments do not change the term thereof, provide additional security therefor,
or increase the payments to be made to holders thereof.
"Interest Period" means, with respect to each Euro-Dollar Loan
comprising part of the same Borrowing, the period commencing on the date of such
Loan or the date of the Conversion of any Base Rate Loan into such Euro-Dollar
Loan and ending on the last day of the period selected by the Company pursuant
to the provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period (or on any other date
selected by the Company pursuant to Section 2.03) and ending on the last day of
the period selected by the Company pursuant to the provisions below and Section
2.03. The duration of each such Interest Period shall be 1, 2, 3 or 6 months or
(subject to Section 2.02(b)) 9 or 12 months, in each case as the Company may,
upon notice received by the Agent not later than 10:00 a.m. (Houston
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16
time) on the third Euro-Dollar Business Day prior to the first day of such
Interest Period, select; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Euro-Dollar Business Day of a
calendar month;
(c) the Company may not select an Interest Period for any Loan
if the last day of such Interest Period would be after June 15, 1997;
and
(d) Interest Periods for all Loans comprising the same
Borrowing shall commence on the same date and shall be of the same
duration.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, advance, Guarantee or otherwise. It
is understood that a joint operating agreement or similar arrangement with
respect to Hydrocarbon properties or the HPG Plant does not constitute a Person
and hence that payments in respect of the acquisition or maintenance of an
interest in such Hydrocarbon properties or the HPG Plant do not constitute an
Investment.
"Joint Venture Debt" means obligations secured by a Lien on the
interests of the Company or a Subsidiary, as the case may be, arising under
either of the Production Sharing Contracts or any related supply contracts, if
such Lien covers ratably the interests of Pertamina and all production sharing
contractors thereunder.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset
(including, without limitation, any production payment, advance payment or
similar arrangement with respect to minerals in place), whether or not filed,
recorded or otherwise perfected under applicable law. For the purposes of this
Agreement, the Company or any Subsidiary shall be deemed to own subject to a
Lien any asset which it has acquired or
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17
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset. The right of set-off, whether by operation of law or by contract, does
not constitute a Lien unless there is a related obligation to maintain a deposit
of cash or other assets in respect of which such right of set-off may be
exercised.
"Loan" means a loan made by a Bank to the Company pursuant to section
2.01 and refers to a Base Rate Loan or a Euro-Dollar Loan (each of which shall
be a "Type" of Loan), and "Loans" means Base Rate Loans or Euro-Dollar Loans or
any combination of the foregoing.
"London Interbank Offered Rate" has the meaning set forth in Section
2.07(b).
"Margin Increase Condition" exists at all times during which any senior
unsecured long-term debt of the Company is rated below BBB- by S&P.
"material" means, with respect to any matter so characterized herein,
that such matter would reasonably be expected to be significant to a Bank in
determining whether to enter into this Agreement or to extend credit hereunder.
"Material Debt" means Debt of the Company and/or any one or more
Restricted Subsidiaries (other than Non-Recourse Debt) in an aggregate principal
amount equal to or greater than $15,000,000, whether incurred under one or more
related or unrelated documents or instruments.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $15,000,000.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NationsBank" means NationsBank of Texas, N.A., a national banking
association.
"Net Sales Proceeds" means, with respect to any Asset Sale, the Fair
Market Value of the Restricted Asset that is sold, leased, transferred or
otherwise disposed of in such Asset Sale, minus the sum of (i) all reasonable
fees, commissions and expenses incurred by the Company or any Subsidiary as a
result of or in connection with
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18
such Asset Sale and (ii) all taxes required to be paid by the Company or any
Subsidiary as a result of such Asset Sale.
"Non-Recourse Debt" means, at any date, (a) the aggregate amount at
such date of Debt of the Company or a Subsidiary (other than Unimar and each
Unimar Subsidiary) and (b) the Unimar Percentage of the aggregate amount at such
date of all Debt of each of Unimar and each Unimar Subsidiary, in respect of
which, in the case of either (a) or (b), (i) the recourse of the holder of such
Debt, whether direct or indirect and whether contingent or otherwise, shall be
effectively limited to Non-Restricted Assets (or, in the case of the Existing
Pakistan Non-Recourse Debt, the assets described in Schedule III) and (ii) in
the case of any such Debt incurred after April 24, 1995, the Company shall have,
at or prior to the time of incurrence thereof or at or prior to the date of this
Agreement, notified the Agent of such incurrence and delivered to the Agent a
certificate of an officer of the Company certifying that such Debt constitutes
Non-Recourse Debt (or that such Debt will be converted into Non-Recourse Debt at
some specified time or upon the occurrence of some specified event); provided
that if any such Debt is secured by any interest in a license, concession,
production sharing contract or other right and any of the Restricted Assets
consists of an interest in such license, concession, production sharing contract
or other right, then the agreements evidencing such Debt must provide that
default under such Debt will not impair or affect such license, concession,
production sharing contract or other right. In the case of any Non-Recourse Debt
incurred after April 24, 1995, such limitation on recourse (i) must be set forth
in the instrument evidencing such Debt, and (ii) must be on terms acceptable to
the Agent as evidenced by the written approval thereof by the Agent (which
approval will not be unreasonably withheld, and in deciding whether to approve
such terms the Agent will, if requested by the Company, take into account what
terms are usual and customary in non-recourse financings) and in any event must
provide that the holder of such Debt waives, to the extent such holder may
effectively do so, such holder's right to elect recourse treatment under 11
U.S.C. Section 1111(b) unless such holder obtains the prior written consent of
the Required Banks. For avoidance of doubt, (a) if any such Debt is Guaranteed
by the Company or a Restricted Subsidiary in a limited amount, the excess over
such amount (but only the excess) constitutes Non-Recourse Debt, and (b) Debt
shall not be determined to not be Non-Recourse Debt solely as a result of the
existence of either of the following: (i) an agreement by a direct or indirect
parent corporation to repay to a subsidiary amounts received by such parent
corporation from such subsidiary in the event such subsidiary has a need for
such amounts in future periods or (ii) an agreement by a direct or indirect
parent corporation to cause a subsidiary to comply with such subsidiary's
contractual obligations so long as the parent corporation is not obligated to
contribute funds to the subsidiary to enable it to comply with such contractual
obligations and has not otherwise Guaranteed such obligations.
"Non-Restricted Asset Non-Recourse Debt" means, at any date, the
aggregate amount at such date of Non-Recourse Debt as to which the recourse of
the
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19
holder is limited exclusively to Non-Restricted Assets as contemplated by clause
(i) of the first sentence of the definition of Non-Recourse Debt.
"Non-Restricted Assets" means all assets of the Company and its
Subsidiaries other than Restricted Assets.
"Non-UK Asset" means any Restricted Asset other than a UK Asset.
"Notes" means promissory notes of the Company, substantially in the
form of Exhibit A hereto, evidencing the obligation of the Company to repay the
Loans made to it, and "Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" has the meaning specified in Section 2.02.
"Obligors" means the Company and the Required Guarantors, and "Obligor"
means any one of them.
"Operating Cash Flow" means, with respect to any period, an amount
equal to
(i) the "net cash (required) provided by operating activities before
changes in other assets and liabilities" of the Company and its
Consolidated Subsidiaries for such period, that should be reflected in
the consolidated statement of cash flows of the Company and its
Consolidated Subsidiaries for such period prepared in accordance with
generally accepted accounting principles on substantially the same
basis as the consolidated statement of cash flows of the Company and
its Consolidated Subsidiaries for the year ended December 31, 1993 as
set forth in the Company's 1993 Form 10-K; provided that in determining
such "net cash (required) provided by operating activities before
changes in other assets and liabilities" there shall be excluded
therefrom (to the extent otherwise included therein) (a) the portion of
such net cash provided by assets securing any Non-Recourse Debt other
than the Existing Pakistan Non-Recourse Debt, (b) the net cash provided
or required by operating activities before changes in other assets and
liabilities of any Person acquired by the Company or a Subsidiary in a
pooling-of-interest transaction for any period prior to the date of
such transaction, and (c) the net cash provided by operating activities
before changes in other assets and liabilities of any Person which is
subject to any contractual restriction which prevents the payment of
dividends or the making of distributions on the capital stock or other
ownership interests of such Person to the extent of such contractual
restrictions,
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20
plus (ii) to the extent included in the determination of the "net cash
(required) provided by operating activities before changes in other
assets and liabilities" for such period in accordance with the
foregoing clause (i), exploration expenses incurred by the Company or
any Consolidated Subsidiary during such period other than (a)
exploration expenses incurred in connection with assets securing any
Non-Recourse Debt other than the Existing Pakistan Non-Recourse Debt,
(b) the exploration expenses of any Person acquired by the Company or a
Subsidiary in a pooling-of-interest transaction for any period prior to
the date of such transaction, and (c) the exploration expenses of any
Person which is subject to any contractual restriction which prevents
the payment of dividends or the making of distributions on the capital
stock or other ownership interests of such Person to the extent of such
contractual restrictions,
plus (or, if cash is required by equity investee, minus) (iii) the
amount of the "cash (required) provided by equity investee" of the
Company and its Consolidated Subsidiaries for such period, that should
be reflected in the consolidated statement of cash flows of the Company
and its Consolidated Subsidiaries for such period prepared in
accordance with generally accepted accounting principles on
substantially the same basis as the consolidated statement of cash
flows of the Company and its Consolidated Subsidiaries for the year
ended December 31, 1993 as set forth in the Company's 1993 Form 10-K,
excluding the effect of any cash required by such equity investee for
the payment of the principal of its Debt and any cash provided by such
equity investee from incurrence of its Debt,
minus (iv) dividends on preferred stock paid during such period by the
Company or any Consolidated Subsidiary, determined on a consolidated
basis.
"Other Credit Agreements" means the Amended and Restated Credit
Agreement dated as of May 13, 1994, as amended and as may be further amended or
modified from time to time, among the Company, NationsBank, as agent, and the
co-agents and banks party thereto currently providing a $450,000,000 credit
facility to the Company and the Credit Agreement dated as of April 24, 1995, as
amended and as may be further amended or modified from time to time, among the
Company, NationsBank, as agent, and the co-agents and banks party thereto
currently providing a $100,000,000 credit facility to the Company.
"Other Credit Agreement Commitments" means the aggregate amount of the
"Commitments" as defined in the Other Credit Agreements.
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21
"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"Partnership" means any general or limited partnership which is
accounted for on the equity method in the Company's consolidated financial
statements and in which the Company or a Subsidiary is a general partner.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof. It is
understood that a joint operating agreement or similar arrangement with respect
to Hydrocarbon properties or the HPG Plant does not constitute a Person.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Production Sharing Contracts" means the production sharing contracts
pertaining to certain operations in Indonesia filed as Exhibits 10.102 and
10.103 to the Company's quarterly report on Form 10-Q for the quarter ending
June 30, 1990, as filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
"Reference Banks" means the principal London offices of NationsBank,
Bank of America National Trust and Savings Association and Union Bank of
Switzerland and such substitute Bank or Banks as may be mutually agreed to by
the Company and the Agent, and "Reference Bank" means any one of such Reference
Banks.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
-16-
22
"Required Banks" means at any time Banks having at least 51% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 51% of the aggregate unpaid
principal amount of the Loans.
"Required Guarantors" means (a) each of Union Texas Petroleum Energy
Corporation, UTPC, Union Texas East Kalimantan Limited, Union Texas
International Corporation and Unistar, Inc. and (b) any Subsidiary that acquires
a Restricted Asset (other than any Restricted Asset in Pakistan or, if such
Subsidiary's entering into the Subsidiary Guaranty Agreement would have a
material adverse tax consequence on the Company, in the United Kingdom
(including the United Kingdom Sector of the North Sea)) after December 31, 1993
or the capital stock of any Required Guarantor after December 31, 1993. Each
Required Guarantor shall continue to be a Required Guarantor unless released
from its obligations under the Subsidiary Guaranty Agreement in accordance with
the terms of the Financing Documents.
"Restricted Assets" means (1) all proved reserves of the Company and
the Subsidiaries as of December 31, 1993 in Indonesia, the United Kingdom
(including the United Kingdom Sector of the North Sea) and Pakistan, (2) all
licenses, concessions, production sharing contracts and other rights pertaining
to any such proved reserves (excluding the portion thereof that does not pertain
to any of such proved reserves, if such portion can be severed without material
adverse consequences on the portion pertaining to such proved reserves), (3)
equipment used in the production of any such proved reserves or in the
transportation of production from any such proved reserves if such equipment is
a fixture or otherwise attached to realty, constitutes all or a part of any
pipeline or related equipment, is all or part of a production platform or
related equipment or is equipment similar to any of the foregoing or used for a
similar purpose, and (4) the HPG Plant.
"Restricted Payment" means (i) any dividend or other distribution on
any shares of the Company's capital stock (except dividends payable solely in
shares of its common stock), or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Company's capital
stock or (b) any option, warrant or other right to acquire shares of the
Company's capital stock (except any such payment made solely in shares of its
common stock); provided that payments of stock-related and other employee
benefits (including purchases by the Company of its common stock in connection
with the payment of such benefits) in the ordinary course of business to
employees of the Company or a Subsidiary shall not be deemed Restricted
Payments.
"Restricted Preferred Stock" means (i) all preferred stock which (a) is
subject to purchase, retirement, redemption, exchange or conversion (other than
exchange for or conversion to common stock of the Company), in whole or in part
under any circumstance whatsoever (other than purchase, retirement, redemption,
exchange or
-17-
23
conversion by the issuer thereof, at the sole option of such issuer, if failure
to exercise such option would not have an adverse effect on the Company or any
Subsidiary pursuant to the terms of any such preferred stock or any documents
related thereto) and (b) provides for dividends materially in excess of the
generally prevailing market dividend rate (at the time of issuance of such
preferred stock) for preferred stock of comparable risk and maturity, and (ii)
the portion of all other preferred stock which is subject to purchase,
retirement, redemption, exchange or conversion (other than exchange for or
conversion to common stock of the Company) at any date or dates on or prior to
April 30, 2000 under any circumstance whatsoever (other than purchase,
retirement, redemption, exchange or conversion by the issuer thereof, at the
sole option of such issuer, if failure to exercise such option would not have an
adverse effect on the Company or any Subsidiary pursuant to the terms of any
such preferred stock or any documents related thereto). For avoidance of doubt,
to the extent that any shares of Restricted Preferred Stock are exchanged for or
converted to common stock of the Company and as a consequence such shares of
Restricted Preferred Stock are cancelled, such shares shall no longer constitute
Restricted Preferred Stock.
"Restricted Subsidiaries Recourse Debt" means, at any date, the sum of
(a) the aggregate amount of all Debt (other than (i) Non-Recourse Debt, (ii) any
Guarantee of Debt of the Company (including the Loans) and (iii) the amount, if
any, by which the Guarantees of the Restricted Subsidiaries (other than Unimar
and the Unimar Restricted Subsidiaries) included in the determination of Excess
Letter of Credit/Guarantee Amount exceeds the Excess Letter of Credit/Guarantee
Amount) of each Restricted Subsidiary (other than Unimar and the Unimar
Restricted Subsidiaries), determined on a consolidated basis as of such date,
and (b) the Unimar Percentage of the aggregate amount of all Debt (other than
(i) Non-Recourse Debt, (ii) any Guarantee of Debt of the Company and (iii) the
amount, if any, by which the Unimar Percentage of the Guarantees of Unimar and
the Unimar Restricted Subsidiaries included in the determination of Excess
Letter of Credit/Guarantee Amount exceeds the Excess Letter of Credit/Guarantee
Amount) of Unimar and the Unimar Restricted Subsidiaries, determined on a
consolidated basis as of such date.
"Restricted Subsidiary" means each Person listed in Part B of Schedule
II hereto and each Subsidiary that owns directly or indirectly any interest in
any Restricted Assets or any Restricted Subsidiary; provided that a Restricted
Subsidiary shall cease to be such at such time as it is converted to an
Unrestricted Subsidiary pursuant to Section 5.20 or ceases to be a Subsidiary as
a result of a transaction permitted by Section 5.14.
"Restricted Transfer" means (i) any Investment in an Affiliate, any
Unrestricted Subsidiary or any subsidiary of an Unrestricted Subsidiary, but
excluding to the extent otherwise included in the foregoing, Investments in
Unimar and the Unimar Subsidiaries, or (ii) any payment by the Company or any
Subsidiary, directly or
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24
indirectly, in respect of Non-Recourse Debt to the extent such Person is not
legally obligated to make such payment by the terms of such Debt, or solely in
the case of Unimar, Unistar, Inc. or any of the Unimar Subsidiaries, to the
extent such Person is not legally obligated to fund such payment under the terms
of the Unimar Partnership Agreement.
"Revolving Credit Period" means the period from and including the
Effective Date to but not including the Termination Date.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc. on the date hereof.
"Subsidiary" means (a) Unimar and the Unimar Subsidiaries (except at
such times as the Company does not own, directly or indirectly, any of the
ownership interest in Unimar) and (b) any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Company, it being understood
that the power to elect exactly 50% of the board of directors or such other
persons does not constitute a "majority" as used herein.
"Subsidiary Guarantors" means the Subsidiaries from time to time
parties to the Subsidiary Guaranty Agreement, and their respective successors.
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty Agreement
dated as of June 30, 1995 among the Subsidiary Guarantors and NationsBank, as
Agent, substantially in the form of Exhibit B hereto, as the same may be amended
from time to time in accordance with the terms thereof.
"Termination Date" means June 15, 1996, or, if such day is not a
Euro-Dollar Business Day, the Termination Date shall be the next preceding
Euro-Dollar Business Day.
"Type" has the meaning specified in the definition of Loan.
"UK Assets" means all Restricted Assets of UTPL as of December 31,
1993.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefits under such Plan
as determined by such Plan's actuary exceeds (ii) the fair market value of all
Plan assets allocable to such benefits (excluding any accrued but unpaid
contributions), all determined as of the then most recent valuation date for
such Plan, but only to the extent
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that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA if such Plan terminated
as of such date.
"Unimar" means Unimar Company, a partnership organized and existing
under the laws of Texas.
"Unimar Partnership Agreement" means the Amended and Restated Agreement
of General Partnership of Unimar dated as of September 11, 1990 between Unistar,
Inc. and Ultrastar, Inc., as amended from time to time.
"Unimar Percentage" means, at any date, the aggregate percentage
ownership interest in Unimar owned at such date by the Company and the
Subsidiaries.
"Unimar Restricted Subsidiary" means any Unimar Subsidiary that is also
a Restricted Subsidiary at the relevant date.
"Unimar Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by Unimar, it being understood that
the power to elect exactly 50% of the board of directors or such other persons
does not constitute a majority as used herein.
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"UT Pakistan" means Union Texas Pakistan, Inc., a Delaware corporation.
"UTPC" means Union Texas Products Corporation, a Delaware corporation.
