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Exhibit 10.8
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:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Terms defined in the Credit Agreement and
not otherwise defined herein are used herein as therein defined.
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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;
(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;
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(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.
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
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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 number as such party may hereafter specify
for the purpose by notice to the Agent and the Company. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answer is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent shall
not be effective until received.
SECTION 3.02. No Waiver; Exercise of Remedies. No failure or delay by
the Agent in exercising any right, power or privilege hereunder shall operate as
a waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. In exercising the rights
and remedies herein provided, the Agent shall act at the instructions of the
Required Banks or, failing such instruction, at its discretion.
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SECTION 3.03. Amendments and Waivers. Any provision of this Agreement
may be amended or waived, and any Subsidiary Guarantor may be released from any
of its obligations hereunder, if, and only if, such amendment, waiver or release
is in writing and is signed by (i) each Subsidiary Guarantor affected thereby
and (ii) the Agent with the consent of Banks at the time having at least 66-2/3%
of the aggregate amount of the Commitments or, if the Commitments shall have
been terminated, holding Notes evidencing at least 66-2/3% of the aggregate
unpaid principal amount of the Loans; provided that any Subsidiary Guarantor
shall be released from its obligations hereunder upon the terms set forth in
Section 5.10 or Section 5.20 of the Credit Agreement.
SECTION 3.04. Texas Law. This Agreement shall be construed in
accordance with and governed by the law of the state of Texas.
SECTION 3.05. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. EACH
SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF TEXAS AND OF ANY FEDERAL COURT
LOCATED IN SUCH STATE OVER EACH OF THEM IN CONNECTION WITH ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY FINANCING DOCUMENT AND, TO THE
FULLEST EXTENT PERMITTED BY LAW, FURTHER AGREES (AND SHALL NOT CONTEST) THAT THE
PROPER VENUE FOR FILING AND MAINTAINING ANY SUCH ACTION, SUIT OR PROCEEDING
SHALL BE IN THE STATE OF TEXAS. IN ANY SUCH ACTION, SUIT OR PROCEEDING, EACH
SUBSIDIARY GUARANTOR WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS OR NOTICE AND AGREES THAT SERVICE BY FIRST CLASS MAIL, RETURN RECEIPT
REQUESTED, TO SUCH SUBSIDIARY GUARANTOR AT ITS ADDRESS FOR NOTICES HEREUNDER, OR
ANY FORM OF SERVICE PROVIDED FOR IN THE TEXAS CIVIL PRACTICE AND REMEDIES CODE
THEN IN EFFECT SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE UPON SUCH SUBSIDIARY
GUARANTOR. EACH SUBSIDIARY GUARANTOR THAT IS NOT ORGANIZED UNDER THE LAWS OF THE
UNITED STATES OR A STATE THEREOF (EACH A "NON-U.S. GUARANTOR") HEREBY APPOINTS
THE PRINCIPAL OFFICE OF CT CORPORATION SYSTEM IN HOUSTON, TEXAS, WHICH, ON THE
DATE HEREOF, IS LOCATED AT 911 DALLAS ST., HOUSTON, TEXAS 77002, AS THE
AUTHORIZED AGENT THEREOF (THE "AUTHORIZED AGENT") UPON WHOM PROCESS MAY BE
SERVED IN ANY SUCH ACTION, SUIT OR PROCEEDING WHICH MAY BE INSTITUTED IN THE
STATE OF TEXAS. SUCH APPOINTMENT SHALL BE IRREVOCABLE UNLESS AND UNTIL THE
APPOINTMENT OF A SUCCESSOR AUTHORIZED AGENT FOR SUCH PURPOSE, AND SUCH
SUCCESSOR'S ACCEPTANCE OF SUCH APPOINTMENT, SHALL HAVE OCCURRED AND THE AGENT
SHALL HAVE BEEN NOTIFIED THEREOF. EACH NON-U.S. GUARANTOR AGREES TO TAKE ANY AND
ALL ACTIONS, INCLUDING, WITHOUT LIMITATION, THE FILING OF ANY AND ALL DOCUMENTS
AND INSTRUMENTS, THAT MAY BE NECESSARY TO CONTINUE SUCH APPOINTMENT IN FULL
FORCE AND EFFECT AS AFORESAID. SERVICE
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OF PROCESS UPON THE AUTHORIZED AGENT WITH RESPECT TO ANY SUCH ACTION, SUIT OR
PROCEEDING SHALL BE DEEMED, IN EVERY RESPECT, EFFECTIVE SERVICE OF PROCESS UPON
ANY SUCH NON-U.S. GUARANTOR. EACH NON-U.S. GUARANTOR SHALL REQUIRE THE
AUTHORIZED AGENT TO AGREE IN WRITING TO ACCEPT THE FOREGOING APPOINTMENT AS
AGENT FOR SERVICE OF PROCESS.
