EXHIBIT 10.24
EXECUTION COPY
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TERM LOAN AGREEMENT
Dated as of February 27, 2003
among
CITGO PETROLEUM CORPORATION,
as the Borrower,
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH,
as Administrative Agent
and
The Other Lenders Party Hereto
CREDIT SUISSE FIRST BOSTON,
as Sole Lead Arranger and Sole Bookrunner
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.............................1
1.01 Defined Terms.............................................1
1.02 Other Interpretive Provisions............................21
1.03 Accounting Terms.........................................21
1.04 Rounding.................................................22
1.05 References to Agreements and Laws........................22
1.06 Times of Day.............................................22
ARTICLE II. THE COMMITMENTS AND BORROWINGS.............................22
2.01 Loans....................................................22
2.02 Borrowings, Conversions and Continuations of Loans.......22
2.03 Prepayments..............................................23
2.04 Termination or Reduction of Commitments..................24
2.05 Repayment of Loans.......................................24
2.06 Interest.................................................24
2.07 Fees.....................................................25
2.08 Computation of Interest and Fees.........................25
2.09 Evidence of Debt.........................................25
2.10 Payments Generally.......................................25
2.11 Sharing of Payments......................................27
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY....................27
3.01 Taxes....................................................27
3.02 Illegality...............................................28
3.03 Inability to Determine Rates.............................28
3.04 Increased Cost and Reduced Return; Capital Adequacy;
Reserves on Eurodollar Rate Loans........................29
3.05 Funding Losses...........................................29
3.06 Matters Applicable to all Requests for Compensation......30
3.07 Survival.................................................30
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS..................30
4.01 Conditions of Initial Borrowing..........................30
ARTICLE V. REPRESENTATIONS AND WARRANTIES..............................33
5.01 Corporate Existence: Power; Compliance with Laws.........33
5.02 Corporate Authorization; No Contravention................33
5.03 Governmental Authorization; Other Consents...............33
5.04 Binding Effect...........................................34
5.05 Litigation...............................................34
5.06 No Default...............................................34
5.07 Fire, Strike, Act of God, etc............................34
5.08 Liens....................................................34
5.09 ERISA....................................................34
5.10 Use of Proceeds; Margin Regulations......................35
5.11 Title to Properties......................................35
5.12 Taxes....................................................35
5.13 Financial Condition......................................35
5.14 Environmental Matters....................................36
5.15 Regulated Entities.......................................36
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5.16 Copyrights, Patents, Trademarks and Licenses, etc........36
5.17 Subsidiaries.............................................37
5.18 Subsidiary Indebtedness..................................37
5.19 The Pledged Entities; Collateral Agreement...............37
5.20 Solvency.................................................37
5.21 Full Disclosure..........................................37
ARTICLE VI. AFFIRMATIVE COVENANTS......................................37
6.01 Financial Statements.....................................37
6.02 Certificates; Other Information..........................38
6.03 Notices..................................................39
6.04 Preservation of Corporate Existence, Etc.................40
6.05 Insurance................................................40
6.06 Taxes....................................................41
6.07 Compliance with Laws.....................................41
6.08 Compliance with Material Contractual Obligations.........41
6.09 Inspection of Property and Books and Records.............41
6.10 Maintenance of Properties................................42
6.11 Use of Proceeds..........................................42
6.12 Further Assurances.......................................42
ARTICLE VII. NEGATIVE COVENANTS........................................42
7.01 Negative Covenants Applicable to the Borrower and
Restricted Subsidiaries..................................42
7.02 Financial Covenants......................................51
ARTICLE VIII. EVENTS OF DEFAULT........................................51
8.01 Event of Default.........................................51
8.02 Remedies Upon Event of Default...........................54
8.03 Application of Funds.....................................54
ARTICLE IX. ADMINISTRATIVE AGENT.......................................55
9.01 Appointment and Authorization of Administrative Agent....55
9.02 Delegation of Duties.....................................55
9.03 Liability of Administrative Agent........................55
9.04 Reliance by Administrative Agent.........................55
9.05 Notice of Default........................................56
9.06 Credit Decision; Disclosure of Information by
Administrative Agent.....................................56
9.07 Indemnification of Administrative Agent..................57
9.08 Administrative Agent in its Individual Capacity..........57
9.09 Successor Administrative Agent...........................57
9.10 Administrative Agent May File Proofs of Claim............58
ARTICLE X. MISCELLANEOUS...............................................58
10.01 Amendments, Etc..........................................58
10.02 Notices and Other Communications; Facsimile Copies.......59
10.03 No Waiver; Cumulative Remedies...........................60
10.04 Attorney Costs, Expenses and Taxes.......................60
10.05 Indemnification by the Borrower..........................61
10.06 Payments Set Aside.......................................61
10.07 Successors and Assigns...................................62
10.08 Confidentiality..........................................64
10.09 Set-off..................................................65
10.10 Interest Rate Limitation.................................65
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10.11 Counterparts.............................................66
10.12 Integration..............................................66
10.13 Survival of Representations and Warranties...............66
10.14 Severability.............................................66
10.15 Tax Forms................................................66
10.16 Replacement of Lenders...................................68
10.17 Certain Repurchases of Tax-Exempt Bonds..................68
10.18 Governing Law............................................68
10.19 Waiver of Right to Trial by Jury.........................68
10.20 Entire Agreement.........................................69
SIGNATURES....................................................S-1
SCHEDULES
1.01 Tax-Exempt Bonds
2.01 Commitments and Pro Rata Shares
4.01 Qualifications as a Foreign Corporation
5.13(c) Off-Balance Sheet Liabilities
5.13(d) Potential Material Adverse Effect
5.14 Environmental Matters
5.17 Subsidiaries and Other Equity Investments
5.18 Subsidiary Indebtedness and Guarantees
5.19 Equity Interests in Colonial Pipeline Entities and Explorer
Pipeline Entity
7.01(a) Existing Liens
7.01(c) Existing Investments
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Interest Period Notice
B Note
C Compliance Certificate
D Assignment and Assumption
E Collateral Agreement
F [Intentionally Omitted]
G-1 and G-2 Form of Opinions of Counsel to the Borrower
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TERM LOAN AGREEMENT
This
TERM LOAN AGREEMENT ("Agreement") is entered into as of February
27, 2003, among
CITGO PETROLEUM CORPORATION, a Delaware corporation (the
"Borrower"), each lender from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender"), and CREDIT SUISSE FIRST BOSTON, CAYMAN
ISLANDS BRANCH, as Administrative Agent.
WHEREAS, the Borrower has requested that the Lenders provide a term
loan facility in an aggregate principal amount of $200,000,000, and the Lenders
are willing to do so on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Administrative Agent" means Credit Suisse First Boston, Cayman Islands
Branch, in its capacity as administrative agent under any of the Loan Documents,
or any successor administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, as to any Person, (a) any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person or (b) in the case of the Borrower or any Subsidiary,
any Person who is a director or officer of such Person or of any Person
described in the foregoing clause (a). For purposes of this definition,
"control" (and with correlative meaning "controlled" and "under common control")
of a Person shall mean (i) the power, direct or indirect, (A) to vote 50% or
more of the securities having ordinary voting power for the election of
directors of such Person or (B) to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise or (ii) the ownership, direct or
indirect, of 10% or more of any class of Voting Stock of such Person (if such
class of Voting Stock is publicly held).
"Affiliate Guarantee Transaction" means any transaction in which the
Borrower or any Subsidiary of the Borrower shall guarantee any Indebtedness or
obligations of any Person that is at the time an Affiliate of the Borrower or of
such Subsidiary, as the case may be, provided that, as of the date of such
guarantee, the Borrower would be in compliance with each of Sections 7.02(a) and
(c) of this Agreement.
"Agent-Related Persons" means the Administrative Agent, together with
its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"Aggregate Commitment" or "Aggregate Commitments" mean the Commitments
of all the Lenders.
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"Agreement" means this Credit Agreement.
"Applicable Rate" means (a) with respect to any Eurodollar Rate Loan,
initially 5.25% per annum and (b) with respect to any Base Rate Loan at any
time, the Applicable Rate in effect at such time for Eurodollar Rate Loans minus
1.00% per annum.
"Arranger" means Credit Suisse First Boston, in its capacity as sole
lead arranger and sole bookrunner.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit D.
"Attorney Costs" means and includes (a) with respect to the
negotiation, syndication, preparation, execution and delivery of this Agreement
and each other Loan Document and any modifications or waivers related thereto,
all reasonable fees and disbursements of any law firm or other external counsel
and the allocated cost of internal legal services and all disbursements of
internal counsel to the extent that the services performed by internal counsel
do not duplicate services performed by external counsel; provided that invoices
for such fees and disbursements shall be rendered in reasonable detail; and (b)
with respect to each particular matter regarding enforcement or protection of
the rights of any Lender, the Administrative Agent in connection with
enforcement or protection of its rights pursuant to this Agreement, all
reasonable fees and disbursements of any law firm or other external counsel
(including, if such Person has not elected to use outside counsel for such
particular matter or if the Company shall have consented, the allocated cost of
internal legal services and all disbursements of internal legal counsel for such
matter).
"Attributable Indebtedness" means, on any date, in respect of any
Synthetic Lease obligation, the capitalized amount of the remaining lease
payments under the relevant lease that would appear on a balance sheet of such
Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries for the fiscal year
ended December 31, 2002, and the related consolidated statements of income or
operations, shareholder's equity and cash flows for such fiscal year of the
Borrower and its Subsidiaries, including the notes thereto.
"Base Rate" means for any day a fluctuating rate per annum equal to the
highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest
in effect for such day as publicly announced from time to time by Credit Suisse
First Boston as its "prime rate" in effect at its principal office in
New York
City and (c) 4.00%. Any change in such rate announced by Credit Suisse First
Boston shall take effect at the opening of business on the day specified in the
public announcement of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a borrowing consisting of simultaneous Loans of the
same Type made, converted or continued on the same date and, in the case of
Eurodollar Rate Loans, having the same Interest Period.
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"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Capitalization" means, as of any date of determination, an amount
equal to the sum of:
(a) Indebtedness as of such date (other than Receivables
Financing Indebtedness and other than Permitted Preferred Trust
Securities) of the Borrower and its Subsidiaries; minus
(b) an amount equal to (a) the Indebtedness as of such date of
each Subsidiary that is not a Wholly-Owned Subsidiary and whose
Indebtedness is not guaranteed by the Borrower or any Subsidiary
multiplied by (b) a fraction, the denominator of which is the number of
shares of outstanding capital stock of such Subsidiary and the
numerator of which is the number of shares of capital stock of such
Subsidiary not held by the Borrower or another Subsidiary; plus
(c) Net Worth. For purposes of calculating the Capitalization
Ratio as of any date which is not the last day of a Fiscal Quarter, Net
Worth shall be calculated as of the last day of the most recent Fiscal
Quarter.
"Capitalization Ratio" means, as of any date of determination, the
ratio of Indebtedness (other than (i) Receivables Financing Indebtedness, (ii)
Permitted Preferred Trust Securities and (iii) Excluded Permitted Affiliate
Subordinated Indebtedness) of the Borrower and its Subsidiaries to
Capitalization; provided, however, there shall be excluded from Indebtedness an
amount equal to (a) the Indebtedness of each Subsidiary that is not a
Wholly-Owned Subsidiary and whose Indebtedness is not guaranteed by the Borrower
or any Subsidiary multiplied by (b) a fraction, the denominator of which is the
number of shares of outstanding capital stock of such Subsidiary and the
numerator of which is the number of shares of capital stock of such Subsidiary
not held by the Borrower or another Subsidiary.
"CARCO" means CITCO Asphalt Refining Company, a New Jersey general
partnership.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.).
"Change of Control" means (a) any condition or occurrence such that
less than 50% of the Voting Stock of the Borrower shall be owned, directly or
indirectly, by PDVSA, (b) the failure by the Borrower at any time to own 100% of
the equity interests in each of the Pledged Entities or (c) the occurrence of
any "Change of Control" as such term is defined in the Indenture.
"CIC" means CITGO Investment Company, a Delaware corporation.
"CITGO Puerto Rico" means CITGO International Puerto Rico Company, a
Puerto Rican civil partnership and an indirect Wholly-Owned Subsidiary of the
Borrower.
"CITGO Puerto Rico Credit Agreement" means the 364 day credit agreement
entered into as of May 28, 2002, among CITGO Puerto Rico, the lenders referred
to therein and Mizuho Corporation Bank Limited as Administrative Agent, together
with the related documents thereto (including the revolving loan facility, note
purchase or placement facility, letter of credit facility or other arrangement
for the extension of credit thereunder, any guarantees and security documents),
as amended, extended, renewed,
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restated, supplemented or otherwise modified (in whole or in part, and without
limitation as to amount, terms, conditions, covenants and other provisions) from
time to time, and any agreement (and related document) governing Indebtedness
incurred to Refinance, in whole or in part, the borrowings and commitments then
outstanding or permitted to be outstanding under such credit agreement or a
successor credit agreement, whether by the same or any other lender or group of
lenders.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means any and all "Collateral" as defined in any
applicable Security Document.
"Collateral Agreement" means the Guarantee and Collateral Agreement
among the Borrower, each Pledged Entity and the Administrative Agent,
substantially in the form of Exhibit E.
"Colonial Pipeline Entities" means Colonial Ventures, L.L.C., a
Delaware limited liability company, and Colonial Pipeline Company, a Delaware
corporation.
"Commitment" means, as to each Lender, its obligation to (a) make a
Loan to the Borrower on the Closing Date pursuant to Section 2.01, in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Computation Period" shall mean, when used in the Compliance
Certificate or in Section 7.02(b) with reference to the calculation as of the
last day of the Fiscal Quarter, the 12-month period ending on that date.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate."
"CPIC" means CITGO Pipeline Investment Company, a Delaware corporation.
"CRCCLP" means CITGO Refining and Chemicals Company, L.P., a Delaware
limited partnership, formerly known as CITGO Refining and Chemicals, Inc., the
partners in which are CIC and the Borrower.
"CRCCLP Crude Supply Agreement" means that certain Crude Oil and
Feedstock Supply Agreement, dated as of March 31, 1987, by and between CRCCLP
and Petroleos.
"Crude Supply Agreement" means that certain Crude Supply Agreement,
dated as of September 30, 1986, by and between the Borrower and Petroleos.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement,
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receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.
"Default" means any event or condition that, with the giving of any
notice, the passage of time, or both, would (if not cured or otherwise remedied
during such time) be an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base Rate plus
(b) the Applicable Rate applicable to Base Rate Loans plus (c) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the
fullest extent permitted by applicable Laws.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans required to be funded by it hereunder within one Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or Insolvency Proceeding.
"Disposition" has the meaning set forth in Section 7.01(b)(v).
"Dollar" and "$" mean lawful money of the United States.
"Domestic" entity means any entity that is organized under the laws of
any political subdivision of the United States.
"EBITDA" means, for any period, an amount equal to the sum of: (a) Net
Income of the Borrower and its Subsidiaries on a consolidated basis for such
period; plus (b) the aggregate amount of Interest Expense of the Borrower and
its Subsidiaries that was deducted for such period in determining such Net
Income; plus (c) the aggregate amount that was deducted in respect of Federal,
state and local income taxes of the Borrower and its Subsidiaries for such
period in determining Net Income, plus (d) the aggregate amount which was
deducted in respect of depreciation and amortization in determining Net Income
for such period.
"Eligible Assignee" has the meaning specified in Section 10.07(g).
"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
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
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"ERISA" means the Employee Retirement Income Security Act of 1974.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the greater of (i) 3.00% per annum and (ii) the rate per
annum equal to the rate determined by the Administrative Agent to be
the offered rate as set forth by any service that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(b) if the rate referenced in the preceding clause (a)(ii) is
not available, the greater of (i) 3.00% per annum and (ii) the rate per
annum determined by the Administrative Agent as the rate of interest at
which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted by Credit
Suisse First Boston and with a term equivalent to such Interest Period
would be offered by Credit Suisse First Boston's London Branch to major
banks in the London interbank eurodollar market at their request at
approximately 4:00 p.m. (London time) two Business Days prior to the
first day of such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excluded Permitted Affiliate Subordinated Indebtedness" means
Permitted Affiliate Subordinated Indebtedness in a principal amount not to
exceed $200,000,000.
"Explorer Pipeline Entity" means Explorer Pipeline Company, a Delaware
corporation.
"Facility" means the senior secured credit facility documented by this
Agreement.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Credit Suisse First
Boston on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means the letter agreement, dated February 20, 2003, among
the Borrower, the Administrative Agent and the Arranger.
"Fiscal Quarter" means each fiscal quarter of the Borrower and its
Subsidiaries.
"Fiscal Year" means each fiscal year of the Borrower and its
Subsidiaries.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
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"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Granting Lender" has the meaning specified in Section 10.07(h).
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other monetary obligation payable by another
Person (the "primary obligor") in any manner, whether directly or indirectly,
and including any monetary obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other monetary obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other monetary obligation of the payment or performance of
such Indebtedness or other monetary obligation, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
or level of income or cash flow of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other monetary obligation, or (iv)
entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other monetary obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof
(in whole or in part), or (b) any Lien on any assets of such Person securing any
Indebtedness or other monetary obligation of any other Person, whether or not
such Indebtedness or other monetary obligation is assumed by such Person. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary monetary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term "Guarantee" as a
verb has a corresponding meaning.
"Guarantee and Collateral Requirement" means, at any time, the
requirement that:
(a) the Administrative Agent shall have received from each
Loan Party a counterpart of the Collateral Agreement duly executed and
delivered on behalf of such Loan Party;
(b) all the capital stock of or other equity interests in the
Colonial Pipeline Entities and the Explorer Pipeline Entity owned
directly or indirectly by the Borrower shall have been transferred to
and shall (except as a result of a transaction expressly permitted
under Section 3.03(II)(b)(i) of the Guarantee and Collateral Agreement)
be owned beneficially and of record by the Pledged Entities, and such
transfer and ownership shall have been made in accordance with all
applicable provisions of the organizational documents of the Colonial
Pipeline Entities and the Explorer Pipeline Entity and all related
equity holders' agreements or other agreements and duly recorded on the
transfer books maintained by the Colonial Pipeline Entities and the
Explorer Pipeline Entity;
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(c) the Borrower shall be the beneficial and record owner of
all the capital stock of or other equity interests in each Pledged
Entity;
(d) each interest of the Borrower in the Pledged Entities
shall be represented by a certificate and shall be a "security" within
the meaning of, and shall be governed by, Article 8 of the
New York UCC
(in accordance with express provisions indicating the same in the
charter documents of the Pledged Entities);
(e) all outstanding capital stock or other equity interests
owned by or on behalf of the Borrower in each Pledged Entity shall have
been pledged pursuant to the Collateral Agreement and the
Administrative Agent shall have received certificates or other
instruments representing all such capital stock or other equity
interests together with stock powers or other instruments of transfer
with respect thereto endorsed in blank;
(f) all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably
requested by the Administrative Agent to be filed, registered or
recorded to create the Liens intended to be created by the Collateral
Agreement and to perfect such Liens to the extent required by, and with
the priority required by, the Collateral Agreement shall have been
filed, registered or recorded or delivered to the Administrative Agent
for filing, registration or recording; and
(g) each Loan Party shall have obtained all consents and
approvals required to be obtained by it in connection with the
execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the granting
by it of the Liens thereunder.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.
"Impermissible Qualification" means, relative to any opinion by
independent public accountants as to any financial statement of the Borrower or
any of its Subsidiaries or of the Borrower and any of its Subsidiaries, any
qualification or exception to such opinion:
(a) which is of a "going concern" or a similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement (other than scope
limitations included in the standard form of opinion utilized by such
accountants); or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require adjustment to such item the effect of which
would be to cause the Borrower to be in default of any of its
obligations under Section 7.02.