"UTPL" means Union Texas Petroleum Limited, an English company.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent with the most recent audited consolidated financial
statements of the Company and its Consolidated Subsidiaries delivered to the
Banks (except for changes concurred in by the Company's independent public
accountants); provided that in any determination of Consolidated Debt if (i) the
Company or any Restricted Subsidiary owes any Debt to an
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Unrestricted Subsidiary which would otherwise be eliminated in such
determination of Consolidated Debt (the "intercompany Debt") (other than Debt in
an amount not exceeding $10,000,000 in the aggregate at any time and
representing advances by the Unrestricted Subsidiaries to the Company or a
Restricted Subsidiary made in the ordinary course of the cash management
practices of the Company and its Subsidiaries) and (ii) such Unrestricted
Subsidiary owes, at the date of determination, any Debt for borrowed money to a
Person other than the Company or a Subsidiary (the "third party Debt") (other
than any such Debt that also constitutes Debt of the Company or a Restricted
Subsidiary), then an amount equal to the lesser of (1) such intercompany Debt
and (2) such third party Debt, shall not be eliminated in such determination of
Consolidated Debt.
SECTION 1.03. Types of Borrowings. The term "Borrowing" denotes the
aggregate of Loans made by Banks to the Company pursuant to Article II on a
single date, of a single Type and, if such Loans are Euro-Dollar Loans, for a
single Interest Period. Borrowings are classified for purposes of this Agreement
by reference to the pricing of Loans comprising such Borrowing (e.g., a
"Euro-Dollar Borrowing" is a Borrowing comprised of Euro-Dollar Loans).
SECTION 1.04. Miscellaneous. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to Articles
and Sections of and Schedules and Exhibits to this Agreement, unless otherwise
specified. The term "including" as used herein means "including without
limitation". Definitions of terms defined herein shall be applicable to both the
singular and plural forms of the terms defined as appropriate. References to
"directly or indirectly" in respect of ownership of any interest in any assets
shall include, without limitation, direct ownership, indirect ownership through
capital stock or other ownership interest (whether through one or more levels of
subsidiaries, affiliates or other Persons) and any other direct or indirect
ownership arrangement.
SECTION 1.05. Unimar. To the extent this Agreement or any other
Financing Document obligates the Company or a Subsidiary to cause Unimar and the
Unimar Subsidiaries to take any action, such obligation shall be satisfied if
(a) the Company votes (or causes a Subsidiary to vote) the Unimar Percentage in
a manner consistent with the obligations of the Company and the Subsidiaries
under the Financing Documents and (b) any representative of the Company sitting
on any management board or board of directors of Unimar or any of the Unimar
Subsidiaries votes, as a member of such management board or board of directors,
in a manner consistent with the obligations of the Company and the Subsidiaries
under the Financing Documents.
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SECTION 1.06. Ratings. A rating, whether public or private, by S&P
shall be deemed to be in effect on the date of announcement or publication by
S&P, as the case may be, of such rating or, in the absence of such announcement
or publication, on the effective date of such rating and will remain in effect
until the effective date of any change in such rating. In the event the
standards for any rating by S&P are revised, or such rating is designated
differently (such as by changing letter designations to numerical designations),
then the references herein to such rating shall be changed to the revised or
redesignated rating for which the standards are closest to, but not lower than,
the standards at the date hereof for the rating which has been revised or
redesignated, all as determined by the Agent in good faith. Long-term debt
supported by a letter of credit, guaranty (other than guaranties of
Subsidiaries) or other similar credit enhancement mechanism shall not be
considered as senior unsecured long-term debt.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Revolving Credit Period
each Bank severally agrees, on the terms and conditions set forth in this
Agreement, to make loans to the Company pursuant to this Section 2.01 from time
to time in amounts such that the aggregate principal amount of Loans by such
Bank at any one time outstanding to the Company shall not exceed the amount of
such Bank's Commitment at such time. Each Borrowing under this Section 2.01
shall be in an aggregate principal amount of $10,000,000 or any larger multiple
of $1,000,000 (except that any such Borrowing may be, subject to the other terms
hereof, in the aggregate amount of the remaining unused Commitments) and shall
be made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Company may borrow under this
Section 2.01, repay (whether pursuant to Section 2.10 or otherwise), or to the
extent permitted by Section 2.11, prepay Loans and reborrow at any time during
the Revolving Credit Period under this Section 2.01.
SECTION 2.02. Notice of Borrowings. (a) The Company shall give the
Agent notice (a "Notice of Borrowing") not later than 10:00 A.M. (Houston time)
on (x) the date of each Base Rate Borrowing, and (y) the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
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(iii) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
Notwithstanding the foregoing, not more than ten Euro-Dollar Borrowings shall be
outstanding at any one time, and any Borrowing which would exceed such
limitation shall be made as a Base Rate Borrowing.
(b) If requested to do so by the Company through the Agent at
least ten Euro-Dollar Business Days before the first day of a proposed Interest
Period for Euro-Dollar Loans, each Bank will advise the Agent before 10:00 A.M.
(Houston time) on the sixth Euro-Dollar Business Day preceding the date of such
proposed Interest Period as to whether, if the Company selects a specified
duration of nine or twelve months for such Interest Period, such Bank expects
that deposits in dollars with a corresponding term will be available to it in
the relevant market on the first day of such Interest Period in the amount
required to fund its Loan to which such Interest Period would apply. Unless a
Bank responds by such time to the effect that it expects such deposits will not
be available to it, the Company shall be entitled to select such proposed
duration for such Interest Period.
SECTION 2.03. Conversions. (a) The Company may on any Euro-Dollar
Business Day, upon notice given to the Agent no later than 10:00 a.m. (Houston
time) on the third Euro-Dollar Business Day prior to the date of the proposed
Conversion and subject to the provisions of Section 2.02 and Article VIII and
the other provisions hereof, Convert all Loans comprising one or more
Borrowings; provided that (i) Loans comprising a Borrowing may not be Converted
if after giving effect to such Conversion, such Borrowing would be a Euro-Dollar
Borrowing and the outstanding principal amount of such Borrowing would be less
than $10,000,000 and (ii) no Conversion (other than changing Euro-Dollar Loans
into Base Rate Loans) may be made if any Event of Default is then existing. Each
such notice of a Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Loans to be Converted, (iii)
if after giving effect to such Conversion, such Borrowing would be a Euro-Dollar
Borrowing, the commencement date and duration of the proposed Interest Period
for each Loan comprising such Borrowing, and (iv) the nature of such Conversion
(i.e., whether such Conversion is a change of Loans of one Type into another
Type, a continuation of Euro-Dollar Loans as such for an additional Interest
Period or an election to change an Interest Period). Each such notice shall be
irrevocable.
(b) If the aggregate unpaid principal amount of Euro-Dollar Loans
comprising any Borrowing shall be reduced by payment or prepayment or otherwise,
to
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less than $10,000,000, such Loans shall automatically, on the last day of the
then existing Interest Period therefor, Convert into Base Rate Loans.
(c) If the Company shall fail to select the duration of any Interest
Period for any Euro-Dollar Loans in accordance with the provisions contained in
the definition of "Interest Period" in Section 1.01, or if there shall be any
Event of Default, such Loans will automatically on the last day of the then
existing Interest Period therefor, Convert into Base Rate Loans.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the Agent shall promptly,
(by no later than 10:30 A.M. (Houston time) by telephone or facsimile
transmission) notify each Bank of the contents thereof and of such Bank's share
of such Borrowing and such Notice of Borrowing shall not thereafter be revocable
by the Company.
(b) Not later than 12:00 Noon (Houston time) on the date of each
Borrowing, each Bank shall (except as provided in subsection (c) of this Section
2.04) make available its share of such Borrowing, in Federal or other funds
immediately available in Houston, to the Agent at its address specified in or
pursuant to Section 9.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied, the Agent will make
the funds so received from the Banks available to the Company at the Agent's
aforesaid address.
(c) If any Bank makes a new Loan hereunder to the Company on a day on
which the Company is to repay all or any part of an outstanding Loan from such
Bank, such Bank shall apply the proceeds of its new Loan to make such repayment
and only an amount equal to the difference (if any) between the amount being
borrowed by the Company and the amount being repaid shall be made available by
such Bank to the Agent as provided in subsection (b), or remitted by the Company
to the Agent as provided in Section 2.12, as the case may be.
(d) Unless the Agent shall have received notice from a Bank prior to
the date of any Borrowing that such Bank will not make available to the Agent
such Bank's share of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such Borrowing in
accordance with subsections (b) and (c) of this Section 2.04 and the Agent may,
in reliance upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Agent, such Bank and the Company severally agree to
repay to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Company until the date such amount is repaid to the Agent, at (i) in the
case of the Company, a rate per annum equal to the higher of
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the Federal Funds Rate and the interest rate applicable thereto pursuant to
Section 2.07 and (ii) in the case of such Bank, the Federal Funds Rate. If such
Bank shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Loan included in such Borrowing for purposes of
this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank to the Company shall
be evidenced by a single Note of the Company payable to the order of such Bank
for the account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans to the Company.
(b) Each Bank may, by notice to the Company and the Agent, request that
its Loans of a particular Type payable to such Bank (or such lending office,
agency or branch of such Bank as such Bank may specify in such request) be
evidenced by a separate Note of the Company in an amount equal to the aggregate
unpaid principal amount of such Loans. Each such Note shall be in substantially
the form of Exhibit A hereto with appropriate modifications to reflect the fact
that it evidences solely Loans of the relevant Type. Any Bank that receives
multiple Notes pursuant to this Section 2.05(b) agrees that: (1) the aggregate
principal amount payable by the Company under such Notes shall never exceed the
aggregate principal amount of the Loans owed to such Bank (including, if
applicable, the separate lending offices, agencies or branches of such Bank) and
(2) the payees of the Notes issued at the request of such Bank shall enjoy no
greater rights (voting or otherwise) than such Bank would enjoy in the absence
of such request and such payees (including, if applicable, the separate lending
offices, agencies or branches of such Bank) shall be considered a single Bank
for purposes of this Agreement. Each reference in this Agreement to the "Note"
of such Bank shall be deemed to refer to and include any or all of such Notes,
as the context may require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(b), the
Agent shall mail or send by private delivery service such Note to such Bank.
Each Bank shall record the date, amount and Type of each Loan made by it to the
Company and the date and amount of each payment of principal made with respect
thereto, and prior to any transfer of its Note shall endorse on the schedule
forming a part thereof appropriate notations to evidence the foregoing
information with respect to each such Loan then outstanding; provided that the
failure of any Bank to make any such recordation or endorsement shall not affect
the obligations of any Obligor under any of the Financing Documents. Each Bank
is hereby irrevocably authorized by the Company so to endorse any Note and to
attach to and make a part of any Note a continuation of any such schedule as and
when required.
SECTION 2.06. Maturity of Loans. Each Loan shall mature, and the
principal amount thereof shall be due and payable, on June 15, 1997.
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SECTION 2.07. Interest Rates. The Company shall pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such
principal amount shall be paid in full, at the following rates per annum:
(a) If such Loan is a Base Rate Loan, for each day that such Loan is a
Base Rate Loan, at a rate per annum equal to the sum of (i) the Base Rate for
such day, plus (ii) at such times as the Margin Increase Condition exists, 1/4%,
plus (iii) at such times as any Event of Default exists, 1%. Such interest shall
be payable quarterly on each March 31, June 30, September 30 and December 31 and
on the date such Base Rate Loan is Converted or paid in full. Any overdue
interest on any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 1% plus the otherwise
applicable rate for such day.
(b) If such Loan is a Euro-Dollar Loan, at a rate per annum equal at
all times during any Interest Period for such Loan to the sum of (i) 0.6875%
plus (ii) the applicable London Interbank Offered Rate plus (iii) at such times
as the Margin Increase Condition exists, 1/4% plus (iv) at such times as any
Event of Default exists, 1%; provided that any overdue principal of or interest
on any Euro-Dollar Loan shall bear interest, payable on demand, for each day
from and including the date payment thereof was due to but excluding the date of
actual payment, at a rate per annum equal to the sum of 1% plus the higher of
(i) the sum of 0.6875% plus the London Interbank Offered Rate applicable to such
Loan plus at such times as the Margin Increase Condition exists, 1/4% and (ii)
the sum of (1) 0.6875% plus (2) the average (rounded upward, if necessary, to
the next higher 1/16 of 1%) of the respective rates per annum at which one day
(or, if such amount due remains unpaid more than three Euro-Dollar Business
Days, then for such other period of time not longer than three months as the
Agent may select) deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Reference Banks are offered to such Reference
Bank in the London interbank market for the applicable period determined as
provided above plus (3) at such times as the Margin Increase Condition exists,
1/4% (or, if the circumstances described in clause (a) or (b) of Section 8.01
shall exist, at a rate per annum equal to the sum of 1% plus the rate applicable
to Base Rate Loans for such day). Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day thereof.
The "London Interbank Offered Rate" applicable to any Interest Period
means the arithmetic average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which deposits in dollars are
offered to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the
first day of such Interest Period in an amount approximately equal to the
principal amount of the Euro-Dollar Loan of
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such Reference Bank to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
(c) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Company and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error. Upon
request of the Company, the Agent shall furnish to it such information as to its
determinations hereunder as the Company may reasonably request.
(d) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section 2.07. If any Reference
Bank does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
(e) This Section 2.07 and each other provision in any of the Financing
Documents or in any other agreement executed in connection herewith are
specifically made subject to Section 2.16.
SECTION 2.08. Fees. (a) During the Revolving Credit Period, the
Company shall pay to the Agent for the account of the Banks ratably in
proportion to their Commitments a commitment fee at a rate per annum equal to
0.1875% on the daily average amount by which the aggregate amount of the
Commitments exceed the aggregate outstanding principal amount of the Loans.
Such commitment fee shall accrue from and including the Effective Date to but
excluding the Termination Date. Additionally, the Company shall pay to the
Agent for the account of the Banks ratably a facility fee at a rate per annum
equal to 0.1875% on the daily average aggregate outstanding principal amount of
the Loans. Such facility fee shall accrue from and including the Effective Date
to but excluding the date the Loans shall be repaid in their entirety.
(b) Payments. Accrued fees under this Section 2.08 shall be payable
quarterly on each March 31, June 30, September 30 and December 31 and upon the
date of termination of the Commitments in their entirety (and, if later, the
date the Loans shall be repaid in their entirety).
SECTION 2.09. Optional Termination or Reduction of Commitments. The
Company may, upon at least three Domestic Business Days' notice to the Agent,
(i) terminate the Commitments at any time, if no Loans are outstanding at such
time or (ii) ratably reduce from time to time by an aggregate amount of
$10,000,000 or any
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larger multiple of $5,000,000 the aggregate amount of the Commitments in excess
of the aggregate outstanding principal amount of the Loans.
SECTION 2.10. Mandatory Termination or Reduction of Commitments.
(a) The Commitments shall terminate on the Termination Date.
(b) On the fifth Domestic Business Day following any Asset Sale that
results in positive Excess Net Sales Proceeds, (i) the Company will deliver to
each of the Banks a certificate of the chief financial officer, the chief
accounting officer or the treasurer of the Company certifying the amount of such
Excess Net Sales Proceeds from such Asset Sale, (ii) the Commitments shall be
automatically reduced ratably by an amount equal to (a) 100% of the amount of
such Excess Net Sales Proceeds minus (b) the amount by which the Other Credit
Agreement Commitments are reduced, pursuant to Section 2.10(d)(ii) of the Other
Credit Agreement that provides a $450,000,000 credit facility to the Company or
pursuant to Section 2.10(b)(ii) of the Other Credit Agreement that provides a
$100,000,000 credit facility to the Company, as a result of such Excess Net
Sales Proceeds from such Asset Sale, (iii) the Company shall be obligated to
repay such principal amount (together with accrued interest thereon) of each
Bank's outstanding Loans, if any, as may be necessary so that after such
repayment the aggregate outstanding principal amount of such Bank's Loans does
not exceed the amount of such Bank's Commitment as then reduced.
SECTION 2.11. Optional Prepayments. (a) The Company may, upon at
least one Domestic Business Day's notice to the Agent, prepay any Borrowing in
whole at any time, or from time to time in part in amounts aggregating
$10,000,000 or any larger multiple of $1,000,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment; provided that no partial prepayment of a Euro-Dollar Borrowing
shall be made if after giving effect thereto the principal amount of such
Borrowing would be less than $10,000,000. Each such optional prepayment shall
be applied to prepay ratably the Loans of the several Banks included in such
Borrowing.
(b) Upon receipt of a notice of prepayment pursuant to this Section
2.11, the Agent shall promptly notify each Bank of the contents thereof and of
such Bank's ratable share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Company.
SECTION 2.12. General Provisions as to Payments. (a) The
Company shall make each payment of principal of, and interest on, the Loans and
of fees hereunder, not later than 12:00 Noon (Houston time) on the date when
due, in Federal or other funds immediately available in Houston, to the Agent
at its address referred to in Section 9.01. The Agent will promptly distribute
to each Bank its ratable
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share of each such payment received by the Agent for the account of the Banks.
Whenever any payment of principal of, or interest on, the Base Rate Loans or of
fees shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of, or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Company prior
to the date on which any payment is due from the Company to the Banks hereunder
that the Company will not make such payment in full, the Agent may assume that
the Company has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such due date an amount equal to the amount then due such Bank. If and
to the extent that the Company shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount distributed to such
Bank together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
(c) At the time of each payment of principal of any Loan, the Company
shall specify, by notice to the Agent, the Loan or Loans to which such payment
shall be applied. If the Company fails to so specify, the Agent shall apply such
payment to the Loans as the Agent may select.
SECTION 2.13. Funding Losses. If any Obligor makes any payment of
principal with respect to any Euro-Dollar Loan (pursuant to Article II, VI or
VIII or otherwise) on any day other than the last day of an Interest Period
applicable thereto, or the end of an applicable period fixed pursuant to the
proviso to Section 2.07(b), or if the Company fails to borrow any Euro-Dollar
Loan after notice has been given to any Bank in accordance with Section 2.04(a),
or if any Conversion of any Euro-Dollar Loan occurs on any day other than the
last day of an Interest Period applicable thereto or fails to occur as
contemplated herein, the Company shall reimburse each Bank within 15 days after
demand for any resulting loss or expense incurred by it (or by an existing or
prospective Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin from the period after any such payment or
failure to borrow; provided that such Bank shall have delivered to the Company a
certificate as to the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error.
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SECTION 2.14. Computation of Interest and Fees. Interest based on the
Base Rate hereunder shall be computed on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual number of days elapsed (including
the first day but excluding the last day). All other interest and fees shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
SECTION 2.15. Chapter 15. In no event shall the provisions of Article
5069, Chapter 15 of the Revised Civil Statutes of Texas (which regulates certain
revolving credit loan accounts and revolving tri-party accounts) apply to any
Loan made hereunder.