SECTION 3.06. WAIVER OF JURY TRIAL. EACH SUBSIDIARY GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 3.07. WAIVER OF SOVEREIGN IMMUNITY. TO THE EXTENT THAT ANY
SUBSIDIARY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION
OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH SUBSIDIARY GUARANTOR
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY DO SO, SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, AGREES, TO THE FULLEST EXTENT IT MAY
LEGALLY DO SO, THAT THE WAIVERS SET FORTH IN THIS SECTION 3.07 SHALL HAVE THE
FULLEST SCOPE PERMITTED UNDER THE FOREIGN SOVEREIGN IMMUNITIES ACT OF 1976 OF
THE UNITED STATES AND ARE INTENDED TO BE IRREVOCABLE FOR PURPOSES OF SUCH ACT.
SECTION 3.08. Successors and Assigns.
(a) All of the provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no Subsidiary Guarantor
may assign or transfer any of its rights or obligations under this
Agreement.
(b) Any Subsidiary may become a party hereto and a Subsidiary
Guarantor hereunder, without any further action by any other party, by
executing and delivering a counterpart hereof to the Agent.
SECTION 3.09. Counterparts. This Agreement may be signed in any number
of counterparts, each of which shall be an original, and all of which taken
together shall constitute a single instrument, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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SECTION 3.10. Judgment Currency. Each Non-U.S. Guarantor agrees to
indemnify the Agent and each Bank against any loss incurred by it as a result of
any judgment or order being given or made and expressed and paid in a currency
(the "Judgment Currency") other than United States dollars and as a result of
any variation as between (i) the rate of exchange at which the United States
dollar amount is converted into the Judgment Currency for the purpose of such
judgment or order and (ii) the spot rate of exchange in The City of New York at
which the Agent or such Bank on the date of payment of such judgment or order is
able to purchase United States dollars with the amount of the Judgment Currency
actually received by the Agent or such Bank. The foregoing indemnity shall
constitute a separate and independent obligation of each Non-U.S. Guarantor and
shall continue in full force and effect notwithstanding any such judgment or
order as aforesaid. The term "spot rate of exchange" shall include any premiums
and costs of exchange payable in connection with the purchase of, or conversion
into, United States dollars.
SECTION 3.11. Existence. Each Subsidiary Guarantor agrees to maintain
its existence except as permitted by Section 5.02 of the Credit Agreement.
SECTION 3.12. Taxes. (a) Any and all payments by any Subsidiary
Guarantor hereunder shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, excluding (i) in the
case of the Agent, each Co-Agent and each Bank, United States federal income
taxes and, without duplication, any taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which the Agent, such
Co-Agent or such Bank, as the case may be, is organized or any political
subdivision thereof and (ii) in the case of each Bank, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction of such Bank's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Subsidiary
Guarantor shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Bank, any Co-Agent or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 3.12) such Bank, such Co-Agent or the Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Subsidiary Guarantor 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
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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.
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: /S/ M.N. MARKOWITZ By: /S/ M.N. MARKOWITZ
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M.N. Markowitz M.N. Markowitz
Treasurer Treasurer
UNION TEXAS PRODUCTS UNION TEXAS INTERNATIONAL
CORPORATION CORPORATION
By: /S/ M.N. MARKOWITZ By: /S/ M.N. MARKOWITZ
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M.N. Markowitz M.N. Markowitz
Treasurer Treasurer
UNISTAR, INC.
By: /S/ M.N. MARKOWITZ
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M.N. Markowitz
Vice President
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AGENT:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By: /S/ PAUL A. SQUIRES
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Paul A. Squires
Senior Vice President
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