"Indebtedness" with respect to any Person means, without duplication,
(a) all of the following, whether or not included as indebtedness or liabilities
in accordance with GAAP: (i) all indebtedness for borrowed money of such Person
or for the deferred purchase price of property acquired by, or services
8
rendered to, such Person, (ii) all indebtedness of such Person created or
arising under any conditional sale or other title retention agreement with
respect to any property acquired by such Person, (iii) all indebtedness for
borrowed money or for the deferred purchase price of property or services
secured by any Lien upon or in any property owned by such Person whether or not
such Person has assumed or become liable for the payment of such indebtedness
for borrowed money, and (iv) at all times such liability is interest bearing,
any finally assessed withdrawal liability of such Person or a commonly enrolled
entity to a Multiemployer Plan; (b) the present value determined in accordance
with GAAP of all obligations of such Person under leases that are recorded as
capitalized leases; (c) indebtedness arising under acceptance facilities, any
surety bond as to which such Person is liable for reimbursement and the undrawn
maximum face amount of all outstanding letters of credit issued for the account
of such Person (except to the extent such letters of credit are issued to secure
the payment by such Person of obligations for Indebtedness otherwise included
herein) and, without duplication, the outstanding amount of all drafts drawn
thereunder; (d) all Off-Balance Sheet Liabilities; and to the extent not
included in clauses (a) through (d) above, all direct or indirect Guarantees by
such Person of Indebtedness described in this definition of any other Person;
provided, that, for purposes of this definition, the following shall not be
included as Indebtedness: (A) trade payables incurred within the ordinary course
of business and payable within 90 days of the incurrence thereof; (B)
Indebtedness of the Borrower owed to Wholly-Owned Subsidiaries of the Borrower,
provided that such Indebtedness is subordinated to the Obligations in accordance
with Section 7.01(e); or (C) Indebtedness of a Wholly-Owned Subsidiary owed to
the Borrower or a Wholly-Owned Subsidiary.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer (for purposes of clarity, it is agreed
that "joint venturer" does not include a limited partner of a limited
partnership), unless such Indebtedness is expressly made non-recourse to such
Person.
"Indemnified Liabilities" has the meaning set forth in Section 10.05.
"Indemnities" has the meaning set forth in Section 10.05.
"Indenture" means the Indenture dated as of the date hereof between the
Borrower and The Bank of
New York, as Trustee, relating to the Borrower's
11-3/8% Senior Notes Due February 1, 2011.
"Insolvency Proceeding" means (a) any case, action or proceeding before
any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"Interest Expense" means, without duplication, for any period, the sum
of:
(i) aggregate interest expense of the Borrower and its
Subsidiaries for such period, as determined in accordance with GAAP and
in any event including, without duplication, all commissions, discounts
and other fees and charges owed with respect to letters of credit and
banker's acceptances and net costs under Interest Rate Swap Contracts
and the portion of any obligation under capitalized leases allocable to
interest expense;
plus
9
(ii) interest expense of the Borrower and its Subsidiaries
capitalized during such period;
minus
(iii) amortization of capitalized interest expense of the
Borrower and its Subsidiaries for such period.
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
March, June, September and December and the Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to a
Eurodollar Rate Loan or on the last day of the preceding Interest Period
applicable to such Eurodollar Rate Loan, as the case may be, and ending as
determined pursuant to Section 2.01 or 2.02(a), on the date either (i) one or
(ii) three months thereafter; provided that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity
Date.
"Interest Period Notice" means an irrevocable notice of the Interest
Period applicable to a continuation of Eurodollar Rate Loans pursuant to Section
2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.
"Interest Rate Swap Contract" has the meaning set forth in the
definition of "Swap Contract."
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IRS" means the United States Internal Revenue Service.
10
"Key Contracts" means the Crude Supply Agreement, the Supplemental
Crude Supply Agreement and the CRCCLP Crude Supply Agreement.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"LCR" means Lyondell-CITGO Refining LP, a Delaware limited partnership.
"Lender" has the meaning specified in the introductory paragraph
hereto.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II.
"Loan Documents" means this Agreement, the Collateral Agreement, each
other Security Document, each Note and the Fee Letter.
"Loan Parties" means each of the Borrower and the Pledged Entities.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"Material Acquisition" means any acquisition where either the purchase
price or the book value of the assets acquired equals or exceeds the greater of
(a) $300,000,000 and (b) 5% of Capitalization.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole, taking into account insurance coverage and
effective indemnification; (b) a material impairment of the ability of the
Borrower to perform its payment or other material obligations under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Borrower or any
other Loan Party of any Loan Document to which it is a party.
"Material Debt" means Indebtedness, Guarantees or Swap Contract
Obligations of any one or more of the Borrower and its Subsidiaries (except for
Indebtedness of any Subsidiary to the Borrower or to any Wholly-Owned
Subsidiary) having an aggregate principal amount (including undrawn committed
11
or available amounts and including amounts owing to all creditors under any
syndicated credit arrangement) of more than $35,000,000.
"Maturity Date" means February 27, 2006.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"Multiemployer Plan" means any "multiemployer plan" (as that term is
defined under section 3(37) of ERISA) under which the Borrower or any Related
Person has contributed or with respect to which the Borrower or such Related
Person may have any liability.
"Net Income" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries for the period, calculated without giving effect to extraordinary
gains and extraordinary losses. For the avoidance of doubt, net income means net
income before any adjustments for comprehensive income or comprehensive loss.
"Net Proceeds" means, with respect to any event,
(a) the cash proceeds received in respect of such event,
including (i) any cash received in respect of any non-cash proceeds,
but only as and when received, (ii) in the case of a casualty, property
damage insurance proceeds (excluding business interruption insurance
proceeds), and (iii) in the case of a condemnation or similar event,
condemnation awards and similar payments, net of
(b) the sum of (i) all reasonable fees and out-of-pocket
expenses paid by the Borrower and the Subsidiaries to third parties
(other than Affiliates) in connection with such event, (ii) in the case
of a sale, transfer or other disposition of an asset (including
pursuant to a Sale Leaseback Transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments
required to be made by the Borrower and the Subsidiaries as a result of
such event to repay Indebtedness (other than Loans) secured by such
asset, and (iii) the amount of all taxes paid (or reasonably estimated
to be payable) by the Borrower and the Subsidiaries, and the amount of
any reserves established by the Borrower and the Subsidiaries to fund
contingent liabilities reasonably estimated to be payable and that, in
each case, are directly attributable to such event.
"Net Worth" means, as of any date of determination, Shareholder's
Equity of the Borrower and its Subsidiaries on a consolidated basis determined
in accordance with GAAP.
"Note" means a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit B.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, the Borrower or any other Loan Party
arising under any Loan Document or otherwise with respect to any Loan, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against the
Borrower, any other Loan Party or any Affiliate thereof of any proceeding under
any Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding.
12
"Off-Balance Sheet Liabilities" means, with respect to any Person as of
any date of determination thereof, without duplication: (a) with respect to any
asset securitization transaction (including any Receivables Purchase Facility)
(i) the unrecovered investment of the purchasers (or the transferees) of the
assets transferred pursuant to such transaction, and (ii) any other payment,
recourse, repurchase, hold harmless, indemnity or similar obligation of such
Person or any of its Subsidiaries in respect of assets transferred or payments
made in respect thereof, other than limited recourse provisions that are
customary for transactions of such type and that neither (x) have the effect of
limiting the loss or credit risk of such purchasers or transferees with respect
to payment or performance by the obligors of the assets so transferred nor (y)
impair the characterization of the transaction as a true sale under applicable
Laws (including Debtor Relief Laws); (b) the monetary obligations under any
Synthetic Lease or financing lease which, upon the application of any Debtor
Relief Law to such Person or any of its Subsidiaries, would be characterized by
a court of competent jurisdiction as indebtedness; (c) the monetary obligations
under any Sale Leaseback Transaction which does not create a liability
classified as Indebtedness; or (d) any other monetary obligation arising with
respect to any other transaction which (i) upon the application of any Debtor
Relief Law to such Person or any of its Subsidiaries, would be characterized by
a court of competent jurisdiction as indebtedness or (ii) is the functional
equivalent of or takes the place of borrowing but which does not constitute
Indebtedness (for purposes of this clause (d), any transaction structured to
provide tax deductibility as interest expense of any dividend, coupon or other
periodic payment will be deemed to be the functional equivalent of a borrowing).
The amount of any Synthetic Lease obligation as of any date shall be deemed to
be the amount of Attributable Indebtedness in respect thereof as of such date.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Outstanding Amount" means, with respect to Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
prepayments or repayments of Loans occurring on such date.
"Participant" has the meaning specified in Section 10.07(d).
"Pass-Through Investment" means an Investment (a) which Investment is
made by the Borrower contemporaneously with the making of a capital contribution
in the Borrower by PDVSA or one of its Subsidiaries, which capital contribution
is in cash and is specified for the purpose of the making of such Investment,
and (b) which Investment shall be no greater than the amount of such capital
contribution.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under ERISA.
"PDVMR" means PDV Midwest Refining, LLC, a Delaware limited liability
company.
"PDVSA" means Petroleos de Venezuela, S.A., a Venezuelan corporation.
13
"Permitted Affiliate Subordinated Indebtedness" means unsecured
Indebtedness owed by the Borrower to an Affiliate of the Borrower, subordinated
to the Obligations and any refinancing thereof pursuant to subordination terms
satisfactory to the Administrative Agent, provided that such Indebtedness (i)
shall not bear a rate of interest that is greater than a market rate of
interest, and (ii) shall not require any principal payment (whether pursuant to
an amortization schedule, maturity, or otherwise) earlier than one year after
the Maturity Date.
"Permitted Liens" has the meaning specified in subsection 7.01(a).
"Permitted Preferred Trust Securities" means any securities made up of
trust participation interests, or of limited partnership interests, issued by a
Subsidiary of the Borrower; provided that:
(a) the issuer of such securities has no assets other than
Permitted Subordinated Trust Indebtedness owing to it by the Borrower.
(b) payments upon such securities can be made only out of
funds received in payment of such Permitted Subordinated Trust
Indebtedness;
(c) so long as no default has occurred and is continuing under
the indenture or related documents executed in connection with the
issuance of such securities, at the election of the Borrower (acting
either directly or through such issuer), all payments upon such
securities can be deferred for the greater of (i) one or more payment
periods, and (ii) a period expiring not earlier than 20 years after the
Maturity Date; and
(d) such securities shall not be subject to mandatory
redemption or redemption at the option of the holder thereof at a time
that is earlier than 20 years after the Maturity Date.
"Permitted Subordinated Trust Indebtedness" means (a) any promissory
notes or debentures issued by the Borrower to any issuer of Permitted Preferred
Trust Securities, provided that such notes or debentures (i) are subordinated to
the Obligations pursuant to subordination terms satisfactory to the
Administrative Agent, (ii) do not require any principal payments to be made at a
time that is earlier than 20 years after the Maturity Date, (iii) provide that
so long as no default has occurred and is continuing thereunder or under the
indenture or related documents executed in connection therewith, at the election
of the Borrower, all payments upon such notes or debentures can be deferred for
the greater of (A) one or more payment periods, and (B) a period expiring not
earlier than 20 years after the Maturity Date, and (iv) have a maturity date
that is not earlier than 20 years after the Maturity Date, and (b) any guaranty
by the Borrower that the issuer of such Permitted Preferred Trust Securities
will make required distributions thereon to the extent it has funds available
therefore, provided that such guaranty is subordinated to the Obligations
pursuant to subordination terms satisfactory to the Administrative Agent.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Petroleos" means PDVSA Petroleo, S.A., a Venezuelan corporation.
"Pipeline Inventory Advance Sales" means sales after the Closing Date
by the Borrower of its refined products at the time those products are delivered
into the custody of interstate pipelines; except to the extent that at any time
the amount of the products so sold that is contained in interstate pipelines at
such time exceeds $100,000,000.
14
"Plan" means any plan described in section 4021(a) of ERISA and not
excluded pursuant to section 4021(b) thereof, under which the Borrower or any
Related Person to the Borrower has contributed or with respect to which the
Borrower or such Related Person is liable.
"Pledged Entities" means CITGO Pipeline Holding I, LLC, a Delaware
limited liability company, and CITGO Pipeline Holding II, LLC, a Delaware
limited liability company, each a direct, Wholly-Owned Subsidiary of the
Borrower.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including
pursuant to a Sale Leaseback Transaction) of any property or asset of
the Borrower or any Subsidiary, other than (i) sales of inventory or
used or surplus equipment in the ordinary course of business, (ii)
sales, transfers and dispositions to the Borrower or a Subsidiary,
(iii) sales pursuant to a permitted Receivables Securitization
Transaction and (iv) Pipeline Inventory Advance Sales; provided that no
Prepayment Event under this clause (a) shall be deemed to exist until
the aggregate amount of Net Proceeds received after the Closing Date in
respect of such sales, transfers or other dispositions (other than
those referred to in clauses (i) through (iv)) shall be in excess of
$50,000,000 and thereafter only to the extent such Net Proceeds are not
reinvested within 90 days after the receipt thereof in respect of
capital expenditures of the Borrower or any Subsidiary; or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset of the Borrower or any Subsidiary, but (i)
only to the extent the Net Proceeds therefrom are not applied to
repair, restore or replace such property or asset within 180 days after
such event (or if any part of such Net Proceeds are received after such
180-day period, only to the extent proceeds equal to or greater than
such part of such Net Proceeds have not been used to repair, restore or
replace such property or asset prior to the date on which such part of
such Net Proceeds are received) and (ii) excluding proceeds received
under business interruption insurance policies; or
(c) any issuance by the Borrower or any Subsidiary of any
capital stock, other than any issuance of capital stock to the
Borrower, any Subsidiary or any Person that is an Affiliate of the
Borrower prior to such issuance; or
(d) any incurrence by the Borrower or any Subsidiary of any
Indebtedness for borrowed money owed to any Person other than the
Borrower or a Subsidiary other than
(i) the Borrower's 11-3/8% Senior Notes Due February
1, 2011 issued on the date hereof,
(ii) Indebtedness under the 364-Day Credit Agreement,
the Three-Year Credit Agreement and the CITGO Puerto Rico
Credit Agreement,
(iii) the reissuance of any Tax-Exempt Bonds,
(iv) Indebtedness incurred pursuant to permitted
Receivables Securitization Transactions,
(v) Indebtedness incurred pursuant to Pipeline
Inventory Advance Sales and
15
(vi) any Refinancing of Indebtedness of the Borrower
existing as of the date hereof, ==
provided that, in the case of the receipt of proceeds from the
issuance of tax-exempt bonds not constituting either Tax-Exempt Bonds
or Indebtedness described in clause (vi) hereof, no Prepayment Event
shall exist at the time such proceeds are received or during the time
that they are held in an account with the related bond trustee pending
their application to the payment of the costs of the project for which
such bonds were issued, but a Prepayment Event shall exist to the
extent such proceeds are disbursed from such account, and such released
proceeds shall be deemed to be the amount of the Net Proceeds (it being
understood that such bond proceeds are not intended to be used directly
or indirectly to make any offer required to be made under Section
2.03(b) in respect of said Prepayment Event); or
(e) any dividends, payments or other transfers of any kind
received by the Borrower in respect of its equity interests in the
Pledged Entities to the extent the cash received by the Borrower in
respect of, or the Net Proceeds realized from any sale or other
disposition of any property received by the Borrower in respect of,
such dividends, payments or transfers exceed $27,500,000 in any
calendar year (such amounts in excess of $27,500,000 to be deemed Net
Proceeds).
"Principal Properties" means (a) (i) the Borrower's refinery located at
Lake Charles Louisiana, (ii) CRCCLP's refinery located at Corpus Christi, Texas
and (iii) PDVMR's refinery located at Lemont, Illinois, and (b) any refinery
property acquired by the Borrower or a Subsidiary in replacement of, or swap
for, any of the foregoing properties.
"Principal Subsidiary" means each Pledged Entity and each of CARCO,
CPIC, CRCCLP, CIC, PDVMR and any other Subsidiary whose assets have an aggregate
book value exceeding $100,000,000.
"Private Placement Agreement" means that certain Note Purchase
Agreement dated as of November 1, 1991 among the Borrower and each of the
purchasers named therein relating to the Borrower's issuance, and such
purchasers' purchase, of the Private Placement Notes.
"Private Placement Notes" means the senior notes issued by the Borrower
pursuant to the Private Placement Agreement, consisting of an issue of
$125,000,000 aggregate principal amount of the Borrower's 9.30% Guaranteed
Series C Senior Notes due 2006.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount, as applicable, of the Commitment or the
Loans of such Lender at such time and the denominator of which is the amount, as
applicable, of the Aggregate Commitments or the Total Outstandings at such time.
The initial Pro Rata Share of each Lender is set forth opposite the name of such
Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which
such Lender becomes a party hereto, as applicable.
"Project Financing" means Indebtedness incurred to finance the
acquisition or construction of a project, provided that no portion of such
Indebtedness permits or provides for recourse against the Borrower or any of its
Subsidiaries other than recourse to the equity interests in, or assets of, the
Project Financing/Special Purpose Subsidiary that is the owner of the project so
financed.
16
"Project Financing/Special Purpose Subsidiary" means a Subsidiary of
the Borrower whose principal purpose is to incur Project Financing, and the
assets of which Subsidiary are limited to those assets being financed in whole
or in part by a Project Financing.
"RCRA" means the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Section 6901 et seq.)
"Receivable" of the Borrower or any Subsidiary means, as at any date of
determination thereof, the unpaid principal portion of the obligation, as stated
on the respective invoice, of any customer of the Borrower or such Subsidiary to
pay money to the Borrower or such Subsidiary in respect of any services
performed by the Borrower or such Subsidiary or inventory purchased from the
Borrower or such Subsidiary net of all credits, rebates and offsets owed to such
customer by the Borrower or such Subsidiary and also net of all commissions
payable by the Borrower or such Subsidiary to third parties (and for purposes
hereof, a credit or rebate paid by check or draft of the Borrower or such
Subsidiary shall be deemed to be outstanding until such check or draft shall
have been debited to the respective account of the Borrower or the Subsidiary on
which such check or draft was drawn).
"Receivables Financing Indebtedness" means obligations of the Borrower
and its Subsidiaries with respect to Receivables Purchase Facilities, which
obligations are included in the definition of Indebtedness.
"Receivables Purchase Facility" means any one or more Receivables
Securitization Transactions.
"Receivables Securitization Transaction" means any sale or series of
related sales by the Borrower or any Subsidiary of the Borrower of Receivables
or interests therein to a trust, corporation or other entity, where (a) the
purchase of such Receivables or interests therein is funded in whole or in part
by the incurrence or issuance by the purchaser (other than the Borrower or any
Subsidiary of the Borrower) or any successor purchaser (other than the Borrower
or a Subsidiary of the Borrower) of indebtedness or securities that are to
receive payments from, or that represent interests in, the cash flow derived
from such Receivables or interests therein, provided, however, that
"Indebtedness" as used in this clause (a) shall not include Indebtedness
incurred by a Special Purpose Receivables Subsidiary owed to the Borrower or to
a Subsidiary of the Borrower which Indebtedness represents all or a portion of
the purchase price paid by the Special Purpose Receivables Subsidiary for such
Receivables or interests therein, (b) any recourse, repurchase, hold harmless,
indemnity or similar obligations of the Borrower or any Subsidiary (other than
the Special Purpose Receivables Subsidiary that is a party to such transaction)
in respect of Receivables or interests therein sold, or payments made in respect
thereof, are customary for transactions of this type, and do not prevent the
characterization of the transaction as a true sale under applicable Laws
(including Debtor Relief Laws), and (c) any recourse, repurchase, hold harmless,
indemnity or similar obligations of a Special Purpose Receivables Subsidiary in
respect of Receivables or interests therein sold, or payments made in respect
thereof, are customary for transactions of this type and any transaction
involving a Special Purpose Receivables Subsidiary as seller or transferor is
structured as a sale and not as a secured loan. As used in this definition and
in Section 7.01(m), the term "Special Purpose Receivables Subsidiary" means a
bankruptcy-remote Subsidiary of the Borrower which is formed for the purpose of
purchasing Receivables from the Borrower or from another Subsidiary of the
Borrower in order to facilitate a Receivables Securitization Transaction and
whose activities are limited to the purchase of Receivables and interests
therein, and the sale thereof, pursuant to a Receivables Securitization
Transaction.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
17
"Register" has the meaning set forth in Section 10.07(c).
"Related Person" with respect to any Person means any other Person
which, together with such Person, is under common control as described in
Section 414 of the Code.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder.
"Required Lenders" means, as of any date of determination, Lenders
having a majority of the Aggregate Commitments or the Total Outstandings;
provided that the Commitment of, and the portion of the Total Outstandings held
or deemed held by, any Defaulting Lender shall be excluded for purposes of
making a determination of Required Lenders.
"Requirement of Law" means, as to any Person, any law, treaty, rule,
regulation, judgment or order of a Governmental Authority or other requirement
having the force of law, in each case applicable to or binding upon the Person
or any of its property or to which the Person or any of its property is subject
and any interpretation thereof by any Person having jurisdiction with respect
thereto or charged with the administration or interpretation thereof.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, controller, treasurer or assistant treasurer of the
Borrower. Any document delivered hereunder that is signed by a Responsible
Officer of the Borrower shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of the
Borrower and such Responsible Officer shall be conclusively presumed to have
acted on behalf of the Borrower.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any equity interest in
the Borrower, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
equity interest in the Borrower or any option, warrant or other right to acquire
any such Equity Interests in the Borrower.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"Sale Leaseback Transaction" means a transaction or series of
transactions pursuant to which the Borrower or any Subsidiary shall sell or
transfer to any Person (other than the Borrower or a Subsidiary) any Principal
Property, whether now owned or hereafter acquired, and, as part of the same
transaction or series of transactions, the Borrower or such Subsidiary shall
rent or lease as lessee (other than pursuant to a capital lease), or similarly
acquire the right to possession or use of, such Principal Property.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Security Documents" means the Collateral Agreement and each other
security agreement or other instrument or document executed and delivered to
secure any of the Obligations.