SECTION 2.16. Maximum Interest Rate. (a) Nothing contained in this
Agreement or the Notes shall require the Company to pay interest at a rate
exceeding the maximum rate permitted without penalty by applicable law. Each
provision in the Financing Documents and any other agreement executed in
connection herewith is expressly limited so that in no event whatsoever shall
the amount paid thereunder, or otherwise paid, by the Company for the use,
forbearance or detention of the money to be loaned under this Agreement, exceed
that amount of money which would cause the effective rate of interest thereon
to exceed the maximum rate of interest permitted without penalty under
applicable law, and all amounts payable under the Financing Documents or any
other agreement executed in connection herewith, or otherwise payable in
connection therewith, shall be subject to reduction so that such amounts paid
or payable for the use, forbearance or detention of money to be loaned under
this Agreement shall not exceed that amount of money which would cause the
effective rate of interest thereon to exceed the maximum rate of interest
permitted without penalty under applicable law.
(b) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to Section 2.07, would exceed the maximum
amount permitted without penalty by applicable law to be charged by such Bank,
the amount of interest payable for its account on such interest payment date
shall be automatically reduced to such maximum permissible amount.
(c) If the amount of interest payable for the account of any Bank in
respect of any interest computation period is reduced pursuant to clause (b) of
this Section 2.16 and the amount of interest payable for its account in respect
of any subsequent interest computation period, computed pursuant to Section
2.07, would be less than the maximum amount permitted without penalty by
applicable law to be charged by such Bank, then the amount of interest payable
for its account in respect of such subsequent interest computation period shall
be automatically increased to such maximum permissible amount; provided that at
no time shall the aggregate amount by which
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interest paid for the account of any Bank has been increased pursuant to this
clause (c) exceed the aggregate amount by which interest paid for its account
has theretofore been reduced pursuant to clause (b) of this Section 2.16.
(d) In the event that maturity of the Loans is accelerated for any
reason, or in the event of any required or permitted prepayment of the Loans,
then such consideration that constitutes interest payable for the account of any
Bank shall never include more than the maximum amount allowed without penalty by
applicable law to be charged by such Bank and excess interest, if any, payable
for the account of such Bank pursuant to its Note, this Agreement or otherwise
shall be cancelled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the Loans of such Bank
(or, to the extent in excess of such Loans, refunded by such Bank to the
Company).
(e) It is further agreed that, without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received for the
account of any Bank under the Note held by it, under this Agreement, under any
other agreement executed in connection herewith or otherwise in connection with
the Loans or the Commitment of such Bank for the purpose of determining whether
such rate exceeds the maximum nonusurious interest rate applicable to such Bank,
shall be made, to the extent permitted by usury laws applicable to such Bank
(now or hereafter enacted), by amortizing, prorating and spreading in equal
parts during the period of the full stated terms of the Loans evidenced by such
Note all interest at any time contracted for, charged or received by such Bank
in connection therewith.
(f) To the extent that any Bank may be subject to Texas law limiting
the amount of interest payable for its account, such Bank shall utilize the
indicated (weekly) rate ceiling from time to time in effect as provided in
Article 5069-1.04 of the Revised Civil Statutes of Texas, as amended.
SECTION 2.17. Taxes. (a) Any and all payments by the Company
hereunder or under the Notes shall be made, in accordance with Section 2.12,
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 the Company shall be required by law to
deduct any Taxes
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from or in respect of any sum payable hereunder or under any Note 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 2.17) 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) the Company shall
make such deductions and (iii) the Company shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Company agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, assessments, charges
or similar levies which arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement, any of the Notes or the Subsidiary Guaranty Agreement
(hereinafter referred to as "Other Taxes").
(c) The Company will indemnify each Bank, each Co-Agent and the Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.17) 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 or Other Taxes were correctly
or legally asserted. Payments under any indemnification provided for in this
Section 2.17(c) 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.
(d) Within 30 days after the date of any payment of Taxes, the Company
will furnish to the Agent, at its address referred to in Section 9.01, 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 the Company of Taxes
as required by this Section 2.17 (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 the Company 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.
(e) Each Bank represents that it is either (i) a corporation,
association or other entity organized under the laws of the United States or any
state thereof or (ii) entitled
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to complete exemption from United States withholding tax imposed on or with
respect to any payments, including fees, to be made to it pursuant to this
Agreement or the Notes. Each Bank that is not organized under the laws of the
United States or any state thereof (a "Foreign Bank") agrees to provide to the
Company and the Agent, on or prior to the date of this Agreement in the case of
each Foreign Bank signatory hereto, and on the date of the Assignment pursuant
to which it became a Bank in the case of each other Foreign Bank, two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Foreign Bank is entitled to receive payments
from the Company under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes. Each Foreign Bank which
so delivers a Form 1001 or 4224 further undertakes to deliver to each of the
Company and the Agent two additional copies of such form (or a successor form)
on or before the date that such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form so delivered
by it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Company or the Agent, in each case certifying that
such Foreign Bank is entitled to receive payments from the Company under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Foreign Bank from duly completing and delivering any
such form with respect to it and such Foreign Bank advises the Company and the
Agent that it is not capable of receiving such payments without any deduction or
withholding of United States federal income tax. Each Bank agrees to indemnify
and hold the Company and the Agent harmless from any United States taxes,
penalties, interest and other expenses, costs and losses incurred or payable by
them as a result of either (a) such Bank's failure to submit any form that it is
required to provide pursuant to this Section 2.17(e) or (b) the Agent's and the
Company's reliance on any such form which such Bank has provided to them, or on
the representation of such Bank made to them pursuant to this Section 2.17(e).
(f) If any Taxes are paid by the Company pursuant to this Section 2.17
in respect of the Applicable Lending Office of any Bank, such Bank will, if
requested to do so by the Company, designate a different Applicable Lending
Office if such designation will avoid the need to pay, or reduce the amount of,
such Taxes and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank.
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ARTICLE III
CONDITIONS
SECTION 3.01. Initial Borrowing. The obligation of any Bank to make a
Loan on the occasion of the initial Borrowing is subject to the satisfaction (or
waiver in accordance with Section 9.05) of each of the following conditions:
(a) receipt by the Agent of counterparts hereof signed by each of the
parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by the Agent for the account of each Bank of a duly
executed Note of the Company dated on the date of this Agreement complying
with the provisions of Section 2.05;
(c) receipt by the Agent of the Subsidiary Guaranty Agreement, duly
executed by each of the Required Guarantors;
(d) receipt by the Agent of an opinion of Newton W. Wilson, III,
General Counsel of the Company, substantially in the form of Exhibit C
hereto;
(e) receipt by the Agent of an opinion of Andrews & Kurth L.L.P.,
special counsel for the Obligors, substantially in the form of Exhibit D
hereto;
(f) receipt by the Agent of an opinion of Bracewell & Patterson,
special counsel for the Agent, substantially in the form of Exhibit E
hereto;
(g) receipt by the Agent of all documents it may reasonably request
relating to the existence of the Obligors, the corporate authority for and
the validity of each of the Financing Documents, and any other matters
relevant thereto, all in form and substance satisfactory to the Agent;
(h) receipt by the Agent of a certificate of an officer of the Company
stating the rating by S&P of all senior unsecured long-term debt of the
Company as in effect on the date of this Agreement; and
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(i) receipt by the Agent of a certificate of the chief financial
officer, the chief accounting officer or the treasurer of the Company
certifying, as of the Effective Date, that no Default exists.
SECTION 3.02. All Borrowings. The obligation of any Bank to make a Loan
on the occasion of any Borrowing is subject to the satisfaction of the following
conditions (in addition to the conditions set forth in Section 3.01):
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.02;
(b) the fact that immediately prior to and immediately after such
Borrowing, no Default shall have occurred and be continuing; and
(c) the fact that the representations and warranties of the Company
contained in this Agreement (except, in the case of any Borrowing subsequent
to the first Borrowing, the representations and warranties set forth in
Section 4.04(a), (c) or (f)) shall be true and correct in all material
respects on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Company on the date of such Borrowing as to the facts specified in this
Section 3.02.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
SECTION 4.01. Corporate Existence and Power. Each of the Obligors is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to own its assets and to carry on its business as now conducted and is duly
qualified as a foreign corporation in good standing in each jurisdiction where
the nature of its business or the ownership or leasing of its properties
requires such qualification and where the failure so to qualify could have a
material adverse effect on the business, financial position, results of
operations or prospects of the Company and its Subsidiaries, taken as a whole.
Neither the Company nor any Subsidiary or Affiliate is subject to regulation
under the Public Utility Holding Company Act of 1935, the Investment Company Act
of 1940, the Interstate Commerce Act or any other law or regulation which limits
the incurrence by the Company or any Subsidiary of Debt, including, but not
limited to, laws relating to
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common or contract carriers or the sale of electricity, gas, steam, water or
other public utility services.
SECTION 4.02. Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by each Obligor of each Financing
Document to which it is shown as being a party are within such Obligor's
corporate powers, have been duly authorized by all necessary corporate action,
and do not contravene, or constitute a default under, any provision of
applicable law or regulation (including, without limitation, Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System) or the
certificate of incorporation, by-laws or other charter documents of such Obligor
or of any instrument or agreement evidencing or governing Debt or any other
material agreement, judgment, injunction, order, decree or other instrument
binding upon such Obligor or result in the creation or imposition of any
material Lien on any asset of the Company or any Subsidiary. All authorizations,
consents and approvals of governmental bodies, agencies or officials required in
connection with the execution, delivery and performance by each Obligor of the
Financing Documents to which it is shown as being a party have been obtained and
are in full force and effect.
SECTION 4.03. Binding Effect. This Agreement and each of the Notes have
been duly executed and delivered by the Company and constitute legal, valid and
binding agreements of the Company, and the Subsidiary Guaranty Agreement has
been duly executed and delivered by each Required Guarantor and constitutes a
legal, valid and binding obligation of each Required Guarantor.
SECTION 4.04. Information.
(a) The consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of December 31, 1994 and the related consolidated statements of
operations, cash flows and common stock and other shareholders' equity for the
fiscal year then ended, reported on by Price Waterhouse and set forth in the
Company's 1994 Form 10-K, a copy of which has been delivered to each of the
Banks, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Company and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such fiscal year.
(b) To the best knowledge of the Company, there are no statements or
conclusions in any Engineering Report delivered pursuant hereto which are based
upon or include misleading information or fail to take into account material
information regarding the matters reported therein, it being understood that
such statements and conclusions are necessarily based upon professional
opinions, estimates and forecasts, and the Company does not warrant that such
opinions, estimates and forecasts will ultimately prove to have been accurate.
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(c) The Company's 1994 Form 10-K, as supplemented by the Company
reports on Form 10-Q for the fiscal quarter ended March 31, 1995 and its reports
on Form 8-K filed during 1995, a copy of each of which has been delivered to
each of the Banks, does not contain any untrue statement of material fact or
omit to state a material fact necessary in order to make the statements
contained therein not misleading. Except for matters of general public knowledge
with respect to the oil and gas industry, the Company has disclosed to the Banks
in writing any and all facts which materially and adversely affect or may be
reasonably expected so to affect (to the extent the Company can now reasonably
foresee), the business, assets, operations, prospects or condition, financial or
otherwise, of the Company and its Subsidiaries or the ability of any Obligor to
perform its obligations under the Financing Documents.
(d) Since December 31, 1994 there has been no material adverse change
in the business, financial position, results of operations or prospects of the
Company and its Subsidiaries, taken as a whole.
(e) No Default exists.
(f) The unaudited consolidated balance sheet of the Company and its
Consolidated Subsidiaries as of March 31, 1995 and the related unaudited
consolidated statements of operations and cash flows for the three months then
ended, set forth in the Company's quarterly report for the fiscal quarter ended
March 31, 1995 as filed with the Securities and Exchange Commission on Form
10-Q, a copy of which has been delivered to each of the Banks, fairly present,
in conformity with generally accepted accounting principles (except for the
absence of footnotes) applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section 4.04, the consolidated
financial position of the Company and its Consolidated Subsidiaries as of such
date and their consolidated results of operations and cash flows for such six
month period (subject to normal year-end adjustments).
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of the Company threatened against or
affecting, the Company or any of its Subsidiaries or any of their respective
properties or interests at law or in admiralty or equity, before any court or
arbitrator or any governmental body, agency or official, foreign or domestic, in
which there is a reasonable possibility of an adverse decision which could
materially adversely affect the business, financial position or results of
operations of the Company and its Subsidiaries, taken as a whole, or which in
any manner draws into question the validity of any Financing Document.
SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue
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Code with respect to each Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standard under Section 412 of the Internal Revenue
Code in respect of any Plan, (ii) failed to make any contribution or payment to
any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made
any amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Internal Revenue Code or (iii) incurred any liability under
Title IV of ERISA other than a liability to the PBGC for premiums under Section
4007 of ERISA.
SECTION 4.07. Environmental Matters. In the ordinary course of its
business, the Company conducts an ongoing review of the effect of existing
Environmental Laws on the business, operations and properties of the Company and
the Subsidiaries, in the course of which it attempts to identify and evaluate
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously owned, any capital or operating expenditures required to achieve
or maintain compliance with environmental protection standards imposed by law or
as a condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted thereat and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, the Company has reasonably concluded that existing Environmental Laws
are unlikely to have a material adverse effect on the business, financial
condition, results of operations or prospects of the Company and its
Subsidiaries, taken as a whole.
SECTION 4.08. Subsidiaries. All Restricted Assets are owned as of the
date of this Agreement by the Company and the Persons listed in Part B of
Schedule II hereto or, in the case of Restricted Assets sold since December 31,
1993, by Persons other than Unrestricted Subsidiaries. The list of entities
under the caption "Subsidiary Guarantors" on the signature pages of the
Subsidiary Guaranty Agreement constitutes a true, complete and accurate list of
all Required Guarantors as of the date of this Agreement. Part A of Schedule II
hereto contains a true, complete and accurate list of all Unrestricted
Subsidiaries, and Part B of Schedule II hereto contains a true, complete and
accurate list of all Restricted Subsidiaries as of the date of this Agreement.
SECTION 4.09. Ownership of Restricted Subsidiaries. The Company or a
Restricted Subsidiary is the record and beneficial owner, free and clear of all
Liens (other than those permitted by Section 5.07), of (i) all of the issued and
outstanding capital stock (other than directors' qualifying shares and shares
beneficially owned by the Company or a Restricted Subsidiary and held by
nominees of the Company or a Restricted Subsidiary solely to satisfy
requirements of local law) and other ownership interests of each Restricted
Subsidiary (except Unimar and the Unimar Restricted Subsidiaries and any other
Restricted Subsidiary the capital stock of which is sold
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pursuant to a sale permitted by Section 5.14) and (ii) except during any period
during which Unimar is an Unrestricted Subsidiary or ceases to be a Subsidiary,
at least 50% of the ownership interest in Unimar and the Unimar Restricted
Subsidiaries. Except as disclosed on Schedule VI, there are no outstanding
options, warrants or other rights to acquire any capital stock or other
ownership interest of any Restricted Subsidiary.
SECTION 4.10. Title to Properties. The Company and each of the
Subsidiaries have good title, free and clear of all Liens, claims, burdens and
title defects, to all of the material assets reflected in the Company's or such
Subsidiary's books and records as being owned by them except Liens permitted by
this Agreement and claims, burdens and title defects not materially adverse in
the aggregate.
SECTION 4.11. Taxes and Other Obligations. Consolidated United States
Federal income tax returns of the Company and the Subsidiaries have been
examined by the Internal Revenue Service, or the statutory period for such
examination has expired, for all years up to and including the year ended
December 31, 1989, and all assessed deficiencies resulting from such examination
have been discharged or reserved against as required by generally accepted
accounting principles. The Company and the Subsidiaries have filed all United
States Federal, state and local income tax returns and all other material
domestic tax returns which are required to be filed by them and have paid, or
provided for the payment before the same became delinquent of, all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
or any Subsidiary, other than those taxes being diligently contested in good
faith by appropriate proceedings. The charges, accruals and reserves on the
books of the Company and the Subsidiaries in respect of taxes are, in the
opinion of the Company, adequate. The Company and the Subsidiaries have set up
such reserves as are required by generally accepted accounting principles for
the payment of additional taxes for years which have not been audited by the
respective tax authorities. The Company and the Subsidiaries have paid all other
material obligations when due other than those being contested in good faith by
appropriate proceedings.
SECTION 4.12. Regulation U. Neither the Company nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation G) or margin stock
(within the meaning of Regulation U). Following the application of the proceeds
of each Loan, not more than 25% of the value of the assets of the Company, or of
the Company and its Subsidiaries, which are subject to any arrangement with the
Agent or any Bank (herein or otherwise) whereby the Company's or any
Subsidiary's right or ability to sell, pledge or otherwise dispose of assets is
in any way restricted will be any such margin stock.
SECTION 4.13. Certain Obligations. Neither the Company nor any
Subsidiary has any obligation to make payments on the Joint Venture Debt other
than
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those permitted by Section 5.17. The only Non-Recourse Debt existing on the
date of this Agreement is the Existing Pakistan Non-Recourse Debt.
SECTION 4.14. United Kingdom Assets. Substantially all of the
Restricted Assets located in the United Kingdom (including the United Kingdom
Sector of the North Sea) are directly owned by UTPL as of the date of this
Agreement.
ARTICLE V
COVENANTS
The Company agrees that, so long as any Bank has any Commitment
hereunder or any amount payable under any Note remains unpaid:
SECTION 5.01. Information. The Company will deliver to each of the
Banks:
(a) as soon as available and in any event within 100 days after the end
of each fiscal year of the Company, a consolidated balance sheet of the
Company and its Consolidated Subsidiaries as of the end of such fiscal year
and the related consolidated statements of operations, cash flows and common
stock and other shareholders' equity for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, all
reported on in a manner acceptable to the Securities and Exchange Commission
by Price Waterhouse or other independent public accountants of nationally
recognized standing;
(b) as soon as available and in any event within 60 days after the end
of each of the first three quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Consolidated Subsidiaries
as of the end of such quarter and the related consolidated statements of
operations and cash flows for such quarter and for the portion of the
Company's fiscal year ended at the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding quarter and
the corresponding portion of the Company's previous fiscal year, all
certified (subject to normal year-end adjustments) as to preparation in
accordance with generally accepted accounting principles and consistency by
the chief financial officer, the chief accounting officer or the treasurer
of the Company;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer, the chief accounting officer or the treasurer of
the Company (i) setting forth in reasonable detail the calculations required
to establish whether the Company was
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in compliance with the requirements of Sections 5.05 and 5.15 on the date of
such financial statements and (ii) stating whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Company and its Subsidiaries are
taking or propose to take with respect thereto;
(d) as soon as available and in any event within 60 days after the end
of each fiscal quarter of the Company, a certificate of the chief financial
officer, the chief accounting officer or the treasurer of the Company
certifying (i) whether the Margin Increase Condition exists as of the date
of such certificate, (ii) the Unimar Percentage as of the end of such
quarter and the amounts as of the end of such quarter of Consolidated Debt,
Defeased Debt, Excluded Subordinated Debt, Debt of the Company and its
Consolidated Subsidiaries determined on a consolidated basis, Debt of the
Company and the Restricted Subsidiaries determined on a consolidated basis,
Debt of Unimar, Debt of Unrestricted Subsidiaries, Excess Letter of
Credit/Guarantee Amount, Non-Restricted Asset Non-Recourse Debt,
Non-Recourse Debt of the Company and the Restricted Subsidiaries, and
Restricted Subsidiaries Recourse Debt, and (iii) each Asset Sale that has
been consummated during such quarter, the Fair Market Value of the
Restricted Assets subject thereto, the amount of fees, commissions, expenses
and taxes related thereto, the Net Sales Proceeds therefrom and the
cumulative amount of the Excess Net Sales Proceeds from all Assets Sales
since December 31, 1993;
(e) within five days after the chief financial officer, the chief
accounting officer or treasurer of the Company obtains knowledge of any
Default, if such Default is then continuing, a certificate of the chief
financial officer, the chief accounting officer or the treasurer of the
Company setting forth the details thereof and the action which the Company
and its Subsidiaries are taking or propose to take with respect thereto;
(f) immediately upon the filing of, or any material development in, any
litigation or the occurrence of any other event or contingency, if such
development, litigation, event or contingency could reasonably be expected
to have a material adverse effect on the business, assets, operations,
prospects or condition, financial or otherwise, of the Company and its
Subsidiaries, taken as a whole, a certificate of the chief financial
officer, the chief accounting officer or the treasurer of the Company
setting forth the details of such development, litigation, event or
contingency and the action which the Company and its Subsidiaries are taking
or propose to take with respect thereto;
(g) as soon as available and in any event within 100 days after the end
of each fiscal year of each Restricted Subsidiary (other than the Unimar
Restricted Subsidiaries), a consolidated balance sheet of such Restricted
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Subsidiary and its consolidated subsidiaries as of the end of such fiscal
year and the related consolidated statements of operations, cash flows and
common stock and other shareholders' equity for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all certified as to preparation in accordance with generally accepted
accounting principles and consistency by the chief financial officer, the
chief accounting officer or the treasurer of such Restricted Subsidiary;
(h) as soon as available and in any event within 60 days after the end
of the first three quarters of each fiscal year of each Restricted
Subsidiary (other than the Unimar Restricted Subsidiaries, Union Texas
Petroleum Energy Corporation and Union Texas International Corporation), a
consolidated balance sheet of such Restricted Subsidiary and its
consolidated subsidiaries as of the end of such quarter and the related
consolidated statements of operations and cash flows for such quarter and
for the portion of such Restricted Subsidiary's fiscal year ended at the end
of such quarter, setting forth in each case in comparative form the figures
for the corresponding quarter and the corresponding portion of such
Restricted Subsidiary's previous fiscal year, all certified (subject to
normal year-end adjustments) as to preparation in accordance with generally
accepted accounting principles and consistency by the chief financial
officer, the chief accounting officer or the treasurer of such Restricted
Subsidiary;
(i) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed;
(j) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) which the Company shall have filed with the Securities
and Exchange Commission;
(k) at least 45 days prior to the closing of each Asset Sale that will
result in aggregate Net Sales Proceeds (for such sale or, if such sale is
one of a series of related sales, for all sales and contemplated sales in
such series) of $50,000,000 or more, notice of such sale describing the
assets to be sold and the estimated Net Sales Proceeds thereof;
(l) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section
4043 of ERISA) (other than a "reportable event" not subject to the
provisions for 30-day notice to the PBGC under the regulations issued under
Section 4043 of ERISA) with respect to any Plan which might constitute
grounds
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for a termination of such Plan under Title IV of ERISA, or knows that the
plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event
given or required to be given to the PBGC; (ii) receives notice of complete
or partial withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the PBGC under
Title IV of ERISA of an intent to terminate, impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer, any Plan, a copy of such notice; (iv) applies for a
waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii)
fails to make any payment or contribution to any Plan or Multiemployer Plan
or in respect of any Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer, the chief accounting officer or
the treasurer of the Company setting forth details as to such occurrence and
action, if any, which the Company or applicable member of the ERISA Group is
required or proposes to take;
(m) within 5 days after the chief financial officer, the Vice
President-Finance, the treasurer or the controller of the Company has
knowledge of any filing under Rule 13d of the Securities and Exchange
Commission, promulgated under the Securities Exchange Act of 1934, as
amended, a copy thereof;
(n) within 5 days after receipt by the Company of any written agreement
of the type referred to in Section 6.01(k)(iii)(c), (A) a copy thereof
except that (i) if such written agreement has not been filed with the
Securities and Exchange Commission and is not otherwise public information,
each Bank as a condition to receiving a copy of such written agreement may
be required to sign, prior to receipt thereof, a confidentiality agreement
pursuant to which it agrees that it will treat such written agreement in a
confidential manner until such written agreement otherwise becomes public,
except for disclosure (a) to counsel for and other advisors, accountants and
auditors of such Bank, (b) as may be required by statute, decision, order,
rule, regulation or other law, (c) to regulatory authorities, (d) in
connection with any litigation involving such written agreement, such
confidentiality agreement or any of the Financing Documents, and (e) in
connection with any assignment, prospective assignment, sale, prospective
sale, participation or prospective participation or other transfer or
prospective transfer of any of such Bank's interests hereunder; provided
that any
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such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, transferee, or prospective transferee
shall have entered into a confidentiality agreement for the benefit of the
Company substantially upon the terms of this Section 5.01(n), and (ii) if
the Company is contractually prohibited from delivering a copy of such
written agreement to the Banks, the Company shall not be required to deliver
such written agreement unless such prohibition has been waived, but the
Company shall use reasonable efforts to obtain such waiver or if it is a
party to such written agreement to prevent any such prohibition from being
included therein, and (B) if the Company is a party to such written
agreement, but is excused pursuant to clause (A)(ii) of this Section 5.01(n)
from delivering a copy thereof to the Banks, the Company shall notify the
Banks of the existence of such written agreement (but not the content
thereof or other parties thereto), but as a condition to receiving such
notice the Banks may be required to sign, prior to receipt of such notice, a
confidentiality agreement conforming to clause (A)(i) of this Section
5.01(n);
(o) by May 1 of each year, an Engineering Report as of the last day of
the immediately preceding year;
(p) promptly upon the closing of the sale or other disposition of any
capital stock of UTPC or any option, warrant or other right to acquire any
such capital stock, notice thereof;
(q) promptly after any change in or termination of the rating of any
senior unsecured long-term debt of the Company by S&P, notice thereof.
(r) from time to time such additional information regarding the
financial position or business of the Company or any Subsidiary as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Affirmative Covenants. The Company will maintain its
existence and cause each Restricted Subsidiary to maintain its existence except
in the case of (i) a merger of a Restricted Subsidiary into the Company in a
merger permitted by Section 5.08 hereof, (ii) the merger of a Restricted
Subsidiary into another Restricted Subsidiary, if immediately after such merger
(and giving effect thereto), no Default shall have occurred and be continuing,
and (iii) any Asset Sale in the form of the merger of a Restricted Subsidiary
into another Person, if immediately after such merger (and giving effect
thereto), no Event of Default shall have occurred and be continuing. The Company
and each Subsidiary shall:
(a) Conduct of Business; Property. Cause all material property useful
and necessary in its business to be maintained in good working order and
condition and to be operated prudently in accordance with good
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industry practice; and to the extent consistent with prudent business
practices, defend its right, title and interest in its material properties
against all adverse claims.
(b) Compliance with Laws. Comply with all applicable laws, ordinances,
rules, regulations and reporting, filing and other requirements of
governmental authorities (including, without limitation, Environmental Laws
and ERISA and the rules and regulations thereunder), except where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings or where the failure to so comply would not have a material
adverse effect on the Company and its Subsidiaries, taken as a whole.
(c) Inspection of Property, Books and Records. Keep proper books of
record and account in accordance with sound accounting practices; and permit
representatives of any Bank, at such Bank's sole risk and expense, to visit
and inspect any of its properties (subject to obtaining any required consent
of third-party operators), to examine and make abstracts and copies from any
of its books and records and to discuss its affairs, finances and accounts
with its officers and employees, and use its best efforts to make its
independent public accountants available to discuss the affairs, finances
and accounts of the Company and any of its Subsidiaries, all at such
reasonable times and as often as may reasonably be desired.
SECTION 5.03. Primary Business. The exploration for,
and production and marketing of, Hydrocarbons will continue to be the
primary business of the Company and its Subsidiaries taken as whole.
SECTION 5.04. Insurance. The Company will maintain, and will cause each
Subsidiary to maintain (either in the name of the Company or in such
Subsidiary's own name) with financially sound and reputable insurance
companies, insurance on their property in at least such amounts and against
at least such risks as are usually insured against in the same general area
by companies of established repute engaged in the same or similar business;
and will furnish to the Banks, upon written request from the Agent, full
information as to the insurance carried.
SECTION 5.05. Debt. (a) [intentionally deleted]
(b) At no time will Restricted Subsidiaries Recourse Debt exceed
$75,000,000.
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(c) Consolidated Debt will not, on the last day of any calendar
quarter, exceed 3.75 times Operating Cash Flow for the four calendar
quarters ending on such day.
(d) Neither the Company nor any Restricted Subsidiary will create,
assume or otherwise incur any Debt if at the time of creation, assumption or
incurrence of such Debt or after giving effect to the creation, assumption
or incurrence of such Debt, any Event of Default would exist; provided that
the Company or any Restricted Subsidiary may renew or extend (but not
increase) its own Debt.
SECTION 5.06. Restricted Payments. Neither the Company nor any
Subsidiary shall declare or make any Restricted Payment unless, immediately
prior thereto and immediately thereafter, no Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall make
any Restricted Transfer unless, immediately prior thereto and immediately
thereafter, no Event of Default shall have occurred and be continuing; provided
that the Company or any Subsidiary can make Restricted Transfers in the form of
Investments in an Affiliate, Unrestricted Subsidiary or subsidiary of an
Unrestricted Subsidiary if (i) such Affiliate, Unrestricted Subsidiary or
subsidiary, as the case may be, has no outstanding Debt at the time of such
Investment and does not thereafter create, assume or otherwise incur any Debt
while any Event of Default is continuing and (ii) the Company notifies the Banks
of any such Investment in excess of $5,000,000 at least ten days prior to such
Investment. Nothing in this Section 5.06 shall prohibit the payment of any
dividend or distribution within 45 days after the declaration thereof if payment
of such dividend or distribution was not prohibited by this Agreement at the
time such declaration was made.
SECTION 5.07. Negative Pledge. Neither the Company nor any Restricted
Subsidiary will create, assume or suffer to exist (i) any Lien on any capital
stock or other ownership interest of any Restricted Subsidiary now owned or
hereafter acquired by it or any Lien on any option, warrant or other right to
acquire any capital stock or other ownership interest of any Restricted
Subsidiary now owned or hereafter acquired by it, other than those described in
Part A of Schedule III or (ii) any Lien on any other asset now owned or
hereafter acquired by it, except for the following Liens on assets not referred
to in the foregoing clause (i) of this Section 5.07:
(a) Liens existing on the date of this Agreement, securing Debt
outstanding and other obligations (including contractual obligations)
existing on the date of this Agreement and, except in the case of inchoate
operator's Liens, described in Part B of Schedule III hereto;
(b) any Lien (i) on any Non-Restricted Asset securing only
Non-Restricted Asset Non-Recourse Debt of the Company or any Restricted
Subsidiary or (ii) on any asset of Virginia Indonesia Company, Virginia
International Company or Union Texas East Kalimantan Limited securing Joint
Venture Debt;
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(c) mechanics', materialmen's, carriers' and other statutory Liens, but
only if arising, and only so long as continuing, in the ordinary course of
business; or deposits or pledges to obtain the release of any such Lien; or
easements, encroachments or other title defects which do not materially
detract from the value of its assets or materially impair the use thereof in
the operation of its business;
(d) Liens arising in the ordinary course of its business which (i) do
not secure Debt, (ii) do not secure any obligation in an amount exceeding
$15,000,000 and (iii) do not in the aggregate materially detract from the
value of its assets or materially impair the use thereof in the operation of
its business;
(e) Liens on any interest in a Partnership arising under any agreement
creating or governing such Partnership (including Unimar) and securing only
obligations of the members of such Partnership to make Investments in such
Partnership;
(f) Liens arising under any customary provision of any joint operating
agreement or similar agreement relating to the exploration, production,
development or transportation of oil and gas;
(g) Liens not otherwise permitted by the foregoing clauses of this
Section 5.07 on assets (other than any of the Restricted Assets) securing
Debt in an aggregate principal amount at any time outstanding not to exceed
$20,000,000; and
(h) any Lien securing the refinancing, extension, renewal or refunding
of any Debt secured by any Lien permitted by the foregoing subsection (a) of
this Section 5.07; provided that such Debt is not increased from the lesser
of the amount of such Debt set forth on Schedule III hereto or the amount of
such Debt outstanding immediately prior to such refinancing, extension,
renewal or refunding, and such Lien does not cover any property that is not
described on Schedule III hereto as securing such Debt.
SECTION 5.08. Consolidations and Mergers. The Company will not
consolidate or merge with or into any Person; provided that the Company may
merge with another Person if the Company is the surviving corporation and,
immediately after such merger (and giving effect thereto), no Default shall have
occurred and be continuing.
SECTION 5.09. Use of Proceeds. The proceeds of the Loans made under
this Agreement will be used by the Company for general corporate purposes;
provided that none of such proceeds will be used in any manner or for any
purpose that results in
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any violation of any applicable law or regulation (including, without
limitation, Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System).
SECTION 5.10. Parties to Subsidiary Guaranty Agreement. The Company
shall cause each Person that shall at any time after the date of this Agreement
become a Required Guarantor to enter into the Subsidiary Guaranty Agreement and
deliver, not later than 30 days after the date on which such Person shall have
become a Required Guarantor, to the Agent, in addition to a duly executed
counterpart of the Subsidiary Guaranty Agreement, duly executed documents, in
form and substance satisfactory to the Agent, of the type referred to in Section
3.01(c), (d), (e) and (g) pertaining to such Required Guarantor and the
Subsidiary Guaranty Agreement executed by it. Upon any sale or other disposition
of all of the capital stock of a Required Guarantor in an Asset Sale permitted
by Section 5.14, so long as no Default exists, such Required Guarantor shall be
released from its obligations under the Subsidiary Guaranty Agreement, and the
Agent shall execute such releases and other documents as such Subsidiary or the
Company may reasonably request to further evidence such release.
SECTION 5.11. Restrictions on Dividends, Intercompany Loans, or
Investments. The Company will not create or otherwise cause or permit to exist
or become effective, or permit any Subsidiary to create or otherwise cause or
permit to exist or become effective, any consensual encumbrance or restriction
(other than the Financing Documents) on the ability of any Restricted Subsidiary
to (i) pay dividends or make any other distributions on its capital stock or
other ownership interests or pay any Debt or other obligation owed to the
Company or any Restricted Subsidiary, or (ii) make any loans or advances to or
other Investments in the Company or any Restricted Subsidiary, except any
encumbrance or restriction in effect on the date of this Agreement and described
on Schedule IV hereto.
SECTION 5.12. Loans and Advances. The Company will not make or permit
to remain outstanding any cash loan or advance to any Person, or permit any
Restricted Subsidiary to make or permit to remain outstanding any cash loan or
advance to any Person, except (i) loans and advances to Subsidiaries or joint
ventures, partnerships or other business ventures in which the Company or any
Subsidiary has or is contemporaneously acquiring an interest or participation;
and (ii) other loans and advances not exceeding $10,000,000 at any time
outstanding.
SECTION 5.13. Cross-Default. The Company will not create, assume,
otherwise incur or suffer to exist, or permit any Restricted Subsidiary to
create, assume, otherwise incur or suffer to exist, any Debt if the maturity of
such Debt is or may be accelerated (assuming the giving of notice or lapse of
time or both), in whole or in part, as a result of any default under, or
acceleration of (i) any Non-Recourse Debt of the Company or any Restricted
Subsidiary or (ii) any Debt of any Unrestricted Subsidiary, unless the Required
Banks shall have given their prior written consent to such Debt of
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the Company or Restricted Subsidiary to be so created, assumed or otherwise
incurred, which consent will not be unreasonably withheld; provided that this
Section 5.13 shall not prohibit a provision in a Guarantee of the Company or a
Restricted Subsidiary Guaranteeing Debt of an Unrestricted Subsidiary that
provides that the payment obligation under such Guarantee may be accelerated
upon default under or acceleration of such Debt.
SECTION 5.14. Subsidiaries. The Company will at all times own, either
directly or through one or more Restricted Subsidiaries, free and clear of all
Liens (other than those permitted by Section 5.07), 100% of all issued and
outstanding capital stock (other than directors' qualifying shares and shares
beneficially owned by the Company or a Restricted Subsidiary and held by
nominees of the Company or a Restricted Subsidiary solely to satisfy
requirements of local law) and other ownership interests of each Restricted
Subsidiary and all options, warrants and other rights to acquire any such
capital stock or any such ownership interest, except for (i) Unimar and the
Unimar Restricted Subsidiaries, (ii) any Restricted Subsidiary sold or otherwise
disposed of pursuant to an Asset Sale, if after giving effect to such Asset
Sale, the Company does not own, directly or indirectly, any interest in such
Restricted Subsidiary, and (iii) those options described on Schedule VI. The
Company will at all times own, either directly or through one or more Restricted
Subsidiaries, free and clear of all Liens (other than those permitted by Section
5.07), 50% or more of the ownership interest in Unimar and the Unimar Restricted
Subsidiaries and all options, warrants and other rights to acquire any such
ownership interest (other than those described on Schedule VI); provided that
the Company and the Restricted Subsidiaries may sell all of their ownership
interest in Unimar and the Unimar Restricted Subsidiaries and such options,
warrants and other rights if, after giving effect to such sale, the Company does
not own, directly or indirectly, any interest in Unimar, the Unimar Restricted
Subsidiaries or any such option, warrant or other right. The Company will not at
any time permit any Restricted Subsidiary that is not a Unimar Restricted
Subsidiary to become a Unimar Restricted Subsidiary. The Company will not permit
any Restricted Asset to be sold, leased, transferred or otherwise disposed of to
any Person that was an Unrestricted Subsidiary immediately prior thereto if any
Default then exists or would result. The Company will not permit any Restricted
Subsidiary to issue any preferred stock unless such preferred stock at all times
is owned only by the Company. The Company will not permit any Restricted
Subsidiary to own, directly, both (a) any UK Asset and (b) any Non-UK Asset.
SECTION 5.15. Adjusted Equity and Interest Coverage. The Company will
at all times maintain Adjusted Equity of $350,000,000 or more. The Company will
cause EBITDA for each period of four consecutive calendar quarters to exceed
4.00 times Cash Interest Expense for such period.