"Senior Notes" means the Borrower's outstanding $200,000,000 aggregate
principal amount 7-7/8% Senior Notes due 2006 and any other notes now or
hereafter issued under the Borrower's Indenture dated as of May 1, 1996 between
the Borrower and Bank One, N.A., as Trustee.
18
"Shareholder's Equity" means, as of any date of determination, (a)
consolidated shareholder's equity of the Borrower and its Subsidiaries as of
that date determined in accordance with GAAP, plus (b) Permitted Preferred Trust
Securities.
"Short-Term Marketable Debt Securities" means a security of a domestic
issuer with a maturity of one year or less and a debt rating of A-1 or better by
S&P and P-1 or better by Xxxxx'x.
"SPC" has the meaning specified in Section 10.07(h).
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of the board of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned directly, or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise specified,
all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Supplemental Crude Supply Agreement" means that certain Supplemental
Crude Supply Agreement, dated as of September 30, 1986, by and between the
Borrower and Petroleos.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement. "Interest Rate
Swap Contracts" means any of the foregoing relating to interest rates.
"Swap Contract Obligations" means Obligations in respect of Swap
Contracts. For purposes of Section 8.01(e), the term "principal amount" of Swap
Contract Obligations of the Borrower or a Subsidiary at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Swap Contract were
terminated at such time.
"Synthetic Lease" of the Borrower or a Subsidiary of the Borrower means
(a) a lease designed to have the characteristics of a loan for federal income
tax purposes while obtaining operating lease treatment for financial accounting
purposes, or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of the Borrower and its
Subsidiaries but which, upon the insolvency or bankruptcy of the Borrower or a
Subsidiary of the Borrower, would be characterized by a court of competent
jurisdiction as the indebtedness of the Borrower or a Subsidiary of the Borrower
(without regard to accounting treatment).
19
"Tax-Exempt Bonds" means the tax-exempt bonds issued by the Borrower
listed on Schedule 1.01.
"364-Day Credit Agreement" means the 364-day credit agreement entered
into as of December 11, 2002, among the Company, the lenders referred to therein
and Bank of America, N.A. as Administrative Agent, together with the related
documents thereto (including the revolving loan facility, note purchase or
placement facility, letter of credit facility or other arrangement for the
extension of credit thereunder, any guarantees and security documents), as
amended, extended, renewed, restated, supplemented or otherwise modified (in
whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any agreement (and
related document) governing Indebtedness incurred to Refinance, in whole or in
part, the borrowings and commitments then outstanding or permitted to be
outstanding under such credit agreement or a successor credit agreement, whether
by the same or any other lender or group of lenders.
"Three-Year Credit Agreement" means the three-year credit agreement
entered into as of December 11, 2002, among the Company, the lenders referred to
therein and Bank of America, N.A. as Administrative Agent, together with the
related documents thereto (including the revolving loan facility, note purchase
or placement facility, letter of credit facility or other arrangement for the
extension of credit thereunder, any guarantees and security documents), as
amended, extended, renewed, restated, supplemented or otherwise modified (in
whole or in part, and without limitation as to amount, terms, conditions,
covenants and other provisions) from time to time, and any agreement (and
related document) governing Indebtedness incurred to Refinance, in whole or in
part, the borrowings and commitments then outstanding or permitted to be
outstanding under such credit agreement or a successor credit agreement, whether
by the same or any other lender or group of lenders.
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans.
"Type" means, with respect to a Loan, its character as a Base Rate Loan
or a Eurodollar Rate Loan.
"Unfunded Vested Liability" means, relative to any Plan, including any
Multiemployer Plan, at any time, the excess (if any) of (a) the present value of
all vested nonforfeitable benefits under such Plan or such Multiemployer Plan,
as the case may be, over (b) the fair market value of all Plan assets or
Multiemployer Plan assets, as the case may be, allocable to such benefits, all
determined as of the then most recent valuation date for such Plan or such
Multiemployer Plan, as the case may be, but only to the extent that such excess
represents a potential liability of the Borrower to the PBGC, such Plan or such
Multiemployer Plan under Title IV of ERISA.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.04(c)(i).
"Voting Stock" means, with respect to any corporation, any class of
shares of stock of such corporation having general voting power under ordinary
circumstances to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency).
"Welfare Plan" means a "welfare plan" as such term is defined in
section 3(1) of ERISA.
20
"Wholly-Owned" means, with respect to any Subsidiary that, except for
directors' qualifying shares required by law, 100% of the capital stock of such
Subsidiary of each class having ordinary voting power, and 100% of the capital
stock of such Subsidiary of every other class, in each case, at the time as of
which any determination is being made, is owned, beneficially and of record, by
the Borrower, or by one or more of the other Wholly-Owned Subsidiaries, or both.
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder"
and words of similar import when used in any Loan Document shall refer
to such Loan Document as a whole and not to any particular provision
thereof.
(ii) Article, Section, Exhibit and Schedule
references are to the Loan Document in which such reference
appears.
(iii) The term "including" is by way of example and
not limitation.
(iv) The term "documents" includes any and all
instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.
(c) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including;" the words "to" and "until" each mean "to but excluding;"
and the word "through" means "to and including."
(d) Section headings herein and in the other Loan Documents
are included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
21
1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
ARTICLE II.
THE COMMITMENTS AND BORROWINGS
2.01 LOANS. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make a loan (each such loan, a "Loan") to the
Borrower on the Closing Date in an aggregate amount equal to such Lender's
Commitment. The Loans made on the Closing Date will be Eurodollar Rate Loans
with an Interest Period of 3 months. Amounts repaid in respect of Loans may not
be reborrowed.
2.02 CONTINUATIONS OF LOANS.
(a) Except as provided in Section 3.02 or 3.03 and unless repaid or
prepaid in accordance with the provisions hereof, each Eurodollar Rate Loan
shall automatically be continued on the last day of the Interest Period in
effect with respect thereto as a Eurodollar Rate Loans for another Interest
Period. Unless otherwise specified in a timely Interest Period Notice from the
Borrower to the Administrative Agent, the length of the Interest Period of the
continued Eurodollar Rate Loan shall remain unchanged from the immediately
preceding Interest Period. Each Interest Period Notice must be received by the
Administrative Agent not later than 12:00 noon three Business Days prior to the
requested date of any continuation of Eurodollar Rate Loans. Such Interest
Period Notice may be given by telephone, but if so given, must be confirmed
promptly by delivery to the Administrative Agent of a written Interest Period
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower.
(b) Each Lender shall make the amount of its Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Closing Date. Upon satisfaction
of the applicable conditions set forth in Section 4.01, the Administrative Agent
shall make all funds so received on the Closing Date available to the Borrower
in like funds as received by the Administrative Agent by wire transfer of such
funds in accordance with instructions provided to (and reasonably acceptable to)
the Administrative Agent by the Borrower.
(c) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative
22
Agent shall notify the Borrower and the Lenders of any change in Credit Suisse
First Boston's prime rate used in determining the Base Rate promptly following
the public announcement of such change.
2.03 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at any
time or from time to time, voluntarily prepay Loans in whole or in part without
premium (except as set forth in paragraph (d) below and in Section 3.05) or
penalty. Any prepayment of Eurodollar Rate Loans under this paragraph (a) shall
be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof; and any prepayment of Base Rate Loans under this paragraph (a)
shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding.
(b) In the event and on each occasion that Net Proceeds are received by
or on behalf of the Borrower or any Subsidiary in respect of any Prepayment
Event, the Borrower shall, immediately after such Net Proceeds are received,
offer to prepay Borrowings in an aggregate amount equal to such Net Proceeds;
provided, however, that notwithstanding anything to the contrary contained
herein, if total Net Proceeds received by or on behalf of the Borrower or any
Subsidiary in respect of any Prepayment Event after (i) the Closing Date or (ii)
if a prepayment offer under this Section 2.03(b) has previously been made by the
Borrower, the date of the most recent prepayment offer made by the Borrower, are
equal to an amount less than $5,000,000, the Borrower shall make such offer to
prepay Borrowings on the last day of fiscal quarter in which such Net Proceeds
are received; and, further provided, that no Lender shall be obligated to accept
any offer made under this paragraph (b);.
(c) In the event and on each occasion that a reduction in Net Worth (or
an increase in Indebtedness secured by Liens) would result in a default or event
of default under this Agreement, the Three-Year Credit Agreement, the 364-Day
Credit Agreement or any other agreement of the Borrower absent a reduction in
the Total Outstandings, the Borrower shall, not later than the last day of the
Fiscal Quarter on which such reduction in Net Worth (or increase of Indebtedness
secured by Liens) occurs, prepay Borrowings in an aggregate amount not less than
the amount required so that such default or event of default shall not occur.
(d) In the event and on each occasion that Loans are prepaid more than
90 days after the Closing Date under paragraph (a) or (c) above, the amount of
such prepayment shall be accompanied by a premium in an amount equal to:
(i) if such prepayment is made after the day that is 90 days
after the Closing Date but on or prior to the day immediately preceding
the first anniversary of the Closing Date, 3.00% of the aggregate
amount of the Loans being prepaid;
(ii) if such prepayment is made on or after the first
anniversary of the Closing Date but on or prior to the day immediately
preceding the second anniversary of the Closing Date, 2.00% of the
aggregate amount of the Loans being prepaid; and
(iii) if such prepayment is made on or after the second
anniversary of the Closing Date but on or prior to the day that is
immediately preceding the Maturity Date, 1.00% of the aggregate amount
of the Loans being prepaid.
23
(e) Prior to any voluntary or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid
and shall specify such selection in the notice of such prepayment pursuant to
paragraph (f) below.
(f) The Borrower shall notify the Administrative Agent of any
prepayment hereunder not later than 12:00 noon (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Loans of the Lenders in accordance with their respective Pro
Rata Shares.
2.04 TERMINATION OF COMMITMENTS.
The Commitments shall terminate at 5:00 p.m. on the Closing Date.
2.05 REPAYMENT OF LOANS.
The Borrower shall repay on the Maturity Date the aggregate principal
amount of the Loans outstanding on such date. Payment shall be made to the
Administrative Agent for the account of the Lenders.
2.06 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. In addition,
while any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
24
2.07 FEES. (a) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(b) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.
2.08 COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by Credit Suisse First Boston's
"prime rate" shall be made on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.10(a), bear interest for one day.
2.09 EVIDENCE OF DEBT.
The Loans made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Loans made by the Lenders to the Borrower and the interest
and payments thereon. Any failure to so record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Borrower hereunder
to pay any amount owing with respect to the Obligations. In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the Administrative
Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender's Loans in
addition to such accounts or records. Each Lender may attach schedules to its
Note and endorse thereon the date, Type (if applicable), amount and maturity of
its Loans and payments with respect thereto.
2.10 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.
25
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion
of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds at
the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount is
recovered by the Administrative Agent (the "Compensation Period") at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal
to the rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Borrowing set
forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans are several
and not joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
26
2.11 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it,
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loans or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described in
Section 10.06 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section), each of the Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.
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(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability (including additions to
tax, penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Payment
under this subsection (d) shall be made within 30 days after the date the Lender
or the Administrative Agent makes a demand therefor.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a conversion to or continuation of Eurodollar
Rate Loans or, failing that, will be deemed to have converted such request into
a request for a Borrowing of Base Rate Loans in the amount specified therein.
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3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.
(a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or a reduction in
the amount received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which Section 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements contemplated by Section 3.04(c)), then from time to time upon
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender shall
be required to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional interest on the unpaid principal amount
of each Eurodollar Rate Loan equal to the actual costs of such reserves
allocated to such Loan by such Lender (as determined by such Lender in good
faith, which determination shall be conclusive), which shall be due and payable
on each date on which interest is payable on such Loan, provided the Borrower
shall have received at least 15 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice. The Borrower shall not be required to compensate a Lender pursuant to
this subsection (c) for any additional costs incurred more than 180 days prior
to the date that such Lender gives notice to the Borrower of additional costs
and of the Lender's intention to claim compensation therefor; provided, that if
the change in law or regulations giving rise to such costs is retroactive, then
the 180-day period shall be extended to include the period of retroactive effect
thereof.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
29
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.16;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III 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, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
(b) Upon any Lender's making a claim for compensation under Section
3.01 or 3.04, the Borrower may replace such Lender in accordance with Section
10.16.
(c) Upon any Lender's making a determination that it is unlawful to
maintain Eurodollar Rate Loans and such Lender fails to designate a different
Lending Office pursuant to Section 3.02, the Borrower may replace such Lender in
accordance with Section 10.16.
3.07 SURVIVAL. All of the Borrower's obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all the
Loans and other Obligations hereunder; provided, that with respect to amounts
payable under Sections 3.04 and 3.05, such amounts shall be deemed to have been
paid if no claim therefor is made within two years after the date that all Loans
have been paid in full and all commitments to make Loans hereunder have
terminated.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF BORROWING ON THE CLOSING DATE. The obligation of
each Lender to make its initial Loan hereunder on the Closing Date is subject to
satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
Borrower and each other applicable Loan Party, each dated the Closing Date (or,
in the case of certificates of governmental officials, a recent date before the
Closing Date) and each in form and substance satisfactory to the Administrative
Agent and its legal counsel:
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(i) executed counterparts of this Agreement and the Collateral
Agreement, sufficient in number for distribution to the Administrative
Agent, each Lender and the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of the Borrower and each other applicable Loan Party as the
Administrative Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other
Loan Documents;
(iv) each of the following documents:
(A) a certificate for the Borrower and each
other applicable Loan Party from the Secretary of
State of the State of Delaware or other applicable
jurisdiction of organization listing the Certificate
of Incorporation or other organization document and
each amendment, if any, thereto, on file in his
office and stating that such documents are the only
charter documents or other organization documents of
the Borrower or such other applicable Loan Party on
file in his office and that the Borrower or such
other applicable Loan Party is duly incorporated and
in good standing in the State of Delaware or such
other jurisdiction, and has filed all franchise tax
returns and has paid all franchise taxes required by
law to be filed and paid by it as of the date of his
certificate; and
(B) signed certificates of the Secretaries
of State (or other appropriate officials) of each
appropriate State set forth on Schedule 4.01, dated
reasonably near the Closing Date, certifying that the
Borrower and each other applicable Loan Party is duly
qualified and in good standing as a foreign
corporation in such State;
(v) a favorable opinion of Sidley Xxxxxx Xxxxx & Xxxx, counsel
to the Borrower and the other Loan Parties, addressed to the
Administrative Agent and each Lender, substantially in the form set
forth in Exhibit G-1 and addressing such other matters concerning the
Borrower, the other Loan Parties and the Loan Documents as the Required
Lenders may reasonably request;
(vi) a favorable opinion of W. Xxxx Xxxxxx, Senior Counsel to
the Borrower, addressed to the Administrative Agent and each Lender,
substantially in the form set forth in Exhibit G-2 and addressing such
other matters concerning the Borrower, the other Loan Parties and the
Loan Documents as the Required Lenders may reasonably request;
(vii) a certificate of a Responsible Officer of each of the
Borrower and the other Loan Parties either (A) attaching copies of all
consents, licenses and approvals required in connection with the
execution, delivery and performance by the Borrower and the other Loan
Parties and the validity against the Borrower and the other Loan
Parties of the Loan Documents to which each is a party, and such
consents, licenses, and approvals shall be in full force and effect, or
(B) stating that no such consents, licenses or approvals are so
required;
(ix) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that (1) the representations and warranties of
the Borrower contained in Article V or of any Loan
31
Party in any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects on and as
of the Closing Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they
shall be true and correct as of such earlier date and (2) no Default or
Event of Default shall exist, or would result from the Borrowing at the
Closing Date, (B) that there has been no event or circumstance since
December 31, 2002 that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect and
(C) a calculation of (w) the Capitalization Ratio, (x) the ratio of
EBITDA to Interest Expense, (y) the Net Worth of the Borrower and (z)
the maximum and available lien amounts under Section 7.01(a)(xix) of
this Agreement, the Three-Year Credit Agreement and the 364-Day Credit
Agreement as of the last day of the Fiscal Quarter of the Borrower most
recently ended prior to the Closing Date;
(x) certificates of insurance demonstrating that the Borrower
and each of its Subsidiaries has procured with responsible insurance
companies insurance with respect to its properties and business
(including business interruption insurance) against such casualties and
contingencies and of such types, in such amounts and with such
deductibles as is required by Section 6.05; and
(xi) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent or the Required Lenders
reasonably may require.
(b) There shall be no threatened or pending litigation, inquiry, or
investigation contesting the Loan Documents or any transaction contemplated
thereby.
(c) Any fees and expenses required to be paid on or before the Closing
Date shall have been paid.
(d) Unless waived by the Administrative Agent, the Borrower shall have
paid all Attorney Costs of the Administrative Agent to the extent invoiced for
work performed prior to or on the Closing Date.
(e) All the capital stock of or other equity interests in the Colonial
Pipeline Entities and the Explorer Pipeline Entity owned directly or indirectly
by the Borrower shall have been transferred to and shall be owned beneficially
and of record by the Pledged Entities; such transfer and ownership shall have
been made in accordance with all applicable provisions of the organizational
documents of the Colonial Pipeline Entities and the Explorer Pipeline Entity and
all related equity holders' agreements or other agreements and duly recorded on
the transfer books maintained by the Colonial Pipeline Entity and the Explorer
Pipeline Entity, and the Administrative Agent shall have received evidence
satisfactory to it of such transfer and recordation.
(f) The Borrower shall be the beneficial and record owner of all the
equity interests in each Pledged Entity.
(g) The Guarantee and Collateral Requirement shall have been satisfied.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
each Lender that:
5.01 CORPORATE EXISTENCE; POWER; COMPLIANCE WITH LAWS.
(a) the Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, and each
Subsidiary of the Borrower is a corporation, partnership, or limited liability
company, as the case may be, duly incorporated or otherwise formed, validly
existing and in good standing under the laws of the state of its incorporation
or formation;
(b) the Borrower and each other Loan Party has all requisite corporate
power and authority, governmental licenses, authorizations, consents and
approvals to own its assets, carry on its business as currently conducted, to
execute, deliver, and perform its obligations under the Loan Documents, and, in
the case of the Borrower, to issue the Notes in the manner and for the purpose
contemplated by this Agreement, and each Subsidiary, has all requisite
corporate, partnership or limited liability company, as the case may be, power
and authority to own its assets and to carry on the business in which it is
engaged;
(c) the Borrower and each Subsidiary of the Borrower is duly qualified
as a foreign Person authorized to do business and is licensed and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license other than where the failure to be so qualified or in good standing
would not reasonably be expected to have a Material Adverse Effect; and
(d) the Borrower and each of its Subsidiaries is in compliance in all
material respects with all Requirements of Law, except to the extent that the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by the Borrower and each other Loan Party of the Loan Documents
to which it is party have been duly authorized by all necessary corporate
action, and do not and will not:
(a) contravene the terms of any of its Organization Documents;
(b) result in any breach or contravention of, or result in the creation
of any Lien (other than Liens created by the Loan Documents) under, any document
evidencing any Contractual Obligation to which it is a party or any order,
injunction, writ or decree of any Governmental Authority to which it or its
property is subject (other than such violations, breaches, defaults or Liens
which would not reasonably be expected to have a Material Adverse Effect); or
(c) violate any Requirement of Law.
5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary for the validity of the
execution, delivery or performance by, or enforcement against, the Borrower or
any other Loan Party of this Agreement, any Note or any other Loan Document
other than routine informational filings with the SEC and/or other Governmental
Authorities.
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5.04 BINDING EFFECT. This Agreement and (when executed and delivered
for value) each other Loan Document constitute the legal, valid and binding
obligations of the Borrower and each other Loan Party party thereto, enforceable
against each of them in accordance with their respective terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally or
by equitable principles relating to enforceability (whether considered in a
court of law or a proceeding in equity).
5.05 LITIGATION. No litigation (including derivative actions),
arbitration proceedings or governmental proceedings are pending or, to the best
knowledge of the Borrower after due inquiry, overtly threatened against the
Borrower or any Subsidiary (a) which would reasonably be expected to result in a
Material Adverse Effect, or (b) that question the validity or enforceability of
this Agreement, any other Loan Document or the transactions contemplated hereby
or thereby. Neither the Borrower nor any of its Subsidiaries has knowledge of
any material contingent liabilities, including those disclosed in the financial
statements referred to in Section 5.13, which would reasonably be expected to
have a Material Adverse Effect.