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SECTION 5.16. Excluded Subordinated Debt and Preferred Stock. Neither
the Company nor any Subsidiary will pay, prepay, purchase, redeem, defease,
acquire, exchange or convert any preferred stock (other than Restricted
Preferred Stock) or any Excluded Subordinated Debt, except (a) exchanges for or
conversions to common stock of the Company, (b) payments of interest when due
required by the terms of any such Excluded Subordinated Debt as such terms are
in effect on the date such Excluded Subordinated Debt is incurred and (c) if no
Event of Default exists, payments of ordinary periodic dividends (excluding
liquidating dividends) on such preferred stock in accordance with the terms
thereof as such terms are in effect on the date such preferred stock is issued.
SECTION 5.17. Certain Obligations. Neither the Company nor any
Subsidiary will create, incur, assume or suffer to exist any obligation on its
part to make any payment on the Joint Venture Debt other than (a) the
obligations set forth in the agreements listed on Schedule V hereto with respect
to Joint Venture Debt in existence on April 24, 1995 and (b) obligations
substantially similar to those referred to in clause (a) with respect to Joint
Venture Debt created, incurred, assumed or arising after April 24, 1995.
SECTION 5.18. Restrictions on Asset Sales. (a) The Company will not and
will not permit any of its Restricted Subsidiaries to enter into any Asset Sale
if after giving effect thereto any Event of Default would exist.
(b) The Company will not permit to occur any Asset Sale involving, directly
or indirectly, any UK Assets if the aggregate Net Sales Proceeds of all Asset
Sales involving, directly or indirectly, UK Assets since December 31, 1993 would
exceed $250,000,000.
SECTION 5.19. UTEK Guaranty. The Company will cause Union Texas East
Kalimantan Limited to report, as promptly as reasonably practicable, the
execution and delivery of the Subsidiary Guaranty Agreement to the Indonesian
Foreign Commercial Loan Team ("Team") established pursuant to Indonesian
Presidential Decree No. 39 of 1991 and to deliver, as promptly as reasonably
practicable, to the Team and to Bank Indonesia copies of this Agreement and the
Subsidiary Guaranty Agreement. The Company will cause Union Texas East
Kalimantan Limited, as promptly as reasonably practical following execution from
time to time of amendments hereto or to the Subsidiary Guaranty Agreement, (i)
to report the execution and delivery of such amendments to the Team and (ii) to
deliver copies of such amendments to the Team and to Bank Indonesia.
SECTION 5.20. Conversion to Unrestricted Subsidiary. The Company may
convert a Restricted Subsidiary into an Unrestricted Subsidiary by giving the
Agent notice of such conversion at least 5 Domestic Business Days prior to such
conversion;
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provided that (i) no Restricted Subsidiary shall be so converted so long as it
owns directly or indirectly any interest in any Restricted Asset and (ii) no
such conversion shall be made if at the time of such notice or after giving
effect to such conversion, any Default would exist. Upon any such conversion of
a Required Guarantor to an Unrestricted Subsidiary such Subsidiary shall be
released from its obligations under the Subsidiary Guaranty Agreement, and the
Agent shall execute such releases and other documents as such Subsidiary or the
Company may reasonably request to further evidence such release.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Company shall fail to pay when due any principal of any Loan,
or shall fail to pay within five days of the due date thereof any interest
on any Loan, any fees or any other amount payable hereunder;
(b) the Company or any Subsidiary shall fail to observe or perform any
covenant contained in Sections 5.05 to 5.18, inclusive;
(c) the Company or any Subsidiary shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those covered
by clause (a) or (b) above) or in the Subsidiary Guaranty Agreement for 30
days after written notice thereof has been given to the Company by the Agent
at the request of any Bank;
(d) any representation, warranty, certification or statement made by
the Company or any Subsidiary in this Agreement or in the Subsidiary
Guaranty Agreement or made in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) the Company or any Restricted Subsidiary shall fail to make any
payment in respect of any Material Debt (other than the Notes) when due or
within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt of the Company or any
Restricted Subsidiary (other than the Notes) or enables (or, with the giving
of notice or lapse of time
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or both, would enable) the holder of such Material Debt or any Person
acting on such holder's behalf to accelerate the maturity thereof;
(g) the Company or any Restricted Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization
or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or
other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any corporate action to
authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Company or any Restricted Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Company or any Restricted
Subsidiary under the federal bankruptcy laws as now or hereafter in
effect;
(i) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $5,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to cause a
trustee to be appointed to administer any Material Plan; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there
shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or
more Multiemployer Plans which could cause one or more members of the
ERISA Group to incur a current payment obligation in excess of
$5,000,000;
(j) a judgment or order for the payment of money in excess of
$15,000,000 (net of applicable insurance coverage which is acknowledged
by the insurer) shall be rendered against the Company or any Restricted
Subsidiary and
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such judgment or order shall continue unsatisfied and unstayed for a
period of 30 days;
(k) any Person or two or more Persons acting in concert,
together with any affiliates thereof, (i) shall have acquired
beneficial ownership, directly or indirectly, (a) within any 12 month
period, of (1) more than 25% of the Company's common stock or (2)
securities representing more than 25% of the combined voting power of
all securities of the Company entitled to vote in the election of
directors (other than securities having such power only by reason of
the happening of a contingency) ("Voting Securities"), or (b) within
any 24 month period, of (1) more than 40% of the Company's common stock
or (2) more than 40% of the Company's Voting Securities, (ii) owns a
higher percentage of the Company's common stock or Voting Securities
than the percentage owned by Kohlberg Kravis Roberts & Co. and/or
non-operating investment entities it controls, and (iii) either (a)
owns 50% or more of the Company's common stock or Voting Securities,
(b) directly or indirectly elects or causes the election of Persons
constituting in the aggregate a majority of the Board of Directors of
the Company or any Restricted Subsidiary, or (c) exercises, directly or
indirectly, by written agreement, control over the Company or any
Restricted Subsidiary; provided that no Default or Event of Default
shall occur under this subsection (k) until the Agent, following
request by the Required Banks, gives notice to the Company that such
an Event of Default is declared, and such notice may not be given
after the date which is 45 days after the Banks actually receive
notice from the Company to the effect that the matters set forth in
clauses (i), (ii) and (iii) have occurred (for purposes of this
provision, "beneficial ownership" shall mean beneficial ownership
within the meaning of Rule 13d-3 of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934, as
amended, and the number and percentage of securities beneficially
owned by any Person or Persons shall be calculated in accordance with
such Rule); or
(l) any "Event of Default", as defined in either of the Other
Credit Agreements, shall occur;
then, and in every such event, the Agent shall (i) if requested by Banks having
at least 51% in the aggregate amount of the Commitments, by notice to the
Company terminate the Commitments and, upon the giving of such notice by the
Agent, they shall thereupon terminate, and (ii) if requested by Banks holding
Notes evidencing at least 51% in aggregate principal amount of the Loans, by
notice to the Company declare the Notes (together with accrued interest thereon)
to be, and, upon the giving of such notice by the Agent, the Notes shall
thereupon become, immediately due and payable without notice of intent to
accelerate, notice of acceleration, presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company; provided
that in the case of any of the Events of Default specified in clause (g) or (h)
above, without any
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notice to the Company or any other act by the Agent or the Banks, the
Commitments shall thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without notice of
intent to accelerate, notice of acceleration, presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Company under Section 6.01(c) promptly upon being requested to do so by any Bank
and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Financing Documents as are delegated to the
Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto. Each Bank hereby consents and agrees to the terms
of, and authorizes and directs the Agent to enter into, the Subsidiary Guaranty
Agreement.
SECTION 7.02. Agent and Affiliates. NationsBank shall have the same
rights and powers under the Financing Documents as any other Bank and may
exercise or refrain from exercising the same as though it were not the Agent,
and NationsBank and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Company or any Subsidiary or
other affiliate of the Company as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations of the Agent under the
Financing Documents are only those expressly set forth herein. Without limiting
the generality of the foregoing, the Agent shall not be required to take any
action with respect to any Default, except as expressly provided in Article VI.
SECTION 7.04. Consultation with Experts. The Agent may consult with
legal counsel (who may be counsel for the Company or any Subsidiary),
independent public accountants, independent petroleum engineers and other
experts selected by it and the Agent shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants, engineers or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
not taken by it in connection herewith (i) with the consent or at the request of
the Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the
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Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into or verify (i) any
statement, warranty or representation made in connection with this Agreement or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of the Company or any Subsidiary; (iii) the satisfaction
of any condition specified in Article III, except receipt of items required to
be delivered to the Agent; (iv) the validity, effectiveness or genuineness of
the Financing Documents or any other instrument or writing furnished in
connection herewith; or (v) the accuracy of any Engineering Report. The Agent
shall not incur any liability by acting in reliance upon any notice, consent,
certificate, statement, or other writing (which may be a bank wire, telex or
similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance
with its Commitment, indemnify the Agent (to the extent not reimbursed by the
Company) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from the Agent's
gross negligence or willful misconduct) that the Agent may suffer or incur in
connection with the Financing Documents or any action taken or omitted by the
Agent hereunder (IT BEING EXPRESSLY UNDERSTOOD AND AGREED THAT, EXCEPT FOR SUCH
NEGLIGENCE AS IS SO DETERMINED TO CONSTITUTE GROSS NEGLIGENCE, SUCH
INDEMNIFICATION DOES EXTEND TO THE CONSEQUENCES OF THE ORDINARY NEGLIGENCE,
WHETHER SOLE OR CONTRIBUTORY, OF THE AGENT).
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Company and may be removed at
any time with or without cause by the Required Banks. Upon any such resignation
or removal, the Company shall have the right, with the consent of the Required
Banks, to appoint a successor Agent. If no successor Agent shall have been so
appointed with the consent of the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized or licensed under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of its appointment as Agent
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hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the
Financing Documents. After any retiring Agent's resignation or removal hereunder
as Agent, the provisions of this Article VII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fees. The Company shall pay to the Agent for its
own account fees in the amounts and at the times previously agreed upon between
the Company and the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period:
(a) the Agent is advised by the Reference Banks that deposits
in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the relevant market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of the
Commitments advise the Agent that the London Interbank Offered Rate as
determined by the Agent will not adequately and fairly reflect the cost
to such Banks of funding their Euro-Dollar Loans for such Interest
Period,
the Agent shall forthwith give notice thereof to the Company and the Banks,
whereupon until the Agent notifies the Company that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make Euro-Dollar Loans, or make any Conversion (other than changing Euro-Dollar
Loans into Base Rate Loans), shall be suspended, and (ii) unless the Company
notifies the Agent at least two Domestic Business Days before the date of any
Euro-Dollar Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Euro-Dollar Lending
Office) with any request or directive (whether or not having the force of law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Euro-Dollar
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Lending Office) to make, maintain or fund its Euro-Dollar Loans, or make any
Conversion (other than changing Euro-Dollar Loans into Base Rate Loans), and
such Bank shall so notify the Agent, the Agent shall forthwith give notice
thereof to the other Banks and the Company, whereupon until such Bank notifies
the Company and the Agent that the circumstances giving rise to such suspension
no longer exist, the obligation of such Bank to make Euro-Dollar Loans, or make
any Conversion (other than changing Euro-Dollar Loans into Base Rate Loans), as
the case may be, shall be suspended. Before giving any notice to the Agent
pursuant to this Section 8.02, such Bank shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully continue to maintain
and fund any of its outstanding Euro-Dollar Loans to maturity and shall so
specify in such notice, each such Euro-Dollar Loan shall be immediately and
automatically Converted into a Base Rate Loan (on which interest and principal
shall be payable contemporaneously with the related Euro-Dollar Loans of the
other Banks).
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the date
hereof, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Applicable Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending Office)
to any tax, duty or other charge with respect to its Euro-Dollar Loans,
its Note or its obligation to make Euro-Dollar Loans, or shall change
the basis of taxation of payments to any Bank (or its Applicable
Lending Office) of the principal of or interest on its Euro- Dollar
Loans or any other amounts due under this Agreement in respect of its
Euro-Dollar Loans or its obligation to make Euro-Dollar Loans (except
for changes in the rate of tax on the overall net income of such Bank
or its Applicable Lending Office imposed by the jurisdiction in which
such Bank's principal executive office or Applicable Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation,
any such requirement imposed by the Board of Governors of the Federal
Reserve System against assets of, deposits with or for the account of,
or credit extended by, any Bank (or its Applicable Lending Office) or
on the United States market for certificates of deposit or the London
interbank market any other condition affecting its Euro-Dollar Loans,
its Note or its obligation to make Euro-Dollar Loans;
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and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan or
making any Conversion (other than changing Euro-Dollar Loans into Base Rate
Loans), or to reduce the amount of any sum received or receivable by such Bank
(or its Applicable Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be material, then, within
15 days after demand by such Bank (with a copy to the Agent), the Company shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such increased cost or reduction; provided that the Company shall not be
obligated to compensate any Bank for any such reduction attributable to a period
(i) more than 90 days prior to the giving of notice by such Bank to the Company
of its intention to seek compensation under this subsection (a) or (ii) more
than six months prior to the making of demand by such Bank for payment thereof
in accordance herewith.
(b) If any Bank shall have determined that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within 15
days after demand by such Bank (with a copy to the Agent), the Company shall pay
to such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction; provided that the Company shall not be obligated
to compensate any Bank for any such reduction attributable to a period (i) more
than 90 days prior to the giving of notice by such Bank to the Company of its
intention to seek compensation under this subsection (b) or (ii) more than six
months prior to the making of demand by such Bank for payment thereof in
accordance therewith.
(c) Each Bank will promptly notify the Company and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section 8.03 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. A certificate
of any Bank claiming compensation under this Section 8.03 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
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SECTION 8.04. Base Rate Loans Substituted for Affected Euro-Dollar
Loans. If (i) the obligation of any Bank to make Euro-Dollar Loans to the
Company has been suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03(a) and the Company shall, by at least
five Euro-Dollar Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section 8.04 shall apply to such Bank,
then, unless and until such Bank notifies the Company that the circumstances
giving rise to such suspension or demand for compensation no longer apply:
(a) all Loans to the Company which would otherwise be made by
such Bank as, or be Converted by such Bank as or into, Euro-Dollar
Loans shall instead be made as, or Converted into, Base Rate Loans (on
which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans to the Company has
been repaid, all payments of principal which would otherwise be applied
to repay such Euro-Dollar Loans shall be applied to repay its Base Rate
Loans instead.
SECTION 8.05. Substitution of Bank. If (i) the obligation of any Bank
to make Euro-Dollar Loans has been suspended pursuant to Section 8.02, (ii) any
Bank has demanded compensation under Section 8.03 or payment of Taxes or Other
Taxes under Section 2.17, or (iii) after satisfaction of all applicable
conditions precedent, any Bank fails to fund when due any Loan it is obligated
to fund under this Agreement, the Company shall have the right, with the
assistance of the Agent, to seek a mutually satisfactory substitute bank or
banks (which may be one or more of the Banks) to purchase the Notes and assume
the Commitment of such Bank (any such Bank is herein called an "Affected Bank").
Each Affected Bank agrees to sell, without recourse, all of its Commitment, its
interest in this Agreement and its Note to any such bank for an amount equal to
the sum of the outstanding unpaid principal of and accrued interest on the Loans
of such Affected Bank and all commitment fees and other fees and amounts due
such Affected Bank hereunder, calculated, in each case, to the date such
Commitment, interest in this Agreement and Note are purchased.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, facsimile transmission or similar writing) and shall be given to such
party: (x) in the case of the Company or the Agent, at its address or telex
number set forth on the signature pages hereof, (y) in the case of any Bank, at
its address or telex number set forth in its
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Administrative Questionnaire or (z) in the case of any party, 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 9.01 and the appropriate answer-back is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid, (iii) if
given by facsimile transmission, when such facsimile is transmitted and
accompanied by a telephone call to the party receiving such transmission or (iv)
if given by any other means, when delivered at the address specified in this
Section 9.01; provided that notices to the Agent shall not be effective until
received.
SECTION 9.02. No Waivers. No failure or delay by the Agent or any Bank
in exercising any right, power or privilege under any Financing Document shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided in the Financing
Documents shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The Company shall pay (i)
all reasonable documented out-of-pocket costs and expenses of the Agent incurred
in connection with the syndication of this Agreement or the preparation of the
Financing Documents, any waiver or consent thereunder or any amendment thereof
or any Default or alleged Default hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket costs and expenses incurred by the Agent or
incurred by any Bank, including fees and disbursements of counsel, in connection
with such Event of Default and collection and other enforcement proceedings
resulting therefrom.
(b) The Company agrees to indemnify the Agent, each Co-Agent and each
Bank and hold the Agent, each Co-Agent and each Bank harmless from and against
any and all liabilities, losses, damages, costs and expenses of any kind
(including, without limitation, the reasonable fees and disbursements of counsel
for the Agent, any Co-Agent or any Bank in connection with any investigative,
administrative or judicial proceedings, whether or not the Agent, such Co-Agent
or such Bank, as the case may be, shall be designated a party thereto) which may
be incurred by the Agent, any Co-Agent or any Bank, relating to or arising out
of this Agreement or any actual or proposed use of proceeds of Loans hereunder,
including specifically, without limitation, all liabilities, losses, damages,
costs and expenses arising out of a violation of any Environmental Law; provided
that neither the Agent nor any Co-Agent nor any Bank shall have the right to be
indemnified hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction (IT BEING EXPRESSLY UNDERSTOOD
AND AGREED THAT, EXCEPT FOR SUCH NEGLIGENCE AS IS SO DETERMINED TO CONSTITUTE
GROSS NEGLIGENCE, SUCH INDEMNIFICATION DOES EXTEND TO THE CONSEQUENCES OF THE
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ORDINARY NEGLIGENCE, WHETHER SOLE OR CONTRIBUTORY, OF THE INDEMNITEE).
(c) Within a reasonable period of time after any Person entitled to
indemnification under Section 9.03(b) (an "Indemnified Person") receives actual
notice of the assertion of any claim or the commencement of any action, or any
threatened claim or action, covered by Section 9.03(b), such Indemnified Person
shall, if indemnification with respect thereof is to be sought from the Company
under Section 9.03(b), notify the Company in writing of such claim or action;
provided that the failure to so notify the Company shall not relieve the Company
from any liability which the Company may have to the Indemnified Person under
Section 9.03(b) unless the obligations of the Company under Section 9.03(b) have
been significantly increased as a result of such failure. The Company and such
Indemnified Person shall cooperate in the defense of any such claim or action
and shall take those actions reasonably within their power to take which are
necessary to preserve any legal defenses to such matters. If any such claim or
action shall be brought or threatened against an Indemnified Person, so long as
no Event of Default exists, the Company shall be entitled to participate in the
defense thereof, and, with the consent of such Indemnified Person, to assume the
defense thereof with counsel reasonably satisfactory to the Indemnified Person.