5.06 NO DEFAULT. No Default or Event of Default exists. Neither the
Borrower nor any Subsidiary is in default under or with respect to its
Organization Documents in any respect which, individually or together with all
other such defaults, would reasonably be expected to have a Material Adverse
Effect.
5.07 FIRE, STRIKE, ACT OF GOD, ETC. Neither the business nor the
properties of the Borrower or any of its Subsidiaries are now affected by any
fire, explosion, accident, labor controversy, strike, lockout or other dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy or
other casualty which would reasonably be expected to have a Material Adverse
Effect, or if any such existing event or condition were to continue for more
than 30 additional days (unless in the reasonable opinion of the Borrower such
event or condition is not likely to continue for such period) would reasonably
be expected to have a Material Adverse Effect.
5.08 LIENS. None of the assets or properties of the Borrower or the
Subsidiaries is subject to any Lien except for Permitted Liens and there are no
Permitted Liens of the Borrower existing in reliance on Section 7.01(a)(xix).
5.09 ERISA. Each Plan and, to the best of the Borrower's knowledge,
each Multiemployer Plan, complies in all material respects with all Requirements
of Law except to the extent that noncompliance could not reasonably be expected
to have a Material Adverse Effect and,
(a) no Reportable Event for which the PBGC has not waived the 30-day
notice requirement has occurred with respect to any Plan or, to the best of the
Borrower's knowledge, any Multiemployer Plan, which could result in the Borrower
incurring a liability or obligation in excess of $10,000,000;
(b) no steps have been taken to terminate any Plan which could result
in the Borrower's making a contribution, or incurring a liability or obligation,
to such Plan in excess of $10,000,000; no steps have been taken to appoint a
receiver to administer any such Plan; to the best of the Borrower's knowledge,
no steps have been taken to terminate or appoint a receiver to administer any
Multiemployer Plan which could result in the Borrower's making a contribution,
or incurring a liability or obligation, to such Multiemployer Plan in excess of
$10,000,000; and neither the Borrower nor any Related Person has withdrawn from
any such Multiemployer Plan or initiated steps to do so;
34
(c) there is no Unfunded Vested Liability with respect to any Plan or,
to the best of the Borrower's knowledge, any Multiemployer Plan, that would
reasonably be expected to have, in the event of termination of such Plan or
withdrawal from such Multiemployer Plan, a Material Adverse Effect; and
(d) no contribution failure has occurred with respect to any Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA; no condition
exists or event or transaction has occurred with respect to any Plan which would
reasonably be expected to have a Material Adverse Effect; and neither the
Borrower nor any of its Subsidiaries has any contingent liability with respect
to any post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 5 of Title I of ERISA, that would
reasonably be expected to have a Material Adverse Effect.
5.10 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
to be used solely for purposes not in contravention of subsection 7.01(i) or
subsection 7.01(k). Not more than 25% of the assets of the Borrower and its
Subsidiaries on a consolidated basis consists of any Margin Stock, and no part
of the proceeds of any Loan will be used to buy or carry any Margin Stock.
Neither the Borrower nor any Subsidiary is generally engaged in the business of
buying or selling Margin Stock or extending credit for the purpose of buying or
carrying Margin Stock.
5.11 TITLE TO PROPERTIES. The Borrower and each of its Subsidiaries (i)
has valid fee title to, or valid leasehold interests in, all of its respective
material real property, and has good and valid title to all of its respective
material personal properties and assets, of any nature whatsoever which are
reflected on the audited balance sheet referred to in Section 5.13 or acquired
by the Borrower or such Subsidiary after the date thereof except for assets
sold, transferred or otherwise disposed of since such date in the ordinary
course of business, except for such defects in title as would not, individually
or in the aggregate, be reasonably expected to have a Material Adverse Effect
and (ii) owns or holds all permits necessary to construct, own, operate, use and
maintain its respective property and assets and to conduct its respective
business as now conducted except where the failure to have such interest or
title or to own or hold such permit would not reasonably be expected to have a
Material Adverse Effect.
5.12 TAXES. The Borrower and each Subsidiary has filed (or obtained
extensions with respect to the filing of) all United States federal income tax
returns and all other material tax returns which are required to be filed by it
and has paid all taxes as shown on such returns or pursuant to any assessment
received by the Borrower or any Subsidiary, except to the extent the same may be
contested in good faith and for which reserves have been established to the
extent required by GAAP. The charges, accruals and reserves on the books of the
Borrower and each Subsidiary in respect of Taxes and other governmental charges
are adequate to the best knowledge of the Borrower.
5.13 FINANCIAL CONDITION.
(a) The audited consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as of December 31, 2002, and the related consolidated
statements of income or operations, shareholder's equity and cash flows for the
fiscal year ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (ii) fairly present the financial position of the
Borrower and its consolidated Subsidiaries as of the date thereof and results of
operations for the period covered thereby.
(b) All Off-Balance Sheet Liabilities of the Borrower and its
Subsidiaries are accurately set forth (a) as of the Closing Date, on Schedule
5.13(c) and (b) as of the end of each Fiscal Year beginning with the Fiscal Year
ended December 31, 2003, on an updated Schedule attached to the Compliance
35
Certificate delivered by the Borrower with the most recent annual financial
statements delivered pursuant to Section 6.01(a).
(c) Since December 31, 2002, no event or condition has occurred which,
either individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect, except as disclosed on Schedule 5.13(d).
5.14 ENVIRONMENTAL MATTERS. Each of the Borrower and its Subsidiaries
are in compliance in all material respects with all Federal, state and local
laws and regulations (i) now applicable to it, or (ii) which, to the best
knowledge of the Borrower will be applicable (or, if not in compliance with such
laws and regulations referred to in this clause (ii), the Borrower or such
Subsidiary is taking appropriate action diligently pursued to be in compliance
therewith on a timely basis or to be exempt from compliance) to it relating to
pollution control and environmental contamination, including all laws and
regulations governing the generation, use, collection, treatment, storage,
transportation, recovery, removal, discharge or disposal of Hazardous Materials,
except to the extent that the failure to comply or take such action would not
reasonably be expected to have a Material Adverse Effect. Except as disclosed on
Schedule 5.14 (as updated from time to time), (A) there are no presently
outstanding allegations by governmental officials that the Borrower or any of
its Subsidiaries is now or at any time prior to the date hereof, was in material
violation of such laws or regulations, (B) there are no material administrative
or judicial proceedings presently pending against the Borrower or any of its
Subsidiaries pursuant to such laws or regulations, and (C) there is no material
claim presently outstanding against the Borrower or any of its Subsidiaries
which was asserted pursuant to such laws or regulations that in each case would
reasonably be expected to result in a liability to the Borrower or any
Subsidiary in excess of $20,000,000 or $50,000,000 in the aggregate for all such
claims (net in each case of actual insurance coverage or effective
indemnification with respect thereto). Except as disclosed in Schedule 5.14 (as
updated from time to time), the Borrower reasonably believes that no facts or
circumstances known to it or any Subsidiary could form the basis for the
assertion of any material claim against the Borrower or any Subsidiary relating
to environmental matters, including any material claim arising from past or
present environmental practices asserted under CERCLA, RCRA, or any
Environmental Law that in each case would reasonably be expected to result in a
liability to the Borrower or any Subsidiary in excess of $20,000,000 or
$50,000,000 in the aggregate for all such claims (net in each case of actual
insurance coverage or effective indemnification with respect thereto).
5.15 REGULATED ENTITIES. None of the Borrower, any Person controlling
the Borrower, or any Subsidiary, is an "Investment Company" within the meaning
of the Investment Company Act of 1940. Neither the Borrower nor any Loan Party
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act or any state public utilities
code.
5.16 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. The Borrower or
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, trade names, copyrights, contractual franchises,
authorizations and other rights that are reasonably necessary for the operation
of their respective businesses as currently conducted (other than where the
failure to so own, be licensed or have the right to use would reasonably be
expected to have a Material Adverse Effect). To the best knowledge of the
Borrower, no slogan or other advertising device, product process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Subsidiary infringes upon any rights held by
any other Person, except for any such infringement that would not reasonably be
expected to have a Material Adverse Effect.
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5.17 SUBSIDIARIES.. As of the Closing Date, the Borrower has no
Subsidiaries other than those disclosed in Schedule 5.17 hereto, and the
Borrower has no equity investments in any other corporation or other entity
other than those disclosed on Schedule 5.17 hereto.
5.18 SUBSIDIARY INDEBTEDNESS. There is no Indebtedness and there are no
Guarantees of the Subsidiaries of the Borrower existing in reliance of Section
7.01(d)(i)(D) (other than as set forth on Schedule 5.18).
5.19 THE PLEDGED ENTITIES; COLLATERAL AGREEMENT. (i) All of the equity
interests in Colonial Ventures, L.L.C. and Colonial Pipeline Company set forth
on Schedule 5.19 as being owned by CITGO Pipeline Holding I, LLC are owned by
it; (ii) all of the equity interests in Explorer Pipeline Company set forth on
Schedule 5.19 as being owned by CITGO Pipeline Holding II, LLC are owned by it;
(iii) the certificates representing the equity interests in the Pledged Entities
delivered to the Administrative Agent under the Guarantee and Collateral
Agreement represent all of the equity interests in the Pledged Entities; and
(iv) upon (x) delivery to the Administrative Agent of such certificates and the
stock powers referred to in the definition of "Guarantee and Collateral
Requirement" and (y) execution of the Collateral Agreement, the Collateral
Agreement will be effective to create in favor of the Administrative Agent, for
the benefit of the Lenders, a legal, valid and enforceable security interest in
the Collateral described therein and proceeds thereof and the Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof, as security for the Obligations (as defined in the Collateral
Agreement), in each case prior and superior in right to any other Person.
5.20 SOLVENCY. The Borrower has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is now solvent and able to pay its respective debts as they
mature, and the Borrower now owns property having a value, both at fair
valuation and at present fair salable value, greater than the amount required to
pay its existing debts.
5.21 FULL DISCLOSURE. None of the representations or warranties made by
the Borrower or any Subsidiary in this Agreement as of the date such
representations and warranties are made or deemed made, and none of the factual
information (taken as a whole) contained in any written notice, exhibit, report,
statement or certificate furnished by or on behalf of the Borrower or any
Subsidiary in connection with this Agreement (including any offering and
disclosure materials delivered by or on behalf of the Borrower to the Lenders
prior to the Closing Date or thereafter in connection with the initial
syndication of the Loans), contains or will when made or furnished contain any
untrue statement of a material fact or omits or will when made or furnished omit
any material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Borrowing or other Obligation shall remain unpaid or unsatisfied, unless the
Required Lenders waive compliance in writing:
6.01 FINANCIAL STATEMENTS. The Borrower shall deliver to the
Administrative Agent and concurrently therewith to each Lender (in accordance
with Section 10.02, which shall be deemed received by each Lender when received
by the Administrative Agent):
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(a) (i) as soon as available and in any event within 90 days (or within
the filing period required by the SEC for annual reporting) after the end of
each Fiscal Year, audited consolidated financial statements of the Borrower and
its consolidated Subsidiaries, prepared in accordance with GAAP, in each case
setting forth, in comparative form, the corresponding figures for the preceding
Fiscal Year and accompanied by an opinion, without Impermissible Qualification,
by independent certified public accountants of recognized national standing and
reputation selected by the Borrower or otherwise reasonably acceptable to the
Administrative Agent (the "Independent Accountants"), consisting of a balance
sheet as at the end of such Fiscal Year and statements of income and retained
earnings and statements of cash flows, and (ii) in the event that the Borrower
is no longer required by Law to file annual reports with the SEC, within thirty
days after the delivery of such financial statements, a report from the
Independent Accountants addressed to the Borrower's management containing a
review of the Borrower's calculations which show compliance with each of the
financial ratios and restrictions contained in Section 7.02 and affirmatively
indicating that, while the audit of the consolidated financial statements of the
Borrower and its consolidated Subsidiaries was not directed primarily toward
obtaining knowledge of such compliance with these specific financial ratios and
restrictions, such accountants have not become aware of events or transactions
that would render such calculations unreliable or misleading; and
(b) as soon as available and in any event within 45 days (or within the
filing period required by the SEC for quarterly reporting) after the end of each
Fiscal Quarter (except the last Fiscal Quarter of each Fiscal Year), (A)
consolidated financial statements of the Borrower and its consolidated
Subsidiaries, and (B) consolidated financial information of the Borrower and its
consolidated Subsidiaries, in each case consisting of a balance sheet as at the
end of such quarter and statements of income, retained earnings, and cash flows
for such Fiscal Quarter then ended and for the Fiscal Year through such quarter,
setting forth in comparative form the corresponding figures for the
corresponding dates and periods of the preceding Fiscal Year, all in reasonable
detail and certified (subject to year-end audit adjustments) by an authorized
financial officer of the Borrower to the best of such officer's knowledge and
belief as fairly presenting in accordance with GAAP (to the extent applicable)
the financial position and results of operations of the Borrower and its
consolidated Subsidiaries as at the date thereof and for the period covered
thereby (provided, that footnotes to such financial statements will not be
required) consistently applied (except as noted therein).
(c) Notwithstanding the preceding provisions of this Section 6.01, if
and so long as the Borrower shall file regular and periodic reports with the SEC
pursuant to Sections 13 and 15 of the Securities Exchange Act of 1934, delivery
to the Administrative Agent of copies of its reports on Forms 10K and 10Q
promptly following filing thereof with the SEC, but in any event not later than
within the periods set forth in subsections 6.01(a) and (b), shall constitute
full compliance with this Section 6.01.
6.02 CERTIFICATES; OTHER INFORMATION. The Borrower shall furnish to the
Administrative Agent:
(a) within thirty days after the delivery of the financial statements
(or reports on Form 10K) referred to in subsection 6.01(a), and within fifteen
days after delivery of the financial statements (or reports on Form 10Q)
referred to in subsection 6.01(b), a Compliance Certificate substantially in the
form of Exhibit C, executed by a Responsible Officer;
(b) promptly, to the extent not provided pursuant to Section 6.01(c),
copies of all financial statements and regular, periodic or special reports
(including registration statements (without exhibits)
38
and Forms 10K, 10Q and 8K) that the Borrower or any Subsidiary may make to, or
file with, the SEC; and
(c) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary as the
Administrative Agent, at the request of any Lender, may from time to time
reasonably request in writing.
Documents required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(b) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website (including, without
limitation, the SEC's website), if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (i) the Borrower
shall deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower to deliver such paper copies and (ii) the
Borrower shall notify (which may be by facsimile or electronic mail) the
Administrative Agent of the posting of any such documents and provide to the
Administrative Agent by electronic mail electronic versions (i.e., soft copies)
of such documents. Notwithstanding anything contained herein, in every instance
the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(a) to the Administrative Agent and each of
the Lenders. Except for such Compliance Certificates, the Administrative Agent
shall have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.
6.03 NOTICES. The Borrower shall notify the Administrative Agent, and
each Lender in writing:
(a) as soon as possible and in any event within 5 Business Days after
the Borrower becomes aware of the occurrence of any Default or Event of Default,
the statement of the President, any Vice President or the Treasurer of the
Borrower setting forth the details of each such Default or Event of Default
which has occurred and the action which the Borrower has taken and proposes to
take with respect thereto;
(b) forthwith upon learning thereof, a description of (i) the
institution of any litigation, arbitration proceeding or governmental proceeding
to which the Borrower or any Subsidiary of the Borrower is a party that would
reasonably be expected to result in a liability to the Borrower or any
Subsidiary of the Borrower in excess of $25,000,000 (net of actual insurance
coverage or effective indemnification with respect thereto), and any material
adverse determination as to liability or amount of damages in any such
litigation, arbitration proceeding or proceeding; and (ii) any matter that has
resulted or could reasonably be expected to result in a Material Adverse Effect;
(c) promptly upon learning thereof, a description of the institution of
any steps of the Borrower or any other Person to terminate any Plan or any
Multiemployer Plan, or the appointment of a receiver to administer any Plan or
any Multiemployer Plan, or the withdrawal by the Borrower or any Related Person
from any Multiemployer Plan, or the failure to make a required contribution to
any Plan if such failure is sufficient to give rise to a Lien under Section
302(f) of ERISA, or the taking of any action with respect to a Plan which could
result in the requirement that the Borrower furnish a bond or other
39
security to the PBGC or such Plan, or the occurrence of any event with respect
to any Plan which could reasonably be expected to result in the incurrence by
the Borrower of any material liability, fine or penalty, or any material
increase in the contingent liability of the Borrower with respect to any
post-retirement Welfare Plan benefit; and
(d) within 10 Business Days after the close of a Material Acquisition
by the Borrower or any Subsidiary, the most recent annual and quarterly
financial reports of the acquired entity which are available to the Borrower,
and, a summary of the environmental due diligence work done for or by the
Borrower in connection with such Material Acquisition (it being understood that
any Persons) engaged by the Borrower to prepare such a summary and to complete
such due diligence must be of recognized national standing in the environmental
field).
6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower shall, and
shall cause each Subsidiary to, except for any sale, dissolution, liquidation or
merger not otherwise prohibited hereby, preserve and maintain its existence and
good standing and its rights, privileges and franchises under the laws of its
state or jurisdiction of incorporation or other formation, and remain qualified
as a foreign Person authorized to do business in each other jurisdiction in
which the failure to so qualify would reasonably be expected to have a Material
Adverse Effect.
6.05 INSURANCE. (a) The Borrower shall maintain, and cause each
Subsidiary to maintain, insurance with respect to their respective properties
and businesses against such liabilities, casualties, risks and contingencies
(including business interruption insurance) in such types and with such
reasonable deductibles and in such amounts (after giving effect to any
self-insurance compatible with the following standards) as are customary in the
case of Persons engaged in the same or similar businesses and similarly
situated. The Borrower and its Subsidiaries shall maintain such insurance (i)
with financially sound and reputable insurers that are not Affiliates of the
Borrower (it is agreed that Oil Insurance Limited and sEnergy Insurance Ltd.
shall not be considered Affiliates of the Borrower for purposes of this Section
6.05), or (ii) with Affiliates(s) ("Affiliated Insurers") to the extent as is
customary in the case of Persons engaged in the same or similar businesses as
Borrower and similarly situated, provided that each such Affiliated Insurer has
in place reinsurance or similar agreement(s) with financially sound and
reputable insurance companies that are not Affiliates of the Borrower
("Unaffiliated Insurers") providing coverage of the type required by this
Section 6.05. Such Affiliated Insurers' agreements with Unaffiliated Insurers
shall provide that (A) the interests and rights held by such Affiliated Insurers
vis-a-vis the Unaffiliated Insurers shall pass through to the Borrower (or its
Subsidiary as applicable), and such interests and rights of the Borrower (or its
Subsidiary as applicable) vis-a-vis the Unaffiliated Insurers shall not be
invalidated or impaired by any act or neglect of, or any bankruptcy, insolvency,
dissolution or other event with respect to, the Affiliated Insurers, and (B) in
the event of the insolvency, dissolution or financial impairment of the
Affiliated Insurers that adversely affects the Borrower's (or its Subsidiary's)
ability to enforce such interests and rights against and receive payment from
the Affiliated Insurer(s), such payment will be payable by the Unaffiliated
Insurers directly to the Borrower (or its Subsidiary as applicable) under the
same circumstances and in the same amounts as would have been available to the
Borrower but for the Affiliated Insurer's insolvency, dissolution or financial
impairment. With respect to the Borrower and its Subsidiaries, the Affiliated
Insurers shall not retain any risk that is not covered by such agreements with
Unaffiliated Insurers.
(b) Upon the execution of this Agreement and at any time thereafter at
the request of the Administrative Agent, the Borrower shall furnish or cause to
be furnished to the Administrative Agent evidence, in form and substance
satisfactory to the Administrative Agent, of the required insurance coverage of
the Borrower and each Subsidiary and, upon reasonable request, copies of the
applicable policies.
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6.06 TAXES. The Borrower shall, and shall cause each Subsidiary to, pay
and discharge all Taxes relating to the Borrower or such Subsidiary, as the case
may be, prior to the date on which penalties attach thereto; provided, that
neither the Borrower nor any Subsidiary shall be required to pay or discharge
any such Tax while the same is being contested by it in good faith and by
appropriate proceedings and so long as reserves have been established to the
extent required by GAAP.
6.07 COMPLIANCE WITH LAWS. The Borrower shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of
Law, including Environmental Laws; provided, that neither the Borrower nor any
Subsidiary shall be required to comply with any such Requirement of Law so long
as the validity or application thereof is being contested in good faith and
reserves have been established with respect to such contest to the extent, if
any, required by GAAP or where such non-compliance would not reasonably be
expected to have a Material Adverse Effect, and obtain and maintain, and cause
each Subsidiary to obtain and maintain, all permits, licenses and approvals
necessary to construct, own, operate, use and maintain their respective
properties and assets and to conduct their respective businesses, except where
the failure to obtain or maintain such permit, license or approval would not
reasonably be expected to have a Material Adverse Effect.
6.08 COMPLIANCE WITH MATERIAL CONTRACTUAL OBLIGATIONS. The Borrower
shall comply, and shall cause each Subsidiary to comply, with all Contractual
Obligations except where failure to so comply would not reasonably be expected
to have a Material Adverse Effect.
6.09 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. (a) The Borrower
shall keep or cause to be kept, and shall cause each Subsidiary to keep or cause
to be kept, adequate records and book of account in which complete entries are
to be made reflecting its business and financial transactions and as required by
applicable rules and regulations of any Governmental Authority having
jurisdiction over the Borrower or any Subsidiary or the transactions
contemplated by this Agreement. Such books of account shall be kept in a manner
consistent with GAAP if so kept on the date hereof. The Borrower shall permit,
and shall cause each Subsidiary to permit, the Administrative Agent or the
Lenders or their representatives at any reasonable time and from time to time at
the request of the Administrative Agent, to visit and inspect any of their
respective properties, to examine the respective corporate, financial and
operating records, and, subject to the confidentiality provisions contained in
Section 10.08 of this Agreement, make copies thereof or abstracts therefrom, and
to discuss their respective affairs, finances and accounts with their respective
officers, all at such reasonable times during normal business hours and as often
as may be reasonably desired, upon prior notice to the Borrower of at least 24
hours in advance; provided, however, that when an Event of Default exists the
Administrative Agent or any Lender may take the actions specified in this
sentence at any times during normal business hours and without advance notice.
One or more officers, employees or representatives of the Borrower may accompany
the Administrative Agent or a Lender or their respective representatives when
making any visit or inspection described in the preceding sentence.
(b) Neither the Administrative Agent nor any Lender has any duty to
visit or inspect the Borrower's or any Subsidiary's properties or to examine or
copy such records and neither the Administrative Agent nor any Lender shall
incur any obligation or liability by reason of not making any such visit or
inspection. In the event that the Administrative Agent or any Lender shall do
any of the foregoing, it will be acting solely for the purposes of protecting
the Administrative Agent or such Lender and preserving its rights under this
Agreement. Neither the Borrower nor any other party is entitled to rely on any
inspection or other inquiry by the Administrative Agent or any Lender. Neither
the Administrative Agent nor any Lender owes any duty of care to protect the
Borrower or any other party against, or to inform the Borrower or any other
party of, any adverse condition that may be observed as
41
affecting the Borrower's or any Subsidiary's properties or business. The
Administrative Agent or any Lender may in its discretion disclose to the
Borrower or any other Person any findings made as a result of, or in connection
with, any inspection of any such properties or records.
6.10 MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each
of its Subsidiaries to, keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
6.11 USE OF PROCEEDS. The Borrower will use the proceeds of the
Borrowings for working capital, capital expenditures, and other lawful general
corporate purposes not in contravention of Sections 7.01(i) or (k), any Law or
of any Loan Document.
6.12 FURTHER ASSURANCES. The Borrower will, and will cause each other
Loan Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements and other documents), which may be
required under any applicable law, or which the Administrative Agent or the
Required Lenders may reasonably request, to cause the Guarantee and Collateral
Requirement to be and remain satisfied at all times, all at the expense of the
Loan Parties. The Borrower also agrees to provide to the Administrative Agent,
from time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Borrowing or other Obligation shall remain unpaid or unsatisfied, unless the
Required Lenders waive compliance in writing:
7.01 NEGATIVE COVENANTS APPLICABLE TO THE BORROWER AND SUBSIDIARIES.
The Borrower shall not, and shall not suffer or permit any Subsidiary to,
directly or indirectly do any of the following:
(a) Limitation on Liens. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, incur or
suffer to exist any Lien on or with respect to any asset, property or
revenues of the Borrower or such Subsidiary, whether now owned or
hereafter acquired, or any interest therein, or assign or sell any
income or revenues (including accounts receivable) in respect thereof,
except the following (collectively, "Permitted Liens", and
individually, a "Permitted Lien"):
(i) Liens listed on Schedule 7.01 existing on the
date hereof and Liens under the Security Documents for the
benefit of the Lenders;
(ii) Liens on property existing at the time of
acquisition thereof or Liens affecting property of a Person
existing at the time it becomes a Subsidiary of the Borrower
or at the time it is merged into or consolidated with the
Borrower or a Subsidiary of the Borrower; provided, however,
that, in either case, such Liens were not granted in
contemplation of such acquisition or in contemplation of the
transaction pursuant to which such Person became a Subsidiary;
and provided further that in either case, such Liens do not
extend to or cover any property of the Borrower or of any of
its Subsidiaries other than the property that secured the
acquired Indebtedness prior to the time such Indebtedness
became Indebtedness of the Borrower or a Subsidiary;
42
(iii) Liens on property securing Indebtedness
incurred prior to, at the time of, or within 12 months after
the acquisition thereof for the purpose of financing all or
part of the purchase price thereof, provided that such Liens
do not extend to or cover any other property of the Borrower
or any Subsidiary and the Indebtedness secured thereby was
incurred to pay, and does not exceed, the purchase price
thereof;
(iv) Liens on any improvements to property securing
Indebtedness incurred to provide funds for all or part of the
cost of such improvements in a principal amount not exceeding
the cost of acquisition or construction of such improvements
and incurred within 12 months after completion of such
improvements or construction, provided that such Liens do not
extend to or cover any property of the Borrower or any
Subsidiary other than such improvements;
(v) Liens to government entities granted to secure
pollution control or industrial revenue bond financings, which
Liens in each financing transaction cover only the property
the acquisition of which, or the construction of which, was
financed by such financing, and property related thereto;
(vi) Liens which secure Indebtedness (A) owing by a
Subsidiary of the Borrower to the Borrower or (B) owing by one
Subsidiary to a Wholly-Owned Subsidiary;
(vii) Liens imposed by law, including mechanics',
materialmen's, carriers' or other like Liens, arising in the
ordinary course of business, which are not overdue by a period
of more than 45 days or which are being contested in good
faith and by appropriate proceedings diligently conducted;
(viii) any Lien incurred or deposits to secure the
performance of surety bonds incurred in the ordinary course of
business consistent with past practice, provided that such
Liens shall cover only the Borrower's or its Subsidiary's
interests in and relating to the contract underlying the
transaction for which such surety bonds were issued;
(ix) any Lien incidental to the normal conduct of the
business of the Borrower or any Subsidiary or the ownership of
its property or the conduct of the ordinary course of its
business, including (A) zoning restrictions, easements, rights
of way, reservations, restrictions on the use of real property
and other minor irregularities of title, (B) rights of lessees
under leases, (C) rights of collecting banks having rights of
setoff, revocation, refund or charge back with respect to
money or instruments of the Borrower or any Subsidiary on
deposit with or in the possession of such banks, (D) Liens to
secure the performance of statutory obligations, tenders,
bids, leases, progress payments, performance or
return-of-money bonds, performance or other similar bonds or
other obligations of a similar nature incurred in the ordinary
course of business, (E) Liens required by any contract or
statute in order to permit the Borrower or a Subsidiary of the
Borrower to perform any contract or subcontract made by it
with or pursuant to the requirements of a governmental entity,
and (F) "first purchaser" Liens on crude oil, in each case
which are not incurred in connection with the borrowing of
money, the obtaining of advances or credit or the payment of
the deferred purchase price of Property and which do not in
the aggregate impair the use of property in the operation of
the business of the Borrower and its Subsidiaries taken as a
whole;
43
(x) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, so long as
reserves have been established to the extent required by GAAP;
(xi) Liens on cash or cash equivalents securing
obligations in respect of Swap Contracts, the value of which
collateral at any time may not exceed $25,000,000;
(xii) sales of Receivables pursuant to any
Receivables Purchase Facility and any Lien granted by the
Borrower or any Subsidiary on its Receivables with regard to
any ownership or security interest under any Receivables
Purchase Facility; provided that the balance of such
Receivables does not at any time exceed in the aggregate an
amount equal to the greater of (i) 5% of net sales of the
Borrower and its consolidated Subsidiaries during the four
Fiscal Quarter period ending on the last day of the most
recent Fiscal Quarter for which the Borrower has delivered
financial statements pursuant to Section 6.01(a) or (b), and
(ii) $400,000,000;
(xiii) Liens on cash or cash equivalents created or
existing to secure stay or appeal bonds or otherwise resulting
from any litigation or legal proceeding which are being
contested in good faith by appropriate action promptly
initiated and diligently conducted, including the Lien of any
judgment; provided, however, that the aggregate amount secured
by all such Liens does not exceed $25 million;
(xiv) any Lien granted by CRCCLP on the real estate
upon which CRCCLP's Corpus Christi refinery is located arising
from the Corpus Christi Refinery West Plant Lease;
(xv) Liens securing any extension, renewal,
replacement or refinancing of Indebtedness secured by any Lien
referred to in the foregoing clauses (i), (ii), (iii), (iv),
(v), and (xiv); provided, however, that
(A) such new Lien shall be limited to all or
part of the same property that secured the original
Lien (plus improvements on such property) and
(B) the amount secured by such Lien at such
time is not increased to any amount greater than the
amount outstanding at the time of such renewal,
replacement or refinancing;
(xvi) Liens on assets or property of the Borrower or
a Subsidiary, other than a Principal Property, in connection
with Synthetic Leases pursuant to which, for financial
accounting purposes, the Borrower or a Subsidiary is the
lessee;
(xvii) Liens on cash collateral securing letter of
credit reimbursement obligations pursuant to Section 2.04(g)
of the Three-Year Credit Agreement and any renewals,
extensions, amendments and restatements thereof or created
under substantially similar provisions of any credit agreement
entered into in replacement for the Three-Year Credit
Agreement;
(xviii) Liens securing Indebtedness under the
Three-Year Credit Agreement, the 364-Day Credit Agreement, the
CITGO Puerto Rico Credit Agreement and, to the extent
44
required to be secured equally and ratably with Indebtedness
secured under the Three-Year Credit Agreement, the 364-Day
Credit Agreement or the CITGO Puerto Rico Credit Agreement,
the Private Placement Notes; provided that the aggregate
principal amount of all Indebtedness (other than Private
Placement Notes and the Obligations) secured by such Liens
does not exceed $545 million; provided that if any such Lien
or related group of Liens (collectively, a "Collateral
Package") encumbers any asset other than inventory or accounts
receivable, such Collateral Package shall only be permitted if
the Administrative Agent shall be satisfied with a report of
an independent appraiser showing that the ratio of (x) the
fair market value of the assets to be subject to such
Collateral Package to (y) the sum of the Obligations, the
maximum amount of all obligations under the Three-Year Credit
Agreement, the 364-Day Credit Agreement and the CITGO Puerto
Rico Credit Agreement to be secured by such Collateral
Package, and, to the extent required to be secured equally and
ratably as described above, the Private Placement Notes, is
not less than 2.0 to 1.0; and provided further that if Lenders
having not less than 66-2/3% of the Aggregate Commitments or
the Total Outstandings shall have approved all amendments
required to this Agreement and the other Loan Documents, as
applicable, and all such amendments shall have been effected,
all other necessary actions shall have been taken in
connection therewith and all terms of all documentation
creating liens pursuant to this clause (xviii), including all
terms with respect to intercreditor provisions, shall be
satisfactory to the Administrative Agent, the Collateral shall
be released and the Obligations shall thereafter be secured
by, and the Administrative Agent shall have, for the benefit
of the Lenders, a first priority perfected security interest,
shared equally and ratably with, to the extent secured by such
Collateral Package, the lenders under the Three-Year Credit
Agreement, the 364-Day Credit Agreement and the CITGO Puerto
Rico Credit Agreement and the holders of the Private Placement
Notes in, such Collateral Package in lieu of the Collateral
(it being understood that if such percentage of Lenders shall
not have given such approval, if such amendments shall not
have been effected, if such necessary actions shall not have
been taken or if such terms of all documentation creating
liens pursuant to this clause (xviii), including all terms
with respect to intercreditor provisions, shall not be
satisfactory to the Administrative Agent, (i) a Lien securing
Indebtedness under the Three-Year Credit Agreement, the
364-Day Credit Agreement, the CITGO Puerto Rico Credit
Agreement and, to the extent required to be secured equally
and ratably with Indebtedness secured under the Three-Year
Credit Agreement, the 364-Day Credit Agreement or the CITGO
Puerto Rico Credit Agreement, the Private Placement Notes on
that assets proposed to have been subject to the Collateral
Package other than the Collateral shall be permitted under
this clause (xviii) if the ratio described above shall be
satisfied and (ii) the Obligations shall continue to be
secured by the Collateral, but shall not be equally and
ratably secured by such Collateral Package).
(xix) Liens not otherwise permitted by the provisions
of this Section 7.01(a) securing indebtedness in an aggregate
principal amount at any time outstanding for the Borrower and
its Subsidiaries not in excess of the difference between (A)
10% of Net Worth of the Borrower and its Subsidiaries and (B)
the Total Outstandings; provided, however, that such Liens do
not encumber (A) the Principal Properties, (B) any right,
title or interest of the Borrower or any Subsidiary in, to, or
under any Key Contract, or (C) any shares of capital stock or
other equity interests in any Subsidiary that, directly or
indirectly either (1) owns, leases or has material contract
rights in respect of any Principal Property or (2) is a party
to a Key Contract.
45
No Lien pursuant to clauses (ii), (iii) or (iv) of this Section 7.01(a)
(and no Lien pursuant to clause (xv) of this Section 7.01(a) which
secures refinancing, renewal, replacement or refinancing of
Indebtedness secured by any Lien referred to in clauses (ii), (iii), or
(iv)) shall cover any part of the Principal Properties, any interest in
a Key Contract or any shares of capital stock or other equity interests
in any Subsidiary that, directly or indirectly either (A) owns, leases
or has material contract rights in respect of any Principal Property or
(B) is a party to a Key Contract. No Lien pursuant to clause (v) of
this Section 7.01(a) (and no Lien pursuant to clause (xv) of this
Section 7.01(a) which secures refinancing, renewal, replacement or
refinancing of Indebtedness secured by any Lien referred to in clause
(v)) shall cover any portion of a Principal Property other than the
portion of the property the acquisition of which or the construction of
which was financed by the relevant bond financing.
(b) Consolidations and Mergers; Sales of Assets. The Borrower
shall not, and shall not permit any Subsidiary to:
(i) be a party to any merger or consolidation, except
that, so long as no Default or Event of Default then exists or
would exist immediately after giving effect thereto or would
result therefrom, (A) the Borrower may merge with any other
Person, provided that the Borrower is the survivor of such
merger and is a Domestic corporation, and (B) any Wholly-Owned
Subsidiary of the Borrower may merge or consolidate into the
Borrower or with or into any other Wholly-Owned Subsidiary of
the Borrower;
(ii) sell all or substantially all of the assets of
the Borrower and its Subsidiaries, taken as a whole, whether
in one transaction or a series of transactions;
(iii) sell, transfer, convey or lease the Principal
Properties other than in connection with any Permitted Lien
granted thereon pursuant to Section 7.01(a)(v) and other than
the sale of all or any portion of the Principal Properties
pursuant to one or more Dispositions permitted pursuant to
clause (v) of this subsection 7.01(b);
(iv) sell, transfer, assign or convey (other than any
disposition to the Borrower or any Wholly-Owned Subsidiary)
any shares of capital stock or other equity interests in any
Subsidiary that, at the time of such sale, transfer,
assignment or conveyance, directly or indirectly either (A)
owns, leases or has material contract rights in respect of any
Principal Property or (B) is a party to a Key Contract; or
(v) sell, transfer, assign or convey any assets or
any shares of capital stock of or other equity interests in
any Subsidiary (collectively, a "Disposition") if, on the day
on which such proposed Disposition is to occur, the aggregate
book value (at the time of the proposed disposition thereof)
of such assets, shares or equity interests (as the case may
be), when added to the aggregate book value (at the time or
times of the disposition thereof) of all other assets, shares
or equity interests disposed of by the Borrower and its
Subsidiaries under this clause (v) on or after the Closing
Date (as defined in the Three-Year Credit Agreement as in
effect on the date hereof) exceeds 20% of the aggregate book
value of the assets of the Borrower and its Subsidiaries as of
the date of the most recent balance sheet of the Borrower
delivered pursuant to Section 6.01(a) or (b); provided that,
if concurrently with any Disposition made pursuant to this
clause (v) or Section 7.01(b)(v) of the Three-Year Credit
Agreement or the 364-Day Credit Agreement (or any analagous
provision of documentation therefor in effect hereafter) or
within one year thereof all or substantially all of the net
proceeds of such Disposition are either
46
(A) reinvested (whether by acquisition,
improvement, repair, construction or otherwise) in
assets related to the business of the Borrower or any
Subsidiary, or
(B) applied to repay the amount then
outstanding under the Loans in accordance with
Section 2.03(b), or
(C) applied ratably (1) in the manner set
forth in clause (B) above and (2) to repay loans
under the Three-Year Credit Agreement and the 364-Day
Credit Agreement and to reduce the Aggregate
Commitments thereunder (as defined in the Three-Year
Credit Agreement and the 364-Day Agreement,
respectively, each, as in effect on the date hereof)
pursuant to the those agreements (it being understood
that the Borrower will repay loans and letter of
credit borrowings under those agreements (as
applicable) in such principal amounts as are required
such that the sum of the outstanding amount of all
loans thereunder does not exceed the Aggregate
Commitment thereunder as so reduced), or
(D) applied ratably (1) in the manner
specified in clause (B) above and (2) to repay other
Indebtedness then outstanding (other than
Indebtedness which is subordinated to the
Obligations) (including Indebtedness evidenced by the
Loans made pursuant to the Three-Year Credit
Agreement, the 364-Day Agreement, the Private
Placement Notes and the Senior Notes),
then such Disposition shall be disregarded for purposes of
calculations pursuant to this clause (v) from and after the
time of such reinvestment or application.
Nothing in this Section 7.01(b) shall prohibit the Borrower or
any Wholly-Owned Subsidiary from purchasing or otherwise acquiring the
assets or stock of any Wholly-Owned Subsidiary.
(c) Investments. The Borrower shall not, and shall not permit
any Subsidiary to, make any Investments, except:
(i) Investments held by the Borrower or such
Subsidiary in the form of cash equivalents or Short-Term
Marketable Debt Securities;
(ii) advances to officers, directors and employees of
the Borrower and Subsidiaries for travel, entertainment,
relocation and analogous ordinary business purposes in
accordance with law;
(iii) Investments of the Borrower in any Domestic
Subsidiary and Investments of any Subsidiary in a Domestic
Subsidiary;
(iv) Investments of the Borrower and of any
Subsidiary in any Foreign Subsidiary after the Closing Date in
an amount not to exceed a cumulative amount equal to 5% of the
book value consolidated assets of the Borrower and its
Subsidiaries as of the end of the most recent Fiscal Quarter
for which the Borrower has delivered financial statements
pursuant to Section 6.01(a) or (b);
47
(v) Investments consisting of extensions of credit by
a Subsidiary to the Borrower provided that the obligations of
the Borrower in respect of such extensions of credit must be
subordinated to the Obligations on subordination terms
satisfactory to the Administrative Agent;
(vi) Investments consisting of extensions of credit
in the nature of accounts receivable or notes receivable
arising from the granting of trade credit in the ordinary
course of business, and Investments received in satisfaction
or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to
prevent or limit loss;
(vii) Guarantees of Indebtedness of Affiliates, to
the extent permitted by Section 7.02 and, in the case of
Guarantees by Subsidiaries, to the extent permitted by Section
7.01(d);
(viii) Investments as of the Closing Date in the
entities set forth on Schedule 7.01(c);
(ix) Pass-Through Investments made after the Closing
Date;
(x) Investments in LCR as follows: (A) Investments as
of the Closing Date, (B) Pass-Through Investments made after
the Closing Date, (C) Investments made after the Closing Date
in an aggregate amount not to exceed the aggregate amount of
cash dividends distributed after the Closing Date by LCR to
the Borrower, and (D) additional Investments not to exceed
$100,000,000 in the aggregate made after the Closing Date; and
(xi) other Investments made after the Closing Date in
a cumulative amount not to exceed 10% of the book value
consolidated assets of the Borrower and its Subsidiaries as of
the end of the most recent Fiscal Quarter for which the
Borrower has delivered financial statements pursuant to
Section 6.01(a) or (b).
(d) Indebtedness, Guarantees, and Preferred Stock of
Subsidiaries.