Notwithstanding any provision hereof to the contrary, no consent order or
settlement shall be entered into in any such claim or action unless both the
Company and such Indemnified Person have given their prior written consent
thereto; provided that such consent of the Company shall not be required if any
Event of Default exists.
(d) All obligations of the Company to indemnify or otherwise to make
payments to the Agent, any Co-Agent or any Bank provided in this Agreement shall
survive any termination of the Commitments and the repayment of the Loans.
SECTION 9.04. Sharing of Set-Offs, Etc. Each Bank agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest due
with respect to any Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of principal and
interest due with respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks, and such other adjustments
shall be made, as may be required so that all such payments of principal and
interest with respect to the Notes held by the Banks shall be shared by the
Banks pro rata; provided that nothing in this Section 9.04 shall impair the
right of any Bank to exercise any right of set-off or counterclaim it may have
and to apply the amount subject to such exercise to the payment of indebtedness
of the Company other than its indebtedness under the Notes. The Company agrees,
to the fullest extent it may effectively do so under applicable law, that any
holder of a participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of
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set-off or counterclaim and other rights with respect to such participation as
fully as if such holder of a participation were a direct creditor of the Company
in the amount of such participation.
SECTION 9.05. Amendments and Waivers. Any provision of this Agreement
or the Notes may be amended or waived, if, but only if, such amendment or waiver
is in writing and is signed by the Company and the Required Banks (and, if the
rights or duties of the Agent are affected thereby, by the Agent); provided that
no such amendment or waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank or subject any Bank to any additional
obligation, (ii) reduce the principal of or rate of interest on any Loan or any
fees hereunder, (iii) postpone the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder or for any reduction or termination
of any Commitment, or (iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action under this
Section 9.05 or any other provision of this Agreement.
SECTION 9.06. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Company may not
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Banks.
(b) Any Bank may at any time and from time to time grant to one or more
banks or other institutions (each a "Participant") participating interests in
its Commitment or any or all of its Loans. In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice to
the Company and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Company and the Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement pursuant to
which any Bank may grant such a participating interest shall provide that such
Bank shall retain the sole right and responsibility to enforce the obligations
of the Company hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (i),
(ii) or (iii) of Section 9.05 without the consent of the Participant. The
Company agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of Article VIII with
respect to its participating interest. An assignment or other transfer which is
not permitted by subsection (c) or (d) below shall be given effect for purposes
of this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
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(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") a proportionate part of all of its rights and
obligations under this Agreement and the Notes in an amount which equals
$10,000,000 or more, and such Assignee shall assume such rights and obligations
under this Agreement and the Notes, pursuant to an Assignment executed by such
Assignee and such transferor Bank, with (and subject to) the subscribed consent
of the Company and the Agent (which such consents shall not be unreasonably
withheld); provided that if an Assignee is an affiliate of such transferor Bank
or is another Bank, no such consent of the Company shall be required; provided,
further, that each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement and the Notes.
Upon execution and delivery of such instrument (and delivery to the Agent of an
Administrative Questionnaire with respect to such Assignee, if such Assignee has
not already done so) and payment by such Assignee to such transferor Bank of an
amount equal to the purchase price agreed between such transferor Bank and such
Assignee, such Assignee shall be a Bank party to this Agreement and shall have
all the rights and obligations of a Bank with a Commitment as set forth in such
instrument of assumption, and the transferor Bank shall be released from its
obligations hereunder to a corresponding extent, and no further consent or
action by any party shall be required. Upon the consummation of any assignment
pursuant to this subsection (c), the transferor Bank, the Agent and the Company
shall make appropriate arrangements so that, if required, a new Note is issued
to the Assignee. In connection with any such assignment, the transferor Bank
shall pay to the Agent for its account an administrative fee in the amount of
$2,500 for processing such assignment. If the Assignee is not incorporated under
the laws of the United States of America or a state thereof, it shall, prior to
the first date on which interest or fees are payable hereunder for its account,
deliver to the Company and the Agent certification as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 2.17.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 8.03 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Company's prior written consent or by
reason of the provisions of Section 8.02 or 8.03 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
SECTION 9.07. Collateral. Each of the Banks represents to the Agent and
each of the other Banks that it in good faith is not relying upon any margin
stock (as
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defined in Regulation G) or any margin stock (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided for in this
Agreement.
SECTION 9.08. Texas Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Texas.
SECTION 9.09. CONSENT TO JURISDICTION. THE COMPANY 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 IT IN CONNECTION WITH ANY
ACTION 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 OR PROCEEDING
SHALL BE IN THE STATE OF TEXAS. IN ANY SUCH ACTION OR PROCEEDING, THE COMPANY
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS OR NOTICE AND
AGREES THAT SERVICE BY FIRST CLASS MAIL, RETURN RECEIPT REQUESTED, TO THE
COMPANY 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 THE COMPANY.
SECTION 9.10. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 9.11. WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, THE
CO-AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVE 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 9.12. COMPLETE AGREEMENT. THIS WRITTEN CREDIT AGREEMENT AND THE
OTHER FINANCING DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG 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 AMONG THE
PARTIES.
SECTION 9.13. Liability of Co-Agents. No Co-Agent, in its capacity as a
Co-Agent hereunder, shall have any duty or responsibility hereunder.
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[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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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 day and year
first above written.
UNION TEXAS PETROLEUM
HOLDINGS, INC.
By /s/ M.N. MARKOWITZ
----------------------------------
M.N. Markowitz
Vice President and Treasurer
1330 Post Oak Blvd.
Houston, Texas 77056
Telex number: 762255
Commitments
$40,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/ PAUL A. SQUIRES
----------------------------------
Paul A. Squires
Senior Vice President
$30,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ LAURA B. SHEPARD
----------------------------------
Laura B. Shepard
Vice President
By /s/ JOHN M. ROBINSON
----------------------------------
John M. Robinson
Managing Director
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$30,000,000 UNION BANK OF SWITZERLAND,
HOUSTON AGENCY
By /s/ EVANS R. SWANN
----------------------------------
Evans R. Swann
Managing Director
By /s/ ALFRED IMHOLZ
----------------------------------
Alfred Imholz
Managing Director
Total Commitments: $100,000,000
================================
NATIONSBANK OF TEXAS, N.A.,
as Agent
By /s/ PAUL A. SQUIRES
----------------------------------
Paul A. Squires
Senior Vice President
700 Louisiana Street, 8th Floor
Houston, Texas 77002
Telex Number: 163244
Answerback: NCNBTEXDAL
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Co-Agent
By /s/ LAURA B. SHEPARD
----------------------------------
Laura B. Shepard
Vice President
By /s/ JOHN M. ROBINSON
----------------------------------
John M. Robinson
Managing Director
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UNION BANK OF SWITZERLAND,
HOUSTON AGENCY,
as Co-Agent
By /s/ EVANS R. SWANN
----------------------------------
Evans R. Swann
Managing Director
By /s/ ALFRED IMHOLZ
----------------------------------
Alfred Imholz
Managing Director
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SCHEDULE II
EXISTING SUBSIDIARIES
PART A
EXISTING UNRESTRICTED SUBSIDIARIES JURISDICTION
- ---------------------------------- ------------
Four Oaks Insurance, Ltd. Bermuda
Unicon Producing Company [Partnership] Texas
Union Texas I Corporation Delaware
Union Texas Adriatic, Inc. Delaware
Union Texas (Argentina) Ltd. Delaware
Union Texas Asia Corporation Delaware
Union Texas Barakan, Inc. Delaware
Union Texas Brasil, Inc. Delaware
Union Texas Britannia Limited England
Union Texas Carthage, Inc. Delaware
Union Texas Development Corporation Delaware
Union Texas Egypt, Inc. Delaware
Union Texas Espana, Inc. Delaware
Union Texas Finance, Inc. Delaware
Union Texas (Kai) Limited Bahamas
Union Texas Maghreb, Inc. Delaware
Union Texas Methane, Inc. Delaware
Union Texas Metropole, S.A. France
Union Texas PNG, Inc. Delaware
Union Texas Petrochemicals Pipeline, Inc. Delaware
Union Texas Petroleum Alaska Corporation Delaware
Union Texas Petroleum Europe and Middle East, Inc. Delaware
Union Texas Petroleum Services Corporation Delaware
Union Texas (Rebi) Limited Bahamas
Union Texas (South East Asia) Inc. Delaware
Union Texas (Tanimbar) Limited Bahamas
Union Texas Trading Corporation Delaware
Union Texas (Transnational) Limited Bahamas
Union Texas Tunisia, Inc. Delaware
West Gemsa Petroleum Company Egypt
75
EXISTING UNIMAR UNRESTRICTED SUBSIDIARIES JURISDICTION
- ----------------------------------------- ------------
AKI International Finance, N.V. Netherlands Antilles
Alaska Interstate International Finance, B.V. Netherlands
Alaska Interstate International Finance, N.V. Netherlands Antilles
ENSTAR Petroleum, Ltd. Canada
Purchasing Services, Inc. Delaware
Unimar Financing Corporation Delaware
VICO Services, Inc. Delaware
VICO Trading, Inc. Delaware
Virginia Services, Ltd. Delaware
PART B
EXISTING RESTRICTED SUBSIDIARIES
- --------------------------------
Union Texas East Kalimantan Limited Bahamas
Union Texas International Corporation Delaware
Union Texas Pakistan, Inc. Delaware
Union Texas Petroleum Energy Corporation Delaware
Union Texas Petroleum Limited England
Union Texas Products Corporation Delaware
Unistar, Inc. Delaware
OTHER RESTRICTED SUBSIDIARY
- ---------------------------
Unimar Company [Partnership] Texas
EXISTING UNIMAR RESTRICTED SUBSIDIARIES
- ---------------------------------------
ENSTAR Corporation Delaware
ENSTAR Indonesia, Inc. Delaware
VICO 7.5, Inc. Delaware
Virginia Indonesia Company Delaware
Virginia International Company Delaware
76
SCHEDULE III
CERTAIN EXISTING LIENS
PART A: LIENS ON OWNERSHIP INTERESTS
1. Amended and Restated Agreement of General Partnership of Unimar Company
("Unimar"), dated as of September 11, 1990, between Unistar, Inc.
("Unistar") and LASMO (USTAR) Inc. ("USTAR," formerly Ultrastar, Inc.) (the
"Unimar Partnership Agreement"):
As security for the payment of all contributions to be made by each partner
pursuant to the Unimar Partnership Agreement, each of Unistar and USTAR has
created a security interest in its partnership interest in Unimar in favor
of the other partner.
2. Articles of Association of Union Texas East Kalimantan Limited ("UTEK")
dated October 26, 1983.
As security for the debts, liabilities and engagements of each member solely
or jointly with any other person to or with UTEK, UTEK has a first and
paramount lien upon all the shares registered in the name of each member,
which lien extends to all dividends from time to time declared in respect of
such shares.
3. Articles of Association of Union Texas Petroleum Limited ("UTPL").
UTPL has a lien under English law that will attach to fully paid shares and
to all shares registered in the name of any person indebted or under
liability to UTPL.
77
SCHEDULE III
CERTAIN EXISTING LIENS
PART B: OTHER EXISTING LIENS
DOCUMENT AND LIEN AMOUNT OF DEBT AS
----------------- OF 3/31/95
-----------------
1. Pledge Agreement dated as of September 25, 1984 by No set amount
Virginia Indonesia Company in favor of Irving Trust
Company (the "Pledge Agreement"), and the Indenture,
dated as of September 25, 1984 between Unimar, as
Issuer, and Irving Trust Company, as Trustee,
providing for 14,077,747 Indonesian Participating
Units (the "IPU Indenture"), as supplemented by the
Supplemental Indenture dated as of October 31, 1986:
As security for performance of the obligations of
Unimar under the IPU Indenture, Section 2 of the
Pledge Agreement sets forth a first lien and
security interest granted by Virginia Indonesia
Company (the "Pledgor") in all of the Pledgor's
rights to receive payments from the Joint Venture
Paying Agent pursuant to the Joint Venture Paying
Agency Agreements, each as defined in the IPU
Indenture, and in all proceeds therefrom. This lien
and security interest only becomes effective upon
the occurrence of certain events specified in the
IPU Indenture. As of December 31, 1994, this lien
and security interest is not effective.
78
DOCUMENT AND LIEN AMOUNT OF DEBT AS
----------------- OF 6/30/95
------------------
2. Deed of Floating Charge dated December 20, 1988 (the $5,728,000
"Deed of Floating Charge") by Union Texas Pakistan,
Inc. ("UT Pakistan") in favor of the Overseas
Private Investment Corporation ("OPIC"), in
connection with the Finance Agreement dated as of
December 20, 1988 between UT Pakistan and OPIC (the
"OPIC Finance Agreement") and one or more Notes
(the "Notes") issued pursuant to the Issuing and
Paying Agency Agreement of even date:
As security for the obligations of UT Pakistan under
the OPIC Finance Agreement and the Notes, Section 2
of the Deed of Floating Charge sets forth a first
floating charge in favor of OPIC in UT Pakistan's
(i) 30% share as a working interest owner of all
crude oil and natural gas produced or to be produced
from the Dedicated Areas, as defined in the Deed of
Floating Charge, and being in transit from the well
head to the various points of delivery, (ii) 30%
share as a working interest owner of all crude oil
produced or to be produced from the Dedicated Areas,
and being under storage in tank batteries in the
Dedicated Areas, as defined in the Deed of Floating
Charge, (iii) rights and benefits under certain sale
agreements relating to the sale of crude oil or
natural gas and (iv) accounts receivable under such
sales agreements. OPIC's recourse is limited to
the assets of UT Pakistan described in Section
8.2(b) of the OPIC Finance Agreement.
79
SCHEDULE IV
CERTAIN EXISTING RESTRICTIONS
1. Finance Agreement dated as of December 20, 1988 between Union Texas
Pakistan, Inc. ("UT Pakistan") and the Overseas Private Investment
Corporation:
a. Negative covenant of UT Pakistan set forth in Section 7.3 restricting,
in the event of a default, payment of dividends, purchases of capital
stock and payments to the Company on any intercorporate line of credit,
among other restrictions.
b. Negative covenant of UT Pakistan set forth in Section 7.5(e)
restricting, among other things, certain loans, advances and guarantees
of loans to persons other than the Company.
2. Amended and Restated Agreement of General Partnership of Unimar Company
("Unimar"), dated as of September 11, 1990 between Unistar, Inc. and LASMO
(USTAR) Inc. (formerly Ultrastar, Inc.) (the "Unimar Partnership
Agreement"):
a. Restrictions resulting from provisions of Article IV regarding the
management of Unimar and shareholder action of certain Unimar Restricted
Subsidiaries.
b. Restrictions resulting from provisions of Article X with respect to
dissolution and liquidation of Unimar.
80
SCHEDULE V
JOINT VENTURE DEBT AGREEMENTS
1. Producers Agreement No. 2 dated as of June 9, 1987 among Pertamina, Roy M.
Huffington, Inc., Virginia International Company, Ultramar Indonesia
Limited, Virginia Indonesia Company, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., and Huffington Corporation, as Producers, in
favor of The Industrial Bank of Japan Trust Company ("IBJ Trust"), as Agent
and Lender, and the other Lenders named therein, as amended by Amendment
No. 1 to Producers Agreement No. 2, dated as of February 9, 1988 and
Amendment No. 2 to Producers Agreement No. 2 dated as of May 31, 1988, each
among the Producers, the Lenders named therein and IBJ Trust, as Agent,
relating to the Bontang Capital Projects Loan Agreement No. 2 dated as of
June 9, 1987 among Continental Bank International, as Trustee, and the
other parties named therein.
2. Bontang III Producers Agreement dated as of February 9, 1988 among
Pertamina, Roy M. Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company, Ultramar Indonesia
Limited, Union Texas East Kalimantan Limited, Universe Tankships, Inc.,
Total Indonesie, Unocal Indonesia, Ltd. and Indonesia Petroleum, Ltd., as
Producers, in favor of Train-E Finance Co., Ltd., as Tranche A Lender, the
Banks named therein as Tranche B Lenders and IBJ Trust as Tranche B Lender
and as Agent for such Tranche B Lenders, as amended by Amendment No. 1
dated as of May 31, 1988, relating to the Bontang III Loan Agreement dated
as of February 9, 1988 among Continental Bank International, as Trustee,
and the other parties named therein.
3. Bontang IV Producers Agreement dated as of August 26, 1991 among Pertamina,
Virginia Indonesia Company, OPICOIL Houston, Inc., Virginia International
Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited,
Universe Gas & Oil Company, Inc., Total Indonesie, Unocal Indonesia, Ltd.,
and Indonesia Petroleum, Ltd., as Producers, in favor of The Chase
Manhattan Bank, N.A., as Lender and as Agent for the Lenders, and the other
Lenders named therein, relating to the Bontang IV Loan Agreement dated as
of August 26, 1991 among Continental Bank International, as Trustee, and
the other parties named therein.
81
SCHEDULE VI
OUTSTANDING OPTIONS
1. Preferential right of purchase, and right to reasonably nullify a proposed
disposition, in favor of each of Unistar, Inc. ("Unistar") and LASMO
(USTAR) Inc. ("USTAR," formerly Ultrastar, Inc.), set forth in Article VIII
of the Amended and Restated Agreement of General Partnership of Unimar
Company, dated as of September 11, 1990, between Unistar and USTAR (the
"Unimar Partnership Agreement").
2. Buy-sell option that may be invoked by either Unistar or USTAR in the event
of irreconcilable differences or continued deadlocks, set forth in Article
IX of the Unimar Partnership Agreement.
63
82
EXHIBIT A
NOTE
Houston, Texas
_________, 199_
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 June 15, 1997 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 Street,
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 June 30, 1995 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 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:___________________________________
M.N. Markowitz
Vice President and Treasurer
83
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount of Type of Principal Date of Notation
Date Loan Loan Repaid Payment Made By
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- --------------------------------------------------------------------------------
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84
EXHIBIT B
SUBSIDIARY GUARANTY AGREEMENT
SUBSIDIARY GUARANTY AGREEMENT dated as of June 30, 1995 (as may be
amended or otherwise modified from time to time in accordance with the terms
hereof, this "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 the Credit Agreement dated as of June 30, 1995
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 (as may be amended or otherwise modified from time
to time, the "Credit Agreement"), the Company is entitled, subject to certain
conditions, to borrow up to $100,000,000 or such other amount as may be
available pursuant thereto;
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:
85
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 the Company or any Subsidiary Guarantor under any Financing Document
or any Guaranteed Amount;
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86
(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 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.
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87
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 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
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88
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.
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
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89
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 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,
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90
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.
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
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91
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 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.
-8-
92
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 UNION TEXAS EAST KALIMANTAN
CORPORATION LIMITED
By:_________________________ By:_________________________
M.N. Markowitz M.N. Markowitz
Treasurer Treasurer
UNION TEXAS PRODUCTS UNION TEXAS INTERNATIONAL
CORPORATION CORPORATION
By:_________________________ By:_________________________
M.N. Markowitz M.N. Markowitz
Treasurer Treasurer
UNISTAR, INC.
By:_________________________
M.N. Markowitz
Vice President
AGENT:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By:_________________________
Paul A. Squires
Senior Vice President
-9-
93
EXHIBIT C
OPINION OF GENERAL COUNSEL
June 30, 1995
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A., as Agent
700 Louisiana Street
Houston, Texas 77002
Dear Sirs:
I am General Counsel, Vice President-Administration, and Secretary of
Union Texas Petroleum Holdings, Inc., a Delaware corporation (the "Company"),
and have acted as counsel for the Company in connection with the Credit
Agreement dated as of June 30, 1995 (the "Credit Agreement") among the Company,
the Banks and Co-Agents listed on the signature pages thereof and NationsBank of
Texas, N.A., as Agent (the "Agent"), and for Union Texas Petroleum Energy
Corporation, a Delaware corporation, Union Texas International Corporation, a
Delaware corporation, Unistar, Inc., a Delaware corporation, Union Texas East
Kalimantan Limited, a Bahamian corporation, and Union Texas Products
Corporation, a Delaware corporation (collectively, the "Subsidiary Guarantors"
and together with the Company, the "Obligors"), in connection with the
Subsidiary Guaranty Agreement dated as of June 30, 1995 (the "Subsidiary
Guaranty Agreement") among the Subsidiary Guarantors and the Agent. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as therein defined.
In connection with the opinions expressed below, I have examined or
caused to be examined executed counterparts of the following (collectively, the
"Financing Documents"):
(a) the Credit Agreement,
(b) the Subsidiary Guaranty Agreement, and
(c) three (3) promissory notes, each substantially in the form of
Exhibit A to the Credit Agreement, one payable to each Bank.
I have also examined or caused to be examined originals or copies,
certified or otherwise identified to my satisfaction, of such other instruments,
documents
94
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A., as Agent
June 30, 1995
Page 2
and records as I deemed necessary to express the opinions hereinafter set forth.
To the extent relevant to my opinion, I have assumed, without independent
verification, (i) the due execution and delivery of each Financing Document by
each party thereto (other than the Obligors), (ii) the genuineness of all
signatures on all documents submitted to me, (iii) that each party (other than
the Obligors) to each of the Financing Documents is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has full power and authority to enter into and to carry out its
obligations under such Financing Documents, (iv) that the execution and delivery
of each of the Financing Documents by each party thereto (other than the
Obligors) and the performance of its obligations under such Financing Documents
have been duly authorized by all necessary proceedings and actions, (v) that
each of the Financing Documents is the legal, valid and binding obligation of
each party thereto (other than the Obligors), enforceable against such party in
accordance with the terms of such Financing Documents, subject to limitations of
the types described in the opinion of Andrews & Kurth L.L.P. delivered to you
pursuant to the Financing Documents, and (vi) the authenticity of all documents
submitted to me as originals and the conformity to authentic original documents
of all documents submitted to me as certified, conformed or photostatic copies.
I have relied, to the extent that I deem such reliance proper, upon certificates
of officers of one or more of the Obligors and of governmental officials as to
matters of fact not independently established by me.
For purposes of the opinion set forth in paragraph 2 below, I have (i)
relied on the opinion of Andrews & Kurth L.L.P. with respect to the agreements
and instruments identified on Schedule I thereto, and (ii) examined or caused to
be examined each other agreement or other instrument binding upon any Obligor, a
breach of or default under which would, in my judgment, have a material adverse
effect upon the Company and its Subsidiaries taken as a whole. As to other
agreements and instruments, I have not undertaken such a review for purposes of
this opinion, given the volume of such documents and given the fact that by
virtue of the character of such documents and the historical practices of the
Company with respect thereto, I have no reason to believe that a breach of or
default under any such document would arise by virtue of the execution, delivery
and performance of the Financing Documents.
Based on the foregoing and subject to the qualifications and
limitations set forth below, I am of the opinion that:
95
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A., as Agent
June 30, 1995
Page 3
1. Each of the Obligors has all material governmental licenses,
authorizations, consents and approvals required to own its assets and to carry
on its business as now conducted.
2. To the best of my knowledge, the execution, delivery and performance
by each Obligor of each Financing Document to which it is a party do not
constitute a breach of or default under, or result in the creation or imposition
of any Lien on any material asset of the Company or any Subsidiary under, any
provision of any instrument or agreement evidencing or governing Debt binding
upon such Obligor or any other material agreement, judgment, injunction, order,
decree or other instrument binding upon such Obligor.
3. To the best of my knowledge, there is no action, suit or proceeding
pending against, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties or interests, at law or in
admiralty or equity, before any court or arbitrator or any governmental body,
agency or official, foreign or domestic, in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, financial position or results of operations of the Company and its
Subsidiaries, taken as a whole, or which in any manner draws into question the
validity of any Financing Document.
My opinions in paragraph 1 are rendered only with respect to the
constitutions, laws, rules and regulations which are currently in effect and
applicable court rulings and orders which have been published and are generally
available. In addition, the foregoing opinions are rendered only as of the date
hereof, and I disclaim any obligation to advise you of changes thereafter.
I am a member of the bar of the State of Texas only, and this opinion
is limited in all respects to the laws of the State of Texas, the General
Corporation Law of Delaware and federal law of the United States of America,
and, to the limited extent described below, the laws of The Commonwealth of The
Bahamas and The Republic of Indonesia. In rendering certain of the opinions
expressed above, I have relied, with your approval, upon an opinion, dated the
date hereof, of Andrews & Kurth L.L.P., a copy of which has been furnished to
you. My opinion in paragraph 1 addresses, with respect to Union Texas East
Kalimantan Limited, the laws of The Commonwealth of The Bahamas and The Republic
of Indonesia, and such opinion with respect to such laws is, with your
permission and without independent investigation, given solely in reliance upon
and limited in scope to the opinions of Graham, Thompson & Co. and Mochtar,
Karuwin
96
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A., as Agent
June 30, 1995
Page 4
& Komar, respectively, dated April 24, 1995 (the "Foreign Opinions") addressed
to each of you as "Banks" under the Credit Agreement dated as of April 24, 1995
among the Company, the banks and co-agents listed on the signature pages thereof
and NationsBank of Texas, N.A., as agent, copies of which Foreign Opinions have
been furnished to you, and my opinion incorporates by reference all
qualifications, exceptions and limitations set forth therein. As you know,
neither Graham, Thompson & Co. nor Mochtar, Karuwin & Komar have reviewed the
Financing Documents, nor have they updated their respective opinions since April
24, 1995. I have assumed, with your permission and without independent
investigation, that the Foreign Opinions are true and correct as of the date
hereof as if such opinions were published on the date hereof and the Financing
Documents were the "Financing Documents" referred to therein.
This opinion is for the benefit of and may be relied upon by the Banks,
the Agent, the Co-Agents, their respective successors and assigns, their
respective counsel and Participants in connection with the transactions
contemplated by the Credit Agreement. Otherwise, this opinion may not be used,
published, circulated or relied upon by any other Person for any purpose without
my prior written consent.
Very truly yours,
Newton W. Wilson, III
97
EXHIBIT D
OPINION OF ANDREWS & KURTH L.L.P.
June 30, 1995
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A., as Agent
700 Louisiana Street
Houston, Texas 77002
Dear Sirs:
We have acted as special counsel to Union Texas Petroleum Holdings,
Inc., a Delaware corporation (the "Company"), in connection with the Credit
Agreement dated as of June 30, 1995 (the "Credit Agreement") among the Company,
the Banks and Co-Agents listed on the signature pages thereof and NationsBank of
Texas, N.A., as Agent (the "Agent"), and to Union Texas Petroleum Energy
Corporation, a Delaware corporation, Union Texas International Corporation, a
Delaware corporation, Unistar, Inc., a Delaware corporation, Union Texas East
Kalimantan Limited, a Bahamian corporation, and Union Texas Products
Corporation, a Delaware corporation (collectively, the "Subsidiary Guarantors"
and together with the Company, the "Obligors"), in connection with the
Subsidiary Guaranty Agreement dated as of June 30, 1995 (the "Subsidiary
Guaranty Agreement") among the Subsidiary Guarantors and the Agent. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as therein defined.
In connection with the opinions expressed below, we have examined
executed counterparts of the following (collectively, the "Financing
Documents"):
(a) the Credit Agreement,
(b) the Subsidiary Guaranty Agreement, and
(c) three (3) promissory notes, each substantially in the form of
Exhibit A to the Credit Agreement, one payable to each Bank (collectively,
the "Notes").
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such other instruments, documents and records
as we deemed necessary to express the opinions hereinafter set forth. To the
extent relevant
98
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A. as Agent
June 30, 1995
Page 2
to our opinion, we have assumed, without independent verification, (i) the due
execution and delivery of each Financing Document by each party thereto (other
than the Obligors), (ii) the genuineness of all signatures on all documents
submitted to us, (iii) that each party (other than the Obligors) to each of the
Financing Documents is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has full power and
authority to enter into and to carry out its obligations under such Financing
Documents, (iv) that the execution and delivery of each of the Financing
Documents by each party thereto (other than the Obligors) and the performance of
its obligations under such Financing Documents have been duly authorized by all
necessary proceedings and actions, (v) that each of the Financing Documents is
the legal, valid and binding obligation of each party thereto (other than the
Obligors) enforceable against such party in accordance with the terms of such
Financing Documents, subject to limitations of the types described herein, and
(vi) the authenticity of all documents submitted to us as originals and the
conformity to authentic original documents of all documents submitted to us as
certified, conformed or photostatic copies. We have relied, to the extent that
we deem such reliance proper, upon certificates of officers of one or more of
the Obligors and of governmental officials as to matters of fact not
independently established by us. We have also examined the representations and
warranties of the Company contained in the Credit Agreement and have relied, to
the extent we deem such reliance proper, upon the relevant facts stated therein.
Based on the foregoing and subject to the qualifications and
limitations set forth below, we are of the opinion that:
1. (a) Each of the Obligors is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate power and authority required to own its
assets and to carry on its business as now conducted.
(b) The execution, delivery and performance by each Obligor of each
Financing Document to which it is a party will not violate the Public Utility
Holding Company Act of 1935, the Investment Company Act of 1940 or the
Interstate Commerce Act.
2. The execution, delivery and performance by each Obligor of each
Financing Document to which it is a party are within such Obligor's corporate
powers, have been duly authorized by all necessary corporate action, and do not
constitute a
99
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A. as Agent
June 30, 1995
Page 3
breach or default under, any provision of applicable law or regulation known to
us after reasonable inquiry or the certificate of incorporation or bylaws of
such Obligor.
3. To the best of our knowledge, the execution, delivery and
performance by each Obligor of each Financing Document to which it is a party do
not constitute a breach of or default under, or result in the creation or
imposition of any Lien on any material asset of the Company or any Subsidiary
under, any provision of the instruments and agreements identified in Schedule I
hereto.
4. No authorization, consent or approval of any governmental body,
agency or official is required in connection with the execution, delivery or
performance by any Obligor of any of the Financing Documents to which it is a
party.
5. (a) The Credit Agreement and the Notes have been duly executed and
delivered by the Company, and constitute legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms.
(b) The Subsidiary Guaranty Agreement has been duly executed and
delivered by each of the Subsidiary Guarantors, and constitutes a legal, valid
and binding obligation of each of the Subsidiary Guarantors, enforceable against
each of the Subsidiary Guarantors in accordance with its terms.
6. If all material facts (as we understand them) and issues of law were
presented and properly argued, a Texas court or a federal court sitting in the
State of Texas and applying the laws of the State of Texas should hold that the
consent by the Company in Section 9.09 of the Credit Agreement, and by each
Subsidiary Guarantor in Section 3.05 of the Subsidiary Guaranty Agreement, to
the non-exclusive personal jurisdiction of the courts of the State of Texas and
of any federal court located in the State of Texas is valid. In this regard we
call to your attention that such consents to non-exclusive jurisdiction are not
effective to (1) confer subject matter jurisdiction that does not otherwise
exist in such court or (2) establish diversity jurisdiction that does not
otherwise exist in an action brought in federal court.
7. Neither the execution, delivery and performance by any Obligor of
the Financing Documents to which it is a party, nor the use of the proceeds of
the Loans in accordance with Section 5.09 of the Credit Agreement, will violate
the
100
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A. as Agent
June 30, 1995
Page 4
provisions of Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System.
The opinions set forth above are subject to the following additional
assumptions, limitations and qualifications:
(a) Our opinions with respect to the enforceability of the Financing
Documents are subject to the qualification that such enforceability may be (i)
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or similar laws affecting the rights of creditors
generally, (ii) subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in equity),
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, and (iii) limited by the power of a court to award
damages in lieu of equitable remedies (including specific performance or
injunctive relief) or otherwise to refuse to grant a particular remedy sought by
the parties to the Financing Documents.
(b) We express no opinion herein as to (1) the right of any Bank to
set-off against funds held in any special account maintained by the Company with
such Bank or which are otherwise subject to special agreement between the
Company and such Bank; (2) whether the provisions of the Credit Agreement which
permit the Agent, the Co-Agents or any Bank to take action or make
determinations may be subject to a requirement that such action be taken or such
determination be made in good faith; (3) whether the holder of a Note may, under
certain circumstances, be called upon to prove the outstanding principal amount
of the loans evidenced thereby; (4) the effect of the law of any jurisdiction
(other than Texas) wherein any Bank may be located which limits rates of
interest which may be charged or collected by such Bank; and (5) the
enforceability of any provision in the Financing Documents that purports to (i)
require indemnification for the negligence or wilful misconduct of the
indemnitee or to otherwise require any Obligor to provide indemnification to the
extent the same may be in conflict with public policy, (ii) limit the effect of
any delay or omission of enforcement of rights or remedies or any course of
performance or course of dealing between the parties, (iii) create an agreement
to agree, (iv) fix evidentiary standards or venue of any proceeding, (v) waive
rights to a trial by jury, or (vi) waive rights to notices, legal defenses or
other benefits that cannot, as a matter of law, be effectively waived.
(c) Whenever this opinion states the existence or absence of any fact
either to the best of our knowledge or known to us, such statement is intended
to convey that, during the course of our representation of the Obligors with
respect to matters
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To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A. as Agent
June 30, 1995
Page 5
addressed herein, no information has come to our attention which has given us
actual knowledge of facts contrary to the statements so expressed herein.
(d) In rendering our opinions in paragraph 1 we have relied upon the
description of the properties, assets and businesses of the Obligors set forth
in the Report on Form 10-K for the year ended December 31, 1994, and on Form
10-Q for the three months ended on March 31, 1995, filed by the Company with the
Securities and Exchange Commission.
(e) In rendering the opinions in paragraphs 2 and 5, we have assumed
that (i) there are no fees, points, premiums or other sums contracted for,
charged to or paid or to be paid by the Company to the Banks on account of the
transactions described in the Credit Agreement other than those described in the
Credit Agreement and those described in the letters of even date herewith from
the Agent to the Company and (ii) the parties to the Financing Documents will
comply strictly with the precise terms of the Financing Documents, including,
without limitation, the usury savings clauses set forth therein with respect to
any consideration contemplated by the Financing Documents that will constitute
interest under Texas law.
(f) In rendering our opinions in paragraph 7 we have assumed that the
representations of the Company and the Banks set forth in Sections 4.12 and
9.07, respectively, of the Credit Agreement will be true and correct at all
times.
(g) The foregoing opinions are rendered only with respect to the
constitutions, laws, rules and regulations which are currently in effect and
applicable court rulings and orders which have been published and are generally
available. In addition, the foregoing opinions are rendered only as of the date
hereof, and we disclaim any obligation to advise you of changes thereafter.
(h) Insofar as our opinion relates to the laws of The Commonwealth of
The Bahamas and The Republic of Indonesia it is, with your permission and
without independent investigation, and subject to the other qualifications set
forth in this paragraph (h), given solely in reliance upon and limited in scope
to the opinions of Graham, Thompson & Co. and Mochtar, Karuwin & Komar,
respectively, dated April 24, 1995 (the "Foreign Opinions") addressed to each of
you as "Banks" under the Credit Agreement dated as of April 24, 1995 among the
Company, the banks and co-agents listed on the signature pages thereof and
NationsBank of Texas, N.A., as agent, copies of which Foreign Opinions have been
furnished to each of you, and our opinion
102
To the Banks and the Agent
Referred to Below
c/o NationsBank of Texas, N.A. as Agent
June 30, 1995
Page 6
incorporates by reference all qualifications, exceptions and limitations set
forth therein. As you know, neither Graham, Thompson & Co. nor Mochtar, Karuwin
& Komar have reviewed the Financing Documents, nor have they updated their
respective opinions since April 24, 1995. We have assumed, with your permission
and without independent investigation, that the Foreign Opinions are true and
correct as of the date hereof as if such opinions were published on the date
hereof and the Financing Documents were the "Financing Documents" referred to
therein.
This opinion is limited in all respects to the laws of the State of
Texas, the General Corporation Law of Delaware and federal law of the United
States of America, and, to the limited extent described in paragraph (h) above,
the laws of The Commonwealth of The Bahamas and The Republic of Indonesia.
This opinion is for the benefit of and may be relied upon by the Banks,
the Agent, the Co-Agents, their respective successors and assigns, their
respective counsel and Participants in connection with the transactions
contemplated by the Credit Agreement and may be relied upon by Newton W. Wilson,
III, General Counsel of the Company, in rendering his opinion to the Banks and
the Agent in connection with such transactions. Otherwise, this opinion may not
be used, published, circulated or relied upon by any other Person for any
purpose without our prior written consent.
Very truly yours,
ANDREWS & KURTH L.L.P.
103
SCHEDULE I
I. UNION TEXAS PETROLEUM HOLDINGS, INC. ("UTPH")
A. Indenture dated as of November 15, 1992 between UTPH, the guarantors
named therein, and State Street Bank and Trust Company, as trustee, relating to
the $100,000,000 8.25% Senior Notes due November 15, 1999 issued by UTPH.
B. Indenture dated as of March 15, 1995 between UTPH, the guarantors
named therein, and The First National Bank of Chicago, as trustee, relating to
the $125,000,000 8 3/8% Senior Notes due 2005 issued by UTPH and the
$75,000,000 8 1/2% Senior Notes due 2007 issued by UTPH.
C. $450,000,000 Amended and Restated Credit Agreement dated as of May 13,
1994 among UTPH, the Banks and Co-Agents listed on the signature pages thereof
and NationsBank of Texas, N.A., as Agent, as amended by the First Amendment
Agreement dated as of November 21, 1994, the Second Amendment Agreement dated as
of January 31, 1995, the Third Amendment Agreement dated as of April 24, 1995,
and the Fourth Amendment Agreement dated as of June 16, 1995.