(i) The Borrower shall not permit any Subsidiary to
create, incur, assume or suffer to exist any Indebtedness or
Guarantees, except (A) Indebtedness owed to the Borrower or to
a Wholly-Owned Subsidiary, (B) subject to the limitations set
forth in Section 7.01(a)(xii), Receivables Financing
Indebtedness under Receivables Purchase Facilities, and (C)
Indebtedness and Guarantees under the Collateral Agreement and
the other Security Documents and (D) Indebtedness and
Guarantees listed on Schedule 5.18.
(ii) The Borrower shall not permit any Subsidiary to
issue any preferred stock or other preferred Equity Interest
other than preferred stock or other preferred Equity Interest
held by the Borrower or a Wholly-Owned Subsidiary.
(e) Indebtedness of the Borrower to Subsidiaries and
Affiliates.
(i) The Borrower shall not create, incur, assume or
suffer to exist any Indebtedness owed to, or any Guarantee of
any obligations of another Person owed to, a
48
Subsidiary of or an Affiliate of the Borrower other than (i)
Permitted Affiliate Subordinated Indebtedness, and (ii) other
Indebtedness or Guarantees in an aggregate amount not to
exceed $50,000,000 principal amount outstanding at any time.
(ii) While any Default or Event of Default exists,
the Borrower will not make any principal or interest payments
in respect of Permitted Affiliate Subordinated Indebtedness or
in respect of any other Indebtedness owed to an Affiliate or
to a Subsidiary of the Borrower.
For purposes of this Section 7.01(e), Indebtedness of the
Borrower owed to a Subsidiary shall not include Receivables
Financing Indebtedness, if any, resulting from the sale of
Receivables by the Borrower to the Subsidiary pursuant to a
Receivables Purchase Facility permitted by Section
7.01(a)(xii).
(f) Swap Contracts. The Borrower shall not, and shall not
permit any Subsidiary to, enter into Swap Contracts except in the
ordinary course of business for the purpose of directly managing risks
associated with liabilities, commitments, investments, assets, or
property held or reasonably anticipated by such Person, or changes in
the value of securities issued by such Person.
(g) No Conflicts. The Borrower shall not, and shall not permit
any Subsidiary to, enter into any material agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any other Loan Document or any
instrument or document delivered or to be delivered by it hereunder or
thereunder or in connection herewith or therewith.
(h) Transactions with Affiliates. The Borrower shall not, and
shall not suffer or permit any Subsidiary to, enter into any material
transaction or series of transactions, whether or not in the ordinary
course of business, with any Affiliate other than on terms and
conditions at least as favorable to the Borrower or its Subsidiary as
would be obtainable by the Borrower or such Subsidiary at the time in a
comparable arm's-length transaction with a Person other than an
Affiliate, or own, purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital
contribution to, PDVSA or any Affiliate of PDVSA other than the
Borrower or any Subsidiary; provided, however, that nothing in this
Section 7.01(h) shall be deemed to prohibit any Affiliate Guarantee
Transaction.
(i) Use of Proceeds in an Unfriendly Takeover. The Borrower
shall not, and shall not permit any Subsidiary to, use the proceeds of
any Loan to purchase or otherwise acquire any publicly owned securities
of another Person (or to refinance any indebtedness incurred for such
purpose) if following such acquisition the Borrower and its
Subsidiaries would own in excess of 15% of the Voting Stock of such
Person and either (i) such purchase or acquisition is opposed by such
Person's board of directors or other governing body or by a shareholder
or shareholders controlling more than 15% of the Voting Stock of such
Person, or (ii) the Borrower knows of facts or circumstances that would
make it likely that such purchase or other acquisition would be hostile
or unfriendly.
(j) Sale Leaseback Transaction. The Borrower shall not, and
shall not permit any Subsidiary to, enter into any Sale Leaseback
Transaction providing for the sale of any portion of any Principal
Property unless the book value (as of the end of the fiscal quarter
immediately preceding the date of such Sale Leaseback Transaction) of
the assets sold in connection with such
49
Sale Leaseback Transaction, when aggregated with the book value of all
assets sold in connection with all other Sale Leaseback Transactions
pertaining to such Principal Property, does not exceed an amount equal
to 33-1/3% of the book value of such Principal Property as of September
30, 2002. Any Sale Leaseback Transaction permitted pursuant to the
preceding sentence shall be treated as a Disposition for purposes of
Section 7.01(b)(v). The Borrower and its Subsidiaries may enter into
Sale Leaseback Transactions providing for the sale of other assets and
the leaseback of such assets to the Borrower or any Subsidiary,
provided that, any Sale Leaseback Transaction involving such a sale
shall be treated as a Disposition for purposes of Section 7.01(b)(v).
(k) Restriction on Use of Proceeds. The Borrower shall not,
and shall not allow any Subsidiary to use the proceeds of any Loan,
directly or indirectly, to make or invest in any loan or advance to, or
to purchase or acquire any obligations or securities of, PDVSA or an
Affiliate of PDVSA except for the Borrower or any Subsidiary of the
Borrower.
(l) Nature of Business. The Borrower shall not, and shall not
permit any Subsidiary to, engage in any business or operations except
those in which the Borrower and its Subsidiaries are engaged on the
date hereof or any related business or operations.
(m) Restrictive Agreements. The Borrower shall not, and shall
not permit any Subsidiary to, enter into any Contractual Obligation
(other than this Agreement or any other Loan Document) that limits the
ability of any Subsidiary to pay dividends or make other distributions
to, or to repay loans or advances to, the Borrower, or to transfer
property to the Borrower; provided, however, that this clause (m) shall
not prohibit (i) any negative pledge incurred or provided in favor of
any holder of Liens permitted under Section 7.01(a)(iii) or (iv) solely
to the extent any such negative pledge relates to the property secured
by such Liens, (ii) limitations on Project Financing/Special Purpose
Subsidiaries, provided that the book value of the assets of such
Subsidiaries does not at any time exceed five percent (5%) of the
consolidated book value of the assets of the Borrower and Subsidiaries
or (iii) limitations on Special Purpose Receivables Subsidiaries that
engage solely in permitted Receivables Securitization Transactions.
(n) Restricted Payments. The Borrower will not declare or
make, or agree to pay or make, directly or indirectly, any Restricted
Payment, unless (a) no Default or Event of Default is existing
immediately before, and none will exist immediately after giving effect
to, such Restricted Payment and (b) such Restricted Payment would be
permissible under the Indenture as in effect on the date hereof.
(o) Key Contracts. The Borrower will not, and will not permit
any of its Subsidiaries to,
(i) amend, modify or waive any provision of any Key
Contract or
(ii) terminate or assign any Key Contract prior to
the end of its stated initial term,
if such amendment, modification, waiver assignment, or early
termination or any combination thereof would have a Material Adverse
Effect.
(p) Pledged Entities. The Borrower will not permit any of the
Pledged Entities to,
50
(i) create, incur, assume or permit to exist any
Indebtedness except Indebtedness created under the Loan
Documents;
(ii) create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired
by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect thereof, except
Liens created under the Collateral Agreement;
(iii) engage in any business or activity other than
the ownership of, in the case of CITGO Pipeline Holding I,
LLC, all the equity interests in Colonial Ventures, L.L.C. and
Colonial Pipeline Company owned directly or indirectly by the
Borrower, and in the case of CITGO Pipeline Holding II, LLC,
all the equity interests in Explorer Pipeline Company owned
directly or indirectly by the Borrower and, in each case,
activities incidental thereto; or
(iv) own or acquire any assets (other than, in the
case of CITGO Pipeline Holding I, LLC, all the equity
interests in Colonial Ventures L.L.C. and Colonial Pipeline
Company owned directly or indirectly by the Borrower, and in
the case of CITGO Pipeline Holding II, LLC, all the equity
interests in Explorer Pipeline Company owned directly or
indirectly by the Borrower and cash) or incur any liabilities
(other than liabilities under the Loan Documents, liabilities
imposed by law, including tax liabilities, and other
liabilities incidental to its existence and permitted business
and activities).
7.02 FINANCIAL COVENANTS.
(a) Capitalization Ratio. The Borrower shall not permit its
Capitalization Ratio to be more than .55 to 1.00 at any time.
(b) Interest Coverage Ratio. The Borrower shall not permit the ratio of
(i) EBITDA for the Computation Period to (ii) Interest Expense for the
Computation Period to be less than 3.00 to 1.00 at the end of any Fiscal
Quarter.
(c) Minimum Net Worth. The Borrower shall not permit at any time Net
Worth to be less than $1,800,000,000 plus 50% of aggregate, cumulative Net
Income accruing for all Fiscal Quarters ending after June 30, 2002 for which Net
Income was positive.
ARTICLE VIII.
EVENTS OF DEFAULT
8.01 EVENT OF DEFAULT. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Borrower fails to pay, when and as
required to be paid herein, any amount of principal of any Loan, or the
Borrower or any other Loan Party fails to pay within 5 days after the
same becomes due, any interest, fee or any other amount payable
hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty
by the Borrower or any other Loan Party made or deemed made herein or
in or under any other Loan Document or in any written notice, report or
certificate delivered pursuant hereto or thereto is incorrect in any
material respect on or as of the date made or deemed made or
reaffirmed, as the case may be; or
51
(c) Specific Defaults. The Borrower fails to perform or
observe any term, covenant or agreement contained in any of Section
6.03(a), Section 6.04 (with respect to the Borrower's existence),
Section 6.11, Section 6.12, Section 7.01 (other than Section 7.01(g)
and 7.01(l)) or Section 7.02; or
(d) Other Defaults. The Borrower or any other Loan Party fails
to perform or observe any other term, covenant, condition or agreement
contained in this Agreement or any other Loan Document, (and not
constituting an Event of Default under any other clause of this Section
8.01) and such default shall continue unremedied for a period of 30
days; or
(e) Non-Payment of Other Indebtedness. The Borrower or any
Subsidiary (i) fails to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration or otherwise) in respect of
any Material Debt (whether due by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure; or (ii)
fails to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or
instrument relating to any Material Debt, if, in any such event, the
effect of such failure, event or condition is to cause, or to permit
the holder or holders thereof or beneficiary or beneficiaries thereof
(or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause (after the expiration of any
applicable grace period or notice period, if any, specified in the
relevant document on the date of such failure) such Material Debt to
become due and payable or to be required to be repurchased, defeased or
redeemed prior to its expressed maturity; or
(f) Insolvency; Voluntary Proceedings. The Borrower or any
Principal Subsidiary (i) ceases or fails to be solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any; (ii)
makes an assignment for the benefit of creditors, (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action
to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Borrower or any Principal
Subsidiary, and any such proceeding or petition shall not be dismissed
within 60 days after commencement; (ii) the Borrower or any Principal
Subsidiary admits the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or similar order
under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii)
the Borrower or any Principal Subsidiary acquiesces in the appointment
of a receiver, trustee, custodian, liquidator or similar person for
itself or a substantial portion of its property or business; or any
receiver, trustee, custodian, liquidator or similar person is appointed
without the application or consent of the Borrower or Principal
Subsidiary and the appointment continues undischarged or unstayed for
60 calendar days;
(h) ERISA. If (i) any Reportable Event constituting grounds
for the termination of any Plan by the PBGC (and the maximum amount of
current liability that may be asserted under Title IV of ERISA by
reason of the termination of such Plan and all other Plans with respect
to which any such event has occurred, shall exceed $10,000,000) or for
the appointment by the appropriate United States District Court of a
trustee to administer or liquidate any such Plan or Plans shall have
occurred and be continuing 30 days after
52
written, telegraphic or telephonic notice to such effect shall have
been given to the Borrower by the PBGC and the maximum amount of
current liability that may be asserted under Title IV of ERISA by
reason of the termination of such Plan and all other Plans with respect
to which any such event has occurred, shall exceed $35,000,000, or (ii)
any Plan shall be terminated with Unfunded Vested Liabilities which
could reasonably be expected to have a Material Adverse Effect, or
(iii) any contribution failure shall occur with respect to a Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA; or
(i) Material Judgments. (i) One or more non-interlocutory
judgments (including judgments entered on arbitration awards) is
entered against the Borrower or any Subsidiary involving in the
aggregate liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage
or effective indemnification by a third party acceptable to the
Required Lenders) exceeding $35,000,000, or (ii) any one or more
non-monetary non-interlocutory judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect, and, in the case of clause (i) or (ii), the same shall
not have been discharged or execution thereof stayed pending appeal for
a period of 30 days after the entry thereof, or if after the expiration
of any such stay, any writ or warrant of attachment is levied in
respect of such judgment or any creditor commences enforcement
proceedings, or within 60 days after the expiration of any such stay
such judgment shall not have been discharged; or
(j) Invalidity of Loan Documents or Liens under the Security
Documents. Any Loan Document, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder
or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or the Borrower or any other Person contests the
validity or enforceability of any Loan Document; or the Borrower denies
that it has any or further liability or obligation under any Loan
Document, or takes action to revoke, terminate or rescind any Loan
Document, or any Lien purported to be created under any Security
Document shall cease to be or shall be asserted by any Loan Party not
to be, a valid and perfected Lien on any Collateral, with the priority
required by the applicable Security Document or either Pledged Entity
shall (except as a result of a transaction expressly permitted under
Section 3.03(II)(b)(i) of the Guarantee and Collateral Agreement) at
any time fail to own any equity interest set forth on Schedule 5.19 as
being owned by it or the Borrower shall (except as a result of a
transaction expressly permitted under Section 3.03(II)(b)(i) of the
Guarantee and Collateral Agreement) own directly or indirectly any
equity interest in a Colonial Pipeline Entity or in the Explorer
Pipeline Entity that is not owned directly by a Pledged Entity; or
(k) Change of Control. There occurs any Change of Control,
unless prior written consent for such lesser percentage ownership is
obtained from the Required Lenders; or
(l) Other Material Obligations. Default in the payment when
due, or in the performance or observance of, any material obligation
of, or condition agreed to by, the Borrower or any Subsidiary with
respect to any material purchase or lease of goods or services (except
only to the extent that the existence of any such default is being
contested by the Borrower or such Subsidiary in good faith and by
appropriate proceedings) if such default would reasonably be expected
to have a Material Adverse Effect; or
53
(m) Default of Three-Year Credit Agreement or 364-Day Credit
Agreement. Any Event of Default shall occur and be continuing pursuant
to the Three-Year Credit Agreement or the 364-Day Credit Agreement.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans to be
terminated, whereupon such commitments and obligation shall be
terminated;
(b) declare the unpaid principal amount of all outstanding
Loans, all interest accrued and unpaid thereon, and all other amounts
owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by
the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents
or applicable law;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, in
each case without further act of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable as set forth in the proviso to Section 8.02), any amounts received
on account of the Obligations shall be applied by the Administrative Agent in
the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, ratably among the Lenders in
proportion to the respective amounts described in this clause Third payable to
them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
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ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by the Borrower or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of the Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Borrower or any Affiliate thereof.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under
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any Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Document in accordance with a request or consent of the
Required Lenders (or such greater number of Lenders as may be expressly required
hereby in any instance) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
Article VIII; provided, however, that unless and until the Administrative Agent
has received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of the Borrower or any Affiliate thereof, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any
Lender as to any matter, including whether Agent-Related Persons have disclosed
material information in their possession. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries, and all applicable bank
or other regulatory Laws relating to the transactions contemplated hereby, and
made its own decision to enter into this Agreement and to extend credit to the
Borrower hereunder. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Affiliates which may come into the possession of any Agent-Related
Person.
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9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the Borrower to do
so), pro rata, and hold harmless each Agent-Related Person from and against any
and all Indemnified Liabilities incurred by it; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities to the extent determined in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Agent-Related Person's own gross negligence or willful misconduct;
provided, however, that no action taken in accordance with the directions of the
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred
by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein, to the extent
that the Administrative Agent is not reimbursed for such expenses by or on
behalf of the Borrower. The undertaking in this Section shall survive
termination of the Aggregate Commitments, the payment of all the Loans and other
Obligations and the resignation of the Administrative Agent.
9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Credit Suisse
First Boston and its Affiliates may make loans to, issue letters of credit for
the account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with each of the Borrower and its Affiliates as though Credit Suisse
First Boston were not the Administrative Agent hereunder and without notice to
or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Credit Suisse First Boston or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans,
Credit Suisse First Boston shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent, and the terms "Lender" and "Lenders"
include Credit Suisse First Boston in its individual capacity.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Required Lenders shall
appoint from among the Lenders a successor administrative agent for the Lenders,
which successor administrative agent shall be consented to by the Borrower at
all times other than during the existence of an Event of Default (which consent
of the Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower, a successor administrative agent
from among the Lenders. Upon the acceptance of its appointment as successor
administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent, and the term "Administrative Agent" shall mean
such successor administrative agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX and Sections 10.04 and
10.05 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative
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Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.
9.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower, the Administrative Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.07 and 10.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.07 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders and the Borrower and each Loan Party party
thereto, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
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(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, any Loan, or (subject to clause (iii) of the second proviso to this Section
10.01) any fees payable hereunder or under any other Loan Document without the
written consent of each Lender directly affected thereby; provided, however,
that only the consent of the Required Lenders shall be necessary to amend the
definition of "Default Rate" or to waive any obligation of the Borrower to pay
interest at the Default Rate;
(e) change Section 2.11 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender; or
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Lenders
required above, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; (ii) Section 10.07(h) may not be
amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Loans are being funded by an SPC at the time of
such amendment, waiver or other modification; and (iii) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to the Borrower or the Administrative Agent, to the
address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 10.02 or to such other address,
facsimile number, electronic mail address or telephone number as shall
be designated by such party in a notice to the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its
Administrative Questionnaire or to such other address, facsimile
number, electronic mail address or telephone number as shall be
designated by such party in a notice to the Borrower and the
Administrative Agent.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
59
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; provided, however, that notices and other communications
to the Administrative Agent pursuant to Article II shall not be effective until
actually received by the Administrative Agent. In no event shall a voicemail
message be effective as a notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on the Borrower,
the other Loan Parties, the Administrative Agent and the Lenders. The
Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Interest Period Notices) purportedly given by or on behalf
of the Borrower or any other Loan Party even if (i) such notices were not made
in a manner specified herein, were incomplete or were not preceded or followed
by any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify each Agent-Related Person and each Lender from all losses,
costs, expenses and liabilities resulting from the reliance by such Person on
each notice purportedly given by or on behalf of the Borrower or any other Loan
Party. All telephonic notices to and other communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of this
Agreement and the other Loan Documents and any amendment, waiver, consent or
other modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Loan Documents (including
all such costs and expenses incurred during any "workout" or restructuring in
respect of the Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs. The
foregoing costs and expenses shall include all search, filing, recording, title
insurance and appraisal charges and fees and taxes
60
related thereto, and other out-of-pocket expenses incurred by the Administrative
Agent and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. All amounts due under this
Section 10.04 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the termination of the Aggregate
Commitments and repayment of all the Loans and other Obligations.
10.05 INDEMNIFICATION BY THE BORROWER. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective Affiliates,
directors, officers, employees, counsel, agents and attorneys-in-fact
(collectively the "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses and disbursements (including Attorney Costs) of any kind
or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or
in connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment or
Loan or the use or proposed use of the proceeds therefrom, (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by the Borrower or any Subsidiary, or
any Environmental Liability related in any way to the Borrower or any
Subsidiary, or (d) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"), in all cases, whether or not
caused by or arising, in whole or in part, out of the negligence of the
Indemnitee; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Indemnitee shall be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Agreement, nor shall any Indemnitee have any liability for
any indirect or consequential damages relating to this Agreement or any other
Loan Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date). All amounts due under this
Section 10.05 shall be payable within ten Business Days after demand therefor.
The agreements in this Section shall survive the resignation of the
Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
Loans and other Obligations.
10.06 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
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10.07 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
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of subsection (b) of this Section,
(ii) by way of participation in accordance with the provisions of subsection (d)
of this Section, (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) or (i) of this Section, or (iv) to
an SPC in accordance with the provisions of subsection (h) of this Section (and
any other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment or the Loans at the time owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund (as defined in subsection (g) of this Section) with respect to a
Lender, the aggregate amount of the Commitment or Loans subject to each such
assignment, determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent or, if "Trade Date"
is specified in the Assignment and Assumption, as of the Trade Date, shall not
be less than $1,000,000 unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed); (ii)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender's rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned; (iii) any assignment of a
Commitment or Loan must be approved by the Administrative Agent unless the
Person that is the proposed assignee is itself a Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, 10.04 and 10.05
with respect to facts and circumstances occurring prior to the effective date of
such assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered
62
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment or the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.09 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.11 as though it were a
Lender.
(e) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 10.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by the Administrative Agent; provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include
the Borrower or any of the Borrower's Affiliates or Subsidiaries.
63
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Approved Fund" means any Fund that is administered or managed
by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower (an "SPC") the option to provide all or
any part of any Loan that such Granting Lender would otherwise be obligated to
make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects
not to exercise such option or otherwise fails to make all or any part of such
Loan, the Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. Each party hereto hereby agrees that (i) neither the grant to any
SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Borrower under
this Agreement (including its obligations under Section 3.04), (ii) no SPC shall
be liable for any indemnity or similar payment obligation under this Agreement
for which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent, assign all
or any portion of its right to receive payment with respect to any Loan to the
Granting Lender and (ii) disclose on a confidential basis any non-public
information relating to its funding of Loans to any rating agency, commercial
paper dealer or provider of any surety or Guarantee or credit or liquidity
enhancement to such SPC.
(i) Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities, provided that unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this
Section 10.07, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.
10.08 CONFIDENTIALITY. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential); (b) to the extent requested
by any regulatory authority; (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process; (d) to any other party
to this Agreement; (e) in
64
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder;
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any Eligible Assignee of or Participant in, or any
prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of the Borrower; (g) with the consent of the
Borrower; (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes available to
the Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower; or (i) to the National Association of Insurance
Commissioners or any other similar organization. In addition, the Administrative
Agent and the Lenders may disclose the existence of this Agreement and
information about this Agreement to market data collectors, similar service
providers to the lending industry, and service providers to the Administrative
Agent and the Lenders in connection with the administration and management of
this Agreement, the other Loan Documents, the Commitments, and the Borrowings.
For the purposes of this Section, "Information" means all information received
from the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower, any such notice being waived by the Borrower to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the Borrower against any and all Obligations owing to such Lender
hereunder or under any other Loan Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured or denominated in a currency
different from that of the applicable deposit or indebtedness. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such set-off and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such set-off and
application.
10.10 INTEREST RATE LIMITATION. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
65
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or Event of Default at the time of any Borrowing, and shall continue
in full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied.
10.14 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 TAX FORMS. (a) (i) Each Lender that is not a "United States
person" within the meaning of Section 7701(a)(30) of the Code (a "Foreign
Lender") shall deliver to the Administrative Agent, prior to receipt of any
payment subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Foreign Lender and entitling
it to an exemption from, or reduction of, withholding tax on all payments to be
made to such Foreign Lender by the Borrower pursuant to this Agreement) or IRS
Form W-8ECI or any successor thereto (relating to all payments to be made to
such Foreign Lender by the Borrower pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may then be
available under then current United States laws and regulations to avoid, or
such evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement, (B) promptly notify the Administrative Agent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary (including the re-designation of its Lending Office) to
avoid any requirement of applicable
66
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or ceases to
act for its own account with respect to any portion of any sums paid or payable
to such Lender under any of the Loan Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the Administrative Agent
on the date when such Foreign Lender ceases to act for its own account with
respect to any portion of any such sums paid or payable, and at such other times
as may be necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed copies of
the forms or statements required to be provided by such Lender as set forth
above, to establish the portion of any such sums paid or payable with respect to
which such Lender acts for its own account that is not subject to U.S.
withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or
any successor thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or statement of exemption
required under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay any additional amount
to any Foreign Lender under Section 3.01 (A) with respect to any Taxes required
to be deducted or withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form W-8IMY pursuant
to this Section 10.15(a) or (B) if such Lender shall have failed to satisfy the
foregoing provisions of this Section 10.15(a); provided that if such Lender
shall have satisfied the requirement of this Section 10.15(a) on the date such
Lender became a Lender or ceased to act for its own account with respect to any
payment under any of the Loan Documents, nothing in this Section 10.15(a) shall
relieve the Borrower of its obligation to pay any amounts pursuant to Section
3.01 in the event that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the account of which
such Lender receives any sums payable under any of the Loan Documents is not
subject to withholding or is subject to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold any
Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Borrower is not required to pay
additional amounts under this Section 10.15(a).
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent
did not properly withhold or backup withhold, as the case may be, any tax or
other amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefore, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments, the
repayment of all the Loans and other Obligations hereunder and the resignation
of the Administrative Agent.
67
10.16 REPLACEMENT OF LENDERS. Under any circumstances set forth herein
providing that the Borrower shall have the right to replace a Lender as a party
to this Agreement, the Borrower may, upon notice to such Lender and the
Administrative Agent, replace such Lender by causing such Lender to assign its
Commitment (with the assignment fee to be paid by the Borrower in such instance)
pursuant to Section 10.07(b) to one or more other Lenders or Eligible Assignees
procured by the Borrower; provided, however, that if the Borrower elects to
exercise such right with respect to any Lender pursuant to Section 3.06(b) or
Section 3.06(c), it shall be obligated to replace all Lenders that have made
similar requests for compensation pursuant to Section 3.01 or 3.04, or made
similar determinations of illegality pursuant to Section 3.02 and failed to cure
such illegality by designating a different Lending Office. The Borrower shall
(x) pay in full all principal, interest, fees and other amounts owing to such
Lender through the date of replacement (including any amounts payable pursuant
to Section 3.05), and (y) release such Lender from its obligations under the
Loan Documents. Any Lender being replaced shall execute and deliver an
Assignment and Assumption with respect to such Lender's Commitment and
outstanding Loans.
10.17 CERTAIN REPURCHASES OF TAX-EXEMPT BONDS. For the avoidance of
doubt, any requirement of the Borrower to repurchase Tax-Exempt Bonds arising
from the termination of, or failure to replace, letters of credit supporting
such Tax-Exempt Bonds shall not for purposes of this Agreement be considered an
event or condition that permits the holders thereof to cause such Tax-Exempt
Bonds to be required to be repurchased prior to their expressed maturity.
10.18 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, the LAW OF THE STATE OF
NEW YORK applicable to agreements made and to be
performed entirely within such State; PROVIDED THAT THE ADMINISTRATIVE Agent AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX
SITTING IN THE BOROUGH OF MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF
NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.
10.19 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR
68
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.20 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CITGO PETROLEUM CORPORATION,
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------
Title: Senior Vice President Finance
Administration and Chief Financial
Officer
---------------------------------
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS
BRANCH, as Administrative Agent and a
Lender,
By: /s/ XXXXX XXXXX
---------------------------------
Name: Xxxxx Xxxxx
---------------------------------
Title: Director
---------------------------------
By: /s/ XXXX XXXXXXXXX
---------------------------------
Name: Xxxx Xxxxxxxxx
---------------------------------
Title: Managing Director
---------------------------------
EXECUTION VERSION
GUARANTEE AND COLLATERAL AGREEMENT
DATED AS OF
FEBRUARY 27, 2003,
AMONG
CITGO PETROLEUM CORPORATION,
CITGO PIPELINE HOLDING I, LLC,
CITGO PIPELINE HOLDING II, LLC,
AND
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH,
AS ADMINISTRATIVE AGENT
Table of Contents
Page
ARTICLE I
SECTION 1.01. Credit Agreement.............................................1
SECTION 1.02. Other Defined Terms..........................................1
ARTICLE II
SECTION 2.01. Guarantee....................................................2
SECTION 2.02. Guarantee of Payment.........................................3
SECTION 2.03. No Limitations, Etc..........................................3
SECTION 2.04. Reinstatement................................................4
SECTION 2.05. Agreement To Pay; Subrogation................................4
SECTION 2.06. Information..................................................4
ARTICLE III
SECTION 3.01. Pledge.......................................................4
SECTION 3.02. Delivery of the Pledged Collateral...........................5
SECTION 3.03. Representations, Warranties and Covenants....................5
SECTION 3.04. Certification of Limited Liability Company Interests.........6
SECTION 3.05. Registration in Nominee Name; Denominations..................7
SECTION 3.06. Voting Rights; Dividends and Interest, etc...................7
ARTICLE IV
ARTICLE V
SECTION 5.01. Remedies upon Default........................................8
SECTION 5.02. Application of Proceeds.....................................10
SECTION 5.03. Securities Act, etc.........................................10
SECTION 5.04. Registration, etc...........................................11
ARTICLE VI
SECTION 6.01. Indemnity and Subrogation...................................11
SECTION 6.02. Contribution and Subrogation................................11
SECTION 6.03. Subordination...............................................12
ARTICLE VII
SECTION 7.01. Notices.....................................................12
SECTION 7.02. Security Interest Absolute..................................12
SECTION 7.03. Survival of Agreement.......................................12
SECTION 7.04. Binding Effect; Several Agreement...........................13
SECTION 7.05. Successors and Assigns......................................13
SECTION 7.06. Administrative Agent's Fees and Expenses; Indemnification...13
SECTION 7.07. Administrative Agent Appointed Attorney-in-Fact.............13
SECTION 7.08. APPLICABLE LAW..............................................14
SECTION 7.09. Waivers; Amendment..........................................14
SECTION 7.10. WAIVER OF JURY TRIAL........................................14
SECTION 7.11. Severability................................................15
SECTION 7.12. Counterparts................................................15
SECTION 7.13. Headings....................................................15
SECTION 7.14. Jurisdiction; Consent to Service of Process.................15
SECTION 7.15. Termination or Release......................................16
SECTION 7.16. Right of Setoff.............................................16
Schedule
Schedule I Pledged Collateral Capital Stock
GUARANTEE AND COLLATERAL AGREEMENT dated as of
February 27, 2003, among
CITGO PETROLEUM CORPORATION, CITGO
PIPELINE HOLDING I, LLC, CITGO PIPELINE HOLDING II, LLC and
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH, as
Administrative Agent.
Reference is made to the Credit Agreement dated as of February 27, 2003
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among
CITGO Petroleum Corporation (the "Borrower"), the Lenders
party thereto and Credit Suisse First Boston, Cayman Islands Branch, as
Administrative Agent. The Lenders have agreed to extend credit to the Borrower
subject to the terms and conditions set forth in the Credit Agreement. The
obligations of the Lenders to extend such credit are conditioned upon, among
other things, the execution and delivery of this Agreement. CITGO Pipeline
Holding I, LLC and CITGO Pipeline Holding II, LLC are affiliates of the
Borrower, will derive substantial benefits from the extension of credit to the
Borrower pursuant to the Credit Agreement and are willing to execute and deliver
this Agreement in order to induce the Lenders to extend such credit.
Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Credit Agreement. (a) Capitalized terms used in this
Agreement and not otherwise defined herein have the meanings specified in the
Credit Agreement. All terms defined in the
New York UCC (as defined herein) and
not defined in this Agreement have the meanings specified therein; the term
"instrument" shall have the meaning specified in Article 9 of the
New York UCC.
(b) The rules of construction specified in Article I of the Credit
Agreement also apply to this Agreement.
SECTION 1.02. Other Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Collateral" means Pledged Collateral.
"Credit Agreement" has the meaning assigned to such term in the
preliminary statement of this Agreement.
"Equity Interests" means shares of capital stock, partnership, joint
venture, member or limited liability or unlimited liability company interests,
beneficial interests in a trust or other equity ownership interests in a Person
of whatever nature and rights, warrants or options to acquire any of the
foregoing.
"Existing Credit Agreements" means the 364-Day Credit Agreement and the
Three-Year Credit Agreement, as amended, restated or replaced and in effect from
time to time.
"Federal Securities Laws" has the meaning assigned to such term in
Section 5.03.
"Grantor" means the Borrower.
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"Guarantors" means CITGO Pipeline Holding I, LLC and CITGO Pipeline
Holding II, LLC.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"
New York UCC" means the Uniform Commercial Code as from time to time
in effect in the State of
New York.
"Obligations" means (a) the due and punctual payment by the Borrower of
(i) the principal of and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, and (ii) all other monetary
obligations of the Borrower to any of the Secured Parties under the Credit
Agreement, this Agreement and each of the other Loan Documents, including fees,
costs, expenses and indemnities, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) and (b) the due
and punctual payment and performance of all obligations of each Loan Party under
each interest rate Hedging Agreement that (i) is in effect on the Closing Date
with a counterparty that is a Lender or an Affiliate of a Lender as of the
Closing Date or (ii) is entered into after the Closing Date with any
counterparty that is a Lender or an Affiliate of a Lender at the time such
interest rate Hedging Agreement is entered into.
"Pledged Collateral" has the meaning assigned to such term in Section
3.01.
"Pledged Securities" means any promissory notes, stock certificates or
other securities now or hereafter included in the Pledged Collateral, including
all certificates, instruments or other documents representing or evidencing any
Pledged Collateral.
"Pledged Interests" has the meaning assigned to such term in Section
3.01.
"Proceeds" has the meaning specified in Section 9-102 of the
New York
UCC.
"Secured Parties" means (a) the Lenders, (b) the Administrative Agent,
(c) each counterparty to any Hedging Agreement with a Loan Party that either (i)
is in effect on the Closing Date if such counterparty is a Lender or an
Affiliate of a Lender as of the Closing Date or (ii) is entered into after the
Closing Date if such counterparty is a Lender or an Affiliate of a Lender at the
time such Hedging Agreement is entered into, (d) the beneficiaries of each
indemnification obligation undertaken by any Loan Party under any Loan Document
and (e) the successors and assigns of each of the foregoing.
ARTICLE II
Guarantee
SECTION 2.01. Guarantee. Each Guarantor unconditionally guarantees,
jointly with the other Guarantor and severally, as a primary obligor and not
merely as a surety, the due and punctual payment and performance of the
Obligations; provided that, so long as the Existing Credit Agreements shall
remain in effect, the principal amount of the Indebtedness guaranteed under this
Article II shall at no time exceed the greater of (a) 5% of Net Worth (as
defined in the Existing Credit Agreements, as in effect
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on the date hereof) as of the end of the most recent fiscal quarter for which
financial statements shall have been delivered or are required to be delivered
pursuant to Section 6.01(a) or (b) of each Existing Credit Agreement at such
time and (b) any greater amount that would be permitted under the covenants
contained in the Existing Credit Agreements to be guaranteed at such time (it
being the express intention of the parties that the amount of such guarantee
shall not exceed the amount permitted under the Existing Credit Agreements, as
in effect on the date hereof, or any greater amount permitted under such
agreements as a result of their subsequent amendment). Each Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its guarantee notwithstanding any extension or renewal of any Obligation. Each
Guarantor waives presentment to, demand of payment from and protest to the
Borrower or any other Loan Party of any of the Obligations, and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment.
SECTION 2.02. Guarantee of Payment. Each Guarantor further agrees that
its guarantee hereunder constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit on
the books of the Administrative Agent or any other Secured Party in favor of the
Borrower or any other Person.
SECTION 2.03. No Limitations, Etc. (a) The obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Guarantor hereunder shall not be discharged or impaired or otherwise
affected by (i) the failure of the Administrative Agent or any other Secured
Party to assert any claim or demand or to enforce any right or remedy under the
provisions of any Loan Document or otherwise; (ii) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of, any Loan Document or any other agreement; (iii) the release of any security
held by the Administrative Agent or any other Secured Party for the Obligations
or any of them; (iv) any default, failure or delay, wilful or otherwise, in the
performance of the Obligations; or (v) any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or otherwise
operate as a discharge of any Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations). Each Guarantor
expressly authorizes the Secured Parties to take and hold security for the
payment and performance of the Obligations, to exchange, waive or release any or
all such security (with or without consideration), to enforce or apply such
security and direct the order and manner of any sale thereof in their sole
discretion or to release or substitute any one or more other guarantors or
obligors upon or in respect of the Obligations, all without affecting the
obligations of any Guarantor hereunder.
(b) To the fullest extent permitted by applicable law, each Guarantor
waives any defense based on or arising out of any defense of the Borrower or any
other Loan Party or the unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
or any other Loan Party, other than the indefeasible payment in full in cash of
all the Obligations. The Administrative Agent and the other Secured Parties may,
at their election, foreclose on any security held by one or more of them by one
or more judicial or nonjudicial sales, accept an assignment of any such security
in lieu of foreclosure, compromise or adjust any part of the Obligations, make
any other accommodation with the Borrower or any other Loan Party or exercise
any other right or remedy available to them against the Borrower or any other
Loan Party, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Obligations have been fully and
indefeasibly paid in full in cash. To the fullest extent permitted by applicable
law, each Guarantor waives
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any defense arising out of any such election even though such election operates,
pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor against
the Borrower or any other Loan Party, as the case may be, or any security.
SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Administrative Agent or any other
Secured Party upon the bankruptcy or reorganization of the Borrower, any other
Loan Party or otherwise.
SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Administrative Agent
or any other Secured Party has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Borrower or any other Loan Party to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Administrative
Agent for distribution to the applicable Secured Parties in cash the amount of
such unpaid Obligation; provided that such promise shall be limited as set forth
in the proviso in Section 2.01. Upon payment by any Guarantor of any sums to the
Administrative Agent as provided above, all rights of such Guarantor against the
Borrower or any other Guarantor arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subject to Article VI.
SECTION 2.06. Information. Each Guarantor assumes all responsibility
for being and keeping itself informed of the Borrower's and each other Loan
Party's financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Obligations and the nature, scope and extent
of the risks that such Guarantor assumes and incurs hereunder, and agrees that
none of the Administrative Agent or the other Secured Parties will have any duty
to advise such Guarantor of information known to it or any of them regarding
such circumstances or risks.
ARTICLE III
Pledged Collateral
SECTION 3.01. Pledge. As security for the payment or performance, as
the case may be, in full of the Obligations, the Grantor hereby assigns and
pledges to the Administrative Agent, its successors and assigns, for the benefit
of the Secured Parties, and hereby grants to the Administrative Agent, its
successors and assigns, for the benefit of the Secured Parties, a security
interest in, all of the Grantor's right, title and interest in, to and under (a)
the Equity Interests owned by it and listed on Schedule I and any other Equity
Interests in the Guarantors obtained in the future by the Grantor and the
certificates representing all such Equity Interests (the "Pledged Interests"),
(b) all other property at any time held directly by the Borrower representing
any interest in property of either Guarantor, either Colonial Pipeline Entity or
the Explorer Pipeline Entity, or the proceeds of any dividend, distribution or
transfer of property to the Borrower by either Guarantor, either Colonial
Pipeline Entity or the Explorer Pipeline Entity, (c) all other property that may
be delivered to and held by the Administrative Agent pursuant to the terms of
this Section 3.01; (d) subject to Section 3.06, all payments of principal or
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of, in exchange for or
upon the conversion of, and all other Proceeds received in respect of, the
securities referred to in clauses (a) and (b) above; (e) subject to Section
3.06, all rights and privileges of such Grantor with respect to the securities
and other property referred to in clauses (a), (b),
4
(c) and (d) above; and (f) all Proceeds of any of the foregoing (the items
referred to in clauses (a) through (f) above being collectively referred to as
the ("Pledged Collateral").
TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Administrative Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, forever; subject, however, to the terms,
covenants and conditions hereinafter set forth.
SECTION 3.02. Delivery of the Pledged Collateral. (a) The Grantor
agrees promptly to deliver or cause to be delivered to the Administrative Agent
any and all Pledged Securities.
(b) Upon delivery to the Administrative Agent, the Pledged Securities
shall be accompanied by stock powers duly executed in blank or other instruments
of transfer satisfactory to the Administrative Agent and by such other
instruments and documents as the Administrative Agent may reasonably request.
The delivery of Pledged Securities shall be accompanied by a schedule describing
the securities, which schedule shall be attached hereto as Schedule II and made
a part hereof; provided that failure to attach any such schedule hereto shall
not affect the validity of such pledge of such Pledged Securities. Each schedule
so delivered shall supplement any prior schedules so delivered.
SECTION 3.03. Representations, Warranties and Covenants. (I) The
Grantor represents, warrants and covenants to and with the Administrative Agent,
for the benefit of the Secured Parties, that:
(a) Schedule I correctly sets forth the percentage of the
issued and outstanding shares of each class of the Equity Interests of
the issuer thereof represented by the Pledged Interests and includes
all Equity Interests required to be pledged hereunder in order to
satisfy the Collateral and Guarantee Requirement;
(b) the Pledged Interests have been duly and validly
authorized and issued by the issuers thereof and are fully paid and
nonassessable;
(c) except for the security interests granted hereunder, the
Grantor (i) is and will continue to be the direct owner, beneficially
and of record, of the Pledged Securities indicated on Schedule I as
owned by the Grantor, (ii) holds the same free and clear of all Liens,
(iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on,
the Pledged Collateral, other than Liens created by this Agreement, and
(iv) subject to Section 3.06, will cause any and all Pledged
Collateral, whether for value paid by the Grantor or otherwise, to be
forthwith deposited with the Administrative Agent and pledged or
assigned hereunder;
(d) except for restrictions and limitations imposed by the
Loan Documents or securities laws generally, the Pledged Collateral is
and will continue to be freely transferable and assignable, and none of
the Pledged Collateral is or will be subject to any option, right of
first refusal, shareholders agreement, charter or by-law provisions or
contractual restriction of any nature that might prohibit, impair,
delay or otherwise affect the pledge of such Pledged Collateral
hereunder, the sale or disposition thereof pursuant hereto or the
exercise by the Administrative Agent of rights and remedies hereunder;
(e) the Grantor (i) has the power and authority to pledge the
Pledged Collateral pledged by it hereunder in the manner hereby done or
contemplated and (ii) will defend its title or interest
5
thereto or therein against any and all Liens (other than the Lien
created by this Agreement), however arising, of all Persons whomsoever;
(f) no consent of any other Person (including stockholders,
partners, members or creditors of the Grantor, any Governmental
Authority or any securities exchange) was or is necessary to the
validity of the pledge effected hereby (other than such as have been
obtained and are in full force and effect);
(g) by virtue of the execution and delivery by the Grantor of
this Agreement, when any Pledged Securities are delivered to the
Administrative Agent in accordance with this Agreement, the
Administrative Agent will obtain a legal, valid and perfected first
priority lien upon and security interest in such Pledged Securities as
security for the payment and performance of the Obligations; and
(h) the pledge effected hereby is effective to vest in the
Administrative Agent, for the benefit of the Secured Parties, the
rights of the Administrative Agent in the Pledged Collateral as set
forth herein.