D. $100,000,000 Credit Agreement dated as of April 24, 1995 among UTPH,
the Banks and Co-Agents listed on the signature pages thereof and NationsBank of
Texas, N.A., as Agent, as amended by the First Amendment Agreement dated as of
June 16, 1995.
E. $100,000,000.00 Credit Agreement dated as of June 30, 1995 among UTPH,
the Banks and Co-Agents listed therein and NationsBank of Texas, N.A., as Agent.
II. UNION TEXAS PAKISTAN, INC. ("UT PAKISTAN")
A. Finance Agreement dated as of December 20, 1988 between UT Pakistan
and Overseas Private Investment Corporation ("OPIC").
B. Issuing and Paying Agency Agreement dated as of December 20, 1988
among First Trust New York National Association (as successor to Morgan Guaranty
Trust Company of New York), as issuing and paying agent, OPIC, and UT Pakistan,
relating to the Promissory Note dated December 20, 1988 issued by UT Pakistan to
Liberty U.S. Government Money Market Trust in the original principal amount of
US$21,250,000.
C. Guaranty Agreement dated as of December 20, 1988 between UTPH and
OPIC.
D. Deed of Floating Charge dated December 20, 1988 by UT Pakistan in
favor of OPIC.
III. UNISTAR, INC. ("UNISTAR") AND UNIMAR COMPANY ("UNIMAR")
A. Amended and Restated Agreement of General Partnership of Unimar
entered into as of September 11, 1990.
104
B. Indenture dated as of September 25, 1984 between Unimar and Irving
Trust Company, as trustee, relating to 14,077,747 Indonesian Participating
Units, as supplemented by the First Supplemental Indenture dated as of October
31, 1986 between such parties.
C. Shareholders Agreement dated as of September 11, 1990 among UTPH,
Unistar, Ultramar America Limited, Ultramar Indonesia Limited and Ultrastar,
Inc.
D. Second Shareholders Agreement dated as of August 26, 1993 among UTPH,
Unistar, LASMO America Limited, LASMO Sanga Sanga Limited and LASMO (USTAR) Inc.
(formerly Ultrastar, Inc.)
IV. UNION TEXAS EAST KALIMANTAN LIMITED ("UTEK")
A. Production Sharing Contract and related Agreements.
1. Amended and Restated Production Sharing Contract dated April 23, 1990,
but effective as of August 8, 1968 among Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara ("Pertamina"), and Roy M. Huffington, Inc., Virginia Indonesia
Company, Virginia International Company, Ultramar Indonesia Limited, Union Texas
East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Huffington
Corporation (all such parties and their predecessors and successors in interest
are herein collectively referred to as the "IJV Contractors"), and Production
Sharing Contract dated April 23, 1990, but effective as of August 8, 1998 among
Pertamina and the IJV Contractors.
2. Joint Venture Agreement effective as of August 8, 1968 by and between
Roy M. Huffington, Inc., Virginia International Company, Austral Petroleum Gas
Corporation, Golden Eagle Indonesia Limited and Union Texas Far East
Corporation, as amended by a Settlement Agreement dated as of January 16, 1976
among these parties and Universe Tankships, Inc., an Agreement dated as of
October 1, 1979 among Roy M. Huffington, Inc., Virginia International Company,
Austral Petroleum Gas Corporation, Golden Eagle Indonesia Limited, Universe
Tankships, Inc. and Union Texas Far East Corporation and a Letter dated October
1, 1979 from Roy M. Huffington, Inc. to Virginia International Company, Austral
Petroleum Gas Corporation, Golden Eagle Indonesia Limited, Universe Tankships,
Inc. and Union Texas Far East Corporation.
3. Operating Agreement dated as of August 8, 1968 between Roy M.
Huffington, Inc., as operator, and Union Texas Far East Corporation, Golden
Eagle Indonesia Limited, Virginia International Company and Austral Petroleum
Gas Corporation, as non-operators, as amended by a letter agreement effective
September 15, 1973 among these parties and an Amendment to Operating Agreement
dated as of April 1, 1990 among Roy M. Huffington, Inc., Ultramar Indonesia
Limited, Virginia Indonesia Company, Virginia International Company, Union Texas
East Kalimantan Limited, and Universe Gas & Oil Company, Inc. and a Letter dated
February 8, 1990 from the IJV Contractors to Pertamina.
4. Amended and Restated Bontang Processing Agreement dated as of February
9, 1988 among Pertamina, the IJV Contractors, Total Indonesie, Indonesia
Petroleum, Ltd., Unocal Indonesia, Ltd., and P. T. Badak.
105
B. Supply Agreements.
1. Amended and Restated Supply Agreement (In support of the Amended and
Restated 1973 LNG Sales Contract) dated September 22, 1993, but effective as of
December 3, 1973, between Pertamina and the IJV Contractors.
2. Supply Agreement for Badak LNG Expansion Project dated as of April 14,
1981 among Pertamina and the IJV Contractors, as supplemented by the Memorandum
of Understanding dated as of April 14, 1981 among Pertamina, the IJV
Contractors, Total Indonesie, and Union Oil Company of Indonesia, and the
Supplemental Memorandum dated August 24, 1983 among Pertamina and the IJV
Contractors and as amended by the Memorandum dated December 1, 1988 among
Pertamina and the IJV Contractors.
3. Badak III LNG Sales Contract Supply Agreement executed October 19,
1987, but effective as of March 19, 1987 among Pertamina and the IJV
Contractors, as supplemented by the Supplemental Memorandum dated as of January
1, 1990 among Pertamina and the IJV Contractors.
4. Amended and Restated Second Supply Agreement for Excess Sales
(Quantities In Kind and LNG Amounts Under Amended and Restated Invoice
Settlement Agreements) dated as of January 19, 1990, but effective December 1,
1988, among Pertamina and the IJV Contractors, as supplemented by the
Supplemental Memorandum dated as of January 1, 1990 among Pertamina and the IJV
Contractors.
5. Badak IV LNG Sales Contract Supply Agreement dated as of August 12,
1991, but effective as of October 23, 1990, among Pertamina and the IJV
Contractors, as supplemented by the Memorandum of Understanding Re: Supply
Agreements and Package IV Sales dated as of August 12, 1991, but effective as of
July 1, 1990, and the Supplemental Memorandum of Understanding dated as of
January 31, 1994, but effective as of July 1, 1990, each among Pertamina, the
IJV Contractors, Total Indonesie, Unocal Indonesia, Ltd., and Indonesia
Petroleum, Ltd., and the Addendum to Badak IV LNG Sales Contract Supply
Agreement dated as of January 31, 1994, but effective as of October 23, 1990
among Pertamina and the IJV Contractors.
6. Package V Supply Agreement for Natural Gas in support of the 1973 LNG
Sales Contract Extension, dated June 16, 1995, effective October 6, 1994,
between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited,
OPICOIL Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil
Company, Inc. and Virginia International Company.
7. Package V Supply Agreement (1995 - 1999 LNG Sales to Korea Gas
Corporation), dated June 16, 1995, effective September 30, 1994, between
Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, OPICOIL
Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company,
Inc. and Virginia International Company.
8. Package V Supply Agreement (1998 - 1999 LNG Sales to Chinese Petroleum
Corporation), dated June 16, 1995, effective December 6, 1994, between Pertamina
and Virginia Indonesia Company, LASMO Sanga Sanga Limited, OPICOIL Houston,
Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and
Virginia International Company.
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C. Miscellaneous Agreements.
1. Amended and Restated Bontang II Trustee and Paying Agent Agreement
dated as of July 15, 1991 among the IJV Contractors, Pertamina, Total Indonesie,
Unocal Indonesia, Ltd., and Indonesia Petroleum Ltd., and Continental Bank
International ("CBI"), as trustee.
2. Amended and Restated Debt Service Allocation Agreement dated as of
February 9, 1988 among Pertamina, the IJV Contractors, Total Indonesie,
Indonesia Petroleum, Ltd. and Unocal Indonesia, Ltd.
3. Amended and Restated Badak Trustee and Paying Agent Agreement dated as
of February 9, 1988 among Pertamina, the IJV Contractors, Total Indonesie,
Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd., and CBI, as trustee ("Bontang
I Trustee").
D. Bontang Capital Project Financing Tier III-2.
1. Producers Agreement No. 2 dated as of June 9, 1987 among the IJV
Contractors, the lenders named therein, and The Industrial Bank of Japan Trust
Company ("IBJ Trust"), as agent for such lenders, as amended by the Amendment
No. 1 to Producers Agreement No. 2 dated as of February 9, 1988 and Amendment
No. 2 to Producers Agreement No. 2 dated as of May 31, 1988, each among the IJV
Contractors, the lenders named therein, and IBJ Trust, as agent for such
lenders.
2. Bontang Capital Projects Loan Agreement No. 2 dated as of June 9, 1987
among the Bontang I Trustee, the lenders named therein, and IBJ Trust, as agent
for such lenders, as amended by the Amendment No. 1 to Bontang Capital Projects
Loan Agreement No. 2 dated as of February 9, 1988 among the Bontang I Trustee,
the lenders named therein, and IBJ Trust, as agent for such lenders.
E. Train E Financing.
1. Bontang III Producers Agreement dated as of February 9, 1988 among
Pertamina, the IJV Contractors, Total Indonesie, Indonesia Petroleum, Ltd., and
Unocal Indonesia, Ltd. in favor of Train-E Finance Co., Ltd., as Tranche A
Lender, the banks named therein as Tranche B Lenders and IBJ Trust as Agent for
such Tranche B Lenders, as amended by Amendment No. 1 dated as of May 31, 1988
among Pertamina, the IJV Contractors, Total Indonesie, Indonesia Petroleum,
Ltd., and Unocal Indonesia, Ltd. in favor of Train-E Finance Co., Ltd., as
Tranche A Lender, the banks named therein as Tranche B Lenders and IBJ Trust as
Agent for such Tranche B Lenders.
2. Bontang III Trustee and Paying Agent Agreement dated as of February 9,
1988 among Pertamina, the IJV Contractors, Total Indonesie, Indonesia Petroleum,
Ltd., Unocal Indonesia, Ltd. and CBI, as trustee (the "Bontang III Trustee"), as
amended by Amendment No.1 dated as of December 11, 1992 among Pertamina, the IJV
Contractors, Total Indonesie, Indonesia Petroleum, Ltd., Unocal Indonesia, Ltd.
and the Bontang III Trustee.
3. Amended and Restated Bontang Excess Sales Trustee and Paying Agent
Agreement dated as of February 9, 1988 among Pertamina, the IJV Contractors,
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Total Indonesie, Indonesia Petroleum, Ltd., Unocal Indonesia, Ltd. and CBI, as
trustee.
4. Bontang III Loan Agreement dated as of February 9, 1988 among the
Bontang III Trustee, Train-E Finance Co., Ltd., as Tranche A Lender, the banks
named therein as Lead Managers and Tranche B Lenders and IBJ Trust as Agent for
such Tranche B Lenders.
F. LPG Financing.
1. Amended and Restated Bontang LPG Trustee and Paying Agent Agreement
dated as of December 31, 1991 among Pertamina, the IJV Contractors, Total
Indonesie, Indonesia Petroleum, Ltd., Unocal Indonesia, Ltd. and CBI, as
trustee.
2. Advance Payment Agreement dated as of February 18, 1987 between
Pertamina and Arun Bontang Project Finance Co., Ltd.
G. Train F Financing.
1. Bontang IV Producers Agreement dated as of August 26, 1991 among
Pertamina, the IJV Contractors, Total Indonesie, Indonesia Petroleum, Ltd., and
Unocal Indonesia, Ltd. in favor of the lenders named therein and The Chase
Manhattan Bank, N.A. as agent for such lenders.
2. Bontang IV Trustee and Paying Agent Agreement dated as of August 26,
1991 among Pertamina, the IJV Contractors, Total Indonesie, Indonesia Petroleum,
Ltd., Unocal Indonesia, Ltd. and CBI, as trustee (the "Bontang IV Trustee").
3. Bontang IV Loan Agreement dated as of August 26, 1991 among the
Bontang IV Trustee, the lenders named therein and The Chase Manhattan Bank, N.A.
as agent for such lenders.
V. UNION TEXAS PETROLEUM LIMITED ("UTPL")
A. Britannia financing.
1. Facility Agreement dated May 26, 1995, between Union Texas Britannia
Limited ("UTBL") and the Arranger, Co-Arrangers, Facility Agent, Technical
Agents, Funding Agent, Account Bank and the Banks named therein.
2. Administrative Services Agreement dated May 26, 1995, between UTPL and
UTBL.
3. Sponsor Direct Agreement dated May 26, 1995, between UTPL, as Sponsor,
UTBL, as Borrower, and NationsBank N.A. (Carolinas), as Facility Agent.
4. Sponsor Support Agreement dated May 26, 1995, between UTBL, as
Borrower, and UTPL, as Sponsor.
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EXHIBIT E
OPINION OF SPECIAL COUNSEL TO THE AGENT
June 30, 1995
To NationsBank of Texas, N.A., as Agent,
and to each of the Banks referred to
below
Ladies and Gentlemen:
We have acted as special counsel to NationsBank of Texas, N.A., acting for
itself and as Agent, in connection with the preparation, execution and delivery
of the Credit Agreement dated as of June 30, 1995 (the "Credit Agreement"),
among Union Texas Petroleum Holdings, Inc., a Delaware corporation (the
"Company"), the banks listed on the signature pages thereof (the "Banks"),
NationsBank of Texas, N.A., as Agent, and the Co-Agents. Capitalized terms
defined in the Credit Agreement and not defined herein are used herein as
therein defined.
In that connection, we have examined counterparts of the Credit Agreement
executed by the Agent and the Company respectively and the following documents:
(1) The Notes delivered to the Agent on the date hereof.
(2) The Subsidiary Guaranty Agreement delivered to the Agent on the
date hereof.
(3) The legal opinions delivered to the Agent pursuant to Sections
3.01(d) and 3.01(e) of the Credit Agreement.
In our examination of the documents referred to above, we have assumed the
authenticity of all such documents submitted to us as originals, the genuineness
of all signatures and the conformity to the originals of all such documents
submitted to us as copies. We have also assumed the accuracy of all matters set
forth in the certificates delivered to the Agent on the date hereof in
connection with the Credit Agreement and assumed that each of Company, the
Banks, the Agent and the Co-Agents has duly executed and delivered, with all
necessary power and authority (corporate and otherwise), the Credit Agreement,
that the Company has duly executed and delivered, with all necessary power and
authority (corporate and otherwise), the respective Notes and that each of the
Required Guarantors and the Agent has duly executed and delivered, with all
necessary power and authority (corporate and otherwise), the Subsidiary Guaranty
Agreement. We have also
109
NationsBank of Texas, N.A.,
as Agent and the Banks
June 30, 1995
Page 2
assumed that no Bank has requested multiple Notes pursuant to Section 2.05(b) of
the Credit Agreement.
Based upon the foregoing examination of documents and assumptions and upon such
other investigation as we have deemed necessary, we are of the opinion that the
documents referred to in items (1), (2) and (3) above are substantially
responsive to the requirements of the Credit Agreement.
This opinion is delivered to you only in connection with the transactions
contemplated by the Credit Agreement and may not be quoted, circulated or
published, in whole or in part, or furnished to any Person, other than your
respective successors and assigns and Participants, without our prior written
consent.
Very truly yours,
Bracewell & Patterson, L.L.P.
110
EXHIBIT F
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _____________, 19__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), [UNION TEXAS PETROLEUM HOLDINGS, INC.
(the "Company")] and NATIONS BANK OF TEXAS, N.A., as Agent (the "Agent").
W I T N E S S E T H:
WHEREAS, this Assignment and Assumption Agreement (this "Agreement")
relates to the Credit Agreement dated as of June 30, 1995 among the Company, the
Banks (including Assignor) and Co-Agents parties thereto and the Agent (such
Credit Agreement, as amended from time to time, is hereinafter referred to as
the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans in an aggregate principal amount at any time
outstanding not to exceed $____________;
WHEREAS, Loans made by the Assignor under the Credit Agreement in the
aggregate principal amount of $_____________ are outstanding at the date hereof;
and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding portion of its outstanding Loans, and the Assignee
proposes to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the
111
corresponding portion of the principal amount of the Loans made by the Assignor
outstanding at the date hereof. Upon the execution and delivery hereof by the
Assignor, the Assignee[, the Company] and the Agent and the payment of the
amounts specified in Section 3 required to be paid on the date hereof, (i) the
Assignee shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Bank under the Credit Agreement with a Commitment
in an amount equal to the Assigned Amount plus the amount of the Commitment, if
any, of the Assignee immediately prior to the effectiveness of this Agreement,
and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced
by an amount equal to the Assigned Amount, and the Assignor shall, as of the
date hereof, be released from its obligations under the Credit Agreement to the
extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor. [The Assignor and
the Assignee hereby certify that the Assignee is [an affiliate of the
Assignor/another Bank,] and accordingly, the Company's consent hereto is not
required.]
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds an amount equal to $__________ *. It is understood
that commitment and/or facility fees accrued to the date hereof are for the
account of the Assignor and such fees accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other party.
As contemplated by Section 9.06(c) of the Credit Agreement, the Assignor agrees
to pay to the Agent for its account on the date hereof in Federal funds an
amount equal to $2,500 as an administrative fee for processing this Agreement.
SECTION 4. Consent. This Agreement is conditioned upon the consent of
[the Company and] the Agent pursuant to Section 9.06(c) of the Credit Agreement.
The execution of this Agreement by [the Company and] the Agent is evidence of
this consent. Pursuant to Section 9.06(c) the Company agrees to execute and
deliver a Note payable to the order of the Assignee to evidence the assignment
and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the Company
or any other Obligor, the validity and enforceability of the obligations of the
Company or any other
________________
*Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
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112
Obligor in respect of the Credit Agreement, any Note or the Subsidiary Guaranty
Agreement or the accuracy of any Engineering Report. The Assignee acknowledges
that it has, independently and without reliance on the Assignor, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Company and the other Obligors, the Engineering
Reports and other relevant matters.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 8. Representation and Agreement. The Assignee represents that
it is either (i) a corporation, association or other entity organized under the
laws of the United States or any state thereof or (ii) entitled to complete
exemption from United States withholding tax imposed on or with respect to any
payments, including fees, to be made to it pursuant to the Credit Agreement or
the Notes. If the Assignee is not organized under the laws of the United States
or any state thereof, it agrees to provide to the Company and the Agent, on or
prior to the date of this Agreement, two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that the
Assignee is entitled to receive payments from the Company under the Credit
Agreement and the Notes without deduction or withholding of any United States
federal income taxes.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[ASSIGNOR]
By:__________________________
Title:
[ASSIGNEE]
By:__________________________
Title:
-3-
113
[UNION TEXAS PETROLEUM
HOLDINGS, INC.
By:___________________________
Title:]
NATIONSBANK OF TEXAS, N.A.,
as Agent
By:___________________________
Title:
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