(II) Each Guarantor represents, warrants and covenants to and with the
Administrative Agent, for the benefit of the Secured Parties, that:
(a) Schedule 5.19 to the Credit Agreement correctly sets forth
the percentage of the issued and outstanding shares of each class of
the Equity Interests in the Colonial Pipeline Entities and the Explorer
Pipeline Entity owned by such Guarantor (collectively, the "Pipeline
Interests");
(b) such Guarantor (i) is and will continue to be the direct
owner, beneficially and of record, of the Pipeline Interests indicated
on such Schedule 5.19 as owned by such Guarantor, other than as a
result of any dividend, distribution or transfer of a Pipeline Interest
to the Grantor that (x) cannot be prohibited by this Agreement without
violation of any debt instrument of the Grantor in effect on the date
hereof and (y) is not consummated prior to the perfection of the
security interest in the property that is the subject of such dividend,
distribution or transfer granted under clause (b) of Section 3.01 of
this Agreement, (ii) holds the same free and clear of all Liens, and
(iii) will make no assignment, pledge, hypothecation or transfer of, or
create or permit to exist any security interest in or other Lien on,
any Pipeline Interest (except as contemplated by clause (i));
(c) such Guarantor (i) has the power and authority to execute
and deliver and perform its obligations under this Agreement and (ii)
will defend its title or interest to or in its Pipeline Interests
against any and all Liens (other than any Lien created by this
Agreement), however arising, of all Persons whomsoever; and
(d) no consent of any other Person (including stockholders,
partners, members or creditors of the Guarantor, any Governmental
Authority or any securities exchange) was or is necessary to the
agreements of such Guarantor hereunder (other than such as have been
obtained and are in full force and effect).
SECTION 3.04. Certification of Limited Liability Company Interests.
Each interest in any limited liability company pledged hereunder shall be
represented by a certificate, shall be a "security" within the meaning of
Article 8 of the New
6
York UCC and shall be governed by Article 8 of the New York UCC. The charter
documents of each such limited liability company shall include an express
provision providing that each interest in such entity "is a security governed by
Article 8 of the Uniform Commercial Code in effect in the State of New York on
the date hereof".
SECTION 3.05. Registration in Nominee Name; Denominations. The
Administrative Agent, on behalf of the Secured Parties, shall have the right (in
its sole and absolute discretion) to hold the Pledged Securities in its own name
as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of
the Grantor, endorsed or assigned in blank or in favor of the Administrative
Agent. The Grantor will promptly give to the Administrative Agent copies of any
notices or other communications received by it with respect to Pledged
Securities registered in the name of the Grantor. The Administrative Agent shall
at all times have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.
SECTION 3.06. Voting Rights; Dividends and Interest, etc. (a) Unless
and until an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have notified the Grantor that its rights under this
Section are being suspended:
(i) The Grantor shall be entitled to exercise any and all
voting and/or other consensual rights and powers inuring to an owner of
Pledged Securities or any part thereof for any purpose consistent with
the terms of this Agreement, the Credit Agreement and the other Loan
Documents; provided that such rights and powers shall not be exercised
in any manner that could materially and adversely affect the rights
inuring to a holder of any Pledged Securities or the rights and
remedies of any of the Administrative Agent or the other Secured
Parties under this Agreement or the Credit Agreement or any other Loan
Document or the ability of the Secured Parties to exercise the same.
(ii) The Administrative Agent shall execute and deliver to the
Grantor, or cause to be executed and delivered to the Grantor, all such
proxies, powers of attorney and other instruments as the Grantor may
reasonably request for the purpose of enabling the Grantor to exercise
the voting and/or consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above.
(iii) The Grantor shall be entitled to receive and retain any
and all dividends, interest, principal and other distributions paid on
or distributed in respect of the Pledged Securities to the extent and
only to the extent that such dividends, interest, principal and other
distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the
other Loan Documents and applicable laws; provided that any noncash
dividends, interest, principal or other distributions, whether
resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities or
received in exchange for Pledged Securities or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a
party or otherwise, shall be and become part of the Pledged Collateral,
and, if received by the Grantor, shall not be commingled by the Grantor
with any of its other funds or property but shall be held separate and
apart therefrom, shall be held in trust for the benefit of the
Administrative Agent and shall be forthwith delivered to the
Administrative Agent in the same form as so received (with any
necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default, after the Administrative Agent shall have notified the Grantor of the
suspension of its rights under paragraph
7
(a)(iii) of this Section 3.06, then all rights of the Grantor to dividends,
interest, principal or other distributions that the Grantor is authorized to
receive pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and all
such rights shall thereupon become vested in the Administrative Agent, which
shall have the sole and exclusive right and authority to receive and retain such
dividends, interest, principal or other distributions. All dividends, interest,
principal or other distributions received by the Grantor contrary to the
provisions of this Section 3.06 shall be held in trust for the benefit of the
Administrative Agent, shall be segregated from other property or funds of the
Grantor and shall be forthwith delivered to the Administrative Agent upon demand
in the same form as so received (with any necessary endorsement). Any and all
money and other property paid over to or received by the Administrative Agent
pursuant to the provisions of this paragraph (b) shall be retained by the
Administrative Agent in an account to be established by the Administrative Agent
upon receipt of such money or other property and shall be applied in accordance
with the provisions of Section 5.02. After all Events of Default have been cured
or waived and the Grantor has delivered to the Administrative Agent certificates
to that effect, the Administrative Agent shall, promptly after all such Events
of Default have been cured or waived, repay to the Grantor (without interest)
all dividends, interest, principal or other distributions that such Grantor
would otherwise be permitted to retain pursuant to the terms of paragraph
(a)(iii) of this Section 3.06 and that remain in such account.
(c) Upon the occurrence and during the continuance of an Event of
Default, after the Administrative Agent shall have notified the Grantor of the
suspension of its rights under paragraph (a)(i) of this Section 3.06, then all
rights of the Grantor to exercise the voting and consensual rights and powers it
is entitled to exercise pursuant to paragraph (a)(i) of this Section 3.06, and
the obligations of the Administrative Agent under paragraph (a)(ii) of this
Section 3.06, shall cease, and all such rights shall thereupon become vested in
the Administrative Agent, which shall have the sole and exclusive right and
authority to exercise such voting and consensual rights and powers; provided
that, unless otherwise directed by the Required Lenders, the Administrative
Agent shall have the right from time to time following and during the
continuance of an Event of Default to permit the Grantor to exercise such
rights.
(d) Any notice given by the Administrative Agent to the Grantor
suspending its rights under paragraph (a) of this Section 3.06 (i) may be given
by telephone if promptly confirmed in writing and (ii) may suspend the rights of
the Grantor under paragraph (a)(i) or paragraph (a)(iii) in part without
suspending all such rights (as specified by the Administrative Agent in its sole
and absolute discretion) and without waiving or otherwise affecting the
Administrative Agent's rights to give additional notices from time to time
suspending other rights so long as an Event of Default has occurred and is
continuing.
ARTICLE IV
[Intentionally Omitted]
ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, the Grantor agrees that the Administrative
Agent shall have the right, subject to the mandatory requirements of applicable
law, to sell or otherwise dispose of all or any part of
8
the Collateral at a public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Administrative Agent shall deem appropriate. The Administrative Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Administrative Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of the Grantor, and the Grantor hereby waives (to
the extent permitted by law) all rights of redemption, stay and appraisal which
the Grantor now has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted.
The Administrative Agent shall give the Grantor 10 days' written notice
(which the Grantor agrees is reasonable notice within the meaning of Section
9-611 of the New York UCC or its equivalent in other jurisdictions) of the
Administrative Agent's intention to make any sale of Collateral. Such notice, in
the case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as the Administrative Agent
may fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as the Administrative Agent may (in its sole and
absolute discretion) determine. The Administrative Agent shall not be obligated
to make any sale of any Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of such Collateral shall have been
given. The Administrative Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Administrative Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Administrative Agent shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may be sold again upon
like notice. At any public (or, to the extent permitted by law, private) sale
made pursuant to this Section, any Secured Party may bid for or purchase, free
(to the extent permitted by law) from any right of redemption, stay, valuation
or appraisal on the part of the Grantor (all said rights being also hereby
waived and released to the extent permitted by law), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
claim then due and payable to such Secured Party from the Grantor as a credit
against the purchase price, and such Secured Party may, upon compliance with the
terms of sale, hold, retain and dispose of such property without further
accountability to any Grantor therefor. For purposes hereof, a written agreement
to purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Administrative Agent shall be free to carry out such sale pursuant
to such agreement and the Grantor shall not be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Administrative Agent shall have entered into such an agreement all
Events of Default shall have been remedied and the Obligations paid in full. As
an alternative to exercising the power of sale herein conferred upon it, the
Administrative Agent may proceed by a suit or suits at law or in equity to
foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section 5.01 shall be deemed to conform to
the commercially reasonable standards as provided in Section 9-610(b) of the New
York UCC or its equivalent in other jurisdictions.
9
SECTION 5.02. Application of Proceeds. The Administrative Agent shall
apply the proceeds of any collection or sale of Collateral, including any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Administrative Agent in connection with such collection or sale or
otherwise in connection with this Agreement, any other Loan Document or
any of the Obligations, including all court costs and the fees and
expenses of its agents and legal counsel, the repayment of all advances
made by the Administrative Agent hereunder or under any other Loan
Document on behalf of the Grantor and any other costs or expenses
incurred in connection with the exercise of any right or remedy
hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts
so applied to be distributed among the Secured Parties pro rata in
accordance with the amounts of the Obligations owed to them on the date
of any such distribution); and
THIRD, to the Grantor, its successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Administrative Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Administrative Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Administrative Agent or of the officer making the sale shall
be a sufficient discharge to the purchaser or purchasers of the Collateral so
sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof.
SECTION 5.03. Securities Act, etc. In view of the position of the
Grantor in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to time
in effect being called the "Federal Securities Laws") with respect to any
disposition of the Pledged Collateral permitted hereunder. The Grantor
understands that compliance with the Federal Securities Laws might very strictly
limit the course of conduct of the Administrative Agent if the Administrative
Agent were to attempt to dispose of all or any part of the Pledged Collateral,
and might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Collateral could dispose of the same. Similarly, there
may be other legal restrictions or limitations affecting the Administrative
Agent in any attempt to dispose of all or part of the Pledged Collateral under
applicable Blue Sky or other state securities laws or similar laws analogous in
purpose or effect. The Grantor recognizes that in light of such restrictions and
limitations the Administrative Agent may, with respect to any sale of the
Pledged Collateral, limit the purchasers to those who will agree, among other
things, to acquire such Pledged Collateral for their own account, for
investment, and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that in light of such restrictions and
limitations, the Administrative Agent, in its sole and absolute discretion (a)
may proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws and (b) may approach and negotiate with
a single potential purchaser to effect such sale. The Grantor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions. In
the event of any such sale, the Administrative Agent shall incur no
responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Administrative Agent, in its sole and absolute
discretion, may in good xxxxx xxxx reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price
10
might have been realized if the sale were deferred until after registration as
aforesaid or if more than a single purchaser were approached. The provisions of
this Section 5.03 will apply notwithstanding the existence of a public or
private market upon which the quotations or sales prices may exceed
substantially the price at which the Administrative Agent sells.
SECTION 5.04. Registration, etc. The Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default hereunder, if for
any reason the Administrative Agent desires to sell any of the Pledged
Collateral at a public sale, it will, at any time and from time to time, upon
the written request of the Administrative Agent, use its best efforts to take or
to cause the issuer of such Pledged Collateral to take such action and prepare,
distribute and/or file such documents, as are required or advisable in the
reasonable opinion of counsel for the Administrative Agent to permit the public
sale of such Pledged Collateral. The Grantor further agrees to indemnify, defend
and hold harmless the Administrative Agent, each other Secured Party, any
underwriter and their respective officers, directors, affiliates and controlling
persons from and against all loss, liability, expenses, costs of counsel
(including, without limitation, reasonable fees and expenses to the
Administrative Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to the Grantor or the issuer of such Pledged
Collateral by the Administrative Agent or any other Secured Party expressly for
use therein. The Grantor further agrees, upon such written request referred to
above, to use its best efforts to qualify, file or register, or cause the issuer
of such Pledged Collateral to qualify, file or register, any of the Pledged
Collateral under the Blue Sky or other securities laws of such states as may be
requested by the Administrative Agent and keep effective, or cause to be kept
effective, all such qualifications, filings or registrations. The Grantor will
bear all costs and expenses of carrying out its obligations under this Section
5.04. The Grantor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 5.04 and that such
failure would not be adequately compensable in damages, and therefore agrees
that its agreements contained in this Section 5.04 may be specifically enforced.
ARTICLE VI
Indemnity, Subrogation and Subordination
SECTION 6.01. Indemnity and Subrogation. In addition to all such rights
of indemnity and subrogation as the Guarantors may have under applicable law
(but subject to Section 6.03), the Borrower agrees that in the event a payment
shall be made by any Guarantor under this Agreement, the Borrower shall
indemnify such Guarantor for the full amount of such payment and such Guarantor
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such payment (it being understood that in no
circumstances will the Secured Parties receive payment in excess of the
Obligations).
SECTION 6.02. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 6.03) that, in the event a
payment shall be made by any other Guarantor hereunder in respect of any
Obligation and such other Guarantor (the "Claiming Guarantor") shall not have
been fully indemnified by the Borrower as provided in Section 6.01, the
Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal
to the amount of such payment multiplied by a fraction of which the numerator
shall be the net worth of the Contributing Guarantor on
11
the date hereof and the denominator shall be the aggregate net worth of both
Guarantors on the date hereof. Any Contributing Guarantor making any payment to
a Claiming Guarantor pursuant to this Section 6.02 shall be subrogated to the
rights of such Claiming Guarantor under Section 6.01 to the extent of such
payment.
SECTION 6.03. Subordination. (a) Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under Sections 6.01 and
6.02 and all other rights of indemnity, contribution or subrogation under
applicable law or otherwise shall be fully subordinated to the indefeasible
payment in full in cash of the Obligations. No failure on the part of the
Borrower or any Guarantor to make the payments required by Sections 6.01 and
6.02 (or any other payments required under applicable law or otherwise) shall in
any respect limit the obligations and liabilities of any Guarantor with respect
to its obligations hereunder, and each Guarantor shall remain liable for the
full amount of the obligations of such Guarantor hereunder.
(b) The Borrower and each Guarantor hereby agrees that all Indebtedness
and other monetary obligations owed by it to the Borrower or any Guarantor shall
be fully subordinated to the indefeasible payment in full in cash of the
Obligations.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 10.02 of the Credit Agreement. All communications and
notices hereunder to any Guarantor shall be given to it in care of the Borrower
as provided in Section 10.02 of the Credit Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the
Administrative Agent hereunder, the grant of a security interest in the Pledged
Collateral and all obligations of the Grantor and Pledgor hereunder to the
fullest extent permitted by law shall be absolute and unconditional irrespective
of (a) any lack of validity or enforceability of the Credit Agreement, any other
Loan Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Grantor or Pledgor in respect of
the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended under the Credit Agreement, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loan or any fee or any other amount payable under any Loan
Document is outstanding and unpaid.
12
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Loan Party when a counterpart hereof executed on
behalf of such Loan Party shall have been delivered to the Administrative Agent
and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Loan Party and
the Administrative Agent and their respective permitted successors and assigns,
and shall inure to the benefit of such Loan Party, the Administrative Agent and
the other Secured Parties and their respective successors and assigns, except
that no Loan Party shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral or Pledged
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Credit Agreement. This Agreement
shall be construed as a separate agreement with respect to each Loan Party and
may be amended, modified, supplemented, waived or released with respect to any
Loan Party without the approval of any other Loan Party and without affecting
the obligations of any other Loan Party hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
permitted successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Grantor or the Administrative Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 7.06. Administrative Agent's Fees and Expenses;
Indemnification. (a) The parties hereto agree that the Administrative Agent
shall be entitled to reimbursement of its expense incurred hereunder as provided
in Section 10.04 of the Credit Agreement.
(b) Without limitation of its indemnification obligations under the
other Loan Documents, the Grantor and each Guarantor jointly and severally agree
to indemnify the Administrative Agent and the other Indemnitees (as defined in
Section 10.05 of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating to
any of the foregoing agreement or instrument contemplated hereby, or to the
Collateral, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Administrative Agent or any other Secured Party. All amounts due
under this Section 7.06 shall be payable on written demand therefor.
SECTION 7.07. Administrative Agent Appointed Attorney-in-Fact. The
Grantor hereby appoints the Administrative Agent its attorney-in-fact for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Administrative Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Administrative Agent shall
13
have the right, upon the occurrence and during the continuance of an Event of
Default, with full power of substitution either in the Administrative Agent's
name or in the name of the Grantor (a) to receive, endorse, assign and/or
deliver any and all notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Collateral or any part thereof; (b) to
demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to commence and prosecute any and
all suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect or otherwise realize on all or any of the Collateral or
to enforce any rights in respect of any Collateral; (d) to settle, compromise,
compound, adjust or defend any actions, suits or proceedings relating to all or
any of the Collateral; and (e) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of this
Agreement, as fully and completely as though the Administrative Agent were the
absolute owner of the Collateral for all purposes; provided, that nothing herein
contained shall be construed as requiring or obligating the Administrative Agent
to make any commitment or to make any inquiry as to the nature or sufficiency of
any payment received by the Administrative Agent, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby. The Administrative Agent and the other Secured Parties
shall be accountable only for amounts actually received as a result of the
exercise of the powers granted to them herein, and neither they nor their
officers, directors, employees or agents shall be responsible to the Grantor for
any act or failure to act hereunder, except for their own gross negligence or
wilful misconduct.
SECTION 7.08. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. Waivers; Amendment. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent or any Lender may have
had notice or knowledge of such Default at the time. No notice or demand on any
Loan Party in any case shall entitle any Loan Party to any other or further
notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties with
respect to which such waiver, amendment or modification is to apply, subject to
any consent required in accordance with Section 10.01 of the Credit Agreement.
SECTION 7.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT
14
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 7.11. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.12. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute single contract, and shall become effective as
provided in Section 7.04. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.
SECTION 7.13. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each of
the Loan Parties hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America, sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against Holdings, the Borrower or its properties in
the courts of any jurisdiction.
(b) Each of the Loan Parties hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (a) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
15
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 7.15. Termination or Release. (a) This Agreement, the Guarantee
and all other security interests granted hereby shall terminate when all the
Loan Document Obligations have been indefeasibly paid in full.
(b) In connection with any termination or release pursuant to paragraph
(a) the Administrative Agent shall execute and deliver to the Grantor, at the
Grantor's expense, all documents that the Grantor shall reasonably request to
evidence such termination or release. Any execution and delivery of documents
pursuant to this Section 7.15 shall be without recourse to or warranty by the
Administrative Agent.
SECTION 7.16. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any
Guarantor against any of and all its obligations now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.
16
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
CITGO PETROLEUM CORPORATION,
By /s/ XXXXX X. XXXXXXXX
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
Finance Administration and
Chief Financial Officer
CITGO PIPELINE HOLDING I, LLC,
by
CITGO Petroleum Corporation, its Member,
by /s/ XXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
Finance Administration and
Chief Financial Officer
CITGO PIPELINE HOLDING II, LLC,
by
CITGO Petroleum Corporation, its Member,
by /s/ XXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
Finance Administration and
Chief Financial Officer
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS
BRANCH, as Administrative Agent,
By /s/ XXXXX X. XXXXX
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Director
By /s/ XXXX XXXXXXXXX
---------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Managing Director
